[Federal Register Volume 82, Number 171 (Wednesday, September 6, 2017)]
[Proposed Rules]
[Pages 42050-42052]
[FR Doc No: 2017-18829]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 100

[Docket Number USCG-2017-0552]
RIN 1625-AA08

Special Local Regulation; Atlantic Ocean, Ft. Lauderdale, FL

AGENCY: Coast Guard, DHS.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Coast Guard proposes to establish a recurring special
local regulation for navigable waters of the Atlantic Ocean in the
vicinity of the Fort Lauderdale for the Grand Prix of the Seas. The
Fort Lauderdale Grand Prix of the Seas race course is located east of
South Beach Park and North of the Port Everglades inlet. Approximately
one hundred high-speed personal watercraft are expected to participate
in this annual event. The special local regulation is needed to protect
personnel, vessels, and the marine environment from potential hazards
during the race event. All vessels and persons in the regulated area
must follow the direction of Coast Guard personnel, law enforcement,
and race officials. We invite your comments on this proposed
rulemaking.

DATES: Comments and related material must be received by the Coast
Guard on or before October 6, 2017.

ADDRESSES: You may submit comments identified by docket number USCG-
2017-0552 using the Federal eRulemaking Portal at http://www.regulations.gov. See the ``Public Participation and Request for
Comments'' portion of the SUPPLEMENTARY INFORMATION section for further
instructions on submitting comments.

FOR FURTHER INFORMATION CONTACT: If you have questions about this
proposed rulemaking, call or email Petty Officer Mara J. Brown, Sector
Miami Waterways Management Division, U.S. Coast Guard; telephone (305)
535-4317, email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Table of Abbreviations

CFR Code of Federal Regulations
DHS Department of Homeland Security
FR Federal Register
NPRM Notice of proposed rulemaking
Sec.  Section
U.S.C. United States Code

II. Background, Purpose, and Legal Basis

    On June 7, 2017, the company Powerboat P1-USA, LLC notified the
Coast Guard that it will be conducting the Ft. Lauderdale Grand Prix of
the Seas annually. This event will occur yearly on one weekend (Friday,
Saturday, and Sunday) in November. The race course will be located
directly east of South Beach Park in Ft. Lauderdale, FL. The special
local regulation is intended to protect personnel, vessels, and the
marine environment. The Captain of the Port Miami (COTP) has determined
that potential hazards associated with the high speeds of the
participants during the races would be a safety concern for anyone who
would enter the race area.
    The purpose of this rulemaking is to ensure the safety of vessels
and the navigable waters within the established race area, marked with
buoys. The Coast Guard proposes this rulemaking under authority in 33
U.S.C. 1233.

III. Discussion of Proposed Rule

    The COTP proposes to establish a special local regulation for this
event occurring annually on one weekend (Friday, Saturday, and Sunday)
in November. The special local regulation would cover all navigable
waters within the established race area, marked with buoys,
approximately one mile north of the Port Everglades inlet. The duration
of the zone is intended to protect personnel, vessels, and the marine
environment in the navigable waters Fort Lauderdale Grand Prix of the
Seas race event. Only those vessels participating in the event may
enter, transit through, anchor in, or remain within the regulated area,
and all vessels and persons in the regulated area must follow the
direction of Coast Guard personnel, law enforcement, and race
officials. The proposed regulatory text appears at the end of this
document.

IV. Regulatory Analyses

    We developed this proposed rule after considering numerous statutes
and Executive orders related to rulemaking. Below we summarize our
analyses based on a number of these statutes and Executive orders and
we discuss First Amendment rights of protestors.

A. Regulatory Planning and Review

    Executive Orders 12866 and 13563 direct agencies to assess the
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits. Executive Order 13771 directs agencies to control
regulatory costs through a budgeting process. This NPRM has not been
designated a ``significant regulatory action,'' under Executive Order
12866. Accordingly, the NPRM has not been reviewed by the Office of
Management and Budget (OMB), and pursuant to OMB guidance it is exempt
from the requirements of Executive Order 13771.
    This regulatory action determination is based on the size,
location, and time-of-year of the special local regulation. Vessel
traffic will be able to safely transit around this regulated area,
which will impact a small designated area of the Atlantic Ocean in Fort
Lauderdale,

FL, directly adjacent to the shore, for three days.

B. Impact on Small Entities

    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as
amended, requires Federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this
proposed rule would not have a significant economic impact on a
substantial number of small entities.
    While some owners or operators of vessels intending to transit the
regulated area may be small entities, for the reasons stated in section
IV.A above, this proposed rule would not have a significant economic
impact on any vessel owner or operator.
    If you think that your business, organization, or governmental
jurisdiction qualifies as a small entity and that this rule would have
a significant economic impact on it, please submit a comment (see
ADDRESSES) explaining why you think it qualifies and how and to what
degree this rule would economically affect it.
    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this proposed rule. If the rule would affect
your small business, organization, or governmental jurisdiction and you
have questions concerning its provisions or options for compliance,
please contact the person listed in the FOR FURTHER INFORMATION CONTACT
section. The Coast Guard will not retaliate against small entities that
question or complain about this proposed rule or any policy or action
of the Coast Guard.

C. Collection of Information

    This proposed rule would not call for a new collection of
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3520).

D. Federalism and Indian Tribal Governments

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has 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. We have analyzed this proposed rule under that Order and
have determined that it is consistent with the fundamental federalism
principles and preemption requirements described in Executive Order
13132.
    Also, this proposed rule does not have tribal implications under
Executive Order 13175, Consultation and Coordination with Indian Tribal
Governments, because it would not have a substantial direct effect on
one or more Indian tribes, on the relationship between the Federal
Government and Indian tribes, or on the distribution of power and
responsibilities between the Federal Government and Indian tribes. If
you believe this proposed rule has implications for federalism or
Indian tribes, please contact the person listed in the FOR FURTHER
INFORMATION CONTACT section.

E. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this proposed rule would not
result in such an expenditure, we do discuss the effects of this rule
elsewhere in this preamble.

F. Environment

    We have analyzed this proposed rule under Department of Homeland
Security Management Directive 023-01 and Commandant Instruction
M16475.lD, which guide the Coast Guard in complying with the National
Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made
a preliminary determination that this action is one of a category of
actions that do not individually or cumulatively have a significant
effect on the human environment. This proposed rule involves a special
local regulation lasting three four days that will impact a small area
in the vicinity of the Port Everglades Inlet. It is categorically
excluded from further review under paragraph 34(h) of Figure 201 of the
Commandant Instructions. A preliminary Record of Environmental
Consideration supporting this determination is available in the docket
where indicated under ADDRESSES. We seek any comments or information
that may lead to the discovery of a significant environmental impact
from this proposed rule.

G. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters.
Protesters are asked to contact the person listed in the FOR FURTHER
INFORMATION CONTACT section to coordinate protest activities so that
your message can be received without jeopardizing the safety or
security of people, places, or vessels.

V. Public Participation and Request for Comments

    We view public participation as essential to effective rulemaking,
and will consider all comments and material received during the comment
period. Your comment can help shape the outcome of this rulemaking. If
you submit a comment, please include the docket number for this
rulemaking, indicate the specific section of this document to which
each comment applies, and provide a reason for each suggestion or
recommendation.
    We encourage you to submit comments through the Federal eRulemaking
Portal at http://www.regulations.gov. If your material cannot be
submitted using http://www.regulations.gov, contact the person in the
FOR FURTHER INFORMATION CONTACT section of this document for alternate
instructions.
    We accept anonymous comments. All comments received will be posted
without change to http://www.regulations.gov and will include any
personal information you have provided. For more about privacy and the
docket, visit http://www.regulations.gov/privacyNotice.
    Documents mentioned in this NPRM as being available in the docket,
and all public comments, will be in our online docket at http://www.regulations.gov and can be viewed by following that Web site's
instructions. Additionally, if you go to the online docket and sign up
for email alerts, you will be notified when comments are posted or a
final rule is published.

List of Subjects in 33 CFR Part 100

    Marine safety, Navigation (water), Reporting and recordkeeping
requirements, Waterways.

    For the reasons discussed in the preamble, the Coast Guard proposes
to amend 33 CFR part 100 as follows:

PART 100--SAFETY OF LIFE ON NAVIGABLE WATERS

0
1. The authority citation for part 100 continues to read as follows:

    Authority: 33 U.S.C. 1233.

0
2. Add Sec.  100.723 to read as follows:

Sec.  100.723  Special Local Regulation; Fort Lauderdale Grand Prix of
the Seas; Fort Lauderdale, FL.

    (a) Location. The following regulated area is established as a
special local regulation. All navigable waters contained within an
imaginary line connecting the following points: beginning at Point 1 in
position 26[deg]6'21'' N., 080[deg]5'51'' W.; thence west to Point 2 in
position 26[deg]6'21'' N., 080[deg]6'13'' W.; thence north to Point 3
in position 26[deg]6'57'' N., 080[deg]6'13'' W.; thence east to Point 4
in position 26[deg]6'57'' N., 080[deg]5'52'' W., thence back to origin
at point 1. All coordinates are North American Datum 1983.
    (b) Definition. The following definitions apply to this section:
    (1) The term ``designated representative'' means Coast Guard Patrol
Commanders, including Coast Guard coxswains, petty officers, and other
officers operating Coast Guard vessels, and Federal, State, and Local
officers designated by or assisting the Captain of the Port Miami in
the enforcement of the regulated areas.
    (2) The term ``Patrol Commander'' means a commissioned, warrant, or
petty officer of the Coast Guard who has been designated by the
respective Coast Guard Sector Commander to enforce these regulations.
    (3) The term ``spectators'' means all persons and vessels not
registered with the event sponsor as participants or official patrol
vessels.
    (c) Regulations.
    (1) All non-participant persons and vessels are prohibited from
entering, transiting through, anchoring in, or remaining within the
regulated area unless authorized by the Captain of the Port Miami or a
designated representative.
    (2) Persons and vessels desiring to enter, transit through, anchor
in, remain within or transit in excess of wake speed within any of the
regulated area may contact the Captain of the Port Miami by telephone
at<PHONE_NUMBER>, or a designated representative via VHF-FM radio on
channel 16 to request authorization. If authorization is granted, all
persons and vessels receiving such authorization must comply with the
instructions of the Captain of the Port Miami or a designated
representative.
    (3) The Coast Guard will use all appropriate means to notify the
public in advance of an event of the enforcement of these regulations
to include publishing a Notice of Enforcement in the Federal Register
and through the local Notice to Mariners and Broadcast Notice to
Mariners.
    (d) Enforcement date. This section will be enforced annually on a
weekend (Friday, Saturday and Sunday) in the month of November.

     Dated: August 22, 2017.
J.H.D. Solomon,
Captain, U.S. Coast Guard, Acting Captain of the Port Miami.
[FR Doc. 2017-18829 Filed 9-5-17; 8:45 am]
 BILLING CODE 9110-04-P


[Federal Register Volume 86, Number 138 (Thursday, July 22, 2021)]
[Notices]
[Page 38737]
[FR Doc No: 2021-15618]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Internal Agency Docket No. FEMA-3561-EM; Docket ID FEMA-2021-0001]

Florida; Emergency and Related Determinations

AGENCY: Federal Emergency Management Agency, Homeland Security (DHS).

ACTION: Notice.

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SUMMARY: This is a notice of the Presidential declaration of an
emergency for the State of Florida (FEMA-3561-EM), dated July 4, 2021,
and related determinations.

DATES: The declaration was issued July 4, 2021.

FOR FURTHER INFORMATION CONTACT: Dean Webster, Office of Response and
Recovery, Federal Emergency Management Agency, 500 C Street SW,
Washington, DC 20472,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: Notice is hereby given that, in a letter
dated July 4, 2021, the President issued an emergency declaration under
the authority of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act, 42 U.S.C. 5121-5207 (the Stafford Act), as follows:

    I have determined that the emergency conditions in certain areas
of the State of Florida resulting from Tropical Storm Elsa beginning
on July 4, 2021, and continuing, are of sufficient severity and
magnitude to warrant an emergency declaration under the Robert T.
Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C.
5121 et seq. (``the Stafford Act''). Therefore, I declare that such
an emergency exists in the State of Florida.
    You are authorized to provide appropriate assistance for
required emergency measures, authorized under Title V of the
Stafford Act, to save lives and to protect property and public
health and safety, and to lessen or avert the threat of a
catastrophe in the designated areas. Specifically, you are
authorized to provide assistance for emergency protective measures
(Category B), limited to direct Federal assistance and reimbursement
for mass care including evacuation and shelter support.
    Consistent with the requirement that Federal assistance be
supplemental, any Federal funds provided under the Stafford Act for
Public Assistance will be limited to 75 percent of the total
eligible costs. In order to provide Federal assistance, you are
hereby authorized to allocate from funds available for these
purposes such amounts as you find necessary for Federal emergency
assistance and administrative expenses.
    Further, you are authorized to make changes to this declaration
for the approved assistance to the extent allowable under the
Stafford Act.

    The Federal Emergency Management Agency (FEMA) hereby gives notice
that pursuant to the authority vested in the Administrator, Department
of Homeland Security, under Executive Order 12148, as amended, Kevin A.
Wallace, of FEMA is appointed to act as the Federal Coordinating
Officer for this declared emergency.
    The following areas of the State of Florida have been designated as
adversely affected by this declared emergency:

    Charlotte, Citrus, Collier, DeSoto, Hardee, Hernando,
Hillsborough, Lee, Levy, Manatee, Miami-Dade, Monroe, Pasco,
Pinellas, and Sarasota Counties for emergency protective measures
(Category B), limited to direct Federal assistance and reimbursement
for mass care including evacuation and shelter support.

    The following Catalog of Federal Domestic Assistance Numbers
(CFDA) are to be used for reporting and drawing funds: 97.030,
Community Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis
Counseling; 97.033, Disaster Legal Services; 97.034, Disaster
Unemployment Assistance (DUA); 97.046, Fire Management Assistance
Grant; 97.048, Disaster Housing Assistance to Individuals and
Households In Presidentially Declared Disaster Areas; 97.049,
Presidentially Declared Disaster Assistance--Disaster Housing
Operations for Individuals and Households; 97.050, Presidentially
Declared Disaster Assistance to Individuals and Households--Other
Needs; 97.036, Disaster Grants--Public Assistance (Presidentially
Declared Disasters); 97.039, Hazard Mitigation Grant.

Deanne Criswell,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2021-15618 Filed 7-21-21; 8:45 am]
BILLING CODE 9111-23-P


[Federal Register Volume 78, Number 61 (Friday, March 29, 2013)]
[Notices]
[Pages 19352-19353]
[FR Doc No: 2013-07298]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69233; File No. SR-NASDAQ-2013-028]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order
Approving a Proposed Rule Change for the Permanent Approval of a Pilot
Program To Permit NASDAQ To Accept Inbound Orders Routed by NASDAQ
Execution Services LLC From the BX Equities Market and PSX

March 25, 2013.

I. Introduction

    On February 6, 2013, The NASDAQ Stock Market LLC (``Exchange'' or
``NASDAQ'') 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
proposed rule change requesting permanent approval of the Exchange's
pilot program that permits the Exchange to accept inbound orders routed
by NASDAQ Execution Services LLC (``NES'') from the NASDAQ OMX BX
Equities Market of NASDAQ OMX BX, Inc. (``BX'') and the NASDAQ OMX PSX
facility (``PSX'') of NASDAQ OMX PHLX LLC (``PHLX''). The proposed rule
change was published for comment in the Federal Register on February
14, 2013.\3\ The Commission received no comment letters regarding the
proposed rule change. This order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 68891 (February 8,
2013), 78 FR 10670 (``Notice'').
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II. Background

    NASDAQ Rule 2160(a) prohibits the Exchange or any entity with which
it is affiliated from, directly or indirectly, acquiring or maintaining
an ownership interest in, or engaging in a business venture with, an
Exchange member or an affiliate of an Exchange member in the absence of
an effective filing under Section 19(b) of the Act.\4\ NES is a
registered broker-dealer that is a member of the Exchange, and
currently provides to members of the Exchange optional routing services
to other markets.\5\ NES is owned by NASDAQ OMX Group, Inc. (``NASDAQ
OMX''), which also owns three registered securities exchanges--the
Exchange, BX, and PHLX.\6\ Thus, NES is an affiliate of these
exchanges.\7\ Absent an effective filing, NASDAQ Rule 2160(a) would
prohibit NES from being a member of the Exchange.
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    \4\ 15 U.S.C. 78s(b). NASDAQ Rule 2160 also prohibits a NASDAQ
member from being or becoming an affiliate of NASDAQ, or an
affiliate of an entity affiliated with NASDAQ, in the absence of an
effective filing under Section 19(b). See NASDAQ Rule 2160(a)(2).
    \5\ See NASDAQ Rule 4758. See also Notice, supra note 3, 10670.
    \6\ See Securities Exchange Act Release No. 58324 (August 7,
2008), 73 FR 46936 (August 12, 2008) (SR-BSE-2008-02; SR-BSE-2008-
23; SR-BSE-2008-25; SR-BSECC-2008-01) (order approving NASDAQ OMX's
acquisition of BX) (``BX Acquisition Order''); Securities Exchange
Act Release No. 58179 (July 17, 2008), 73 FR 42874 (July 23, 2008)
(SR-Phlx-2008-31) (order approving NASDAQ OMX's acquisition of PHLX)
(``PHLX Acquisition Order'').
    \7\ See id. See also Notice, supra note 3, at 10670; and
Securities Exchange Act No. 59153 (December 23, 2008), 73 FR 80485
(December 31, 2008) (SR-NASDAQ-2008-098). On September 7, 2007,
NASDAQ filed a proposed rule change codifying the function of NES.
See Securities Exchange Release No. 56708 (October 26, 2007), 72 FR
61925 (November 1, 2011) (SR-NASDAQ-2007-078).
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    On October 6, 2011, the Exchange filed a proposed rule change for
NASDAQ to accept inbound orders routed from the NASDAQ OMX BX Equities
Market of BX and PSX on a pilot basis subject to certain limitations
and conditions.\8\ On February 6, 2013, the Exchange filed the instant
proposal to allow the Exchange to accept such orders routed inbound by
NES from BX and PSX on a permanent basis subject to certain limitations
and conditions.\9\
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    \8\ See Securities Exchange Act Release No. 65554 (October 13,
2011), 76 FR 65311 (October 20, 2011) (SR-NASDAQ-2011-142) (notice
of proposed rule change to allow NASDAQ to accept inbound orders
from the NASDAQ OMX BX Equities Market of BX and PSX on a one-year
pilot basis). See also, Securities Exchange Act Release No. 67997
(October 5, 2012), 77 FR 62293 (October 12, 2012) (extending one-
year pilot for an additional six-month period).
    \9\ See Notice, supra note 3.
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III. Discussion and Commission Findings

    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.\10\ Specifically, the Commission finds that the proposed rule
change is consistent with Section 6(b)(1) of the Act,\11\ which
requires, among other things, that a national securities exchange be so
organized and have the capacity to carry out the purposes of the Act,
and to comply and enforce compliance by its members and persons
associated with its members, with the provisions of the Act, the rules
and regulation thereunder, and the rules of the Exchange. Further, the
Commission finds that the proposed rule change is consistent with
Section 6(b)(5) of the Act,\12\ which requires, among other things,
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 foster cooperation and coordination
with persons engaged in regulating, clearing, settling, and processing
information with respect to, and facilitating transactions in
securities; to remove impediments to and perfect the mechanism of a
free and open market and a national market system; and, in general, to
protect investors and the public interest. Section 6(b)(5) also
requires that the rules of an exchange not be designed to permit unfair
discrimination among customers, issuers, brokers, or dealers.
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    \10\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition and
capital formation. 15 U.S.C. 78c(f).
    \11\ 15 U.S.C. 78f(b)(1).
    \12\ 15 U.S.C. 78f(b)(5).
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    Recognizing that the Commission has previously expressed concern
regarding the potential for conflicts of interest in instances where a
member firm is affiliated with an exchange of which it is a member, the
Exchange previously proposed, and the Commission approved, limitations
and conditions on NES's affiliation with the Exchange.\13\ Also
recognizing that the Commission has expressed concern regarding the
potential for conflicts of interest in instances where a member firm is
affiliated with an exchange to which it is routing orders, the Exchange
previously implemented limitations and conditions to NES's affiliation
with the Exchange to permit the Exchange to accept inbound orders that
NES routes in its capacity as a facility of BX and PHLX on a pilot
basis.\14\ The Exchange has proposed to permit NASDAQ to accept inbound
orders that NES routes in its capacity as a facility of BX and PHLX on
a permanent basis, subject to the same limitations and conditions of
this pilot:
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    \13\ See supra, note 7, 73 FR at 80486. See also Notice, supra
note 3, at 10670 n.8 and accompanying text.
    \14\ See Notice, supra note 3, at 10670.
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     First, the Exchange and the Financial Industry Regulatory
Authority (``FINRA'') will maintain a Regulatory Contract, as well as
an agreement pursuant to Rule 17d-2 under the Act (``17d-2
Agreement'').\15\ Pursuant to the Regulatory Contract and the 17d-2
Agreement, FINRA will be allocated regulatory responsibilities to
review NES's compliance with certain NASDAQ rules.\16\ Pursuant to the
Regulatory Contract, however, the

Exchange retains ultimate responsibility for enforcing its rules with
respect to NES.
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    \15\ 17 CFR 240.17d-2.
    \16\ NES is also subject to independent oversight by FINRA, its
designated examining authority, for compliance with financial
responsibility requirements.
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     Second, FINRA will monitor NES for compliance with
NASDAQ's trading rules, and will collect and maintain certain related
information.\17\
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    \17\ Pursuant to the Regulatory Contract, both FINRA and the
Exchange will collect and maintain all alerts, complaints,
investigations and enforcement actions in which NES (in its capacity
as a facility of BX and PHLX routing orders to the Exchange) is
identified as a participant that has potentially violated applicable
Commission or Exchange rules. The Exchange and FINRA will retain
these records in an easily accessible manner in order to facilitate
any potential review conducted by the Commission's Office of
Compliance Inspections and Examinations. See Notice, supra note 3,
at 10670 n.11.
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     Third, FINRA will provide a report to the Exchange's chief
regulatory officer (``CRO''), on a quarterly basis, that: (i)
Quantifies all alerts (of which the Exchange or FINRA is aware) that
identify NES as a participant that has potentially violated Commission
or Exchange rules, and (ii) lists all investigations that identify NES
as a participant that has potentially violated Commission or NASDAQ
rules.
     Fourth, the Exchange has in place NASDAQ Rule 2160(c),
which requires NASDAQ OMX, as the holding company owning both the
Exchange and NES, to establish and maintain procedures and internal
controls reasonably designed to ensure that NES does not develop or
implement changes to its system, based on non-public information
obtained regarding planned changes to the Exchange's systems as a
result of its affiliation with the Exchange, until such information is
available generally to similarly situated Exchange members, in
connection with the provision of inbound order routing to the Exchange.
    The Exchange stated that it has met all the above-listed
conditions. By meeting such conditions, the Exchange believes that it
has set up mechanisms that protect the independence of the Exchange's
regulatory responsibility with respect to NES, and has demonstrated
that NES cannot use any information advantage it may have because of
its affiliation with the Exchange.\18\ In the past, the Commission has
expressed concern that the affiliation of an exchange with one of its
members raises potential conflicts of interest, and the potential for
unfair competitive advantage.\19\ Although the Commission continues to
be concerned about potential unfair competition and conflicts of
interest between an exchange's self-regulatory obligations and its
commercial interest when the exchange is affiliated with one of its
members, for the reasons discussed below, the Commission believes that
it is consistent with the Act to permit NES, in its capacity as a
facility of BX and PHLX, to route orders inbound to the Exchange on a
permanent basis instead of a pilot basis, subject to the limitations
and conditions described above.\20\
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    \18\ See Notice, supra note 3, at 10671.
    \19\ See, e.g., Securities Exchange Act Release Nos. 54170 (July
18, 2006), 71 FR 42149 (July 25, 2006) (SR-NASDAQ-2006-006) (order
approving NASDAQ's proposal to adopt NASDAQ Rule 2140, restricting
affiliations between NASDAQ and its members); 53382 (February 27,
2006), 71 FR 11251 (March 6, 2006) (SR-NYSE-2005-77) (order
approving the combination of the New York Stock Exchange, Inc. and
Archipelago Holdings, Inc.); 58673 (September 29, 2008), 73 FR 57707
(October 3, 2008) (SR-Amex-2008-62 and SR-NYSE-2008-60) (order
approving the combination of NYSE Euronext and the American Stock
Exchange LLC); 59135 (December 22, 2008), 73 FR 79954 (December 30,
2008) (SR-ISE-2009-85) (order approving the purchase by ISE Holdings
of an ownership interest in Direct Edge Holdings LLC); 59281
(January 22, 2009), 74 FR 5014 (January 28, 2009) (SR-NYSE-2008-120)
(order approving a joint venture between NYSE and BIDS Holdings
L.P.); 58375 (August 18, 2008), 73 FR 49498 (August 21, 2008) (File
No. 10-182) (order granting the exchange registration of BATS
Exchange, Inc.); 61698 (March 12, 2010), 75 FR 13151 (March 18,
2010) (File Nos. 10-194 and 10-196) (order granting the exchange
registration of EDGX Exchange, Inc. and EDGA Exchange, Inc.); and
62716 (August 13, 2010), 75 FR 51295 (August 19, 2010) (File No. 10-
198) (order granting the exchange registration of BATS-Y Exchange,
Inc.).
    \20\ The Commission notes that these limitations and conditions
are consistent with those previously approved by the Commission for
other exchanges. See, e.g., Securities Exchange Act Release Nos.
67256 (June 26, 2012) 77 FR 39277 (July 2, 2012) (SR-BX-2012-030);
and 64090 (March 17, 2011), 76 FR 16462 (March 23, 2011) (SR-BX-
2011-007).
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    The Exchange has proposed four ongoing conditions applicable to
NES's routing activities, which are enumerated above. The Commission
believes that these conditions will mitigate its concerns about
potential conflicts of interest and unfair competitive advantage. In
particular, the Commission believes that FINRA's oversight of NES,\21\
combined with FINRA's monitoring of NES's compliance with the
Exchange's rules and quarterly reporting to the Exchange, will help to
protect the independence of the Exchange's regulatory responsibilities
with respect to NES. The Commission also believes that the Exchange's
Rule 2160 is designed to ensure that NES cannot use any information
advantage it may have because of its affiliation with the Exchange.
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    \21\ This oversight will be accomplished through the 17d-2
Agreement between FINRA and the Exchange and the Regulatory
Contract. See Notice, supra note 3, at 10670 n.10 and accompanying
text.
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\22\ that the proposed rule change (SR-NASDAQ-2013-028) be, and
hereby is, approved.
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    \22\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
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    \23\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013-07298 Filed 3-28-13; 8:45 am]
BILLING CODE 8011-01-P