Nasdaq MRX Trades Feed (``Trades Feed'') displays last trade
information. The data provided for each option series includes the
symbols (series and underlying security), put or call indicator,
expiration date, the strike price of the series, and whether the
option series is available for trading on MRX and

identifies if the series is available for closing transactions only.

    As set forth in Options 3, Section 23(a)(5), the Exchange offers
the Nasdaq MRX Spread Feed (``Spread Feed''), which currently is a feed
that consists of: (1) options orders for all Complex Orders (i.e.,
spreads, buy-writes, delta neutral strategies, etc.); (2) data
aggregated at the top five price levels (BBO) on both the bid and offer
side of the market; (3) last trades information. The Spread Feed
provides updates, including prices, side, size, and capacity, for every
Complex Order placed on the MRX Complex Order Book. The Spread Feed
shows: (1) aggregate bid/ask quote size; (2) aggregate bid/ask quote
size for Professional Customer Orders; and (3) aggregate bid/ask quote
size for Priority Customer Orders for MRX traded options. The feed also
provides Complex Order auction notifications.
    Similar to the proposed changes to the Depth of Market Feed above,
the Exchange now proposes in the Spread Feed to no longer provide book
information for the top five price levels, and instead provide full
depth-of-book information. As such, the Exchange will delete language
that relates to top five price level information in the rule text, and
replace it with full depth language that is substantively similar to
the language in the current BX Depth of Market Feed in BX Options 3,
Section 23(a)(1) and in the Exchange's proposed Depth of Market Feed in
Options 3, Section 23(a)(1), except the proposed language herein will
be tailored to complex functionality. The Exchange also proposes to add
Attributable Complex Order \107\ tags (when provided by the Member)
into the Spread Feed.\108\ The Exchange also proposes to delete the
following sentence: ``The Spread Feed provides updates, including
prices, side, size, and capacity, for every Complex Order placed on the
MRX Complex Order Book. The Spread Feed shows: (1) aggregate bid/ask
quote size; (2) aggregate bid/ask quote size for Professional Customer
Orders; and (3) aggregate bid/ask quote size for Priority Customer
Orders for MRX traded options.'' The Exchange proposes instead to
incorporate these concepts into the amended Spread Feed rule in a
manner that is more consistent with the other amended rules in Options
3, Section 23(a).
---------------------------------------------------------------------------

    \107\ An Attributable Complex Order is a Market or Limit Complex
Order that is designated as an Attributable Order as provided in
Options 3, Section 7(h). See Options 3, Section 14(b)(4).
    \108\ Cboe currently allows complex orders to be designated as
Attributable. See Cboe Rule 5.33(b)(3). While Cboe does not have a
comparable data feed rule, Cboe's technical specifications indicate
that it currently has Participant ID and Client ID tags available on
its Complex Multicast PITCH data feed. See Section 3.8 in https://cdn.cboe.com/resources/membership/US_OPTIONS_COMPLEX_MULTICAST_PITCH_SPECIFICATION.pdf (relating to
Participant ID or Client ID as optionally specified values).
---------------------------------------------------------------------------

    As amended, Options 3, Section 23(a)(5) will provide:

    Nasdaq MRX Spread Feed (``Spread Feed'') is a feed that consists
of: (1) options orders for all Complex Orders (i.e., spreads, buy-
writes, delta neutral strategies, etc.); (2) full Complex Order
depth information, including prices, side, size, capacity,
Attributable Complex Order tags when provided by a Member, and order
attributes (e.g., OCC account number, give-up information, CMTA
information), for individual Complex Orders on the Exchange book;
(3) last trades information; and (4) calculating and disseminating
MRX's complex best bid and offer position, with aggregated size
(including total size in aggregate, for Professional Order size in
the aggregate and Priority Customer Order size in the aggregate),
based on displayable Complex Order interest in the System. The feed
also provides Complex Order auction notifications.

    In addition, the Exchange proposes to no longer offer TradeInfo,
which is a user interface set forth in Options 3, Section 23(b)(2) that
permits Members to: (i) search all orders submitted in a particular
security or all orders of a particular type, regardless of their status
(open, canceled, executed, etc.); (ii) view orders and executions; and
(iii) download orders and executions for recordkeeping purposes.
TradeInfo users may also cancel open orders at the order, port, or firm
mnemonic level through TradeInfo. Due to the lack of demand for this
interface by Members,\109\ the Exchange seeks to decommission the
TradeInfo interface when the Exchange migrates over to the enhanced
Nasdaq platform with the technology migration.\110\ The Exchange notes
that FIX, FIX DROP,\111\ and the Clearing Trade Interface
(``CTI''),\112\ which are available to all Members, can be used today
to obtain order information that is currently available within
TradeInfo, and FIX can be used to cancel orders today.
---------------------------------------------------------------------------

    \109\ No Members logged into TradeInfo in 2022.
    \110\ The Exchange provided notice to all Members through an
Options Trader Alert. See Options Trader Alert #2022-29.
    \111\ FIX DROP is a real-time order and execution update message
that is sent to a Member after an order been received/modified or an
execution has occurred and contains trade details specific to that
Member. The information includes, among other things, the following:
(i) executions; (ii) cancellations; (iii) modifications to an
existing order; and (iv) busts or post-trade corrections. See
Options 3, Section 23(b)(3).
    \112\ CTI is a real-time cleared trade update message that is
sent to a Member after an execution has occurred and contains trade
details specific to that Member. The information includes, among
other things, the following: (i) The Clearing Member Trade Agreement
(``CMTA'') or The Options Clearing Corporation (``OCC'') number;
(ii) badge or mnemonic; (iii) account number; (iv) information which
identifies the transaction type (e.g., auction type) for billing
purposes; and (v) market participant capacity. See Options 3,
Section 23(b)(1).
---------------------------------------------------------------------------

    In connection with its proposal to retire TradeInfo, the Exchange
also proposes to eliminate all references to TradeInfo in Options 7
(Pricing Schedule). Today, as set forth in Options 7, Section 6(ii)(3),
the Exchange does not charge any fees for TradeInfo. With the proposed
changes, the Exchange will amend Options 7 to delete Section 6(ii)(3)
in its entirety.
Optional Risk Protections
    The Exchange proposes to introduce optional quantity and notional
value checks in new Options 3, Section 28, entitled ``Optional Risk
Protections.'' The proposed optional order risk protections will be
functionally identical to the protections currently offered by BX.\113\
Members may use this voluntary functionality through their FIX
protocols to limit the quantity and notional value they can send per
order and on aggregate for the day. Specifically, Members may establish
limits for the following parameters, as set forth in proposed
subparagraphs (a)(1)-(4):
---------------------------------------------------------------------------

    \113\ See BX Options 3, Section 28. While BX's rule does not
contain the level of granularity as proposed in the Exchange's rule,
including how orders are rejected if any of the optional risk
protection values are exceeded, the Exchange understands that BX's
optional risk protections operate in the same manner.
---------------------------------------------------------------------------

    (1) Notional dollar value per order, which will be calculated as
quantity multiplied by limit price multiplied by number of underlying
shares;
    (2) Daily aggregate notional dollar value;
    (3) Quantity per order; and
    (4) Daily aggregate quantity
    Proposed paragraph (b) will provide that Members may elect one or
more of the above optional risk protections by contacting Market
Operations and providing a per order value (for (a)(1) and (a)(3)) or
daily aggregate value (for (a)(2) and (a)(4)) for each order
protection. Members may modify their settings through Market
Operations. Proposed paragraph (c) will provide that the System will
reject all incoming aggregated Member orders for any of the (a)(2) and
(a)(4) risk protections after the value configured by the Member is
exceeded. Proposed paragraph (d) will provide that the System will
reject all incoming Member orders for any of the (a)(1) and (a)(3) risk
protections upon

arrival if the value configured by the Member is exceeded by the
incoming order. The Exchange notes that the difference in handling
between aggregate and individual order protections is necessary to
allow for complete processing of the final order that puts a Member's
configured value over the aggregate values configured. While individual
orders can be directly measured against the configured values for
(a)(1) and (a)(3), the aggregate values must be calculated after
complete processing of an order and thus the rejection of orders begins
upon the arrival of the next order after the aggregate values in (a)(2)
or (a)(4) have been exceeded.
    The following example shows how the System will reject all
subsequent incoming aggregated orders after the (a)(2) or (a)(4) values
configured by the Member have been exceeded:

Aggregate Quantity Limit = 800.
1. Member enters an Order to Buy 500--Accepted
2. Member enters an Order to Buy 400--Accepted (Member did not meet the
configured limit of 800 with the first order of 500 at the time Member
entered the second order)
3. Member enters an Order to Buy 1--Rejected (Member already exceeded
the configured limit of 800 with the second order of 400)

    The following example shows how the System will reject all incoming
orders upon arrival if the (a)(1) or (a)(3) values configured by the
Member have been exceeded by the arriving order:

Quantity per Order Limit = 800.
1. Member enters an Order to Buy 801--Rejected (Member exceeded the
Quantity per order limit upon arrival with the order to buy 801
contracts)
    Proposed paragraph (e) will provide that if a Member sets a
notional dollar value, a Market Order would not be accepted from that
Member. This is because notional dollar value is calculated by using an
order's specified limit price, and Market Orders by definition are
priced at the best available price upon execution. Lastly, proposed
paragraph (f) will provide that the proposed risk protections are only
available for orders entered through FIX. Additionally, all of the
proposed settings will be firm-level.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\114\ in general, and furthers the objectives of
Section 6(b)(5) of the Act,\115\ in particular, in that it is designed
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. As it relates to the elimination of fees for flash
functionality and TradeInfo, the Exchange believes that its proposal is
consistent with Section 6(b) of the Act,\116\ in general, and furthers
the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\117\ 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.
---------------------------------------------------------------------------

    \114\ 15 U.S.C. 78f(b).
    \115\ 15 U.S.C. 78f(b)(5).
    \116\ 15 U.S.C. 78f(b).
    \117\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    Generally, the Exchange's proposal is intended to add or align
certain System functionality with functionality currently offered on BX
in order to provide a more consistent technology offering across
affiliated Nasdaq options exchanges. A more harmonized technology
offering, in turn, will simplify technology implementation, changes,
and maintenance by market participants of the Exchange that are also
participants on Nasdaq affiliated options exchanges. The Exchange's
proposal also seeks to provide greater harmonization between the rules
of the Exchange and its affiliates, which would result in greater
uniformity, and less burdensome and more efficient regulatory
compliance by market participants. As such, the proposal would foster
cooperation and coordination with persons engaged in facilitating
transactions in securities and would remove impediments to and perfect
the mechanism of a free and open market and a national market system.
The Exchange believes that more consistent rules will increase the
understanding of the Exchange's operations for market participants that
are also participants on the Nasdaq affiliated options exchanges,
thereby contributing to the protection of investors and the public
interest. The proposal also seeks to memorialize existing functionality
and add more granularity in the Exchange's rules to describe how
existing functionality operates today. The Exchange believes that such
changes would remove impediments to and perfect the mechanism of a free
and open market and a national market system because the proposed
changes would promote transparency in Exchange rules and reducing
potential confusion, thereby ensuring that Members, regulators, and the
public can more easily navigate the Exchange's rulebook and better
understand how options trading is conducted on the Exchange.
Routing Changes
    The Exchange believes that the proposed amendments throughout
Options 3 and Options 7 to conform to the Routing Filing is consistent
with the Act. As discussed above, the Routing Filing harmonizes the
Exchange's routing functionality with that of BX.\118\ As part of this
harmonization, the Routing Filing adopts or harmonizes routing
strategies on the Exchange that are substantially identical to BX,
(DNR, FIND, and SRCH), and eliminates existing Exchange routing
functionality that BX does not offer today (flash functionality and
Sweep Orders). The proposed changes to Options 3 and Options 7 herein
will therefore ensure that the Rules conform to the amendments in the
Routing Filing by removing references to flash functionality and Sweep
Orders, eliminating do-not-route orders as an order type and describing
it instead as a DNR routing strategy to harmonize with BX, and also
making clear which routing strategies may now be utilized when
submitting an order type. The Exchange believes that the proposed
changes will bring greater clarity to the Rulebook, which would benefit
market participants and investors by reducing potential confusion.
---------------------------------------------------------------------------

    \118\ As discussed above, the Routing Filing was filed by ISE to
amend ISE Options 5. Because MRX Options 5 incorporates ISE Options
5 by reference, amendments to ISE Options 5 are accordingly
integrated as amendments to MRX Options 5. See supra note 3.
---------------------------------------------------------------------------

    The Exchange's proposal to remove pricing related to flash
functionality from Options 7 is reasonable, equitable, and not unfairly
discriminatory because flash functionality would no longer be available
to any Member. It is reasonable to remove the fees related to flash
orders and the references to flash orders from the Exchange's Pricing
Schedule as the Exchange is removing this functionality from its
Rulebook. Additionally, it is equitable and not unfairly discriminatory
to remove the fees related to flash orders and the references to flash
orders from the Pricing Schedule because no Member would be able to
utilize the flash functionality once it is removed from the System.

Bulk Message
    The Exchange believes that its proposal to memorialize its bulk
message functionality is consistent with the Act as it will codify
existing functionality, thereby promoting transparency in the
Exchange's rules and reducing any potential confusion.\119\ This
functionality provides Market Makers with an additional tool to meet
their various quoting obligations in a manner they deem appropriate,
consistent with the purpose of the bulk message functionality to
facilitate Market Makers' provision of liquidity. By providing Market
Makers with additional control over the quotes they use to provide
liquidity to the Exchange, this tool may benefit all investors through
additional execution opportunities at potentially improved prices. As
noted above, other options exchanges like Cboe currently offer similar
bulk messaging functionality that allow their market participants to
submit block quantity quotes in a single electronic message.\120\
---------------------------------------------------------------------------

    \119\ As discussed above, this existing functionality is
currently described in the Exchange's publicly available technical
specifications. See supra note 13.
    \120\ See supra note 16.
---------------------------------------------------------------------------

    The Exchange does not believe that the offering the bulk message
functionality to only Market Makers would permit unfair discrimination.
Market Makers play a unique and critical role in the options market by
providing liquidity and active markets, and are subject to various
quoting obligations (which other market participants are not, including
obligations to maintain active markets, update quotes in response to
changed market conditions, to compete with other Market Makers in its
appointed classes, and to provide intra-day quotes in its appointed
classes.\121\ Bulk message functionality provides Market Makers with a
means to help them satisfy these obligations.
---------------------------------------------------------------------------

    \121\ See Options 2, Sections 4 and 5.
---------------------------------------------------------------------------

Order Types
    The Exchange believes that the proposed changes to the rules
governing Exchange order types are consistent with the Act. As
discussed above, the proposed changes consist of several functional
enhancements to align the Exchange's order types to existing BX order
types, and rule adjustments that add more specificity and clarity to
existing order types.
Market Orders
    The Exchange believes that the proposed changes to the definition
of Market Orders in Options 3, Section 7(a) are consistent with the
Act. The proposed intra-day cancel timer feature mirrors existing BX
functionality in BX Options 3, Section 7(a)(5), and would provide
Members with additional flexibility and control to bring the Market
Order back to the Member so they can get an execution on another venue
by canceling unexecuted Market Orders after a certain period of time.
The Exchange believes it is appropriate to offer this feature intra-day
because the Exchange already has a separate opening delay timer that
provides protection to the market during the Opening Process as
discussed above.
Intermarket Sweep Orders
    The Exchange believes that the proposed changes to the definition
of ISOs in Options 3, Section 7(b)(5) are consistent with the Act. As
discussed above, the proposed changes are intended to add more
granularity and more closely align the level of detail in the ISO rule
with BX's ISO rule in BX Options 3, Section 7(a)(6) by specifying how
the Exchange would handle ISOs, including how ISOs may be submitted and
when. As such, the Exchange believes that its proposal will promote
transparency in the Exchange's rules and consistency across the rules
of the Nasdaq affiliated options exchanges.\122\
---------------------------------------------------------------------------

    \122\ As noted above, BX's ISO rule also currently states that
``ISOs may be entered on the Order Book or into the PRISM Mechanism
pursuant to Options 3, Section 13(ii)(K).'' The Exchange will file a
separate rule change to add similar language as BX relating to how
ISOs may be entered on the Exchange.
---------------------------------------------------------------------------

    Furthermore, the proposed changes do not amend current ISO
functionality except for the proposed stipulation that ISOs must have a
TIF designation of IOC. Today, Options 5, Section 1(h) provides that
ISOs may be either an IOC or an order that expires on the day it is
entered. The Exchange believes it is appropriate to no longer allow
non-IOC ISOs, as an ISO is generally used when trying to sweep a price
level across multiple exchanges in an effort to post the balance of an
order without locking an away market. The Exchange therefore believes
that ISOs have a limited purpose and should be cancelled if they do not
execute or do not entirely execute. This is also consistent with how BX
currently handles ISOs in that BX only allows ISOs to be entered as
IOC.
All-or-None Orders
    The Exchange believes that the proposed changes to the definition
of AON Orders in Options 3, Section 7(c) are consistent with the Act.
As discussed above, the Exchange is memorializing current System
behavior by specifying how AON Orders will execute against multiple,
aggregated orders to align with the level of detail in BX Options 3,
Section 7(a)(4)(A). The proposed description of the handling of AON
Orders is consistent with the Exchange's allocation methodology in
Options 3, Section 10 by making clear that because of the size
contingency of the AON Order (i.e., executed in its entirety or not at
all), those orders must be satisfied simultaneously to avoid any
priority conflict on the order book, which considers current displayed
NBBO prices to avoid locked and crossed markets as well as trade-
throughs. Finally, the proposed changes to add that AON Orders may not
be submitted during the Opening Process will better articulate current
System behavior, and aligns to the level of detail currently in BX's
AON rule at BX Options 3, Section 7(a)(7).
Stop and Stop Limit Orders
    The Exchange believes that the proposed changes to the definition
of Stop Orders and Stop Limit Orders in Options 3, Sections 7(d) and
7(e), respectively, are consistent with the Act. The Exchange is
proposing to codify current System behavior by adding that Stop Orders
and Stop Limit Orders will be cancelled if they are immediately
electable upon receipt. As discussed above, the purpose of each of
these order types is to not execute upon entry, and instead rest in the
System until the market reaches a certain price level, at which time
the order could be executed. A Stop Order or Stop Limit Order that is
immediately electable upon receipt would therefore negate the purpose
of this order type, so the Exchange believes it is appropriate to
cancel such orders to ensure that Members are able to use these order
types to achieve their intended purpose. As noted above, the proposed
changes to codify current Stop and Stop Limit Order handling will align
the Exchange's rules with Phlx's Stop and Stop Limit Order rules.\123\
---------------------------------------------------------------------------

    \123\ See supra notes 34 and 36.
---------------------------------------------------------------------------

    The Exchange believes that the proposed changes to specify current
System functionality that Stop and Stop Limit Orders may only be
entered into FIX will make clear that these order types are only
available to be entered

through one of the two order entry protocols offered by the Exchange
(i.e., FIX and OTTO). As such, the proposed changes will promote
transparency in the Exchange's rules and reduce any potential
confusion.
Cancel and Replace Orders
    The Exchange believes that the proposed changes to the rule
governing Cancel and Replace Orders would promote clarity and make the
rules easier to navigate. As discussed above, these are non-substantive
changes to relocate the rule from Supplementary Material .02 to Options
3, Section 7 into the main body of the order types rule at Options 3,
Section 7(f), updating incorrect cross-cites therein, and adding more
granularity around how the Exchange will treat the cancellation and
replacement of Reserve Orders.
Reserve Orders
    The Exchange believes that the proposed changes to the Reserve
Order rule at Options 3, Section 7(g) are consistent with the Act. The
Exchange is proposing to add more granularity around how Members may
elect to refresh the display quantity for the Reserve Order. The
Exchange notes that the new rule text does not have any impact on the
priority rules of the displayed or non-displayed portion of the Reserve
Order. This refresh feature for Reserve Orders is intended to provide
more flexibility and opportunities for Members to add displayed
liquidity to the Exchange, which, in turn, benefits all market
participants through more trading opportunities and enhanced price
discovery. As discussed above, the proposed changes do not amend
current functionality, but rather is intended to promote transparency
around the current operation of Reserve Orders. Further, the Exchange
believes that the non-substantive changes in the Reserve Order rule to
renumber and reformat the paragraphs therein, and make corrective
changes as described above, are consistent with the protection of
investors and the public interest because they will simply make the
Exchange's rules easier to navigate, thereby reducing any potential
confusion. As noted above, other options exchanges like Cboe currently
offer Reserve Orders that have similar refresh features.\124\
---------------------------------------------------------------------------

    \124\ See supra note 39.
---------------------------------------------------------------------------

Attributable Orders
    The Exchange believes that it is consistent with the Act to delete
existing rule text in Options 3, Section 7(h), which currently
indicates that Attributable Orders may be available for specified
classes of securities, and to make a corrective change to ``an Options
Trader Alert.'' Because Attributable Orders are available for all
classes of securities today, the Exchange is deleting this language as
inaccurate. The Exchange believes that the proposed changes will
promote transparency in the Exchange's rules.
Customer Cross Orders
    The Exchange believes that the non-substantive amendment in Options
3, Section 7(i) to add that Customer Cross Orders may trade in
accordance with Options 3, Section 12(a) is consistent with the
protection of investors and the public interest because the proposal
will simply add a cross reference in the Customer Cross Order rule to
Section 12(a), which currently describes in detail how this order type
would execute on the Exchange, thereby adding clarity to how Customer
Cross Orders function today.
Qualified Contingent Cross Orders
    The Exchange believes that the proposed changes to the QCC Order
rule in Options 3, Section 7(j) to add a reference to ``QCC'' and to
provide that QCC Orders will trade in accordance with Options 3,
Section 12(c) are consistent with the Act because the changes are
merely intended to add greater clarity to how QCC Orders function
today. The Exchange further believes that specifying that QCC Orders
may only be entered through FIX will better articulate current System
behavior, and will make clear that QCC Orders are available to be
entered through only one of the two order entry protocols currently
offered by the Exchange (i.e., FIX and OTTO), thereby reducing any
potential confusion.
Preferenced Orders
    The Exchange believes that its proposal to add a definition of
Preferenced Orders in Options 3, Section 7(l) is consistent with the
Act. While Preferenced Orders are currently described in Options 2,
Section 10, the Exchange believes that it would be useful to have order
types centralized within one rule to make the Rulebook easier to
navigate for market participants. As noted above, Phlx similarly lists
out Directed Orders (akin to Preferenced Orders) in its order types
rule at Phlx Options 3, Section 7(b)(11).
Add Liquidity Orders
    The Exchange believes that the proposed changes to the ALO rule in
Options 3, Section 7(n) are consistent with the Act. As discussed
above, the Exchange is enhancing current ALO functionality to reflect
that the Exchange will handle ALOs in a consistent manner with the new
continuous re-pricing mechanism that is being proposed concurrently in
the Re-Pricing Filing as proposed Options 3, Section 5(d) in situations
where the ALO would not lock or cross an order or quote on the System,
but would lock or cross the NBBO.\125\ The Exchange therefore believes
that the proposed changes will make clear how the Exchange will handle
ALOs under the new re-pricing mechanism. The ALO order type was adopted
to provide market participants greater control over the circumstances
in which their orders are executed. As noted above, the purpose of an
ALO is to provide liquidity. For investors and market participants that
elect only to provide liquidity in certain circumstances, such as to
receive a maker fee (or rebate) upon execution of an order, the
Exchange continues to believe that ALOs, as amended under this
proposal, will continue to accommodate this strategy. The proposed
order handling for ALOs is consistent with how ALOs are handled on BX
today.\126\
---------------------------------------------------------------------------

    \125\ See supra note 45.
    \126\ See BX Options 3, Section 7(a)(12).
---------------------------------------------------------------------------

    The Exchange also believes that adding ``or quotes'' in the ALO
rule at Options 3, Section 7(n) is consistent with the Act. Today, if
at the time of entry, an ALO would lock or cross one or more non-
displayed orders or quotes on the Exchange, the ALO will be cancelled
or re-priced in the manner specified within the ALO rule. Adding this
rule text will bring greater clarity around current ALO behavior.
    The Exchange further believes that the proposed addition that ALOs
may only be submitted when an options series is open for trading will
make clear ALOs will not be accepted during the Opening Process as the
order book is not available. The proposed changes codify existing
System behavior, and will therefore promote transparency in the
Exchange's rules.
QCC With Stock Orders
    The Exchange believes that the non-substantive change to correct a
cross-cite in the QCC with Stock Order rule in Options 3, Section 7(t)
will promote clarity in the Exchange's rules.
Opening Sweep
    The Exchange believes that the proposed changes to the Opening
Sweep rule in Options 3, Section 7(u) are consistent with the Act. As
discussed

above, the Exchange is codifying current System behavior and providing
additional context to the rule in a manner that is consistent with
Phlx's Opening Sweep rule in Phlx Options 3, Section 7(b)(6). The
Exchange therefore believes that the proposed changes promote greater
transparency in the Exchange's rules and consistency across the rules
of the Nasdaq affiliated options exchanges. Specifically, because an
Opening Sweep is an IOC order submitted by a Market Maker during the
Opening Process, the Exchange is making clear that Opening Sweeps are
entered though SQF in the proposed rule text. The Exchange also
believes that it is appropriate to specify that Opening Sweeps are not
subject to any risk protections in Options 3, Section 15 (except
Automated Quotation Adjustments) because the Opening Process itself has
boundaries (notably, the Quality Opening Market and the Opening Quote
Range) within which orders will be executed. Finally, the proposed
language relating to Opening Sweep participation in the Opening Process
and cancellation upon the open merely provides additional context in
the order type rule. As noted above, Opening Sweeps are already
described in the opening rule today in Options 3, Section 8, and apply
only during the Opening Process.
Time in Force
    The Exchange believes that the proposed changes to the TIF rules
are consistent with the Act. As discussed above, the Exchange believes
that certain existing functionality currently described as an ``order
type'' in Options 3, Section 7 would be more precisely described as a
TIF attribute that designates the basic parameters of an order type.
Relocating and centralizing the existing TIF rules into proposed
Supplementary Material .02 to Options 3, Section 7 will therefore
clearly delineate these order attributes and make the proposed rules
easier to navigate. Codifying the definition of ``TIF'' in proposed
Supplementary Material .02 will add greater clarity and transparency to
the Exchange's rules in a manner consistent with BX Options 3, Section
7(b).
    The Exchange believes that the adjustments in proposed
Supplementary Material .02(a) to Options 3, Section 7 to add that Day
orders may be entered through FIX or OTTO will add further granularity
and clarity to the Exchange's rules. The proposed changes provide
additional detail about current functionality in a manner that is
consistent with the level of detail in BX's Day order.\127\
---------------------------------------------------------------------------

    \127\ See supra note 51.
---------------------------------------------------------------------------

    The Exchange believes that the adjustments to the relocated GTC and
GTD rules in proposed Supplementary Material .02(b) and (c) will add
further granularity and clarity to how these TIFs operate today. The
Exchange further believes that aligning the level of detail in the GTD
rule to the GTC rule, as described above, is appropriate because these
two TIFs are meant to be functionally similar except the manner in
which they persist in the System.
    The Exchange believes that the proposed changes to the relocated
IOC rule in proposed Supplementary Material .02(d) will promote greater
transparency in the Exchange's rules by providing more granularity to
current IOC functionality. Further, the changes conform the Exchange's
IOC rule to BX's IOC rule, thereby promoting consistency across the
rules of the Nasdaq affiliated options exchanges. Specifically, the
proposed changes to remove the word ``limit'' will make clear that IOC
orders may be sent as either a Market or Limit Order today, identical
to BX IOC orders.\128\ The proposed changes to state that IOC orders
are not eligible for routing, and that IOC orders may be entered
through FIX, OTTO, or SQF, will codify current IOC behavior in a manner
that is consistent with BX's IOC rule.\129\
---------------------------------------------------------------------------

    \128\ See supra note 52.
    \129\ See supra notes 53--54.
---------------------------------------------------------------------------

    As it relates to the proposed changes to memorialize the various
risk protections that are excluded from applying to Market Maker IOC
orders entered through SQF, the Exchange believes this is appropriate
because only Market Makers utilize SQF to enter IOC orders. As
discussed above, Market Makers are professional traders with more
sophisticated infrastructures than other market participants, and are
able to manage their risk through their own risk settings in addition
to the risk protections required by the Exchange. The Exchange will
continue to apply the specified risk protections on IOC orders entered
through FIX and OTTO, which are used by the other market participants.
The proposed changes will harmonize the Exchange's IOC rule with BX's
IOC rule.\130\ Further, the proposal to add substantially similar
exclusionary language into the SQF rule itself at Supplementary
Material .03(c) to Options 3, Section 7 will make clear that these risk
protections will not apply to IOC orders entered through SQF.
---------------------------------------------------------------------------

    \130\ See supra notes 59--60.
---------------------------------------------------------------------------

    Specifying in the proposed IOC rule that orders entered into the
Exchange's various auction and crossing mechanisms are considered to
have a TIF of IOC memorializes current System behavior, and is intended
to bring greater transparency in how these order types are handled
today. As noted above, BX currently has substantially similar language
in its IOC rule for BX PRISM orders in BX Options 3, Section 7(b)(2).
    Lastly, the Exchange believes that the adjustments to the relocated
OPG rule in proposed Supplementary Material .02(e) to Options 3,
Section 7 will add granularity and clarity to how OPG orders operate,
and will conform the OPG rule with the level of detail currently in
BX's OPG rule in BX Options 3, Section 7(b)(1). As discussed above, the
Exchange is proposing to enhance OPG functionality to allow both Market
and Limit OPG orders whereas today, only Limit OPG orders are allowed.
This harmonizes OPG functionality with BX OPG functionality. The other
modifications to replace ``opening rotation'' with ``Opening Process,''
stating OPG orders may not route, and indicating that OPG orders are
not subject to the protections listed in Options 3, Section 15 (except
Size Limitation) all memorialize current OPG behavior, and align to the
current BX OPG rule. As discussed above, the Exchange does not apply
any of the risk protections in Options 3, Section 15 (except Size
Limitation) because the Opening Process itself has boundaries within
which orders will be executed.
Opening Process
    The Exchange believes that the proposed changes to the Opening
Process in Options 3, Section 8 are consistent with the Act. As
discussed above, the Exchange is proposing to remove the current
limitation that only allows Public Customers interest to route during
the opening, and will instead allow all market participant interest to
route. The proposed changes will serve to more closely align the
Exchange's Opening Process with BX's Opening Process. Like BX, the
Exchange believes that it will be beneficial to provide all market
participants with the opportunity to have their interest executed on
away markets during the Opening Process. The Exchange further believes
that the related changes to remove references to ``Public Customer''
throughout Options 3, Section 8, and to update the cross-cite currently
pointing to the Priority Customer priority overlay to the more general
priority rule, will add clarity, transparency, and internal consistency
to Exchange rules regarding

the proposed handling of routable interest during the Opening Process.
    The Exchange believes that its proposal to no longer round in the
direction of the previous trading day's closing price and simply round
up to the MPV, if the mid-point of the highest and lowest of the
Potential Opening Prices is not expressed as a permitted MPV, will
simplify and bring greater transparency to the Opening Process, to the
benefit of investors. Market participants can now have a better sense
of how the Potential Opening Price will be calculated without having to
account for the closing price of each options series. The Exchange
believes this may promote greater efficiency in the marketplace
especially in view of the continued growth in the number of options
today.
    The Exchange further believes that the proposed changes to replace
``are marketable against the ABBO'' with ``cross the ABBO'' will better
articulate how the Exchange currently determines the OQR boundaries in
the scenario specified in Options 3, Section 8(i)(3).
Auction Mechanisms
Facilitation and Solicited Order Mechanisms
    The Exchange believes that its proposal to relocate the rule text
relating to Responses from Supplementary Material .02 to Options 3,
Section 11 into the introductory paragraph of Options 3, Section 11,
and adding that Responses can be modified, is consistent with the Act.
The Exchange is relocating this language into the introductory
paragraph of Options 3, Section 11 after the definition of ``Response''
for better readability. The proposed change to add ``or modified'' to
indicate that Responses may be canceled or modified any time prior to
execution better aligns the rule text to current System behavior. As
noted above, the rules for the complex Facilitation and Solicited Order
Mechanisms in Options 3, Sections 11(c)(7) and (e)(4), respectively,
already provide for this concept.
Price Improvement Mechanism
    The Exchange's proposal to amend Options 3, Section 13(b)(4) to
clarify the current rule text by adding the words ``or modified'' after
``canceled'' is consistent with the Act because the additional text
will make clear that a Crossing Transaction may not be modified unless
the Counter-Side Order is being improved during the exposure period.
    The Exchange's proposal to add clarifying rule text within Options
3, Section 13(b)(5) which states, ``Crossing Transactions submitted at
or before the opening of trading are not eligible to initiate an
Auction and will be rejected'' is consistent with the Act because it
will bring greater clarity to when a Crossing Transaction is currently
eligible to initiate a PIM. The PIM considers both the NBBO and local
book for its entry price validation and therefore requires an opening
for the PIM to begin.
    The Exchange's proposal to amend the current PIM functionality
within Options 3, Section 13(c)(3) to permit Improvement Orders to be
canceled or modified is consistent with the Act. The Exchange proposes
to amend this functionality so that Improvement Orders may be canceled
or modified similar to functionality on BX today within Options 3,
Section 13(ii)(a)(8). Today, during the exposure period, Improvement
Orders may not be canceled and Improvement Orders may be modified to
(i) increase the size at the same price, or (ii) improve the price of
the Improvement Order for any size up to the size of the Agency Order.
The modification and cancellation of an Improvement Order through OTTO
will be similar to the manner in which a Cancel and Replace Order would
be handled outside of the auction process. For Improvement Orders
through SQF, the modification and cancellation of such orders will be
handled by sending new Improvement Orders that overwrite the existing
Improvement Order with updated price/quantity instructions. Improvement
Orders are not visible to other auction participants, including the
Agency Order. The Exchange believes that providing responders with
flexibility to cancel or modify their Improvement Orders may encourage
market participants to respond to more auctions, including PIM.
    The proposal to amend Options 3, Section 13(d)(5) to permit an
auction to automatically terminate upon the occurrence of a trading
halt with execution solely with the Counter-Side Order is consistent
with the Act. This functionality would be similar to rule text within
BX Options 3, Section 13(ii)(C). The Exchange believes that utilizing
the price of the Counter-Side Order to execute the Crossing Transaction
promotes just and equitable principles of trade, and fosters
cooperation and coordination with persons engaged in facilitating
transactions in securities since the Counter-Side Order has guaranteed
that an execution will occur at the same price as the Crossing
Transaction, or better, prior to the trading halt, and Improvement
Orders offer no such guarantee, the Counter-Side Order is the only
valid price at which to execute the Crossing Transactions, and the
Counter-Side Order is the appropriate contra-side.\131\
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    \131\ The Exchange notes that trading on the Exchange in any
option contract will be halted whenever trading in the underlying
security has been paused or halted by the primary listing market.
---------------------------------------------------------------------------

    The Exchange believes that the proposed System change to adopt a
new same side execution price check for PIM in new subsection (d)(6) of
Options 3, Section 13 is consistent with the Act. As discussed above,
this feature would be functionally identical to BX PRISM in BX Options
3, Section 13(ii)(I). Like BX, the proposed price check is designed to
ensure that the Exchange would not trade at prices that would lock or
cross interest on the same side of the market as the Agency Order where
limit orders have rested and obtained priority to execute at that
price. In the event where a limit order arrives on the same side of the
market as the Agency Order and is at the same or better price than the
initiating Crossing Transaction price, the Exchange would execute the
entire PIM transaction at the initiating Crossing Transaction price.
The execution takes place at this price because the PIM is guaranteed
an execution and the PIM agency side instructions would not allow an
execution to take place at a higher (lower) price than submitted for a
buying (selling) agency side PIM order. Considering that the limit
order has arrived either at or better on the same side as the Agency
Order than the agency side price, the initiating Crossing Transaction
price is the only price at which the guaranteed execution can take
place.
    The Exchange's proposal to amend Options 3, Section 13(e)(4)(ii) to
permit Improvement Complex Orders to be canceled or modified is
consistent with the Act. Further, similar to the proposed change for
simple PIM, the Exchange notes that the modification and cancellation
of an Improvement Complex Order will be similar to the manner in which
a Cancel and Replace Order would be handled outside of the auction
process. Improvement Complex Orders are not visible to other auction
participants, including the Agency Complex Order. Further, similar to
the proposed changes for simple PIM, the Exchange believes that
providing responders with flexibility to cancel or modify their
Improvement Complex Orders may encourage market participants to respond
to more auctions, including Complex PIM.
    The Exchange's proposal to amend Options 3, Section 13(e)(4)(iv) at
new

``(D)'' to provide that the exposure period for a Complex PIM will
automatically terminate when a resting Complex Order in the same
complex strategy on either side of the market becomes marketable
against the Complex Order Book or bids and offers for the individual
legs is consistent with the Act. The proposed changes will codify
current System behavior and will provide greater transparency to market
participants for situations in which early termination would occur for
Complex PIMs today. As noted above, Complex Order Exposure currently
early terminates in similar situations, so the proposed language for
Complex PIM closely tracks existing Complex Exposure language in
Supplementary Material .01(b)(ii) to Options 3, Section 14.\132\ The
Exchange believes that it is appropriate to early terminate Complex PIM
under these circumstances for the following reasons. When the resting
Complex Order is on the same side as the Agency Complex Order, interest
that becomes marketable against the resting Complex Order would also be
marketable against the Complex PIM order. Therefore, early terminating
the Complex PIM would allow the Complex PIM order to interact with this
interest given that the Complex PIM order is at a superior price
compared to the resting Complex Order, thus providing an opportunity
for price improvement for the Agency Complex Order. Additionally, when
the resting Complex Order is on the opposite side of the Agency Complex
Order, interest that arrives marketable against the resting Complex
Order is now at a superior price to the Agency Complex Order. The
Exchange would therefore early terminate in this scenario and execute
the Complex PIM order with its contra side order because it is no
longer at top of book.
---------------------------------------------------------------------------

    \132\ Supplementary Material .01(b)(ii) of MRX Options 3,
Section 14 provides: ``The exposure period for a Complex Order will
end immediately: (A) upon the receipt of a Complex Order for the
same complex strategy on either side of the market that is
marketable against the Complex Order Book or bids and offers for the
individual legs; (B) upon the receipt of a non-marketable Complex
Order for the same complex strategy on the same side of the market
that would cause the price of the exposed Complex Order to be
outside of the best bid or offer for the same complex strategy on
the Complex Order Book; or (C) when a resting Complex Order for the
same complex strategy on either side of the market becomes
marketable against interest on the Complex Order book or bids and
offers for same individual legs of the complex strategy.''
---------------------------------------------------------------------------

    The Exchange's proposal to relocate the last sentence of Options 3,
Section 13(e)(3) into Options 3, Section 13(e)(4)(iv) at new ``(E)'' is
consistent with the Act. This non-substantive amendment will relocate
the rule text to a more logical place within the Complex PIM rule.
    The Exchange believes that its proposal to codify existing Complex
PIM behavior in Options 3, Section 13(e)(5) to articulate that the
complex mid-way price will be rounded to the $0.01 increment that
favors the Agency Complex Order will promote clarity and transparency
in the Exchange's rules by better aligning the rule text with the
current operation of the System. As noted above, the simple PIM rule
already articulates that the mid-way price will be rounded to the $0.01
increment that favors the Agency Order in Options 3, Section 13(d)(4).
The rounding for Complex PIM currently operates the same way as simple
PIM in this respect, so the proposed Complex PIM language closely
tracks the simple PIM language.
    Finally, the proposal to amend Supplementary Material .02 to
Options 3, Section 15 to add a sentence which provides, ``It will be
considered a violation of this Rule and will be deemed conduct
inconsistent with just and equitable principles of trade and a
violation of Options 9, Section 1 if an Electronic Access Member
submits a PIM Order (initiating an auction) and also submits its own
Improvement Order in the same auction,'' is consistent with the Act. BX
has a similar prohibition within Options 3, Section 13(iii). The
proposed new rule is designed to prevent fraudulent and manipulative
acts and practices, to promote just and equitable principles of trade,
by providing guidance to Members where certain behavior within a PIM
will not be considered a bona fide transaction.
Order Price Protection
    The Exchange believes that its proposal to replace its current
Limit Order Price Protection with a similar ``fat finger'' check called
Order Price Protection in Options 3, Section 15(a)(1)(A) is consistent
with the Act. The proposed OPP would similarly prevent the execution of
limit orders at prices outside pre-set numerical or percentage
parameters, and is designed to prevent limit orders entered at clearly
unintended prices from executing in the System to the detriment of
market participants. The proposed risk protection is also functionally
similar to BX's OPP in BX Options 3, Section 15(a)(1), and therefore is
not novel.\133\ Similar to BX, the Exchange believes that the proposed
fixed dollar amount and percentage parameters will protect against
erroneous executions, while also allowing orders to execute within a
reasonable range.
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    \133\ As noted above, the Exchange is proposing to adopt an OPP
rule that more accurately describes the proposed functionality than
BX's current OPP rule, so BX will align its current OPP rule to the
Exchange's proposed rule text in a separate rule filing.
---------------------------------------------------------------------------

    The Exchange believes that using the Reference BBO (i.e., better of
the NBBO or the internal market BBO) to calculate the proposed OPP,
identical to current BX OPP functionality, will similarly protect
investors and the public interest where the internal market BBO is
better than the NBBO.
    The Exchange further believes that its proposal to add language
allowing Exchange discretion to temporarily deactivate OPP on an intra-
day basis is consistent with the Act. BX has identical language today
in BX Options 3, Section 15(a)(1)(A)(i), and similar to BX, the
Exchange believes that having this discretion will be useful if the
Exchange determined that unusual market conditions warranted
deactivation in the interest of a fair and orderly market. Like BX, the
Exchange believes that it will be useful to have the flexibility to
temporarily disable OPP intra-day in response to an unusual market
event (e.g., if dissemination of data was delayed and resulted in
unreliable underlying values needed for the Reference BBO) to maintain
a fair and orderly market. This will promote just and equitable
principles of trade and ultimately protect investors.
Post-Only Quoting Protection
    The Exchange's proposal to adopt a new Post-Only Quote
Configuration in Options 3, Section 15(a)(3)(C) to permit Market Makers
to prevent their quotes from removing liquidity from the Exchange's
order book promotes equitable principles of trade and protects
investors and the public interest by enhancing the risk protections
available to Market Makers. This optional risk protection would enable
Market Maker to better manage their risk when quoting on the Exchange.
As noted above, BX offers identical functionality today in BX Options
3, Section 15(c)(3).
    The proposed risk protection allows Market Makers the ability to
avoid removing liquidity from the Exchange's order book if their quote
would otherwise lock or cross any resting order or quote on the
Exchange's order book upon entry, thereby protecting investors and the
general public as Market Makers transact a large number of orders on
the Exchange and bring liquidity to the marketplace. Market Makers
would utilize the proposed risk protection to avoid unintentionally
taking liquidity

with resting interest \134\ on the order book. As a result of taking
liquidity, Market Makers would incur a taker fee that may impact the
Market Maker's ability to provide liquidity and meet quoting
obligations. Market Makers are required to add liquidity on the
Exchange and, in turn, are rewarded with lower pricing \135\ and
enhanced allocations.\136\ Specifically, the risk protection would
permit Market Makers to add liquidity only and avoid removing resting
interest on the order book, which will lead to enhanced liquidity on
the Exchange and in turn will benefit and protect investors and the
public interest through the potential for greater volumes of orders and
executions on the Exchange.
---------------------------------------------------------------------------

    \134\ As noted above, this would include any re-priced orders as
described in the Re-Pricing Filing as proposed Options 3, Section
5(d), ALOs as described in proposed Options 3, Section 7(n), and any
re-priced quotes as described in Options 3, Section 4(b)(6). As
discussed above, ALOs may re-price.
    \135\ See Options 7, Section 3.
    \136\ See Options 3, Section 10.
---------------------------------------------------------------------------

    The Exchange does not believe that introducing this Post-Only Quote
Configuration will unfairly discriminate among market participants.
Today, all Members may utilize the existing Add Liquidity Order type to
prevent orders from removing liquidity from the Exchange's order book
upon entry. The Post-Only Quote Configuration is available to Market
Makers only as a risk protection. Unlike other market participants,
Market Makers have certain obligations on the market, such as
requirements to provide continuous two-sided quotes on a daily basis
\137\ and are subject to various obligations associated with providing
liquidity on the market.\138\ Market Makers are liquidity providers on
the Exchange and, therefore, are offered certain quote risk protections
noted to allow them to manage their risk more effectively.\139\ The
proposed Post-Only Quote Configuration is another risk protection
afforded to Market Makers to assist them in managing their risk while
continuing to comply with their obligations. The Exchange notes that
enhancing the ability of Market Makers to add liquidity and avoid
taking liquidity from the order book promotes just and equitable
principles of trade on the Exchange and protects investors and the
public interest, thereby enhancing market structure by allowing Market
Makers to add liquidity only. Greater liquidity benefits all market
participants by providing more trading opportunities and attracting
greater participation by Market Makers. Also, an increase in the
activity of Market Makers in turn facilitates tighter spreads.
---------------------------------------------------------------------------

    \137\ See Options 2, Section 5(e).
    \138\ See Options 2, Section 4.
    \139\ Options 3, Section 15(a)(3) currently sets forth the Anti-
Internalization and Quotation Adjustments Protections that are
available today to Market Makers.
---------------------------------------------------------------------------

Kill Switch
    The Exchange does not believe that the proposed decommission of the
GUI Kill Switch for order cancellation will affect the protection of
investors or the public interest or the maintenance of a fair and
orderly market because no Members have used the GUI Kill Switch risk
protection in 2022.\140\ The Exchange does not charge any fees for the
GUI Kill Switch. In addition, the Exchange notes that the use of this
tool is completely optional, and the Exchange will continue to offer
substantially similar Kill Switch functionality through FIX and OTTO.
As set forth in the Kill Switch rule, the GUI Kill Switch allows for
the cancellation and restriction of orders for the requested
Identifier(s) on a user or group level, whereas the port Kill Switch
allows for cancellation and restriction of orders for the requested
Identifier(s) on a user level.\141\ While the GUI Kill Switch had more
optionality around how Members may combine the Kill Switch request by
Identifier(s), no Members have used the GUI Kill Switch risk protection
this year. Furthermore, Members will retain the ability to contact
market operations staff to manually purge their orders from the market.
In addition, the Exchange will continue to implement System-enforced
risk mechanisms that automatically remove orders for the Member once
certain pre-set thresholds or conditions are met (i.e., market wide
risk protection and cancel on disconnect).
---------------------------------------------------------------------------

    \140\ As noted above, the Exchange has provided notice of the
decommission to all Members via Options Trader Alert. See Options
Trader Alert #2022-30.
    \141\ See Options 3, Section 17(a)(1) and (2).
---------------------------------------------------------------------------

    Also, the Exchange believes that the low usage rate for the GUI
Kill Switch does not warrant the continuous resources necessary for
System support of such tools. As a result, the Exchange believes that
the proposal will remove impediments to and perfect the mechanism of a
free and open market and a national market system by allowing the
Exchange to reallocate System capacity and resources currently used to
maintain this functionality to the development and maintenance of other
business initiatives and risk management products.
    As noted above, the Exchange previously amended its rules to
decommission the quote removal Kill Switch that was available to Market
Makers through the GUI.\142\ Similar to the GUI Kill Switch for quote
removal, the Exchange has found that no Members use the GUI Kill Switch
to cancel their orders, but rather, utilize other means to purge their
existing orders from the System. The Exchange therefore believes that
eliminating the GUI Kill Switch all together (including for orders as
proposed herein) will streamline the Exchange's risk protection
offerings in a manner that reflects Member use.
---------------------------------------------------------------------------

    \142\ See supra note 99.
---------------------------------------------------------------------------

Data Feeds and Trade Information
    The Exchange believes that the proposed changes to the current data
feed offerings in Options 3, Section 23(a) are consistent with the Act.
Specifically, the Exchange believes that the proposed changes to its
Depth of Market Feed to provide full depth-of-market information will
serve to more closely align the information provided on the Exchange's
Depth of Market Feed with that of BX's Depth of Market Feed in BX
Options 3, Section 23(a)(1), thereby ensuring a more consistent
technology offering across the Nasdaq affiliated options exchanges. The
Exchange also believes that the modified Depth of Market Feed will help
to protect a free and open market by providing additional data to the
marketplace. The Exchange further believes that the proposed changes to
add more specificity around what would be provided in the opening/
reopening order imbalance information, and to correct an erroneous
reference to ``ISE'' in the Depth of Market Feed rule will promote
transparency and clarity in the Exchange's rules.
    The Exchange believes that the proposed changes to the Order Feed
around what type of information would be available on this data feed
offering, as further described above, will promote clarity and
transparency in the Exchange's rules. Furthermore, the proposed data
elements in the Order Feed are based on data elements that currently
exist on other markets. For instance, the specificity around what would
be provided in the opening/reopening order imbalance information, as
well as the auction and exposure notifications are identical to the
content within BX's Depth of Market Feed in BX Options 3, Section
23(a)(1). As noted above, the Attributable Order content is similar to
the data elements on Cboe's current multicast PITCH feed.\143\
---------------------------------------------------------------------------

    \143\ See supra note 103.
---------------------------------------------------------------------------

    The Exchange believes that the proposed changes to the existing Top

Quote Feed to rebrand into the Top Feed, to no longer provide
information for opening price, daily trading volume, and high and low
prices for the day, will serve to further align the Exchange's Top Feed
with BX's Top Feed in BX Options 3, Section 23(a)(2), thereby ensuring
a more consistent technology offering across the Nasdaq affiliated
options exchanges.
    The proposed changes to the Trades Feed to no longer provide
information for opening price, daily trading volume, and high and low
prices for the day are intended to align to the proposed changes to the
Top Feed described above. The Exchange believes that removing this
language will promote clarity and transparency in the Exchange's rules.
    The proposed changes to the Spread Feed to provide full depth-of-
book information rather than at the first five price levels are
intended to align to the proposed changes to the Depth of Market Feed
described above. The proposed full depth language will also be
substantially similar to the full depth language in BX's Depth of
Market Feed in BX Options 3, Section 23(a)(1) and in the Exchange's
proposed Depth of Market Feed in proposed Options 3, Section 23(a)(1),
except the proposed language herein will be tailored to complex
functionality. Furthermore, the proposed Attributable Complex Order
content is similar to the content currently on Cboe's Complex Multicast
PITCH feed.\144\ The Exchange believes that the modified Spread Feed
will help to protect a free and open market by providing additional
data to the marketplace. The Exchange also believes that the proposed
changes to reorganize and incorporate existing concepts in the Spread
Feed rule a manner that is more consistent with the other amended data
feed rules in Options 3, Section 23(a) will make the rules easier to
navigate for market participants.
---------------------------------------------------------------------------

    \144\ See supra note 108.
---------------------------------------------------------------------------

    The Exchange believes that it is consistent with the Act to no
longer offer TradeInfo when the Exchange migrates over the enhanced
Nasdaq functionality, as there is a lack of demand from Members.\145\
The Exchange does not assess a fee for TradeInfo. As noted above,
Members use FIX, FIX DROP, and CTI to obtain order information
currently available in TradeInfo, and to cancel orders through FIX. The
Exchange further believes that the proposed decommission of TradeInfo
will remove impediments to and perfect the mechanism of a free and open
market and a national market system by allowing the Exchange to
reallocate System capacity and resources currently used to maintain
this functionality to the development and maintenance of other business
initiatives and risk management products.
---------------------------------------------------------------------------

    \145\ As noted above, the Exchange provided notice of the
decommission to all Members through an Options Trader Alert. See
Options Trader Alert #2022-29.
---------------------------------------------------------------------------

    The Exchange's proposal to eliminate TradeInfo pricing from Options
7, Section 6(ii)(3) in its entirety is reasonable, equitable, and not
unfairly discriminatory because TradeInfo would no longer be available
to any Member. It is reasonable to remove all references to TradeInfo
pricing from the Exchange's Pricing Schedule as the Exchange is
removing this functionality from its Rulebook. As discussed above, the
Exchange does not assess a fee for TradeInfo today. Additionally, it is
equitable and not unfairly discriminatory to remove the references to
TradeInfo pricing from the Pricing Schedule because no Member would be
able to utilize this functionality once it is removed from the System.
Optional Risk Protections
    The Exchange believes that introducing the optional quantity and
notional value risk protections as described above will protect
investors and the public interest, and maintain fair and orderly
markets, by providing market participants with another tool to manage
their order risk. As noted above, BX offers functionally identical
optional risk protections in BX Options 3, Section 28.\146\ In
addition, providing Members with more tools for managing risk will
facilitate transactions in securities because Members will have more
confidence that risk protections are in place. As a result, the new
functionality has the potential to promote just and equitable
principles of trade.
---------------------------------------------------------------------------

    \146\ As noted above, while the proposed rule text in Options 3,
Section 28 adds more granularity, including around how orders are
rejected when the value thresholds for the options risk protections
are exceeded, the Exchange understands that the BX optional risk
protections operate in the same manner.
---------------------------------------------------------------------------

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. The Exchange operates in a
competitive market and regularly competes with other options exchanges
for order flow. As discussed above, the Exchange is re-platforming its
System in connection with the technology migration to enhanced Nasdaq
functionality, which the Exchange believes would promote competition
among options exchanges by potentially attracting additional order flow
to the Exchange with the enhanced trading platform.
    As it relates to the elimination of fees for flash functionality
and TradeInfo from Options 7, the Exchange believes that its proposal
does not impose an undue burden on competition because the flash
functionality and TradeInfo would no longer be available to any
Members.
    The basis for the majority of the proposed rule changes are the
rules of the Nasdaq affiliated options exchanges, which have been
previously filed with the Commission as consistent with the Act. As it
relates to bulk messaging for quotes as proposed in Options 3, Section
4(b)(3), the Exchange notes that Cboe similarly allows for bulk
messaging in Cboe Rule 1.1, except Cboe also allows bulk messaging for
orders, unlike the Exchange. As it relates to the proposal in Options
3, Section 7(g)(4) to codify the refresh features into the Exchange's
Reserve Order rule, the Exchange notes that Cboe's Reserve Order
functionality has similar refresh features in Cboe Rule 5.6(c). As it
relates to the proposal in Options 3, Section 23(a) to add Attributable
Order and Attributable Complex Order content in the Order Feed and
Spread Feed, respectively, Cboe currently has similar data elements
available on its Multicast PITCH feed and Complex Multicast PITCH
feed.\147\
---------------------------------------------------------------------------

    \147\ See supra notes 103 and 108.
---------------------------------------------------------------------------

    The proposed rule changes are based on the following rules of the
Nasdaq affiliated exchanges:
     The Market Order proposal in Options 3, Section 7(a) will
be materially identical to BX's Market Orders in BX Options 3, Section
7(a)(5).
     The ISO proposal in Options 3, Section 7(b)(5) will be
substantially similar to BX's ISO in BX Option 3, Section 7(a)(6).
Unlike BX, the Exchange's ISO proposal will not refer to how ISOs may
be entered on the Exchange as the Exchange intends address that in a
separate rule filing.
     The Exchange's AON proposal will be substantially similar
to BX's Contingency Order rule in BX Options 3, Section 7(a)(4)(A)
(except BX's rule also describes Minimum Quantity Orders, which the
Exchange does not offer today) and BX's AON rule in BX Options 3,
Section 7(a)(7).

     The Stop Order proposal in Options 3, Section 7(d) will be
substantially similar to Phlx Options 3, Section 7(b)(4), except Phlx
does not currently explicitly state that Phlx Stop Orders may only be
entered through FIX because Phlx only offers one order entry protocol
(FIX), unlike the Exchange, which offers two (FIX and OTTO).
     The Stop Limit Order proposal in Options 3, Section 7(e)
will be substantially similar to Phlx Options 3, Section 7(b)(4)(A),
except Phlx does not currently explicitly state that Phlx Stop Limit
Orders may only be entered through FIX for the same reasons stated for
Stop Orders above.
     The Preferenced Order proposal in Options 3, Section 7(l)
will be materially identical to Phlx's Directed Order rule in Phlx
Options 3, Section 7(b)(11).
     The ALO proposal in Options 3, Section 7(n) will be
materially identical to BX ALOs in BX Options 3, Section 7(a)(12).
     The Opening Sweep proposal in Options 3, Section 7(u) will
be materially identical to the Phlx Opening Sweep in Phlx Options 3,
Section 7(b)(6).
     The Day order proposal in Supplementary Material .02(a) to
Options 3, Section 7 will be substantially similar to BX Options 3,
Section 7(b)(3), except BX's rule does not refer to OTTO because BX
does not offer OTTO functionality today.
     The IOC proposal in Supplementary Material .02(d) to
Options 3, Section 7 will be substantially similar to BX's IOC in BX
Options 3, Section 7(b)(2), except the BX rule does not refer to OTTO
or Complex Order Price Protection as BX does not offer these features
today.
     The OPG proposal in Supplementary Material .02(e) to
Options 3, Section 7 will be materially identical to BX's OPG in BX
Options 3, Section 7(b)(1).
     The Opening Process proposal in Options 3, Section 8 to
allow all market participant interest to route will be identical to
BX's Opening Process in BX Options 3, Section 8.
     The following proposed changes to PIM are based on BX
PRISM: (1) proposed Options 3, Section 13(b)(5) will be materially
identical to BX Options 3, Section 13(i)(E); (2) proposed Options 3,
Section 13(c)(3) will be materially identical to BX Options 3, Section
13(ii)(A)(8); (3) proposed Options 3, Section 13(d)(5) will be
functionally similar to BX Options 3, Section 13(ii)(C); (4) proposed
Options 3, Section 13(d)(6) will be functionally similar to BX Options
3, Section 13(ii)(I); (5) proposed Options 3, Section 13(e)(4)(ii) will
be functionally similar to BX Options 3, Section 13(ii)(A)(8) with
respect to the ability to cancel or modify PIM responses (Improvement
Orders); and (6) proposed Supplementary Material .02 to Options 3,
Section 13 will be materially identical to BX Options 3, Section
13(iii).
     The proposed OPP risk protection in Options 3, Section
15(a)(1)(A) will be functionally similar to BX OPP in BX Options 3,
Section 15(a)(1).\148\
---------------------------------------------------------------------------

    \148\ As noted above, BX will file a separate rule change to
conform its OPP rule to the Exchange's proposed rule.
---------------------------------------------------------------------------

     The proposed Post-Only Quote Configuration in Options 3,
Section 15(a)(3)(C) will be functionally identical to the BX Post-Only
Quote Configuration in BX Options 3, Section 15(c)(3).
     The Depth of Market Feed proposal in Option 3, Section
23(a)(1) will be substantially similar to the BX Depth of Market Feed
in BX Options 3, Section 23(a)(1), except the Exchange will not offer
auction and exposure notifications on its Depth of Market Feed like BX
does today.
     The Order Feed proposal in Options 3, Section 23(a)(2)
will contain data elements that are identical to those on BX's Depth of
Market Feed in BX Options 3, Section 23(a)(1), specifically around what
would be provided in the opening/reopening order imbalance information
(i.e., the size of matched contracts and size of the imbalance), and
auction and exposure notifications.
     The Top Feed proposal in Options 3, Section 23(a)(3) will
be substantially similar to the BX Top Feed in BX Options 3, Section
23(a)(2), except the Exchange will continue to provide aggregated size
information unlike BX.
     The Spread Feed proposal in Options 3, Section 23(a)(5)
will contain full depth language that is substantially similar to BX's
Depth of Market Feed in BX Options 3, Section 23(a)(1), except the
proposed language in the Spread Feed will be tailored to complex
functionality.
     The proposed optional quantity and notional value risk
protections in Options 3, Section 28 will be functionally identical to
the protections in BX Options 3, Section 28.\149\
---------------------------------------------------------------------------

    \149\ As noted above, while the proposed rule text in Options 3,
Section 28 adds more granularity, including around how orders are
rejected when the value thresholds for the options risk protections
are exceeded, the Exchange understands that the BX optional risk
protections operate in the same manner.
---------------------------------------------------------------------------

    The Exchange reiterates that the proposed rule change is being
proposed in the context of the technology migration to enhanced Nasdaq
functionality. The Exchange further believes the proposed rule change
will benefit Members by providing a more consistent technology
offering, as well as consistent rules, for market participants on the
Nasdaq affiliated options exchanges. In addition, the proposed rule
change relates to adding clarity and consistency in the Exchange's
Rulebook, and are designed to reduce any potential investor confusion
as to the features and applicability of certain functionality presently
available on the Exchange.
    The Exchange does not believe that the proposed rule change will
impose any burden on intra-market competition that is not necessary or
appropriate in furtherance of the purposes of the Act, as the majority
of the proposed changes will apply to all Members. As it relates to the
proposed rule change relating to bulk message functionality, while the
Exchange currently offers this functionality to Market Makers only,
bulk messaging is intended to provide Market Makers with an additional
tool to meet their various quoting obligations in a manner they deem
appropriate. As such, the Exchange believes that this functionality may
facilitate Market Makers' provision of liquidity, thereby benefiting
all market participants through additional execution opportunities at
potentially improved prices. Furthermore, while the Exchange will offer
the proposed Post-Only Quote Configuration to Market Makers only, the
proposed risk protection will enhance the ability of Market Makers to
add liquidity and avoid removing liquidity from the Exchange's order
book in the manner described above. Greater liquidity benefits all
market participants by providing more trading opportunities and
attracting greater participation by Market Makers. The Exchange also
does not believe that the proposed decommission of the GUI Kill Switch
for order cancellation will impose any burden on intra-market
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. As discussed above, the Exchange previously
amended its rules to decommission the quote removal Kill Switch that
was available to Market Makers through the GUI.\150\ The Exchange
therefore believes that eliminating the GUI Kill Switch for order
cancellation will streamline the Exchange's risk protection offerings
in a manner that reflects Member use. The Exchange will continue to
offer substantially similar Kill Switch functionality through FIX and
OTTO.
---------------------------------------------------------------------------

    \150\ See supra note 99.

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

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

    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 \151\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\152\
---------------------------------------------------------------------------

    \151\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \152\ 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.
---------------------------------------------------------------------------

    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. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-MRX-2022-18 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-MRX-2022-18. 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-MRX-2022-18 and should be submitted on
or before November 1, 2022.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\153\
---------------------------------------------------------------------------

    \153\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-21984 Filed 10-7-22; 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: Mr. James Tompkins,<PHONE_NUMBER>>

<Cutting Edge Formulations, Inc.>

<7F7225>

<	EPA has received a pesticide petition (7F7225) from Cutting Edge
Formulations, Inc., 5106 Bristol Industrial Way, Suite 400, Buford,
Georgia. 30518 proposing, 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.>

<>

<	1.  to establish an exemption from the requirement of a tolerance for
>

<	d-Limonene in or on tree, vine and berry crops, vegetable crops,
alfalfa, rice, cotton, herbs and spices.  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.>

<	2. Analytical method. This petition is to establish an exemption from
the requirement of a tolerance.  Therefore, practical methods for
detecting and measuring residues are not applicable. >

<	3. Magnitude of residues. This petition is to establish an exemption
from the requirement of a tolerance.  Therefore, analysis of the
magnitude of residues is not applicable. >

<B. Toxicological Profile>

<	1. Acute toxicity.  The acute toxicity of d-limonene in rodents is
fairly low after oral, intraperitoneal, subcutaneous, and intravenous
administration. >The oral LD50 of d-limonene in mice is 5600 mg/kg
(male) and 6600 mg/kg (female.)  In rats, the oral LD50 in rats is 4400
mg/kg (male) and 5100 mg/kg (female).  The dermal LD50 is >5000 mg/kg.
Irritation to rabbit eyes have been observed.  Dermal irritation studies
have been conducted on guinea pigs, rabbits and rat with low or moderate
irritation observed.  D-Limonene did not cause dermal sensitization.  No
studies on the acute inhalation of d-limonene in animals have been
identified (an inhalation study on humans has been reported.)  An
intraperitoneal study on rats resulted in an LD50 of 3600 mg/kg (males)
and 4500 mg/kg (females).  Subcutaneous intravenous studies in mice
resulted in LD50s of >41.5 g/kg (single application) and >21.5 g/kg (7
days).

<	2. Genotoxicty. On the basis of available data, there is no evidence
that >d-limonene or its metabolites are genotoxic or mutagenic.
Limonene and its epoxides were not mutagenic when tested at
concentrations of 0.3-3333 µg/plate in in vitro assays using different
strains of Salmonella typhimurium, in the presence or absence of
metabolic activation (Florin et al., 1980; Watabe et al., 1981; Haworth
et al., 1983; Connor et al., 1985; NTP, 1990).   d-Limonene did not
increase the frequency of forward mutation at the TK+/- locus in mouse
L5178Y cells (NTP, 1990), induce cytogenetic damage in Chinese hamster
ovary cells (Anderson et al., 1990), or malignantly transform Syrian
hamster embryo cells (Pienta, 1980).  In one in vitro study, following
exposure with benzo(a)pyrene, d-limonene (21.9 µmol/litre) inhibited
the formation of transformed cell colonies in tracheal epithelium
isolated from rats (Steele et al., 1990).  No evidence of mutagenicity
was reported in an in vivo spot test with mice, involving the
intraperitoneal injection of limonene at 215 mg/kg body weight per day
on days 9-11 during gestation (Fahrig, 1984).

<	3. Reproductive and developmental toxicity. Various study data in the
rat, mouse and rabbit, indicate that there is no evidence that limonene
has teratogenic or embryotoxic effects in the absence of maternal
effects. In addition, a rat developmental toxicity study was reviewed in
the RED (1994), and based on the data presented, it is concluded that
d-limonene is not a developmental toxicant.  The NOAEL was determined to
be 250 mg/kg/day for both maternal and developmental toxicity. There
were small decrements in maternal body weight gain at 500 mg/kg/day, and
there were slight, but statistically significant and dose-dependent
increases in the number of litters and fetuses with 14 ribs, instead of
13 ribs, at 500 mg/kg/day. The RED considered these effects to be
variations in skeletal formation, not accompanied by other effects, and
were secondary to the maternal toxicity, so the RED concluded these
effects do not represent a concern for the developmental toxicity of
limonene.>

<	4. Subchronic toxicity. Several subchronic feeding studies have been
conducted on mice and rats with d-limonene the results of which are
detailed in the EPA TRED.  A 16-day oral gavage with mice resulted in
deaths at 3300 and 6600 mg/kg bw/d, but no compound-related clinical
signs were observed in mice in 1650 mg/kg-bw dose group that lived to
the end of dosing, plus no compound related histological effects. The
NOAEL was 1650 mg/kg-bw/d and the LOAEL 3300 mg/kg-bw/d (NTP, 1990).  A
13-week oral gavage study with mice reduced body weights and death, plus
rough hair coats and decreased activity.  The NOAEL was 500 mg/kg-bw/d
and the LOAEL, 1000 mg/kg-bw/d (NTP, 1990).  A 16-day feeding study with
rats observed deaths at 3300 and 6600 mg/kg-bw/d, but no clinical signs
in 1650 mg/kg-bw dose group or lower, and no compound-related
histopathological effects seen in any rats.  The NOAEL was 1650
mg/kg-bw/d and the LOAEL 3300 mg/kg-bw/d (NTP, 1990).  A 26-day oral
gavage study was completed with rats (males only).  At the lowest dose
tested, effects were observed on kidneys of male rats.  In addition,
increased relative kidney and liver weights, measured in 300 mg/kg-bw/d
dosed group, but not in 150 mg/kg-bw/d group.  In light microscopy,
kidneys showed dose-related hyaline droplet formation, as well as
granular casts in outer zone of medulla and chronic nephrosis, but no
evident alterations observed in liver sections, even at highest dose
tested. The observed NOAEL was 150 mg/kg-bw/d (liver); the LOAEL was 75
mg/kg-bw/d (kidney) and 300 mg/kg-bw/d (liver) (Kanerva et al., 1987).
A 30-day oral gavage was conducted with male rats at 400 mg/kg-bw/d.  At
only dose tested, 20-30% increase in amount and activity of different
liver enzymes, increase in relative liver weight, and decrease in
cholesterol levels; no histopathological examinations conducted. The
LOAEL was 400 mg/kg-bw/d (males only) (Ariyoshi et al., 1975).  A
13-week oral gavage study was completed on males rats.  The NOAEL was 5
mg/kg-bw/d (kidney) and 30 mg/kg-bw/d (liver); the LOAEL was 30
mg/kg-bw/d (kidney) and 75 mg/kg-bw/d (liver).  For kidneys,
“incidence and severity of these lesions increased slightly at 10 mg
d-limonene/kg body weight although ... a clear 91-day lowest-observable
effect (LOEL) was produced at 30 mg d-limonene/kg body weight (P <
0.01)”. For liver, no differences in absolute liver weights, and
increase in relative liver weights statistically significant only at 75
mg/kg-bw/d, but no histopathological effects observed (Webb et al.,
1989).  A 13-week oral gavage study was completed on rats.  The NOAEL
was undetermined in male, and 600 mg/kg-bw/d in female.  The LOAEL was
150 mg/kg-bw/d in male, 1200 mg/kg-bw/d in female. In males, kidneys
showed nephropathy at all doses, with severity dose related. In females,
at 1200 mg/kg-bw, rough hair coats, lethargy, and excessive lacrimation
(NTP, 1990).

>

<	5. Chronic toxicity. Two chronic feeding studies were conducted, one
with mice and the other rats.  The 103-week oral gavage study with mice
used dose rates of 0, 250, and 500 mg/kg-bw/d for males, and 0, 500, and
1000 mg/kg-bw/d for females. The NOAEL was 250 mg/kg-bw/d (male) and 500
mg/kg-bw/d (female).  The LOAEL was 500 mg/kg-bw/d (male) and 1000
mg/kg-bw/d (female).  In males dosed at 500 mg/kg-bw/d, livers exhibited
presence of cells with abnormal numbers of nuclei and cytomegaly. In
females, decreased survival and lower body weights (5 - 15%) in highest
dose tested, 1000 mg/kg-bw, but no treatment related clinical signs at
any dose tested (NTP, 1990).

A chronic oral gavage study was also conducted with rats.  Males were
administered 0, 75, and 150 mg/kg-bw/d; females: 0, 300, 600 mg/kg-bw/d.
   The NOAEL was undetermined for the male kidney, 150 mg/kg-bw/d (male;
other than kidney, no adverse effects at highest dose tested), and 300
mg/kg/bw/d in female.  The LOAEL was 75 mg/kg-bw/d (male: kidney),
undetermined (male; other than kidney with no other adverse effects at
highest dose tested), and 600 mg/kg-bw/d in female.  In males, effects
in kidneys included dose-related increases in incidences of
mineralization and epithelial hyperplasia, even at lowest dose tested;
however, no other significant adverse effects were observed by NTP in
males dosed at 150 mg/kg-bw/d, other than on kidneys. In females, at 600
mg/kg-bw/d, reduced survival, but no adverse effects in low dose group,
300 mg/kg-bw/day (NTP, 1990)>

<	6. Animal metabolism. >

<	7. Metabolite toxicology. The biotransformation of d-limonene has been
studied in many species, with several possible pathways of metabolism.
Metabolic differences between species have been observed with respect to
the metabolites present in both plasma and urine.  About 25-30% of an
oral dose of  d-limonene in humans was found in urine as
d-limonene-8,9-diol and its glucuronide; about 7-11% was eliminated as
perillic acid (4-(1-methylethenyl)-1-cyclohexene-1-carboxylic acid) and
its metabolites (Smith et al., 1969; Kodama et al., 1976).
d-Limonene-8,9-diol is probably formed via  d-limonene-8,9-epoxide
(Kodama et al., 1976; Watabe et al., 1981).  In another study, perillic
acid was reported to be the principal metabolite in plasma in both rats
and humans (Crowell et al., 1992).  Other reported pathways of limonene
metabolism involve ring hydroxylation and oxidation of the methyl group
(Kodama et al., 1976).

Falk-Filipsson et al. (1993) reported on a study to assess the
toxicokinetics of d-limonene in human volunteers, exposed by inhalation
for 2 hours each, in an exposure chamber. The exposures were at
concentrations of approximately 10, 225, or 450 mg/m3 d-limonene. The
relative pulmonary uptake of the d-limonene was high, about 70% of the
amount supplied. The blood clearance (1.1 L/kg/hr) indicates that the
d-limonene is readily metabolized, although a long half-timer in the
blood was observed during the slow elimination phase, suggesting some
accumulation in adipose tissues. After the end of the exposure, about 1%
of the total d-limonene uptake was eliminated unchanged in the expired
air, while 0.003% was eliminated in the urine.  It was observed that
there was a decrease in the vital capacity after exposure, in those
exposed at the highest dose, but that none of the subjects experienced
any irritative symptoms or any symptoms related to the central nervous
system. >

<	8. Endocrine disruption. >

<C. Aggregate Exposure>

<	1. Dietary exposure. d-Limonene occurs naturally in citrus and certain
fruits, vegetables, meats and spices. And, d-limonene is classified by
the US FDA as a GRAS food additive. It is present in baked goods, ice
cream products, gelatins, puddings, mouthwash and chewing gum at levels
ranging from 68 to 2300 ppm from the direct food additive use.

Given the physical/chemical properties of d-limonene, it is unlikely
that d-limonene will occur in drinking water sources.

As an inert ingredient, d-limonene can presently be applied to all
agricultural crops.  In the TRED, the Agency’s screening level dietary
assessment was performed based on a use pattern that considered uses on
all crops and thus the calculations in the TRED are appropriate for the
proposed exemption from tolerance when d-limonene is used as an active
ingredient on raw agricultural commodities.

Based on the vapor pressure of 2 mm Hg, thus indicative of significant
evaporation, (1) it is unlikely that any significant amount of residues
of a volatile chemical would remain on the surface of the plant or
edible commodity and (2) it is also unlikely that residues of such a
volatile chemical would be incorporated into the raw agricultural
commodity that is eventually harvested.

Generally, the Agency has advocated a position that if a pesticide
chemical is used on a food crop, residues of that chemical substance are
assumed to be present unless there is compelling data to the contrary.
Such data could be a radiolabelled uptake study of sufficient
sensitivity to ascertain whether or not the residues exist in the edible
commodity. The Agency is unaware of such data for a chemical such as
d-limonene. Therefore, the generic dietary exposure estimates used in
this assessment are overly conservative for a chemical such as
d-limonene, and the estimated MOEs could be even larger.

For this assessment of d-limonene, there are no dermal or inhalation
toxicological studies in animals and no dermal absorption studies
available in the existing literature. Therefore, to assess short-term
dermal and inhalation exposures, an oral LOAEL was used. The dermal dose
was conservatively converted to an equivalent oral dose using a 100%
dermal and inhalation absorption factor. The oral toxicological LOAEL
endpoint of 400 mg/kg-day was used (Ariyoshi et al. 1975). This LOAEL
was based on liver effects (increased enzymes and liver weights)
observed in a 30-day rat oral (gavage) study (WHO, 1998). Since this
endpoint is based on a LOAEL, an additional safety factor of 3X was
applied to the uncertainty factor of 100 (10 for interspecies
extrapolation and 10 for intraspecies variation). A Margin of Exposure
(MOE) of 300 or greater is protective for these short-term risk
assessments.

The calculated dietary MOE is 290 which is less than the target MOE of
300.  However, as previously discussed the dietary exposures are
considered to be much over-estimated due to the volatile nature of
d-limonene. If the dietary exposure is divided by 2 (0.12/2 = 0.06),
then the MOE is 305. >

<	i. Food. >

<	ii. Drinking water. d-Limonene is only somewhat soluble in water (13.8
mg/L) and has an estimated octanol/water partition coefficient of 4.2.
d-Limonene is expected to rapidly volatilize from water to the
atmosphere, with an estimated half-life for volatilization from a model
river of 3.4 hr, although adsorption to sediment and suspended organic
matter may attenuate the rate of this process. Based on these data, it
is unlikely that d-limonene will occur in drinking water sources
resulting from any of the registered and proposed uses as an active
ingredient or when used as an inert ingredient.

>

<	2. Non-dietary exposure. >

<D. Cumulative Effects>

<	Section 408(b)(2)(D)(v) of the 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.” Unlike other pesticides for which EPA
has followed a cumulative risk approach based on a common mechanism of
toxicity, EPA has not made a common mechanism of toxicity finding as to
d-limonene and any other substances, and d-limonene does not appear to
produce a toxic metabolite produced by other substances.

For the purposes of this tolerance action, therefore, EPA has not
assumed that d-limonene has a common mechanism of toxicity with other
substances.

>

<E. Safety Determination>

<	1. U.S. population. >

<	2. Infants and children. At this time, there is no concern for
potential sensitivity to infants and children. Based on the data from
the study reviewed in the RED (EPA, 1994) and the various teratogenicity
and embryotoxicity studies reviewed in the WHO study (1998), it is now
again concluded that limonene is not a developmental toxicant.

Calculated MOE for all population subgroups from infants (< 1 year) to
youths (13 - 19 years) range from 360 to 1500.  >

<F. International Tolerances>

<	The WHO (1998) reported that “the establishment of an acceptable
daily intake expressed in numerical form was not deemed necessary.” >

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