[Federal Register Volume 77, Number 71 (Thursday, April 12, 2012)]
[Notices]
[Pages 22027-22032]
[FR Doc No: 2012-8783]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66759; File No. SR-CBOE-2012-005]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Order Approving a Proposed Rule Change Relating to Stock-
Option Orders

 April 6, 2012.

I. Introduction

    On February 7, 2012, the Chicago Board Options Exchange,
Incorporated (``CBOE'' or ``Exchange''), filed with the Securities and
Exchange Commission (``Commission''), pursuant to Section 19(b)(1) of
the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to amend CBOE Rule 6.53C,
``Complex Orders on the Hybrid System,'' to, among other things, revise
CBOE's procedures for electronically executing stock-option orders. The
proposed rule change was published for comment in the Federal Register
on February 21, 2012.\3\ The Commission received no comment letters
regarding the proposed rule change. This order approves the proposed
rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 66394 (February 14,
2012), 77 FR 10026 (``Notice'').
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II. Description

    CBOE proposes to amend CBOE Rule 6.53C to adopt new definitions of
complex order and stock-option order, and to make several changes to
its procedures for electronically executing stock-option orders.

A. Definitions of Complex Order and Stock-Option Order

    CBOE Rule 6.53C(a) currently defines complex orders, including
stock-option orders, in terms of enumerated strategies. The proposal
replaces these enumerated strategies with general definitions of
complex order \4\ and stock-option order.\5\ According to CBOE, the
investing industry creates new and legitimate investment strategies
that do not necessarily fit within the current narrow definitions of
complex order types, and, as a result, bona fide transactions to limit
risk are not afforded the facility of execution provided to more common
complex orders.\6\ CBOE believes that more general definitions will
provide greater flexibility in the design and use of complex
strategies.\7\ CBOE notes that its new definitions of complex order and
stock-option order are consistent with those of another options
exchange \8\ and with CBOE Rule 6.80(4).
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    \4\ CBOE proposes to define a complex order as any order for the
same account involving the execution of two or more different
options series in the same underlying security occurring at or near
the same time in a ratio that is equal to or greater than one-to-
three (.333) and less than equal to three-to-one (3.00) (or such
lower ratio as may be determined by the Exchange on a class-by-class
basis) and for the purpose of executing a particular investment
strategy. See CBOE Rule 6.53C(a)(1).
    \5\ CBOE proposes to define a stock-option order as any order
for the same account to buy or sell a stated number of units of an
underlying stock or a security convertible into the underlying stock
(``convertible security'') coupled with the purchase or sale of
options contract(s) on the opposite side of the market representing
either (i) the same number of units of the underlying stock or
convertible security; or (ii) the number of units of the underlying
stock necessary to create a delta neutral position, but in no case
in a ratio greater than eight (8) options contracts per unit of
trading of the underlying stock or convertible security established
for that series by The Options Clearing Corporation (or such lower
ratio as may be determined by the Exchange on a class-by-class
basis). See CBOE Rule 6.53C(a)(2).
    \6\ See Notice, 77 FR at 10032.
    \7\ See id.
    \8\ See ISE Rule 722(a)(1) and (2).
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    CBOE Rule 6.53C(c)(iii) currently permits only complex orders with
no more than four legs to be placed in the Complex Order Book
(``COB''). CBOE proposes to remove this limitation and to provide that
only complex orders and stock-option orders with no more than the
applicable number of legs, as determined by CBOE on a class-by-class
basis, will be eligible for electronic processing.\9\
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    \9\ See CBOE Rule 6.53C(a)(1) and (2).
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B. Execution of Stock-Option Orders

1. Legging of Stock-Option Orders
    Currently, complex orders, including stock-option orders, may trade
with other complex orders or by ``legging'' with the individual orders
and quotes in CBOE's and CBSX's electronic books (``EBooks'') for the
individual component legs, provided that the complex order can be
executed in full, or in a permissible ratio, by the orders and quotes
in the EBooks for the individual component legs.\10\ In the case of a
stock-option order that is legged, the stock component of the order
would trade with CBSX's EBook and the option

series leg(s) would trade with CBOE's EBook.\11\
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    \10\ See, e.g., CBOE Rule 6.53C, Interpretation and Policy
.06(c) and (d).
    \11\ See Notice, 77 FR at footnote 10.
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    The proposal revises CBOE Rule 6.53C, Interpretation and Policy .06
to provide that stock-option orders will execute against other stock-
option orders through COB and the Complex Order RFR Auction (``COA''),
rather than by legging against individual orders and quotes.\12\ CBOE
believes that this change will provide for more efficient execution and
processing of stock-option orders and will help to mitigate the
potential risks associated with legging stock-option orders, including
the risk of an unhedged position if one leg of the order cannot be
executed.\13\
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    \12\ CBOE will retain legging functionality in one limited
circumstance, as described below. See CBOE Rule 6.53C,
Interpretation and Policy .06(d).
    \13\ See Notice, 77 FR at 10028.
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    The proposal retains the legging functionality for an eligible
market stock-option order that cannot be executed in full or in a
permissible ratio at the conclusion of a COA.\14\ At the conclusion of
a COA, any remaining balance of the option leg(s) of an eligible market
stock-option order will continue to route to the Hybrid System for
processing as a simple market order(s), and CBOE will electronically
transmit any remaining balance of the stock leg to a designated broker-
dealer (as described below) for processing as a market order.\15\ The
designated broker-dealer will represent the stock leg on behalf of the
party that submitted the stock-option order.
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    \14\ See CBOE Rule 6.53C, Interpretation and Policy .06(d). For
purposes of the legging functionality, an eligible market order is a
stock-option order that is within the designated size and order type
parameters, as determined by CBOE on a class-by-class basis, and for
which the NBBO is within designated size and price parameters, as
determined by CBOE for the individual leg. See CBOE Rule 6.53C,
Interpretation and Policy .06(d).
    \15\ See CBOE Rule 6.53C, Interpretation and Policy .06.
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    CBOE believes that the order eligibility parameters for eligible
market stock-option orders help to mitigate the potential risks
associated with legging stock-option orders, including the risk of an
order drilling through multiple price points on another exchange
(thereby resulting in executions at prices that are far from the NBBO
and potentially erroneous), and the risk that one leg of the stock-
option order will go unexecuted (resulting in an incomplete execution
and a partial position that is unhedged).\16\
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    \16\ See Notice, 77 FR at 10028.
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2. Eligible Market Orders
    For purposes of the legging functionality, an eligible market order
is a stock-option order that is within certain parameters determined by
CBOE, and for which the NBBO is within designated size and price
parameters, as determined by CBOE for the individual leg.\17\
Currently, CBOE may determine the NBBO price parameters based on a
minimum bid price for sell orders and a maximum sell price for buy
orders.\18\ The proposal eliminates the provision permitting CBOE to
specify a designated NBBO price parameter based on a maximum offer
price for buy orders because CBOE does not intend to utilize this
parameter.\19\
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    \17\ See CBOE Rule 6.53C, Interpretation and Policy .06(d).
    \18\ See CBOE Rule 6.53C, Interpretation and Policy .06(d).
    \19\ See Notice, 77 FR at footnote 16.
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3. Communication of Stock Leg to a Designated Broker-Dealer(s)
    Under the proposal, CBOE will electronically communicate the stock
leg of a stock-option order to a designated broker-dealer(s) for
execution on behalf of a Trading Permit Holder, rather than routing the
stock leg to CBSX.\20\ CBOE believes that this procedure will provide a
more efficient means for processing stock-option orders.\21\ To
participate in stock-option order automated processing, a Trading
Permit Holder must enter into a brokerage agreement with one or more
designated broker-dealers that are not affiliated with CBOE.\22\
However, CBOE notes that this process is not exclusive, and that
Trading Permit Holders will be able to continue using open outcry
procedures to execute stock-option orders if they choose to do so.\23\
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    \20\ See CBOE Rule 6.53C, Interpretation and Policy .06(a). As
described above, CBOE may continue to route to CBSX the stock leg of
an eligible market stock-option order that cannot be executed in
full or in a permissible ratio at the conclusion of a COA. See CBOE
Rule 6.53C, Interpretation and Policy .06(d).
    \21\ See Notice, 77 FR at 10027.
    \22\ See CBOE Rule 6.53C, Interpretation and Policy .06(a).
    \23\ CBOE notes that stock-option orders may be represented in
open outcry by floor brokers or by CBOE PAR officials. See Notice,
77 FR at footnote 9. See also CBOE Rules 6.45A(b) and 6.45B(b).
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    CBOE will transmit the stock component of a stock-option order to a
designated broker-dealer as two paired orders with a designated limit
price (except in the limited circumstance described above for eligible
market stock-option orders) after the Exchange's trading system has
determined that a stock-option order trade is possible and at what net
prices.\24\ The designated broker-dealer will act as agent for the
stock leg of a stock-option order and will be responsible for the
proper execution, trade reporting, and submission to clearing of the
stock trade.\25\ After CBOE communicates the stock orders to the
designated broker-dealer for execution, the broker-dealer will be
responsible for determining whether the orders may be executed in
accordance will all of the rules applicable to the execution of equity
orders, including compliance with the applicable short sale, trade-
through, and reporting rules.\26\
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    \24\ See Notice, 77 FR at 10026.
    \25\ See Notice, 77 FR at 10026-10027.
    \26\ See Notice, 77 FR at 10027.
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    A Trading Permit Holder may submit a stock-option order only if the
order complies with the qualified contingent trade exemption (``QCT
Exemption'') from Rule 611(a) of Regulation NMS,\27\ and a Trading
Permit Holder submitting a stock-option order represents that the order
complies with the QCT Exemption.\28\ In addition, as described more
fully in the Notice, CBOE's Hybrid System will validate compliance with
the QCT Exemption with respect to each matched order communicated to
the designated broker-dealer.\29\
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    \27\ 17 CFR 242.611(a). See Securities Exchange Act Release No.
57620 (April 4, 2008), 73 FR 19271 (April 9, 2008) (order modifying
the QCT Exemption). See also Securities Exchange Act Release No.
54389 (August 31, 2006), 71 FR 52829 (September 7, 2006) (order
establishing the QCT Exemption).
    \28\ See CBOE Rule 6.53C, Interpretation and Policy .06(a).
    \29\ See Notice, 77 FR at 10027.
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    CBOE intends to file a separate proposal to establish fees related
to the routing of the stock portion of a stock-option order.\30\
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    \30\ See Notice, 77 FR at 10026-10027.
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C. Allocation Algorithms and Priority

1. COB and COA Allocation Algorithms
    Currently, stock-option orders in COB may execute against other
stock-option orders or against individual orders and quotes in the
EBook.\31\ Because CBOE will no longer permit the legging of stock-
option orders in COB against individual orders and quotes in the
component legs, the proposal amends the COB algorithm to provide that
stock-option orders that are marketable against each other will execute
automatically.\32\ Multiple stock-option orders at the same price will
be allocated pursuant to the rules of trading priority otherwise
applicable to incoming electronic orders in the individual component
legs,\33\ or

pursuant to another allocation algorithm designated by CBOE under CBOE
Rule 6.53C, Interpretation and Policy .09.\34\
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    \31\ See CBOE Rule 6.53C, Interpretation and Policy .06(b), (c),
and (f).
    \32\ See CBOE Rule 6.53C, Interpretation and Policy .06(c).
    \33\ See id. CBOE notes that the allocation algorithms for the
individual series legs include price-time, pro-rata, and the
ultimate matching algorithm (``UMA'') base priorities, and a
combination of various optional priority overlays pertaining to
public customer priority, Market Maker participation entitlement,
small order preference, and market turner. See Notice, 77 FR at
footnote 17. See also CBOE Rules 6.45A and 6.45B.
    \34\ CBOE Rule 6.53C, Interpretation and Policy .09 allows CBOE
to determine, on a class-by-class basis, which electronic matching
algorithm from CBOE Rule 6.45A or 6.45B, as applicable, will apply
to executions in COB in lieu of the algorithm specified in CBOE Rule
6.53C(c)(ii)(2) and (3).
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    Stock-option orders in COA, like stock-option orders in COB,
currently may execute against other stock-option orders or against
individual orders and quotes in the EBook.\35\ Because CBOE will no
longer permit the legging of stock-option orders in COA against
individual orders and quotes in the component legs, except in the
limited circumstance noted above, the proposal amends the COA algorithm
to provide that stock-option orders executed against other stock-option
orders through COA will trade first at the best net price(s) and, at
the same price, in the sequence set forth in CBOE Rule 6.53C(d)(2)-
(4).\36\
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    \35\ See CBOE Rule 6.53C, Interpretation and Policy .06(b), (d),
and (f).
    \36\ See CBOE Rule 6.53C, Interpretation and Policy .06(d).
Under Interpretation and Policy .06(d), as amended, a stock-option
order that was subject to a COA would execute against other stock-
option orders first, at the best net price(s) and, at the same
price, in the following sequence: (i) Against public customer stock-
option orders resting in COB before, or received during, the COA
Response Time Interval, and public customer RFR Responses, with
multiple public customer orders ranked by time priority; (ii)
against non-public customer orders resting in COB before the COA
Response Time Interval, with multiple orders subject to the UMA
allocation in CBOE Rule 6.45A or 6.45B, as applicable; and (iii)
against non-public customer orders resting in COB that are received
during the COA Response Time Interval, and non-public customer RFR
Responses, with multiple orders subject to the CUMA allocation in
CBOE Rule 6.45A or 6.45B, as applicable.
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2. Priority
    For a stock-option order to execute against another stock-option
order in COB or COA, the execution must occur at a price where the
option leg(s) of the stock-option order have priority over the
individual orders and quotes in CBOE's EBook.\37\ To satisfy this
condition, the individual options legs of the stock-option order: (1)
Must not trade at a price that is inferior to CBOE's best bid (offer)
in the individual component series; and (2) must not trade at CBOE's
best bid (offer) in the individual component series if one or more
public customer orders are resting at the best bid (offer) in each of
the component series and the stock-option order could otherwise be
executed in full or in a permissible ratio.\38\
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    \37\ See Notice, 77 FR at 10028.
    \38\ See CBOE Rule 6.53C, Interpretation and Policy .06(a) and
(d). See also Notice, 77 FR at 10028 and 10029.
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D. Provisions Applicable to Marketable Stock-Option Orders

    Several provisions in the proposal address the handling of stock-
option orders that become marketable. First, to the extent that a
marketable stock-option order cannot be executed in full, or in a
permissible ratio, after it is routed to COB or following a COA, any
part of the order that can execute will execute and the remaining
balance will be routed on a class-by-class basis to PAR or, at the
order entry firm's discretion, to the order entry firm's booth.\39\ If
the order is not eligible to route to PAR, the remaining balance will
be cancelled.\40\
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    \39\ See CBOE Rule 6.53C, Interpretation and Policy .06(b)(1).
The Commission notes that CBOE intends to file a separate proposed
rule change to revise CBOE Rule 6.53C, Interpretation and Policy .06
and .08 to further describe booth routing parameters and related
order management terminal operations. See email message from
Jennifer Lamie, Assistant General Counsel, Legal Division, CBOE, to
Yvonne Fraticelli, Special Counsel, and Brian Baltz, Attorney,
Division of Trading and Markets, Commission, dated March 27, 2012.
    \40\ See id.
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    Second, to the extent that a stock-option order resting in COB
becomes marketable against the derived net market, the full order will
be subject to a COA.\41\ The derived net market will be calculated
using CBOE's best bid or offer for the individual option series leg(s)
and the NBBO for the stock leg.\42\ CBOE believes that automatically
initiating a COA after a resting stock-option order becomes marketable
against the derived net market will provide an opportunity for market
participants to match or improve the net price and provide an
opportunity for automatic execution of the order.\43\ CBOE notes that
this system feature will not be applicable to a resting stock-option
order that becomes marketable against another stock-option
order(s).\44\
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    \41\ See CBOE Rule 6.53C, Interpretation and Policy .06(a)(2).
The order would not execute automatically against the derived net
market because stock-option orders will no longer execute against
the individual legs of the order, except in the limited circumstance
described above.
    \42\ See id.
    \43\ See Notice, 77 FR at 10029.
    \44\ See id.
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E. Price Check Parameters

    CBOE proposes to adopt a new price check parameter applicable to
the electronic processing of stock-option orders.\45\ This price check
parameter would allow CBOE to determine, on a class-by-class basis, and
announce to Trading Permit Holders via Regulatory Circular, not to
automatically execute a marketable stock-option order if, following a
COA, the execution would not be within the acceptable derived net
market for the strategy that existed at the start of the COA.\46\ Such
an order would route on a class-by-class basis to PAR or, at the order
entry firm's discretion, to the order entry firm's booth.\47\ If the
order is not eligible to route to PAR, the remaining balance would be
cancelled.\48\
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    \45\ See CBOE Rule 6.53C, Interpretation and Policy .08(f).
    \46\ See CBOE Rule 6.53, Interpretation and Policy .08(f)(1).
    \47\ See CBOE Rule 6.53C, Interpretation and Policy .08(f)(2).
See also note 39, supra.
    \48\ See id.
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    The ``acceptable derived net market'' for a strategy will be
calculated using CBOE's best bid or offer in the individual option
series leg(s) and the NBBO in the stock leg plus/minus an acceptable
tick distance.\49\ CBOE will determine the ``acceptable tick distance''
on a class-by-class and premium basis.\50\ CBOE believes that it is
reasonable and appropriate to use the Exchange's best bid and offer for
the individual series to calculate the acceptable derived net market
for the option series leg(s) because the option component leg(s) of a
stock-option order are not permitted to trade at a price that is
inferior to CBOE's best bid and offer.\51\ CBOE believes that it is
reasonable and appropriate to use the NBBO plus/minus an acceptable
tick distance to calculate the acceptable derived net market for the
stock component because CBOE believes that the NBBO should serve as a
reasonable proxy for what may be considered a reasonable price for the
automatic execution of the stock component leg.\52\ CBOE believes,
further, that it also may be appropriate to consider some range outside
the NBBO in determining the acceptable tick distance because the stock
leg of a stock-option order that qualifies for the QCT Exemption \53\
may be executed outside the NBBO for the stock.\54\ Accordingly, in
establishing the acceptable tick distance for the stock leg of the
order, CBOE would have the flexibility to use the NBBO (which would
equate to an acceptable tick

distance of 0) or a range outside the NBBO.\55\
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    \49\ See CBOE Rule 6.53C, Interpretation and Policy .08(f)(1).
    \50\ See id.
    \51\ See Notice, 77 FR at footnote 21.
    \52\ See id.
    \53\ See note 27, supra.
    \54\ See Notice, 77 FR at footnote 21.
    \55\ See id.
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    In classes where this price check parameter is available, it will
also be available for COA responses under CBOE Rule 6.53C(d), AIM and
Solicitation Auction Mechanism stock-option orders and responses under
CBOE Rules 6.74A and 6.74B, and customer-to-customer immediate cross
stock-option orders under CBOE Rule 6.74A, Interpretation and Policy
.08 (``CTC'').\56\ Under these provisions, paired stock-option orders
and responses will not be accepted except that, to the extent that only
a paired contra-side order subject to an auction under CBOE Rule 6.74A
or 6.74B exceeds the price check parameter, the contra-side order will
not be accepted and the paired original Agency Order will not be
accepted or, at the order entry firm's discretion, the Agency Order
would continue processing as an unpaired stock option order (e.g., the
Agency Order would route to COB or COA for processing).\57\ To the
extent that a contra-side order or response is marketable, its price
will be capped at the price inside the acceptable derived net
market.\58\
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    \56\ See CBOE Rule 6.53C, Interpretation and Policy .08(f)(2).
AIM, SAM and CTC are mechanisms that may be used to cross two paired
orders. See Notice, 77 FR at footnote 22.
    \57\ See CBOE Rule 6.53C, Interpretation and Policy .08(f)(2)
and Notice, 77 FR at 10030.
    \58\ See CBOE Rule 6.53C, Interpretation and Policy .08(f)(2).
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    CBOE also proposes to apply the existing individual series leg
width price check parameter in CBOE Rule 6.53C, Interpretation and
Policy .08(a)(i) to market and marketable limit stock-option
orders.\59\ Under this price check parameter, a market or marketable
limit stock-option order in a class where the price check parameter was
available would not be executed automatically if the width between
CBOE's best bid and best offer in any individual series leg was not
within an acceptable price range.\60\
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    \59\ See CBOE Rule 6.53C, Interpretation and Policy .08(a) and
Notice, 77 FR at 10030-10031.
    \60\ See id.
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    CBOE believes that the price protection parameters will help to
mitigate the potential risks associated with stock-option orders
drilling through multiple price points, thereby resulting in executions
that are extreme and potentially erroneous.\61\
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    \61\ See Notice, 77 FR at 10031.
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F. Extension of the re-COA Feature to Stock-Option Orders

    CBOE Rule 6.53C, Interpretation and Policy .04(b) provides that,
for classes in which COA is activated, a non-marketable order resting
at the top of the COB may be automatically subject to COA if the order
is within a number of ticks away from current derived net market. The
proposal extends this ``re-COA'' feature to include stock-option orders
resting at the top of the COB, and to provide that the derived net
market for a stock-option order will be calculated using CBOE's best
bid or offer in the individual option series leg(s) and the NBBO in the
stock leg.\62\ CBOE notes that this feature would apply only to a
resting non-marketable stock-option order that moves close to the
derived net market, but would not apply to a resting stock-option order
that becomes marketable against another stock-option order(s).\63\ CBOE
believes that this feature will facilitate the execution of stock-
option orders by providing an automated opportunity for the execution
of, and price improvement to, a resting stock-option order that is
priced near the current market, similar to what a Trading Permit Holder
might do if the Trading Permit Holder were representing the stock-
option order in open outcry or entering the order into COB.\64\
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    \62\ See CBOE Rule 6.53C, Interpretation and Policy .04(b).
    \63\ See Notice, 77 FR at 10031.
    \64\ See id.
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G. Rule Text Reorganizations

    As described more fully in the Notice, CBOE also proposes various
changes to reorganize and simplify the rules governing stock-option
orders by, among other things, consolidating certain provisions in CBOE
Rule 6.53C, Interpretation and Policy .06.\65\
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    \65\ See Notice, 77 FR at 10031-10032.
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III. Discussion and Commission's Findings

    After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
exchange.\66\ In particular, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act,\67\ which
requires, among other things, that the rules of a national securities
exchange be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to 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.
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    \66\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
    \67\ 15 U.S.C. 78f(b)(5).
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A. Definitions of Complex Order and Stock-Option Order

    The Commission finds that the proposed definitions of complex order
and stock-option order are consistent with the Act. The Commission
believes that the new definitions could permit the electronic trading
on CBOE of complex orders representing investment strategies that do
not fall within the enumerated strategies in CBOE's current rule,
including transactions designed to limit risk. The Commission notes
that the proposed definitions of complex order and stock-option order
are consistent with definitions included in the rules of another
options exchange \68\ and in CBOE Rule 6.80(4).\69\ In addition, the
Commission believes that the rule changes removing the limit on the
number of legs that may be included in a complex order could provide
greater flexibility and permit the electronic trading on CBOE of
additional complex orders.
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    \68\ See ISE Rule 722(a)(1) and (2).
    \69\ CBOE Rule 6.80(4) defines a Complex Trade for purposes of
CBOE Chapter VI, Section E, ``Order Protection; Locked and Crossed
Markets.'' CBOE Rule 6.81(b)(7) provides an exception from the
prohibition on Trade-Throughs for any transaction that was effected
as a portion of a Complex Trade.
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B. Execution of Stock-Option Orders

1. Legging of Stock-Option Orders
    The Commission believes that the proposal to revise CBOE Rule
6.53C, Interpretation and Policy .06 to provide for the execution of
stock-option against other stock-option orders through COB and COA,
rather than by legging against individual orders and quotes in the CBOE
and CBSX EBooks, is consistent with the Act because it could facilitate
the execution of stock-option orders. The Commission notes that another
options exchange similarly permits stock-option orders traded on its
electronic trading platform to execute only against other stock-option
orders.\70\
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    \70\ See Phlx Rule 1080, Commentary .08(a)(i) (stating that
stock-option orders may only be executed against other stock-option
orders and cannot be executed by the System against orders for the
individual components).
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    The Commission also believes that it is consistent with the Act for
CBOE to retain the legging feature for eligible market stock-option
orders that cannot be executed, in full or in a permissible ratio, at
the conclusion of a COA because the legging functionality could provide
an additional opportunity for these orders to be executed. The
Commission notes that CBOE believes

that the eligibility parameters for eligible market stock-option orders
could help to mitigate the risks that may be associated with legging
stock-option orders.\71\
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    \71\ See Notice, 77 FR at 10028. Under CBOE Rule 6.53C,
Interpretation and Policy .06(d), as amended, an ``eligible market
order'' is a stock-option order that is within the designated size
and order type parameters determined by CBOE on a class-by-class
basis, and for which the NBBO is within designated size and price
parameters, as determined by CBOE for the individual leg. The
designated NBBO price parameters will be determined based on a
minimum bid price for sell orders. CBOE may determine on a class-by-
class basis to limit the trading times within regular trading hours
that the legging functionality will be available.
---------------------------------------------------------------------------

2. Eligible Market Orders
    The Commission believes that it is consistent with the Act for CBOE
to modify the eligible market order parameter in CBOE Rule 6.53C,
Interpretation and Policy .06(d) by eliminating the provision that
allows CBOE to establish an NBBO price parameter for such orders based
on a maximum offer price for buy orders. CBOE states that it does not
intend to use this parameter.\72\ Accordingly, the Commission believes
that eliminating this parameter will help to assure that the rule
accurately reflects the parameters that CBOE may use to identify
eligible market stock-option orders.
---------------------------------------------------------------------------

    \72\ See Notice, 77 FR at footnote 16.
---------------------------------------------------------------------------

3. Communication of Stock Leg to a Designated Broker-Dealer(s)
    As described more fully above, CBOE proposes to revise its rules to
allow the Exchange to electronically communicate the stock leg of a
stock-option order to a designated broker-dealer for execution on
behalf of a Trading Permit Holder.\73\ To participate in stock-option
order automated processing, a Trading Permit Holder must enter into a
brokerage agreement with one or more designated broker-dealers that are
not affiliated with CBOE.\74\
---------------------------------------------------------------------------

    \73\ See CBOE Rule 6.53C, Interpretation and Policy .06(a).
    \74\ See CBOE Rule 6.53C, Interpretation and Policy .06(a).
---------------------------------------------------------------------------

    The designated broker-dealer will act as agent for the stock leg of
a stock-option order and will be responsible for the proper execution,
trade reporting, and submission to clearing of the stock trade.\75\ In
addition, after CBOE communicates the paired stock orders to the
designated broker-dealer for execution, the broker-dealer will be
responsible for determining whether the orders may be executed in
accordance with all of the rules applicable to the execution of equity
orders, including compliance with the applicable short sale, trade-
through, and reporting rules.\76\ In addition, a Trading Permit Holder
may submit a stock-option order only if the order complies with the QCT
Exemption from Rule 611(a) of Regulation NMS, and a Trading Permit
Holder submitting a stock-option order represents that the order
complies with the QCT Exemption.\77\ As described more fully in the
Notice, CBOE's Hybrid System will validate compliance with the QCT
Exemption with respect to each matched order communicated to the
designated broker-dealer.\78\
---------------------------------------------------------------------------

    \75\ See Notice, 77 FR at 10026-10027.
    \76\ See Notice, 77 FR at 10027.
    \77\ See CBOE Rule 6.53C, Interpretation and Policy .06(a).
    \78\ See Notice, 77 FR at 10027.
---------------------------------------------------------------------------

    CBOE states that this automated process for executing stock-option
orders is not exclusive, and that Trading Permit Holders will continue
to be able to use open outcry procedures to execute stock-option orders
if they choose to do so.\79\
---------------------------------------------------------------------------

    \79\ Stock-option orders may be represented in open outcry by
floor brokers or by CBOE PAR officials. See Notice, 77 FR at
footnote 9 and accompanying text. See also CBOE Rules 6.45A(b) and
6.45B(b).
---------------------------------------------------------------------------

    The Commission notes that CBOE's proposal to electronically
communicate the stock leg of a stock-option order to a designated
broker-dealer for execution is similar to rules adopted by other
options exchanges.\80\ In addition, the Commission notes that Trading
Permit Holders will continue to have the ability to use open outcry
procedures to execute stock-option orders if they choose to do so.
Accordingly, the Commission finds that the proposal to allow CBOE to
electronically communicate the stock leg of a stock-option order to a
designated broker-dealer that is not affiliated with CBOE for execution
on behalf of a Trading Permit Holder is consistent with the Act.
---------------------------------------------------------------------------

    \80\ See ISE Rule 722, Supplementary Material .02. See also Phlx
Rule 1080, Commentary .08.
---------------------------------------------------------------------------

C. Allocation Algorithms and Priority

1. COB and COA Allocation Algorithms
    Because stock-option orders generally will not execute against
individual leg market interest in the CBOE and CBSX EBooks, CBOE is
eliminating references in CBOE Rule 6.53C, Interpretation and Policy
.06 to executions of stock-option orders against individual orders and
quotes. Instead, stock-option orders in COB that are marketable against
each other will execute automatically, and multiple stock-option orders
at the same price will be allocated pursuant to the rules of trading
priority otherwise applicable to incoming electronic orders in the
individual component legs.\81\ The Commission notes that this
allocation provision for stock-option orders in COB is consistent with
the existing complex order allocation provision in CBOE Rule
6.53C(c)(ii)(2).\82\ Accordingly, the Commission believes that the
allocation provision for marketable stock-option orders in COB is
consistent with the Act.
---------------------------------------------------------------------------

    \81\ See CBOE Rule 6.53C, Interpretation and Policy .06(c). CBOE
also could allocate stock-option orders pursuant to another
allocation algorithm designated by CBOE under CBOE Rule 6.53C,
Interpretation and Policy .09.
    \82\ CBOE Rule 6.53C(c) states that the allocation of complex
orders in COB that are marketable against each other will be
pursuant to the rules to trading priority otherwise applicable to
incoming electronic orders in the individual component legs.
---------------------------------------------------------------------------

    Because CBOE will no longer permit the legging of stock-option
orders in COA against individual orders and quotes in the component
legs (except with respect to an eligible market stock-option order that
cannot be executed following a COA), CBOE is amending the COA algorithm
to eliminate the reference to executions against individual orders and
quotes in the EBook, but retaining the remainder of the current stock-
option order allocation algorithm in CBOE Rule 6.53C, Commentary
.06(d). Accordingly, stock-option orders executed through COA will
trade first at the best net price(s) and, at the same price, in the
sequence set forth in CBOE Rule 6.53C(d)(v)(2)-(4).\83\ The Commission
believes that it is consistent with the Act for CBOE to continue to
apply this allocation algorithm to stock-option orders.
---------------------------------------------------------------------------

    \83\ See CBOE Rule 6.53C, Interpretation and Policy .06(d).
---------------------------------------------------------------------------

2. Priority
    For a stock-option order to execute against another stock-option
order in COB or COA, the execution must occur at a price where the
option leg(s) of the stock-option order have priority over the
individual orders and quotes in CBOE's EBook.\84\ To satisfy this
condition, the individual options legs of the stock-option order: (1)
Must not trade at a price that is inferior to CBOE's best bid (offer)
in the individual component series; and (2) must not trade at CBOE's
best bid (offer) in the individual component series if one or more
public customer orders are resting at the best bid (offer) in each of
the component series and the stock-option order could otherwise be
executed in full or in a permissible ratio. These provisions are
consistent with CBOE's existing priority rules,\85\ and with the rules
of other

options exchanges.\86\ Accordingly, the Commission finds that the
priority requirements for stock-option orders in CBOE Rule 6.53C,
Commentary .06(b) are consistent with the Act.
---------------------------------------------------------------------------

    \84\ See Notice, 77 FR at 10028.
    \85\ See, e.g., CBOE Rules 6.45(e); 6.45A(b)(ii); and
6.45B(b)(ii).
    \86\ See, e.g., ISE Rule 722(b)(2); and NYSE Amex Rule 980NY,
Commentary .03(d).
---------------------------------------------------------------------------

D. Provisions Applicable to Marketable Stock-Option Orders

    To the extent that a marketable stock-option order cannot be
executed in full in, or in a permissible ratio, after it is routed to
COB or following a COA, any part of the order that can execute will
execute and the remaining balance will be routed on a class-by-class
basis to PAR or, at the order entry firm's discretion, to the order
entry firm's booth.\87\ If the order is not eligible to route to PAR,
the remaining balance will be cancelled.\88\ The Commission believes
that these provisions are consistent with the Act because they
establish procedures for handling the remaining balance of a marketable
stock-option order that cannot be executed in full or in a permissible
ratio.
---------------------------------------------------------------------------

    \87\ See CBOE Rule 6.53C, Interpretation and Policy .06(a)(1).
As noted above, CBOE plans to file a separate proposal that will
further describe booth routing parameters and order management
terminal operations. See note 39, supra.
    \88\ See id.
---------------------------------------------------------------------------

    In addition, to the extent that a stock-option order resting in COB
becomes marketable against the derived net market, the full order will
be subject to a COA.\89\ The Commission believes that this provision is
consistent with the Act because it could facilitate the execution of a
stock-option order that is marketable against the derived net market,
but that would not execute against the derived net market because
stock-option orders generally will not execute against leg market
interest.
---------------------------------------------------------------------------

    \89\ See CBOE Rule 6.53C, Interpretation and Policy .06(a)(2).
This system feature will not be applicable to a resting stock-option
order that becomes marketable against another stock-option order(s).
---------------------------------------------------------------------------

E. Price Check Parameters

    The stock-option derived net market price check parameter in CBOE
Rule 6.53C, Interpretation and Policy .08(f) will prevent the automatic
execution of a stock-option order following a COA if the execution
would not be within the acceptable derived net market that existed at
the start of the COA. The Commission believes that this price check
parameter is consistent with the Act because it could help to prevent
the automatic execution of stock-option orders at extreme or
potentially erroneous prices. The Commission believes that it is
reasonable to use CBOE's best bid and offer for the individual series
legs to calculate the acceptable derived net market for the option
leg(s) of a stock-option order because the option leg(s) would not be
permitted to trade at a price that is inferior to CBOE's best bid or
offer. The Commission believes that using the NBBO for the stock, plus
or minus an acceptable tick distance, to determine the acceptable
derived net market for the stock leg of a stock-option order will
provide CBOE with flexibility in setting this parameter. The Commission
notes that a stock-option order submitted to the Hybrid System must
comply with the QCT Exemption.\90\ The stock leg of a stock-option
order that complies with the QCT Exemption would be permitted to trade
at a price that is outside the NBBO for the stock.
---------------------------------------------------------------------------

    \90\ See CBOE Rule 6.53C, Interpretation and Policy .06(a).
---------------------------------------------------------------------------

    CBOE also proposes to extend the existing individual series leg
width price check parameter in CBOE Rule 6.53C, Interpretation and
Policy .08(a)(i), which currently applies to complex orders, to the
individual series legs of market and marketable limit stock-option
orders.\91\ This price check parameter prevents the automatic execution
of a marketable complex order when the width between CBOE's best bid
and offer in any individual series leg is not within an acceptable
price range. The Commission believes that it is consistent with the Act
for CBOE to have the ability to apply this price check parameter to
stock-option orders, in addition to complex orders.
---------------------------------------------------------------------------

    \91\ See CBOE Rule 6.53C, Interpretation and Policy .08(a)(5)
and Notice, 77 FR at 10030--10031.
---------------------------------------------------------------------------

F. Extension of the Re-COA Feature to Stock-Option Orders

    CBOE proposes to amend CBOE Rule 6.53C, Interpretation and Policy
.04(b) to apply its ``re-COA'' feature to stock-option orders resting
at the top of the COB. For classes in which COA is activated, a non-
marketable stock-option order resting at the top of the COB may be
automatically subject to COA if the order is within a number of ticks
away from current derived net market.\92\ The Commission believes that
applying the ``re-COA'' feature to stock-option orders could facilitate
the execution of stock-option orders by providing an opportunity for a
stock-option resting at the top of the COB to be executed
automatically. Accordingly, the Commission finds that the provision is
consistent with the Act.
---------------------------------------------------------------------------

    \92\ See CBOE Rule 6.53C, Interpretation and Policy .04(b). CBOE
will calculate the derived net market for a stock-option order using
CBOE's best bid or offer in the individual option series leg(s) and
the NBBO in the stock leg.
---------------------------------------------------------------------------

G. Rule Text Reorganizations

    The Commission believes that the proposed changes to reorganize,
consolidate, and simplify CBOE Rule 6.53C, Interpretation and Policy
.06 are consistent with the Act.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\93\ that the proposed rule change (SR-CBOE-2012-005) is approved.
---------------------------------------------------------------------------

    \93\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\94\
---------------------------------------------------------------------------

    \94\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-8783 Filed 4-11-12; 8:45 am]
BILLING CODE 8011-01-P


EPA REGISTRATION DIVISION COMPANY NOTICE OF FILING FOR PESTICIDE PETITIONS PUBLISHED IN THE FEDERAL REGISTER

EPA Registration Division contact: [insert name and telephone number with area code]

INSTRUCTIONS:  Please utilize this outline in preparing the pesticide petition.  In cases where the outline element does not apply, please insert "NA-Remove" and maintain the outline. Please do not change the margins, font, or format in your pesticide petition. Simply replace the instructions that appear in green, i.e., "[insert company name]," with the information specific to your action.

TEMPLATE:

[Rosen's Inc.]

[Insert petition number]

	EPA has received a pesticide petition ([IN-xxx]) from Rosen's Inc., 700 SW 291 Hwy, Suite 204, Liberty, MO 64068 requesting, pursuant to section 408(d) of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a(d), to amend 40 CFR part 180.920 to establish an exemption from the requirement of a tolerance in or on all raw agricultural commodities for the inert ingredient potassium polyaspartate (CAS Reg. No. 64723-18-8) when used as a complexing agent at no more than 10% in pesticide formulations.  EPA has determined that the petition contains data or information regarding the elements set forth in section 408 (d)(2) of FDDCA; however, EPA has not fully evaluated the sufficiency of the submitted data at this time or whether the data supports granting of the petition. Additional data may be needed before EPA rules on the petition.

A. Residue Chemistry

	1. Plant metabolism.  Plant metabolism data are not required for the establishment of a tolerance exemption.

	2. Analytical method. An analytical method is not required when proposing an exemption form the requirement of a tolerance.

	3. Magnitude of residues. Magnitude of the residue studies are not required for the establishment of a tolerance exemption.

B. Toxicological Profile

	1. Acute toxicity.  The acute oral toxicity of sodium polyaspartate as an ~ 40% aqueous solution was tested in two acute oral toxicity studies.  In both studies the acute oral LD50 was greater than 5000 mg/kg (Toxicity Category IV).  In one of the studies, the LD50 was based on the weight of the dry material administered and the other on the amount of the solution administered.  Aspartic acid was also tested in an acute oral toxicity study at 2000 mg/kg which caused no mortality (Toxicity Category III).

In an acute dermal toxicity study on aspartic acid, the acute dermal LD50 was greater than 5000 mg/kg (Toxicity Category IV).

The acute inhalation LC50 of the 40% aqueous solution of sodium polyaspartate was greater than 5.1 mg/L (Toxicity Category IV).  This same aqueous solution of sodium polyaspartate was neither a dermal irritant nor an eye irritant (Toxicity Category IV).

Aspartic acid was not a dermal irritant (Toxicity Category IV) and was slightly irritating to the eye (Toxicity Category III).  In addition, aspartic acid was not a dermal sensitizer in the guinea pig maximization test.

Overall, the sodium salt of polyaspartate and aspartic acid exhibit low acute toxicity via inhalation, dermal and oral routes.  Sodium polyaspartate (40% aqueous solution) is not a dermal or eye irritant.  Aspartic acid is not a dermal irritant, is a slight eye irritant and is not a dermal sensitizer.  Reading across the database, potassium polyaspartate can be considered to have low acute oral, dermal and inhalation toxicity, and is not likely to be dermal or eye irritant or a dermal sensitizer based on results of studies conducted on sodium polyaspartate and L-aspartic acid.

	2. Genotoxicity. Potassium polyaspartate was tested in an Ames Salmonella assay for its ability to induce gene mutations and in an in vitro micronucleus assay in human lymphocytes.  The results of both studies were negative.  In addition, L-aspartic acid and N-acetyl-L-aspartic acid were negative in the Ames Salmonella assay up to the limit dose of 5000 ug/plate and in an in vivo mouse micronucleus assay up to the limit dose of 2000 mg/kg.  The rationale for inclusion of L-aspartic acid is as follows.  In a simulated gastric digestion study of potassium polyaspartate using porcine pepsin and pancreatin, less than 4% of was broken down to aspartic acid.  The majority of the material remained as polyaspartate following the in vitro simulated gastric digestion.  Based on the results of an in vitro study using Caco-2 cell absorption model, it was concluded that negligible absorption of polyaspartate would occur in vivo; however, in vivo absorption studies have not been conducted.  As noted in a Joint FAO/WHO Expert Committee on Food Additives (JECFA) document, should polyaspartate be orally absorbed microbial fermentation in the human colon could occur and there could be resulting exposure to L- and D-aspartic acid.  Consequently studies, on L-aspartic acid are summarized and L-aspartic acid is being used as a possible surrogate for potassium polyaspartate.  Studies on N-acetyl-L-aspartic acid are summarized since it is metabolized in vivo to L-aspartic acid making it a surrogate for potassium polyaspartate as well.  Based on the results of these studies, it can be concluded that based on a weight of the evidence evaluation that potassium polyaspartate has no genotoxic potential.

	3. Reproductive and developmental toxicity. Developmental/reproductive toxicity studies were not available on potassium polyaspartate; however, reproduction and fertility effects studies were available on L-aspartic acid and N-acetyl-L-aspartic acid.

L-Aspartic acid is being used as a surrogate for potassium polyaspartate based on the following rationale.  In a simulated gastric digestion study of potassium polyaspartate using porcine pepsin and pancreatin, less than 4% of potassium polyaspartate was broken down to aspartic acid.  The majority of the material remained as polyaspartate following the in vitro simulated gastric digestion.  Based on the results of an in vitro study using Caco-2 cell absorption model, it was concluded that negligible absorption of polyaspartate would occur in vivo; however, in vivo absorption studies have not been conducted.  As noted in a Joint FAO/WHO Expert Committee on Food Additives (JECFA) document, should polyaspartate be orally absorbed, microbial fermentation in the human colon could occur and there would be exposure to L- and D-aspartic acid.  Consequently, studies on L-aspartic acid are also summarize herein and L-aspartic acid is being used as a surrogate for potassium polyaspartate.  Studies on N-acetyl-L-aspartic acid are summarized since it is metabolized in vivo to L-aspartic acid making it a surrogate for potassium polyaspartate as well.

The L-Aspartic acid study was conducted according to OECD guideline 416 with additional response variables.  Male and female Sprague-Dawley rats (25/sex/group) were administered L-aspartic acid in the diet at target levels of 0 and 500 mg/kg bw/day over two generations.  The rats were exposed to the diets for 10 weeks prior to mating.  The day of parturition was defined as day 1 of lactation.  To avoid potential biases in pup viabilities and body weight gains, F1 and F2 generations litters were not culled during the lactation period.  Both generations were weaned on postnatal day (PND) 22 through 25.  Pups were assigned to one of 4 subsets (1 pup/sex/litter/subset, when possible).  Clinical observations and body weight and food consumption were conducted according to OECD guideline 416.  Ophthalmological examinations were performed for all rats assigned to F1 generation Subset 3 between PNDs 22-27 and PNDs 74-82 and F2 generation Subset 7 between PNDs 22-28 and PND 80.  Estrous cyclicity was evaluated for P and F1 generation dams before the scheduled cohabitation period.  Male and female rats from F1 generation Subset 3 and F2 generation Subsets 7 and 8 were observed for the age at which sexual maturation began, age of preputial separation (PS) and vaginal patency (VP), respectively.  Body weight was recorded on the day of sexual maturation was observed.  Behavioral and developmental assessment of F1 (Subset 3) and F2 (Subset 7) rats was conducted at various times depending on the variable.  Motor activity assessment was conducted at weaning on days 22 and 61 postpartum.  The same rats tested on day 22 were tested again on day 61.  The same rats were also tested for passive avoidance beginning on days 23 to 25 and water maze performance beginning on days 59 to 63 postpartum.  Following sacrifice, the following organs were weighed:  brain, pituitary gland, liver, kidney, ovaries and uterus with cervix, epididymides testes, prostate and seminal vesicles with coagulating gland.  Histopathology was conducted on P generation rats and rats from the progeny randomly selected from subsets assigned to this evaluation (F1 generation Subsets 2 and 4; F2 generation Subsets 6 and 8).  With the exception of salivary glands, tissues only from the control group and the 500 mg N-acetyl-L-aspartic acid/kg bw/day were examined.  The salivary glands from all exposure groups from rats in Subset 3 (F1 generation) and Subset 7 (F2 generation) were evaluated.  The following other tissues were examined:  pituitary gland, gross lesions, ovaries, oviducts, mammary gland vagina, uterus, cervix, testes, epididymides seminal vesicles, coagulating land and prostate.  Neurohistopathology was conducted on randomly selected rats (10/sex/group for F1 generation Subsets 1 and 3 and F2 generation Subsets 5 and 7).  Tissues from the control and high dose N-acetyl-L-aspartic acid groups were examined as well as those from the aspartic acid comparative control group.

The nominal dose of 500 mg/kg bw/day corresponded to an actual average dose of 462.9 mg/kg bw/day in males and 629.8 mg/kg bw/day in females. Compared to the control group, no effects were observed in the L-aspartic acid group on mortality, clinical signs, body weight, food consumption, behavioral assessment, reproductive parameters, sexual maturation, estrous cycling, neurohistopathological evaluations, gross necropsy or histopathology of selected tissues/organs.  In the P generation, lower mean absolute pituitary weights and lower mean pituitary weight relative to terminal body weight were observed in male rats.  The effects on pituitary weights were not considered to be treatment related because the differences were not dose related and because the individual data values were within the range of the historical control values.  In addition, there was no histopathology of the pituitary. The NOAEL was considered to be >462.9 mg/kg bw/day in males and >629.8 mg/kg bw/day in females.

This N-acetyl-L-aspartic acid study was conducted according to OECD guideline 416 with additional response variables.  Male and female Sprague-Dawley rats (25/sex/group) were administered N-acetyl-L-aspartic acid in the diet at target levels of 0, 100, 250 and 500 mg/kg bw/day over two generations.  The rats were exposed to the diets for 10 weeks prior to mating.  The day of parturition was defined as day 1 of lactation.  To avoid potential biases in pup viabilities and body weight gains, F1 and F2 generations litters were not culled during the lactation period.  Both generations were weaned on postnatal day (PND) 22 through 25.  Pups were assigned to one of 4 subsets (1 pup/sex/litter/subset, when possible).  Clinical observations and body weight and food consumption were conducted according to OECD guideline 416.  Ophthalmological examinations were performed for all rats assigned to F1 generation Subset 3 between PNDs 22-27 and PNDs 74-82 and F2 generation Subset 7 between PNDs 22-28 and PND 80.  Estrous cyclicity was evaluated for P and F1 generation dams before the scheduled cohabitation period.  Male and female rats from F1 generation Subset 3 and F2 generation Subsets 7 and 8 were observed for the age at which sexual maturation began, age of preputial separation (PS) and vaginal patency (VP), respectively.  Body weight was recorded on the day of sexual maturation was observed.  Behavioral and developmental assessment of F1 (Subset 3) and F2 (Subset 7) rats was conducted at various times depending on the variable.  Motor activity assessment was conducted at weaning on days 22 and 61 postpartum.  The same rats tested on day 22 were tested again on day 61.  The same rats were also tested for passive avoidance beginning on days 23 to 25 and water maze performance beginning on days 59 to 63 postpartum.  Following sacrifice, the following organs were weighed:  brain, pituitary gland, liver, kidney, ovaries and uterus with cervix, epididymides testes, prostate and seminal vesicles with coagulating gland.  Histopathology was conducted on P generation rats and rats from the progeny randomly selected from subsets assigned to this evaluation (F1 generation Subsets 2 and 4; F2 generation Subsets 6 and 8).  With the exception of salivary glands, tissues only from the control group and the 500 mg N-acetyl-L-aspartic acid/kg bw/day were examined.  The salivary glands from all exposure groups from rats in Subset 3 (F1 generation) and Subset 7 (F2 generation) were evaluated.  The following other tissues were examined:  pituitary gland, gross lesions, ovaries, oviducts, mammary gland vagina, uterus, cervix, testes, epididymides seminal vesicles, coagulating land and prostate.  Neurohistopathology was conducted on randomly selected rats (10/sex/group for F1 generation Subsets 1 and 3 and F2 generation Subsets 5 and 7).  Tissues from the control and high dose N-acetyl-L-aspartic acid groups were examined as well as those from the aspartic acid comparative control group.

Actual consumed doses across generations were 0, 92.8, 231.8 and 471.2 mg/kg bw/day in males and 0, 119.5, 306.5 and 632.8 mg/kg bw/day in females for the 0, 100, 250 and 500 mg/kg bw/day groups, respectively.  Compared to the control group, no effects were observed in the N-acetyl-L-aspartic acid groups on mortality, clinical signs, body weight, food consumption, behavioral assessment, reproductive parameters, sexual maturation, estrous cycling, neurohistopathological evaluations or gross necropsy.  In the P generation, lower mean absolute pituitary weights and lower mean pituitary weight relative to terminal body weight were observed in male rats in the 100 and 500 mg/kg bw/day groups.  The effects on pituitary weights were not considered to be treatment related because the differences were not dose related and because the individual data values were within the range of the historical control values.  In addition, there was no histopathology of the pituitary observed in these test groups.  An increase in the incidence of minimal acinar cell hypertrophy of the submandibular salivary gland was observed in high dose males of subsets 3 and 7 and in high dose females of subset 3.  The study authors concluded that this observation is not an adverse effect since salivary gland hypertrophy is commonly observed in laboratory animals in response to different physical and chemical stimuli, is considered to be an adaptive physiological mechanism and there were no microscopic findings of inflammation, degeneration, necrosis or hyperplasia in the salivary gland indicative of cytotoxicity.   The NOAEL for N-acetyl-L-aspartic acid in this study was considered to be 500 mg/kg bw/day or 471.2 mg/kg bw/day in males and 632.8 mg/kg bw/day in females.

	4. Subchronic toxicity. Potassium polyaspartate (A-5D K SD; 94%) was administered to Wistar rats by gavage in a 14-day range-finding study at dose levels of 0 (analytical grade water), 60, 125, 250, 500 or 1000 mg/kg bw/day to determine dose levels for a subsequent 90-day repeated dose oral toxicity study.  No mortality occurred during the study nor did any treatment-related clinical signs.  Body weights and food consumption were comparable across dose groups.  Eosinophilic count was statistically decreased in 500 mg/kg bw/day males and 125 mg/kg bw/day females.  This finding was not considered to be treatment related because there was no dose response.  In males, AST was statistically decreased at 125 mg/kg bw/day and at 1000 mg/kg bw/day, glucose was statistically decreased at 250 mg/kg bw/day and urea nitrogen and urea were statistically increased at 500 mg/kg bw/day.  In females, albumin was statistically increased at 125 and 1000 mg/kg bw/day and total cholesterol was statistically increased at 125 and 500 mg/kg bw/day.  The clinical chemistry findings in males and females were not considered to be treatment related because of a lack of dose response for all parameters which were statistically impacted.  Absolute kidney weights were statistically increased in females at 500 and 1000 mg/kg bw/day without a dose response.  In males, relative kidney weight was statistically increased at 60, 250, 500 and 1000 mg/kg bw/day and in females at 500 and 1000 mg/kg bw/day.  There were no findings upon gross necropsy.  Based on the results of this study, dose levels of 0, 250, 500 and 1000 mg/kg bw/day were selected for the 90-day study gavage study.

The 90-day study was conducted according to OECD guideline 408.  Male and female Wistar rats (10/sex/group) were administered the test material by gavage at doses of 0 (analytical grade water), 250, 500 and 1000 mg/kg bw/day for 90 days.  Additional groups of 5 rats/sex/group received the vehicle or 1000 mg/kg bw/day of the test material were observed for an additional 28 days following the 90-day dosing period.  Dose levels were selected based on the results of a 14-day dose range finding study, the results of which are summarized above.  Rats were checked for mortality twice per day and examined for clinical signs once daily.  They were subjected to a detailed clinical examination before initiation of treatment and weekly thereafter.  Ophthalmoscopic examinations were conducted prior to treatment and study termination on the control and high dose rats.  During the 13th week of dosing, all animals were examined for assessment of sensory reactivity, grip strength and motor activity.  Body weights were recorded before initiation of treatment and weekly thereafter and at necropsy.  Food consumption was recorded weekly.  On study day 90 and at termination of the recovery period, the stage of estrous cycle of all females was determined from vaginal smears.  Hematology (hemoglobin, packed cell volume, red cell count, white cell count, MCV, MC, MCHC, neutrophils, lymphocytes, eosinophils, monocytes, basophils and platelet count), coagulation parameters (prothrombin time and activated partial thromboplastin time), clinical chemistry (total protein, albumin, globulin, alkaline phosphatase, aspartate aminotransferase, alanine aminotransferase, glucose, urea nitrogen, urea, creatinine, total bilirubin, calcium, phosphorous, total cholesterol, triglycerides, triiodothyronine, thyroxine, TSH, sodium and potassium) and urine (color, appearance, specific gravity, pH, protein, glucose, ketone, bilirubin, urobilinogen, nitrite, blood, leucocytes, epithelial cells, casts, crystals and volume) parameters were evaluated at study termination.  At the end of the treatment period or recovery period, rats were sacrificed and subjected to a complete necropsy.  The following organs were weighed:  kidneys, liver, adrenals, testes, epididymides, uterus, thymus, spleen, brain, ovaries and heart.  A complete set of organs/tissues were examined microscopically for all animals from the control and high dose group.

There were no treatment-related effects on any parameter examined in this study, except perhaps for a decrease in % neutrophils in high dose males.  However, this value (20.36%) was at the high end of the normal range for this parameter in Wistar rats 19-21 weeks of age (normal range = 1-29%) as was the control value (29.53).  Another reference gave a mean of 20.7% + 6.5 for male Wistar rats.  In addition, it occurred in the absence of any other findings that could result from a significance decrease in neutrophils and was considered marginal in light of the control value.  Therefore, the decrease was considered unrelated to treatment and not of toxicological significance.  The NOAEL in the study was considered to be 1000 mg/kg bw/day in male and female Wistar rats.

L-Aspartic acid was also tested in a 90-day study in rats.  Male and female Fisher 344 rats (10/sex/group) were administered the test material in the diet at concentrations of 0, 0.05, 1.25, 2.5 or 5.0% for 90 days.  These concentrations were equivalent to 0, 26.9, 696.6, 1416.6 and 2770.2 mg/kg/day in males and 0, 28.7, 715.2, 1470.4 and 2965.9 mg/kg bw/day in females, respectively.  Rats were checked for mortality and examined for clinical signs once daily.  Body weights and food consumption were recorded weekly.  Hematology (hemoglobin, red cell count, white cell count, MCV, MC, MCHC, differential leukocyte counts and platelet count), clinical chemistry (total protein, albumin, globulin, alkaline phosphatase, aspartate aminotransferase, alanine aminotransferase, glucose, blood urea nitrogen, uric acid, creatinine, total bilirubin, calcium, phosphorous, total cholesterol, triglycerides, sodium and potassium) and urine (urobilinogen, occult blood, bilirubin ketone, glucose, protein, pH and nitrous acid) parameters were evaluated at study termination.  At the end of the treatment period or recovery period, rats were sacrificed and subjected to a complete necropsy.  The following organs were weighed:  brain, thyroids with parathyroids, heart, spleen, liver, adrenals, kidneys, testes, ovaries and uterus.  A complete set of organs/tissues were examined microscopically.

No mortality occurred during the study nor were there any treatment-related clinical signs of toxicity.  Body weights and food consumption were unaffected by treatment.  In male rats, RBC values of the 1.25% and 5.0% groups, and HCT for the 1.25% or greater groups were significantly increased compared to control values.  Values for MCH of the 0.05%, 1.25% and 5.0% groups, and MCHD of the 0.05% or greater groups were significantly decreased compared to controls.  In female, MCH and MCHC values of the 5.0% group were also significantly decreased.  Data were not resented in the literature references; however, the study authors stated that all values were within the normal range of the historical control values.  In males, total cholesterol was statistically significantly decreased in the 2.5% and 5.0% groups and triglycerides were statistically decreased at all dietary concentration.  In females, total cholesterol was statistically increased at the highest dietary concentration and triglycerides were statistically decreased at 1.25% and above, blood urea nitrogen was statistically decreased at the highest dietary concentration, uric acid and creatinine were statistically decreased at 1.25% and above, potassium was statistically decreased at 2.5% and 5.0% and chloride was statistically decreased at 5.0%.  The study authors state that most of these values were within the range of the historical control values, except for triglycerides.  The values for triglycerides of the 2.5% and lower in males were higher than the historical control values.  In male rats, incidences of positive bilirubin in the 5.0% group and ketone and protein in the 1.25% group and above were significantly higher than the control group.  In females, incidences of positive ketone in the 1.25% and 2.5% group and ketone in the 2.5% group and above were also significantly increased.  In male rats, relative kidney weights were statistically increased in the 5.0% group.  No treatment-related macroscopic changes were observed in males or females.  In males, the incidence of regenerative renal tubules with tubular dilation was statistically increased in the 2.5% and 5.0% groups, submandibular gland acinar cell hypertrophy was significantly increase in the 5.0% group and parotid gland acinar cell hypertrophy was statistically increased in the 2.5% and 5.0% groups.  The α 2u-globulin immunohistochemistry for the kidney sections demonstrated positive granular signals in animals of both sexes, which was more marked in males and in both the treated and control rats. The study authors go on to say that there were neither quantitative nor qualitative differences in the outcome for α2u-globulin between the control and treated rats.  The acinar cell atrophy of the salivary gland was a diffuse change affecting the whole gland with serous acinar cells featuring granular cytoplasm and pyknotic nuclei located in the basal area. In female rats as in male rats, submandibular gland acinar cell hypertrophy was significantly increased in the 5.0% group and parotid gland acinar cell hypertrophy was significantly increased in the 2.5% and 5.0% groups.  The study authors concluded that the NOAEL for aspartic acid in this study was 696.6 mg/kg bw/day in males and 715.2 mg/kg bw/day in females based on histopathology of the kidney and possibly of the salivary gland observed at higher doses.  It should be noted that the authors of the literature reference on the 2-generation rat reproduction study on L-aspartic acid and N-acetyl-L-aspartic acid concluded that the observation of acinar cell hypertrophy of the salivary is not an adverse effect since salivary gland hypertrophy is commonly observed in laboratory animals in response to different physical and chemical stimuli, is considered to be an adaptive physiological mechanism and there were no microscopic findings of inflammation, degeneration, necrosis or hyperplasia in the salivary gland indicative of cytotoxicity .  The study authors go on to say that although changes in urinalysis and serum biochemistry were observed in males at 1.25% and higher, histopathology of the kidney only showed toxic changes in male rats at 1.25% and above to justify their selection of the NOAEL in this study.

	5. Chronic toxicity. No carcinogenicity data are available for polyaspartic acid.  Polyaspartic acid is not listed by the US National Toxicology Program (NTP) or the International Agency for Research on Cancer (IARC), and it is not regulated as a carcinogen by the US Occupational Safety & Health Administration (OSHA).  Studies on carcinogenicity should not be required based on a weight of evidence approach and taking into account that:       ::	minimal proteolytic digestion of PPA was observed in vitro, and an in vitro study found no evidence of absorption across a human intestinal cell monolayer;       ::	potassium polyaspartate was not genotoxic;       ::	there was no evidence from subchronic studies of lesions that could lead to neoplasia through non genotoxic mechanisms, and       ::	there was no evidence of adverse effects on reproductive tissues or the oestrus cycle in the 90-day toxicity study.

	6. Animal metabolism. No animal metabolism data are available for potassium polyaspartate.  However, as noted in a Joint FAO/WHO Expert Committee on Food Additives (JECFA) document, should polyaspartate be orally absorbed microbial fermentation in the human colon could occur and there could be resulting exposure to L- and D-aspartic acid.  Consequently L-aspartic acid is used as a possible surrogate for potassium polyaspartate. [14]C-L- aspartic acid is metabolized in rats to expired [14]CO2; lesser amounts of [14]C are incorporated into protein and lipid and/or excreted in the urine.  Aspartate also participates in the urea cycle. Based on the n-octanol-water partition coefficient (Log P <0; Log P -1.16), PPA will not bioaccumulate.

	7. Metabolite toxicology. No data are available.

	8. Endocrine disruption. There is no information available that links PPA or its surrogates L-aspartic acid and N-acetyl-L-aspartic acid to direct effects on the endocrine system.  A 90-day sub-chronic toxicity study with PPA (OECD TG 408) was modified to include assessment of additional parameters described in the more recent OECD TG 407 guideline on repeated-dose 28-day oral toxicity study in rodents.  These additional parameters are intended to place more emphasis on endocrine-related endpoints, and include assessment of thyroid hormones, oestrus cycles, and histopathology of tissues that may indicate endocrine activity of test substances.  No toxicity was observed at the maximum dose level of 1000 mg/kg bw/day (no toxicological hazard identified) in the 90-day study performed with potassium polyaspartate in rats and a NOAEL of 1000 mg/kg bw/day was determined for potassium polyaspartate. There is no histopathological or behavioral evidence of an endocrine function in any toxicity evaluations of L-aspartic acid and N-acetyl-L-aspartic acid conducted in laboratory animals.  The L-aspartic acid and N-acetyl-L-aspartic acid one-generation reproduction toxicity studies conducted in rats included pre-mating, mating period, gestation, lactational and post-lactation dosing and no effects were observed on reproductive parameters up to doses >600 mg/kg bw/day.

C. Aggregate Exposure

	1. Dietary exposure. An inert dietary exposure evaluation based on the EPA I-DEEM model can be carried out.  I-DEEM uses a screening level dietary assessment of 57 of the most "significant" active ingredients as surrogates for inerts within the Dietary Exposure Evaluation Model software with the Food Commodity Intake Database (DEEM-FCID(TM), Version 4.02).  Exposure from food, animal commodities and drinking water would be included.  Rosen's Inc. has not carried out this dietary evaluation for PPA.  However, PPA will be applied at low rates (no more than 280 g per A per year).  For the general population, the estimated exposure through the diet is expected to be low.  Residues in drinking water are expected to be low due to biodegradation of PPA by soil microbes.

	2. Non-dietary exposure. No exposure to PPA is expected through residential application of pesticidal products containing PPA.

Studies are not available to characterize the potential toxicity of PPA for the inhalation route of exposure.  Potential effects from inhalation exposure to PPA may be assessed based on the oral study data and assuming 100% absorption via inhalation.  PPA was not toxic in an acute oral toxicity study.

A dermal absorption rate of 100% may be assumed to estimate the potential exposure and risk from dermal exposure to PPA based on oral exposure studies.  This assumption will likely overestimate the potential risk from dermal exposure to PPA, although the dermal absorption is expected to be less than 100%.  No dermal toxicity was observed in the acute dermal toxicity study.

Some exposure to PPA from non-pesticidal uses may occur since PPA is approved as a stabilizer for use in red, rośe, and white wines to prevent tartrate crystal precipitation.  PPA is added to wine at typical levels of 100-200 mg/L (no more than 300 mg/L).  In addition, the sodium salt of polyaspartic acid is authorized for use in USA (Environmental Assessment LANXESS Deutschland GmbH, Food Contact Notification, 2007), (Environmental Assessment Food Contact Notification, NanoChem Solutions, 2013) and Australia (Summary Report "2-Butenedioic acid (2Z)-, ammonium salt, homopolymer, hydrolyzed, sodium salts" Reference No: NA/932) as a food contact substance, as a dispersant for fillers and an anti-scale additive in sugar processing; and as a water treatment agent used as a scale inhibitor in cooling tower and boiler water applications.

D. Cumulative Effects

	Cumulative effects from substances with a common mechanism of toxicity. Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider "available information" concerning the cumulative effects of a particular pesticide's residues and "other substances that have a common mechanism of toxicity.  Potassium polyaspartate does not appear to produce a toxic metabolite and Rosen's, Inc. has assumed that potassium polyaspartate does not have a common mechanism of toxicity with other substances.

E. Safety Determination

	1. U.S. population. The proposed use of potassium polyaspartate is expected to be below the EPA's level of concern when evaluated against the chronic dietary toxicity cPAD value.  Rosen's, Inc. concludes that there is a reasonable certainty that no harm will result to the general population or to infants and children from aggregate exposure to residues of potassium polyaspartate.

	2. Infants and children. Based on the data, Rosen's, Inc. concludes that there is a reasonable certainty that no harm will result to the general population or to infants and children from aggregate exposure to residues of potassium polyaspartate.

F. International Tolerances

	There are no known CODEX or international tolerances or tolerance exemptions established for potassium polyaspartate on food crops.  The European Food Safety Authority reviewed the safety data and the European Union approved the use of PPA at levels of 100 mg/L in wine.  The Australia New Zealand Food Standard Code has been revised to include PPA as a food additive (stabilizer) in wine at 100 mg/L.


Appendix II.E.6.

Water Outputs – Region D

This appendix is available on EPA’s website at

  HYPERLINK
"http://www.epa.gov/pesticides/cumulative/common_mech_groups.htm#op"
http://www.epa.gov/pesticides/cumulative/common_mech_groups.htm#op

A CD containing the data in this appendix may also be obtained by

contacting the Office of Pesticide Programs Public Docket

Docket #  EPA-HQ-OPP-2006-0618

One Potomac Yard

12777 S. Crystal Drive Room S-4400

Arlington, Virginia, 22202

703-305-5805

Monday through Friday, 8:30 am – 4:00 pm


[Federal Register Volume 81, Number 105 (Wednesday, June 1, 2016)]
[Notices]
[Pages 35118-35120]
[FR Doc No: 2016-12834]

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2016-0063]

Notice of Buy America Waiver

AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation (DOT).

ACTION: Notice of Buy America Waiver.

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SUMMARY: This notice provides NHTSA's finding with respect to a request
to waive the requirements of Buy America from the New York Governor's
Traffic Safety Committee (GTSC). NHTSA finds that a non-availability
waiver of the Buy America requirement is appropriate for New York's
purchase of a liquid chromatography-tandem mass spectrometry instrument
using Federal highway traffic safety grant funds because that product
is not produced in the United States.

DATES: The effective date of this waiver is June 16, 2016. Written
comments

regarding this notice may be submitted to NHTSA and must be received on
or before: June 16, 2016.

ADDRESSES: Written comments may be submitted using any one of the
following methods:
     Mail: Docket Management Facility, M-30, U.S. Department of
Transportation, West Building, Ground Floor, Rm. W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590.
     Fax: Written comments may be faxed to<PHONE_NUMBER>.
     Internet: To submit comments electronically, go to the
Federal regulations Web site at http://www.regulations.gov. Follow the
online instructions for submitting comments.
     Hand Delivery: West Building Ground Floor, Room W12-140,
1200 New Jersey Avenue, SE., between 9 a.m. and 5 p.m. Eastern Time,
Monday through Friday, except Federal holidays.
    Instructions: All comments submitted in relation to this waiver
must include the agency name and docket number. Please note that all
comments received will be posted without change to http://www.regulations.gov, including any personal information provided. You
may also call the Docket at<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: For program issues, contact Barbara
Sauers, Office of Regional Operations and Program Delivery, NHTSA
(phone:<PHONE_NUMBER>). For legal issues, contact Andrew DiMarsico,
Office of Chief Counsel, NHTSA (phone:<PHONE_NUMBER>). You may send mail
to these officials at the National Highway Traffic Safety
Administration, 1200 New Jersey Avenue SE., Washington, DC 20590.

SUPPLEMENTARY INFORMATION: This notice provides NHTSA's finding that a
waiver of the Buy America requirement, 23 U.S.C. 313, is appropriate
for the GTSC to purchase a liquid chromatography-tandem mass
spectrometry device and its accessories for approximately $400,000
using grant funds authorized under 23 U.S.C. 405(d). Section 405(d)
funds are available for use by State highway safety programs to support
effective programs to reduce driving under the influence of alcohol,
drugs, or the combination of alcohol and drugs, including enforcement
efforts. 23 U.S.C. 405(d). States may use Section 405(d) grant funds to
improve blood-alcohol concentration testing and reporting and
developing impaired driving information systems. Id.
    Buy America provides that NHTSA ``shall not obligate any funds
authorized to be appropriated to carry out the Surface Transportation
Assistance Act of 1982 (96 Stat. 2097) or [Title 23] and administered
by the Department of Transportation, unless steel, iron, and
manufactured products used in such project are produced in the United
States.'' 23 U.S.C. 313. However, NHTSA may waive those requirements if
NHTSA finds ``(1) that their application would be inconsistent with the
public interest; (2) that such materials and products are not produced
in the United States in sufficient and reasonably available quantities
and of a satisfactory quality; or (3) that the inclusion of domestic
material will increase the cost of the overall project contract by more
than 25 percent.'' 23 U.S.C. 313(b).
    The New York GTSC seeks a waiver to purchase a liquid
chromatography-tandem mass spectrometry device (LC/MS/MS system) using
Federal grant funds to be used by the New York State Police Forensic
Investigation Center's Toxicology Section (FIC) to analyze drugs in
impaired driving case samples. The cost of a LC/MS/MS system is
approximately $400,000.
    Liquid chromatography-tandem mass spectrometry is an analytical
chemistry technique that combines the physical separation capabilities
of liquid chromatography with the mass analysis capabilities of mass
spectrometry. It is a technique that has very high sensitivity and
selectivity that is oriented towards the separation, general detection
and potential identification of chemicals of particular masses in the
presence of other chemicals. This complex analytical technique involves
two separate but connected instruments. These two instruments are each
comprised of advanced scientific equipment, and this equipment is
essential for the function of the entire LC/MS/MS system. The liquid
chromatograph (LC) portion performs the chromatography part of the
analysis that separates the drugs of interest from any interferences in
the sample and passes them to a detector at known time intervals. Some
essential pieces of equipment within the LC system are the autosampler,
which is used to inject all the samples, the pump used to control the
mobile phase flow rate, the mixer used to precisely blend the mobile
phases, and the degasser used to remove air from the mobile phase. The
detector, a tandem mass spectrometer (MS/MS), uniquely identifies the
drug by comparing its fragmentation pattern to a known library match.
Some of the essential equipment within the MS/MS system are the rotary
pump used to create a vacuum environment, the source used to fragment
the drug into ions, the quadrupole mass analyzers used to filter the
desired fragmented ions, the collision cell used to further fragment
the filtered drug parent ions, and the ion detector (electron
multiplier) used to detect every ion of selected mass that passes
through the quadrupoles. In addition, a computer system with advanced
software is used to control the entire LC/MS/MS instrument to provide
more accurate reporting of the findings.
    In support of its waiver request, GTSC states it seeks to purchase
the LC/MS/MS instrument to replace a gas chromatography-mass
spectrometry (GC/MS). GTSC adds that while GC/MS has long been an
effective technique for the analysis of blood and urine for trace
levels of drugs, LC/MS/MS has emerged in recent years as the preferred
instrumentation. It adds that the benefits of LC/MS/MS are numerous,
including increased sensitivity (which reduces sample consumption and
lowers detection limits), fewer interferences from other drugs or
metabolites (which can potentially reduce the number of inconclusive
results), quicker and easier sample preparation, and faster run times.
According to GTSC, these advantages can help to reduce overall
turnaround time and give the analysts more time for additional
casework. GTSC adds that the FIC is one of the only toxicology labs in
the state that does not currently have an LC/MS/MS instrument and is
unable to meet current driving under the influence detection guidelines
for detection limits for many of the drug assays using a GC/MS
instrument.
    The GTSC claims that there are no LC/MS/MS instruments manufactured
or assembled in the United States. It states that Agilent Technologies,
Waters Corporation, AB Sciex (a subsidiary of Danaher Corporation),
Thermo Fisher Scientific and Shimadzu are the only manufacturers that
offer a full LC/MS/MS instrument that are proven within the forensic
toxicology community. The GTSC adds that it compared the available LC/
MS/MS instruments' relative cost, size, service and training packages,
pre-existing methods, method transfer (within the forensic toxicology
community), technical capability, software, LC and MS/MS compatibility,
and country of origin. Although the features of the instruments vary,
GTSC states that the critical needs for the FIC are size, pre-existing
methods, and method transfer ability. First, the LC/MS/MS instrument
must meet the available space in the FIC laboratory. According to the
GTSC, the FIC plans to purchase a second instrument within a few years
to support additional casework. The GTSC identified three

manufacturers (Waters, AB Sciex and Thermo Fisher Scientific) that
produce an instrument that is small enough for two instruments to fit
within the FIC laboratory. Second, the GTSC identified four
manufacturers that have forensic toxicology packages that are included
with the software, that contain pre-loaded methods that are already
developed and are widely used in the toxicology community. According to
GTSC, this last feature is critical since it will permit the FIC to
communicate with other labs for assistance with methods and
troubleshooting, which would save considerable time and resources. GTSC
states that Waters, Agilent, AB Sciex and Thermo Fisher Scientific meet
its pre-existing methods and transfer methods requirements.
    NHTSA conducted similar assessments \1\ and was unable to locate
domestic manufacturers of LC/MS/MS instruments with the specifications
required by GTSC. Based upon New York GTSC's and NHTSA's analysis,
NHTSA is unaware of an LC/MS/MS instrument that is manufactured
domestically. Since an LC/MS/MS instrument is unavailable from a
domestic manufacturer and the equipment would improve blood-alcohol
testing and reporting by increasing detection, reducing drug
interference, and increasing processing speed to advance the purpose of
23 U.S.C. 405(d), a Buy America waiver is appropriate. NHTSA invites
public comment on this conclusion.
---------------------------------------------------------------------------

    \1\ NHTSA conducted internet searches, reviewed manufacturer Web
sites, public information, and reviewed several Web sites that
catalog domestic-made products (www.usaonly.us;
www.americansworking.com; www.madeinamericaforever.com; and
www.madeinusa.org) to locate domestically made LC/MS/MS instruments.
---------------------------------------------------------------------------

    We note that NHTSA highway safety grant funds are intended to
support traffic safety programs in the States. The goal of the impaired
driving countermeasures grant is to have States adopt and implement
effective programs to reduce driving under the influence of alcohol,
drugs, or the combination of alcohol and drugs. Activities and
equipment fully funded and purchased using NHTSA 405(d) grant funds
must be used solely to support this goal. For all funded activities and
equipment that have both related and unrelated highway safety grant
components, the Federal share is based proportionately on the projected
use for the highway safety grant purpose. Therefore, if a State plans
to use an item of equipment 50 percent of the time to support its
federally funded traffic safety program and 50 percent of the time to
support unrelated state programs, the NHTSA participation cannot exceed
50 percent of the total cost of the equipment.
    In light of the above discussion, and pursuant to 23 U.S.C.
313(b)(2), NHTSA finds that it is appropriate to grant a waiver from
the Buy America requirements to GTSC in order to purchase a LC/MS/MS
instrument. This waiver is effective through fiscal year 2016 and
expires at the conclusion of fiscal year 2016 (September 30, 2016). In
accordance with the provisions of Section 117 of the Safe, Accountable,
Flexible, Efficient Transportation Equity Act: A Legacy of Users
Technical Corrections Act of 2008 (Pub. L. 110-244, 122 Stat. 1572),
NHTSA is providing this notice as its finding that a waiver of the Buy
America requirements is appropriate for the purchase of a LC/MS/MS
instrument.
    Written comments on this finding may be submitted through any of
the methods discussed above. NHTSA may reconsider this finding if,
through comment, it learns of additional relevant information regarding
its decision to grant the GTSC waiver request.
    This finding should not be construed as an endorsement or approval
of any products by NHTSA or the U.S. Department of Transportation. The
United States Government does not endorse products or manufacturers.

    Authority: 23 U.S.C. 313; Pub. L. 110-161; Pub. L. 110-244.

    Issued in Washington, DC, on May 25, 2016, under authority
delegated in 49 CFR 1.95.
Paul A. Hemmersbaugh,
Chief Counsel.
[FR Doc. 2016-12834 Filed 5-31-16; 8:45 am]
BILLING CODE 4910-59-P


[Federal Register Volume 79, Number 212 (Monday, November 3, 2014)]
[Rules and Regulations]
[Pages 65142-65143]
[FR Doc No: 2014-26088]

=======================================================================
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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 117

[Docket No. USCG-2014-0889]

Drawbridge Operation Regulation; Cerritos Channel, Long Beach, CA

AGENCY: Coast Guard, DHS.

ACTION: Notice of deviation from drawbridge regulation.

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SUMMARY: The Coast Guard has issued a temporary deviation from the
operating schedule that governs the Henry Ford Avenue railroad
drawbridge across Cerritos Channel, mile 4.8, at Long Beach, CA. The
deviation is necessary to allow the bridge owner to make necessary
bridge maintenance repairs. This deviation allows the bridge to remain
in the closed-to-navigation position during the deviation period.

DATES: This deviation is effective from 5 a.m. on November 12, 2014, to
5 p.m. on November 17, 2014.

ADDRESSES: The docket for this deviation, [USCG-2014-0889], is
available at http://www.regulations.gov. Type the docket number in the
``SEARCH'' box and click ``SEARCH.'' Click on Open Docket Folder on the
line associated with this deviation. You may also visit the Docket
Management Facility in Room W12-140 on the ground floor of the
Department of Transportation West Building, 1200 New Jersey Avenue SE.,
Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays.

FOR FURTHER INFORMATION CONTACT: If you have questions on this
temporary deviation, call or email David H. Sulouff, Chief, Bridge
Section, Eleventh Coast Guard District; telephone<PHONE_NUMBER>, email
<EMAIL_ADDRESS>If you have questions on viewing the docket,
call Cheryl Collins, Program Manager, Docket Operations, telephone 202-
366-9826.

SUPPLEMENTARY INFORMATION: The Port of Los Angeles has requested a
temporary change to the operation of the Henry Ford Avenue railroad
drawbridge, mile 4.8, over Cerritos Channel, at Long Beach, CA. The
drawbridge navigation span provides 7 feet vertical clearance above
Mean High Water in the closed-to-navigation position. In accordance
with 33 CFR 117.147(b), the drawspan is maintained in the fully open
position, except when a train is crossing or for maintenance. When the
draw is in the closed position, it opens on signal. Navigation on the
waterway is mainly recreational, emergency response and commercial tug
and barge combinations between the ports of Los Angeles and Long Beach.
    The Port of Los Angeles has requested the drawbridge be allowed to
remain closed to navigation at various times from 5 a.m. on November
12, 2014 to 5 p.m. on November 17, 2014, so they can perform
replacement of the auxiliary counterweight wire ropes on the
drawbridge. The vertical lift span will be secured in the closed to
navigation position at various times as follows: 6 a.m. to 10 a.m.
November 12, 2014; 2:30 p.m. on November 12, 2014 to 6:30 a.m. on
November 13, 2014; 6 a.m. to 3 p.m. November 14, 2014; and 6 a.m. to 3
p.m. on November 17, 2014.
    Mariners must contact the bridge tender to obtain status of the
drawbridge when planning transits between the ports. This temporary
deviation has been coordinated with the waterway users. No objections
to the proposed temporary deviation were raised.
    Vessels able to pass through the bridge in the closed position may
do so at anytime. The bridge will not be able to open for emergencies.
There is an alternative route, transiting around the south side of
Terminal Island, for vessels unable to pass through the bridge in the
closed position. The Coast Guard will inform waterway users of this
temporary deviation via our Local and Broadcast Notices to Mariners, to
minimize resulting navigational impacts.
    In accordance with 33 CFR 117.35(e), the drawbridge must return to
its regular operating schedule immediately at the

end of the effective period of this temporary deviation. This deviation
from the operating regulations is authorized under 33 CFR 117.35.

    Dated: October 22, 2014.
D.H. Sulouff,
District Bridge Chief, Eleventh Coast Guard District.
[FR Doc. 2014-26088 Filed 10-31-14; 8:45 am]
BILLING CODE 9110-04-P