[Federal Register: February 8, 2006 (Volume 71, Number 26)]
[Notices]
[Page 6530-6535]
[DOCID:fr08fe06-153]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53202; File No. SR-PCX-2006-04]

Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
the Certificate of Incorporation of PCX Holdings, Inc.

January 31, 2006.
    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 January 27, 2006, the Pacific Exchange, Inc. (``PCX'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by PCX. PCX filed the proposed
rule change pursuant to Section 19(b)(3)(A) of the Act,\3\ and Rule
19b-4(f)(6) thereunder,\4\ which renders the proposal effective upon
filing with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    PCX proposes to submit to the Commission a proposed rule change to
further extend certain temporary exceptions from the voting and
ownership limitations in the certificate of incorporation of PCX
Holdings, Inc. (``PCXH''), a Delaware corporation and a parent company
of PCX, originally approved by the Commission in an order issued on
September 22, 2005 (the ``SEC Order'') \5\ and extended pursuant to a
proposed rule change filed with the Commission on December 19, 2005
(the ``Original Extension Rule Filing'') \6\ and amended on December
23, 2005,\7\ so as to allow: (a) Archipelago Holdings, Inc.
(``Archipelago''), a Delaware corporation and the ultimate parent
company of PCXH and PCX, to continue to (i) own Wave Securities, L.L.C.
(``Wave'') and (ii) own and operate the ATS Inbound Router Function (as
defined below) of

Archipelago Trading Services, Inc. (``ATS'') and the Inbound Router
Clearing Function (as defined below) of Archipelago Securities, L.L.C.
(``Archipelago Securities''); and (b) Gerald D. Putnam, Chairman and
Chief Executive Officer of Archipelago (``Mr. Putnam''), to own in
excess of 5% of Terra Nova Trading, L.L.C. (``TNT'') and continue to
serve as a director of TAL Financial Services (``TAL''), in each case
until the earlier of (x) the closing date of the merger of Archipelago
and the New York Stock Exchange, Inc. (the ``Archipelago NYSE Merger'')
and (y) March 31, 2006.
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    \5\ See Securities Exchange Act Release No. 52497 (September 22,
2005), 70 FR 56949 (September 29, 2005) (SR-PCX-2005-90) (the ``SEC
Order'').
    \6\ See Pacific Exchange, Inc., Proposed Rule Change Relating to
the Certificate of Incorporation of PCX Holdings, Inc., File No. SR-
PCX-2005-139 (December 19, 2005).
    \7\ See Amendment No. 1 to the Original Extension Rule Filing
(December 23, 2005).
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, PCX 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. PCX 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
    a. PCXH Acquisition and the Amendment of the PCXH Certificate of
Incorporation. Archipelago operates the Archipelago Exchange
(``ArcaEx''), an open, all-electronic stock market for the trading of
equity securities. On September 26, 2005, Archipelago completed its
acquisition of PCXH and all of its wholly-owned subsidiaries, including
PCX and PCXE (the ``PCXH Acquisition''). The PCXH Acquisition was
accomplished by way of a merger of PCXH with a wholly-owned subsidiary
of Archipelago, with PCXH being the surviving corporation in the merger
and becoming a wholly-owned subsidiary of Archipelago.
    The certificate of incorporation of PCXH (as amended to date, the
``PCXH Certificate of Incorporation'') contains various ownership and
voting restrictions on PCXH's capital stock, which are designed to
safeguard the independence of the self-regulatory functions of PCX and
to protect the Commission's oversight responsibilities. In order to
allow Archipelago to own 100% of the capital stock of PCXH, prior to
the completion of the PCXH Acquisition, PCX filed with the Commission a
proposed rule change which sought to, among other things, amend the
PCXH Certificate of Incorporation to create an exception from the
voting and ownership restrictions for Archipelago and certain of its
related persons (the ``Original Rule Filing'').\8\ The Original Rule
Filing, as amended by Amendment No. 1 and Amendment No. 2 thereto, was
approved by the Commission on September 22, 2005 \9\ and the amended
PCXH Certificate of Incorporation became effective on September 26,
2005, upon the closing of the PCXH Acquisition.
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    \8\ See Pacific Exchange, Inc., Proposed Rule Change Relating to
the Certificate of Incorporation of PCX Holdings, Inc., PCX Rules,
and Bylaws of Archipelago Holdings, Inc., File No. SR-PCX-2005-90
(August 1, 2005).
    \9\ See SEC Order.
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    Article Nine of the PCXH Certificate of Incorporation provides that
no Person,\10\ either alone or together with its Related Persons,\11\
may own, directly or indirectly, shares constituting more than 40% of
the outstanding shares of any class of PCXH capital stock,\12\ and that
no Person, either alone or together with its Related Persons who is a
trading permit holder of PCX or an equities trading permit holder of
PCXE, may own, directly or indirectly, shares constituting more than
20% of any class of PCXH capital stock.\13\ Furthermore, the PCXH
Certificate of Incorporation provides that, for so long as PCXH
controls, directly or indirectly, PCX, no Person, either alone or with
its Related Persons, may directly or indirectly vote or cause the
voting of shares of PCXH capital stock or give any proxy or consent
with respect to shares representing more than 20% of the voting power
of the issued and outstanding PCXH capital stock.\14\ The PCXH
Certificate of Incorporation also places limitations on the right of
any Person, either alone or with its Related Persons, to enter into any
agreement with respect to the withholding of any vote or proxy.\15\
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    \10\ ``Person'' is defined to mean an individual, partnership
(general or limited), joint stock company, corporation, limited
liability company, trust or unincorporated organization, or any
governmental entity or agency or political subdivision thereof. PCXH
Certificate of Incorporation, Article Nine, Section 1(b)(iv).
    \11\ The term ``Related Person,'' as defined in the PCXH
Certificate of Incorporation, means (i) with respect to any person,
all ``affiliates'' and ``associates'' of such person (as such terms
are defined in Rule 12b-2 under the Act); (ii) with respect to any
person constituting a trading permit holder of PCX or an equities
trading permit holder of PCXE, any broker dealer with which such
holder is associated; and (iii) any two or more persons that have
any agreement, arrangement or understanding (whether or not in
writing) to act together for the purpose of acquiring, voting,
holding or disposing of shares of the capital stock of PCXH. PCXH
Certificate of Incorporation, Article Nine, Section 1(b)(iv).
    \12\ PCXH Certificate of Incorporation, Article Nine, Section
1(b)(i). However, such restriction may be waived by the Board of
Directors of PCXH pursuant to an amendment to the Bylaws of PCXH
adopted by the Board of Directors, if, in connection with the
adoption of such amendment, the Board of Directors adopts a
resolution stating that it is the determination of such Board that
such amendment will not impair the ability of PCX to carry out its
functions and responsibilities as an ``exchange'' under the Act and
is otherwise in the best interests of PCXH and its stockholders and
PCX, and will not impair the ability of the Commission to enforce
said Act, and such amendment shall not be effective until approved
by said Commission; provided that the Board of Directors of PCXH
shall have determined that such Person and its Related Persons are
not subject to any applicable ``statutory disqualification'' (within
the meaning of Section 3(a)(39) of the Act). PCXH Certificate of
Incorporation, Article Nine, Sections 1(b)(i)(B) and 1(b)(i)(C).
    \13\ Id., Article Nine, Section 1(b)(ii).
    \14\ Id., Article Nine, Section 1(c).
    \15\ Id.
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    PCX proposed and the Commission approved an exception from the
ownership and voting limitations described above to add a new paragraph
at the end of Article Nine of the PCXH Certificate of Incorporation,
which provides that for so long as Archipelago directly owns all of the
outstanding capital stock of PCXH, these ownership and voting
limitations shall not be applicable to the ownership and voting of
shares of PCXH by (i) Archipelago, (ii) any Person which is a Related
Person of Archipelago, either alone or together with its Related
Persons, and (iii) any other Person to which Archipelago is a Related
Person, either alone or together with its Related Persons.\16\ These
exceptions to the ownership and voting limitations, however, shall not
apply to any ``Prohibited Persons,'' \17\ which is defined to mean any
Person that is, or that has a Related Person that is (i) an OTP Holder
or an OTP Firm (as defined in the rules of PCX) \18\ or (ii) an ETP
Holder (as defined in the rules of PCXE),\19\ unless such Person is
also a

``Permitted Person'' under the PCXH Certificate of Incorporation.\20\
The PCXH Certificate of Incorporation further provides that any
Prohibited Person not covered by the definition of a Permitted Person
who is subject to and exceeds the voting and ownership limitations
imposed by Article Nine as of the date of the closing of the PCXH
Acquisition shall be permitted to exceed the voting and ownership
limitations imposed by Article Nine only to the extent and for the time
period approved by the Commission.\21\
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    \16\ Id., Article Nine, Section 4.
    \17\ Id.
    \18\ PCX rules define an ``OTP Holder'' to mean any natural
person, in good standing, who has been issued an Options Trading
Permit (``OTP'') by the Exchange for effecting approved securities
transactions on the Exchange's trading facilities, or has been named
as a Nominee. PCX Rule 1.1(q). The term ``Nominee'' means an
individual who is authorized by an ``OTP Firm'' (a sole
proprietorship, partnership, corporation, limited liability company
or other organization in good standing who holds an OTP or upon whom
an individual OTP Holder has conferred trading privileges on the
Exchange's trading facilities) to conduct business on the Exchange's
trading facilities and to represent such OTP Firm in all matters
relating to the Exchange. PCX Rule 1.1(n).
    \19\ PCXE rules define an ``ETP Holder'' to mean any sole
proprietorship, partnership, corporation, limited liability company
or other organization in good standing that has been issued an
Equity Trading Permit, a permit issued by the PCXE for effecting
approved securities transactions on the trading facilities of PCXE.
PCXE Rule 1.1(n).
    \20\ ``Permitted Person'' is defined to mean (A) any broker or
dealer approved by the Commission after June 20, 2005 to be a
facility (as defined in Section 3(a)(2) of the Act) of PCX; (B) any
Person that has been approved by the Commission prior to it becoming
subject to the provisions of Article Nine of the PCXH Certificate of
Incorporation with respect to the voting and ownership of shares of
PCXH capital stock by such Person; and (C) any Person that is a
Related Person of Archipelago solely by reason of beneficially
owning, either alone or together with its Related Persons, less than
20% of the outstanding shares of Archipelago capital stock. PCXH
Certificate of Incorporation, Article Nine, Section 4.
    \21\ Id.
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    b. Wave. Wave is an introducing broker for Archipelago's
institutional customers and provides such customers with access to
ArcaEx and other market centers. Because Wave, a broker-dealer and an
ETP Holder of PCXE, is a wholly-owned subsidiary and, consequently, a
Related Person, of Archipelago, it falls within the definition of
``Prohibited Persons'' under the PCXH Certificate of Incorporation.
Consequently, absent an exception, Archipelago's ownership of PCXH
would cause Wave, as an ETP Holder, to exceed the voting and ownership
limitations imposed by Article Nine of the PCXH Certificate of
Incorporation. Therefore, in connection with the PCXH Acquisition, PCX
requested a temporary exception from the ownership and voting
limitations in the PCX Certificate of Incorporation for Archipelago's
ownership of Wave until December 31, 2005, subject to the condition
that during that interim period Archipelago would continue to maintain
and comply with its current information barriers between Wave, on the
one hand, and PCX, PCXE and other subsidiaries of Archipelago that are
facilities of PCX or PCXE, on the other hand.\22\
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    \22\ See Original Rule Filing at 36-37 and Amendment No. 2 to
the Original Rule Filing (September 16, 2005) (``Amendment No. 2''),
at 4.
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    The Commission approved PCX's rule proposal regarding Wave (the
``Original Wave Exception'').\23\ In the SEC Order, the Commission
stated that the affiliation of an exchange with one of its members that
provides inbound access to the exchange--in direct competition with
other members of the exchange--raises potential conflicts of interest
between the exchange's regulatory responsibilities and its commercial
interests, and the potential for unfair competitive advantage that the
affiliated member could have by virtue of informational or operational
advantages, or the ability to receive preferential treatment.\24\
However, noting that the conditions to be imposed during the interim
period were designed to mitigate potential conflicts of interest and
the potential for unfair competitive advantage, the Commission
concluded that it would be appropriate and consistent with the Act to
allow a limited, temporary exception for Archipelago to continue its
ownership of Wave.\25\ In granting the approval for the Original Wave
Exception, the Commission also noted that in addition to being a member
of PCX, Wave is a member of the National Association of Securities
Dealers, Inc. (``NASD''), a self-regulatory organization (``SRO'') not
affiliated with Archipelago, and the NASD has been designated by the
Commission as the ``Designated Examining Authority'' for Wave pursuant
to Rule 17d-1 of the Act.\26\ Furthermore, during the interim period,
Wave would continue to be covered by the scope of an agreement between
NASD and PCX, which was entered into pursuant to Rule 17d-2 under the
Act \27\ (the ``17d-2 Agreement'') and provides for a plan concerning
the regulatory responsibilities of NASD with respect to certain members
of PCX, including Wave.\28\
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    \23\ See SEC Order at 56960.
    \24\ Id. at 56959.
    \25\ Id.
    \26\ Id. Pursuant to Rule 17d-1 under the Act, where a member of
the Securities Investor Protection Corporation is a member of more
than one SRO, the Commission shall designate to one of such
organizations the responsibility of examining such member for
compliance with the applicable financial responsibility rules. In
making such designation, the Commission shall take into
consideration the regulatory capabilities and procedures of the
SROs, availability of staff, convenience of location, unnecessary
regulatory duplication, and such other factors as the Commission may
consider germane to the protection of investors, the cooperation and
coordination among SROs, and the development of a national market
system for the clearance and settlement of securities transactions.
17 CFR 240.17d-1.
    \27\ Rule 17d-2 under the Act provides that any two or more SROs
may file with the Commission a plan for allocating among such SROs
the responsibilities to receive regulatory reports from persons who
are members or participants of more than one of such SROs to examine
such persons for compliance, or to enforce compliance by such
persons, with specified provisions of the Act, the rules and
regulations thereunder, and the rules of such SROs, or to carry out
other specified regulatory functions with respect to such persons.
17 CFR 240.17d-2.
    \28\ See SEC Order at 56959.
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    In accordance with the terms of the Original Wave Exception,
Archipelago has been working to sell its ownership interests in Wave.
On December 19, 2005, the Exchange submitted the Original Extension
Rule Filing requesting an extension of the Original Wave Exception to
January 31, 2006, subject to the same conditions as applied to the
Original Wave Exception described above.\29\ The extension took effect
immediately upon the filing of the Original Extension Rule Filing (the
``Original Wave Extension''). On January 19, 2006, Archipelago entered
into a definitive agreement for the sale of Wave. The definitive
agreement conditions the sale on the satisfaction of a number of
closing conditions, including the receipt of certain regulatory
approvals, and Archipelago intends to complete the sale as soon as
possible following the satisfaction of these conditions.
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    \29\ The Original Extension Rule Filing at 13-14.
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    c. ATS Inbound Router Function and the Inbound Router Clearing
Function. Archipelago currently owns ATS, a wholly owned subsidiary
that is a broker-dealer and an ETP Holder of PCXE. The business of ATS
consists of, among other things, acting as an introducing broker for
non-ETP Holder broker or dealer clients for securities traded on ArcaEx
(the ``ATS Inbound Router Function''). Archipelago Securities, a
wholly-owned subsidiary of Archipelago, is a registered broker-dealer,
a member of the NASD and an ETP Holder. In addition to its other
functions, Archipelago Securities provides clearing functions for
trades executed by the ATS Inbound Router Function (the ``Inbound
Router Clearing Function'').
    Because ATS, a broker-dealer and an ETP Holder of PCXE, is a
wholly-owned subsidiary and, consequently, a Related Person, of
Archipelago, it falls within the definition of ``Prohibited Persons''
under the PCXH Certificate of Incorporation. Consequently, absent an
exception, Archipelago's ownership of PCXH would cause ATS to exceed
the voting and ownership limitations imposed by Article Nine of the
PCXH Certificate of Incorporation. Likewise, because Archipelago
Securities, a broker-dealer and an ETP Holder of PCXE, is a wholly
owned subsidiary and, consequently, a Related Person, of Archipelago,
and the approvals of

Archipelago Securities set forth elsewhere in the SEC Order were
limited in scope and did not include its Inbound Router Clearing
Function, it falls within the definition of ``Prohibited Persons''
under the PCXH Certificate of Incorporation. Consequently, absent an
exception, Archipelago's ownership of PCXH would cause Archipelago
Securities to exceed the voting and ownership limitations imposed by
Article Nine of the PCXH Certificate of Incorporation.
    Therefore, in connection with the PCXH Acquisition, PCX requested a
temporary exception from the ownership and voting limitations in the
PCX Certificate of Incorporation for Archipelago's ownership and
operation of the ATS Inbound Router Function and the Inbound Router
Clearing Function until the earlier of (i) the closing date of the
Archipelago NYSE Merger and (ii) March 31, 2006, subject to the
following conditions: (1) The revenues derived by Archipelago from the
ATS Inbound Router Function will not exceed 7% of the consolidated
revenues of Archipelago (determined on a quarterly basis); (2) the ATS
Inbound Router Function will not accept any new clients following the
closing of Archipelago's acquisition of PCXH; and (3) Archipelago will
continue to maintain and comply with its current information barrier
between the ATS Inbound Router Function on the one hand and PCX, PCXE
and the other subsidiaries of Archipelago that are facilities of PCX or
PCXE on the other hand.\30\ The Commission approved PCX's rule proposal
regarding the ATS Inbound Router Function and the Inbound Router
Clearing Function (the ``Original Inbound Router Exception'').\31\ In
the SEC Order, the Commission stated that the affiliation of an
exchange with one of its members that provides inbound access to the
exchange--in direct competition with other members of the exchange--
raises potential conflicts of interest between the exchange's
regulatory responsibilities and its commercial interests, and the
potential for unfair competitive advantage that the affiliated member
could have by virtue of informational or operational advantages, or the
ability to receive preferential treatment.\32\ However, noting that the
conditions to be imposed during the interim period were designed to
mitigate potential conflicts of interest and the potential for unfair
competitive advantage, the Commission concluded that it would be
appropriate and consistent with the Act to allow a limited, temporary
exception for Archipelago to continue its ownership of the ATS Inbound
Router Function and the Inbound Router Clearing Function.\33\ In
granting the approval for the Original Inbound Router Exception, the
Commission also noted that in addition to being a member of PCX, ATS is
a member of the NASD and the NASD has been designated by the Commission
as the ``Designated Examining Authority'' for ATS pursuant to Rule 17d-
1 of the Act.\34\ Furthermore, during the interim period, ATS would
continue to be covered by the scope of the 17d-2 Agreement,\35\ which
provides for a plan concerning the regulatory responsibilities of NASD
with respect to certain members of PCX, including ATS.\36\
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    \30\ See Amendment No. 2 at 5-6.
    \31\ See SEC Order at 56960.
    \32\ Id. at 56959.
    \33\ Id.
    \34\ Id. See supra note 26 for a description of Rule 17d-1 under
the Act.
    \35\ See supra note 27.
    \36\ See SEC Order at 56959.
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    In accordance with the terms of the Original Inbound Router
Exception, Archipelago has been working to sell its ownership interest
in the ATS Inbound Router Function. Given the uncertainty of the
closing date of the Archipelago NYSE Merger, in the Original Extension
Rule Filing, as amended by Amendment No. 1 thereto, the Exchange
requested an extension of the Original Inbound Router Exception to
January 31, 2006, subject to the same conditions as applied to the
Original Inbound Router Exception described above.\37\ The extension
took effect immediately upon the filing of Amendment No. 1 to the
Original Extension Rule Filing (the ``Original Inbound Router
Extension''). On December 23, 2005, Archipelago entered into a
definitive agreement for the sale of the ATS Inbound Router Function to
Order Execution Services Holdings, Inc. (``OES'').\38\ The definitive
agreement conditions the sale on the satisfaction of a number of
closing conditions, including the receipt of NASD and other regulatory
approvals, and Archipelago intends to complete the sale as soon as
possible following the satisfaction of these conditions.
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    \37\ Original Extension Rule Filing at 13-14, and Amendment No.
1 to the Original Extension Rule Filing at 6.
    \38\ OES is neither a Related Person of Archipelago nor a
``Prohibited Person'' under the PCXH Certificate of Incorporation.
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    d. TNT. TNT is a wholly owned subsidiary of TAL. Mr. Putnam
indirectly owns in excess of 5% of TNT and serves as a director of
TAL.\39\ Because TNT, a broker-dealer and an ETP Holder of PCXE, is a
Related Person of Archipelago by virtue of Mr. Putnam's ownership of in
excess of 5% of TNT and service as a director of TAL, it falls within
the definition of ``Prohibited Persons'' under the PCXH Certificate of
Incorporation. Consequently, absent an exception, Archipelago's
ownership of PCXH would cause TNT to exceed the voting and ownership
limitations imposed by Article Nine of the PCXH Certificate of
Incorporation. Therefore, in connection with the PCXH Acquisition, the
Commission approved the Exchange's request for a temporary exception
for Mr. Putnam to continue to own in excess of 5% of TNT and continue
to serve as a director of TAL until December 31, 2005 (the ``Original
TNT Exception'').\40\ In the SEC Order, the Commission stated that it
believes that such a temporary exception is appropriate and consistent
with the Act because it will eliminate the affiliation between TNT and
Archipelago but allow Mr. Putnam a reasonable amount of time to
effectuate such actions necessary to eliminate the affiliation.\41\
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    \39\ PCX clarified that Mr. Putnam's ownership in TNT is
indirect. Telephone conversation between Kevin J.P. O'Hara, General
Counsel, PCX and Jennifer Dodd, Special Counsel, Division of Market
Regulation, Commission, on January 30, 2006 (``Telephone
Conversation'').
    \40\ See SEC Order at 56960.
    \41\ Id.
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    Mr. Putnam has been working to eliminate the affiliation with TNT.
In light of the fact that the sale of Mr. Putnam's interest in TNT was
unlikely to be consummated by December 31, 2005, in the Original
Extension Rule Filing, as amended by Amendment No. 1 thereto, the
Exchange also requested an extension of the Original TNT Exception to
January 31, 2006.\42\ The extension took effect immediately upon the
filing of Amendment No. 1 to the Original Extension Rule Filing (the
``Original TNT Extension'').
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    \42\ Original Extension Rule Filing at 14, and Amendment No.1 to
the Original Extension Rule Filing at 6.
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    e. Further Extensions of the Temporary Exceptions.
    i. Wave. On January 19, 2006, Archipelago entered into a definitive
agreement for the sale of Wave.\43\ The definitive agreement conditions
the sale on the satisfaction of a number of closing conditions,
including the receipt of certain regulatory approvals, and Archipelago
intends to complete the sale as soon as possible following the
satisfaction of these conditions. The Original Wave Extension expires
on January 31, 2006. In light of the fact that

the sale is unlikely to be consummated by January 31, 2006, the
Exchange hereby proposes to further extend the Original Wave Exception
to the earlier of (x) the closing date of the Archipelago NYSE Merger
and (y) March 31, 2006, subject to the same conditions as applied to
the Original Wave Exception described above. In requesting such
extension, Archipelago and the Exchange note that the NASD is the
``Designated Examining Authority'' for Wave pursuant to Rule 17d-1 of
the Act. Furthermore, during the interim period, Wave would continue to
be covered by the scope of the 17d-2 Agreement, which provides for a
plan concerning the regulatory responsibilities of NASD with respect to
certain members of PCX, including Wave. Archipelago and the Exchange
believe that this extension would be in keeping with the policy
justifications for the Original Wave Exception and the Original Wave
Extension outlined above, while allowing Archipelago to complete the
sale of Wave.
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    \43\ The purchaser of Wave is neither a Related Person of
Archipelago nor a ``Prohibited Person'' under the PCXH Certificate
of Incorporation.
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    ii. ATS Inbound Router Function and the Inbound Router Clearing
Function. On December 23, 2005, Archipelago entered into a definitive
agreement for the sale of the ATS Inbound Router Function to OES.\44\
The definitive agreement conditions the sale on the satisfaction of a
number of closing conditions, including the receipt of NASD and other
regulatory approvals, and Archipelago intends to complete the sale as
soon as possible following the satisfaction of these conditions. The
Original Inbound Router Extension expires on January 31, 2006. Because
of the uncertainties associated with the timing of the regulatory
approvals, it is unclear whether Archipelago would be able to complete
the sale by January 31, 2006. Therefore, the Exchange hereby proposes
to further extend the Original Inbound Router Exception to the earlier
of (x) the closing date of the Archipelago NYSE Merger and (y) March
31, 2006, subject to the same conditions as applied to the Original
Wave Exception described above. In requesting such extension,
Archipelago and the Exchange note that the NASD is the ``Designated
Examining Authority'' for ATS pursuant to Rule 17d-1 of the Act.
Furthermore, during the interim period, ATS would continue to be
covered by the scope of the 17d-2 Agreement, which provides for a plan
concerning the regulatory responsibilities of NASD with respect to
certain members of PCX, including ATS. Archipelago and the Exchange
believe that this extension would be in keeping with the policy
justifications for the Original Inbound Router Exception and the
Original Inbound Router Extension outlined above, while allowing
Archipelago to complete the sale of the ATS Inbound Router Function.
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    \44\ PCX clarified that the Inbound Router Clearing Function
will be discontinued after the sale of the ATS Inbound Router
Function subject only to the provision of transition services by
Archipelago Securities to OES, and that PCX intends to file a
proposed rule change requesting approval of such services. Telephone
Conversation.
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    iii. TNT. Mr. Putnam has been working to eliminate the affiliation
with TNT. Once he has reduced his interest in TNT, Mr. Putnam would
also cease serving as a director of TAL.\45\ The Original TNT Extension
expires on January 31, 2006. In light of the fact that the sale of Mr.
Putnam's interest in TNT is unlikely to be consummated by January 31,
2006, the Exchange hereby proposes to extend the Original TNT Exception
to the earlier of (x) the closing date of the Archipelago NYSE Merger
and (y) March 31, 2006. In requesting such extension, Archipelago and
the Exchange note that the NASD is the ``Designated Examining
Authority'' for TNT pursuant to Rule 17d-1 of the Act. Furthermore,
during the interim period, TNT would continue to be covered by the
scope of the 17d-2 Agreement, which provides for a plan concerning the
regulatory responsibilities of NASD with respect to certain members of
PCX, including TNT. Archipelago and the Exchange believe that this
extension would be in keeping with the policy justifications for the
Original TNT Exception and the Original TNT Extension outlined above,
while allowing Mr. Putnam a reasonable amount of time to effectuate the
actions necessary to eliminate the affiliation between TNT and
Archipelago.
---------------------------------------------------------------------------

    \45\ PCX clarified that Mr. Putnam would cease serving as a
director of TAL once he has reduced his interest in TNT. Telephone
Conversation.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change in this filing
is consistent with Section 6(b) \46\ of the Act, in general, and
furthers the objectives of Section 6(b)(1),\47\ in particular, in that
it enables the Exchange to be so organized so as to have the capacity
to be able to carry out the purposes of the Act and to comply, and
(subject to any rule or order of the Commission pursuant to Section
17(d) or 19(g)(2) of the Act) to enforce compliance by its exchange
members and persons associated with its exchange members, with the
provisions of the Act, the rules and regulations thereunder, and the
rules of the Exchange. The Exchange also believes that this filing
furthers the objectives of Section 6(b)(5),\48\ in particular, because
the rules summarized herein would create a governance and regulatory
structure with respect to the operation of the equities and options
business of PCX that is designed to help prevent fraudulent and
manipulative acts and practices; to promote just and equitable
principles of trade; to foster cooperation and coordination with
persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities; and to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest.
---------------------------------------------------------------------------

    \46\ 15 U.S.C. 78f(b).
    \47\ 15 U.S.C. 78f(b)(1).
    \48\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

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

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

    Written comments on the proposed rule change were neither solicited
nor received.

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

    Because the foregoing proposed rule change does not: (1)
Significantly affect the protection of investors or the public
interest; (2) impose any significant burden on competition; and (3)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate if consistent with
the protection of investors and the public interest, it has become
effective pursuant to Section 19(b)(3)(A) \49\ of the Act and Rule 19b-
4(f)(6) thereunder.\50\ At any time within 60 days of the filing of the
proposed rule change, the Commission may summarily abrogate such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \49\ 15 U.S.C. 78s(b)(3)(A).
    \50\ 17 CFR 240.19b-4(f)(6). The Exchange provided the
Commission with written notice of its intent to file this proposed
rule change on January 23, 2006.

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

    PCX has asked the Commission to waive the 30-day operative delay.
The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest.
Because the Original Wave Extension, the Original Inbound Router
Extension and the Original TNT Extension each expire on January 31,
2006, such waiver will allow each of Wave, ATS (with respect to the ATS
Inbound Router Function), Archipelago Securities (with respect to the
Inbound Router Clearing Function), and TNT to remain in compliance with
the voting and ownership limitations in the PCXH Certificate of
Incorporation. The Commission notes that the Exchange has represented
that Archipelago entered into definitive agreements for the sale of
Wave on January 19, 2006 and for the sale of the ATS Inbound Router
Function on December 23, 2005. The time period for each of the
extensions is short and will terminate on the earlier of (1) the
closing date of the Archipelago NYSE Merger and (2) March 31, 2006. In
addition, the Commission notes that the following protections are and
will continue to be in place during the interim period: (i) Wave, ATS,
and TNT are members of the NASD as well as PCX, (ii) the NASD is the
Designated Examining Authority for Wave, ATS, and TNT pursuant to Rule
17d-1 of the Act, and (iii) Wave, ATS, and TNT are, and will continue
to be during the extension, covered by the scope of the 17d-2
Agreement. Further, Archipelago's ownership and operation of Wave, the
ATS Inbound Router Function of ATS, and the Inbound Router Clearing
Function of Archipelago Securities will continue to be subject to the
same conditions as the Original Wave Exception and the Original Inbound
Router Exception, as described above and as approved by the Commission
in the SEC Order.
    For these reasons, the Commission designates the proposal to be
effective and operative upon filing with the Commission.\51\
---------------------------------------------------------------------------

    \51\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

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 e-mail to<EMAIL_ADDRESS>Please include

File Number SR-PCX-2006-04 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
    All submissions should refer to File Number SR-PCX-2006-04. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments,

all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for inspection
and copying in the Commission's Public Reference Room. Copies of such
filing also will be available for inspection and copying at the
principal office of the PCX.
    All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-PCX-2006-04
and should be submitted on or before March 1, 2006.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\52\
Nancy M. Morris,
Secretary.
---------------------------------------------------------------------------

    \52\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

 [FR Doc. E6-1730 Filed 2-7-06; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 83, Number 81 (Thursday, April 26, 2018)]
[Notices]
[Pages 18319-18321]
[FR Doc No: 2018-08795]

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

DEPARTMENT OF HOMELAND SECURITY

Coast Guard

[Docket Number USCG-2018-0193]

Polar Icebreaker Program; Preparation of Environmental Impact
Statement

AGENCY: Coast Guard, DHS.

ACTION: Notice of intent to prepare an Environmental Impact Statement
(EIS); notice of public meeting; and request for comments.

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

SUMMARY: The U.S. Coast Guard, as lead agency, is providing notice of
their intent to prepare an environmental impact statement (EIS) in
accordance with the National Environmental Policy Act (NEPA) for the
Polar Icebreaker Program's design and build of up to six polar
icebreakers (PIB). Notice is hereby given that the public scoping
process has begun for the preparation of an EIS that will address the
impacts and alternatives of the Proposed Action. The purpose of the
scoping process is to solicit public comments regarding the range of
issues, including potential environmental impacts and alternatives that
should be addressed in the EIS. This notice also notifies the public
that the U.S. Coast Guard intends to hold public meetings to discuss
potential issues, concerns and reasonable alternatives that should be
considered in the EIS. Following the scoping meetings and comment
period, a Draft EIS will be prepared and ultimately circulated for
public comment.

DATES: Comments and related material must be received by the U.S. Coast

Guard on or before June 25, 2018. The public meetings will be held in
May 2018 in Anchorage, Utqia[gdot]vik (Barrow), Nome, and Kotzebue. The
exact days and times of the public meetings will be announced through
notice in the local papers (The Arctic Sounder, The Anchorage Daily
News, and The Nome Nugget) and online at http://www.dcms.uscg.mil/Our-Organization/Assistant-Commandant-for-Acquisitions-CG-9/Programs/Surface-Programs/Polar-Icebreaker/.

ADDRESSES: You may submit comments identified by docket number USCG-
2018-0193 using the Federal portal at http://www.regulations.gov. See
the ``Public Participation and Request for Comments'' portion of the
SUPPLEMENTARY INFORMATION section for further instructions on
submitting comments. Written comments and related material may also be
submitted to U.S. Coast Guard personnel specified at the public
meetings.

FOR FURTHER INFORMATION CONTACT: If you have questions about this
notice of intent, email Mr. Ahmed Majumder, Deputy Program Manager,
Polar Icebreaker Program, U.S. Coast Guard; email
[email protected].

SUPPLEMENTARY INFORMATION:

I. Table of Abbreviations

CFR Code of Federal Regulations
CGC Coast Guard Cutter
EIS Environmental Impact Statement
FR Federal Register
NEPA National Environmental Policy Act
PIBs Polar Icebreakers
U.S.C. United States Code

II. Background and Purpose

    The U.S. Coast Guard's current fleet of PIBs consists of two heavy
icebreakers, Coast Guard Cutter (CGC) POLAR STAR and CGC POLAR SEA, and
one medium icebreaker, CGC HEALY. The U.S. Coast Guard's heavy
icebreakers have both exceeded their designed 30 year service life. CGC
POLAR STAR was commissioned in 1976 and CGC POLAR SEA in 1978. CGC
POLAR STAR began reactivation in 2010 and completed a service life
extension in 2013 to allow CGC POLAR STAR to operate for an additional
seven to ten years. CGC POLAR SEA has remained out of service since
2010 and is not expected to be reactivated. The current PIB program
acquisition strategy is approved to construct up to three heavy PIBs
and may (at a future date) potentially expand to include up to three
medium icebreakers, with planned service design lives of 30 years each.
The first of these new PIBs is expected to delivered in 2023. Because
the first new PIB would not be operational in the Polar Regions until
at least 2023, new information may become available after the
completion of this EIS. In that case, supplemental NEPA documentation
may, as appropriate, be prepared in support of individual proposed
actions. Examples of new information may include, but are not limited
to, changes to a species listing status or any other applicable laws
and directives, and information regarding mission, training,
homeporting, maintenance, and eventual decommissioning of the new PIBs.
    A new PIB would be designed to carry out the U.S. Coast Guard's
primary missions supported by the current polar icebreaker fleet.
Expected missions include Ice Operations, Defense Readiness, Aids to
Navigation, Living Marine Resources, Marine Safety, Marine
Environmental Protection, Other Law Enforcement, Ports, Waterways, and
Coastal Security, and Search and Rescue.
    In executing its various missions, the U.S. Coast Guard protects
the public, the environment, and U.S. economic and security interests
in any maritime region, including international waters and the Nation's
coasts, ports, and inland waterways, as required to support national
security. Legislation and Executive orders assign the U.S. Coast Guard
a wide range of responsibilities applicable to Polar regions. The U.S.
Coast Guard derives its authority for the use of icebreaking from
several statutes governing execution of its missions. These include 14
U.S.C. 81 (Coast Guard establishment, maintenance, and operation of
aids to navigation), 14 U.S.C. 88 (Coast Guard saving of life and
property), 14 U.S.C. 89 (Coast Guard law enforcement), 14 U.S.C. 90
(Arctic maritime transportation), 14 U.S.C. 91 (controlling anchorage
and movement of vessels), 14 U.S.C. 94 (conduct oceanographic
research), and 14 U.S.C. 141 (cooperation with agencies, States,
territories, and others). In addition, Executive Order 7521 (Use of
Vessels for Icebreaking in Channels and Harbors), 1 FR 2184, Dec. 24,
1936, directs the U.S. Coast Guard to assist in keeping channels and
harbors open to navigation by means of icebreaking operations.
    The U.S. Coast Guard proposes to conduct polar icebreaker
operations and training exercises to meet Coast Guard mission
responsibilities in the U.S. Arctic and Antarctic regions of operation,
in addition to vessel performance testing post-dry dock in the Pacific
Northwest near the probable polar icebreaker homeport of Seattle,
Washington (the exact location for homeporting has not been determined,
but the current fleet of polar icebreakers is homeported in Seattle,
Washington).
    Polar regions are becoming increasingly important to U.S. national
interests. The changing environment in these regions could lead to a
rise in human activity and increased commercial ship, cruise ship, and
naval surface ship operations, as well as increased exploration for oil
and other resources, particularly in the Arctic. One of the U.S. Coast
Guard's highest priorities is safety of life at sea. This entails the
artic responsibilities described above as well as assisting with
McMurdo Station; Antarctica Logistics. Long term-projected increases in
U.S. Coast Guard mission demand in the Polar Regions would require
additional support from PIBs. A lack of infrastructure, polar
environmental conditions, distance between operating areas and support
bases, all influence the U.S. Coast Guard's ability to provide
comparable service and presence provided in other non-polar areas of
operation with existing Coast Guard assets.
    Although the total number of new PIBs is subject to change, no more
than six are proposed or anticipated, and therefore, the EIS will
analyze the potential impacts of the range of up to six new PIBs, as
this will be the highest number projected to be operational in the
Polar Regions. Fewer than six new PIBs is also possible, but the
analysis will cover impacts of fewer vessels and it is expected that
fewer icebreakers will result in either similar impacts or some
combination that should result in fewer impacts than what will be
discussed and evaluated in the EIS. Potential environmental stressors
include acoustic (underwater acoustic transmissions, vessel noise,
icebreaking noise, aircraft noise, and gunnery noise), and physical
(vessel movement, aircraft or in-air device movement, in-water device
movement, icebreaking, and marine expended materials).

III. Scoping Process

    The U.S. Coast Guard intends to follow the Council on Environmental
Quality (CEQ) regulations implementing the NEPA (40 CFR 1500 et seq.)
by scoping through public comment and public meetings. Scoping, which
is integral to the process for implementing NEPA, provides a process to
ensure that (1) issues are identified early and properly studied; (2)
issues of little significance do not consume substantial time and
effort; (3) the draft EIS is thorough and balanced; and (4) delays
caused by an inadequate EIS are avoided.

    Public scoping is a process for determining the scope of issues to
be addressed in this EIS and for identifying the issues related to the
proposed action that may have a significant effect on the project
environment. The scoping process begins with publication of this notice
and ends after the U.S. Coast Guard has:
    [ssquf] Invited the participation of Federal, State, and local
agencies, any affected Indian tribe, and other interested persons;
    [ssquf] Consulted with affected Federally Recognized Tribes on a
government-to-government basis, and with affected Alaska Native
corporations, in accordance with Executive Order 13175 and other
policies. Native concerns, including impacts on Indian trust assets and
potential impacts to cultural resources, will be given appropriate
consideration;
    [ssquf] Requested the Environmental Protection Agency, the United
States Fish and Wildlife Service, the National Marine Fisheries
Service, and the United States Army Corps of Engineers to serve as
cooperating agencies in the preparation of this EIS. With this Notice
of Intent, we are asking Federal, State, and local agencies with
jurisdiction or special expertise with respect to environmental issues
in the project area, in addition to those we have already contacted, to
formally cooperate with us in the preparation of this EIS;
    [ssquf] Determined the scope and the issues to be analyzed in depth
in the EIS;
    [ssquf] Allocated responsibility for preparing the EIS components;
    [ssquf] Indicated any related environmental assessments or
environmental impact statements that are not part of this EIS;
    [ssquf] Identified other relevant environmental review and
consultation requirements, such as Coastal Zone Management Act
consistency determinations, and threatened and endangered species and
habitat impacts;
    [ssquf] Indicated the relationship between timing of the
environmental review and other aspects of the application process; and
    [ssquf] Exercised our option under 40 CFR 1501.7(b) to hold the
public scoping meeting announced in this notice.
    Once the scoping process is complete, the U.S. Coast Guard will
prepare a draft EIS, and will publish a Federal Register notice
announcing its public availability. We will provide the public with an
opportunity to review and comment on the draft EIS. Comments received
during the draft EIS review period will be available in the public
docket and made available in the final EIS. After the U.S. Coast Guard
considers those comments, we will prepare the final EIS and similarly
announce its availability and solicit public review and comment.

IV. Information Requested

    We are seeking comments on the potential environmental impacts that
may result from the development, building, testing, and operation of up
to three heavy polar icebreakers and potentially three medium
icebreakers to help in the development of an EIS. NEPA requires Federal
agencies to consider environmental impacts that may result from a
proposed action, to inform the public of potential impacts and
alternatives, and to facilitate public involvement in the assessment
process. An EIS would include, among other matters, discussions of the
purpose and need for the proposed action, a description of
alternatives, a description of the affected environment, and an
evaluation of the environmental impacts of the proposed action and
alternatives.
    As required by the NEPA, the U.S. Coast Guard also will analyze the
No Action Alternative as a baseline for comparing the impacts of the
proposed action. For the purposes of this proposed action, the No
Action Alternative is defined as not approving the design and build of
new polar icebreakers. The U.S. Coast Guard encourages public
participation in the EIS process. The scoping period will begin upon
publication of this notice in the Federal Register and continue for a
period of sixty (60) days. As part of the scoping process, and as
authorized by 40 CFR 1508.22(b)(4), the U.S. Coast Guard will hold a
public scoping meeting and informational open house in Anchorage,
Utqia[gdot]vik (Barrow), Nome, and Kotzebue, Alaska in May 2018. Public
comments will be accepted at those meetings and can also be submitted
to the docket, as previously described under ADDRESSES.

V. Public Participation and Request for Comments

    Pursuant to the CEQ regulations, the U.S. Coast Guard invites
public participation in the NEPA process. This notice requests public
participation in the scoping process, establishes a public comment
period, and provides information on how to participate.
    We encourage you to submit comments through the Federal portal at
http://www.regulations.gov. If your material cannot be submitted using
http://www.regulations.gov, contact the person in the FOR FURTHER
INFORMATION CONTACT section of this document for alternate
instructions. In your submission, please include the docket number for
this notice of intent and provide a reason for each suggestion or
recommendation.
    We accept anonymous comments. All comments received will be posted
without change to http://www.regulations.gov and will include any
personal information you have provided. For more about privacy and the
docket, visit http://www.regulations.gov/privacyNotice.
    Documents mentioned in this notice of intent as being available in
the docket, and all public comments, will be in our online docket at
http://www.regulations.gov and can be viewed by following that
website's instructions.
    We plan to hold public meetings in Anchorage, Utqia[gdot]vik
(Barrow), Nome, and Kotzebue to receive oral comments on this notice of
intent. The dates, times, and locations of the public meetings will be
announced in the local papers (The Arctic Sounder, The Anchorage Daily
News, and The Nome Nugget) and online at http://www.dcms.uscg.mil/Our-Organization/Assistant-Commandant-for-Acquisitions-CG-9/Programs/Surface-Programs/Polar-Icebreaker/. If special assistance is required
to attend the meetings, such as sign language interpretation or other
reasonable accommodations, contact the U.S. Coast Guard as indicated in
FOR FURTHER INFORMATION CONTACT.

    Dated: April 23, 2018.
Ahmedur Majumder,
Deputy Program Manager, Polar Icebreaker Program, United States Coast
Guard.
[FR Doc. 2018-08795 Filed 4-25-18; 8:45 am]
 BILLING CODE 9110-04-P


[Federal Register Volume 87, Number 93 (Friday, May 13, 2022)]
[Rules and Regulations]
[Pages 29217-29220]
[FR Doc No: 2022-10459]

========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents.

========================================================================

Federal Register / Vol. 87, No. 93 / Friday, May 13, 2022 / Rules and
Regulations

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2022-0504; Project Identifier MCAI-2022-00531-T;
Amendment 39-22035; AD 2022-09-15]
RIN 2120-AA64

Airworthiness Directives; Dassault Aviation Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule; request for comments.

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

SUMMARY: The FAA is adopting a new airworthiness directive (AD) for all
Dassault Aviation Model FALCON 2000 and FALCON 2000EX airplanes. This
AD was prompted by brake system failures during landing due to a brake
servo-valve failure resulting from application of an inappropriate oil
type during production and maintenance. This AD requires relocating
affected servo-valves and revising the existing airplane flight manual
(AFM) to provide temporary information necessary to operate airplanes
fitted with at least one affected brake servo-valve, as specified in a
European Union Aviation Safety Agency (EASA) AD, which is incorporated
by reference. This AD also limits or prohibits the installation of
affected brake servo-valves. The FAA is issuing this AD to address the
unsafe condition on these products.

DATES: This AD becomes effective May 31, 2022.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in this AD as of May 31,
2022.
    The FAA must receive comments on this AD by June 27, 2022.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.
     Hand Delivery: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.
    For material incorporated by reference (IBR) in this AD, contact
EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221
8999 000; email [email protected]; internet www.easa.europa.eu. You
may find this IBR material on the EASA website at https://ad.easa.europa.eu. You may view this material at the FAA, Airworthiness
Products Section, Operational Safety Branch, 2200 South 216th St., Des
Moines, WA. For information on the availability of this material at the
FAA, call<PHONE_NUMBER>. It is also available in the AD docket at
https://www.regulations.gov by searching for and locating Docket No.
FAA-2022-0504.

Examining the AD Docket

    You may examine the AD docket at https://www.regulations.gov by
searching for and locating Docket No. FAA-2022-0504; or in person at
Docket Operations between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays. The AD docket contains this AD, the mandatory
continuing airworthiness information (MCAI), any comments received, and
other information. The street address for Docket Operations is listed
above.

FOR FURTHER INFORMATION CONTACT: Tom Rodriguez, Aerospace Engineer,
Large Aircraft Section, FAA, International Validation Branch, 2200
South 216th St., Des Moines, WA 98198; telephone<PHONE_NUMBER>; email
[email protected].

SUPPLEMENTARY INFORMATION:

Comments Invited

    The FAA invites you to send any written data, views, or arguments
about this final rule. Send your comments to an address listed under
ADDRESSES. Include ``Docket No. FAA-2022-0504; Project Identifier MCAI-
2022-00531-T'' at the beginning of your comments. The most helpful
comments reference a specific portion of the final rule, explain the
reason for any recommended change, and include supporting data. The FAA
will consider all comments received by the closing date and may amend
this final rule because of those comments.
    Except for Confidential Business Information (CBI) as described in
the following paragraph, and other information as described in 14 CFR
11.35, the FAA will post all comments received, without change, to
https://www.regulations.gov, including any personal information you
provide. The agency will also post a report summarizing each
substantive verbal contact received about this final rule.

Confidential Business Information

    CBI is commercial or financial information that is both customarily
and actually treated as private by its owner. Under the Freedom of
Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public
disclosure. If your comments responsive to this AD contain commercial
or financial information that is customarily treated as private, that
you actually treat as private, and that is relevant or responsive to
this AD, it is important that you clearly designate the submitted
comments as CBI. Please mark each page of your submission containing
CBI as ``PROPIN.'' The FAA will treat such marked submissions as
confidential under the FOIA, and they will not be placed in the public
docket of this AD. Submissions containing CBI should be sent to Tom
Rodriguez, Aerospace Engineer, Large Aircraft Section, FAA,
International Validation Branch, 2200 South 216th St., Des Moines, WA
98198; telephone<PHONE_NUMBER>; email [email protected]. Any
commentary that the FAA receives which is not specifically designated
as CBI will be placed in the public docket for this rulemaking.

Background

    EASA, which is the Technical Agent for the Member States of the
European Union, has issued EASA Emergency AD 2022-0068-E, dated April
14, 2022 (EASA Emergency AD 2022-0068-E) (also referred to as the
MCAI), to correct an unsafe condition for all Model

FALCON 2000 and FALCON 2000EX airplanes.
    This AD was prompted by brake system failures during landing.
Subsequent investigation determined the root cause to be a brake servo-
valve failure. A batch of brake servo-valves has been identified during
airplane production and maintenance with an internal oil type that does
not meet the manufacturer's cold temperature specifications, which can
lead to their failure. The FAA is issuing this AD to prevent temporary
failure of the brake servo-valves, which could lead to reduced braking
performance during landing including degraded or dissymmetric braking,
possibly resulting in reduced control of the airplane, lateral
excursion of the runway, and consequent damage to the airplane. See the
MCAI for additional background information.

Related Service Information Under 1 CFR Part 51

    EASA Emergency AD 2022-0068-E specifies procedures for, among other
actions, relocating affected brake servo-valves between the left-hand
and right-hand brake control systems to ensure that at least one of the
two independent brake systems has no affected parts. EASA Emergency AD
2022-0068-E also specifies revising the existing AFM to provide
temporary information necessary to operate airplanes fitted with at
least one affected brake servo-valve. EASA Emergency AD 2022-0068-E
also limits or prohibits the future installation of affected brake
servo-valves. This material is reasonably available because the
interested parties have access to it through their normal course of
business or by the means identified in the ADDRESSES section.

FAA's Determination

    These products have been approved by the aviation authority of
another country and are approved for operation in the United States.
Pursuant to the FAA's bilateral agreement with this State of Design
Authority, it has notified the FAA of the unsafe condition described in
the MCAI described above. The FAA is issuing this AD after determining
that the unsafe condition described previously is likely to exist or
develop on other products of these same type designs.

Requirements of This AD

    This AD requires accomplishing the actions specified in EASA
Emergency AD 2022-0068-E described previously, except for any
differences identified as exceptions in the regulatory text of this AD,
and except as discussed under ``Differences Between this AD and the
MCAI.''
    EASA Emergency AD 2022-0068-E requires operators to ``inform all
flight crews'' of revisions to AFM, and thereafter to ``operate the
aeroplane accordingly.'' However, this AD does not specifically require
those actions as they are already required by FAA regulations. FAA
regulations require that operators furnish to pilots any changes to the
AFM (for example, 14 CFR 135.81(c)), and to ensure that pilots are
familiar with the AFM (for example, 14 CFR 91.505(a)). FAA regulations
also require pilots to follow the procedures in the existing AFM
including all updates. 14 CFR 91.9 requires that any person operating a
civil aircraft must comply with the operating limitations specified in
the AFM. Therefore, including a requirement in this AD to operate the
airplane according to the revised AFM would be redundant and
unnecessary.

Explanation of Required Compliance Information

    In the FAA's ongoing efforts to improve the efficiency of the AD
process, the FAA developed a process to use some civil aviation
authority (CAA) ADs as the primary source of information for compliance
with requirements for corresponding FAA ADs. The FAA has been
coordinating this process with manufacturers and CAAs. As a result,
EASA Emergency AD 2022-0068-E is incorporated by reference in this AD.
This AD requires compliance with EASA Emergency AD 2022-0068-E in its
entirety through that incorporation, except for any differences
identified as exceptions in the regulatory text of this AD. Using
common terms that are the same as the heading of a particular section
in EASA Emergency AD 2022-0068-E does not mean that operators need
comply only with that section. For example, where the AD requirement
refers to ``all required actions and compliance times,'' compliance
with this AD requirement is not limited to the section titled
``Required Action(s) and Compliance Time(s)'' in EASA Emergency AD
2022-0068-E. Service information required by EASA Emergency AD 2022-
0068-E for compliance will be available at https://www.regulations.gov
by searching for and locating Docket No. FAA-2022-0504 after this AD is
published.

Difference Between This AD and the MCAI

    The MCAI specifies to replace each affected brake servo-valve
within 12 months. The FAA is considering requiring that action, but the
planned compliance time would allow enough time to provide notice and
opportunity for prior public comment on the merits of the replacement.
The FAA considers that this AD is interim action. The FAA may consider
additional rulemaking that would require the replacement of affected
brake servo-valves.

FAA's Justification and Determination of the Effective Date

    Section 553(b)(3)(B) of the Administrative Procedure Act (APA) (5
U.S.C. 551 et seq.) authorizes agencies to dispense with notice and
comment procedures for rules when the agency, for ``good cause,'' finds
that those procedures are ``impracticable, unnecessary, or contrary to
the public interest.'' Under this section, an agency, upon finding good
cause, may issue a final rule without providing notice and seeking
comment prior to issuance. Further, section 553(d) of the APA
authorizes agencies to make rules effective in less than thirty days,
upon a finding of good cause.
    An unsafe condition exists that requires the immediate adoption of
this AD without providing an opportunity for public comments prior to
adoption. The FAA has found that the risk to the flying public
justifies forgoing notice and comment prior to adoption of this rule
because a brake servo-valve failure due to application of an
inappropriate oil could lead to reduced braking performance during
landing including degraded or dissymmetric braking, possibly resulting
in reduced control of the airplane, lateral excursion of the runway,
and consequent damage to the airplane. Given the significance of the
risk presented by this unsafe condition, it must be immediately
addressed. Accordingly, notice and opportunity for prior public comment
are impracticable and contrary to the public interest pursuant to 5
U.S.C. 553(b)(3)(B).
    In addition, the FAA finds that good cause exists pursuant to 5
U.S.C. 553(d) for making this amendment effective in less than 30 days,
for the same reasons the FAA found good cause to forgo notice and
comment.

Regulatory Flexibility Act (RFA)

    The requirements of the RFA do not apply when an agency finds good
cause pursuant to 5 U.S.C. 553 to adopt a rule without prior notice and
comment. Because the FAA has determined that it has good cause to adopt
this rule without notice and comment, RFA analysis is not required.

Costs of Compliance

    The FAA estimates that this AD affects 441 airplanes of U.S.
registry.

The FAA estimates the following costs to comply with this AD:

                                      Estimated Costs for Required Actions
----------------------------------------------------------------------------------------------------------------
                                                              Cost per
                Labor cost                   Parts cost        product             Cost on U.S. operators
----------------------------------------------------------------------------------------------------------------
Up to 10 work-hours x $85 per hour = $850         $11,690         $12,540  Up to $5,530,140.
----------------------------------------------------------------------------------------------------------------

    According to the manufacturer, some or all of the costs of this AD
may be covered under warranty, thereby reducing the cost impact on
affected individuals. The FAA does not control warranty coverage for
affected individuals. As a result, the FAA has included all known costs
in the cost estimate.

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.
    The FAA is 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

    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 that this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866, and
    (2) Will not affect intrastate aviation in Alaska.

List of Subjects in 14 CFR Part 39

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

The Amendment

    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 airworthiness
directive:

2022-09-15 Dassault Aviation: Amendment 39-22035; Docket No. FAA-
2022-0504; Project Identifier MCAI-2022-00531-T.

(a) Effective Date

    This airworthiness directive (AD) is effective May 31, 2022.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to all Dassault Aviation Model FALCON 2000 and
FALCON 2000EX airplanes, certificated in any category.

(d) Subject

    Air Transport Association (ATA) of America Code 32, Landing
gear.

(e) Unsafe Condition

    This AD was prompted by brake system failures during landing due
to a brake servo-valve failure resulting from application of an
inappropriate oil type during production and maintenance. The FAA is
issuing this AD to prevent temporary failure of the brake servo-
valves, which could lead to reduced braking performance during
landing including degraded or dissymmetric braking, possibly
resulting in reduced control of the airplane, lateral excursion of
the runway, and consequent damage to the airplane.

(f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) Requirements

    Except as specified in paragraph (h) of this AD: Comply with all
required actions and compliance times specified in, and in
accordance with, European Union Aviation Safety Agency (EASA)
Emergency AD 2022-0068-E, dated April 14, 2022 (EASA Emergency AD
2022-0068-E).

(h) Exceptions to EASA Emergency AD 2022-0068-E

    (1) Where EASA Emergency AD 2022-0068-E refers to its effective
date, this AD requires using the effective date of this AD.
    (2) Where paragraph (2) of EASA Emergency AD 2022-0068-E
requires operators to ``inform all flight crews and, thereafter,
operate the aeroplane accordingly'' after revision of the existing
airplane flight manual (AFM), this AD does not require those
actions.
    (3) Where paragraph (4) of EASA Emergency AD 2022-0068-E
requires replacement of all affected brake servo-valves within 12
months, this AD does not require this action; except, for those
conditions that require replacement, as specified in the relocation
service information identified in paragraph (1) of EASA Emergency AD
2022-0068-E, this AD requires replacement, prior to further flight,
of one or two affected servo-valves as described in the relocation
service information for cases when 3 or 4 affected servo-valves are
found, as applicable.
    (4) The ``Remarks'' section of EASA Emergency AD 2022-0068-E
does not apply to this AD.

(i) No Reporting

    Although the service information referenced in EASA Emergency AD
2022-0068-E specifies to submit certain information and send removed
parts to the manufacturer, this AD does not include that
requirement.

(j) Additional AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
Large Aircraft Section, International Validation Branch, FAA, has
the authority to approve AMOCs for this AD, if requested using the
procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19,
send your request to your principal inspector or responsible Flight
Standards Office, as appropriate. If sending information directly to
the Large Aircraft Section, International Validation Branch, send it
to the attention of the person identified in paragraph (k) of this
AD. Information may be emailed to: [email protected].
Before using any approved AMOC, notify your appropriate principal
inspector, or lacking a principal inspector, the manager of the
responsible Flight Standards Office.
    (2) Contacting the Manufacturer: For any requirement in this AD
to obtain instructions from a manufacturer, the instructions must

be accomplished using a method approved by the Manager, Large
Aircraft Section, International Validation Branch, FAA; or EASA; or
Dassault Aviation's EASA Design Organization Approval (DOA). If
approved by the DOA, the approval must include the DOA-authorized
signature.

(k) Related Information

    For more information about this AD, contact Tom Rodriguez,
Aerospace Engineer, Large Aircraft Section, FAA, International
Validation Branch, 2200 South 216th St., Des Moines, WA 98198;
telephone<PHONE_NUMBER>; email [email protected].

(l) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference of the service information listed in this
paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless this AD specifies otherwise.
    (i) European Union Aviation Safety Agency (EASA) Emergency AD
2022-0068-E, dated April 14, 2022.
    (ii) [Reserved]
    (3) For EASA Emergency AD 2022-0068-E, contact EASA, Konrad-
Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221 8999 000;
email [email protected]; internet www.easa.europa.eu. You may find
this EASA AD on the EASA website at https://ad.easa.europa.eu.
    (4) You may view this material at the FAA, Airworthiness
Products Section, Operational Safety Branch, 2200 South 216th St.,
Des Moines, WA. For information on the availability of this material
at the FAA, call<PHONE_NUMBER>.
    (5) You may view this material that is incorporated by reference
at the National Archives and Records Administration (NARA). For
information on the availability of this material at NARA, email
[email protected], or go to https://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued on April 21, 2022.
Gaetano A. Sciortino,
Deputy Director for Strategic Initiatives, Compliance & Airworthiness
Division, Aircraft Certification Service.
[FR Doc. 2022-10459 Filed 5-11-22; 11:15 am]
BILLING CODE 4910-13-P