[Federal Register: September 9, 2010 (Volume 75, Number 174)]
[Notices]
[Page 54926-54928]
[DOCID:fr09se10-122]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62825; File No. SR-NYSEAmex-2010-90]

Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by NYSE Amex LLC To Amend the
Exchange Price List

September 1, 2010.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on August 30, 2010, NYSE Amex LLC (``NYSE Amex'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    The Exchange proposes to amend its 2010 Price List for equities to
modify the fees it charges for all market at-the-close (``MOC'') and
limit at-the-close (``LOC'') orders executed in the Exchange's closing
transaction. For

securities with a per share price of $1.00 or more, the fee will
increase from $0.0007 per share executed to $0.00085 per share
executed. For securities with a per share price below $1.00 per share,
the fee will change from (A) the lesser of (i) $0.0007 per share
executed and (ii) 0.25% of the total dollar value of the transaction to
(B) the lesser of (i) $0.00085 per share executed and (ii) 0.25% of the
total dollar value of the transaction. The Exchange also proposes to
lower the fee for taking liquidity from the Exchange from $0.0021 per
share executed to $0.0013 per share executed for NASDAQ securities with
a share price of $1.00 or more that trade on the Exchange pursuant to
unlisted trading privileges (``UTP''). The amended pricing will take
effect on September 1, 2010. The text of the proposed rule change is
available at the Exchange, at http://www.nyse.com, at the Commission's
Public Reference Room, and on the Commission's Web site at http://
www.sec.gov.

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

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

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

1. Purpose
    The Exchange proposes to amend its 2010 Price List for equities to
modify the fees it charges for all MOC and LOC orders executed in the
Exchange's closing transaction. For securities with a per share price
of $1.00 or more, the fee will increase from $0.0007 per share executed
to $0.00085 per share executed. For securities with a per share price
below $1.00 per share, the fee will change from (A) the lesser of (i)
$0.0007 per share executed and (ii) 0.25% of the total dollar value of
the transaction to (B) the lesser of (i) $0.00085 per share executed
and (ii) 0.25% of the total dollar value of the transaction. The
Exchange notes that The NASDAQ Stock Market LLC (``NASDAQ'') recently
made a similar filing increasing the fee that it charges for MOC and
LOC orders in its closing cross from $0.0007 per share executed to
$0.0010 per share executed.\4\
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 62592 (July 29,
2010), 75 FR 47053 (August 4, 2010) (SR-NASDAQ-2010-095).
---------------------------------------------------------------------------

    The Exchange also proposes to lower the fee for taking liquidity
from the Exchange from $0.0021 per share executed to $0.0013 per share
executed for NASDAQ securities with a share price of $1.00 or more that
trade on the Exchange pursuant to UTP. This fee reduction for such
transactions in NASDAQ securities will apply to all market participants
as well as to Designated Market Makers and Supplemental Liquidity
Providers. There will be no changes to the rebates for adding liquidity
for trades on the Exchange in NASDAQ securities pursuant to UTP.
    Finally, because full implementation has now been achieved of the
Exchange's recently approved rule changes providing for incorporation
of the receipt and execution of odd-lot interest into the round lot
market and decommissioning the use of the odd-lot system,\5\ the
Exchange is taking this opportunity to delete several obsolete
references in its 2010 Price List to separate execution pricing for odd
lot interest and the odd lot portions of partial round lots.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 62578 (July 27,
2010), 75 FR 45185 (August 2, 2010) (SR-NYSEAmex-2010-53).
---------------------------------------------------------------------------

    These changes are intended to be effective immediately for all
transactions beginning September 1, 2010.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Securities Exchange Act of 1934
(the ``Act''),\6\ in general, and Section 6(b)(4) of the Act,\7\ in
particular, in that it is designed to provide for the equitable
allocation of reasonable dues, fees, and other charges among its
members and other persons using its facilities. The Exchange believes
that the proposal does not constitute an inequitable allocation of
fees, as all similarly situated member organizations will be charged
the same amount and access to the Exchange's market is offered on fair
and non-discriminatory terms. Further, with respect to the proposed fee
change for MOC and LOC orders that are executed in the Exchange's
closing transaction, a competing exchange also recently implemented a
similar fee change for its market participants, as described above.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b) [sic].
    \7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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

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

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

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

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

    The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \8\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \9\ thereunder, because it establishes a due, fee, or other charge
imposed by the NYSE Amex.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number SR-NYSEAmex-2010-90 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEAmex-2010-90. This
file number should be included on the

subject line if e-mail is used. To help the Commission process and
review your comments more efficiently, please use only one method. The
Commission will post all comments on the Commission's Web site (http://
www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent
amendments, all written statements with respect to the proposed rule
change that are filed with the Commission, and all written
communications relating to the proposed rule change between the
Commission and any person, other than those that may be withheld from
the public in accordance with the provisions of 5 U.S.C. 552, will be
available for website viewing and printing in the Commission's Public
Reference Room, 100 F Street, NE., Washington, DC 20549, on official
business days between the hours of 10 a.m. and 3 p.m. Copies of the
filing will also be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NYSEAmex-2010-90 and should be submitted on or before
September 30, 2010.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-22446 Filed 9-8-10; 8:45 am]
BILLING CODE 8010-01-P


[Federal Register Volume 81, Number 6 (Monday, January 11, 2016)]
[Notices]
[Pages 1257-1260]
[FR Doc No: 2016-260]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76825; File No. SR-NASDAQ-2015-162]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Nasdaq Rule 7015

January 5, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that, on December 23, 2015, The NASDAQ Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    Nasdaq is proposing to amend Nasdaq Rule 7015 to clarify the
connectivity options and application of the fees assessed thereunder.
    The text of the proposed rule change is available at
nasdaq.cchwallstreet.com [sic] at Nasdaq [sic] principal office, and at
the Commission's Public Reference Room.

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

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

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

1. Purpose
    Rule 7015 provides the charges Nasdaq assesses for equity
securities market connectivity to systems operated by Nasdaq. Nasdaq is
amending Rule 7015 in seven ways: (1) To clarify how Rule 7015 applies
to FINRA systems; (2) to clarify the term ``port pair''; (3) to clarify
QIX protocol connectivity options; (4) to clarify FIX protocol
connectivity options; (5) to eliminate outdated CTCI connectivity
options that rely on Nasdaq-supported circuits; (6) to eliminate CTCI
connectivity as it relates to FINRA/NASDAQ Trade Reporting Facility;
and (7) to add clarifying rule text and numbering to the section of the
rule concerning other port fees.
    First, Nasdaq is proposing to add clarifying language to the
preamble of the rule. Specifically, Nasdaq is proposing to note that
the various connectivity options under the rule include connectivity to
systems operated by FINRA. Although Nasdaq believes that it is clear
that some of the systems listed are operated by FINRA (e.g., FINRA's
OTCBB Service), the Exchange believes that expressly stating that the
systems include those of FINRA will make the rule more clear. Nasdaq is
also updating the list of FINRA systems that the connectivity options
under the rule may connect to. Nasdaq notes that, from time to time,
new systems are added by Nasdaq and FINRA, and Nasdaq is taking this
opportunity to update the rule with all of the FINRA systems covered by
the rule. As such, Nasdaq is updating the rule to include the FINRA
Trade Reporting and Compliance Engine (``TRACE''), and the FINRA OTC
Reporting Facility (``ORF'').
    Second, Nasdaq is proposing to clarify the use of the term ``port
pair,'' which is used inconsistently under the rule. For certain ports
under Rule 7015 that are used for either trading or data, Nasdaq
additionally provides a disaster recovery port at no cost. Such a
disaster recovery port provides connectivity to Nasdaq's or FINRA's
disaster recovery location in the event of a failure of Nasdaq's or
FINRA's primary trading infrastructure. Nasdaq has provided disaster
recovery ports at no cost since 2006 to encourage member firms to
maintain such connectivity in the event of a market disruption so that
the market as a whole could continue to operate.\3\ As noted, Nasdaq
has not used the term port pair consistently under the rule, whereby in
certain cases, port pair is not noted in the rule yet Nasdaq provides a
disaster recovery port nonetheless.\4\ Accordingly, the Exchange is
eliminating the term port pair and is clarifying the rule by
specifically noting when a disaster recovery port is available for a
particular protocol under a rule.\5\
---------------------------------------------------------------------------

    \3\ Although Nasdaq encourages all member firms and options
participants to have and use disaster recovery ports and to
participate in disaster recovery testing, the Exchange historically
was unable to compel a member firm to connect to, or otherwise take
the steps necessary to, use a disaster recovery port. Nasdaq
recently adopted rules to require mandatory business continuity and
disaster recovery plans testing by certain member firms and options
participants, consistent with Regulation SCI. See Rule 1170; see
also Securities Exchange Act Release No. 76368 (November 5, 2015),
80 FR 70045 (November 12, 2015) (SR-NASDAQ-2015-134). As a
consequence, certain member firms will be required to use disaster
recovery ports and participate in business continuity and disaster
recovery plans testing.
    \4\ For example, a FIX Trading Port under Rule 7015(b).
    \5\ A disaster recovery port is available for QIX, FIX, and CTCI
protocol ports under Rules 7015(a), (b), (c). Disaster recovery
ports are also available for all of the ports available under Rule
7015(g)(2).
---------------------------------------------------------------------------

    Third, Nasdaq is reorganizing and adding language to subparagraph
(a) of

Rule 7015 to list all QIX connectivity provided by Nasdaq and to
clarify that the fee assessed for QIX trading ports applies to ports
that are used exclusively for FINRA connectivity. QIX is a proprietary
messaging protocol that allows a member firm to send and receive
messages relating to quotes and order entry. A QIX port may be used
exclusively for connectivity to Nasdaq or to FINRA's OTCBB. Nasdaq
assesses a fee of $1,200 per port,\6\ per month for QIX connectivity to
FINRA.\7\ Thus, a member firm that wishes to connect to both Nasdaq and
FINRA using the QIX protocol must have two separate ports. Nasdaq
assesses a fee for QIX ports used exclusively for connectivity to
facilities of FINRA, but not for ports used for connectivity to Nasdaq.
As such, Nasdaq is adding new text that clarifies that the charge under
the rule applies to QIX ports used for FINRA quoting and/or trading,
and new language that clarifies that QIX ports used for Nasdaq quoting
and/or trading are provided at no cost. Nasdaq is also eliminating the
ECN direct connection port pair connectivity option from the rule as it
is based on outdated technology and Nasdaq does not have any
subscribers to it. Lastly, Nasdaq is deleting the existing rule text
concerning unsolicited message ports and is adding new rule text making
it clear that such ports are for FINRA connectivity.
---------------------------------------------------------------------------

    \6\ Unlike other protocols such as FIX, subscription to QIX
provides three physical connections to either Nasdaq or FINRA. The
QIX connectivity option is architected in this manner to increase
throughput performance by separating unsolicited message streams
from quote/order entry and response streams, and to separate a
member firm's proprietary quote information from customer orders
that are reflected in its quotes. For purposes of assessing a fee,
the QIX trading functionality is deemed to be a single port.
    \7\ Under Rule 7015(a), a member firm may subscribe to a QIX
trading port, and a QIX unsolicited message port. An unsolicited
message port is not used for trading, but rather provides
information concerning orders such as order status and execution
reports.
---------------------------------------------------------------------------

    Fourth, Nasdaq is proposing to add clarifying rule text to
subparagraph (b) of the rule, which concerns fees assessed for FIX
ports. A FIX port is a trading port using a FIX-based telecommunication
protocol. FIX, an abbreviation for Financial Information eXchange, is a
standard message protocol that defines an electronic message exchange
for communicating securities transactions between two parties. Nasdaq
offers four FIX-based trading ports, which vary based on messaging
formats and capability. Nasdaq is proposing to list these four
protocols under the rule that a member firm may select when subscribing
to a FIX trading port. Similarly, Nasdaq is adding clarifying language
to the FIX Port for Services Other than Trading subscription. A FIX
Port for Services Other than Trading provides subscribers with a non-
trading port that is used solely to report over the counter trades for
tape reporting and/or clearing purposes. Nasdaq is proposing to list
each venue to which a FIX Port for Services Other than Trading may
connect a member firm. Lastly, Nasdaq is adding language to the rule
noting that disaster recovery ports are available for FIX connectivity
at no charge.
    Fifth, Nasdaq is proposing to eliminate rule text under
subparagraph (c) of the rule that concerns bandwidth-based connectivity
options to connect to a CTCI station and related fees. The deleted
table of fees concerns CTCI connectivity that relies on Nasdaq-
supported circuits. These circuits are based on outdated technology and
Nasdaq does not have any subscribers to any of these circuits. Member
firms instead use third party connectivity to access their CTCI
stations. Nasdaq is also adding language to the subparagraph noting
that disaster recovery ports are available for CTCI station
connectivity at no charge.
    Sixth, Nasdaq is proposing to eliminate CTCI connectivity from
subparagraph (e) of the rule, which concerns specialized services
related to the FINRA/NASDAQ Trade Reporting Facility. Nasdaq is
proposing to eliminate the connectivity option because this add on fee
is directly related to the CTCI connectivity options Nasdaq is
proposing to eliminate, rendering it moot.
    Seventh, Nasdaq is proposing to add clarifying rule text and
numbering to subparagraph (g) of the rule, which concerns other port
fees. Subparagraph (g) contains all other connectivity options
available that are not otherwise described in Rule 7015. These
connectivity options include wireless connectivity (specifically
Multicast Wave Ports), and other trading and telecommunications ports.
Under the rule, the Exchange assesses a charge of $550 per month for
each port pair, other than Multicast ITCH data feed pairs, for which
the fee is $1,000 per month for software-based TotalView-ITCH or $2,500
per month for combined software- and hardware-based TotalView-ITCH, and
TCP ITCH data feed pairs, for which the fee is $750 per month. The
Exchange also assesses an additional charge of $200 per month for each
port used for entering orders or quotes over the Internet. Lastly, the
Exchange assesses an additional charge of $600 per month for each port
used for market data delivery over the Internet. The Exchange is
proposing to list each connectivity option provided under the rule and
the related fee.
    Under subparagraph (g) of the rule, a member firm may subscribe to
other port pairs not otherwise noted in the rule. Such port pairs may
be OUCH and RASH protocol ports or Drop ports. The Exchange is
proposing to describe each of these options under the rule separately.
Member firms may subscribe to trading ports, which are exclusively used
for testing purposes. These ports may not be used for trading in
securities in the System, and are provided at no cost. The Exchange is
adding rule text noting that these test ports may be subscribed to
under the rule. The Exchange also provides optional backup ports for
OUCH port subscribers at no cost. OUCH backup ports are similar to
disaster recovery ports; however, unlike disaster recovery ports that
provide backup connectivity to the Exchange's disaster recovery
location in Chicago, OUCH backup ports provide alternative port
hardware in the event of a failure of the primary port hardware in the
primary connectivity location in Carteret. The Exchange notes that OUCH
ports have the largest number of subscribers and the hardware used for
OUCH ports houses the largest number of member firms per hardware unit,
therefore representing the greatest potential impact to the market
should there be a hardware failure. Accordingly, the Exchange
determined that offering OUCH backup ports will help ensure there is
minimal market impact should there be an OUCH port hardware failure.
The Exchange is adding OUCH backup ports as a service that may be
subscribed to at no cost. The Exchange also provides data
retransmission ports at no cost. Data retransmission ports allow a
subscriber to replay market data, in the event the data was missed in
live feed or for verification purposes. Data retransmission ports only
allow replay of the current trading day and do not provide data
concerning prior trading days' data. The Exchange is adding rule text
noting that data retransmission ports may be subscribed to under the
rule. The Exchange is also expressly noting that disaster recovery
ports are available for the connectivity options under the rule at no
cost. Lastly, the Exchange is proposing to eliminate the two
subscription options and related fees provided under subparagraph (g)
of the rule assessed for ports that are used for entering orders or
quotes over the Internet, and ports that are used for market data
delivery over the Internet. The Exchange notes that it is

eliminating these ports because they are outmoded means of connecting
to the Exchange and neither have any subscribers.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
Section 6(b) of the Act,\8\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\9\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among members and issuers and other persons using any
facility or system which Nasdaq operates or controls, and is designed
to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, to foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest; and is not designed to
permit unfair discrimination between customers, issuers, brokers, or
dealers.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that the clarifying changes to the rule
protect investors and the public interest because they explicitly
describe the fees assessed for all ports under the rule. Describing all
services covered by the rule will serve to avoid investor confusion
over the scope of what connectivity options are available, and the
costs of such options. The Exchange notes that it is not adding new
connectivity options or functionality, but is rather describing more
specifically what is currently offered under the rule. In this regard,
the Exchange is adding new rule text that describes all functionality
available under each subparagraph of the rule, and is reorganizing some
rule text under the rule in an effort to make the rule clearer. The
Exchange notes that much of the new text concerns testing ports, and
ports used in the event of a disaster or hardware failure. These ports
help ensure that a fair and orderly market is maintained by allowing
member firms to test their systems prior to connecting to the live
trading environment, and to provide backup connectivity in the event of
a failure or disaster. Thus, the Exchange believes the proposed
clarifying changes are consistent with the protection of investors and
the public interest.
    The Exchange believes that the proposed deletion of the ECN direct
connection port pair under Rule 7014(a) [sic], the deletion of the CTCI
connectivity options under Rule 7014(c) [sic] and (e) [sic], as well as
the deletion of the Internet-based port fees under Rule 7014(g) [sic],
are reasonable, equitably allocated, and not unfairly discriminatory
because there are no subscribers to these connectivity options, all of
which are based on outmoded means of connecting to the Exchange. As a
consequence, no member firms will be impacted by deletion of the
connectivity options. The Exchange notes that it is not altering the
charges assessed for the remaining connectivity options under Rule
7015.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. Specifically, Nasdaq is
making clarifying changes to Rule 7015, which does not impose any
burden on competition whatsoever. To the contrary, the proposed change
facilitates competition by clarifying what connectivity options are
provided by the Exchange, thereby informing [sic] other market venues a
better understanding of what connectivity options are available for
Nasdaq. With that better understanding, other market venues may improve
existing connectivity options or offer new connectivity options to
compete with Nasdaq. Accordingly, the proposed changes do not inhibit
market participants' ability to compete among each other, nor do they
impose any burden on competition among market venues, but rather may
promote competition among market venues.

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

    Written comments were neither solicited nor received.

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

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \10\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\11\ At any time within 60
days of the filing of the proposed rule change, the Commission
summarily may temporarily suspend such rule change if it appears to the
Commission that such action is: (i) Necessary or appropriate in the
public interest; (ii) for the protection of investors; or (iii)
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(a)(iii) [sic].
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2015-162 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2015-162. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and

printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NASDAQ-2015-162 and should
be submitted on or before February 1, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

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

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-260 Filed 1-8-16; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 83, Number 10 (Tuesday, January 16, 2018)]
[Notices]
[Pages 2258-2261]
[FR Doc No: 2018-00523]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82466; File No. SR-GEMX-2017-63]

Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the
Exchange's Schedule of Fees at Chapter V, Section H, Entitled ``Nasdaq
GEMX Trades Feed''

January 9, 2018.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 26, 2017, Nasdaq GEMX, LLC (``GEMX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``Commission'')
the proposed rule change as described in Items I, II, and III, below,
which Items have been prepared by the Exchange. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
---------------------------------------------------------------------------

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

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

    The Exchange proposes to amend the Exchange's Schedule of Fees at
Chapter V, Section H, entitled ``Nasdaq GEMX Trades Feed,'' to
introduce a monthly fee of $500 for unlimited internal and/or external
distribution of the Nasdaq GEMX Trade Feed,\3\ as described further
below.
---------------------------------------------------------------------------

    \3\ As part of this proposal, the Exchange proposes to correct a
typographical error by renaming the Nasdaq GEMX Trades Feed the
``Nasdaq GEMX Trade Feed.'' The Exchange hereinafter refers to the
product by its corrected name.
---------------------------------------------------------------------------

    The text of the proposed rule change is available on the Exchange's
website at http://nasdaqgemx.cchwallstreet.com/, at the principal
office of the Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The purpose of the proposed rule change is to amend the Exchange's
Schedule of Fees at Chapter V, Section H, entitled ``Nasdaq GEMX Trades
Feed,'' to introduce a monthly fee of $500 for unlimited internal and/
or external distribution of the GEMX Trade Feed.
    The Nasdaq GEMX Trade Feed is a direct data feed product that
displays last sale information about trades that occur in the
Exchange's execution system, along with opening price, cumulative
volume, and high and low prices for the day. The data provided for each
instrument includes the symbols (series and underlying security), put
or call indicator, expiration date, the strike price of the series, and
trading status. Access to real-time last sale options data from the
Exchange increases transparency and enables firms to provide
dynamically updated tickers, portfolio trackers and price/time charts.
    The Exchange presently offers subscriptions to the Nasdaq GEMX
Trade Feed for free, but subscriptions are available only to those
firms that subscribe to other fee-liable Nasdaq GEMX data products--
i.e., the Nasdaq GEMX Real-time Depth of Market Raw Data Feed, the
Nasdaq GEMX Order Feed, or the Nasdaq GEMX Top Quote Feed.
    The Exchange now proposes to amend Section H to offer the Nasdaq
GEMX Trade Feed on a standalone basis, including to firms that do not
currently subscribe to another fee-liable GEMX data feed. For this
standalone subscription to the Nasdaq GEMX Trade Feed, the Exchange
proposes to charge a fee of $500 per month (for unlimited internal and
external distribution). Upon effectiveness of the proposal, this
monthly fee will apply to all firms that choose to subscribe to the
Nasdaq GEMX Trade Feed, including firms that currently subscribe to or
that subsequently become subscribers to the Nasdaq GEMX Real-time Depth
of Market Raw Data Feed, the Nasdaq GEMX Order Feed, or the Nasdaq GEMX
Top Quote Feed.
    Although the Exchange proposes to offer the Nasdaq GEMX Trade Feed
for a fee on a standalone basis, it notes that the Trade Feed is a
purely optional product and a subscription to it is not required to
receive the data that it provides. The same GEMX trade information that
is available on the Nasdaq GEMX Trade Feed is also broadcast on two
other Nasdaq GEMX data feeds: the GEMX Top Quote Feed and the GEMX
Depth of Market Feed.
    The Exchange's proposal reflects the value of the investments that
the Exchange has made in developing, maintaining, and upgrading the
GEMX Trade Feed product and the Exchange trading facility that supports
it, which include the following:
     Exchange Re-Platform and Harmonization of Specifications.
In connection with its recent acquisition by Nasdaq, Inc. and the
associated efforts to re-platform and integrate the Exchange into the
Nasdaq, Inc. family of exchanges, the Exchange upgraded the GEMX Trade
Feed so that it is consistent with the specifications and formats of
the other Nasdaq, Inc. trade data feeds. The re-platforming and
associated upgrades will render connection to and consumption of the
GEMX Trade Feeds and other data products easier for customers to
manage. Having one harmonized specification document format that is
standardized across six exchanges makes initial onboarding and
implementation of the data feeds into customers' systems more efficient
than having multiple documents in disparate formats across different
platforms. Furthermore, any updates or enhancements that are introduced
across any of the six exchanges will now be more cost effective for
customers to implement because of the standardized message format. In
addition, the migration to the Nasdaq Inet technology allows customers
to seamlessly conduct business across multiple exchanges by leveraging
Nasdaq's standard messaging protocols to interact with GEMX data feeds
as well as all Nasdaq options data feeds. Moreover, the hardware
efficiencies provide a highly-distributed and efficient system for the
Exchange to operate from.
     Geographic Diversity. In connection with the Exchange's
integration into the Nasdaq, Inc. family of exchanges, the Exchange
moved its disaster recovery system to the site utilized by the other
Nasdaq, Inc. exchanges in Chicago, Illinois. Customers can both receive
market data and send orders through the Chicago facility, potentially
reducing overall networking costs. Additionally, this new disaster
recovery location enables firms to easily connect to a multitude of
multi-asset class engines currently housed in or near this Chicago
facility, which also may reduce networking costs. Adding such
geographic diversity helps protect the market in the event of a
catastrophic event impacting the entire East Coast. Lastly, the new
facility has new equipment that will offer improved performance and
resiliency.
    The Exchange notes that while it and its sister exchange, Nasdaq
ISE, LLC, are unique among theirs [sic] competitors in offering a
standalone Trade Feed, the Exchange proposes to price the product at or
below the prices that competing exchanges charge for their data feeds.
The Exchange notes that although fees for external distribution of data
feeds are typically higher than internal distribution fees, the
Exchange proposes to charge the same price for both internal and
external distribution of the Trade Feed as a means of incentivizing
external distribution.
    The Exchange also notes that it proposes to price its Trade Feed
lower than that of the Nasdaq ISE product. The Exchange believes that
this price differential is reasonable given the fact that Nasdaq ISE
has more listings, strike volume, and market makers than does Nasdaq
GEMX, such that the Nasdaq ISE Trade Feed product has greater potential
value to customers than does the Exchange's product. Specifically, the
ISE market has 3,788 listed options on its platform, totaling 732,000
strikes. Comparatively, GEMX has 2,642 listed options and 619.000 [sic]
strikes. ISE also has 33% more market makers providing liquidity than
does GEMX.
    Finally, offering valuable trade data as a standalone feed allows
for a much lower bandwidth option that customers can utilize instead of
having to subscribe to other GEMX feeds that may include quotes and
orders and require much more system effort to consume and utilize due
to the larger number of messages required for processing.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\4\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5)

of the Act,\5\ in particular, in that it provides for the equitable
allocation of reasonable dues, fees, and other charges among members
and issuers and other persons using any facility, and is not designed
to permit unfair discrimination between customers, issuers, brokers, or
dealers.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Commission and the courts have repeatedly expressed their
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. In Regulation
NMS, while adopting a series of steps to improve the current market
model, the Commission highlighted the importance of market forces in
determining prices and self-regulatory organization (``SRO'') revenues
and, also, recognized that current regulation of the market system
``has been remarkably successful in promoting market competition in its
broader forms that are most important to investors and listed
companies.'' \6\
---------------------------------------------------------------------------

    \6\ Securities Exchange Act Release No. 51808 (June 9, 2005), 70
FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
---------------------------------------------------------------------------

    Likewise, in NetCoalition v. Securities and Exchange Commission
7 (``NetCoalition'') the D.C. Circuit upheld the
Commission's use of a market-based approach in evaluating the fairness
of market data fees against a challenge claiming that Congress mandated
a cost-based approach.\8\ As the court emphasized, the Commission
``intended in Regulation NMS that `market forces, rather than
regulatory requirements' play a role in determining the market data . .
. to be made available to investors and at what cost.'' \9\
---------------------------------------------------------------------------

    \7\ NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
    \8\ See NetCoalition, at 534-535.
    \9\ Id. at 537.
---------------------------------------------------------------------------

    Further, ``[n]o one disputes that competition for order flow is
`fierce.' . . . As the SEC explained, `[i]n the U.S. national market
system, buyers and sellers of securities, and the broker-dealers that
act as their order-routing agents, have a wide range of choices of
where to route orders for execution'; [and] `no exchange can afford to
take its market share percentages for granted' because `no exchange
possesses a monopoly, regulatory or otherwise, in the execution of
order flow from broker dealers'. . . .'' \10\ Although the court and
the SEC were discussing the cash equities markets, the Exchange
believes that these views apply with equal force to the options
markets.
---------------------------------------------------------------------------

    \10\ Id. at 539 (quoting Securities Exchange Act Release No.
59039 (December 2, 2008), 73 FR 74770, 74782-83 (December 9, 2008)
(SR-NYSEArca-2006-21)).
---------------------------------------------------------------------------

    The Exchange believes that its proposal is reasonable because it
expands the availability of the Nasdaq GEMX Trade Feed to all firms
that wish to subscribe to it, rather than by limiting its availability
to only those firms that subscribe to other fee-liable Nasdaq GEMX data
products. Even though certain firms presently receive trade data for
free as part of their other paid data feeds, the Exchange believes that
such firms may prefer to receive a standalone Trade Feed because it
will provide them with pure trade data and no longer require them to
sift through their other paid feeds to isolate it. The Exchange also
believes that its proposal is reasonable to charge a monthly fee for
all subscriptions to the Nasdaq GEMX Trade Feed because this product
provides valuable data to firms. As noted above, access to real-time
last sale options data from the Exchange increases transparency and
enables firms to provide dynamically updated tickers, portfolio
trackers and price charts.
    Moreover, the Exchange believes its proposal to charge a monthly
fee of $500 for a subscription to the Nasdaq GEMX Trade Feed is a
reasonable reflection of the Exchange's costs in producing,
maintaining, and upgrading the product to provide value to subscribers.
The Exchange notes, for example, that in connection with its recent
acquisition by Nasdaq, Inc. and the associated efforts to re-platform
and integrate the Exchange into the Nasdaq, Inc. family of exchanges,
the Exchange upgraded the Trade Feed so that it is consistent with the
specifications and formats of the other Nasdaq, Inc. data feeds. The
re-platforming and associated upgrades will render connection to and
consumption of the Trade Feeds and other data products easier for
customers to manage.
    Moreover, the Exchange's integration into Nasdaq, Inc. has also
resulted in its migration to a more robust and geographically diverse
disaster recovery facility, located in Chicago, IL. Customers can both
receive market data and send orders through the Chicago facility,
potentially reducing overall networking costs. Adding such geographic
diversity helps protect the market in the event of a catastrophic event
impacting the entire East Coast.
    The Exchange notes that while it and its sister exchange, Nasdaq
ISE, LLC, are unique among its competitors in offering a standalone
Trade Feed, it proposes to price the product at or below the prices
that competing exchanges charge for their data feeds. The Exchange
notes that although fees for external distribution of data feeds are
typically higher than internal distribution fees, the Exchange proposes
to charge the same price for both internal and external distribution of
the GEMX Trade Feed as a means of incentivizing external distribution.
    The Exchange also notes that it proposes to price its Trade Feed
lower than that of the Nasdaq ISE product. The Exchange believes that
this price differential is reasonable given the fact that Nasdaq ISE
has more listings, strike volume, and market makers than does Nasdaq
GEMX, such that the Nasdaq ISE Trade Feed product has greater potential
value to customers than does the Exchange's product.
    The Exchange believes that the proposal is an equitable allocation
and is not unfairly discriminatory because the Exchange will apply the
same fee to all, regardless of membership.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. In terms of inter-market
competition, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues if they deem fee levels at a particular venue to be
excessive, or rebate opportunities available at other venues to be more
favorable. In such an environment, the Exchange must continually adjust
its fees to remain competitive with other exchanges. Because
competitors are free to modify their own fees in response, and because
market participants may readily adjust their order routing practices,
the Exchange believes that the degree to which fee changes in this
market may impose any burden on competition is extremely limited.
    In this instance, the proposed establishment of the Nasdaq GEMX
Trade Feed fee does not impose an undue burden on competition because a
subscription to the Nasdaq GEMX Trade Feed is completely voluntary and
subject to extensive competition both [sic] other exchanges. In sum, if
the change proposed herein is unattractive to market participants, it
is likely that the Exchange will lose market share as a result.
Accordingly, the Exchange does not believe that the proposed change
will impair the ability of members or competing order execution venues
to maintain their competitive standing in the financial markets.

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\11\ At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is: (i) Necessary or appropriate in the public
interest; (ii) for the protection of investors; or (iii) otherwise in
furtherance of the purposes of the Act. If the Commission takes such
action, the Commission shall institute proceedings to determine whether
the proposed rule should be approved or disapproved.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-GEMX-2017-63 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-GEMX-2017-63. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-GEMX-2017-63, and should be submitted on
or before February 6, 2018.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

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

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-00523 Filed 1-12-18; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 86, Number 242 (Tuesday, December 21, 2021)]
[Rules and Regulations]
[Pages 72186-72188]
[FR Doc No: 2021-27510]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2020-1006; Project Identifier 2019-CE-047-AD; Amendment
39-21855; AD 2021-25-11]
RIN 2120-AA64

Airworthiness Directives; Piper Aircraft, Inc. Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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

SUMMARY: The FAA is superseding Airworthiness Directive (AD) 78-02-03,
which applied to all Piper Aircraft, Inc. (Piper) Model PA-23-250
airplanes. AD 78-02-03 required repetitively inspecting the stabilator
tip tube and weight assemblies for cracks, inspecting for missing
rivets and screws, replacing the forward rib/horn assemblies, and
reinforcing the mounting. Since AD 78-02-03 was issued, Piper developed
a newly-designed stabilator, which is not subject to the unsafe
condition, and revised its service information. This AD retains the
actions of AD 78-02-03, but reduces the applicability and requires the
actions in the revised service information. The FAA is issuing this AD
to address the unsafe condition on these products.

DATES: This AD is effective January 25, 2022.
    The Director of the Federal Register approved the incorporation by
reference of certain publications listed in this AD as of January 25,
2022.

ADDRESSES: For service information identified in this final rule,
contact Piper Aircraft, Inc., 2926 Piper Drive, Vero Beach, FL 32960;
phone:<PHONE_NUMBER>; website: https://www.piper.com/. You may view
this service information at the FAA, Airworthiness Products Section,
Operational Safety Branch, 901 Locust, Kansas City, MO 64106. For
information on the availability of this material at the FAA, call (817)
222-5110. It is also available at https://www.regulations.gov by
searching for and locating Docket No. FAA-2020-1006.

Examining the AD Docket

    You may examine the AD docket at https://www.regulations.gov by
searching for and locating Docket No. FAA-2020-1006; or in person at
Docket Operations between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays. The AD docket contains this final rule, any
comments received, and other information. The street address for Docket
Operations is listed above.

FOR FURTHER INFORMATION CONTACT: John Marshall, Aviation Safety
Engineer, Atlanta ACO Branch, FAA, 1701 Columbia Avenue, College Park,
GA 30337; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
[email protected].

SUPPLEMENTARY INFORMATION:

Background

    The FAA issued a notice of proposed rulemaking (NPRM) to amend 14
CFR part 39 by superseding AD 78-02-03 [Reg. Docket No. 77-EA-81,
Amendment 39-3128] (43 FR 3079, January 23, 1978) (AD 78-02-03). AD 78-
02-03 applied to all Piper Model PA-23-250 airplanes and required
repetitively inspecting both the stabilator tip tube and weight
assemblies for cracks. For different groups of serial-numbered
airplanes, AD 78-02-03 required a one-time inspection of the stabilator
tip ribs for missing rivets and screws, replacement of the forward rib/
horn assemblies, and reinforcement of the mounting. The repetitive
inspections in AD 78-02-03 for all serial-numbered airplanes had no
terminating action and were required regardless of any corrective
actions performed.
    The NPRM published in the Federal Register on September 16, 2021
(86 FR 51636). The NPRM was prompted by Piper developing a newly-
designed stabilator, which is not subject to the unsafe condition, and
revising its service information. The FAA determined the applicability
of AD 78-02-03 should be revised to exclude airplanes beginning with
serial number 27-7954122, which were manufactured with the stabilator
design change. In the NPRM, the FAA proposed to retain all of the
requirements of AD 78-02-03 but reduce the applicability and update
some of the service information that would be required for compliance.
The FAA is issuing this AD to address the unsafe condition on these
products.

Discussion of Final Airworthiness Directive

Comments

    The FAA received no comments on the NPRM or on the determination of
the costs.

Conclusion

    The FAA reviewed the relevant data and determined that air safety
requires adopting this AD as proposed. Accordingly, the FAA is issuing
this AD to address the unsafe condition on these products. This AD is
adopted as proposed in the NPRM.

Related Service Information Under 1 CFR Part 51

    The FAA reviewed the following service documents required for
compliance with this AD:
     Piper Service Bulletin (SB) No. 547, dated March 1, 1977,
which contains instructions for inspecting the stabilator tip rib;
     Piper SB No. 569, dated August 24, 1977, which contains
information for replacing the stabilator tab horn;
     Piper Service Letter No. 807A, dated September 8, 1977,
which contains information for installing the stabilator outboard nose
rib; and
     Piper SB No. 540B, February 9, 2021, which contains
instructions for inspecting the stabilator tip tube and weight assembly
and addressing any cracks found.
    This service information is reasonably available because the
interested parties have access to it through their normal course of
business or by the means identified in the ADDRESSES section.

Other Related Service Information

    The FAA reviewed the following documents for information related to
this AD:
     Piper SB 540, which contains instructions for inspecting
and reinforcing the stabilator tip tube and weight assembly; and
     Piper Aztec Service Manual, Part Number 753-564, dated
January 1, 2009. Paragraphs 4-65 through 4-67 of this manual contain
procedures for checking control surface balance.

Differences Between This AD and the Service Information

    Piper SB 540B specifies contacting Piper for repair instructions.
This AD requires contacting the FAA for an approved repair method
instead.

Costs of Compliance

    The FAA estimates that this AD affects 625 airplanes of U.S.
registry.
    The FAA estimates the following costs to comply with this AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per        Cost on U.S.
            Action                    Labor cost             Parts cost           airplane          operators
----------------------------------------------------------------------------------------------------------------
Inspect the stabilator tip      0.5 work-hour x $85     Not applicable......  $42.50 per        $26,562.50 per
 tube and weight assembly.       per hour = $42.50.                            inspection        inspection
                                                                               cycle.            cycle.
Inspect the stabilator tip      0.5 work-hour x $85     Not applicable......  $42.50..........  $26,562.50.
 ribs.                           per hour = $42.50.
Replace the stabilator tab      4 work-hours x $85 per  $817................  $1,157..........  $723,125.
 forward rib/horn assemblies.    hour = $340.
Install additional nose ribs..  1 work-hour x $85 per   $367................  $452............  $282,500.
                                 hour = $85.
----------------------------------------------------------------------------------------------------------------

    The FAA estimates the following costs to do any necessary repairs
or replacements that will be required based on the results of the
inspection. The FAA has no way of determining the number of airplanes
that might need these repairs or replacements:

                                               On-Condition Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per
                Action                         Labor cost                   Parts cost               airplane
----------------------------------------------------------------------------------------------------------------
Repair stabilator tip tube and weight   4 work-hours x $85 per    $80...........................            $420
 assemblies (airplanes without kit P/N   hour = $340.
 763 987).
Install missing stabilator tip rib      1 work hour x $85 per     $39...........................             124
 rivets and/or the stabilator tip tube   hour = $85.
 and weight assembly attachment screws.
Balance stabilator....................  5 work-hours x $85 per    Not applicable................             425
                                         hour = $425.
----------------------------------------------------------------------------------------------------------------

    For airplanes with kit P/N 763 987, the cost to repair cracking may
vary significantly from airplane to airplane, and therefore the FAA has
no way of determining an estimated cost.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.
    The FAA is issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: General requirements.
Under that section, Congress charges the FAA with promoting safe flight
of civil aircraft in air commerce by prescribing regulations for
practices, methods, and procedures the Administrator finds necessary
for safety in air commerce. This regulation is within the scope of that
authority because it addresses an unsafe condition that is likely to
exist or develop on products identified in this rulemaking action.

Regulatory Findings

    This AD will not have federalism implications under Executive Order
13132. This AD will not have a substantial direct effect on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government.
    For the reasons discussed above, I certify that this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Will not affect intrastate aviation in Alaska, and
    (3) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

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

The Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by:
0
a. Removing Airworthiness Directive 78-02-03 [Reg. Docket No. 77-EA-81,
Amendment 39-3128] (43 FR 3079, January 23, 1978); and
0
b. Adding the following new airworthiness directive:

2021-25-11 Piper Aircraft, Inc.: Amendment 39-21855; Docket No. FAA-
2020-1006; Project Identifier 2019-CE-047-AD.

(a) Effective Date

    This airworthiness directive (AD) is effective January 25, 2022.

(b) Affected ADs

    This AD replaces AD 78-02-03 [Reg. Docket No. 77-EA-81,
Amendment 39-3128] (43 FR 3079, January 23, 1978) (AD 78-02-03).

(c) Applicability

    This AD applies to Piper Aircraft, Inc., Model PA-23-250
airplanes, serial numbers 27-7654001 through 27-7954121,
certificated in any category.

(d) Subject

    Joint Aircraft System Component (JASC) Code 5510, Horizontal
Stabilizer Structure.

(e) Unsafe Condition

    This AD was prompted by reports of cracks developing on the
stabilator structure. The FAA is issuing this AD to prevent
weakening of the stabilator structure and to detect and

correct cracks on the stabilator tip tube and weight assembly. The
unsafe condition, if not addressed, could cause weakening of the
complete structure and lead to loss of the trim tab and counter
balance weight, which may result in reduced airplane control.

(f) Compliance

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

(g) Previously Required Actions Retained From AD 78-02-03

    (1) Within 50 hours time-in-service (TIS) after January 26, 1978
(the effective date of AD 78-02-03), do the following inspections
and modifications.
    (i) For airplanes with serial numbers 27-7654001 through 27-
7754054, inspect both stabilator tip ribs for missing rivets and
missing tube and weight assembly attachment screws and if necessary
alter in accordance with Piper Service Bulletin (SB) 547, dated
March 1, 1977.
    (ii) For airplanes with serial numbers 27-7654001 through 27-
7754127, 27-7754130, 27-7754131, 27-7754133 through 27-7754136, and
27-7754138 through 27-7754144, replace the right and left stabilator
tab forward inboard rib/horn assemblies by installing Piper Kit 761
143 or equivalent kit in accordance with Piper SB 569, dated August
24, 1977.
    (iii) For airplanes with serial numbers 27-7654001 through 27-
7754041 equipped with stabilators Piper part number (P/N) 15658-2,
15658-3, 15658-22 or 15658-23, reinforce the mounting of the
stabilator tube and weight assemblies by installing additional nose-
ribs with Piper Kit 761 141 or equivalent kit in accordance with
Piper Service Letter 807A, dated September 8, 1977.
    (2) Before further flight after completing the alterations in
paragraphs (g)(1)(ii) and (iii) of this AD, balance the stabilator.

(h) Inspection of Stabilator Tip Tube and Weight Assembly

    Within 10 hours TIS after the effective date of this AD or
within 100 hours TIS after completing the last inspection required
by paragraph (a) of AD 78-02-03, whichever occurs later, and
thereafter at intervals not to exceed 100 hours TIS, inspect the
left and right stabilator balance weight assemblies for cracks and
complete any necessary repairs by following Parts I and II of the
Instructions in Piper SB No. 540B, dated February 9, 2021, except
you are not required to contact Piper for repair instructions.
Instead, repair in accordance with FAA-approved procedures.

(i) Credit for Previous Actions

    You may take credit for the initial inspection and corrective
actions required by paragraph (h) of this AD if you performed those
actions before the effective date of this AD using Piper SB No. 540,
dated January 4, 1977, or SB No. 540A, dated October 20, 1980.

(j) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Atlanta ACO Branch, FAA, has the authority to
approve AMOCs for this AD, if requested using the procedures found
in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request
to your principal inspector or local Flight Standards District
Office, as appropriate. If sending information directly to the
manager of the certification office, send it to the attention of the
person identified in paragraph (k) of this AD.
    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.
    (3) For service information that contains steps that are labeled
as Required for Compliance (RC), the following provisions apply.
    (i) The steps labeled as RC, including substeps under an RC step
and any figures identified in an RC step, must be done to comply
with the AD. An AMOC is required for any deviations to RC steps,
including substeps and identified figures.
    (ii) Steps not labeled as RC may be deviated from using accepted
methods in accordance with the operator's maintenance or inspection
program without obtaining approval of an AMOC, provided the RC
steps, including substeps and identified figures, can still be done
as specified, and the airplane can be put back in an airworthy
condition.

(k) Related Information

    For more information about this AD, contact John Marshall,
Aviation Safety Engineer, Atlanta ACO Branch, FAA, 1701 Columbia
Avenue, College Park, GA 30337; phone:<PHONE_NUMBER>; fax: (404)
474-5605; email: [email protected].

(l) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference of the service information listed in this
paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless the AD specifies otherwise.
    (i) Piper Service Bulletin No. 547, dated March 1, 1977.
    (ii) Piper Service Bulletin No. 569, dated August 24, 1977.
    (iii) Piper Service Letter No. 807A, dated September 8, 1977.
    (iv) Piper Service Bulletin No. 540B, February 9, 2021.
    (3) For the service information identified in this AD, contact
Piper Aircraft, Inc., 2926 Piper Drive, Vero Beach, FL 32960; phone:
(772) 299-2141; website: https://www.piper.com/.
    (4) You may view this referenced service information at the FAA,
Airworthiness Products Section, Operational Safety Branch, 901
Locust, Kansas City, MO 64106. For information on the availability
of this material at the FAA, call<PHONE_NUMBER>.
    (5) You may view this service information that is incorporated
by reference at the National Archives and Records Administration
(NARA). For information on the availability of this material at
NARA, email: [email protected], or go to: https://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued on December 3, 2021.
Lance T. Gant,
Director, Compliance & Airworthiness Division, Aircraft Certification
Service.
[FR Doc. 2021-27510 Filed 12-20-21; 8:45 am]
BILLING CODE 4910-13-P