[Federal Register Volume 88, Number 42 (Friday, March 3, 2023)]
[Notices]
[Pages 13477-13486]
[FR Doc No: 2023-04357]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96990; File No. SR-Phlx-2023-06]

Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Phlx
Options 7, Section 4, Multiply Listed Options Fees

February 27, 2023.
    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 February 22, 2023, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``Commission'')
the proposed rule change as described in Items I, II, and III, below,
which Items have been prepared by the Exchange. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend Phlx's Pricing Schedule at Options
7, Section 4, ``Multiply Listed Options Fees (Includes options
overlying equities, ETFs, ETNs and indexes which are Multiply Listed)
(Excludes SPY).'' \3\
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    \3\ On February 10, 2023, the Exchange withdrew SR-Phlx-2023-03
and replaced it with SR-Phlx-2023-05. On February 22, 2023, SR-Phlx-
2023-05 was withdrawn and replaced with the instant filing.
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    The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/phlx/rules, 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
    Phlx proposes to amend its Pricing Schedule at Options 7, Section
4, ``Multiply Listed Options Fees (Includes options overlying equities,
ETFs, ETNs and indexes which are Multiply Listed) (Excludes SPY).''
Specifically, Phlx proposes to: (1) to remove its current Qualified
Contingent Cross (``QCC'') Rebate Schedule and propose a new QCC Rebate
and QCC Growth Tier Rebate; (2) amend the Monthly Firm Fee

Cap; and (3) propose a new Floor Transaction (Open Outcry) Floor Broker
Incentive Program. Each change is described below.
QCC Rebates
    Today, the Exchange assesses a $.20 per contract QCC Transaction
Fee for a Lead Market Maker,\4\ Market Maker,\5\ Firm \6\ and Broker-
Dealer.\7\ Customers \8\ and Professionals \9\ are not assessed a QCC
Transaction Fee. QCC Transaction Fees apply to electronic QCC Orders
\10\ and Floor QCC Orders.\11\ Rebates are paid on all qualifying
executed electronic QCC Orders and Floor QCC Orders based on the below
QCC Rebate Schedule: \12\
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    \4\ The term ``Lead Market Maker'' applies to transactions for
the account of a Lead Market Maker (as defined in Options 2, Section
12(a)). A Lead Market Maker is an Exchange member who is registered
as an options Lead Market Maker pursuant to Options 2, Section
12(a). An options Lead Market Maker includes a Remote Lead Market
Maker which is defined as an options Lead Market Maker in one or
more classes that does not have a physical presence on an Exchange
floor and is approved by the Exchange pursuant to Options 2, Section
11. See Options 7, Section 1(c). The term ``Floor Lead Market
Maker'' is a member who is registered as an options Lead Market
Maker pursuant to Options 2, Section 12(a) and has a physical
presence on the Exchange's trading floor. See Options 8, Section
2(a)(3).
    \5\ The term ``Market Maker'' is defined in Options 1, Section
1(b)(28) as a member of the Exchange who is registered as an options
Market Maker pursuant to Options 2, Section 12(a). A Market Maker
includes SQTs and RSQTs as well as Floor Market Makers. See Options
7, Section 1(c). The term ``Floor Market Maker'' is a Market Maker
who is neither an SQT or an RSQT. A Floor Market Maker may provide a
quote in open outcry. See Options 8, Section 2(a)(4).
    \6\ The term ``Firm'' applies to any transaction that is
identified by a member or member organization for clearing in the
Firm range at The Options Clearing Corporation. See Options 7,
Section 1(c).
    \7\ The term ``Broker-Dealer'' applies to any transaction which
is not subject to any of the other transaction fees applicable
within a particular category. See Options 7, Section 1(c).
    \8\ The term ``Customer'' applies to any transaction that is
identified by a member or member organization for clearing in the
Customer range at The Options Clearing Corporation (``OCC'') which
is not for the account of a broker or dealer or for the account of a
``Professional'' (as that term is defined in Options 1, Section
1(b)(45)). See Options 7, Section 1(c).
    \9\ The term ``Professional'' applies to transactions for the
accounts of Professionals, as defined in Options 1, Section 1(b)(45)
means any person or entity that (i) is not a broker or dealer in
securities, and (ii) places more than 390 orders in listed options
per day on average during a calendar month for its own beneficial
account(s). See Options 7, Section 1(c).
    \10\ Electronic QCC Orders are described in Options 3, Section
12.
    \11\ Floor QCC Orders are described in Options 8, Section 30(e).
    \12\ Volume resulting from all executed electronic QCC Orders
and Floor QCC Orders, including Customer-to-Customer, Customer-to-
Professional, and Professional-to-Professional transactions and
excluding dividend, merger, short stock interest or reversal or
conversion strategy executions, is aggregated in determining the
applicable volume tier.

                           QCC Rebate Schedule
------------------------------------------------------------------------
                                                                 Rebate
           Tier                         Threshold                 per
                                                                contract
------------------------------------------------------------------------
Tier 1....................  0 to 999,999 contracts in a month      $0.09
Tier 2....................  1,000,000 contracts or more in a        0.20
                             month.
------------------------------------------------------------------------

The Exchange does not pay a QCC Rebate where the transaction is either:
(i) Customer-to-Customer; (ii) Customer-to-Professional; (iii)
Professional-to-Professional; or (iv) a dividend, merger, short stock
interest or reversal or conversion strategy execution (as defined in
Options 7, Section 4).
    The Exchange proposes to remove the existing QCC Rebate Schedule
and replace those rebates with new QCC Rebates in new Section A as well
as a QCC Growth Tier Rebate in new Section B. The Exchange proposes to
insert a new title ``QCC Transaction Fee'' before the paragraph which
describes QCC fees.
    The Exchange proposes to add a new title ``A. QCC Rebate'' to
describe its proposed QCC Rebates. The Exchange proposes to pay a QCC
Rebate of $0.12 per contract on electronic QCC Orders, as defined in
Options 3, Section 12, and Floor QCC Orders, as defined in Options 8,
Section 30(e), when a QCC Order is comprised of a Customer or
Professional order on one side and a Lead Market Maker, Market Maker,
Broker-Dealer, or Firm order on the other side. The Exchange proposes
to increase this rebate to $0.17 per contract in the event that a
member or member organization executes greater than 1,000,000
qualifying QCC contracts in a given month. The Exchange also proposes
to pay a new QCC Rebate of $0.14 per contract on electronic QCC Orders,
as defined in Options 3, Section 12, and Floor QCC Orders, as defined
in Options 8, Section 30(e), when a QCC Order is comprised of a Lead
Market Maker, Market Maker, Broker-Dealer, or Firm order on one side
and a Lead Market Maker, Market Maker, Broker-Dealer, or Firm order on
the other side. The Exchange proposes to increase this rebate to $0.19
per contract in the event that a member or member organization executes
greater than 1,000,000 qualifying QCC contracts in a given month.
    As is the case today, the two new proposed QCC rebates would be
paid on all qualifying executed electronic QCC Orders, as defined in
Options 3, Section 12, and Floor QCC Orders, as defined in Options 8,
Section 30(e), except where the transaction is either: (i) Customer-to-
Customer; (ii) Customer-to-Professional; and (iii) Professional-to-
Professional. Today, the Exchange excludes dividend, merger, short
stock interest or reversal or conversion strategy executions, as
defined in Options 7, Section 4, as qualifying transactions. At this
time, the Exchange proposes to exclude all strategy executions within
Options 7, Section 4, (dividend, merger, short stock interest, reversal
and conversion, jelly roll, and box spread strategy executions) as
qualifying transactions.
    Further, as is the case today, volume resulting from all executed
electronic QCC Orders and Floor QCC Orders, including Customer-to-
Customer, Customer-to-Professional, and Professional-to-Professional
transactions and excluding dividend, merger, short stock interest or
reversal or conversion strategy executions, is aggregated in
determining the applicable volume tier. With this proposed change, the
Exchange would aggregate the applicable member or member organization
qualifying QCC contract volume in a given month which includes volume
resulting from all executed electronic QCC Orders and Floor QCC Orders,
including Customer-to-Customer, Customer-to-Professional, and
Professional-to-Professional transactions, as is the case today, and
would exclude all strategy executions within Options 7, Section 4,
(dividend, merger, short stock interest, reversal and conversion, jelly
roll, and box spread strategy executions) as qualifying transactions.
    The Exchange notes that Customers and Professionals are not
assessed a QCC Transaction Fee while all other market participants pay
a QCC Transaction Fee of $0.20 per contract. The Exchange proposes to
pay greater rebates where the two contra-parties to a QCC Order are not
Customers and Professionals as greater QCC transaction fees are being
assessed to Lead Market Maker, Market Maker, Broker-Dealer or Firm
orders. These QCC Rebates are intended to encourage Phlx members and
member organizations to transact a greater number of QCC Orders on
Phlx.
    Additionally, the Exchange proposes to establish a new QCC Growth
Tier Rebate and title that new section as ``B. QCC Growth Tier
Rebate''. This QCC Growth Tier Rebate is intended to encourage Phlx
members and member organizations to transact a greater number of QCC
Orders on Phlx. In order to qualify for the QCC Growth Tier Rebate, a
member's or member

organization's total floor transaction,\13\ and electronic QCC Orders
and Floor QCC Orders volume (``QCC transaction volume'') must exceed
12,500,000 contracts in a given month. In addition to the
aforementioned criteria, the member's or member organization's
respective Phlx House Account \14\ must execute QCC transaction volume
of 250,000 or more contracts in excess of the member's or member
organization's QCC transaction volume in January 2023. For members or
member organizations with no QCC transaction volume in January 2023,
the QCC transaction volume, in their respective Phlx House Account,
must be 250,000 or more contracts in a given month.
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    \13\ The term ``floor transaction'' is a transaction that is
effected in open outcry on the Exchange's trading floor. See Phlx
Options 7, Section 1(c). Of note, the term ``floor transaction'' is
more broadly defined than the term ``Open Outcry Floor Transaction''
which is discussed herein and is a subset of the term ``floor
transaction''.
    \14\ Each Phlx member or member organization is required to
establish one Phlx House Account with the Exchange's Membership
Department. Only one Phlx House Account is required to transact
business on Phlx. The Exchange assesses a $50.00 a month account fee
for this account as provided for within Options 7, Section 8A. A
Phlx member or member organization has the option of acquiring
multiple Phlx House Accounts depending on a member's or member
organization's business model and how they elect to organize their
business.
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    The Exchange also proposes to offer an alternative qualification to
achieve the QCC Growth Tier Rebate. A member's or member organization's
Open Outcry Floor Transaction volume in a given month must exceed
500,000 contracts. In addition to the aforementioned criteria, a
member's or member organization's respective Phlx House Account must
execute QCC transaction volume of 2,500,000 or more contracts in excess
of the member's or member organization's QCC transaction volume in
January 2023. For members or member organizations with no QCC
transaction volume in January 2023, the QCC transaction volume, in
their respective Phlx House Account, must be 2,500,000 or more
contracts in a given month.
    As proposed for the QCC Growth Tier Rebate, the term ``Open Outcry
Floor Transaction'' includes all transactions executed in open outcry
on Phlx's trading floor except: (1) dividend, merger, short stock
interest, reversal and conversion, jelly roll, and box spread strategy
executions as defined in this Options 7, Section 4; (2) Cabinet
Transactions as defined in Options 8, Section 33; and (3) Customer-to-
Customer transactions.
    The Exchange proposes to pay the QCC Growth Tier Rebates per Phlx
House Account. The Exchange will pay a $0.20 per contract QCC Growth
Tier Rebate on a QCC Order comprised of a Customer or Professional
order on one side and a Lead Market Maker, Market Maker, Broker-Dealer,
or Firm order on the other side. Further, the Exchange will pay a $0.26
per contract QCC Growth Tier Rebate on a QCC Order comprised of a Lead
Market Maker, Market Maker, Broker-Dealer, or Firm order on one side
and a Lead Market Maker, Market Maker, Broker-Dealer, or Firm order on
the other side. Finally, members and member organizations will be
entitled to one QCC Rebate in a given month, either the QCC Rebate in
Section A or the QCC Growth Tier Rebate in Section B in a given month,
but not both.
    The Exchange believes that the proposed QCC Rebates in proposed
Section A and the proposed QCC Growth Tier Rebate in Section B will
encourage market participants to send QCC orders to Phlx for execution
in an effort to earn higher QCC Rebates.
    The Exchange proposes to add a new title before the Monthly Market
Maker Cap rule text which states, ``Monthly Market Maker Cap''.
Monthly Firm Fee Cap
    The Exchange proposes to add a new title prior to the paragraph
which describes Phlx's Monthly Firm Fee Cap which states, ``Monthly
Firm Fee Cap and Facilitation''.
    Today, Firms are subject to a maximum fee of $150,000 (``Monthly
Firm Fee Cap''). Firm Floor Option Transaction Charges and QCC
Transaction Fees, in the aggregate, for one billing month do not exceed
the Monthly Firm Fee Cap per member or member organization provided
such members or member organizations are trading in their own
proprietary account. Today, the Monthly Firm Fee Cap and all dividend,
merger, and short stock interest strategy executions; transactions in
broad-based index options symbols listed within Options 7, Section 5.A
are excluded from the Monthly Firm Fee Cap. Today, reversal and
conversion, jelly roll and box spread strategy executions and QCC
Transaction Fees are included in the Monthly Firm Fee Cap.\15\
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    \15\ Members and member organizations must notify the Exchange
in writing of all accounts in which the member or member
organization is not trading in its own proprietary account. The
Exchange will not make adjustments to billing invoices where
transactions are commingled in accounts which are not subject to the
Monthly Firm Fee Cap.
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    At this time, the Exchange proposes two changes to the Monthly Firm
Fee Cap. First, the Exchange proposes to increase the Monthly Firm Fee
Cap from $150,000 to $200,000. Second, instead of not assessing Firms
any fee once the Monthly Firm Fee Cap is exceeded, the Exchange
proposes to instead assess a nominal transaction fee of $0.02 per
capped contract once a Firm exceeds the Monthly Firm Fee Cap unless no
fee \16\ is charged or the fee is waived.\17\ The Exchange proposes to
amend the text within Options 7, Section 4 to state,
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    \16\ Today, Firms pay an electronic Options Transaction Charge
of $0.48 per contract in Penny Symbols for simple orders and $0.40
per contract in Penny Symbols for complex orders. Also, Firms pay a
Floor Options Transaction Charge of $0.25 per contract in Penny
Symbols. Today, Firms pay an electronic Options Transaction Charge
of $0.75 per contract in Non-Penny Symbols and a Floor Options
Transactions Charge of $0.25 per contract in Non-Penny Symbols. See
Options 7, Section 4.
    \17\ Today, the Firm Floor Options Transaction Charges is waived
for members executing facilitation orders pursuant to Options 8,
Section 30 when such members are trading in their own proprietary
account (including Cabinet Options Transaction Charges). The Firm
Floor Options Transaction Charges will be waived for the buy side of
a transaction if the same member or its affiliates under Common
Ownership represents both sides of a Firm transaction when such
members are trading in their own proprietary account. See Options 7,
Section 4.

    Firms are subject to a $200,000 ``Monthly Firm Fee Cap''. Firm
Floor Option Transaction Charges and QCC Transaction Fees, as
defined in this section above, in the aggregate, for one billing
month that exceed the Monthly Firm Fee Cap per member or member
organization, when such members or member organizations are trading
in their own proprietary account, will be subject to a reduced
transaction fee of $0.02 per capped contract unless there is no fee
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or the fee is waived.

While the Exchange would be increasing the cap as well as fees for
Firms with this proposal, the Exchange believes that the Monthly Firm
Fee Cap still serves to lower fees for Firms that transact certain
qualifying volume on Phlx, thus enabling these Firms the ability to
lower costs.
    Additionally, the Exchange proposes to amend the types of strategy
executions that will be included in the Monthly Firm Fee Cap. Today,
dividend, merger, and short stock interest strategies are excluded from
the Monthly Firm Fee Cap and reversal and conversion, jelly roll and
box spread strategy executions are included in the Monthly Firm Fee
Cap. At this time, the Exchange proposes to exclude all strategy
executions from the Monthly Firm Fee Cap (dividend, merger, short stock
interest, reversal and conversion, jelly roll, and box spread strategy
executions).

Floor Transaction (Open Outcry) Floor Broker Incentive Program
    The Exchange proposes to create a new incentive program for Floor
Brokers \18\ that is designed to attract order flow to Phlx's trading
floor for execution in open outcry. The Exchange proposes to pay Floor
Broker certain rebates for transaction they execute on Phlx's trading
floor in open outcry. The Exchange proposes to title this new section,
``Floor Transaction (Open Outcry) Floor Broker Incentive Program''.
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    \18\ The term ``Floor Broker'' means an individual who is
registered with the Exchange for the purpose, while on the Options
Floor, of accepting and handling options orders. See Phlx Options 7,
Section 1(c).
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    The following floor transactions would not be subject to the
rebates offered within the Floor Transaction (Open Outcry) Floor Broker
Incentive Program: (1) Floor QCC Orders, as defined in Options 8,
Section 30(e); \19\ (2) dividend, merger, short stock interest,
reversal and conversion, jelly roll and box spread strategy executions
as defined in this Options 7, Section 4; (3) Firm Floor Options
Transactions Charges for members executing facilitation orders pursuant
to Options 8, Section 30 when such members are trading in their own
proprietary account (including Cabinet Options Transaction Charges);
and (4) Customer-to-Customer transactions.
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    \19\ Today, Floor QCC Orders are not transacted in open outcry.
The Exchange proposes to include Floor QCC Orders in the list of
exclusions to remind members and member organizations that Floor QCC
Orders will not be paid the Floor Transaction (Open Outcry) Floor
Broker Incentive Program rebate.
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    The Exchange would pay Floor Transaction (Open Outcry) Floor Broker
Incentive Program rebates on qualifying volume at each threshold level
per the below schedule.

------------------------------------------------------------------------
                                                                  Per
                     Qualifying contracts                       contract
                                                                 rebate
------------------------------------------------------------------------
0-5,000,000..................................................      $0.03
5,000,001-10,000,000.........................................       0.06
Greater than 10,000,000......................................       0.09
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    By way of example, a Floor Broker that executes floor transactions
in a given month totaling 10,500,000 contracts will be paid $0.03 for
the first 5,000,000 floor transaction contracts ($150,000), $0.06 for
the next 5,000,000 floor transaction contracts ($300,000), and $0.09
for the final 500,000 floor transaction contracts ($45,000) for a total
rebate of $495,000 for that month. Further, as an additional clarifying
example, if a Floor Broker executes a floor transaction in the amount
of 1,000,000 contracts, represents both sides of the floor transaction,
and executes the floor transaction as a crossing transaction pursuant
to Options 8, Section 30(a) for 700,000 of the 1,000,000 contracts,
then trades the remaining 300,000 contracts with the trading crowd, the
Floor Transaction (Open Outcry) Floor Broker Incentive Program rebate
for this transaction will be paid on the qualifying floor transaction
volume of 1,000,000 contracts.
    Finally, the Exchange proposes to cap rebates for the Floor
Transaction (Open Outcry) Floor Broker Incentive Program at $1,000,000
per member or member organization in a given month.
    The Exchange believes that the Floor Transaction (Open Outcry)
Floor Broker Incentive Program will attract greater order flow to
Phlx's trading floor.
Technical Amendments
    The Exchange proposes to add a title before the rule text related
to strategies which states, ``Floor Originated Strategy Executions''.
The Exchange believes the proposed new titles throughout Options 7,
Section 4 will assist market participants in locating certain pricing
within this rule. The Exchange also proposes to adjust rule text within
Options 7, Section 4 in the Strategies pricing to make clear that all
dividend, merger, short stock interest, reversal and conversion, jelly
roll and box spread strategy executions, as defined in this Options 7,
Section 4, will be excluded from the Monthly Firm Fee Cap as proposed
herein.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\20\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\21\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among members and issuers and other persons using any
facility, and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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    \20\ 15 U.S.C. 78f(b).
    \21\ 15 U.S.C. 78f(b)(4) and (5).
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    The Commission and the courts have repeatedly expressed their
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. In Regulation
NMS, while adopting a series of steps to improve the current market
model, the Commission highlighted the importance of market forces in
determining prices and SRO revenues and, also, recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its broader forms that are most
important to investors and listed companies.'' \22\
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    \22\ Securities Exchange Act Release No. 51808 (June 9, 2005),
70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
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    Likewise, in NetCoalition v. Securities and Exchange Commission
\23\ (``NetCoalition'') the D.C. Circuit upheld the Commission's use of
a market-based approach in evaluating the fairness of market data fees
against a challenge claiming that Congress mandated a cost-based
approach.\24\ As the court emphasized, the Commission ``intended in
Regulation NMS that `market forces, rather than regulatory
requirements' play a role in determining the market data . . . to be
made available to investors and at what cost.'' \25\
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    \23\ NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
    \24\ See NetCoalition, at 534-535.
    \25\ Id. at 537.
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    Further, ``[n]o one disputes that competition for order flow is
`fierce.' . . . As the SEC explained, `[i]n the U.S. national market
system, buyers and sellers of securities, and the broker-dealers that
act as their order-routing agents, have a wide range of choices of
where to route orders for execution'; [and] `no exchange can afford to
take its market share percentages for granted' because `no exchange
possesses a monopoly, regulatory or otherwise, in the execution of
order flow from broker dealers' . . . .'' \26\ Although the court and
the SEC were discussing the cash equities markets, the Exchange
believes that these views apply with equal force to the options
markets.
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    \26\ Id. at 539 (quoting Securities Exchange Act Release No.
59039 (December 2, 2008), 73 FR 74770, 74782-83 (December 9, 2008)
(SR-NYSEArca-2006-21)).
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QCC Rebates
Section A QCC Rebates
    The Exchange's proposal to remove the existing QCC Rebate Schedule
and replace those rebates with new rebates as well as a QCC Growth Tier
Rebate is reasonable because the Exchange proposes to offer its members
and member organizations additional qualifications to obtain
potentially greater QCC Rebates. The Exchange believes the opportunity
to earn larger rebates will incentivize members and member
organizations to execute a larger amount of floor transactions, QCC
transaction volume, and Open Outcry Floor Transaction volume on Phlx's
trading floor. The Exchange's proposal to remove the existing QCC
Rebate Schedule and replace those rebates with

new rebates as well as a QCC Growth Tier Rebate is equitable and not
unfairly discriminatory because all members and member organizations
may execute QCC trades, electronically or on the Exchange's trading
floor.
    Today, the Exchange pays a $0.09 QCC rebate for executing up to
999,999 QCC contracts in a month and a $0.20 per contract QCC Rebate
for executing 1,000,000 or more QCC contracts in a month. With the two
new proposed QCC Rebates within Section A the Exchange offers to pay a
QCC Rebate of $0.12 per contract on electronic QCC Orders, as defined
in Options 3, Section 12, and Floor QCC Orders, as defined in Options
8, Section 30(e), when a QCC Order is comprised of a Customer or
Professional order on one side and a Lead Market Maker, Market Maker,
Broker-Dealer, or Firm order on the other side. This proposed QCC
Rebate is greater than the lowest tier QCC Rebate offered today ($0.09
(old) vs. $0.12 (new)). Additionally, the Exchange proposes to pay an
increased QCC Rebate of $0.17 per contract in the event that a member
or member organization executes greater than 1,000,000 qualifying QCC
contracts in a given month which is less than the current QCC rebate
for 1,000,000 or more contracts today ($0.20 (old) vs. $0.17 (new)).
Additionally, depending on the contra-parties to the QCC Order, the
Exchange would pay a $0.14 per contract QCC Rebate on electronic QCC
Orders, as defined in Options 3, Section 12, and Floor QCC Orders, as
defined in Options 8, Section 30(e), when a QCC Order is comprised of a
Lead Market Maker, Market Maker, Broker-Dealer, or Firm order on one
side and a Lead Market Maker, Market Maker, Broker-Dealer, or Firm
order on the other side. This rebate is also greater than the lowest
tier QCC Rebate offered today ($0.09 (old) vs. $0.14 (new)).
Additionally, the Exchange proposes to pay an increased QCC Rebate of
$0.19 per contract in the event that a member or member organization
executes greater than 1,000,000 qualifying QCC contracts in a given
month which is less than the current QCC rebate for 1,000,000 or more
contracts today ($0.20 (old) vs. $0.19 (new)). The Exchange believes
that while some QCC Rebates are higher and some QCC Rebates are lower,
the range of QCC Rebates offered by Phlx remains competitive and the
Exchange believes these QCC Rebates will continue to attract QCC Orders
to Phlx. The Exchange believes its proposal to offer these two new QCC
Rebates is equitable and not unfairly discriminatory because any market
participant may qualify for a QCC Rebate provided they qualified for
the QCC Rebate. Further, the Exchange's proposal which pays greater
rebates where the two contra-parties to a QCC Order are not Customers
and Professionals is equitable and not unfairly discriminatory because,
today, the Exchange assesses greater fees to Lead Market Maker, Market
Maker, Broker-Dealer and Firms for QCC Orders. Customers and
Professionals are not assessed a QCC Transaction Fee, while all other
market participants pay a QCC Transaction Fee of $0.20 per contract.
    The Exchange's proposal to amend the QCC Rebate qualifications such
that all strategy executions (dividend, merger, short stock interest,
reversal and conversion, jelly roll, and box spread) will be excluded
and, as proposed, will aggregate the applicable member or member
organization qualifying QCC contract volume in a given month, excluding
all strategy executions, is reasonable. Today, the Exchange offers
strategy caps \27\ for these strategy executions and, therefore,
members and member organizations have the ability to pay no fees on
strategy executions once the cap is met. The Exchange's proposal to
amend the QCC Rebate qualification such that all strategy executions
(dividend, merger, short stock interest, reversal and conversion, jelly
roll, and box spread) will be excluded and, as proposed, will aggregate
the applicable member or member organization qualifying QCC contract
volume in a given month, excluding all strategy executions is equitable
and not unfairly discriminatory because the Exchange would uniformly
apply the QCC Rebate qualifications as well as calculate the QCC
Rebates.
---------------------------------------------------------------------------

    \27\ Today, the Exchange offers certain strategy caps for
dividend, merger, short stock interest, reversal and conversion,
jelly roll, and box spread strategy executions. To qualify for a
strategy cap, the buy and sell side of a transaction must originate
either from the Exchange's trading floor or as a Floor Qualified
Contingent Cross Order. See Options 7, Section 4.
---------------------------------------------------------------------------

Section B QCC Growth Tier Rebate
    The Exchange's proposal to establish a new QCC Growth Tier Rebate
is reasonable because this rebate should provide additional incentives
for members and member organizations to engage in substantial amounts
of trading activity which would serve to bring additional open outcry
liquidity to the trading floor and additional QCC Order Flow to Phlx.
This incentive may also encourage members and member organizations to
commence sending such order flow to Phlx for the opportunity to earn
this rebate. Additionally, the Exchange's proposal to establish a new
QCC Growth Tier Rebate is equitable and not unfairly discriminatory
because any member or member organization may qualify for this rebate.
    The Exchange's proposal offers member and member organizations two
paths to qualify for a QCC Growth Tier Rebate. In the first instance, a
member's or member organization's total floor transaction, and
electronic QCC Orders and Floor QCC Orders volume (``QCC transaction
volume'') must exceed 12,500,000 contracts in a given month and the
member's or member organization's respective Phlx House Account must
execute QCC transaction volume of 250,000 or more contracts in excess
of the member's or member organization's QCC transaction volume in
January 2023. For members or member organizations with no QCC
transaction volume in January 2023, the QCC transaction volume, in
their respective Phlx House Account, must be 250,000 or more contracts
in a given month. In the second instance, a member's or member
organization's Open Outcry Floor Transaction volume in a given month
must exceed 500,000 contracts and a member's or member organization's
respective Phlx House Account must execute QCC transaction volume of
2,500,000 or more contracts in excess of the member's or member
organization's QCC transaction volume in January 2023. For members or
member organizations with no QCC transaction volume in January 2023,
the QCC transaction volume, in their respective Phlx House Account,
must be 2,500,000 or more contracts in a given month. The Exchange
believes that these qualifications are reasonable because they offer
members and member organizations optional qualifications to achieve a
QCC Growth Tier Rebate. Additionally, the Exchange believes that these
qualifications are equitable and not unfairly discriminatory as all
members and member organizations may qualify for the QCC Growth Tier
Rebate.\28\ All members and member organizations may enter order flow
to obtain a QCC Growth Tier Rebate.
---------------------------------------------------------------------------

    \28\ The Exchange notes that while all Phlx member organizations
may transact an options business electronically or on the Exchange's
trading floor, each member located on Phlx's trading floor must have
an individual permit. Alternatively, Phlx members or member
organizations may transact business on the trading floor through a
Floor Broker.
---------------------------------------------------------------------------

    The Exchange's exclusion of strategy executions, cabinet
transactions and

Customer-to-Customer transactions is reasonable. Cabinet transactions
and Customer-to-Customer transactions are excluded today from QCC
Rebates. This proposal would exclude all strategy executions, which is
a change from the current QCC Rebate exclusions which only excludes
dividend, merger, short stock interest, and reversal or conversion
strategies. Today, the Exchange offers strategy caps \29\ for these
types of open outcry transactions and, therefore, members and member
organizations have the ability to pay no fees on strategy executions
once the cap is met. The Exchange's exclusion of strategy executions,
cabinet transactions and Customer-to-Customer transactions are
equitable and not unfairly discriminatory as the qualifications for the
QCC Growth Tier Rebate will be uniformly applied.
---------------------------------------------------------------------------

    \29\ Today, the Exchange offers certain strategy caps for
dividend, merger, short stock interest, reversal and conversion,
jelly roll, and box spread strategy executions. To qualify for a
strategy cap, the buy and sell side of a transaction must originate
either from the Exchange's trading floor or as a Floor Qualified
Contingent Cross Order. See Options 7, Section 4.
---------------------------------------------------------------------------

    The Exchange's proposal to utilize January 2023 as a baseline to
add 250,000 or more contracts for the QCC Growth Tier Rebate and permit
members or member organizations with no QCC transaction volume in
January 2023, to add 250,000 or more contracts in a given month is
reasonable as it will create an incentive for members and member
organizations to bring liquidity to Phlx's trading floor relative to a
benchmark. The Exchange believes that if the proposed incentive is
effective, then any ensuing increase in trading activity on the
Exchange will improve the quality of the market overall, to the benefit
of all market participants. Further, it is reasonable to consider any
new liquidity volume for members or member organizations who have no
volume for the month of January 2023 for those members or member
organizations to qualify to receive the proposed QCC Growth Tier Rebate
because this program is designed to attract additional liquidity from
new members and member organizations. To the extent this proposal
attracts new members and member organization volume to the Exchange,
all market participants should benefit through more trading
opportunities. The Exchange's proposal to utilize January 2023 as a
baseline to add 250,000 or more contracts for the QCC Growth Tier
Rebate and permit members or member organizations with no QCC
transaction volume in January 2023, to add 250,000 or more contracts in
a given month is equitable and not unfairly discriminatory for the
reasons which follow. The Exchange's proposal is designed to increase
participation in Phlx's trading floor and reward those members and
member organizations for the unique role they play in ensuring a robust
market. As discussed above, the proposal is designed to encourage
members and member organizations to substantially execute additional
volume on the trading floor. To the extent the Exchange succeeds in
increasing the levels of liquidity and activity on the Exchange, the
Exchange will experience improvements in market quality, which stands
to benefit all floor members. The Exchange believes that it is
equitable and not unfairly discriminatory to consider any new volume
for members and member organizations with no such volume for the month
of January 2023 for those members and member organizations to qualify
to receive the proposed QCC Growth Tier Rebate because the program is
designed to attract additional liquidity from new members and member
organizations to the Exchange. In turn, this additional liquidity
should benefit all market participants through increased liquidity and
order interaction.
    The Exchange's proposal to pay the QCC Growth Tier Rebates per Phlx
House Account is reasonable, equitable and not unfairly discriminatory.
Today, each Phlx member or member organization is required to establish
one Phlx House Account with the Exchange's Membership Department. Only
one Phlx House Account is required to transact business on Phlx.\30\ A
Phlx member or member organization has the option of acquiring multiple
Phlx House Accounts depending on a member's or member organization's
business model and how they elect to organize their business.
---------------------------------------------------------------------------

    \30\ The Exchange assesses a $50.00 a month account fee for this
account as provided for within Options 7, Section 8A.
---------------------------------------------------------------------------

    The Exchange's proposal to pay a $0.20 per contract QCC Growth Tier
Rebate on a QCC Order comprised of a Customer or Professional order on
one side and a Lead Market Maker, Market Maker, Broker-Dealer, or Firm
order on the other side and a $0.26 per contract QCC Growth Tier Rebate
on a QCC Order is comprised of a Lead Market Maker, Market Maker,
Broker-Dealer, or Firm order on one side and a Lead Market Maker,
Market Maker, Broker-Dealer, or Firm order on the other side is
reasonable because these rebates are both higher than the rebates
offered today for QCC Rebates. Today, the QCC Rebate for Tier 1 is
$0.09 per contract and the QCC Rebate for Tier 2 is $0.20 per contract.
Further, the Exchange's proposal to pay greater rebates where both
sides are not a Customer or a Professional is reasonable because,
today, Customers and Professionals are not assessed a QCC Transaction
Fee. Lead Market Makers, Market Makers, Broker-Dealers, and Firms pay a
QCC Transaction Fee of $0.20 per contract. The Exchange's proposal to
pay a $0.20 per contract QCC Growth Tier Rebate on a QCC Order
comprised of a Customer or Professional order on one side and a Lead
Market Maker, Market Maker, Broker-Dealer, or Firm order on the other
side and a $0.26 per contract QCC Growth Tier Rebate on a QCC Order is
comprised of a Lead Market Maker, Market Maker, Broker-Dealer, or Firm
order on one side and a Lead Market Maker, Market Maker, Broker-Dealer,
or Firm order on the other side is equitable and not unfairly
discriminatory because the Exchange will uniformly apply the
qualifications and to pay the QCC Growth Tier Rebate.
    The Exchange's proposal to pay members and member organizations the
greater of the QCC Rebate in Section A or the QCC Growth Tier Rebate in
Section B in a given month, but not both QCC Rebates, is reasonable,
equitable and not unfairly discriminatory because each of the
Exchange's QCC rebates remain competitive with today's QCC Rebate and
the Exchange would uniformly only pay the greater of the two QCC
Rebates.
Monthly Firm Fee Cap
    The Exchange's proposal to amend the Monthly Firm Fee Cap from
$150,000 to $200,000 and assess a nominal fee of $0.02 per capped
contract once a Firm exceeds the Monthly Firm Fee Cap, instead of not
assessing Firms any fee once the Monthly Firm Fee Cap is exceeded is
reasonable. While the Exchange would be increasing the cap as well as
fees for Firms with this proposal, the Exchange believes that the
Monthly Firm Fee Cap still serves to lower fees for Firms that transact
certain qualifying volume on Phlx, thus enabling these firms the
ability to lower costs. The Exchange believes that the Monthly Firm Fee
Cap would continue to incentivize Firms to direct order flow to the
Exchange to achieve the benefits of reducing their fees. The Exchange's
proposal to not assess the $0.02 per contract transaction fee if no fee
\31\ is charged or the fee is

waived \32\ is reasonable because the Exchange wants to ensure that
members and member organizations get the most favorable incentive that
they qualify for under its Pricing Schedule. The Exchange's proposal to
amend the Monthly Firm Fee Cap from $150,000 to $200,000 and assess a
nominal fee of $0.02 per capped contract once a Firm exceeds the
Monthly Firm Fee Cap, instead of not assessing Firms any fee once the
Monthly Firm Fee Cap is exceeded is equitable and not unfairly
discriminatory as other market participants benefit from an opportunity
to pay reduced fees on Phlx as do Firms. Today, Customers are not
assessed an Options Transaction Charge in multiply-listed Penny or non-
Penny Symbols.\33\ Customer liquidity benefits all market participants
by providing more trading opportunities. An increase in the activity of
these market participants in turn facilitates tighter spreads, which
may cause an additional corresponding increase in order flow from other
market participants. Today, Lead Market Makers and Market Makers are
subject to a Monthly Market Maker Cap.\34\ With respect to Broker-
Dealers, today, the Exchange waives the Floor Options Transaction
Charge for Broker-Dealers executing facilitation orders pursuant to
Options 8, Section 30 when such members would otherwise incur this
charge for trading in their own proprietary account contra to a
Customer (``BD-Customer Facilitation''), if the member's BD-Customer
Facilitation average daily volume (including both FLEX and non-FLEX
transactions) exceeds 10,000 contracts per day in a given month.\35\
Finally, today, Professional Floor Options Transaction Charges are less
favorable than Customers but more favorable than Firms.\36\
Additionally, the Exchange believes that the proposal is equitable and
not unfairly discriminatory because members and member organizations
that are JBOs \37\ could be subject to the Monthly Firm Fee Cap,\38\ as
are other members, as long as the JBO trades for their own proprietary
account. Additionally, the proposed change would encourage JBOs that
are not members or member organizations to seek to become members or
member organizations to further reduce their transaction fees. Finally,
other market participants may interact with the order flow submitted by
Firms to Phlx to reach the cap. The Exchange's proposal to not assess
the $0.02 per contract transaction fee if no fee is charged or the fee
is waived is equitable and not unfairly discriminatory as the Exchange
would uniformly not assess the transaction fee in this case.
---------------------------------------------------------------------------

    \31\ Today, Firms pay an electronic Options Transaction Charge
of $0.48 per contract in Penny Symbols for simple orders and $0.40
per contract in Penny Symbols for complex orders. Also, Firms pay a
Floor Options Transaction Charge of $0.25 per contract in Penny
Symbols. Today, Firms pay an electronic Options Transaction Charge
of $0.75 per contract in Non-Penny Symbols and a Floor Options
Transactions Charge of $0.25 per contract in Non-Penny Symbols. See
Options 7, Section 4.
    \32\ Today, the Firm Floor Options Transaction Charges is waived
for members executing facilitation orders pursuant to Options 8,
Section 30 when such members are trading in their own proprietary
account (including Cabinet Options Transaction Charges). The Firm
Floor Options Transaction Charges will be waived for the buy side of
a transaction if the same member or its affiliates under Common
Ownership represents both sides of a Firm transaction when such
members are trading in their own proprietary account. See Options 7,
Section 4.
    \33\ See Options 7, Section 4.
    \34\ See Options 7, Section 4. Lead Market Makers and Market
Makers are subject to a ``Monthly Market Maker Cap'' of $500,000
for: (i) electronic Option Transaction Charges, excluding surcharges
and excluding options overlying broad-based index options symbols
listed within Options 7, Section 5.A; and (ii) QCC Transaction Fees
(as defined in Exchange Options 3, Section 12 and Floor QCC Orders,
as defined in Options 8, Section 30(e)). The trading activity of
separate Lead Market Maker and Market Maker member organizations is
aggregated in calculating the Monthly Market Maker Cap if there is
Common Ownership between the member organizations. All dividend,
merger, short stock interest, reversal and conversion, jelly roll
and box spread strategy executions (as defined in this Options 7,
Section 4) is excluded from the Monthly Market Maker Cap. Lead
Market Makers or Market Makers that (i) are on the contra-side of an
electronically-delivered and executed Customer order, excluding
responses to a PIXL auction; and (ii) have reached the Monthly
Market Maker Cap will be assessed fees as follows: $0.05 per
contract Fee for Adding Liquidity in Penny Symbols; $0.18 per
contract Fee for Removing Liquidity in Penny Symbols; $0.18 per
contract in Non-Penny Symbols; and $0.18 per contract in a non-
Complex electronic auction, including the Quote Exhaust auction and,
for purposes of this fee, the opening process. A Complex electronic
auction includes, but is not limited to, the Complex Order Live
Auction (``COLA''). Transactions which execute against an order for
which the Exchange broadcast an order exposure alert in an
electronic auction will be subject to this fee.
    \35\ See Options 7, Section 4.
    \36\ See Options 7, Section 4.
    \37\ The term ``Joint Back Office'' or ``JBO'' applies to any
transaction that is identified by a member or member organization
for clearing in the Firm range at OCC and is identified with an
origin code as a JBO. A JBO is priced the same as a Broker-Dealer. A
JBO participant is a member, member organization or non-member
organization that maintains a JBO arrangement with a clearing
broker-dealer (``JBO Broker'') subject to the requirements of
Regulation T Section 220.7 of the Federal Reserve System as further
discussed at Options 6D, Section 1. See Options 7, Section 1(c).
    \38\ Firms are subject to a Monthly Firm Fee Cap. See Options 7,
Section 4.
---------------------------------------------------------------------------

    The Exchange's proposal to amend the types of strategy executions
that will be included in the Monthly Firm Fee Cap to exclude all
strategy executions from the Monthly Firm Fee Cap is reasonable because
the Exchange offers strategy caps \39\ for these types of open outcry
transactions and, therefore, members and member organizations have the
ability to pay no fees on strategy executions once the cap is met. The
Exchange's proposal to amend the types of strategy executions that will
be included in the Monthly Firm Fee Cap to exclude all strategy
executions from the Monthly Firm Fee Cap is equitable and not unfairly
discriminatory because the Exchange would uniformly calculate
qualifying transactions to arrive at the Monthly Firm Fee Cap.
---------------------------------------------------------------------------

    \39\ Today, the Exchange offers certain strategy caps for
dividend, merger, short stock interest, reversal and conversion,
jelly roll, and box spread strategy executions. To qualify for a
strategy cap, the buy and sell side of a transaction must originate
either from the Exchange's trading floor or as a Floor Qualified
Contingent Cross Order. See Options 7, Section 4.
---------------------------------------------------------------------------

Floor Transaction (Open Outcry) Floor Broker Incentive Program
    The Exchange's proposal to create a new incentive program for Floor
Brokers that is designed to attract order flow to Phlx's trading floor
for execution in open outcry is reasonable, equitable and not unfairly
discriminatory because the Exchange's program seeks to attract greater
order flow to the Exchange's trading floor. The Exchange notes that
other Phlx floor members may interact with orders exposed in open
outcry on the Exchange's trading floor. Other floor members \40\ may
interact with the order flow that Floor Brokers attract to Phlx's
trading floor.
---------------------------------------------------------------------------

    \40\ Floor members include all members who have acquired a
permit to trade on Phlx's trading floor.
---------------------------------------------------------------------------

    The Exchange's proposal to exclude Floor QCC Orders, dividend,
merger, short stock interest, reversal and conversion, jelly roll and
box spread strategy executions as defined in this Options 7, Section 4;
Firm Floor Options Transaction Charges for members executing
facilitation orders pursuant to Options 8, Section 30 when such members
are trading in their own proprietary account (including Cabinet Options
Transaction Charges); and Customer-to-Customer transactions from the
Floor Transaction (Open Outcry) Floor Broker Incentive Program is
reasonable. Within this proposal, the Exchange offers to pay
significant QCC Rebates for Floor QCC Orders. As noted herein, with
respect to strategy transactions, the Exchange offers strategy caps
\41\ for these types of open outcry transactions and, therefore,
members and member organizations have the ability to pay no fees on

strategy executions once the cap is met. The Exchange is excluding Firm
Floor Options Transaction Charges for members executing facilitation
orders pursuant to Options 8, Section 30 when such members are trading
in their own proprietary account (including Cabinet Options Transaction
Charges) because, today, Firm Floor Options Transaction Charges are
waived pursuant to Options 7, Section 4. Finally, the Exchange is
excluding Customer-to-Customer transaction as Customers are not subject
to Options Transaction Charges within Options 7, Section 4. The
Exchange's proposal to exclude Floor QCC Orders, dividend, merger,
short stock interest, reversal and conversion, jelly roll and box
spread strategy executions as defined in this Options 7, Section 4;
Firm Floor Options Transaction Charges for members executing
facilitation orders pursuant to Options 8, Section 30 when such members
are trading in their own proprietary account (including Cabinet Options
Transaction Charges); and Customer-to-Customer transactions from the
Floor Transaction (Open Outcry) Floor Broker Incentive Program is
equitable and not unfairly discriminatory because the Exchange would
uniformly apply the qualification criteria to calculate rebates.
---------------------------------------------------------------------------

    \41\ Today, the Exchange offers certain strategy caps for
dividend, merger, short stock interest, reversal and conversion,
jelly roll, and box spread strategy executions. To qualify for a
strategy cap, the buy and sell side of a transaction must originate
either from the Exchange's trading floor or as a Floor Qualified
Contingent Cross Order. See Options 7, Section 4.
---------------------------------------------------------------------------

    The Exchange's proposal to pay Floor Brokers rebates on qualifying
open outcry volume at each of three threshold levels, with rebates
ranging from $0.03 to $0.09 per contract, is reasonable because the
Exchange believes that these rebates will serve to incentivize Floor
Brokers to execute a greater number of orders in the Exchange's trading
crowd. The Exchange's proposal to pay Floor Brokers rebates on
qualifying open outcry volume at each of three threshold levels, with
rebates ranging from $0.03 to $0.09 per contract, is equitable and not
unfairly discriminatory as the Exchange would uniformly calculate all
qualifying volume and uniformly pay rebates associated with the Floor
Transaction (Open Outcry) Floor Broker Incentive Program.
    The Exchange's proposal to cap rebates for the Floor Transaction
(Open Outcry) Floor Broker Incentive Program at $1,000,000 per member
or member organization in a given month is reasonable. The Exchange's
program will pay Floor Brokers up to $1,000,000 in rebates a month to
incentivize them to bring additional order flow to the Exchange's
trading crowd. The Exchange believes that the incentive, despite the
cap, will attract order flow to Phlx. All other floor members may
interact with that order flow. The Exchange's proposal to cap rebates
for the Floor Transaction (Open Outcry) Floor Broker Incentive Program
at $1,000,000 per member or member organization in a given month is
equitable and not unfairly discriminatory as all Floor Brokers would be
subject to the same cap.
Technical Amendments
    The Exchange's proposal to add certain titles within Options 7,
Section 4 is reasonable, equitable and not unfairly discriminatory as
the titles will assist market participants in locating certain pricing
within Phlx's Options 7, Section 4 rule. The addition of these titles
are non-substantive amendments.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
Inter-Market Competition
    The proposal does not impose an undue burden on inter-market
competition. The Exchange believes its proposal remains competitive
with other options markets and will offer market participants with
another choice of where to transact options. The Exchange notes that it
operates in a highly competitive market in which market participants
can readily favor competing venues if they deem fee levels at a
particular venue to be excessive, or rebate opportunities available at
other venues to be more favorable. In such an environment, the Exchange
must continually adjust its fees to remain competitive with other
exchanges. Because competitors are free to modify their own fees in
response, and because market participants may readily adjust their
order routing practices, the Exchange believes that the degree to which
fee changes in this market may impose any burden on competition is
extremely limited.
Intra-Market Competition
    The proposed amendments do not impose an undue burden on intra-
market competition. In terms of intra-market competition, the Exchange
does not believe that its proposals will place any category of market
participant at a competitive disadvantage. The Exchange believes that
the proposed QCC Rebate and QCC Rebate Growth Tier Rebates will
encourage market participants to send a greater amount of electronic
QCC orders and Floor QCC Orders to Phlx for execution in order to
obtain greater rebates and lower their costs. Further, the proposed QCC
Growth Tier Rebate should incentivize a greater amount of floor
transactions on Phlx, thereby allowing Phlx to compete more effectively
with other options floor models. The proposed Floor Broker Incentive
Program should encourage Floor Brokers to send additional order flow to
Phlx to obtain rebates and lower their costs. Any market participant
may send an order to a Phlx Floor Broker for execution on Phlx's
trading floor. The Exchange believes that the additional liquidity will
enhance the quality of the Exchange's market and increase certain
trading opportunities on the Exchange's trading floor for floor
members.
QCC Rebates
Section A QCC Rebates
    The Exchange's proposal to remove the existing QCC Rebate Schedule
and replace those rebates with new rebates as well as a QCC Growth Tier
Rebate does not impose an undue burden on competition because all
members and member organizations may execute QCC rebates,
electronically or on the Exchange's trading floor. The Exchange
believes its proposal to offer these two new QCC Rebates does not
impose an undue burden on competition because any market participant
may qualify for a QCC Rebate provided they qualified for the QCC
Rebate. Further, the Exchange's proposal which pays greater rebates
where the two contra-parties to a QCC Order are not Customers and
Professionals does not impose an undue burden on competition because,
today, the Exchange assesses greater fees to Lead Market Maker, Market
Maker, Broker-Dealer and Firms for QCC Orders. Customers and
Professionals are not assessed a QCC Transaction Fee, while all other
market participants pay a QCC Transaction Fee of $0.20 per contract.
The Exchange's proposal to amend the QCC Rebate qualification such that
all strategy executions (dividend, merger, short stock interest,
reversal and conversion, jelly roll, and box spread) will be excluded
and, as proposed, will aggregate the applicable member or member
organization qualifying QCC contract volume in a given month, excluding
all strategy executions does not impose an undue burden on competition
because the Exchange would uniformly apply the QCC Rebate
qualifications as well as calculate the QCC Rebates.
Section B QCC Growth Tier Rebate
    The Exchange's proposal to establish a new QCC Growth Tier Rebate
does not impose an undue burden on competition, rather is it pro-
competitive in that would serve to increase liquidity

on Phlx, thus rendering Phlx a more attractive and vibrant venue to
market participants. The QCC Growth Tier Rebate qualifications do not
impose an undue burden on competition because all members and member
organizations may qualify for the QCC Growth Tier Rebate.\42\ All
members and member organizations may enter order flow to obtain a QCC
Growth Tier Rebate. The Exchange's exclusion of strategy executions,
cabinet transactions and Customer-to-Customer transactions does not
impose an undue burden on competition as the qualifications for the QCC
Growth Tier Rebate will be uniformly applied. The Exchange's proposal
to utilize January 2023 as a baseline to add 250,000 or more contracts
for the QCC Growth Tier Rebate and permit members or member
organizations with no QCC transaction volume in January 2023, to add
250,000 or more contracts in a given month does not impose an undue
burden on competition because the proposal is designed to increase
participation in Phlx's trading floor and reward those members and
member organizations for the unique role they play in ensuring a robust
market. Further, the proposal is designed to encourage members and
member organizations to substantially add liquidity to the trading
floor. To the extent the Exchange succeeds in increasing the levels of
liquidity and activity on the Exchange, the Exchange will experience
improvements in market quality, which stands to benefit all floor
members. The proposal considers any new volume for members and member
organizations with no such volume for the month of January 2023 for
those members and member organizations to qualify to receive the
proposed QCC Growth Tier Rebate. This does not impose an undue burden
on competition because the program is designed to attract additional
liquidity from new members and member organizations to the Exchange. In
turn, this additional liquidity should benefit all market participants
through increased liquidity and order interaction. The Exchange's
proposal to pay the QCC Growth Tier Rebates per Phlx House Account does
not impose an undue burden on competition. Today, each Phlx member or
member organization is required to establish one Phlx House Account
with the Exchange's Membership Department. Only one Phlx House Account
is required to transact business on Phlx.\43\ A Phlx member or member
organization has the option of acquiring multiple Phlx House Accounts
depending on a member's or member organization's business model and how
they elect to organize their business. The Exchange's proposal to pay a
$0.20 per contract QCC Growth Tier Rebate on a QCC Order comprised of a
Customer or Professional order on one side and a Lead Market Maker,
Market Maker, Broker-Dealer, or Firm order on the other side and a
$0.26 per contract QCC Growth Tier Rebate on a QCC Order is comprised
of a Lead Market Maker, Market Maker, Broker-Dealer, or Firm order on
one side and a Lead Market Maker, Market Maker, Broker-Dealer, or Firm
order on the other side does not impose an undue burden on competition
because the Exchange will uniformly apply the qualifications and to pay
the QCC Growth Tier Rebate. The Exchange's proposal to pay members and
member organizations the greater of the QCC Rebate in Section A or the
QCC Growth Tier Rebate in Section B in a given month, but not both QCC
Rebates, does not impose an undue burden on competition because each of
the Exchange's QCC rebates remain competitive with today's QCC Rebate
and the Exchange would uniformly only pay the greater of the two QCC
Rebates.
---------------------------------------------------------------------------

    \42\ The Exchange notes that while all Phlx member organizations
may transact an options business electronically or on the Exchange's
trading floor, each member located on Phlx's trading floor must have
an individual permit. Alternatively, Phlx members or member
organizations may transact business on the trading floor through a
Floor Broker.
    \43\ The Exchange assesses a $50.00 a month account fee for this
account as provided for within Options 7, Section 8A.
---------------------------------------------------------------------------

Monthly Firm Fee Cap
    The Exchange's proposal to amend the Monthly Firm Fee Cap from
$150,000 to $200,000 and assess a nominal fee of $0.02 per capped
contract once a Firm exceeds the Monthly Firm Fee Cap, instead of not
assessing Firms any fee once the Monthly Firm Fee Cap is exceeded does
not impose an undue burden on competition as other market participants
benefit from an opportunity to pay reduced fees on Phlx as do Firms.
Today, Customers are not assessed an Options Transaction Charge in
multiply-listed Penny or non-Penny Symbols.\44\ Customer liquidity
benefits all market participants by providing more trading
opportunities. An increase in the activity of these market participants
in turn facilitates tighter spreads, which may cause an additional
corresponding increase in order flow from other market participants.
Today, Lead Market Makers and Market Makers are subject to a Monthly
Market Maker Cap.\45\ With respect to Broker-Dealers, today, the
Exchange waives the Floor Options Transaction Charge for Broker-Dealers
executing facilitation orders pursuant to Options 8, Section 30 when
such members would otherwise incur this charge for trading in their own
proprietary account contra to a Customer (``BD-Customer
Facilitation''), if the member's BD-Customer Facilitation average daily
volume (including both FLEX and non-FLEX transactions) exceeds 10,000
contracts per day in a given month.\46\ Finally, today, Professional
Floor Options Transaction Charges are less favorable than Customers but
more favorable than Firms.\47\ Additionally, the Exchange believes that
the proposal is equitable and not unfairly discriminatory because
members and member organizations that are JBOs \48\ could be subject to
the Firm Related Equity Option Cap, as are other members, as long as
the JBO trades for their own proprietary account. Additionally, the
proposed change would encourage JBOs that are not

members or member organizations to seek to become members or member
organizations to further reduce their transaction fees. Finally, other
market participants may interact with the order flow submitted by Firms
to Phlx to reach the cap. The Exchange's proposal to not assess the
$0.02 per contract transaction fee if no fee is charged or the fee is
waived does not impose an undue burden on competition as the Exchange
would uniformly not assess the transaction fee in this case.
---------------------------------------------------------------------------

    \44\ See Options 7, Section 4.
    \45\ See Options 7, Section 4. Lead Market Makers and Market
Makers are subject to a ``Monthly Market Maker Cap'' of $500,000
for: (i) electronic Option Transaction Charges, excluding surcharges
and excluding options overlying broad-based index options symbols
listed within Options 7, Section 5.A; and (ii) QCC Transaction Fees
(as defined in Exchange Options 3, Section 12 and Floor QCC Orders,
as defined in Options 8, Section 30(e)). The trading activity of
separate Lead Market Maker and Market Maker member organizations is
aggregated in calculating the Monthly Market Maker Cap if there is
Common Ownership between the member organizations. All dividend,
merger, short stock interest, reversal and conversion, jelly roll
and box spread strategy executions (as defined in this Options 7,
Section 4) is excluded from the Monthly Market Maker Cap. Lead
Market Makers or Market Makers that (i) are on the contra-side of an
electronically-delivered and executed Customer order, excluding
responses to a PIXL auction; and (ii) have reached the Monthly
Market Maker Cap will be assessed fees as follows: $0.05 per
contract Fee for Adding Liquidity in Penny Symbols; $0.18 per
contract Fee for Removing Liquidity in Penny Symbols; $0.18 per
contract in Non-Penny Symbols; and $0.18 per contract in a non-
Complex electronic auction, including the Quote Exhaust auction and,
for purposes of this fee, the opening process. A Complex electronic
auction includes, but is not limited to, the Complex Order Live
Auction (``COLA''). Transactions which execute against an order for
which the Exchange broadcast an order exposure alert in an
electronic auction will be subject to this fee.
    \46\ See Options 7, Section 4.
    \47\ See Options 7, Section 4.
    \48\ The term ``Joint Back Office'' or ``JBO'' applies to any
transaction that is identified by a member or member organization
for clearing in the Firm range at OCC and is identified with an
origin code as a JBO. A JBO is priced the same as a Broker-Dealer. A
JBO participant is a member, member organization or non-member
organization that maintains a JBO arrangement with a clearing
broker-dealer (``JBO Broker'') subject to the requirements of
Regulation T Section 220.7 of the Federal Reserve System as further
discussed at Options 6D, Section 1. See Options 7, Section 1(c).
---------------------------------------------------------------------------

Floor Transaction (Open Outcry) Floor Broker Incentive Program
    The Exchange's proposal to create a new incentive program for Floor
Brokers that is designed to attract order flow to Phlx's trading floor
for execution in open outcry does not impose an undue burden on
competition because the Exchange's program seeks to attract greater
order flow to the Exchange. Other floor members may interact with the
order flow that Floor Brokers attract to Phlx's trading floor. The
Exchange's proposal to exclude Floor QCC Orders, dividend, merger,
short stock interest, reversal and conversion, jelly roll and box
spread strategy executions as defined in this Options 7, Section 4;
Firm Floor Options Transaction Charges for members executing
facilitation orders pursuant to Options 8, Section 30 when such members
are trading in their own proprietary account (including Cabinet Options
Transaction Charges); and Customer-to-Customer transactions from the
Floor Transaction (Open Outcry) Floor Broker Incentive Program does not
impose an undue burden on competition because the Exchange would
uniformly apply the qualification criteria to calculate rebates. The
Exchange's proposal to pay Floor Brokers rebates on qualifying open
outcry volume at each of three threshold levels, with rebates ranging
from $0.03 to $0.09 per contract, does not impose an undue burden on
competition as the Exchange would uniformly calculate all qualifying
volume and uniformly pay rebates associated with the Floor Transaction
(Open Outcry) Floor Broker Incentive Program. The Exchange's proposal
to cap rebates for the Floor Transaction (Open Outcry) Floor Broker
Incentive Program at $1,000,000 per member or member organization in a
given month does not impose an undue burden on competition as all Floor
Brokers would be subject to the same cap.
Technical Amendments
    The Exchange's proposal to add certain titles within Options 7,
Section 4 does not impose an undue burden on competition as the titles
will assist market participants in locating certain pricing within
Phlx's Options 7, Section 4 rule. The addition of these titles are non-
substantive amendments.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\49\
---------------------------------------------------------------------------

    \49\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

    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: (i)
necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) 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 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 protected]. Please include
File Number SR-Phlx-2023-06 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-Phlx-2023-06. 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-Phlx-2023-06 and should be submitted on
or before March 24, 2023.

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

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

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-04357 Filed 3-2-23; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 76, Number 250 (Thursday, December 29, 2011)]
[Notices]
[Pages 82036-82037]
[FR Doc No: 2011-33350]

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

DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

[Docket No. FRA-2011-0001-N-21]

Proposed Agency Information Collection Activities; Comment
Request

AGENCY: Federal Railroad Administration, (FRA), Department of
Transportation (DOT).

ACTION: Notice and Request for Comments.

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

SUMMARY: In compliance with the Paperwork Reduction Act of 1995 (44
U.S.C. 3501 et seq.), this notice announces that the Information
Collection Requirements (ICRs) abstracted below are being forwarded to
the Office of Management and Budget (OMB) for review and comment. The
ICRs describe the nature of the information collections and their
expected burden. The Federal Register notice with a 60-day comment
period soliciting comments on the following collections of information
was published on October 14, 2011 (76 FR 63990).

DATES: Comments must be submitted on or before January 30, 2012.

FOR FURTHER INFORMATION CONTACT: Mr. Robert Brogan, Office of Safety,
Planning and Evaluation Division, RRS-21, Federal Railroad
Administration, 1200 New Jersey Ave. SE., 3rd Floor, Mail Stop 25,
Washington, DC 20590 (telephone:<PHONE_NUMBER>), or Ms. Kimberly
Toone, Office of Information Technology, RAD-20, Federal Railroad
Administration, 1200 New Jersey Ave. SE., 3rd Floor, Mail Stop 35,
Washington, DC 20590 (telephone:<PHONE_NUMBER>). (These telephone
numbers are not toll-free.)

SUPPLEMENTARY INFORMATION: The Paperwork Reduction Act of 1995 (PRA),
Public Law 104-13, Section 2, 109 Stat. 163 (1995) (codified as revised
at 44 U.S.C. 3501-3520), and its implementing regulations, 5 CFR Part
1320, require Federal agencies to issue two notices seeking public
comment on information collection activities before OMB may approve
paperwork packages. 44 U.S.C. 3506, 3507; 5 CFR 1320.5, 1320.8(d)(1),
1320.12. On October 14,

2011, FRA published a 60-day notice in the Federal Register soliciting
comment on these ICRs for which the agency is seeking OMB approval. 76
FR 63990. FRA received no comments in response to this notice.
    Before OMB decides whether to approve these proposed collections of
information, it must provide 30 days for public comment. 44 U.S.C.
3507(b); 5 CFR 1320.12(d). Federal law requires OMB to approve or
disapprove paperwork packages between 30 and 60 days after the 30 day
notice is published. 44 U.S.C. 3507 (b)-(c); 5 CFR 1320.12(d); see also
60 FR 44978, 44983, Aug. 29, 1995. OMB believes that the 30 day notice
informs the regulated community to file relevant comments and affords
the agency adequate time to digest public comments before it renders a
decision. 60 FR 44983, Aug. 29, 1995. Therefore, respondents should
submit their respective comments to OMB within 30 days of publication
of this Notice to best ensure having their full effect. 5 CFR
1320.12(c); see also 60 FR 44983, Aug. 29, 1995.
    The summary below describes the nature of the information
collection requirements (ICRs) and the expected burden being submitted
for clearance by OMB as required by the PRA.
    Title: Identification of Cars Moved in Accordance with Order 13528.
    OMB Control Number: 2130-0506.
    Type of Request: Extension without change of a currently approved
collection.
    Affected Public: Businesses.
    Abstract: This collection of information identifies a freight car
being moved within the scope of Order 13528 (now codified at under 49
CFR 232.3). Otherwise, an exception will be taken, and the car will be
set out of the train and not delivered. The information that must be
recorded is specified at 49 CFR 232.3(d)(3), which requires that a car
be properly identified by a card attached to each side of the car and
signed stating that such movement is being made under authority of the
Order. Section 232.2(d)(3) does not require retaining cards or tags.
When a car bearing a tag for movement under this provision arrives at
its destination, the tags are simply removed. This requirement/record
comes into play only when a railroad finds it necessary to move
equipment as specified above. FRA estimates that approximately 400 cars
per year are moved under this Order.
    Form Number(s): N/A.
    Total Annual Estimated Burden Hours: 67 hours.
    Addressee: Send comments regarding this information collection to
the Office of Information and Regulatory Affairs, Office of Management
and Budget, 725 Seventeenth Street NW., Washington, DC 20503,
Attention: FRA Desk Officer. Comments may also be sent via email to OMB
at the following address<EMAIL_ADDRESS>    Comments are invited on the following: Whether the proposed
collection of information is necessary for the proper performance of
the functions of the Department, including whether the information will
have practical utility; the accuracy of the Department's estimate of
the burden of the proposed information collection; ways to enhance the
quality, utility, and clarity of the information to be collected; and
ways to minimize the burden of the collection of information on
respondents, including the use of automated collection techniques or
other forms of information technology.
    A comment to OMB is best assured of having its full effect if OMB
receives it within 30 days of publication of this notice in the Federal
Register.

    Authority: 44 U.S.C. 3501-3520.

    Issued in Washington, DC, on December 22, 2011.
Michael Logue,
Acting Director, Office of Financial Management, Federal Railroad
Administration.
[FR Doc. 2011-33350 Filed 12-28-11; 8:45 am]
BILLING CODE 4910-06-P


[Federal Register Volume 75, Number 5 (Friday, January 8, 2010)]
[Notices]
[Pages 1090-1091]
[FR Doc No: X10-720108]

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

SECURITIES AND EXCHANGE COMMISSION

Sunshine Act Meeting Notice

    Notice is hereby given, pursuant to the provisions of the
Government in the Sunshine Act, Public Law 94-409, that the Securities
and Exchange Commission will hold an Open Meeting on January 13, 2010
at 10 a.m., in the Auditorium, Room L-002.
    The subject matter of the Open Meeting will be:
    Item 1: The Commission will consider whether to publish a concept
release on equity market structure. The concept release would invite
public comment on a wide range of issues, including the performance of
equity market structure in recent years, high frequency trading, and
undisplayed, or ``dark,'' liquidity.

    Item 2: The Commission will consider whether to propose a new rule
regarding risk management controls and supervisory procedures to manage
financial, regulatory and other risks for brokers or dealers that
provide market access.
    At times, changes in Commission priorities require alterations in
the scheduling of meeting items.
    For further information and to ascertain what, if any, matters have
been added, deleted or postponed, please contact:
    The Office of the Secretary at<PHONE_NUMBER>.

    Dated: January 5, 2010.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010-200 Filed 1-6-10; 11:15 am]
BILLING CODE 8011-01-P


DRAFT Page 1 of 1 12/ 27/ 2004 U. S. EPA BOARD OF SCIENTIFIC COUNSELORS Endocrine Disrupting Chemicals Subcommittee DRAFT MEETING AGENDA January 6, 2005 12: 00 pm   2: 00 pm EST CONFERENCE CALL Participation by Teleconference Only Thursday, January 6, 2005 12: 00 12: 10 pm Welcome Dr. Anna Harding  Summary of Subcommittee Activities Chair, EDC Subcommittee  Agenda for this Conference Call 12: 10 12: 15 pm Administrative Issues Dr. Neil Stiber ( EPA)  FACA, Time Sheets, etc. DFO, EDC Subcommittee 12: 15 1: 30 pm Preparation of Draft Final Report for Dr. Anna Harding Deliberation by BOSC Executive Committee  Additions and Revisions Needed  Writing and Editing Assignments 1: 30 1: 50 pm Feedback on Program Review Process EDC Subcommittee 1: 50 2: 00 pm Public Comments ( if needed)

2: 00 pm Adjourn


[Federal Register: January 7, 2008 (Volume 73, Number 4)]
[Rules and Regulations]
[Page 1044-1046]
[DOCID:fr07ja08-2]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2007-0044; Directorate Identifier 2007-NM-126-AD;
Amendment 39-15320; AD 2007-26-18]
RIN 2120-AA64

Airworthiness Directives; BAE Systems (Operations) Limited Model
BAe 146 and Avro 146-RJ Airplanes

AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).

ACTION: Final rule.

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

SUMMARY: We are adopting a new airworthiness directive (AD) for the
products listed above. This AD results from mandatory continuing
airworthiness information (MCAI) originated by an aviation authority of
another country to identify and correct an unsafe condition on an
aviation product. The MCAI describes the unsafe condition as: ``An
accumulator cylinder had material defects and suffered an in-flight
burst failure causing damage to the aircraft structure.'' We are
issuing this AD to require actions to correct the unsafe condition on
these products.

DATES: This AD becomes effective February 11, 2008.
    The Director of the Federal Register approved the incorporation by
reference of certain publications listed in this AD as of February 11,
2008.

ADDRESSES: You may examine the AD docket on the Internet at http://www.regulations.gov
 or in person at the U.S. Department of

Transportation, Docket Operations, M-30, West Building Ground Floor,
Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Todd Thompson, Aerospace Engineer,
International Branch, ANM-116, FAA, Transport Airplane Directorate,
1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone (425)
227-1175; fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR
part 39 to include an AD that would apply to the specified products.
That NPRM was published in the Federal Register on October 17, 2007 (72
FR 58774). That NPRM proposed to correct an unsafe condition for the
specified products. The MCAI states:

    An accumulator cylinder had material defects and suffered an in-
flight burst failure causing damage to the aircraft structure. This
resulted in the issue of EASA Emergency AD 2006-0061-E [we issued AD
2006-23-12 to address that EASA AD] that required the identification
and check of cylinders from known suspect batches. Further
investigations and checks by the accumulator manufacturer have
concluded that all cylinders from a particular supplier may not have
been correctly inspected at manufacture. To prevent the risk of
further failures, this Airworthiness Directive (AD) requires all
accumulators with cylinders from this supplier to be identified and
inspected prior to re-installation.

The corrective action includes replacing any accumulator found to have
a defect. You may obtain further information by examining the MCAI in
the AD docket.

Comments

    We gave the public the opportunity to participate in developing
this AD. We received no comments on the NPRM or on the determination of
the cost to the public.

Conclusion

    We reviewed the available data and determined that air safety and
the public interest require adopting the AD as proposed.

Differences Between This AD and the MCAI or Service Information

    We have reviewed the MCAI and related service information and, in
general, agree with their substance. But we might have found it
necessary to use different words from those in the MCAI to ensure the
AD is clear for U.S. operators and is enforceable. In making these
changes, we do not intend to differ substantively from the information
provided in the MCAI and related service information.
    We might also have required different actions in this AD from those
in the MCAI in order to follow our FAA policies. Any such differences
are highlighted in a NOTE within the AD.

Costs of Compliance

    We estimate that this AD will affect about 1 product of U.S.
registry. We also estimate that it will take about 4 work-hours per
product to comply with the basic requirements of this AD. The average
labor rate is $80 per work-hour. Based on these figures, we estimate
the cost of this AD to the U.S. operators to be $320, or $320 per
product.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of

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

Regulatory Findings

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

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov
; or in person at the Docket Operations office

between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains the NPRM, the regulatory evaluation,
any comments received, and other information. The street address for
the Docket Operations office (telephone<PHONE_NUMBER>) is in the
ADDRESSES section. Comments will be available in the AD docket shortly
after receipt.

List of Subjects in 14 CFR Part 39

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

Adoption of the Amendment

0
Accordingly, under the authority delegated to me by the Administrator,
the FAA amends 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

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

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new AD:

2007-26-18 BAE Systems (Operations) Limited (Formerly British
Aerospace Regional Aircraft): Amendment 39-15320. Docket No. FAA-
2007-0044; Directorate Identifier 2007-NM-126-AD.

Effective Date

    (a) This airworthiness directive (AD) becomes effective February
11, 2008.

Affected ADs

    (b) None.

Applicability

    (c) This AD applies to BAE Systems (Operations) Limited Model
BAe 146-100A, -200A, and -300A series airplanes; and Model Avro 146-
RJ70A, 146-RJ85A, and 146-RJ100A airplanes; certificated in any
category, all models, all serial numbers.

Subject

    (d) Air Transport Association (ATA) of America Code 29:
Hydraulic power.

Reason

    (e) The mandatory continuing airworthiness information (MCAI)
states:
    An accumulator cylinder had material defects and suffered an in-
flight burst failure causing damage to the aircraft structure. This
resulted in the issue of EASA Emergency AD 2006-0061-E [we issued AD
2006-23-12 to address that EASA AD] that required the identification
and check of cylinders from known suspect batches. Further
investigations and checks by the accumulator manufacturer have
concluded that all cylinders from a particular supplier may not have
been correctly inspected at manufacture. To prevent the risk of
further failures, this Airworthiness Directive (AD) requires all
accumulators with cylinders from this supplier to be identified and
inspected prior to re-installation.

The corrective action includes replacing any accumulator found to
have a defect.

Actions and Compliance

    (f) Unless already done, do the following actions.
    (1) Within 30 months after the effective date of this AD,
identify the installed accumulator in accordance with paragraph 2.C.
of BAE Systems (Operations) Limited Inspection Service Bulletin
ISB.29-047, dated October 3, 2006, which makes reference to APPH
Service Bulletin AIR91666-29-03, dated July 2006.
    (2) When an accumulator is identified as being affected by this
AD, before further flight after accomplishing the actions required
in paragraph (f)(1) of this AD, remove the accumulator in accordance
with paragraph 2.D. of BAE Systems (Operations) Limited Inspection
Service Bulletin ISB.29-047, dated October 3, 2006, and do a
magnetic particle inspection of the cylinder for any defects in
accordance with the Accomplishment Instructions of APPH Service
Bulletin AIR91666-29-03, dated July 2006.
    (3) If any defect is found during the inspection required in
paragraph (f)(2) of this AD, before next flight, replace the
accumulator with a serviceable unit in accordance with the
Accomplishment Instructions of APPH Service Bulletin AIR91666-29-03,
dated July 2006.
    (4) After the effective date of this AD, no person may install a
spare accumulator identified by APPH Service Bulletin AIR91666-29-
03, dated July 2006, as a replacement part, unless it has been
inspected in accordance with APPH Service Bulletin AIR91666-29-02,
dated March 2006; or APPH Service Bulletin AIR91666-29-03, dated
July 2006 (see second Note in paragraph 1.D.(1) of BAE Systems
(Operations) Limited Inspection Service Bulletin ISB.29-047, dated
October 3, 2006, for further explanation).

FAA AD Differences

    Note: This AD differs from the MCAI and/or service information
as follows:
    (1) Where the MCAI specifies to identify the installed
accumulator within 6 weeks after the effective date of the AD, we
have determined that the identification may be done within 30 months
after the effective date of this AD to coincide with the compliance
time for the magnetic particle inspection. In making this
determination, we considered the maximum interval of time allowable
for all affected airplanes to continue to operate without
compromising safety, fleet usage, and the availability of
replacement parts.

Other FAA AD Provisions

    (g) The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager, ANM-
116, International Branch, Transport Airplane Directorate, FAA, has
the authority to approve AMOCs for this AD, if requested using the
procedures found in 14 CFR 39.19. Send information to ATTN: Todd
Thompson, Aerospace Engineer, International Branch, ANM-116, FAA,
Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton,
Washington 98057-3356; telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>.
Before using any approved AMOC on any airplane to which the AMOC
applies, notify your appropriate principal inspector (PI) in the FAA
Flight Standards District Office (FSDO), or lacking a PI, your local
FSDO.
    (2) Airworthy Product: For any requirement in this AD to obtain
corrective actions from a manufacturer or other source, use these
actions if they are FAA-approved. Corrective actions are considered
FAA-approved if they are approved by the State of Design Authority
(or their delegated agent). You are required to assure the product
is airworthy before it is returned to service.

    (3) Reporting Requirements: For any reporting requirement in
this AD, under the provisions of the Paperwork Reduction Act, the
Office of Management and Budget (OMB) has approved the information
collection requirements and has assigned OMB Control Number 2120-
0056.

Related Information

    (h) Refer to MCAI European Aviation Safety Agency Airworthiness
Directive 2007-0076, dated March 21, 2007, and the service
information listed in Table 1 of this AD for related information.

                      Table 1.--Service Information
------------------------------------------------------------------------
             Service Bulletin                           Date
------------------------------------------------------------------------
APPH Service Bulletin AIR91666-29-02......  March 2006.
APPH Service Bulletin AIR91666-29-03......  July 2006.
BAE Systems (Operations) Limited            October 3, 2006.
 Inspection Service Bulletin ISB.29-047.
------------------------------------------------------------------------

Material Incorporated by Reference

    (i) You must use the service information specified in Table 2 of
this AD to do the actions required by this AD, unless the AD
specifies otherwise.
    (1) The Director of the Federal Register approved the
incorporation by reference of this service information under 5
U.S.C. 552(a) and 1 CFR part 51.
    (2) For service information identified in this AD, contact
British Aerospace Regional Aircraft American Support 13850 Mclearen
Road, Herndon, Virginia 20171; and APPH Ltd., Engineering Division,
Unit 1, Pembroke Court, Chancellor Road, Manor Park, Runcorn,
Cheshire, WA7 1TG, England, United Kingdom.
    (3) You may review copies at the FAA, Transport Airplane
Directorate, 1601 Lind Avenue, SW., Renton, Washington; or at the
National Archives and Records Administration (NARA). For information
on the availability of this material at NARA, call<PHONE_NUMBER>,
or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html
.

              Table 2.--Material Incorporated by Reference
------------------------------------------------------------------------
             Service Bulletin                           Date
------------------------------------------------------------------------
APPH Service Bulletin AIR91666-29-03......  July 2006.
BAE Systems (Operations) Limited            October 3, 2006.
 Inspection Service Bulletin ISB.29-047.
------------------------------------------------------------------------

    Issued in Renton, Washington, on December 20, 2007.
Ali Bahrami,
Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. E7-25479 Filed 1-4-08; 8:45 am]

BILLING CODE 4910-13-P