[Federal Register Volume 84, Number 207 (Friday, October 25, 2019)]
[Notices]
[Pages 57509-57513]
[FR Doc No: 2019-23254]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87368; File No. SR-BX-2019-038]

Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Make Permanent
Certain Options Market Rules That Are Linked to the Equity Market Plan
To Address Extraordinary Market Volatility

October 21, 2019.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on October 18, 2019, Nasdaq BX, Inc. (``BX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to make permanent certain options market
rules that are linked to the equity market Plan to Address
Extraordinary Market Volatility.
    The text of the proposed rule change is available on the Exchange's
website at http://nasdaqbx.cchwallstreet.com/, at

the principal office of the Exchange, and at the Commission's Public
Reference Room.

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

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

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

1. Purpose
    The purpose of the proposed rule change is to make permanent
certain options market rules in connection with the equity market Plan
to Address Extraordinary Market Volatility (the ``Limit Up-Limit Down
Plan'' or the ``Plan''). This change is being proposed in connection
with the recently approved amendment to the Limit Up-Limit Down Plan
that allows the Plan to continue to operate on a permanent basis
(``Amendment 18'').\3\ This proposed rule change is substantially
similar to a recently-approved rule change by Cboe Exchange, Inc.
(``Cboe'').\4\
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    \3\ See Securities Exchange Act Release No. 85623 (April 11,
2019), 84 FR 16086 (April 17, 2019) (Order Approving Amendment No.
18).
    \4\ See Securities Exchange Act Release Nos. 86744 (August 23,
2019), 84 FR 45565 (August 29, 2019) (SR-CBOE-2019-049) (Notice of
Filing); and 87311 (October 15, 2019) (SR-CBOE-2019-049) (Notice of
Filing of Amendment No. 2 and Order Granting Accelerated Approval of
a Proposed Rule Change, as Modified by Amendment Nos. 1 and 2). The
Exchange understands that the other national securities exchanges
will also file similar proposals to make permanent their respective
pilot programs.
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    In an attempt to address extraordinary market volatility in NMS
Stocks, and, in particular, events like the severe volatility on May 6,
2010, U.S. national securities exchanges and the Financial Industry
Regulatory Authority, Inc. (collectively, ``Participants'') drafted the
Plan pursuant to Rule 608 of Regulation NMS and under the Act.\5\ On
May 31, 2012, the Commission approved the Plan, as amended, on a one-
year pilot basis.\6\ Though the Plan was primarily designed for equity
markets, the Exchange believed it would, indirectly, potentially impact
the options markets as well. Thus, the Exchange has previously adopted
and amended Chapter V, Section 3(d) to ensure the option markets were
not harmed as a result of the Plan's implementation and has implemented
such rules on a pilot basis that has coincided with the pilot period
for the Plan (the ``Options Pilots'').\7\ Chapter V, Section 3(d)
addresses the interplay of the Exchange's rules in response to the
Plan, and includes provisions on how the Exchange will treat certain
options orders during a limit or straddle state as well as options
market maker quoting obligations during a limit or straddle state. In
addition, Section 3(d)(iv) provides that during a limit or straddle
state, trades are not subject to obvious or catastrophic error review.
A limit or straddle state occurs when at least one side of the National
Best Bid (``NBB'') or Offer (``NBO'') bid/ask is priced at a non-
tradable level. Specifically, a straddle state exists when the NBB is
below the lower price band while the NBO is inside the prices band or
when the NBO is above the upper price band and the NBB is within the
band, while a limit state occurs when the NBO equals the lower price
band (without crossing the NBB), or the NBB equals the upper price band
(without crossing the NBO). The Exchange adopted the Options Pilots to
protect investors because when an underlying security is in a limit up-
limit down state, there will not be a reliable price for the security
to serve as a benchmark for the price of the option. Specifically, the
Exchange adopted Chapter V, Section 3(d)(iv) because the application of
the obvious and catastrophic error rules would be impracticable given
the potential for lack of a reliable NBBO in the options market during
limit and straddle states. When adjusting or busting a trade pursuant
to the obvious error rule, the determination of theoretical value of a
trade generally references the NBB (for erroneous sell transactions) or
NBO (for erroneous buy transactions) just prior to the trade in
question, and is therefore not reliable when at least one side of the
NBBO is priced at a non-tradeable level, as is the case in limit and
straddle states. In such a situation, determining theoretical value may
often times be a very subjective rather than an objective determination
and could give rise to additional uncertainty and confusion for
investors. As a result, application of the obvious and catastrophic
error rules would be impracticable given the lack of a reliable NBBO in
the options market during limit and straddle states, and may produce
undesirable effects or unanticipated consequences. As noted above, the
Exchange adopted additional measures via other Options Pilot rules that
are designed to protect investors during limit and straddle states.\8\
For example, the Exchange will reject Market Orders (as defined in
Chapter VI, Section 1) during a Limit Up-Limit Down state to ensure
that only those orders with a limit price will be executed during a
limit or straddle state given the uncertainty of market prices during
such a state. Furthermore, the Exchange believes that eliminating the
application of obvious error rules during a limit or straddle state
eliminates the re-evaluation of a transaction executed during such a
state that could potentially create an unreasonable adverse selection
opportunity due to the lack of a reliable reference price on one side
of the market or another and discourage participants from providing
liquidity during limit and straddle states, which is contrary to the
goal in limiting participants' adverse selection with the application
of the obvious error rule during normal trading states. For these
reasons, the Exchange believes the Options Pilots and related rules are
designed to add certainty on the options markets, which encourages more
investors to participate in light of the changes associated with the
Plan. The Plan was originally implemented on a pilot-basis in order to
allow the public, the participating exchanges, and the Commission to
assess the operation of the Plan and whether the Plan should be
modified prior to approval on a permanent basis. As stated, the
Exchange adopted the Option Pilots to coincide with this pilot; to
continue the protections therein while the industry gains further
experience operating the Plan.
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    \5\ See Securities Exchange Act Release No. 64547 (May 25,
2011), 76 FR 31647 (June 1, 2011) (File No. 4-631).
    \6\ See Securities and Exchange Act Release No. 67091 (May 31,
2012), 77 FR 33498 (June 6, 2012).
    \7\ See Securities Exchange Act Release Nos. 69119 (March 12,
2013), 78 FR 16746 (March 18, 2013) (SR-BX-2013-021); 69334 (April
5, 2013), 78 FR 21653 (April 11, 2013) (SR-BX-2013-022); and 69343
(April 8, 2013), 78 FR 21982 (April 12, 2013) (SR-BX-2013-026).
    \8\ As set forth in Chapter V, Section 3(d), this includes rules
in connection with special handling for Market Orders, and options
market maker quoting obligations during a limit or straddle state.
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    In connection with the order approving the establishment of the
obvious error pilot, as well as the extensions of the obvious error
pilot, the Exchange committed to submit monthly data regarding the
program and to submit an overall analysis of the obvious error pilot in
conjunction with

the data submitted under the Plan and any other data as requested by
the Commission. Pursuant to a rule filing, approved on April 8, 2014,
each month, the Exchange committed to provide the Commission, and the
public, a dataset containing the data for each straddle and limit state
in optionable stocks that had at least one trade on the Exchange.\9\
The Exchange has continued to provide the Commission with this data on
a monthly basis. For each trade on the Exchange, the Exchange provides
(a) the stock symbol, option symbol, time at the start of the straddle
or limit state, an indicator for whether it is a straddle or limit
state, and (b) for the trades on the Exchange, the executed volume,
time-weighted quoted bid-ask spread, time-weighted average quoted depth
at the bid, time-weighted average quoted depth at the offer, high
execution price, low execution price, number of trades for which a
request for review for error was received during straddle and limit
states, an indicator variable for whether those options outlined above
have a price change exceeding 30% during the underlying stock's limit
or straddle state compared to the last available option price as
reported by OPRA before the start of the limit or straddle state. In
addition, to help evaluate the impact of the pilot program, the
Exchange has provided to the Commission, and the public, assessments
relating to the impact of the operation of the obvious error rules
during limit and straddle states including: (1) An evaluation of the
statistical and economic impact of limit and straddle states on
liquidity and market quality in the options markets, and (2) an
assessment of whether the lack of obvious error rules in effect during
the straddle and limit states are problematic. The Exchange has
concluded that the Options Pilots do not negatively impact market
quality during normal market conditions,\10\ and that there has been
insufficient data to assess whether a lack of obvious error rules is
problematic, however, the Exchange believes the continuation of the
Options Pilots function to protect against any unanticipated
consequences in the options markets during a limit or straddle state
and add certainty on the options markets.
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    \9\ See Securities Exchange Act Release No. 71900 (April 8,
2014), 79 FR 20951 (April 14, 2014) (SR-BX-2014-017); see also BX
LULD Reports, available at: https://www.nasdaq.com/solutions/options/LULD.
    \10\ See also BX LULD Reports, available at: https://www.nasdaq.com/solutions/options/LULD. During the most recent Review
Period the Exchange did not receive any obvious error review
requests for Limit-Up-Limit Down trades, and Limit Up-Limit Down
trade volume accounted for nominal overall trade volume.
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    The Commission recently approved the Plan on a permanent basis
(Amendment 18).\11\ In connection with this approval, the Exchange now
proposes to amend Chapter V, Section 3(d) that currently implement
provisions of the Plan on a pilot basis to eliminate the pilot basis,
which effectiveness expires on October 18, 2019, and to make such rules
permanent. In its approval order to make the Plan permanent, the
Commission recognized that, as a result of the Participants' and
industry analysis of the Plan's operation, the Limit Up-Limit Down
mechanism effectively addresses extraordinary market volatility.
Indeed, the Plan benefits markets and market participants by helping to
ensure orderly markets, but also, the Exchange believes, based on the
data made available to the public and the Commission during the pilot
period, that the obvious error pilot does not negatively impact market
quality during normal market conditions.\12\ Rather, the Exchange
believes the obvious error pilot functions to protect against any
unanticipated consequences in the options markets during a limit or
straddle state and add certainty on the options markets. The Exchange
also believes the other Options Pilots rules provide additional
measures designed to protect investors during limit and straddle
states. For example, the Exchange will reject Market Orders during a
Limit Up-Limit Down state to ensure that only those orders with a limit
price will be executed during a limit or straddle state given the
uncertainty of market prices during such a state.\13\ This removes
impediments to and perfects the mechanism of a free and open market and
national market system by encouraging more investors to participate in
light of the changes associated with the Plan. The Exchange believes
that if approved on a permanent basis, the Options Pilots would
permanently provide investors with the above-described additional
certainty of market prices and mitigation of unanticipated consequences
and unreasonable adverse selection risk during limit and straddle
states.
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    \11\ See supra note 3.
    \12\ See supra note 10.
    \13\ See supra note 8.
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    Since the Commission's approval of Amendment 18 allowing the Plan
to operate on a permanent basis, the Exchange and other national
securities exchanges have determined that no further amendments should
be made to the Options Pilots; \14\ the current Options Pilots
effectively address extraordinary market volatility, are reasonably
designed to comply with the requirements of the Plan, facilitate
compliance with the Plan and should now operate on a permanent basis,
consistent with the Plan. The Exchange does not propose any substantive
or additional changes to Chapter V, Section 3(d).
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    \14\ See Securities Exchange Act Release No. 85622 (April 11,
2019), 84 FR 16116 (April 17, 2019) (SR-BX-2019-007).
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the requirements of Section 6(b) of the Act,\15\ in general, and
Section 6(b)(5) of the Act,\16\ in particular, in that it is designed
to remove impediments to and perfect the mechanism of a free and open
market and a national market system, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest and not to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(5).
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    In particular, the Exchange believes that the proposed rule
supports the objectives of perfecting the mechanism of a free and open
market and the national market system because it promotes transparency
and uniformity across markets concerning rules for options markets
adopted to coincide with the Plan. The Exchange believes that
eliminating the pilot basis for the Options Pilots and making such
rules permanent facilitates compliance with the Plan by adding
certainty to the markets during periods of market volatility, which has
been approved and found by the Commission to be reasonably designed to
prevent potentially harmful price volatility in NMS Stocks. It has been
determined by the Commission that the Plan benefits markets and market
participants by helping to ensure orderly markets, and, based on the
data made available to the public and the Commission during the pilot
period for Chapter V, Section 3(d)(iv), the Plan does not negatively
impact options market quality during normal market conditions. Rather,
the Plan, as it is implemented under the obvious error pilot, functions
to protect against any unanticipated consequences in the options
markets during a limit or straddle state and add certainty on the
options markets. During a limit or

straddle state, determining theoretical value of an option may be a
subjective rather than an objective determination given the lack of a
reliable NBBO, which may create an unreasonable adverse selection
opportunity and discourage participants from providing liquidity during
limit and straddle states. Therefore, the Exchange believes eliminating
obvious error review in such states would, in turn, eliminate
uncertainty and confusion for investors and benefit investors by
encouraging more participation in light of the changes associated with
the Plan. As stated, the Exchange believes the other Options Pilots
rules provide additional measures designed to protect investors during
limit and straddle states. For example, the Exchange will reject Market
Orders during a Limit Up-Limit Down state to ensure that only those
orders with a limit price will be executed during a limit or straddle
state given the uncertainty of market prices during such a state.\17\
Accordingly, the Exchange believes that making the Options Pilots
permanent will further the goals of investor protection and fair and
orderly markets as the rules effectively address extraordinary market
volatility pursuant to the Plan.
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    \17\ See supra note 8.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change would
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change is
necessary to reflect that the Plan no longer operates as a pilot and
has been approved to operate on a permanent basis by the Commission. As
such, Chapter V, Section 3(d), which implement protections in
connection with the Plan, should be amended to operate on a permanent
basis. The Exchange understands that the other national securities
exchanges will also file similar proposals to make permanent their
respective pilot programs.\18\ Thus, the proposed rule change will help
to ensure consistency across market centers without implicating any
competitive issues.
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    \18\ In addition, the Exchange's proposal is substantially
similar to Cboe's recently approved rule change. See supra note 4.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

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

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \19\ and Rule 19b-
4(f)(6) thereunder.\20\
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    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \21\ normally
does not become operative prior to 30 days after the date of the
filing. However, Rule 19b-4(f)(6)(iii) \22\ permits the Commission to
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may become effective and operative immediately upon filing.
The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest, as
it will allow the current Options Pilots to continue on a permanent
basis without any changes, prior to the pilot expiration on October 18,
2019. For this reason, the Commission hereby waives the 30-day
operative delay and designates the proposed rule change as operative
upon filing.\23\
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    \21\ 17 CFR 240.19b-4(f)(6).
    \22\ 17 CFR 240.19b-4(f)(6)(iii).
    \23\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-BX-2019-038 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BX-2019-038. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-BX-2019-038 and should be submitted on
or before November 15, 2019.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
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    \24\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-23254 Filed 10-24-19; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: January 3, 2006 (Volume 71, Number 1)]
[Notices]
[Page 116-118]
[DOCID:fr03ja06-78]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-ORD-2005-0553; FRL-8016-5]

Request for Nominations for a Human Studies Review Board

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: The U.S. Environmental Protection Agency (EPA or Agency)
Office of the Science Advisor (OSA) is soliciting nominations of
qualified individuals to serve on a proposed Human Studies Review Board
(HSRB). The Agency anticipates establishment of such a board to provide
advice and recommendations on issues related to the scientific and
ethical review of human subjects research. EPA was directed to
establish such a Board pursuant to the 2006 EPA Appropriations Act and
included such a Board in a proposed rule for protection of subjects in
human research. See: ``Department of Interior, Environment, and Related
Agencies Appropriations Act, 2006'', Public Law No. 109-54 and
``Protections for Subjects in Human Research: Proposed Rule,'' 70 FR
53,838; September 12, 2005.

DATES: Nominations should be submitted to EPA no later than February 2,
2006.

ADDRESSES: Submit your nominations (``comments''), identified by Docket
ID No. EPA-HQ-ORD-2005-0553, by one of the following methods:
     http://www.regulations.gov: Follow the on-line

instructions for submitting comments.
     E-mail<EMAIL_ADDRESS>     Mail: ORD Docket, Environmental Protection Agency,
Mailcode: 28221T, 1200 Pennsylvania Ave., NW., Washington, DC 20460.
     Hand Delivery: EPA Docket Center (EPA/DC), Room B102, EPA
West Building, 1301 Constitution Avenue, NW., Washington, DC 20460,
Attention Docket ID No. EPA-HQ-ORD-2005-0553. Deliveries are only
accepted from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding
legal holidays. Special arrangements should be made for deliveries of
boxed information.

    Instructions: Direct your nominations to Docket ID No. EPA-HQ-ORD-
2005-0553. EPA's policy is that all nominations received will be
included in the public docket without change and may be made available
online at http://www.regulations.gov, including any personal

information provided, unless the nomination includes information
claimed to be Confidential Business Information (CBI) or other
information whose disclosure is restricted by statute. Do not submit
information that you consider to be CBI or otherwise protected through
http://www.regulations.gov or e-mail. The http://www.regulations.gov
Web site is an ``anonymous access'' system, which means EPA will not
know your identity or contact information unless you provide it in the
body of your nomination. If you send an e-mail nomination directly to
EPA, without going through http://www.regulations.gov, your e-mail

address will be automatically captured and included as part of the
nomination that is placed in the public docket and made available on
the Internet. If you submit a nomination electronically, EPA recommends
that you include your name and other contact information in the body of
your nomination and with any disk or CD-ROM you submit. If EPA cannot
read your nomination due to technical difficulties and cannot contact
you for clarification, EPA may not be able to consider it. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses.
    Docket: All documents in the docket are listed in the http://www.regulations.gov
 index. Although listed in the index, some

information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, will be publicly available only in hard copy.
Publicly available docket materials are available either electronically
in http://www.regulations.gov or in hard copy at the ORD Docket, EPA/

DC, EPA West, Room B102, 1301 Constitution Ave., NW., Washington, DC.
The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday
through Friday, excluding legal holidays. The telephone number for the
Public Reading Room is<PHONE_NUMBER>, and the telephone number for the
ORD Docket is<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Paul I. Lewis, Office of the Science
Advisor, Mail Code 8105R, Environmental Protection Agency, 1200
Pennsylvania Avenue, NW., Washington, DC 20460; telephone number: (202)
564-8381 fax number:<PHONE_NUMBER>, e-mail<EMAIL_ADDRESS>or
William Sette, Office of the Science Advisor, Mail Code 8105R,
Environmental Protection Agency, 1200 Pennsylvania Avenue, NW.,
Washington, DC 20460; telephone number:<PHONE_NUMBER>, fax number:
(202) 564-2070, e-mail<EMAIL_ADDRESS>
I. General Information

A. Does This Action Apply to Me?

    This action is directed to the public in general. This action may,
however, be of interest to persons who conduct or assess human research
on substances regulated by EPA or to persons who are or may be required
to conduct testing of chemical substances under the Federal Food, Drug,
and Cosmetic Act (FFDCA), the Federal Insecticide, Fungicide, and
Rodenticide Act (FIFRA), and the Food Quality Protection Act of 1996
(FQPA). Since other entities may also be interested, the Agency has not
attempted to describe all the specific entities that may be affected by
this action. If you have any questions regarding the applicability of
this action to a particular entity, consult the person listed under FOR
FURTHER INFORMATION CONTACT.

B. How Can I Access Electronic Copies of This Document and Other
Related Information?

    In addition to using regulations.gov, you may access this Federal
Register document electronically through the EPA Internet under the
Federal Register listings at http://www.epa.gov/fedrgstr/.

C. What Should I Consider as I Prepare My Nomination for EPA?

    You may find the following suggestions helpful for preparing your
nomination:
    1. Providing as much supporting information as possible about the
nominee, including contact information.
    2. Make sure to submit your nomination by the deadline in this
document.
    3. To ensure proper receipt by EPA, be sure to identify the docket
ID number assigned to this action in the subject line on the first page
of your response. You may also provide the name, date and Federal
Register citation.

SUPPLEMENTARY INFORMATION:

Background

    On August 2, 2005, the President signed into law the Department of
Interior, Environment, and Related Agencies Appropriations Act, 2006,
Public Law 109-54 (Appropriations Act), which provides appropriated
funds for the Environmental Protection Agency and other Federal
departments and agencies. Section 201 of the Appropriations Act
includes the following provision:

    None of the funds made available by this Act may be used by the
Administrator of the Environmental Protection Agency to accept,
consider or rely on third-party intentional dosing human toxicity
studies for pesticides, or to conduct intentional dosing human
toxicity studies for pesticides until the Administrator issues a
final rulemaking on this subject. The Administrator shall allow for
a period of not less than 90 days for public comment on the Agency's
proposed rule before issuing a final rule. Such rule shall not
permit the use of pregnant women, infants or children as subjects;
shall be consistent with the principles proposed in the 2004 report
of the National Academy of Sciences on intentional human dosing and
the principles of the Nuremberg Code with respect to human
experimentation; and shall establish an independent Human Subjects
Review Board. The final rule shall be issued no later than 180 days
after enactment of this Act.

    Consistent with the express Congressional directive, on September
12, 2005 (70 FR 53838), EPA published a Notice of Proposed Rulemaking
(NPRM) regarding protections for subjects in human research and the
establishment of the Human Studies Review Board (HSRB or Board).
    Concurrent with this rulemaking process, EPA is reevaluating older
registered pesticides with a goal of meeting the August 2006 deadline
for completing the reregistration of pesticide active ingredients with
food uses and the reassessment of tolerances mandated by section 408(q)
of the FFDCA, as amended by the 1996 Food Quality Protection Act (FQPA)
[Pub. L. 104-70]. In addition, EPA has received applications for
registration or amended registration of pesticide products. Under the
provisions of the Pesticide Registration Improvement Act (PRIA), EPA
has deadlines by which it must make a decision whether to approve new
applications for pesticide registrations or amendments to
registrations.
    EPA expects to issue the final rule in early 2006 after considering
all public comments provided to the Agency. However, once the rule is
finalized, there will be limited time between the establishment of the
HSRB and the mandatory completion dates for tolerance reassessment and
PRIA deadlines. Therefore, the Agency is initiating the actions
necessary to enable a HSRB to begin reviewing completed

human research that would be relevant to pending reregistration,
tolerance reassessment and new registration decisions, and in
accordance with the provisions of the final rule. The first step toward
establishing a HSRB is to solicit nominations for qualified individuals
to serve on the HSRB for a review of intentional dosing human studies.

Process and Deadline for Submitting Nominations

    Any interested person or organization may nominate qualified
individuals to be considered as prospective candidates for the HSRB.
Additional avenues and resources may be utilized in the solicitation of
nominees to encourage a broad pool of expertise. Nominees should be
experts who have sufficient professional qualifications, including
training and experience, to be capable of providing expert comments on
the ethical and/or scientific issues that may be considered by the
HSRB. Nominees are requested who are nationally recognized experts in
one or more of the following areas:
    Biostatistics: expertise in statistical design and analysis of
human subjects research studies.
    Human toxicology: Expertise in pharmacokinetic and toxicokinetic
studies, clinical trials, toxicology of cholinesterase inhibitors, and
other classes of environmental substances.
    Bioethics: Expertise in the ethics of research on human subjects;
research ethics.
    Human health risk assessment
    To be considered, all nominations should include: a current
curriculum vitae (C.V.) which provides the nominee's background,
qualifications, relevant research experience and publications; and a
brief biographical sketch (``biosketch''). The biosketch should be no
longer than one page and should contain the following information for
the nominee:
    (a) Current professional affiliations and positions held;
    (b) Area(s) of expertise, and research activities and publications
relevant to the HSRB;
    (c) Leadership positions in national associations or professional
publications or other significant distinctions;
    (d) Educational background, especially advanced degrees, including
when and from which institutions these were granted.

The credentials of nominees received in reply to this notice will be
compared to the specific expertise sought for the HSRB. Qualified
nominees who agree to be further considered will be included in a
smaller subset (known as the ``Short List''). This subset will be
posted on the OSA Web site http://www.epa.gov/osa/index.htm and will

include, for each candidate, the nominee's name and their biosketch.
Public comments will be accepted for 14 calendar days on the Short
List. During this comment period, the public will be requested to
provide relevant information or other documentation on nominees that
OSA should consider in evaluating the candidates. Board members will be
selected from the Short List.
    The selection of experts to serve on the HSRB will be based on the
function of the Board and the expertise needed. No interested
candidates shall be ineligible to serve by reason of their membership
on any other advisory committee to a Federal department or agency or
their employment by a Federal department or agency (except the EPA).
Other factors that will be considered during the selection process
include availability of the potential Board member to fully participate
in the Board's reviews, absence of any conflicts of interest,
impartiality, independence with respect to the matters under review,
and public comments to the Short List. Though financial conflicts of
interest, the appearance of lack of impartiality, lack of independence,
and bias may result in disqualification, the absence of such concerns
does not assure that a candidate will be selected to serve on the HSRB.
Numerous qualified candidates may be identified. Therefore, selection
decisions involve carefully weighing a number of factors including, but
not limited to, the candidates' areas of expertise and professional
qualifications, and responses to the Short List in achieving an overall
balance of different perspectives on the Board.
    If a prospective candidate for service on the HSRB is considered,
the candidate is subject to the provisions of 5 CFR part 2634,
Executive Branch Financial Disclosure, as supplemented by the EPA in 5
CFR part 6401. As such, the HSRB candidate is required to submit a
Confidential Financial Disclosure Form for Special Government Employees
Serving on Federal Advisory Committees at the U.S. Environmental
Protection Agency (EPA Form 3110-48 [5-02]) which shall fully disclose,
among other financial interests, the candidate's employment, stocks,
and bonds, and where applicable, sources of research support. The EPA
will evaluate the candidate's financial disclosure form to assess that
there are no financial conflicts of interest, no appearance of lack of
impartiality, and no prior involvement with the development of the
documents under consideration (including previous scientific peer
review) before the candidate is considered further for service on the
HSRB.
    Those who are selected from the pool of prospective candidates will
be asked to attend public meetings and to participate in the discussion
of key issues and assumptions at these meetings. In addition, they will
be asked to review and to help finalize the meeting minutes. The Agency
will consider all nominations of prospective candidates for this
meeting that are received on or before February 2, 2006. However, final
selection of members is a discretionary function of the Agency.
Nominations should be submitted by one of the methods listed under
ADDRESSES.

    Dated: December 22, 2005.
William H. Farland,
Chief Scientist, Office of the Science Advisor.
 [FR Doc. E5-8220 Filed 12-30-05; 8:45 am]

BILLING CODE 6560-50-P


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