 . Signature: Project No.: 0<IP_ADDRESS>   DISTRIBUTION Page __ 1_ of _ 1_

Project Name: 304m Industry Investigations: Timber Products TELEPHONE CALL RECORD Outgoing Call Date: January 16, 2004 Time: 11: 45 AM 12 PM Company Name: US EPA, Region 4, Water Management Division Contact Name: Roosevelt Childress, Chief, Surface Water Permits Branch Phone No.: ( 404) 562 9279 Name: Betsy Bicknell & Arash Hooshangi Eastern Research Group, Inc.

GENERAL SUBJECT : Wood Treating Facilities NPDES Permitting TOPICS DISCUSSED AND ACTION TAKEN Arash and I called Roosevelt Childress, EPA Region 4, about permitting at wood treating facilities. He didn't have much detailed information, but will e mail his contacts in NC and AL ( both of which have a lot of wood treating sites), to try to identify a permit writer familiar with wood treating who might be able to more specifically answer my questions. He did provide the following useful insights:

 facilities that have no discharge, but that have the potential for a discharge ( say from overtopping a storage pond), should be given a " no discharge" permit. In the event of a discharge due to an upset or by pass, the facility would be shielded from prosecution for an unpermitted discharge.

 discharges from clean up of a superfund site would not usually be issued an NPDES permit. The discharge would be controlled by the ROD ( record of decision). [ I'm not sure if this would also apply to RCRA clean ups at operating facilities.]

 Mr. Childress thought that stormwater discharges from wood preserving facilities would be covered by the Multi Sector General Permit ( MSGP), and probably would have the monitoring requirements specified in the MSGP for wood preserving facilities. He didn't know if individual states had general stormwater permits for wood treaters ( possibly requiring additional monitoring). He did agree that any stormwater monitoring data would be at the states.


DRAFT EPA WA 3 8 ( Report of WA 2 18 Study) 282 Preliminary Data: May be subject to change following QA and Management review July 30, 2003 7.0 DISCUSSION The primary objectives of this study were two fold: 1) evaluate in an independent lab a short term reproduction test developed by EPA ( 2001) for Tier 1 screening of endocrine disrupting chemicals ( EDCs) with the fathead minnow, and 2) compare this test with two other assays, one a non spawning 14 day adult fathead minnow screen ( OECD 2001) and the other a shortened version of the assay described by EPA ( 2001), with respect to an ability to identify EDCs operating by different modes of action. The effectiveness of the ability of the three different short term screening assays to detect substances that interact adversely with endocrine systems in fish ( estrogen, androgen, and thyroid systems) were assessed after exposure to four chemical agents representing different endocrine disruptive modes of action, with the ultimate goal of selecting a preferred assay to be used in Tier 1 screening. In general, the Tier 1 screen should be relatively quick and simple to run, have the ability to detect multiple modes of action of EDCs, and be readily interpretable. The information gleaned from a Tier 1 assay will be used to determine whether the chemical under investigation could adversely affect the endocrine system of fish and, if necessary, direct the focus of further Tier 2 testing.

The four test chemicals used in this study have been previously tested by USEPA MED using the 21 day protocol, providing a reference data set to allow comparison of results with the present study and indicate the transferability of the short term fish screening assay. Before discussing transferability and performance of the various protocols, a comparison is made of control values for selected endpoints reported in this study with those of previous studies. This comparison is intended to provide some context for quantitative comparisons between current and past studies, in addition to comparison of the relative differences within a study among exposed and non exposed fish.

7.1 Fecundity The fecundity endpoint is a measure of the number of eggs produced by an individual female. Arguably, fecundity is the most useful indicator of the general reproductive condition of mature fish as it reflects successful integration of a variety of physiological processes. As a reference for daily fecundity averages in fathead minnows, a summary is presented in Table 7.1. The values in this table were taken from previous EPA MED studies ( Ankley et al. 2001, 2002, 2003) using the same 21 day protocol as that used in this study. Also included are representative fecundity data from other studies using pair breeding minnows or alternative group breeding configurations. Based on this comparison, the average daily fecundity of minnows maintained during the course of this study appear to be two to three times higher than those typically observed at the EPA MED laboratory, but within the upper range reported in other studies. The increased fecundity in the present study appears directly related to the larger size of females ( Table 7.1). There is a trend toward increased body size among females during the study, which is reflected in the progressively higher daily fecundity. This increased size is to be expected, as fecundity in batch spawning is a direct function of body size ( Wootton 1990). Importantly, the daily variation in fecundity observed in this study (% CV) appears to be consistent with that reported in past studies. DRAFT EPA WA 3 8 ( Report of WA 2 18 Study) 283 Preliminary Data: May be subject to change following QA and Management review July 30, 2003 Table 7.1. Average Daily Fecundity in Control Fathead Minnows ( mean, mean ± SD)

Fish Average Fecundity Reference or Weight eggs / female / day ( ± SD) 2 18 average ( g) Pair Breeding Group Breeding Benoit & Carlson 1977 1.5 34  52 a Kramer et al. 1998 nr 9.6   15.7 b Harries et al. 2000 nr 34   132c Jensen et al. 2001 nr 19 ± 1 Ankley et al. 2001 nr 20.5 ± 1d Ankley et al. 2001 nr 16.4 ± 5.4e Ankley et al. 2002 nr 20.5 ± 5.7 Ankley et al. 2003 1.75 38 f Ankley et al. unpublished nr 57 g This study: Methoxychlor controls 1.59 32.5 ± 2.5 Trenbolone controls 1.72 43.7 ± 9.5 Flutamide controls 1.82 55.7 ± 9.2 Fadrozole controls 2.13 66.0 ± 5.0 Note: All data are based on 21 day cumulative egg production except where noted below. nr = not reported. aRange of values from daily spawnings ( average of 11 16 spawns) using a variety of minnow barns; includes non adhering eggs laid ( 3 males / 6 females per tank). bDaily average calculated from range reported per female after 13 spawning days ( 3 males / 3 females per tank). cRange reported in the Harries et al. 2000 study from two separate experiments ( including tank water and solvent control values). dControl values reported with methoxychlor results. eControl values reported with methyl testosterone results ( 12 day data collection). fEstimated from Figure 3 in the Ankley et al. 2003 paper. gEstimated from unpublished control data collected during flutamide studies.

7.2 Histology and Gonadosomatic index ( GSI)

The gonadosomatic index ( GSI) is generally considered a good measure of gonad maturation and spawning readiness and is based on the broad assumption that proportionally larger gonads indicate greater development ( West 1990). The GSI in female fathead minnows can also be quite variable depending on the time since last spawning ( Jensen et al. 2001). Control values for GSI in females throughout this study ranged between 10% and 14%, and for males, between 1.1% and 1.4%. Although the male GSI values are consistent with previous studies, the female GSI values are slightly higher than those observed in past EPA MED studies, which appears to vary between 8% and 12% ( Jensen et al. 2001; Ankley et al. 2001). This difference may be related to the larger size of female fish used in the present study. The use of the GSI assumes a linear relationship between gonad weight and body weight, which may not be consistent across a broad range of body weights, as negative or positive allometric effects may skew the values ( Weatherly 1990).

Histology is a qualitative to semi quantitative tool used to describe alterations and localize specific changes in organ morphology. Histological methods have been recognized as the most accurate approach for staging reproductive development in fish ( West 1990). However, a primary difficulty in applying histological analysis is that interpretation of changes in tissues may vary from one investigator to another. In the present study, quantitative aspects of the histological examination have been emphasized as much DRAFT EPA WA 3 8 ( Report of WA 2 18 Study) 284 Preliminary Data: May be subject to change following QA and Management review July 30, 2003 as possible to reduce investigator bias. As a comparison to the analysis used in this study, the histological examination of the normal fathead minnow reproductive system described in Jensen et al. ( 2001) is perhaps the most relevant. With respect to ovarian development, the Jensen et al. ( 2001) study described approximately 35% to 55% of the oocytes as being in Stage I development ( subdivided into 1a and 1b in the current study), and the remaining stages varying between 5% and 25% of the total number of oocytes. Notably, the oocytes in a late vitellogenic stage ( equivalent to Stage 4 in the current study) varied systematically with time since last spawning, with approximately 35% of the oocytes at Stage 4 two days after spawning and 12% the same day after spawning. This pattern of oocyte growth is consistent with the findings from control fish sampled during the present study. Typically, oocytes in Stage 4 development comprised 20% of the sample, and were often highly variable in number, probably reflecting ovaries removed from females at different post spawning intervals.

7.3 Vitellogenin and Plasma Steroid Levels The biological role of VTG and regulation of its biosynthesis is well established in fish, including fathead minnows. Synthesis of VTG is under estrogen control and both male and female fish can be induced to synthesize VTG after estrogen exposure or after exposure to estrogen mimics. In sexually mature control minnows, it is expected that VTG levels are low to negligible in males and in the mg/ mL concentration range in spawning females. Mean values of VTG in spawning females from previous EPA MED studies appear to vary from 12   27 mg/ mL ( Table 7.2). Other studies have reported much lower values ( for example Harries et al. 2001), which are likely due to differences in analytical methods, specifically the use of carp anti VTG antibodies as opposed to fathead minnow anti VTG used in past EPA MED studies. In the present study, a commercially available kit for VTG detection was used, which used carp anti VTG. The average values for VTG in control males using this kit were very low, as expected, and are similar or slightly higher than those observed in previous studies ( Table 7.3). The VTG levels in control females ranged from 1 mg/ mL to 6 mg/ mL, or roughly 2 to 4 times lower than those from past EPA MED studies. This difference is likely attributable to the use of carp versus minnow anti VTG. It also appears inter female variation in VTG levels are greater in the present study ( e. g., % CV up to 95%, Table 7.2) than that found in previous EPA studies. As mentioned previously in the results section, a large part of this variation is due to some control females having exceptionally low VTG levels ( < 2% to 5% of the sample mean; see figures E21, E14M VTG 1; E21, E14FL VTG 1). For these fish, it is questionable whether they would be able to successfully spawn despite an external appearance of sexual maturity. This variation may represent an accepted inevitability with protocols using group spawners, in which it is difficult to identify individual females that are not laying eggs during pre exposure observations.

Besides VTG, the measurement of plasma levels of E2, 11 KT, and T can be used as endpoints to assess endocrine status in male and female fish, provided there is some knowledge about normal population levels when the samples are taken. Plasma levels of E2 have limited utility in males, because levels of this steroid are usually low or non detectable. The measurement of plasma E2 is most useful in sexually maturing females because of the gradual rise in this hormone during the period of vitellogenesis, and the cyclic nature of the levels during the reproductive cycle ( Jensen et al. 2001). In male fishes, 11 KT is the sex steroid characteristic of sexual maturity, and reduced levels are considered synonymous with reproductive dysfunction. Very low levels of 11 KT ( e. g., pg/ mL range) are sometimes reported in adult female fish ( Jensen et al., 2001; Simpson and Wright 1977), although the physiological significance, if any, is not understood. Testosterone levels are normally much lower than 11 KT in males at time of spawning ( Jensen et al., 2001), although in females, levels of T can approach E2 levels, making this a useful endpoint to measure in assessing the endocrine status of sexually mature fish. An important concern with single measurements of plasma sex steroids in mature fish is the relevance of one measurement to reproductive function or dysfunction. As an aid in determining mode of action, steroid DRAFT EPA WA 3 8 ( Report of WA 2 18 Study) 285 Preliminary Data: May be subject to change following QA and Management review July 30, 2003 Table 7.2. Average Plasma Markers in Control Female Fathead Minnows ( mean or mean ± SD)

Vitellogenin Estrogen Testosterone 11 Keto E2 / T mg / ml ng / ml ng / ml ng / ml Ratio 2 18 average Jensen et al. 2001 12 17 5.97 ± 1.1 3.08 ± 0.34 0.36 ± 0.11 1.94 Harries et al. 2000 0.1   0.35a nd nd nd Makynen et al. 2000 nd 3.52 ± 1.22 3.79 ± 3.63 nr 0.93 Ankley et al. 2001b 13 9 3.25 nr 2.77 Ankley et al. 2001bc 25 4.5 3.5 nr 1.29 Ankley et al. 2002b 19.5 5.5 5.5 nr 1.0 Ankley et al. 2003b 27 4 4.25 nr 0.94 Ankley unpublishedd 16 9 6 nr 1.50 This study: Methoxychlor 4.93 ± 4.07 1.73 ± 1.38 4.34 ± 7.48 0.839 ± 0.441 0.4 Trenbolone 1.29 ± 1.16 1.36 ± 1.38 1.33 ± 1.33 nd 1.02 Flutamide 4.92 ± 2.14 1.23 ± 1.26 1.33 ± 1.06 nd 0.92 Fadrozole 5.95 ± 2.25 2.86 ± 1.49 1.10 ± 0.94 0.071 ± 0.19 2.6 WA 2 18 study avg.

nd = not determined; nr = not reported aDetermined using Carp anti VTG ab. bValues estimated from figures. cControl values reported with Methyl testosterone results ( 12 d data collection). d Estimated from unpublished control data collected during Flutamide studies.

Table 7.3. Average Plasma Markers in Control Male Fathead Minnows ( mean or mean ± SD)

Vitellogenin Estrogen Testosterone 11 Keto mg / ml ng / ml ng / ml ng / ml 2 18 average Jensen et al. 2001 0.004 ± 0.001 0.4 ± 0.13 9.11 ± 0.92 33.1 ± 3.14 Harries et al. 2000 0.00003a nd nd nd Makynen et al. 2000 nd 0.8 ± 0.16 5.32 ± 4.82 7.09 ± 9.11 Ankley et al. 2001b < 0.0001 0.1 ± 0.13 7.5 ± 0.92 29 ± 3.14 Ankley et al. 2001bc < 0.0001 0.3 8 28 Ankley et al. 2002b < 0.0001 12.5 40. Ankley et al. 2003b nd 0.2 12 32 Ankley unpublishedd < 0.02 0.15 25 45 This study: Methoxychlor 0.00011 ± 0.00015 0.31 ± 0.09 5.21 ± 3.0 35.21 ± 16.81 Trenbolone 0.0029 ± 0.0036 0.32 ± 0.27 1.41 ± 0.60 12.93 ± 18.17 Flutamide 0.0024 ± 0.0046 0.19 ± 0.09 2.22 ± 1.17 16.88 ± 8.48 Fadrozole 0.0023 ± 0.0026 0.069 ± 0.09 2.21 ± 1.11 19.77 ± 15.11 WA 2 18 study avg.

nd = not determined aDetermined using Carp anti VTG anti bodies. Male VTG from solvent controls were < 0.00007 mg/ mL bValues estimated from figures. cControl values reported with Methyl testosterone results ( 12 d data collection). d Estimated from unpublished control data collected during Flutamide studies. DRAFT EPA WA 3 8 ( Report of WA 2 18 Study) 286 Preliminary Data: May be subject to change following QA and Management review July 30, 2003 ratios, specifically E2 / T in females, may be more useful. The basis for this analysis is the hypothesis that sex steroid ratios, as opposed to their absolute values, are more important in determining sexual differentiation and, perhaps, sexual development ( Jalabert et al. 2000). In fathead minnows, there does appear to be a correlation between plasma E2 and T levels in female fish, with E2 / T concentration ratios between 1 and 2 being typical ( Jensen et al. 2001).

The mean sex steroid levels observed in control female and male fish from the current study are summarized in Table 7.2 and 7.3. The levels for E2 and T in females are lower than those previously observed in EPA MED studies by a factor of roughly 2 to 3. However, the E2 / T ratios are similar to past studies and generally ranged between 1 and 2, as to be expected. The exception to this observation was control female fish sampled during the methoxychlor studies, which had unusually high T levels, lowering the ratio to less than 0.5 ( Table 7.2). The T levels in male control fish sampled during this same time were also unusually high ( Table 7.3), suggesting the cause may be analytical as opposed to biological ( e. g., assay error rather than induction). This may be explained by the use of an ELISA based method for analyzing steroids as opposed to the RIA based method used in the EPA MED studies. The sex steroid levels in male fish were, in general, closer to values reported in previous EPA studies although T levels in this study are approximately 4 to 5 times lower than those previously observed.

7.3.1 Test Results: Transferability and Inter Protocol Comparison During the course of this study, an enormous quantity of raw data was collected and summarized in the statistical analysis presented in the previous results section. A number of measured parameters, such as the chemistry values, serve to establish that the environmental conditions and measured exposure levels were within acceptable limits. Other parameters such as body weight and condition factor provide some indication of the general health status of the fish. In the latter case, it was anticipated that condition factor would be unaffected by the chemical treatments, as sublethal doses were employed that have been previously established to be well tolerated in EPA MED studies. In general, the results of this study essentially confirm this expectation. Although in some treatments a significant difference in body was noted, this appeared to be a random occurrence. With regard to other biological endpoints, a number of the measurements concerning fertilization success, hatchability, and larval survivability / development indicated these were comparatively insensitive parameters, as consistently high values were recorded (> 90%) regardless of chemical treatment. For the protocols incorporating reproduction, overall fecundity either expressed as total eggs or the daily average was the most useful indicator of reproductive performance.

In considering the merits of the different test protocols in this study, it is important to identify the endpoints that appear to be the most sensitive and pertinent to the evaluation of mode of action. Therefore, the following discussion focuses on fecundity, plasma VTG and sex steroids, GSI, and histology as the key endpoints for comparison. For each chemical treatment, a table is presented that summarizes the results as either not significantly different () from control values, or if a significant difference was observed, the direction of the change higher ( ) or lower ( ). For simplification, doseresponse aspects of the treatments are ignored ( e. g., differences between high and low treatments). Also, in some of the sex steroid analysis, it appeared that exceptionally high variability prevented a statistically significant conclusion, despite obviously large differences in the sample means. In these instances, a "~" symbol is shown on the tables to distinguish these conclusions from those that achieved statistical significance.

7.3.2 Methoxychlor ( mode of action: weak estrogen)

Methoxychlor is a relatively non persistent organochlorine insecticide that has been demonstrated to be a weak estrogen mimic in fish and both an estrogen and anti androgen proprieties in mammals. It is DRAFT EPA WA 3 8 ( Report of WA 2 18 Study) 287 Preliminary Data: May be subject to change following QA and Management review July 30, 2003 registered for insect control in post harvest applications in a variety of crops, foliar treatment, soil, and seed treatment. It is most commonly used to control black flies, houseflies, and mosquitoes in association with human habitation ( EPA 1992).

The results of the methoxychlor tests summarized below indicate a general lack of response in the measured endpoints. The notable exception was reduced fecundity at the high exposure during the 21 day spawning protocol. In contrast, fecundity was not statistically different during the 14 day protocol. However, problems with male mortality during the first week of the exposure reduced the sample size to two replicates at termination, and combined with high variation in fecundity, diminished the statistical power of this test. With regard to the biochemical endpoints, some differences were observed at the low and mid exposure levels but not at the high, making the biological significance of the findings questionable. Similarly, histological changes were observed at the lower treatments but not at the highexposure rate in the non spawning protocol. With the exception of fecundity, no significant effects on measured endpoints were observed at the high exposure rate.

The decreased fecundity at the high exposure level is in agreement with a previous study by Ankley et al. ( 2001), which also observed a significant reduction in fecundity at an exposure rate of 5 µ g/ L. Changes in sex steroid levels and VTG induction were also observed. In females, estradiol levels were decreased, whereas in males, decreased testosterone and 11 KT and increased VTG were documented ( Ankley et al. 2001). These additional changes were not observed in the present study; however, high variability in these measurements made it difficult to assess statistical significance. Additionally, the confounding variable of the mycobacterium infestation discovered after the test may also be a contributing factor to the unusually high variability observed in the biochemical endpoints.

Table 7.4. Methoxychlor Summary Exposure level ( measured range in µ g/ L) Endpoint Low ( 0.8) Mid ( 2.0) High ( 3.22  4.1) E 21 E 14 NS 14 NS 14 E 21 E 14 NS 14 Fecundity   nd nd    nd VTG  F       Estradiol  M       Testosterone   F  F

11 keto testost. F        GSI Females        GSI Males        Histology Females        Histology Males   Y Y

 not significantly different from controls Y a significant effect observed M male F female   or   significantly greater or less than controls. nd not determined. DRAFT EPA WA 3 8 ( Report of WA 2 18 Study) 288 Preliminary Data: May be subject to change following QA and Management review July 30, 2003 7.3.3 Trenbolone ( anabolic steroid)

Trenbolone is a potent steroid that is often used in the cattle industry to promote growth and was selected to be used in this study as a model androgenic compound. In this study, trenbolone exposure caused pronounced changes in many of the test endpoints at the high, mid, and in some instances, low concentrations ( Table 7.5). These results are as one would expect from a potent anabolic steroid and are summarized below.

In comparing the test results among the three different protocols, fecundity results between the 14 and 21 day spawning assay at the high and low concentrations were similar. Plasma biochemical measurements were also similar between the two spawning assays, with the only differences being female testosterone plasma levels. In these tests, the results of the high exposure group showed a significant decrease in female testosterone levels in the 14 day assay but not in the 21 day spawning assay. The opposite was seen in the low treatments, in which a significant decrease in female testosterone plasma levels was observed in the 21 day assay but was not observed in the 14 day assay. Regarding the nonspawning assay, biochemical results were similar to both the 14 and 21 day spawning protocols at the high concentration. However, at the low concentrations, the 14 day non spawning assay observed a significant decrease in female vitellogenin and testosterone, and male estradiol, testosterone, and 11 KT steroid plasma levels. This significant difference was not observed in the low treatment groups of the 14 day and 21 day spawning protocols ( the 21 day low treatment had reduction in female testosterone levels only). Regarding GSI, no significant differences were observed in the non spawning assay, whereas GSI in females was significantly greater than that in controls in both treatment groups for both the 14 and 21 day spawning protocols. Female histology results were similar at high and low concentrations in both 14 and 21 day spawning protocols. At high concentrations, significant differences were observed in females for both spawning protocols. This significant difference in female histology was not observed at the high concentration in the 14 day non spawning protocol. Male histology results were generally similar among the three protocols in that no significant differences were observed between treatments and controls. The only exception was the observed significant difference at the high concentration in the 14 day spawning protocol.

The results from this study are similar to results from previous studies using the 21 day spawning protocol ( Ankley et al, 2003) with regard to a significant reduction in female fecundity and plasma steroid levels ( testosterone, estradiol, vitellogenin concentrations). However, this study did not observe significant increases in estradiol and vitellogenin plasma concentrations in male fish, as was observed from EPA MED studies. DRAFT EPA WA 3 8 ( Report of WA 2 18 Study) 289 Preliminary Data: May be subject to change following QA and Management review July 30, 2003 Table 7.5. Trenbolone Summary Exposure level ( measured range in µ g/ L) Endpoint Low ( 0.041 0.71) Mid ( 0.45) High ( 0.60 0.86) E 21 E 14 NS 14 NS 14 E 21 E 14 NS 14 Fecundity   nd nd     nd VTG   F  F  F  F  F  Estradiol   M  F  F  F  ~ F  Testosterone F   ~ F/ M  ~ F/ M   F  F  11 keto testost.   M      GSI Females            GSI Males         Histology Females     Y Y  Histology Males      Y

 not significantly different from controls Y a significant effect observed M male F female   or   significantly greater or less than controls. nd not determined.

Female body weights increased in E 21 high treatment. Histology: E 21 test females had   in atretic follicles and   in corpus lutea at high treatment. E 14 test females exhibited similar effects plus inhibition of stage 3 4 progression of oocytes ( progression to late vitellogenesis). In E 14 males, there was an   in microscopic staging.

7.3.4 Flutamide ( anti androgen)

Flutamide is an anti androgen and therapeutic agent that is used primarily to treat prostate cancer ( Sogani et al. 1984). It is considered to be a pro drug, and bioactivation to the 2 hydroxy metabolite is believed necessary for full biological activity ( Simard et al. 1986). In this study, the effects of flutamide exposure on test endpoints were similar to methoxychlor in that relatively little or no effect was observed. A notable exception was in the fecundity data, which showed a decrease at the high exposure level in both the 14 and 21 day spawning protocols. This result was consistent with the histological analysis, which indicated an increase in atretic follicles in these fish. With regard to sex steroid levels, increased levels of testosterone in females and 11 KT in males are noteworthy. The former result indicates a decrease in the E2 / T ratio in females, which may be associated with decreased fecundity, although sex steroid levels were unaffected in the 14 day spawning protocol. It should also be noted that no statistically significant differences in the endpoints were observed in the non spawning protocol fish.

The relatively weak activity of flutamide in the fathead minnow protocols may be the result of limited bioactivation compared with mammals or inadequate exposure duration. The latter point is supported by the more pronounced effects observed on sex steroid levels in the 21 day females compared to 14 day spawning females. In general, the results from the 21 day spawning protocol in this study are consistent with a previous unpublished study ( Ankley 2002) using a similar exposure protocol. In the earlier study, fecundity was decreased at an exposure level of 640 µ g/ L. Similarly, testosterone levels in females were increased with an apparent decrease in E2 levels ( statistical significance unknown). Thus, flutamide exposure appeared to decrease the E2 / T ratio in females. Other sex steroid levels did not appear to be significantly altered, nor was GSI affected. There did, however, appear to be a slight induction of VTG in males at the 640 µ g/ L exposure level, which was not observed in the current study. DRAFT EPA WA 3 8 ( Report of WA 2 18 Study) 290 Preliminary Data: May be subject to change following QA and Management review July 30, 2003 Table 7.6. Flutamide Summary Exposure level ( measured range in µ g/ L) Endpoint Low ( 43 47) Mid ( 260) High ( 504 519) E 21 E 14 NS 14 NS 14 E 21 E 14 NS 14 Fecundity   nd nd F  F  nd VTG        Estradiol     M  M   Testosterone M     F

11 keto testost.     M    GSI Females        GSI Males        Histology Females     Y Y  Histology Males

 not significantly different from controls Y a significant effect observed M male F female   or   significantly greater or less than controls. nd not determined.

Histology: E 21, 14 test females had   in atretic follicles.

7.3.5 Fadrozole ( aromatase inhibitor, indirect anti estrogen)

Fadrozole is a competitive inhibitor of CYP19 ( aromatase), a key enzyme in the biosynthetic pathway for estradiol synthesis. Estrogen synthesis inhibitors may also be considered indirect anti estrogens. In this study, fadrozole exposure caused pronounced changes in several test endpoints after the high and in some instances, mid and low exposure levels. As expected with an aromatase inhibitor, estradiol levels in females were decreased in the high exposure groups and in the low exposure group from the 21 day spawning protocol. This decrease in estradiol was also associated with reduced fecundity and VTG in females. Testosterone levels were elevated in females, causing an overall large decrease in the E2 / T ratio. Histological examination of the ovaries was also consistent with the biochemical and fecundity results, with significantly reduced staging ( preponderance of immature oocytes) observed in nearly all treatments and protocols. Fadrozole effects on male fish were less obvious, except for consistent increases in testosterone and 11 KT levels. The GSI in males from the 21 day protocol was elevated, which was associated with an increase in tubule diameter determined during histological examination.

In comparing the test results from the different protocols, the biochemical, fecundity, and histological results were similar between the 14 and 21 day spawning protocols, although estradiol levels were decreased at the low exposure level only in the 21 day protocol. With regard to the non spawning protocol, it is notable that no effects were seen at the low treatment, which is in contrast to the results from the protocols that include spawning.

The results from this study are in close agreement with a previous study using the 21 day spawning protocol ( Ankley et al. 2002). In that study, fadrozole exposure altered the biochemical endpoints in females in a manner nearly identical to that observed in this study, including decreases in estradiol at 10, 50, and 2 µ g/ L, and decreases in VTG at 10 and 50 µ g/ L fadrozole exposures. Fecundity was reduced at 2 µ g/ L and spawning ceased within 2 days at the higher treatment levels ( Ankley et al. 2002). Histological analysis of the ovaries was similar to the current study, with essentially the absence of DRAFT EPA WA 3 8 ( Report of WA 2 18 Study) 291 Preliminary Data: May be subject to change following QA and Management review July 30, 2003 oocytes beyond Stage 3 development ( Ankley et al. 2002). In males, the GSI, testosterone, and 11 KT levels were increased at the high treatment rates, which is also consistent with results from the present study.

Table 7.7. Fadrozole Summary Exposure level ( measured range in µ g/ L) Endpoint Low ( 5.1 5.5) Mid ( 31.7) High ( 55.7 60.0) E 21 E 14 NS 14 NS 14 E 21 E 14 NS 14 Fecundity   nd nd     nd VTG F  F   F  F  F  F  Estradiol F     nd F  F  Testosterone F, M  F, M    F, M  F, M  ~ M  11 keto testost. M  M    M  M  ~ M  GSI Females            GSI Males         Histology Females Y Y  Y Y Y Y Histology Males     Y

 not significantly different from controls Y a significant effect observed M male F female   or   significantly greater or less than controls. nd not determined.

Female body weights greater in high treatment E 21,14. Histology: E 21,14; NS 14 test females exhibited less advanced staging (  pre vitellogenic oocytes) at the mid and high doses and both increased numbers of atretic follicles. E 21 males had   tubule diameter.

7.4 Conclusion The results suggest the four endocrine disruptive chemicals tested in this study can be divided into two groups: weak acting with little measured effect ( methoxychlor and flutamide) or strong acting, causing pronounced effects ( trenbolone and fadrozole). It is interesting to note that the weak acting chemicals require bioactivation for biological effect. Undoubtedly, both inter species ( e. g., mammals versus fish) and inter individual differences contribute to the extent of metabolite formation, and for pharmaceutical agents such as flutamide, it is unclear whether the active metabolite binds to fish androgen receptors ( Wells and Van Der Kraak 2000). Nonetheless, this distinction can be useful in determining which protocol is superior as a screening protocol, since it likely both strong and weakly active compounds will be encountered during large scale screening efforts.

7.5 Protocol Selection The short term reproduction assay ( 21 day protocol) was demonstrated to be the most comprehensive and sensitive protocol for use as a fish endocrine disruptor screening assay. However, the 14 day spawning protocol shows good promise as a cost effective alternative. The reasons for this can be summarized as follows:

  Consistency in overall response to the 21 day protocol DRAFT EPA WA 3 8 ( Report of WA 2 18 Study) 292 Preliminary Data: May be subject to change following QA and Management review July 30, 2003   Insufficient need for quantitative pre exposure fecundity measurements   Reduced costs compared with the 21 day protocol   Lack of response at the low exposure level and frequent negative responses at the highexposure level in the non spawning protocol. This observation suggests a higher risk of false negative results, particularly with weak acting endocrine disruptors.

Throughout the study, the 14 day protocol gave results that were generally consistent with the 21 day protocol, including fecundity. In nearly all chemical treatments and exposure levels, the conclusions drawn from the fecundity measurements were identical for both the 14 day and 21 day treatments, with the notable exception of methoxychlor. For the most part, results from sex steroid analysis were similar, with a slight tendency for more obvious results in the 21 day protocol with flutamide and fadrozole. With regard to the pre exposure evaluation period, quantitative fecundity estimates did not improve the power of the statistical analysis, which is the primary limitation in the use of fecundity measurements. Thus, the effort placed in quantitative pre exposure fecundity measurements would be better served if used to increase the sample size of exposure replicates. Since this increase may be impractical for many laboratories relying on proportional diluters for toxicant delivery, the qualitative approach used in the 14 day protocol is a reasonable, yet cost effective alternative. It is recommended that additional development of the abbreviated 14 day spawning protocol be performed to evaluate how well the assay performs in comparison to the full 21 day protocol with weaker acting and/ or high log P compounds.

When comparing the results between the non spawning protocol and those incorporating reproduction, it is clear that all protocols would provide similar conclusions with strong acting endocrine disruptors tested at high exposure levels. However, comparison of the results from the weak acting compounds and results from all low exposure treatments suggests the non spawning protocol is less sensitive and may falsely conclude that a chemical is not an endocrine disruptor. For example, all measured endpoints were negative in the non spawning assay during the flutamide exposure, yet the high exposure level clearly reduced fecundity and elevated androgen levels in both sexes in the spawning protocols. In the lowfadrozole exposure, the non spawning assay gave completely negative results, whereas the spawning protocols exhibited a pattern of effects typical of anti estrogens. Thus, we cannot recommend the nonspawning protocol, as the potential exists for a high false negative rate with weak acting compounds and negative results due to testing an insufficiently low concentration.

7.6 Transferability Comparison of the results from this study with previous EPA MED efforts using the 21 day spawning protocol suggest the protocols are readily transferable, in that similar conclusions regarding mode of action can be made from the experimental results. The consistency in the results between the current and past studies is most obvious at the high treatment rates and with measurements of fecundity, sex steroids, and histology. In a few instances in the present study, notably with the methoxychlor results, a lack of response was observed in some endpoints, whereas a significant change was noted in a previous study. However, unusually high variation in some parameters, such as fecundity during the methoxychlor exposures, reduced the sensitivity of this and other measurements. In general, higher variability ( and hence, reduced statistical power) was a greater problem at lower exposure levels throughout the study and in particular with weak acting chemicals. Thus, for acceptable transferability of the protocol, proper dose selection is critical. Greatest reproducibility of the results would be expected to occur at the highest possible dose level that does not cause unacceptable lethality during the course of the study. DRAFT EPA WA 3 8 ( Report of WA 2 18 Study) 293 Preliminary Data: May be subject to change following QA and Management review July 30, 2003 8.0 REFERENCES Ankley, G. T., K. M. Jensen, M. D. Kahl, J. J. Korte, and E. A. Makynen. 2001. " Description and evaluation of a short term reproduction test with the fathead minnow ( Pimephales promelas)." Environmental Toxicology and Chemistry 20, 1276 1290.

Ankley, G. T., K. M. Jensen, E. A. Makynen, M. D. Kahl, J. J. Korte, M. W. Hornung, T. R. Henry, J. S. Denny, V. S. Leino, M. C. Wilson, P. C. Cardon, and L. E. Gray. 2003. " Effect of the Androgenic Growth Promoter 17   Trenbolone on Fecundity and Reproductive Endocrinology of the Fathead Minnow." Environmental Toxicology and Chemistry, Vol. 22 No. 6, pp. 1350 1360.

Ankley, G. T., M. D. Kahl, K. M. Jensen, M. W. Hornung, J. J. Korte, E. A. Makynen, and R. L. Leino. 2002. " Evaluation of the aromatase inhibitor fadrozole in a short term reproduction assay with the fathead minnow ( Pimephales promelas)." Toxicological Sciences 67, 121 130.

Benoit, D. A., and R. W. Carlson,. 1977. " Spawning Success of Fathead Minnows on Selected Artificial Substrates," The Progressive Fish Culturist vol. 39, no 2, pp. 67 69.

Chapman, P. F., M. Crane, J. Wiles, F. Noppert, and E. McIndoe. 1996. Improving the quality of statistics in regulatory ecotoxicity tests. Ecotoxicology 5: 169 186.

Daniel, W. W. 1978. Applied Nonparametric Statistics. Houghton Mifflin Company, Boston. 503 pp.

EPA ( U. S. Environmental Protection Agency). 1987. Guidelines for the Culture of Fathead Minnows Pimephales promelas for Use in Toxicity Tests. U. S. Environmental Protection Agency, Environmental Research Laboratory, Duluth, MN. EPA/ 600/ 3 87/ 001. January 1987.

EPA ( U. S. Environmental Protection Agency). 1992. National Study of Chemical Residues in Fish. EPA, Office of Science and Technology, Standards and Applied Science Division, V. 2 EPA 823 R 92 008B.

EPA ( U. S. Environmental Protection Agency). 2001. A Short term Method for Assessing the Reproductive Toxicity of Endocrine Disrupting Chemicals Using the Fathead Minnow ( Pimephales promelas). U. S. Environmental Protection Agency, Mid Continent Ecology Division, EPA/ 600/ R 01/ 067.

Harries, J. E., T. Runnalls, E. Hill, C. A. Harris, S. Maddix, J. P. Sumpter, and C. R. Tyler. 2000. " Development of a reproductive performance test for endocrine disrupting chemicals using pair breeding fathead minnows ( Pimephales promelas)," Environmental Science & Technology, vol. 34, no. 14, pp. 3003 3011.

Jalabert, B., J. F. Baroiller, B. Breton, A. Fostier, F. Le Gac, Y. Guiguen, and G. Monod. 2000. " Main Neuro endocrine, Endocrine and Paracrine Regulations of Fish Reproduction, and Vulnerability to Xenobiotics," Ecotoxicology, Vol. 9, No. 1 2, pp. 25 40.

Jensen, K. M, J. J. Korte, M. D. Kahl, M. S. Pasha, G. T. Ankley 2001. " Aspects of basic reproductive biology and endocrinology in the fathead minnow ( Pimephales promelas)" Comparative Biochemistry and Physiology Part C Toxicology & Pharmacology , vol. 128C, pp. 127 141.

Kahl M. D., C. L. Russom, D. L. DeFoe, and D. E. Hammermeister. 1999. Saturation Units for Use in Aquatic Bioassays. Chemosphere, v. 39, p. 539 551. DRAFT EPA WA 3 8 ( Report of WA 2 18 Study) 294 Preliminary Data: May be subject to change following QA and Management review July 30, 2003 Kramer, V. J., S. Miles Richardson, S. L. Pierens, J. P. Giesy, J. P. 1998. " Reproductive impairment and induction of alkaline labile phosphate, a biomarker of estrogen exposure, in fathead minnows ( Pimephales promelas) exposed to waterborne 17beta estradiol." Aquatic Toxicology, vol. 40, pp. 335 360.

Makynen, E. A., M. D. Kahl, K. M. Jensen, J. E. Tietge, K. L Wells, G. Van Der Kraak, G. T. Ankley. 2000. " Effects of the mammalian antiandrogen vinclozolin on development and reproduction of the fathead minnow ( Pimephales promelas)." Aquatic Toxicology vol. 48, p. 461 475.

OECD. ( 2001 Draft). Guidelines for the Testing of Chemicals Draft Proposal for a New Guideline: Short term Reproductive Test with the Fathead Minnow for Identification of Endocrine Disruption Chemicals. OECD Environmental Health and Safety Publications. Series on Testing and Assessment.

Simard, J., I. Luthy, J. Guay, A. Belanger, and F. Labrie. 1986. " Characteristics of Interaction of the Antiandrogen Flutamide with the Androgen Receptor in Various Target Tissues." Molecular and Cellular Endocrinology 44, 261 270.

Simpson, T. H., and R. S. Wright. 1977. " A Radioimmunoassay for 11 oxotestosterone: its Application in the Measurement of Levels in Blood Serum of Rainbow Trout ( S. Gairdneri).," Steroids No. 29, pp. 383 398.

Snedecor, G. W., and W. G. Cochran. 1980. Statistical Methods. The Iowa State University Press, Ames, Iowa. 507 pp.

Sogani, P. C., M. R. Vagaiwala, W. F. Whitmore. 1984. " Experience with Flutamide in Patients with Advanced Prostatic Cancer without Prior Endocrine Therapy." Cancer vol. 54 no. 4: 744 750.

Weatherley, A. H. 1990. " Approaches to Understanding Fish Growth." Transactions of the American Fisheries Society, Vol. 119, No. 4, pp. 662 672.

Wells, K., and G. Van Der Kraak. 2000. " Differential binding of endogenous steroids and chemicals to androgen receptors in rainbow trout and goldfish." Environmental Toxicology and Chemistry 19, 2059 2065.

West, G. 1990, " Methods of Assessing Ovarian Development in Fishes  a Review," Australian Journal of Marine and Freshwater Research, Vol. 41, No. 2, pp. 199 222.

Wootton, R. J. 1990. Ecology of Teleost Fishes. Chapman and Hall. Fish and Fisheries Series 1. ISBN: 0 412 31720 6


[Federal Register Volume 81, Number 193 (Wednesday, October 5, 2016)]
[Notices]
[Pages 69123-69126]
[FR Doc No: 2016-24009]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78987; File No. SR-NSX-2016-13]

Self-Regulatory Organizations; National Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Amend Exchange Rules 11.11 and 11.26 To Describe Changes to System
Functionality Necessary To Implement the Regulation NMS Plan To
Implement a Tick Size Pilot Program

September 29, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on September 26, 2016, National Stock Exchange, Inc. (``NSX'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change, as described in
Items I and II, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comment on the proposed
rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange is proposing to: (1) Amend Exchange Rule 11.11(c),
Other Types of Orders and Order Modifiers, to specify that certain
order types will not be supported upon the effective date of the
Regulation NMS Plan to Implement a Tick Size Pilot (the ``Plan'') \3\
and (2) amend Exchange Rule 11.26 to specify that the Exchange will not
to support the Block Size Order Exemption to the Trade-at rule for Test
Group Three securities. The Exchange is proposing this rule change
after carefully considering the scope of the changes to the Exchange's
trading system (``System'') \4\ to support the functionality
requirements for Test Group Three securities and the potential for
introducing additional systemic risk.
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    \3\ See Securities Exchange Act Release No. 72460 (June 24,
2014), 79 FR 36840 (June 30, 2014).
    \4\ Under Exchange Rule 1.5S.(4) [sic], the term ``System'' is
defined as the electronic securities communications and trading
facility designated by the Board of Directors of the Exchange
through which the orders of Users are consolidated for ranking and
execution.
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    The Exchange has designated this proposal as a ``non-
controversial'' proposed rule change pursuant to Section 19(b)(3)(A) of
the Act \5\ and provided the Commission with the notice required by
Rule 19b-4(f)(6)(iii) under the Act.\6\
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    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 17 CFR 240.19b-4(f)(6)(iii).
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    The text of the proposed rule change is available on the Exchange's
Web site at http://www.nsx.com, at the principal office of the
Exchange, and at the Commission's public reference room.

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

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

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

1. Purpose
    On August 25, 2014, NYSE Group, Inc., on behalf of BZX, Chicago
Stock Exchange, Inc., Bats EDGA Exchange, Inc., Bats EDGX Exchange,
Inc., Financial Industry Regulatory Authority, Inc. (``FINRA''), NASDAQ
OMX BX, Inc., NASDAQ OMX PHLX LLC, the Nasdaq Stock Market LLC, New
York Stock Exchange LLC (``NYSE''), NYSE MKT LLC, and NYSE Arca, Inc.
(collectively ``Participants''), filed with the Commission, pursuant to
Section 11A of the Act \7\ and Rule 608 of Regulation NMS
thereunder,\8\ the Plan to Implement a Tick Size Pilot Program
(``Pilot'').\9\ The Participants filed the Plan to comply with an order
issued by the Commission on June 24, 2014.\10\ The Plan \11\ was
published for comment in the Federal Register on November 7, 2014 and
was thereafter approved by the Commission, as modified, on May 6,
2015.\12\ On November 6, 2015, the Commission granted the Participants
an exemption from implementing the Plan until October 3, 2016.\13\ On
March 3, 2016, the Commission noticed an amendment to the Plan adding
NSX as a Participant.\14\
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    \7\ 15 U.S.C. 78k-1.
    \8\ 17 CFR 242.608.
    \9\ See Letter from Brendon J. Weiss, Vice President,
Intercontinental Exchange, Inc., to Secretary, Commission, dated
August 25, 2014.
    \10\ See note 3, supra.
    \11\ Unless otherwise specified, capitalized terms used in this
rule filing are based on the defined terms of the Plan.
    \12\ See Securities Exchange Act Release No. 74892 (May 6,
2015), 80 FR 27513 (May 13, 2015) (File No. 4-657) (``Approval
Order'').
    \13\ See Securities Exchange Act Release No. 76382 (November 6,
2015), 80 FR 70284 (November 13, 2015) (File No. 4-657) (Order
Granting Exemption From Compliance With the National Market System
Plan To Implement a Tick Size Pilot Program).
    \14\ See Securities Exchange Act Release No. 77277 (March 3,
2016), 81 FR 12162 (March 8, 2016).
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    The Plan is designed to allow the Commission, market participants,
and the public to study and assess the impact of increment conventions
on the liquidity and trading of the common stocks of small-
capitalization companies. Each Participant is required to comply, and
to enforce compliance by its member organizations, as applicable, with
the provisions of the Plan. As is described more fully below, the
proposed rules would require ETP Holders \15\ to comply with the
applicable data collection requirements of the Plan.\16\
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    \15\ An ``ETP Holder'' is a registrant of NSX to which NSX has
issued an ETP. An ``ETP'' is defined as ``. . . an Equity Trading
Permit issued by the Exchange for effecting approved securities
transactions on the Exchange's trading facilities. . . .'' See
Exchange Rule 1.5.E(1).
    \16\ Rule 11.26, Interpretations and Policies .11, which is
being renumbered to .12, provides that the Rule shall be in effect
during a pilot period to coincide with the pilot period for the Plan
(including any extensions to the pilot period for the Plan).
---------------------------------------------------------------------------

    The Pilot will include stocks of companies with $3 billion or less
in market capitalization, an average daily trading volume of one
million shares or less, and a volume weighted average price of at least
$2.00 for every trading day. The Pilot will consist of a control group
of approximately 1,400 Pilot Securities and three test groups with 400
Pilot Securities in each (selected by a stratified random sampling
process).\17\ During the pilot, Pilot Securities in the control group
will be quoted at the current tick size increment of $0.01 per share
and will trade at the currently permitted increments. Pilot Securities
in the first test group (``Test Group One'') will be quoted in $0.05
minimum increments but will continue to trade at any price increment
that is currently permitted.\18\ Pilot Securities in the second test
group (``Test Group Two'') will be quoted in $0.05 minimum increments
and will trade at $0.05 minimum increments subject to a midpoint
exception, a retail investor order exception, and a negotiated trade

exception.\19\ Pilot Securities in the third test group (``Test Group
Three'') will be subject to the same quoting and trading increments as
Test Group Two and also will be subject to the ``Trade-at'' requirement
to prevent price matching by a market participant that is not
displaying at a Trading Center's ``Best Protected Bid'' or ``Best
Protected Offer,'' unless an enumerated exception applies.\20\ In
addition to the exceptions provided under Test Group Two, an exception
for Block Size orders and exceptions that mirror those under Rule 611
of Regulation NMS \21\ will apply to the Trade-at requirement.
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    \17\ See Section V of the Plan for identification of Pilot
Securities, including criteria for selection and grouping.
    \18\ See Section VI(B) of the Plan.
    \19\ See Section VI(C) of the Plan.
    \20\ See Section VI(D) of the Plan.
    \21\ 17 CFR 242.611.
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    In approving the Plan, the Commission noted that the Trading Center
data reporting requirements would facilitate an analysis of the effects
of the Pilot on liquidity (e.g., transaction costs by order size),
execution quality (e.g., speed of order executions), market maker
activity, competition between trading venues (e.g., routing frequency
of market orders), transparency (e.g., choice between displayed and
hidden orders), and market dynamics (e.g., rates and speed of order
cancellations).\22\
---------------------------------------------------------------------------

    \22\ See Approval Order, 80 FR at 27543.
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Proposed Amendments to Rule 11.11, Order Types and Modifiers
    The Exchange proposes to amend NSX Rule 11.11(c) to specify that,
upon the Plan's effective date, certain order types will not be
supported for trading across all symbols and will be rejected upon
entry into the System. The Exchange is making this proposal to avoid
creating unnecessary System complexity and introducing unnecessary
systemic risk to the System, as well as to avoid expending resources
unnecessarily in order to support order types that are of limited
current usage. Pursuant to Rule 1001(a) of Regulation Systems
Compliance and Integrity (``Regulation SCI''),\23\ the Exchange is
required to ``. . . establish, maintain and enforce written policies
and procedures reasonably designed to ensure that its SCI systems, and
for the purposes of security standards, indirect SCI systems, have
levels of capacity, integrity, resiliency and security adequate to
maintain [its] operational capability and promote the maintenance of
fair and orderly markets.'' The Exchange is proposing the instant rule
change in order to assure that it will maintain the operational
capability of the System and assure that the System will be ready to
operate under Plan requirements as of its effective date, October 3,
2016.
---------------------------------------------------------------------------

    \23\ 17 CFR 242.1001(a).
---------------------------------------------------------------------------

    The Exchange has determined to reject all incoming Sweep Orders and
Destination Specific Orders in all symbols. The Exchange is proposing
this approach, instead of one in which it would only reject any such
orders entered in the Plan securities, in order to avoid data anomalies
that could result if the Exchange were to reject only Sweep Orders and
Destination Specific Orders in the Pilot securities, but continue to
allow them in non-Pilot symbols.
Sweep Orders
    The Exchange proposes to amend Rule 11.11(c)(7) to state that upon
the effective date of the Plan, described in Rule 11.26,\24\ the
Exchange will reject all Sweep Orders entered into the System. A Sweep
Order is a limit order that instructs the System to ``sweep'' the
market. Sweep Orders may be designated as ``Protected Sweep,'' ``Full
Sweep,'' or ``Destination Sweep.'' An order designated as a Protected
Sweep Order is converted into one or more limit orders with sizes equal
to the order sizes in the NSX Book and the order sizes of protected
quotations at away trading centers to be executed in accordance with
Exchange Rule 11.15(b).\25\ An order designated as a Full Sweep Order
is converted into one or more limit orders with sizes equal to the
sizes of the best available quotations (including manual quotations) in
the NSX Book and at away trading centers in accordance with Exchange
Rule 11.15(b). An order designated as a Destination Sweep Order is
routed to an away trading center specified by the User, after the order
is exposed to the NSX Book.
---------------------------------------------------------------------------

    \24\ NSX Rule 11.26 governs the Exchange's data collection and
quoting and trading requirements under the Plan.
    \25\ Exchange Rule 11.15(b) pertains to order handling and
execution of Sweep Orders.
---------------------------------------------------------------------------

    The System changes and testing necessary for handling a Sweep Order
to comply with the Trade-at requirements for Test Group Three
securities under the Plan are complex and will create unnecessary risk
to the System relative to ETP Holders' current usage of the order type.
The Exchange would be required to dedicate significant resources to
changing the System to ensure that Sweep Orders are handled in
compliance with the Trade-at prohibition of Test Group Three, even
though the Exchange has received only one Sweep Order since it resumed
trading operations in December 2015.\26\ The Exchange believes that
this extremely limited usage of Sweep Orders does not justify creating
additional System complexity and introducing the inherent risk to the
System in creating such complexity by supporting these order types. The
Exchange has determined that the scope of programming and testing to
assure that Sweep Orders would execute and route consistent with the
requirements of the Plan does not justify the level of potential risk
involved, especially in view of the October 3, 2016 Plan implementation
date. As a result of these factors, the Exchange proposes to reject all
Sweep Orders entered into the System for all securities traded on the
Exchange.
---------------------------------------------------------------------------

    \26\ See Exchange Act Release No. 76640 (December 14, 2015), 80
FR 79122 (December 18, 2015), Order Approving a Proposed Rule Change
to Modify and Eliminate Certain Rules and to Enable Trading Activity
to Resume on the Exchange. Trading operations resumed on December
22, 2015 and since that time, the Exchange has received one Sweep
Order.
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Destination Specific Orders
    The Exchange proposes to amend Rule 11.26(c)(7) [sic] to specify
that upon the effective date of the Plan, described in NSX Rule 11.26,
the Exchange will reject all Destination Specific Orders entered into
the System. A Destination Specific Order is a market or limit order
that instructs the System to route the order to a specified away
trading center, after exposing the order to the NSX Book. Users can
access markets offering bids and offers other than protected quotations
(i.e., manual quotations) by entering a Destination Specific Order. The
System changes necessary for handling of a Destination Specific Order
to comply with the Trade-at provision of the Plan become increasingly
complex and introduce unnecessary risk relative to ETP Holders' usage
of the order type. For example, in a Test Group Three security, which
is subject to the Trade-at Prohibition, the Exchange would not be able
to follow the customer's instruction to route the order to a specific
destination if another trading center was displaying a protected
quotation at the Trade-at price, and the order would have to be
canceled. The Exchange would be required to dedicate significant
resources to programming the System to ensure that Destination Specific
Orders are handled in compliance with the Trade-at prohibition of Test
Group Three, even though the Exchange has not received a single
Destination Specific Order since resuming trading operations in

December 2015. The Exchange believes that current non-usage of
Destination Specific Orders does not justify using extensive resources
to create additional System complexity by supporting the Destination
Specific Order type for Pilot securities. As a result of these factors,
the Exchange proposes to not accept all Destination Specific Orders
entered into the System.
Block Size Order Exemption
    The Exchange is further proposing to renumber Exchange Rule 11.26,
Interpretations and Policies .11 to Interpretations and Policies .12
and to adopt new Interpretations and Policies .11 to specify that the
Exchange will not to support the Block Size Order Exemption to the
Trade-at rule for Test Group Three securities. Pursuant to the Plan,
the Exchange adopted Rule 11.26(c)(3)(d)(iii)c. [sic] to provide for
the Block Size Order Exemption, which allows an ETP Holder to execute a
block size order (i.e., an order of 5,000 shares or for a quantity of
stock having a market value of at least $100,000) against undisplayed
liquidity in Test Group Three securities at the Trade-at price. The
Exemption was included in the Plan to allow customers to completely
fill their large orders at a single venue, thereby avoiding the time
and cost associated with filling a block size order through many
smaller orders routed to other execution venues. The Exchange has
determined that, because of the programming required to implement the
exemption, it will not support the exemption and will handle a block
size order in a Test Group Three security as the Exchange would handle
any other order not subject to exemption. Thus, block size orders in
Test Group Three securities entered on NSX will be subject to the
Trade-at prohibition, unless the order qualifies for one of the other
exemptions under the rule.
    The Exchange will not support the Block Size Order Exemption
because block size orders are generally not applicable to the order
types that the Exchange supports and, as such, the Exchange has rarely
received block size orders. The Exchange has determined that the System
changes necessary to exempt a block size order from complying with the
Trade-at provision of the Plan are complex and will introduce
unnecessary risk relative to ETP Holders' usage of block size orders on
the Exchange.
    The Exchange does not believe that market participants will be
harmed in any way as a result of this determination because they can
enter block-size orders in Test Group 3 securities on another exchanges
for execution. The Exchange will provide notice to all of its ETP
Holders that it will not support the Block Size Order Exemption for
Test Group Three securities. Further, since the Exchange receives
rarely receives block-size orders at present, there is minimal risk
that the data it produces under the Plan will be affected by the
absence of information relating to the Block Size Order Exemption.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act \27\ in general, and furthers the objectives of Section
6(b)(5) of the Act \28\ in particular, in that it is designed to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system and, in general, to
protect investors and the public interest. The Plan requires the
Exchange to establish, maintain, and enforce written policies and
procedures that are reasonably designed to comply with applicable
quoting and trading requirements specified in the Plan. The proposed
rule change is designed to comply with the Plan, reduce complexity, and
enhance System resiliency while not adversely affecting the data
collected under the Plan. Therefore, the Exchange believes that the
proposed rule changes are reasonably designed to comply with applicable
quoting and trading requirements specified in the Plan and, as
discussed further below, other applicable regulations.
---------------------------------------------------------------------------

    \27\ 15 U.S.C. 78f(b).
    \28\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that this proposal is consistent with the Act
because it is designed to assist the Exchange in meeting its regulatory
obligations pursuant to the Plan by allowing the Exchange to dedicate
its resources to adjusting System functionalities that are consistently
used by the Exchange and are impacted under the Plan. In approving the
Plan, the Commission noted that the Pilot was an appropriate, data-
driven test that was designed to evaluate the impact of a wider tick
size on trading, liquidity, and the market quality of securities of
smaller capitalization companies, and was therefore in furtherance of
the purposes of the Act. The Exchange believes that this proposal is in
furtherance of the objectives of the Plan, as identified by the
Commission, and is therefore consistent with the Act because the
proposal allows the Exchange to further dedicate its resources to
System changes that are in furtherance of compliance with the Plan.
    The Exchange also believes that its proposed amendments are
consistent with the Act because they are intended to eliminate
unnecessary System complexity and risk based on the de minimis current
usage of such order types and sizes in Pilot Securities under the
Plan's minimum trading and quoting increments or the Trade-at
Prohibition. The Commission adopted Regulation SCI in November 2014 to
strengthen the technology infrastructure of the U.S. securities
markets.\29\ Regulation SCI is designed to reduce the occurrence of
system issues, improve resiliency when system problems do occur, and
enhance the Commission's oversight and enforcement of securities market
technology infrastructure.
---------------------------------------------------------------------------

    \29\ See Securities Exchange Act Release No. 73639 (November 19,
2014), 79 FR 72251 (December 5, 2014) (``Regulation SCI Approval
Order'').
---------------------------------------------------------------------------

    Regulation SCI requires the Exchange to establish written policies
and procedures reasonably designed to ensure that their systems have
levels of capacity, integrity, resiliency, availability, and security
adequate to maintain their operational capability and promote the
maintenance of fair and orderly markets, and that they operate in a
manner that complies with the Exchange Act. Each of these proposed
changes are intended to reduce complexity and risk in the System to
ensure the Exchange's technology remains resilient. In determining the
scope of the proposed changes, the Exchange carefully weighed the
impact on the Pilot, System complexity, and the usage of such order
types and block size orders in Pilot Securities.\30\ The potential
complexity results from code changes for a majority of the Exchange's
order types, which requires the implementation and testing of a
separate branch of code for each Test Group. Development work for the
Tick Pilot results in the creation of four additional branches of code
that are to be developed and tested (e.g., Control Group and three Test
Groups). Given these complexities, the Exchange determined that the
changes proposed herein are necessary to ensure continued System
resiliency in accordance with the requirements of Regulation SCI.
Therefore, the Exchange believes the proposed rule change

promotes just and equitable principles of trade, removes impediments to
and perfects the mechanism of a free and open market and a national
market system and, in general, to protect investors and the public
interest.
---------------------------------------------------------------------------

    \30\ But for the Plan, the Exchange notes that it would not have
proposed to amend the operation of Sweep Orders and Destination
Specific Orders, as well as not support the Block Size Order
Exemption, as described herein.
---------------------------------------------------------------------------

    In addition, each of these proposed changes would have no impact on
the data reported pursuant to the Plan. As evidenced above, Sweep
Orders and Destination Specific Orders, and block size orders have
rarely been used since the Exchange resumed trading operations. The
limited usage and execution scenarios do not justify the additional
system complexity which would be created by modifying the System to
support such order types and support the Block Size Order Exemption in
order to comply with the Plan. Therefore, the Exchange believes each
proposed change is a reasonable means to assure the System's integrity,
resiliency, and availability are such that they will continue to
promote the maintenance of fair and orderly markets. Due to the
additional complexity and limited usage, the Exchange believes it is
not unfairly discriminatory to apply the changes proposed herein as
such changes are necessary to reduce complexity and ensure continued
System resiliency in accordance with the requirements of Regulation
SCI. Moreover, since the Exchange is proposing to reject all Sweep
Orders and Destination Specific Orders, and not just those in Pilot
securities or on a test group-specific basis, there is no potential
that the data compiled and submitted by the Exchange pursuant to the
Plan will be affected by disparate standards applied to Plan
securities.

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

    The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The Exchange
notes that the proposed rule change is designed to assist the Exchange
in meeting its regulatory obligations pursuant to the Plan, reduce
System complexity, and enhance resiliency. The Exchange also notes that
the proposed rule change will apply equally to all such ETP Holders, as
will the data collection requirements for Market Makers.

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

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

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) \31\ of the Act and Rule 19b-4(f)(6) \32\ thereunder
because the proposal does not: (i) Significantly affect the protection
of investors or the public interest; (ii) impose any significant burden
on competition; and (iii) by its terms, become operative for 30 days
from the date on which it was filed, or such shorter time as the
Commission may designate if consistent with the protection of investors
and the public interest.
---------------------------------------------------------------------------

    \31\ 15 U.S.C. 78s(b)(3)(A).
    \32\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \33\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\34\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that so that the
proposed rule change can become operative on September 26, 2016.
---------------------------------------------------------------------------

    \33\ 17 CFR 240.19b-4(f)(6).
    \34\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because it will allow the Exchange to implement the proposed rules
immediately thereby preventing delays in the implementation of the
Plan. The Commission notes that the Plan is scheduled to start on
October 3, 2016. Therefore, the Commission hereby waives the 30-day
operative delay and designates the proposed rule change to be operative
upon filing with the Commission.\35\
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    \35\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NSX-2016-13 on the subject line.

Paper Comments

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

All submissions should refer to File No. SR-NSX-2016-13. This file
number should be included in the subject line if email is used. To help
the Commission process and review comments more efficiently, please use
only one method. The Commission will post all comments on the
Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for Web site viewing and printing in
the Commission's Public Reference Room, 100 F Street NE., Washington,
DC 20549, on official business days between the hours of 10 a.m. and 3
p.m. eastern time. Copies of such filings will also be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to file number SR-NSX-2016-13 and should be
submitted on or before October 26, 2016.

    For the Commission by the Division of Trading and Markets,
pursuant to the delegated authority.\36\
---------------------------------------------------------------------------

    \36\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-24009 Filed 10-4-16; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 83, Number 97 (Friday, May 18, 2018)]
[Rules and Regulations]
[Pages 23209-23212]
[FR Doc No: 2018-10576]

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

Federal Aviation Administration

14 CFR Part 25

[Docket No. FAA-2017-0636; Special Conditions No. 25-726-SC]

Special Conditions: The Boeing Company Model 777-8 and 777-9
Airplanes; Folding Wingtips

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final special conditions.

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SUMMARY: These special conditions are issued for The Boeing Company
(Boeing) Model 777-8 and 777-9 airplanes. These airplanes will have a
novel or unusual design feature when compared to the state of
technology envisioned in the airworthiness standards for transport-
category airplanes. This design feature is folding wingtips. The
applicable airworthiness regulations do not contain adequate or
appropriate safety standards for this design feature. These special
conditions contain the additional safety standards that the
Administrator considers necessary to establish a level of safety
equivalent to that established by the existing airworthiness standards.

DATES: Effective June 18, 2018.

FOR FURTHER INFORMATION CONTACT: Ian Won, FAA, Airframe and Cabin
Safety Section, AIR-675, Policy and Innovation Division, Transport
Standards Branch, Aircraft Certification Service, 2200 South 216th St.,
Des Moines, Washington, 98198-6547; telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Background

    On April 19, 2017 (for the Model 777-8 airplane), and May 12, 2015
(for the 777-9 airplane), Boeing applied for an amendment to Type
Certificate (TC) No. T00001SE to include the new Model 777-8 and 777-9
airplanes. These airplanes are constructed with new carbon-fiber-
reinforced plastic (CFRP) wings with folding wingtips.

    The Model 777-9 airplane, a derivative of the Model 777-300ER
airplane currently approved under TC No. T00001SE, is a stretched-
fuselage, large, twin-engine airplane with seating for 408 passengers
and a maximum takeoff weight of 775,000 pounds.
    The Model 777-8 airplane, a shortened-body derivative of the Model
777-9 airplane, is a large, twin-engine airplane with seating for 359
passengers and a maximum takeoff weight of 775,000 pounds.

Type Certification Basis

    Under the provisions of title 14, Code of Federal Regulations (14
CFR) 21.101, Boeing must show that the Model 777-8 and 777-9 airplanes
meet the applicable provisions of the regulations listed in TC No.
T00001SE, or the applicable regulations in effect on the date of
application for the change, except for earlier amendments as agreed
upon by the FAA.
    If the Administrator finds that the applicable airworthiness
regulations (i.e., 14 CFR part 25) do not contain adequate or
appropriate safety standards for the Model 777-8 and 777-9 airplanes
because of a novel or unusual design feature, special conditions are
prescribed under the provisions of Sec.  21.16.
    Special conditions are initially applicable to the model for which
they are issued. Should the type certificate for that model be amended
later to include any other model that incorporates the same novel or
unusual design feature, or should any other model already included on
the same type certificate be modified to incorporate the same novel or
unusual design feature, these special conditions would also apply to
the other model under Sec.  21.101.
    In addition to the applicable airworthiness regulations and special
conditions, the Model 777-8 and 777-9 airplanes must comply with the
fuel-vent and exhaust-emission requirements of 14 CFR part 34, and the
noise-certification requirements of 14 CFR part 36.
    The FAA issues special conditions, as defined in 14 CFR 11.19, in
accordance with Sec.  11.38, and they become part of the type
certification basis under Sec.  21.101.

Novel or Unusual Design Features

    The Boeing Model 777-8 and 777-9 airplanes will incorporate the
following novel or unusual design features: CFRP wings with folding
wingtips.
    Boeing will incorporate this on-ground wingtip-fold capability to
reduce the wingspan from 235 to 212 feet when folded. These folding
wingtips comply with Code E gate \1\ compatibility when folded during
ground operations.
---------------------------------------------------------------------------

    \1\ A Code E gate is designed to accommodate aircraft wingspans
between 170.6 ft. (52m) and 213.3 ft. (65m), and outer main-gear
wheel spans between 29.5 ft. (9m) and 45.9 ft. (14m). Boeing 777
airplanes are in this gate-code category.
---------------------------------------------------------------------------

Discussion

    Boeing will add folding wingtips to their Model 777-8 and 777-9
airplane wings to maintain Code E gate compatibility when folded during
ground operations. This wing-folding feature will be operable on the
ground only. Boeing has no plan to carry fuel in the folding sections
of the wings.
    Boeing has determined that a catastrophic event could occur if the
Model 777-8 and 777-9 airplane wingtips are not properly positioned and
secured for takeoff and during flight. In service, numerous takeoff
operations with improper airplane configurations have occurred due to
failures of the takeoff warning systems, or inadvertent crew actions.
For these special conditions, a parallel is drawn between taking off
with gust locks engaged and taking off with the wingtips folded, as
either condition could result in a catastrophic event. Consequently,
the FAA has determined that the level of safety in protecting a
misconfigured airplane from takeoff with wingtips folded should be the
same as taking off with the gust locks engaged. Therefore, condition 2
of these special conditions has the same intent as Sec.  25.679(a)(2).
Per Sec.  25.1309, the applicant must show that such an event is
extremely improbable, must not result from a single failure, and that
appropriate alerting must be provided for the crew to manage unsafe
system-operating conditions. In addition, the applicant must ensure
that the wingtips are properly secured during ground operations to
protect ground personnel against bodily injury.
    Factors to be considered when showing compliance to these special
conditions include, but are not limited to:
     With wingtips in the folded position, the conventional
airplane-wingtip-position lights may have reduced visibility due to the
upward position of the wingtips, possibly impacting ground-operation
safety. Light placement may require special consideration to retain the
current ground-operation safety, and mitigate any adverse impact this
light position may have on pilot visibility during night-lighting
conditions.
     Due to upward wingtip positioning on the ground,
significant loads may be imposed by wind gusts combined with taxi speed
during the transition from the unfolded to the folded position.
     The FAA issued Policy Statement No. PS-ANM-25-12,
``Certification of Structural Elements in Flight Control Systems,'' to
address structural elements in systems that act as both structure and
as part of a system. This policy provides additional guidance on the
appropriate application of the fatigue and damage-tolerance
requirements of Sec.  25.571, and the system-safety requirements of
Sec. Sec.  25.671 and 25.1309.
    These special conditions contain the additional safety standards
that the Administrator considers necessary to establish a level of
safety equivalent to that established by the existing airworthiness
standards.

Discussion of Comments

    Notice of Proposed Special Conditions No. 25-17-02-SC for the
Boeing Model 777-8 and 777-9 airplanes was published in the Federal
Register on November 1, 2017 (82 FR 50581). The FAA received responses
from four commenters.

Commenter 1: Air Line Pilots Association (ALPA)

    ALPA stated that the special conditions should require
demonstration of ground-handling effects due to the folding wingtips,
and implementing a robust flight-test procedure to evaluate the effects
of the folding wingtips during landing rollout and taxi under high
crosswind and gust conditions, to ensure no exceptional piloting skill
is required during these operations. ALPA also suggests including,
within the Boeing Model 777 series airplane flight manual, the
crosswind conditions under which the folding wingtips were studied.
    The FAA notes that demonstration of acceptable handling qualities
is required by special condition 5 as written. The method of compliance
demonstration, and associated documentation, is outside the scope of
these special conditions, and the special conditions remain adopted as
proposed.

Commenter 2

    One commenter suggested various means for the applicant to address
the special conditions, for example, the need for additional power cut
outs that are separate circuits. The FAA partially agrees with the
commenter, noting that special conditions are performance standards
that may be satisfied by various means, including those the commenter
proposed. However, the method of compliance demonstration is outside
the scope of these special

conditions. Therefore, the special conditions remain adopted as
proposed.

Commenter 3

    One commenter expressed concern that the special conditions may be
confusing to the United States Congress. The FAA responds that special
conditions are part of the Executive Branch rulemaking process, which
is independent of the United States Congress lawmaking process. Special
conditions are unique to aircraft certification and, therefore, are
written with the aerospace-industry audience in mind. The special
conditions remain adopted as proposed.

Commenter 4

    One commenter stated concern over the applicability of these
special conditions to future models on the Boeing Model 777 airplane
type certificate. Should Boeing apply at a later date for a change to
the type certificate to include another model incorporating the same
novel or unusual design feature, these special conditions would apply
to that model as well. The FAA responds that these special conditions
provide requirements for a safe design for folding wingtips on future
Model 777 airplane derivatives, as well as on the current Model 777
airplanes. These special conditions will ensure that future models
incorporating the same novel or unusual design feature meet the level
of safety equivalent to that established in the regulations.
    The commenter suggested that the 1.25 factor specified in Sec.
25.415(d) be applied to the portion of the system that is isolated in-
flight, and is not critical for safe flight and landing. The FAA
disagrees with the comment. The structure the commenter addressed has
no impact on safety of flight. Additionally, the special conditions
require that the wingtips must have a means by which to safeguard
against unlocking from the extended, flight-deployed position in-flight
because of failures, including the failure of any single structural
element. The special conditions remain adopted as proposed.
    The commenter suggested that the airplane must demonstrate
acceptable handling qualities during rollout in a crosswind
environment, as the wingtips transition from the flight-deployed to
folded position, and transitioning from the folded to the flight-
deployed position, as well as during the unlikely event of asymmetric
wingtip folding. The FAA agrees with the comment, but it is the FAA's
position that the special conditions, as proposed, indicate that the
airplane must exhibit acceptable handling qualities under normal and
asymmetric operation. The special conditions remain adopted as
proposed.
    The commenter suggested that the FAA repeat the Sec.  25.675 text
in special condition 6, in lieu of only referencing Sec.  25.675 in the
special condition. The FAA finds that the special condition has the
same legal effect either way, and finds no advantage to repeating the
text of Sec.  25.675 in special condition 6.

Applicability

    As discussed above, these special conditions are applicable to
Boeing Model 777-8 and 777-9 airplanes. Should Boeing apply at a later
date for a change to the type certificate to include another model
incorporating the same novel or unusual design feature, these special
conditions would apply to that model as well.

Conclusion

    This action affects only a certain novel or unusual design feature
on one model series of airplanes. It is not a rule of general
applicability.

List of Subjects in 14 CFR Part 25

    Aircraft, Aviation safety, Reporting and recordkeeping
requirements.

    The authority citation for these special conditions is as follows:

    Authority: 49 U.S.C. 106(g), 40113, 44701, 44702, 44704.

The Special Conditions

    Accordingly, pursuant to the authority delegated to me by the
Administrator, the following special conditions are issued as part of
the type certification basis for Boeing Model 777-8 and 777-9
airplanes.

    Note: The term ``latch'' refers to the mechanism that allows the
wingtip to carry flight loads in the down (flight-deployed)
position. The term ``lock'' refers to the mechanism that prevents
disconnection of the latch when the wing tip is down.

    1. More than one means must be available to alert the flightcrew
that the wingtips are not properly positioned and secured prior to
takeoff. Each of these means must be unique in their wingtip-monitoring
function. When meeting this condition, the applicant must add a
function to the takeoff warning system, as required by Sec.
25.703(a)(1) and (2), to warn of an unlocked or improperly positioned
wingtip, including indication to the flightcrew when a wingtip is in
the folded position during taxi.
    2. In addition to a takeoff warning in accordance with Sec.
25.703, a means must be provided to prevent airplane takeoff if a
wingtip is not properly positioned and secured for flight.
    3. The applicant must consider the effects of folding-wingtip
freeplay when evaluating compliance to the design load requirements of
14 CFR part 25, subpart C, and the aeroelastic stability (including
flutter, divergence, control reversal, and any undue loss of stability
and control as a result of structural deformation) requirements of
Sec.  25.629. Thus, the effects of normal wear, and other long-term
durability conditions (such as corrosion) of the folding-wingtip
operating mechanism on freeplay, and its impact on loads and
aeroelastic stability, must be considered. Where freeplay limitations
are required to ensure aeroelastic stability, acceptable freeplay
limits and freeplay check procedures must be established. If
lubrication is required to control excessive wear, lubrication
intervals must be established. These procedures and limitations must be
documented in accordance with Sec.  25.1529. The freeplay-check and
mechanism-lubrication intervals, if required, must be documented as a
certification maintenance requirement (CMR). Guidance for CMRs can be
found in Advisory Circular 25-19A, ``Certification Maintenance
Requirements.'' The effects of freeplay on wing-joint torsional and
bending stiffness, as well as wing frequencies, must be evaluated when
showing compliance to loads and aeroelastic stability requirements.
Also, the effects of freeplay on fatigue and damage tolerance must be
considered when showing compliance with Sec.  25.571.
    4. The folding wingtips and their operating mechanism must be
designed for 65 knot, horizontal, ground-gust conditions in any
direction as specified in Sec.  25.415(a). Relevant design conditions
must be defined using combinations of steady wind and taxi speeds
determined by rational analysis utilizing airport wind data. The
folding wingtip is not a control surface as specified in Sec.
25.415(b). Therefore, in lieu of the equation provided in Sec.
25.415(b), the hinge moment may be calculated from rational wind-tunnel
data. The 1.25 factor specified in Sec.  25.415(d) need not be applied
to the portion of the system that is isolated in flight and is not
critical for safe flight and landing. The folding-wingtip system must
be designed for the conditions specified in Sec.  25.415(e), (f), and
(g). Runway roughness, as specified in Sec.  25.491, must be evaluated
separately up to the maximum relevant airplane ground speeds. All of
the above conditions must be applied to the folding wingtips in the
extended (flight-

deployed), folded, and transient positions.
    5. The airplane must demonstrate acceptable handling qualities
during rollout in a crosswind environment, as wingtips transition from
the flight-deployed to folded position, as well as during the unlikely
event of asymmetric wingtip folding.
    6. The wingtip-fold operating mechanism must have stops that
positively limit the range of motion of the wingtips. Each stop must be
designed to the requirements of Sec.  25.675.
    7. The wingtip hinge structure must be designed for inertia loads
acting parallel to the hinge line. In the absence of more rational
data, the inertia loads may be assumed to be equal to KW as referenced
in Sec.  25.393. Hinge design must meet the requirements of Sec.
25.657.
    8. In lieu of Sec.  25.1385(b): The forward position lights must be
installed such that they consist of a red and a green light spaced
laterally as far apart as practicable, and installed forward on the
airplane, so that, with the airplane in the normal flying position and
with the wingtips in the folded position for ground operations, the red
light is on the left side and the green light is on the right side at
approximately the level of the wingtips in the takeoff configuration.
Each light must be approved and must meet the requirements of Sec.
25.1385(a) and (d). The lights must not impair the vision of the
flightcrew when the wingtips are in the folded and transient positions.
    9. The applicant must include design features that ensure the
wingtips are properly secured during ground operations, to protect
ground personnel from bodily injury as well as to prevent damage to the
airframe, ground structure, and ground support equipment.
    10. The wingtips must have means to safeguard against unlocking
from the extended, flight-deployed position in flight, as a result of
failures, including the failure of any single structural element. All
sources of airplane power that could initiate unlocking of the wingtips
must be automatically isolated from the wingtip-fold operating system
(including the latching and locking system) prior to flight, and it
must not be possible to restore power to the system during flight. The
wingtip latching and locking mechanisms must be designed so that, under
all airplane flight-load conditions, no force or torque can unlatch or
unlock the mechanisms. The latching system must include a means to
secure the latches in the latched position, independent of the locking
system. It must not be possible to position the lock in the locked
position if the latches and the latching mechanisms are not in the
latched position, and it must not be possible to unlatch the latches
with the locks in the locked position.

    Issued in Des Moines, Washington, on May 11, 2018.
Victor Wicklund,
Manager, Transport Standards Branch, Policy and Innovation Division,
Aircraft Certification Service.
[FR Doc. 2018-10576 Filed 5-17-18; 8:45 am]
 BILLING CODE 4910-13-P