EPA recognizes certain significant issues that still need to be resolved before a comprehensive proposal can be 184 set forth for public review and comment. These issues are presented here for public consideration. The EPA will review the comments submitted and present its findings in a supplemental notice in the future if the Agency intends to continue to pursue this option.

( 1) Failure to show ongoing statewide downward trend in NOx emissions. The EPA recognizes that it may not be possible to show a continuing downward trend of total NOx emissions in every State. Consequently, in those States, it may be difficult to demonstrate the use of the State planning option as a substitute for the NO2 increment system. As stated earlier, it is the obligation of the State to demonstrate that the objectives of the statutory PSD program for NOx are being met, whether or not NOx emissions remain below the baseline at the end of a 10 year period.

As part of the demonstration that States must make to support the State planning option, the State will have to conduct a comprehensive assessment of the likelihood that total statewide NOx emissions will continue to exhibit a downward trend for future years. The EPA believes that it will be necessary for the State to conduct periodic assessments ( e. g., 10 year intervals) of air quality trends for NO2 in order to continue justifying the SIP as a substitute for an increment system for preventing significant air quality deterioration for NOx. The EPA 185 seeks comments on the frequency of any necessary periodic assessment, as well as other possible mechanisms for determining when adjustments may need to be made to a SIP that does not employ an NO2 increment system to prevent significant air quality deterioration from NOx emissions.

( 2) Potential for localized adverse impacts resulting from emissions increases from new and modified sources. We recognize the possibility under this proposed option that sources may have potentially adverse localized impacts even when fulfilling statewide NOx emissions requirements. A related concern arises if not all source categories are subject to the statewide NOx emissions requirements under this option.

Thus, while we are tentatively considering allowing States to avoid the need under their PSD rules to require case by case source impact analyses ( including the process of involving FLMs) under the preconstruction review for PSD,

we are at the same time soliciting comments on the extent to which the possibility of localized adverse impacts,

especially near Class I areas, represents a potential problem under the State planning approach, and what possible options may exist for addressing such problem.

( 3) Additional measures under a SIP. We believe the SIP under the State planning option will have to include additional measures toward NOx emissions control and/ or a 186 fall back increments program. A backstop for the State planning option might involve a margin of progress. The SIP would contain provisions for additional reductions or NO2 increments if the margin of progress is exceeded. For example, if a State's NOx emissions rate ( tons per year)

increases such that it is within 5 percent of the baseline rate, then the State would be obliged to employ the additional measures in its SIP to correct its NOx emissions.

We solicit comment on whether States under option 3 should be required to continue to track NO2 increment for new and modified sources.

VII. Other Alternative Considered EPA is not proposing to utilize " critical load" as the basis for a regulatory measure for prevention of significant deterioration for NOx at this time, given that the science is still being developed for the concept.

The National Park Service ( NPS) has been focusing on the concept of a " critical load" to assess the risk to park ecosystems from atmospheric deposition. Critical loads can be defined as " quantitative estimates of an exposure to one or more pollutants below which significant harmful effects on specified sensitive elements of the environment do not occur according to present knowledge" ( 1995 SP at xi xii).

In its 1995 report titled, " Acid Deposition Standard Feasibility Study: Report to Congress," EPA noted that 187 critical loads had been developed in other countries and that, in the U. S., several States had developed critical loads for acid deposition, expressed as deposition rates for sulfur. Only in California had critical loads been established for nitrogen as recommendations to protect certain sensitive California resources ( 1995 SP at 53 55).

Ecosystems research over the last few decades has produced findings that may be sufficient to identify changes to sensitive elements of the environment resulting from exposure to atmospheric nitrogen in its various forms. In some cases, the available scientific literature has indicated the possibility of estimating levels of exposure at which a particular adverse impact will result.

For exposure to nitrogen, deposition critical load determinations are based on indicators of harmful ecological change that include episodic and chronic acidification of streams and rivers, chemical changes in soils and vegetation, nutrient enrichment and eutrophication, and shifts in plant species composition. A more detailed description of these types of adverse effects is contained in section V of this preamble. Nitrogen critical load thresholds are expressed in kilograms or equivalents of nitrogen deposited per hectare per year. Federal Land Managers are beginning to evaluate the European approach for ecosystem assessment that uses the concept of critical 188 loads.

Nitrogen impacts have been documented in areas ranging from East Coast estuaries to southern California chaparral communities. These impacts are found in diverse ecological communities ranging from fisheries to grasslands to lichens.

At a given location, different critical loads can be developed for different ecosystem changes ( e. g., the loading at which episodic acidification begins to occur may be different than the loading at which plant species shifts occur in the same area).

VIII. Statutory and Executive Order Reviews A. Executive Order 12866  Regulatory Planning and Review Under Executive Order 12866 ( 58 FR 51735, October 4,

1993), the Agency must determine whether the regulatory action is " significant" and therefore subject to review by the Office of Management and Budget ( OMB) and the requirements of the Executive Order. The Order defines " significant regulatory action" as one that is likely to result in a rule that may:

( 1) have an annual effect on the economy of $ 100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition,

jobs, the environment, public health or safety, or State,

local, or tribal governments or communities;

( 2) create a serious inconsistency or otherwise 189 interfere with an action taken or planned by another agency;

( 3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs, or the rights and obligations of recipients thereof; or ( 4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

Pursuant to the terms of Executive Order 12866, it has been determined that this rule is a " significant regulatory action" because . As such,

this action was submitted to OMB for review. Changes made in response to OMB suggestions or recommendations will be documented in the public record.

B. Paperwork Reduction Act This action does not impose any new information collection burden. Under the proposed action, one option is to retain the existing increments and regulatory framework of the PSD regulations for NOx will be retained. Another option is to implement a cap and trade program to manage NOx emissions that are already being controlled through other rulemakings. A third option is to utilize a State planning approach to manage NOx emissions that are already being controlled by individual States. If the proposed action results in our retaining the existing increments program,

the Office of Management and Budget ( OMB) has previously 190 approved the information collection requirements contained in the existing regulations ( 40 CFR parts 51 and 52) under the provisions of the Paperwork Reduction Act, 44 U. S. C.

3501, et seq., and has assigned OMB control number 2060

0003, EPA ICR number 1230.11. A copy of the OMB approved Information Collection Request ( ICR) may be obtained from Susan Auby, Collection Strategies Division, U. S.

Environmental Protection Agency ( 2822T), 1200 Pennsylvania Ave., NW, Washington, DC 20460, or by calling ( 202) 566

1672. If the proposed action results in our adopting the second or third options, then we will be publishing a supplemental notice and will at that time identify changes in information collection requirements.

Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain,

or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting,

validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the 191 collection of information; and transmit or otherwise disclose the information.

An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.

The OMB control numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act ( RFA)

The Regulatory Flexibility Act ( RFA) generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.

For purposes of assessing the impacts of today's proposed rule on small entities, small entity is defined as:

( 1) a small business as defined by the Small Business Administration's ( SBA) regulations at 13 CFR 121.201; ( 2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; or ( 3) a small organization that is any not for profit enterprise which is 192 independently owned and operated and is not dominant in its field.

After considering the economic impacts of today's proposed rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. This proposed rule will not impose any requirements on small entities and in fact may relieve them of certain permit related expenses. We continue to be interested in the potential impacts of the proposed rule on small entities and welcome comments on issues related to such impacts.

D. Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act of 1995 ( UMRA), P. L. 104 4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost benefit analysis, for proposed and final rules with " Federal mandates" that may result in expenditures to State, local,

and tribal governments, in the aggregate, or to the private sector, of $ 100 million or more in any one year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory 193 alternatives and adopt the least costly, most costeffective or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law.

Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost effective, or least burdensome alternative if the Administrator publishes with the final rule an explanation why that alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments,

including tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing,

educating, and advising small governments on compliance with the regulatory requirements.

Today's action contains no Federal mandates ( under the regulatory provisions of Title II of the UMRA) for State,

local, or tribal governments or the private sector. The proposed rule imposes no enforceable duty on any State,

local or tribal governments or the private sector. In any event, EPA has determined that this proposed rule does not 194 contain a Federal mandate that may result in expenditures of $ 100 million or more for State, local, and tribal governments, in the aggregate, or in the private sector in any one year. Thus, today's proposed rule is not subject to the requirements of sections 202 and 205 of the UMRA.

E. Executive Order 13132  Federalism Executive Order 13132, entitled " Federalism" ( 64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure " meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications."

" Policies that have federalism implications" is defined in the Executive Order to include regulations that have " substantial direct effects 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."

This proposed rule does not have federalism implications. This proposed rule will not have substantial direct effects 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, as specified in Executive Order 13132.

If the existing regulations for increments are retained, no new regulatory restrictions will be imposed. If today's 195 proposed action instead results in adoption of a cap and trade program or other State planning option, such program will be based on compliance with other rulemakings. Direct compliance costs associated with today's proposed action could be incurred when States incorporate any required changes into their State implementation plans, but these direct compliance costs would not be significant. Thus,

Executive Order 13132 does not apply to this proposed rule.

In the spirit of Executive Order 13132, and consistent with EPA policy to promote communications between EPA and State and local governments, EPA specifically solicits comment on this proposed rule from State and local officials.

F. Executive Order 13175  Consultation and Coordination with Indian Tribal Governments Executive Order 13175, entitled " Consultation and Coordination with Indian Tribal Governments" ( 65 FR 67249,

November 9, 2000), requires EPA to develop an accountable process to ensure " meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications." This proposed rule does not have tribal implications, as specified in Executive Order 13175.

The proposed action, whether to retain existing regulations or to claim benefit from emission reductions pursuant to other rulemakings, does not impose any new regulatory restrictions. Thus, Executive Order 13175 does not apply to 196 this proposed rule. The EPA specifically solicits additional comment on the proposed rule from tribal officials.

G. Executive Order 13045  Protection of Children from Environmental Health Risks and Safety Risks Executive Order 13045, " Protection of Children from Environmental Health Risks and Safety Risks" ( 62 FR 19885,

April 23, 1997), applies to any rule that: ( 1) is " economically significant" as defined under Executive Order 12866; and ( 2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency.

This proposed rule is not subject to the Executive Order because it is not economically significant as defined in Executive Order 12866, and because the Agency does not have reason to believe the environmental health or safety risks addressed by this action present a disproportionate risk to children. The proposed action does not impose any new regulatory restrictions. The public is invited to submit or identify peer reviewed studies and data, of which 197 the agency may not be aware, that assessed results of early life exposure to NOx.

H. Executive Order 13211  Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use This proposed rule is not a " significant energy action"

as defined in Executive Order 13211, " Actions Concerning Regulations That Significantly Affect Energy Supply,

Distribution, or Use" ( 66 FR 28355, May 22, 2001), because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Any regulatory restrictions from which the proposed action claims benefit would be imposed by rulemakings other than the proposed action.

I. National Technology Transfer and Advancement Act of 1995 Section 12( d) of the National Technology Transfer and Advancement Act of 1995 (" NTTAA"), P. L. 104 113, 12( d) ( 15 U. S. C. 272 note), directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical.

Voluntary consensus standards are technical standards ( e. g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA PSD for NOx   Page 198 of 201 198 directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards. This proposed rule does not involve technical standards. Therefore, EPA is not considering the use of any voluntary consensus standards.

The EPA welcomes comments on this aspect of the proposed rulemaking and specifically invites the public to identify potentially applicable voluntary consensus standards and to explain why such standards should be used in this regulation.

List of Subjects in 40 CFR Parts 51 and 52 Environmental protection, Administrative practices and procedures, Air pollution control, Intergovernmental relations, nitrogen oxides, Ozone, Particulate Matter,

Reporting and recordkeeping requirements.

Dated:

Stephen L. Johnson, Acting Administrator.

References Allen, E. B., P. E. Padgett, A. Bytenerowicz, R. Minnich, 1998. " Nitrogen Deposition Effects on Coastal Sage 199 Vegetation of Southern California." Proceedings of the International Symposium on Air Pollution and Climate Change Effects on Forest Ecosystems, Riverdale, CA. February 5 9, 1996. USDA Forest Service Gen. Tech. Rep. Pacific Southwest Research Station, PSW GTR 166, 131 139.

Baron, J. S., H. M. Rueth, A. M. Wolfe, K. R. Nydick, E. J. Allstott, J. T. Minear, and B. Moraska, " Ecosystem Responses to Nitrogen Deposition in the Colorado Front Range." Ecosystems ( 2000) 3: 352 368. http:// wrapair. org/ forums/ ioc/ meetings/ 030728/ Paper2. pdf Bowman, W. D., 2000. " Biotic Controls over Ecosystem Response to Environmental Change in Alpine Tundra of the Rocky Mountains." Ambio, vol. 29, no. 7 ( p. 396 400), November 2000.

Butler, T. J., G. E. Likens, and B. J. B. Stunder, " Regionalscale Impacts of Phase I of the Clean Air Act Amendments in the USA: the Relation Between Emissions and Concentrations, Both Wet and Dry." Atmospheric Environment, vol. 37 ( p. 1015 1028), 2000. http:// www. sciencedirect. com/ science/ journal/ 13522310 Butler, T. J., G. E. Likens, F. M. Vermeylen, and B. J. B. Stunder, " The Relation Between NOx Emissions and Precipitation NO3  in the Eastern USA." Atmospheric Environment, vol. 37 ( p. 2093 2104), 2003. http:// www. sciencedirect. com/ science/ journal/ 13522310 Dahlgreen R. A., J. M. Holloway, " Geologic Nitrogen as a Nonpoint Source of Nitrate in Natural Waters." Soil Science: Confronting New Realities in the 21st Century ( World Congress of Soil Science); 17th WCSS, 14 21 August 2002; Symposium no. 6, paper no. 83. http:// www. sfst. org/ Proceedings/ 17WCSS_ CD/ papers/ 0083. pdf Driscoll, C. T., " Aluminum in Acidic Surface Waters: Chemistry, Transport, and Effects." Environmental Health Perspectives, vol. 63 ( p. 93 104), 1985. http:// ehp. niehs. nih. gov/ members/ 1985/ 063/ 63012. PDF Driscoll, C. T., G. B. Lawrence, A. J. Bulger, T. J. Butler, C. S. Cronan, C. Eagar, K. F. Lambert, G. E. Likens, J. L. Stoddard, and K. C. Weathers, " Acidic Deposition in the Northeastern United States, Sources and Inputs, Ecosystem Effects, and Management Strategies." BioScience, vol. 51, no. 3 ( p. 180 198), March 2001. 200 Driscoll, C. T., G. B. Lawrence, A. J. Bulger, T. J. Butler, C. S. Cronan, C. Eagar, K. F. Lambert, G. E. Likens, J. L. Stoddard, and K. C. Weathers, " Acid Rain Revisited: Advances in Scientific Understanding Since the Passage of the 1970 and 1990 Clean Air Act Amendments." Hubbard Brook Research Foundation Science Links   Publication. Vol. 1, no. 1, 2001.

Driscoll, C. T., K. M. Driscoll, M. J. Mitchell, and D. J. Raynal, " Effects of Acidic Deposition on Forest and Aquatic Ecosystems in New York State." Environmental Pollution, 123 ( 2003) 327 336.

Fenn, M. E., M. A. Poth, J. D. Aber, J. S. Baron, B. T. Bormann, D. W. Johnson, A. D. Lemly, S. G. McNulty, D. F. Ryan, and R. Stottlemyer, 1997. " Nitrogen Excess in North American Ecosystems: Predisposing Factors, Ecosystem Responses, and Management Strategies." Ecological Applications, vol. 8, no. 3 ( p. 706 733), August 1998.

Fenn, M. E., R. Haeuber, G. S. Tonnesen, J. S. Baron, S. Grossman Clarke, D. Hope, D. A. Jaffe, S. Copeland, L. Geiser, H. M. Rueth, and J. O. Sickman, " Nitrogen Emissions, Deposition and Monitoring in the Western United States." BioScience, vol. 53, no. 4 ( p. 1 13), April 2003.

National Oceanic and Atmospheric Administration. ( 2004) AIRMon Dry Deposition. Air Resources Laboratory. http:// www. arl. noaa. gov/ research/ projects. airmon_ dry. html; August 5, 2004.

National Science and Technology Council. ( 1998) NAPAP Biennial Report to Congress: An Integrated Assessment. National Acid Precipitation Assessment Program. May 1998.

Taylor, G. E., D. W. Johnson, " Air Pollution and Forest Ecosystems: A Regional to Global Perspective." Ecological Applications, vol. 4, no. 4 ( p. 662 689) 1994.

U. S. Department of the Interior, " Air Quality in the National Parks: Second Edition." September 2002.

U. S. Environmental Protection Agency. ( 1993) Air Quality Criteria for Oxides of Nitrogen. ( 3 volumes). Office of Air Quality Planning and Standards. EPA 600/ 8 91/ 049aF cF, August 1993. Available at Docket No. AR 95 01.

U. S. Environmental Protection Agency. ( 1995) Review of the National Ambient Air Quality Standards for Nitrogen Dioxide: Assessment of Scientific and Technical Information. ( OAQPS 201 Staff Paper.) Office of Air Quality Planning and Standards. EPA 452/ R 95 005, September 1995. http:// www. epa. gov/ ttn/ naaqs/ standards/ nox/ s_ nox_ pr_ sp. html U. S. Environmental Protection Agency. ( 1995) Acid Deposition Standard Feasibility Study: Report to Congress. Office of Air and Radiation. EPA 430 R 95 001a, October 1995. Available at Docket No. AR 95 01.

U. S. Environmental Protection Agency. ( 1997) Nitrogen Oxides: Impacts on Public Health and the Environment. Office of Air Quality Planning and Standards. EPA 452/ R 97 002, August 1997.

U. S. Environmental Protection Agency. ( 2003) Latest Findings on National Air Quality: 2002 Status and Trends. Office of Air Quality Planning and Standards. EPA 454/ K 03 001, August 2003.

U. S. General Accounting Office, " Acid Rain: Emissions Trends and Effects in the Eastern United States. Report to Congress Requesters." GAO/ RCED 00 47, March 2000. http:// www. gao. gov/ archive/ 2000/ rc00047. pdf Wang, X., " Aluminum Mobilization from the Forest Land." The Roosevelt Wild Life Station. State University of New York; College of Environmental Science and Forestry. http:// www. esf. edu/ resorg/ rooseveltwildlife/ Research/ Al/ Al. h tm; July 28, 2004.


To: 	Project Files							From:	Susan Fairchild
	Project Docket (EPA-HQ-OAR-2010-1041)			Date: 	May 1, 2012
Re: 	Mineral Wool Industry Telephone conference calls on May 1, 2012
Two phone calls were made by the project lead to industry representatives that had stated in the April 30, 2012 EPA/Industry meeting they would provide EPA with additional information on which to consider HF, HCl and COS limits for the final rule.
Steve Edris , Thermafiber
There are 2 types of cupolas- closed top and open top.  When a cupola is closed top its air flow is restricted and controlled through `tweers', which are small ports in the bottom of the cupola through which air is drawn at a specific rate.  Closed top cupolas have a different emissions profile as a result of being closed and having a controlled air flow.
Open top cupolas are open to the air and air flows unrestricted and uncontrolled through the cupola.  The air flow rate is not regulated and so the emissions profile through an open top cupola is different.
All mineral wool products can be made on either open or closed top cupolas.
We put sorbent injection in before the baghouse to reduce SO2 and we expected this would be able to get any HF or HCl that was emitted, but it doesn't achieve the level of control that would be required by the proposed limits. So it seems like the best control can't achieve your proposed limits, and these pollutants are not a real health threat anyway at these concentrations, so why is EPA pursuing such tight limits for these pollutants?
Translating the costs we've incurred to achieve control across the industry is not really appropriate in this situation because we are not spending this money out of our profits- we actually declared bankruptcy years ago and went through a restructuring. We are owned by a trust and our profits go to benefit asbestos victims that were former employees of the company. We can't really go out of business as a result of costs, we just don't make as much money for the trust. So the rationale that one company spent all this money and the others can too isn't really appropriate for this industry.
Chris Bullock - IIG
Coke used at all mineral wool facilities is `foundry' coke- scraps from GM and other foundries.  The other coke available in the US is furnace coke.  Furnace coke is higher in volatile content but it won't melt rock.  Furnace coke cannot be used to make mineral wool.  The cost of foundry coke is 5X what it cost in 2003.
Slag used in IIG mineral wool production is iron ore slag- it is about 40% Si, 10-12% Al, 10% MgO, 30% Ca, some FeO and trace amounts of other metals.  This is slag made from the first melt (primary iron) of the iron ore. Some slag used at other mineral wool producers is EAF slag which has different chemistry because it is collected from recycling scrap iron, which has already been melted at least once.  So the slag is much lower in iron and other metals.  Different chemistry of the slag will make mineral wool products for different uses.  One does not necessarily substitute for another because each must meet the specificity of its' end use, and meet UL specifications for what those end use requirements are. So although each cupola could theoretically produce any mineral wool product, the fact is that the product is a result of the raw materials available to the mineral wool producer's location.  None of our companies would transport slag from across the country.  We all use the rock or slag that is close to us.  If a slag producer (for instance, the iron ore plant from which we get our slag) were to close down, we'd be in a difficult position because we'd have to make product to fill either a new niche or make the product fill the existing niche with a different (i.e, mostly rock?) chemistry.
We have invested in lots of controls to reduce our air pollution and it's not really okay with us to give the rest of the industry a pass. The incinerator for our 2 cupolas cost us $5.5M; the new electric furnace was $6M and $1M was spent on restructuring the plant.


[Federal Register Volume 77, Number 155 (Friday, August 10, 2012)]
[Notices]
[Pages 47902-47905]
[FR Doc No: 2012-19609]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67596; File No. SR-C2-2012-023]

Self-Regulatory Organizations; C2 Options Exchange, Incorporated;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
Relating to the Options Regulatory Fee

August 6, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on July 31, 2012, C2 Options Exchange, Incorporated (the
``Exchange'' or ``C2'') filed with the Securities and Exchange
Commission (the ``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.
---------------------------------------------------------------------------

    \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 institute a new transaction-based
``Options Regulatory Fee''. The text of the proposed rule change is
available on the Exchange's Web site (http://www.c2exchange.com/Legal/
), at the Exchange's Office of the Secretary, 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 the
Statutory Basis for, the Proposed Rule Change

1. Purpose
    In order to offset more fully the cost of the Exchange's regulatory
programs, the Exchange proposes to adopt a transaction-based Options
Regulatory Fee (``ORF'') of $0.0015 per contract. The Exchange is
adopting an ORF due to substantial increases in resources devoted to
regulatory services, including the recent hiring of many new employees,
increased office space and regulatory systems enhancements. The
proposed fee would be operative on August 1, 2012.
    The ORF would be assessed by the Exchange to each Permit Holder for
all options transactions executed or cleared by the Permit Holder that
are cleared by The Options Clearing Corporation (``OCC'') in the
customer range, i.e., transactions that clear in a customer account at
OCC, regardless of the marketplace of execution. In other words, the
Exchange would impose the ORF on all customer-range transactions
executed by a Permit Holder, even if the transactions do not take place
on the Exchange.\3\ The ORF would also be charged for transactions that
are not

executed by a Permit Holder but are ultimately cleared by a Permit
Holder. In the case where a Permit Holder executes a transaction and a
Permit Holder clears the transaction, the ORF would be assessed to the
Permit Holder who executed the transaction. In the case where a non-
Permit Holder executes a transaction and a Permit Holder clears the
transaction, the ORF would be assessed to the Permit Holder who clears
the transaction. The Exchange believes that its broad regulatory
responsibilities with respect to Permit Holders' activities supports
applying the ORF to transactions cleared but not executed by a Permit
Holder. The Exchange's regulatory responsibilities are the same
regardless of whether a Permit Holder executes a transaction or clears
a transaction executed on its behalf. The Exchange regularly reviews
all such activities, including performing surveillance for position
limit violations, manipulation, frontrunning, contrary exercise advice
violations and insider trading.\4\ These activities span across
multiple exchanges.
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    \3\ Exchange rules require each Permit Holder to record the
appropriate account origin code on all orders at the time of entry
in order to allow the Exchange to properly prioritize and route
orders and assess transaction fees pursuant to the rules of the
Exchange and report resulting transactions to the OCC. C2 order
origin codes are defined in C2 Regulatory Circular RG10-4. The
Exchange represents that it has surveillances in place to verify
that Permit Holders mark orders with the correct account origin
code.
    \4\ The Exchange also participates in The Options Regulatory
Surveillance Authority (``ORSA'') national market system plan and in
doing so shares information and coordinates with other exchanges
designed to detect the unlawful use of undisclosed material
information in the trading of securities options. ORSA is a national
market system comprised of several self-regulatory organizations
whose functions and objectives include the joint development,
administration, operation and maintenance of systems and facilities
utilized in the regulation, surveillance, investigation and
detection of the unlawful use of undisclosed material information in
the trading of securities options. The Exchange compensates ORSA for
the Exchange's portion of the cost to perform insider trading
surveillance on behalf of the Exchange. The ORF will cover the costs
associated with the Exchange's arrangement with ORSA.
---------------------------------------------------------------------------

    The ORF would be collected indirectly from Permit Holders through
their clearing firms by OCC on behalf of the Exchange. The Exchange
expects that Permit Holders will pass-through the ORF to their
customers in the same manner that firms pass-through to their customers
the fees charged by Self Regulatory Organizations (``SROs'') to help
the SROs meet their obligations under Section 31 of the Exchange Act.
    The ORF is designed to recover a material portion of the costs to
the Exchange of the supervision and regulation of Permit Holder
customer options business, including performing routine surveillances,
investigations, as well as policy, rulemaking, interpretive and
enforcement activities. The Exchange believes that revenue generated
from the ORF, when combined with all of the Exchange's other regulatory
fees, will cover a material portion, but not all, of the Exchange's
regulatory costs.\5\ The Exchange notes that its regulatory
responsibilities with respect to Permit Holder compliance with options
sales practice rules have been allocated to FINRA under a 17d-2
agreement. The ORF is not designed to cover the cost of options sales
practice regulation.
---------------------------------------------------------------------------

    \5\ The Exchange collects other regulatory revenues from Firm
Designated Examining Authority Fees and Communication Review Fees.
See C2 Fees Schedule, Section 8.
---------------------------------------------------------------------------

    The Exchange would monitor the amount of revenue collected from the
ORF to ensure that it, in combination with its other regulatory fees
and fines, does not exceed the Exchange's total regulatory costs. The
Exchange expects to monitor regulatory costs and revenues at a minimum
on an annual basis. If the Exchange determines regulatory revenues
exceed regulatory costs, the Exchange would adjust the ORF by
submitting a fee change filing to the Commission. The Exchange would
notify Permit Holders of adjustments to the ORF via regulatory
circular.
    The Exchange believes the proposed ORF is equitably allocated
because it would be charged to all Permit Holders on all their customer
options business. The Exchange believes the proposed ORF is reasonable
because it will raise revenue related to the amount of customer options
business conducted by Permit Holders, and thus the amount of Exchange
regulatory services those Permit Holders will require.
    As a fully-electronic exchange without a trading floor, the amount
of resources required by the Exchange to regulate non-customer trading
activity is significantly less than the amount of resources the
Exchange must dedicate to regulate customer trading activity. This is
because regulating customer trading activity is much more labor
intensive and requires greater expenditure of human and technical
resources than regulating non-customer trading activity, which tends to
be more automated and less labor-intensive. As a result, the costs
associated with administering the customer component of the Exchange's
overall regulatory program are materially higher than the costs
associated with administering the non-customer component (e.g., Permit
Holder proprietary options transactions) of its regulatory program.\6\
---------------------------------------------------------------------------

    \6\ If the Exchange changes its method of funding regulation or
if circumstances otherwise change in the future, the Exchange may
decide to impose the ORF or a separate regulatory fee on Permit
Holder proprietary options transactions if the Exchange deems it
advisable.
---------------------------------------------------------------------------

    The Exchange believes it is reasonable and appropriate for the
Exchange to charge the ORF for options transactions regardless of the
exchange on which the transactions occur. The Exchange has a statutory
obligation to enforce compliance by Permit Holders and their associated
persons with the Exchange Act and the Rules of the Exchange and to
surveil for other manipulative conduct by market participants
(including non-Permit Holders) trading on the Exchange. The Exchange
cannot effectively surveil for such conduct without looking at and
evaluating activity across all options markets. Many of the Exchange's
market surveillance programs require the Exchange to look at and
evaluate activity across all options markets, such as surveillance for
position limit violations, manipulation, frontrunning and contrary
exercise advice violations/expiring exercise declarations.\7\ Also, the
Exchange and the other options exchanges are required to populate a
consolidated options audit trail (``COATS'') system in order to surveil
Permit Holder activities across markets.\8\
---------------------------------------------------------------------------

    \7\ The Exchange and other options SROs are parties to a 17d-2
agreement allocating among the SROs regulatory responsibilities
relating to compliance by the common members with rules for expiring
exercise declarations, position limits, OCC trade adjustments, and
Large Option Position Report reviews. See Securities Exchange Act
Release No. 63430 (December 3, 2010), 75 FR 76758 (December 9,
2010).
    \8\ COATS effectively enhances intermarket options surveillance
by enabling the options exchanges to reconstruct the market promptly
to effectively surveil certain rules.
---------------------------------------------------------------------------

    In addition to its own surveillance programs, the Exchange works
with other SROs and exchanges on intermarket surveillance related
issues. Through its participation in the Intermarket Surveillance Group
(``ISG''),\9\ the Exchange shares information and coordinates inquiries
and investigations with other exchanges designed to address potential
intermarket manipulation and trading abuses. The Exchange's
participation in ISG helps it to satisfy the Exchange Act requirement
that it have coordinated surveillance with markets on which security
futures are traded and markets on which any security underlying
security futures are traded to detect manipulation and insider
trading.\10\
---------------------------------------------------------------------------

    \9\ ISG is an industry organization formed in 1983 to coordinate
intermarket surveillance among the SROs by cooperatively sharing
regulatory information pursuant to a written agreement between the
parties. The goal of the ISG's information sharing is to coordinate
regulatory efforts to address potential intermarket trading abuses
and manipulations.
    \10\ See Exchange Act Section 6(h)(3)(I).
---------------------------------------------------------------------------

    The Exchange believes that charging the ORF across markets will
avoid having Permit Holders direct their trades to other markets in
order to avoid

the fee and to thereby avoid paying for their fair share of regulation.
If the ORF did not apply to activity across markets then Permit Holders
would send their orders to the least cost, least regulated exchange.
Other exchanges could impose a similar fee on their member's activity,
including the activity of those members on C2. In addition to the ORF
that is currently in place at other exchanges,\11\ the Exchange notes
that there is established precedent for an SRO charging a fee across
markets, namely, FINRA's Trading Activity Fee.\12\ While the Exchange
does not have all the same regulatory responsibilities as FINRA, the
Exchange believes that, like the other exchanges that assess an ORF,
its broad regulatory responsibilities with respect to Permit Holders'
activities, irrespective of where their transactions take place,
supports a regulatory fee applicable to transactions on other markets.
Unlike FINRA's Trading Activity Fee, the ORF would apply only to a
Permit Holder's customer options transactions.
---------------------------------------------------------------------------

    \11\ The BOX Options Exchange, LLC (``BOX''), Chicago Board
Options Exchange, Incorporated (``CBOE''), the International
Securities Exchange, LLC (``ISE''), NYSE Arca, Inc. (``NYSEArca''),
NYSE MKT LLC (``NYSE MKT''), NASDAQ OMX PHLX, LLC (``Phlx'') and
NASDAQ Stock Market, LLC (``NASDAQ'') all charge ORFs.
    \12\ See Securities Exchange Act Release No. 47946 (May 30,
2003), 68 FR 34021 (June 6, 2003).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\13\ Specifically, the
Exchange believes the proposed rule change is consistent with Section
6(b)(4) of the Act,\14\ which provides that Exchange rules may provide
for the equitable allocation of reasonable dues, fees, and other
charges among its Permit Holders and other persons using its
facilities.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    In particular, the Exchange believes the ORF is equitable and not
unfairly discriminatory because it is objectively allocated to Permit
Holders in that it would be charged to all Permit Holders on all their
transactions that clear as customer at the OCC. Moreover, the Exchange
believes the ORF ensures fairness by assessing higher fees to those
Permit Holders that require more Exchange regulatory services based on
the amount of customer options business they conduct. As a fully-
electronic exchange without a trading floor, the amount of resources
required by the Exchange to regulate non-customer trading activity is
significantly less than the amount of resources the Exchange must
dedicate to regulate customer trading activity. This is because
regulating customer trading activity is much more labor intensive and
requires greater expenditure of human and technical resources than
regulating non-customer trading activity, which tends to be more
automated and less labor-intensive. As a result, the costs associated
with administering the customer component of the Exchange's overall
regulatory program are materially higher than the costs associated with
administering the non-customer component (e.g., Permit Holder
proprietary options transactions) of its regulatory program.
    The ORF seeks to recover the costs of supervising and regulating
Permit Holders including performing routine surveillances,
investigations, examinations, financial monitoring, and policy,
rulemaking, interpretive, and enforcement activities. The Exchange's
regulatory responsibilities are the same regardless of whether a Permit
Holder executes a transaction or clears a transaction executed on its
behalf. The Exchange believes that this proposal is reasonable,
equitable and not unfairly discriminatory for the foregoing reasons and
also because this proposal would offset more fully the cost of the
Exchange's regulatory programs. The Exchange is adopting an ORF due to
substantial increases in resources devoted to regulatory services,
including the recent hiring of many new employees, increased office
space and regulatory systems enhancements.
    The Commission has addressed the funding of an SRO's regulatory
operations in the Concept Release Concerning Self-Regulation \15\ and
the release on the Fair Administration and Governance of Self-
Regulatory Organizations.\16\ In the Concept Release, the Commission
states that: ``Given the inherent tension between an SRO's role as a
business and a regulator, there undoubtedly is a temptation for an SRO
to fund the business side of its operations at the expense of
regulation''.\17\ In order to address this potential conflict, the
Commission proposed in the Governance Release rules that would require
an SRO to direct monies collected from regulatory fees, fines, or
penalties exclusively to fund the regulatory operations and other
programs of the SRO related to its regulatory responsibilities.\18\ The
Exchange has designed the ORF to generate revenues that, when combined
with all of the Exchange's other regulatory fees, would recover a
material portion, but not all, of C2's regulatory costs, which is
consistent with the Commission's view that regulatory fees be used for
regulatory purposes and not to support the Exchange's business side.
---------------------------------------------------------------------------

    \15\ See Securities Exchange Act Release No. 50700 (November 18,
2004), 69 FR 71256 (December 8, 2004) (``Concept Release'').
    \16\ See Securities Exchange Act Release No. 50699 (November 18,
2004), 69 FR 71126 (December 8, 2004) (``Governance Release'').
    \17\ Concept Release at 71268.
    \18\ Governance Release at 71142.
---------------------------------------------------------------------------

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

    C2 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

    The Exchange neither solicited nor received comments on the
proposed rule change.

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) \19\ of the Act and paragraph (f) of Rule 19b-4 \20\
thereunder. At any time within 60 days of the filing of the proposed
rule change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 17 CFR 240.19b-4(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 email to<EMAIL_ADDRESS>Please include
File Number SR-C2-2012-023 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-C2-2012-023. 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 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 Web site 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 such filing also will be available
for inspection and copying at the principal office of the Exchange. 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-C2-2012-023 and should be
submitted by August 31, 2012.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
---------------------------------------------------------------------------

    \21\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-19609 Filed 8-9-12; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 76, Number 20 (Monday, January 31, 2011)]
[Notices]
[Pages 5424-5425]
[FR Doc No: 2011-2104]

=======================================================================
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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No. FMCSA-2006-26367]

Motor Carrier Safety Advisory Committee; Request for Nominations

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Request for Nominations to the Motor Carrier Safety Advisory
Committee (MCSAC).

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

SUMMARY: The FMCSA solicits nominations for interested persons to serve
on the MCSAC. The MCSAC is composed of FMCSA stakeholders from the
safety enforcement, industry, labor, and safety sectors and is charged
with providing advice and recommendations to the FMCSA Administrator on
Federal motor carrier safety programs.

DATES: Nominations for the MCSAC must be received on or before March 2,
2011.

FOR FURTHER INFORMATION CONTACT: Ms. Shannon L. Watson, MCSAC Liaison,
FMCSA, at<PHONE_NUMBER> or via e-mail at<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Background

    Section 4144 of the Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users (SAFETEA-LU) (Pub. L.
109-59, August 10, 2005) required the Secretary of Transportation to
establish the MCSAC. The Committee provides advice and recommendations
to the Administrator of FMCSA on the needs, objectives, plans,
approaches, content, and accomplishments of motor carrier safety
programs and motor carrier safety regulations under its charter (http:/
/mcsac/about.htm). The Committee may be comprised of not more than 20
members appointed by the Administrator for up to 2-year terms. Members
are selected from among individuals who are not employees of FMCSA and
who are specially qualified to serve on the Committee based on their
education, training, or experience. Currently, the members include
representatives of the motor carrier

industry, shipping industry, safety advocates, labor, and safety
enforcement officials. Representatives of a single enumerated interest
group may not constitute a majority of the Committee members. The
Administrator designates a chairman of the Committee from among the
members.
    Committee members must not be officers or employees of the Federal
Government and serve without pay. The Administrator may allow a member,
when attending meetings of the Committee or a subcommittee,
reimbursement of expenses authorized under Section 5703 of Title 5,
United States Code and the Federal Travel Regulation, 41 CFR part 301,
relating to per diem, travel, and transportation.
    The President's Memorandum of June 18, 2010, concerning lobbyists
on Agency boards and commissions (75 FR 35995, 6/23/10) directed the
heads of Executive departments and agencies ``not to make any new
appointments or reappointments of federally registered lobbyists to
advisory committees and other boards and commissions.'' Pursuant to the
President's directive, FMCSA will not consider for appointment to the
MCSAC any individual who is subject to the registration and reporting
requirements of the Lobbying Disclosure Act (2 U.S.C. 1605).
    The Designated Federal Officer anticipates calling Committee
meetings approximately four times each year. Meetings are open to the
general public, except as provided under the Federal Advisory Committee
Act (FACA) (5 U.S.C. App.). Notice of each meeting is published in the
Federal Register at least 15 calendar days prior to the date of the
meeting.

II. Request for Nominations

    The FMCSA seeks nominations for membership to the MCSAC from among
its stakeholder groups for representatives with specialized experience,
education, or training in commercial motor vehicle safety issues. The
Agency is required under FACA to appoint members of diverse views and
interests to ensure the committee is balanced with appropriate
consideration of background. All Committee members must be able to
attend at least three to four meetings each year in person or by
teleconference. Interested persons should have a commitment to
transportation safety, knowledge of transportation issues, experience
on panels that deal with transportation safety, and a record of
collaboration and professional experience in commercial motor vehicle
safety issues.
    On-line applications will be accepted for positions on the MCSAC.
Applications may be obtained from the MCSAC Web site at http://mcsac.fmcsa.dot.gov/, completed on-line, and e-mailed to Shannon L.
Watson, MCSAC liaison, at<EMAIL_ADDRESS>The Web site contains
additional information on the MCSAC, including reports, meeting
minutes, and membership information.
    Nominations must be received on or before March 2, 2011.

    Issued on: January 21, 2011.
Anne S. Ferro,
Administrator.
[FR Doc. 2011-2104 Filed 1-28-11; 8:45 am]
BILLING CODE 4910-EX-P


[Federal Register Volume 79, Number 17 (Monday, January 27, 2014)]
[Notices]
[Pages 4373-4375]
[FR Doc No: 2014-01427]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71363; File No. SR-NYSEMKT-2014-01]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change Amending NYSE MKT Rule
500--Equities to Extend the Operation of the Pilot Program That Allows
Nasdaq Stock Market Securities to be Traded on the Exchange Pursuant to
a Grant of Unlisted Trading Privileges Until the Earlier of a Permanent
Approval or July 31, 2014

January 21, 2014.
    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 6, 2014, NYSE MKT LLC (``Exchange'' or ``NYSE MKT'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the self-regulatory organization. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19 b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend NYSE MKT Rule 500--Equities to
extend the operation of the pilot program that allows Nasdaq Stock
Market (``Nasdaq'') securities to be traded on the Exchange pursuant to
a grant of unlisted trading privileges. The pilot program is currently
scheduled to expire on January 31, 2014; the Exchange proposes to
extend it until the earlier of Securities and Exchange Commission
(``Commission'') approval to make such pilot permanent or July 31,
2014. The text of the proposed rule change is available on the
Exchange's Web site at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

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

    In its filing with the Commission, the self-regulatory organization
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 those 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 parts of such statements.

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

1. Purpose
    The Exchange proposes to amend NYSE MKT Rule 500--Equities to
extend the operation of the pilot program that allows Nasdaq securities
to be traded on the Exchange pursuant to a grant of unlisted trading
privileges. The pilot program is currently scheduled to expire on
January 31, 2014; the Exchange proposes to extend it until the earlier
of Commission approval to make such pilot permanent or July 31, 2014.
    NYSE MKT Rules 500-525--Equities, as a pilot program, govern the
trading of any Nasdaq-listed security on the Exchange pursuant to
unlisted trading privileges (``UTP Pilot Program'').\3\ The Exchange
hereby seeks to extend the operation of the UTP Pilot Program,
currently scheduled to expire on January 31, 2014, until the earlier of
Commission approval to make such pilot permanent or July 31, 2014.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 62479 (July 9,
2010), 75 FR 41264 (July 15, 2010) (SR-NYSEAmex-2010-31). See also
Securities Exchange Act Release Nos. 62857 (September 7, 2010), 75
FR 55837 (September 14, 2010) (SR-NYSEAmex-2010-89); 63601 (December
22, 2010), 75 FR 82117 (December 29, 2010) (SR-NYSEAmex-2010-124);
64746 (June 24, 2011), 76 FR 38446 (June 30, 2011) (SR-NYSEAmex-
2011-45); 66040 (December 23, 2011), 76 FR 82324 (December 30, 2011)
(SR-NYSEAmex-2011-104); 67497 (July 25, 2012), 77 FR 45404 (July 31,
2012) (SR-NYSEMKT-2012-25); 68561 (January 2, 2013), 78 FR 1290
(January 8, 2013) (SR-NYSEMKT-2012-86); and 69814 (June 20, 2013),
78 FR 38762 (June 27, 2013) (SR-NYSEMKT-2013-53).
---------------------------------------------------------------------------

    The UTP Pilot Program includes any security listed on Nasdaq that
(i) is designated as an ``eligible security'' under the Joint Self-
Regulatory Organization Plan Governing the Collection, Consolidation
and Dissemination of Quotation and Transaction Information for Nasdaq-
Listed Securities Traded on Exchanges on an Unlisted Trading Privilege
Basis, as amended (``UTP Plan''),\4\ and (ii) has

been admitted to dealings on the Exchange pursuant to a grant of
unlisted trading privileges in accordance with Section 12(f) of the
Act,\5\ (collectively, ``Nasdaq Securities'').\6\
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 70953 (November 27,
2013), 78 FR 72932 (December 4, 2013) (File No. S7-24-89). The
Exchange's predecessor, the American Stock Exchange LLC, joined the
UTP Plan in 2001. See Securities Exchange Act Release No. 55647
(April 19, 2007), 72 FR 20891 (April 26, 2007) (File No. S7-24-89).
In March 2009, the Exchange changed its name to NYSE Amex LLC, and,
in May 2012, the Exchange subsequently changed its name to NYSE MKT
LLC. See Securities Exchange Act Release Nos. 59575 (March 13,
2009), 74 FR 11803 (March 19, 2009) (SR-NYSEALTR-2009-24) and 67037
(May 21, 2012), 77 FR 31415 (May 25, 2012) (SR-NYSEAmex-2012-32).
    \5\ 15 U.S.C. 78l.
    \6\ ``Nasdaq Securities'' is included within the definition of
``security'' as that term is used in the NYSE MKT Equities Rules.
See NYSE MKT Rule 3--Equities. In accordance with this definition,
Nasdaq Securities are admitted to dealings on the Exchange on an
``issued,'' ``when issued,'' or ``when distributed'' basis. See NYSE
MKT Rule 501--Equities.
---------------------------------------------------------------------------

    The Exchange notes that its New Market Model Pilot (``NMM Pilot''),
which, among other things, eliminated the function of specialists on
the Exchange and created a new category of market participant, the
Designated Market Maker (``DMM''),\7\ is also scheduled to end on
January 31, 2014.\8\ The timing of the operation of the UTP Pilot
Program was designed to correspond to that of the NMM Pilot. In
approving the UTP Pilot Program, the Commission acknowledged that the
rules relating to DMM benefits and duties in trading Nasdaq Securities
on the Exchange pursuant to the UTP Pilot Program are consistent with
the Act \9\ and noted the similarity to the NMM Pilot, particularly
with respect to DMM obligations and benefits.\10\ Furthermore, the UTP
Pilot Program rules pertaining to the assignment of securities to DMMs
are substantially similar to the rules implemented through the NMM
Pilot.\11\ The Exchange has similarly filed to extend the operation of
the NMM Pilot until the earlier of Commission approval to make the NMM
Pilot permanent or July 31, 2014.\12\
---------------------------------------------------------------------------

    \7\ See NYSE MKT Rule 103--Equities.
    \8\ See Securities Exchange Act Release No. 60758 (October 1,
2009), 74 FR 51639 (October 7, 2009) (SR-NYSEAmex-2009-65). See also
Securities Exchange Act Release Nos. 61030 (November 19, 2009), 74
FR 62365 (November 27, 2009) (SR-NYSEAmex-2009-83); 61725 (March 17,
2010), 75 FR 14223 (March 24, 2010) (SR-NYSEAmex-2010-28); 62820
(September 1, 2010), 75 FR 54935 (September 9, 2010) (SR-NYSEAmex-
2010-86); 63615 (December 29, 2010), 76 FR 611 (January 5, 2011)
(SR-NYSEAmex-2010-123); 64773 (June 29, 2011), 76 FR 39453 (July 6,
2011) (SR-NYSEAmex-2011-43); 66042 (December 23, 2011), 76 FR 82326
(December 30, 2011) (SR-NYSEAmex-2011-102); 67495 (July 25, 2012),
77 FR 45406 (July 31, 2012) (SR-NYSEMKT-2012-21); 68559 (January 2,
2013), 78 FR 1286 (January 8, 2013) (SR-NYSEMKT-2012-84); and 69812
(June 20, 2013), 78 FR 38766 (June 27, 2013) (SR-NYSEMKT-2013-51).
    \9\ 15 U.S.C. 78.
    \10\ See SR-NYSEAmex-2010-31, supra note 3, at 41271.
    \11\ Id.
    \12\ See SR-NYSEMKT-2014-02.
---------------------------------------------------------------------------

    Extension of the UTP Pilot Program in tandem with the NMM Pilot,
both from January 31, 2014 until the earlier of Commission approval to
make such pilots permanent or July 31, 2014, will provide for the
uninterrupted trading of Nasdaq Securities on the Exchange on a UTP
basis and thus continue to encourage the additional utilization of, and
interaction with, the Exchange, and provide market participants with
improved price discovery, increased liquidity, more competitive quotes
and greater price improvement for Nasdaq Securities.
    The proposed change is not otherwise intended to address any other
issues and the Exchange is not aware of any problems that member
organizations would have in complying with the proposed change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange. In particular,
the Exchange believes that its proposal to extend the UTP Pilot Program
is consistent with (i) Section 6(b) of the Act,\13\ in general, and
furthers the objectives of Section 6(b)(5) of the Act,\14\ in
particular, in that it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to remove impediments to and perfect the mechanism
of a free and open market and a national market system, and, in
general, to protect investors and the public interest; (ii) Section
11A(a)(1) of the Act,\15\ in that it seeks to ensure the economically
efficient execution of securities transactions and fair competition
among brokers and dealers and among exchange markets; and (iii) Section
12(f) of the Act,\16\ which governs the trading of securities pursuant
to UTP consistent with the maintenance of fair and orderly markets, the
protection of investors and the public interest, and the impact of
extending the existing markets for such securities.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(5).
    \15\ 15 U.S.C. 78k-1(a)(1).
    \16\ 15 U.S.C. 78l(f).
---------------------------------------------------------------------------

    Specifically, the Exchange believes that extending the UTP Pilot
Program would provide for the uninterrupted trading of Nasdaq
Securities on the Exchange on a UTP basis and thus continue to
encourage the additional utilization of, and interaction with, the
Exchange, thereby providing market participants with additional price
discovery, increased liquidity, more competitive quotes and potentially
greater price improvement for Nasdaq Securities. Additionally, under
the UTP Pilot Program, Nasdaq Securities trade on the Exchange pursuant
to rules governing the trading of Exchange-Listed securities that
previously have been approved by the Commission. Accordingly, this
proposed rule change would permit the Exchange to extend the
effectiveness of the UTP Pilot Program in tandem with the NMM Pilot,
which the Exchange has similarly proposed to extend until the earlier
of Commission approval to make such pilot permanent or July 31,
2014.\17\
---------------------------------------------------------------------------

    \17\ See supra note 13.
---------------------------------------------------------------------------

    Finally, the Exchange believes that it is subject to significant
competitive forces, as described below in the Exchange's statement
regarding the burden on competition. For these reasons, the Exchange
believes that the proposal is consistent with the Act.

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

    In accordance with Section 6(b)(8) of the Act,\18\ the Exchange
believes that the proposed rule change would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. The Exchange believes that extending the UTP Pilot
Program will promote competition in the trading of Nasdaq Securities
and thereby provide market participants with opportunities for improved
price discovery, increased liquidity, more competitive quotes, and
greater price improvement.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    Finally, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues. In such an environment, the Exchange must continually
review, and consider adjusting the services it offers and the
requirements it imposes to remain competitive with other U.S. equity
exchanges. For the reasons described above, the Exchange believes that
the proposed rule change reflects this competitive environment.

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

    No written comments were solicited or received with respect to the
proposed rule change.

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) of the Act \19\ and Rule 19b-4(f)(6) \20\ thereunder
because the proposal does not: (i) Significantly affect the protection
of investors or the public interest; (ii) impose any significant burden
on competition; and (iii) by its terms, 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.\21\
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    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 17 CFR 240.19b-4(f)(6).
    \21\ In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to
give the Commission written notice of the Exchange's intent to file
the proposed rule change, along with a brief description and text of
the proposed rule change, at least five business days prior to the
date of filing of the proposed rule change, or such shorter time as
designated by the Commission. The Exchange has satisfied this
requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) normally may
not become operative prior to 30 days after the date of filing.
However, Rule 19b-4(f)(6)(iii) \22\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the 30-day operative delay period. The Commission
believes that waiver of the 30-day operative delay period is consistent
with the protection of investors and the public interest because waiver
would allow the pilot program to continue uninterrupted. Accordingly,
the Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest,
and designates the proposed rule change to be operative upon filing
with the Commission.\23\
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    \22\ 17 CFR 240.19b-4(f)(6)(iii).
    \23\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.\24\
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    \24\ 15 U.S.C. 78s(b)(3)(C).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSEMKT-2013-01 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
    All submissions should refer to File Number SR-NYSEMKT-2014-01.
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 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 Web site
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 such filing also will be
available for inspection and copying at the principal office of the
Exchange. 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-
NYSEMKT-2014-01 and should be submitted on or before February 18, 2014.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\25\
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    \25\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-01427 Filed 1-24-14; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 78, Number 246 (Monday, December 23, 2013)]
[Notices]
[Pages 77528-77530]
[FR Doc No: 2013-30453]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71107; File No. SR-BX-2013-061]

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Relating
to Extension of the Exchange's Penny Pilot Program

December 17, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on December 13, 2013, NASDAQ OMX BX, Inc. (``Exchange'' or ``BX'')
filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I and
II, below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    BX is filing with the Commission a proposal to amend Chapter VI,
Section 5 (Minimum Increments) to: extend through June 30, 2014, the
Penny Pilot Program in options classes in certain issues (``Penny
Pilot'' or ``Pilot''), and to change the date when delisted classes may
be replaced in the Penny Pilot.\3\
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    \3\ The Penny Pilot was established in June 2012 and extended in
June 2013. See Securities Exchange Act Release Nos. 67256 (June 26,
2012), 77 FR 39277 (July 2, 2012) (SR-BX-2012-030) (order approving
BX option rules and establishing Penny Pilot); and 69784 (June 18,
2013), 78 FR 37873 (June 24, 2013) (SR-BX-2013-039)(notice of filing
and immediate effectiveness extending the Penny Pilot through
December 31, 2013).
---------------------------------------------------------------------------

    The Exchange requests that the Commission waive the 30-day
operative delay period to the extent needed for timely industry-wide
implementation of the proposal.
    The text of the amended Exchange rule is set forth immediately
below.
    Proposed new language is italicized and proposed deleted language
is [bracketed].

NASDAQ OMX BX Rules

Options Rules

* * * * *

Chapter VI Trading Systems

* * * * *

Sec. 5 Minimum Increments

    (a) The Board may establish minimum quoting increments for
options contracts traded on BX Options. Such minimum increments
established by the Board will be designated as a stated policy,
practice, or interpretation with respect to the administration of
this Section within the meaning of Section 19 of the Exchange Act
and will be filed with the SEC as a rule change for effectiveness
upon filing. Until such time as the Board makes a change in the
increments, the following principles shall apply:
    (1) If the options series is trading at less than $3.00, five
(5) cents;
    (2) If the options series is trading at $3.00 or higher, ten
(10) cents; and
    (3) For a pilot period scheduled to expire on [December 31,
2013] June 30, 2014, if the options series is trading pursuant to
the Penny Pilot program one (1) cent if the options series is
trading at less than $3.00,

five (5) cents if the options series is trading at $3.00 or higher,
unless for QQQQs, SPY and IWM where the minimum quoting increment
will be one cent for all series regardless of price. A list of such
options shall be communicated to membership via an Options Trader
Alert (``OTA'') posted on the Exchange's Web site.
    The Exchange may replace any pilot issues that have been
delisted with the next most actively traded multiply listed options
classes that are not yet included in the pilot, based on trading
activity in the previous six months. The replacement issues may be
added to the pilot on the second trading day following [July 1,
2013] January 1, 2014.
    (4) No Change.
    (b) No Change.
* * * * *
    The text of the proposed rule change is also available on the
Exchange's Web site at http://nasdaqomxbx.cchwallstreet.com, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.

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

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

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

1. Purpose
    The purpose of this filing is to amend Chapter VI, Section 5 to
extend the Penny Pilot through June 30, 2014, and to change the date
when delisted classes may be replaced in the Penny Pilot.
    Under the Penny Pilot, the minimum price variation for all
participating options classes, except for the Nasdaq-100 Index Tracking
Stock (``QQQQ''), the SPDR S&P 500 Exchange Traded Fund (``SPY'') and
the iShares Russell 2000 Index Fund (``IWM''), is $0.01 for all
quotations in options series that are quoted at less than $3 per
contract and $0.05 for all quotations in options series that are quoted
at $3 per contract or greater. QQQQ, SPY and IWM are quoted in $0.01
increments for all options series. The Penny Pilot is currently
scheduled to expire on December 31, 2013.
    The Exchange proposes to extend the time period of the Penny Pilot
through June 30, 2014, and to provide revised dates for adding
replacement issues to the Penny Pilot. The Exchange proposes that any
Penny Pilot Program issues that have been delisted may be replaced on
the second trading day following January 1, 2014. The replacement
issues will be selected based on trading activity in the previous six
months \4\ [sic]
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    \4\ The replacement issues will be announced to the Exchange's
membership via an Options Trader Alert (OTA) posted on the
Exchange's Web site. The Exchange proposes in its Penny Pilot rule
that replacement issues will be selected based on trading activity
in the previous six months. The replacement issues would be
identified based on The Option Clearing Corporation's trading volume
data from June 1, 2013 through November 30, 2013. The month
immediately preceding the replacement issues' addition to the Pilot
Program (i.e. December) would not be used for purposes of the six-
month analysis.
---------------------------------------------------------------------------

    This filing does not propose any substantive changes to the Penny
Pilot Program; all classes currently participating in the Penny Pilot
will remain the same and all minimum increments will remain unchanged.
The Exchange believes the benefits to public customers and other market
participants who will be able to express their true prices to buy and
sell options have been demonstrated to outweigh the potential increase
in quote traffic.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act \5\ in general, and furthers the objectives of Section
6(b)(5) of the Act \6\ in particular, in that it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in facilitating transactions in securities, and to
remove impediments to and perfect the mechanism of a free and open
market and a national market system. In particular, the proposed rule
change, which extends the Penny Pilot for an additional six months
through June 30, 2014 and changes the date for replacing Penny Pilot
issues that were delisted to the second trading day following January
1, 2014, will enable public customers and other market participants to
express their true prices to buy and sell options for the benefit of
all market participants. This is consistent with the Act.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 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 not necessary or appropriate in
furtherance of the purposes of the Act. To the contrary, this proposal
is pro-competitive because it allows Penny Pilot issues to continue
trading on the Exchange. Moreover, the Exchange believes that the
proposed rule change will allow for further analysis of the Pilot and a
determination of how the Pilot should be structured in the future; and
will serve to promote regulatory clarity and consistency, thereby
reducing burdens on the marketplace and facilitating investor
protection. The Pilot is an industry wide initiative supported by all
other option exchanges. The Exchange believes that extending the Pilot
will allow for continued competition between market participants on the
Exchange trading similar products as their counterparts on other
exchanges, while at the same time allowing the Exchange to continue to
compete for order flow with other exchanges in option issues trading as
part of the Pilot.

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 Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) \7\ of the Act and subparagraph (f)(6) of Rule 19b-4
thereunder.\8\ Because the proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) \9\ of the Act and
subparagraph (f)(6) of Rule 19b-4 thereunder.\10\
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(6).
    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative prior to 30 days after

the date of the filing.\11\ However, pursuant to Rule 19b-
4(f)(6)(iii),\12\ the Commission may designate a shorter time if such
action is consistent with the protection of investors and the public
interest. The Exchange has asked the Commission to waive the 30-day
operative delay so that the proposal may become operative immediately
upon filing. The Commission believes that waiving the 30-day operative
delay is consistent with the protection of investors and the public
interest because doing so will allow the Pilot Program to continue
without interruption in a manner that is consistent with the
Commission's prior approval of the extension and expansion of the Pilot
Program and will allow the Exchange and the Commission additional time
to analyze the impact of the Pilot Program.\13\ Accordingly, the
Commission designates the proposed rule change as operative upon filing
with the Commission.\14\
---------------------------------------------------------------------------

    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change along with a
brief description and the text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this pre-filing requirement.
    \12\ 17 CFR 240.19b-4(f)(6)(iii).
    \13\ See Securities Exchange Act Release No. 61061 (November 24,
2009), 74 FR 62857 (December 1, 2009) (SR-NYSEArca-2009-44).
    \14\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    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_ADDRESS>Please include
File Number SR-BX-2013-061 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BX-2013-061. 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 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 Web site 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 BX. 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-BX-2013-061 and should be
submitted on or before January 13, 2014.
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-30453 Filed 12-20-13; 8:45 am]
BILLING CODE P