[Federal Register Volume 86, Number 165 (Monday, August 30, 2021)]
[Proposed Rules]
[Pages 48363-48366]
[FR Doc No: 2021-18164]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 61 and 63

[EPA-R06-OAR-2020-0086; FRL-8847-01-R6]

National Emission Standards for Hazardous Air Pollutants;
Delegation of Authority to Oklahoma

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Oklahoma Department of Environmental Quality (ODEQ) has
submitted updated regulations for receiving delegation and approval of
its program for the implementation and enforcement of certain National
Emission Standards for Hazardous Air Pollutants (NESHAP), as provided
for under previously approved delegation mechanisms. The updated state
regulations incorporate by reference certain NESHAP promulgated by the
Environmental Protection Agency (EPA) as they existed through June 30,
2019. The EPA is proposing to approve ODEQ's requested delegation
update. The proposed delegation of authority under this action applies
to sources located in certain areas of Indian country as discussed
herein.

DATES: Written comments on this proposed rule must be received on or
before September 29, 2021.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R06-
OAR-2020-0086, at http://www.regulations.gov or via email to
<EMAIL_ADDRESS>Follow the online instructions for submitting
comments. Once submitted, comments cannot be edited or removed from
Regulations.gov. The EPA may publish any comment received to its public
docket. Do not submit electronically any information you consider to be
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Multimedia submissions (audio,
video, etc.) must be accompanied by a written comment. The written
comment is considered the official comment and should include
discussion of all points you wish to make. The EPA will generally not
consider comments or comment contents located outside of the primary
submission (i.e., on the web, cloud, or other file sharing system). For
additional submission methods, please contact Rick Barrett, 214-665-
7227<EMAIL_ADDRESS>For the full EPA public comment policy,
information about CBI or multimedia submissions, and general guidance
on making effective comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets.
    Docket: The index to the docket for this action is available
electronically at www.regulations.gov. While all documents in the
docket are listed in the index, some information may not be publicly
available due to docket file size restrictions or content (e.g., CBI).

FOR FURTHER INFORMATION CONTACT: Rick Barrett, EPA Region 6 Office,
ARPE,<PHONE_NUMBER><EMAIL_ADDRESS>Out of an abundance of
caution for members of the public and our staff, the EPA Region 6
office will be closed to the public to reduce the risk of transmitting
COVID-19. We encourage the public to submit comments via https://www.regulations.gov, as there will be a delay in processing mail and no
courier or hand deliveries will be accepted. Please call or email the
contact listed above if you need alternative access to material indexed
but not provided in the docket.

SUPPLEMENTARY INFORMATION: Throughout this document wherever ``we,''
``us,'' or ``our'' is used, we mean the EPA.

Table of Contents

I. What does this action do?
II. What is the authority for delegation?
III. What criteria must Oklahoma's program meet to be approved?
IV. How did ODEQ meet the NESHAP program approval criteria?
V. What is being delegated?
VI. What is not being delegated?
VII. How will statutory and regulatory interpretations be made?
VIII. What Authority Does the EPA Have?
IX. What Information must ODEQ provide to the EPA?
X. What is the EPA's oversight role?
XI. Should sources submit notices to the EPA or ODEQ?
XII. How will unchanged authorities be delegated to ODEQ in the
future?
XIII. Impact on Areas of Indian Country
XIV. Proposed Action
XV. Statutory and Executive Order Reviews

I. What does this action do?

    The EPA is proposing to approve the delegation of the
implementation and enforcement of certain NESHAPs to ODEQ. If
finalized, the delegation will provide ODEQ with the primary
responsibility to implement and enforce the delegated standards.

II. What is the authority for delegation?

    Section 112(l) of the Clean Air Act (CAA), and 40 CFR part 63,
subpart E, authorize the EPA to delegate authority to any State or
local agency which submits adequate regulatory procedures for
implementation and enforcement of emission standards for hazardous air
pollutants. The hazardous air pollutant standards are codified at 40
CFR parts 61 and 63.

III. What criteria must Oklahoma's program meet to be approved?

    Section 112(l)(5) of the CAA requires the EPA to disapprove any
program submitted by a State for the delegation of NESHAP standards if
the EPA determines that:
    (A) The authorities contained in the program are not adequate to
assure compliance by the sources within the State with respect to each
applicable standard, regulation, or requirement established under
section 112;
    (B) adequate authority does not exist, or adequate resources are
not available, to implement the program;
    (C) the schedule for implementing the program and assuring
compliance by affected sources is not sufficiently expeditious; or
    (D) the program is otherwise not in compliance with the guidance
issued by the EPA under section 112(l)(2) or is not likely to satisfy,
in whole or in part, the objectives of the CAA.
    In carrying out its responsibilities under section 112(l), the EPA
promulgated regulations at 40 CFR part 63, subpart E setting forth
criteria for the approval of submitted programs. For example, in order
to obtain approval of a program to implement and enforce Federal
section 112 rules as promulgated without changes (straight delegation)
for part 70 sources, a state must demonstrate that it meets the
criteria of 40 CFR 63.91(d). 40 CFR 63.91(d)(3) provides that interim
or final Title V program approval will satisfy the criteria of 40 CFR
63.91(d).\1\ The NESHAP delegation for Oklahoma, as it applies to both
part 70 and non-part 70

sources, was most recently approved on October 22, 2018 (83 FR 53183).
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    \1\ Some NESHAP standards do not require a source to obtain a
Title V permit (e.g., certain area sources that are exempt from the
requirement to obtain a Title V permit). For these non-Title V
sources, the EPA believes that the State must assure the EPA that it
can implement and enforce the NESHAP for such sources. See 65 FR
55810, 55813 (September 14, 2000). The EPA previously approved
Oklahoma's program to implement and enforce the NESHAP as they apply
to non-part 70 sources. See 66 FR 1584 (January 9, 2001).
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IV. How did ODEQ meet the NESHAP program approval criteria?

    As to the NESHAP standards in 40 CFR parts 61 and 63, as part of
its Title V submission ODEQ stated that it intended to use the
mechanism of incorporation by reference to adopt unchanged Federal
section 112 standards into its regulations. This commitment applied to
both existing and future standards as they applied to part 70 sources.
The EPA's final interim approval of Oklahoma's Title V operating
permits program delegated the authority to implement certain NESHAP,
effective March 6, 1996 (61 FR 4220, February 5, 1996). On December 5,
2001, the EPA granted final full approval of the State's operating
permits program (66 FR 63170). These interim and final Title V program
approvals satisfy the upfront approval criteria of 40 CFR 63.91(d).
Under 40 CFR 63.91(d)(2), once a state has satisfied up-front approval
criteria, it needs only to reference the previous demonstration and
reaffirm that it still meets the criteria for any subsequent submittals
of the section 112 standards. ODEQ has affirmed that it still meets the
up-front approval criteria. With respect to non-part 70 sources, the
EPA has previously approved delegation of NESHAP authorities to ODEQ
after finding adequate authorities to implement and enforce the NESHAP
for such sources. See 66 FR 1584 (January 9, 2001).

V. What is being delegated?

    By letter dated December 23, 2019, ODEQ requested the EPA to update
its existing NESHAP delegation. With certain exceptions noted in
section VI of this document, Oklahoma's request included NESHAPs in 40
CFR parts 61 and 63. ODEQ's request included newly incorporated NESHAPs
promulgated by the EPA and amendments to existing standards currently
delegated, as amended between September 1, 2016 and June 30, 2018, as
adopted by the State.
    More recently, by letter dated March 23, 2021, the EPA received a
request from ODEQ to update its existing NESHAP delegation. With
certain exceptions noted in section VI of this document, ODEQ's request
includes certain NESHAP in 40 CFR parts 61 and 63. ODEQ's request
included newly incorporated NESHAPs promulgated by the EPA and
amendments to existing standards currently delegated, as amended
between June 30, 2018 and June 30, 2019, as adopted by the State.

VI. What is not being delegated?

    All authorities not affirmatively and expressly proposed for
delegation by this action will not be delegated. These include the
following parts 61 and 63 authorities listed below:
     40 CFR part 61, subpart B (National Emission Standards for
Radon Emissions from Underground Uranium Mines);
     40 CFR part 61, subpart H (National Emission Standards for
Emissions of Radionuclides Other Than Radon From Department of Energy
Facilities);
     40 CFR part 61, subpart I (National Emission Standards for
Radionuclide Emissions from Federal Facilities Other Than Nuclear
Regulatory Commission Licensees and Not Covered by Subpart H);
     40 CFR part 61, subpart K (National Emission Standards for
Radionuclide Emissions from Elemental Phosphorus Plants);
     40 CFR part 61, subpart Q (National Emission Standards for
Radon Emissions from Department of Energy facilities);
     40 CFR part 61, subpart R (National Emission Standards for
Radon Emissions from Phosphogypsum Stacks);
     40 CFR part 61, subpart T (National Emission Standards for
Radon Emissions from the Disposal of Uranium Mill Tailings); and
     40 CFR part 61, subpart W (National Emission Standards for
Radon Emissions from Operating Mill Tailings).
    In addition, the EPA regulations provide that we cannot delegate to
a state any of the Category II Subpart A authorities set forth in 40
CFR 63.91(g)(2). These include the following provisions: Sec.  63.6(g),
Approval of Alternative Non-Opacity Standards; Sec.  63.6(h)(9),
Approval of Alternative Opacity Standards; Sec.  63.7(e)(2)(ii) and
(f), Approval of Major Alternatives to Test Methods; Sec.  63.8(f),
Approval of Major Alternatives to Monitoring; and Sec.  63.10(f),
Approval of Major Alternatives to Recordkeeping and Reporting. Also,
some parts 61 and 63 standards have certain provisions that cannot be
delegated to the states. Furthermore, no authorities are being proposed
for delegation that require rulemaking in the Federal Register to
implement, or where Federal overview is the only way to ensure national
consistency in the application of the standards or requirements of CAA
section 112. Finally, this action does not propose delegation of any
authority under section 112(r), the accidental release program.
    If this action is finalized as proposed, all questions concerning
implementation and enforcement of the excluded standards in the State
of Oklahoma should be directed to the EPA Region 6 Office.
    The EPA is proposing a determination that the NESHAP program
submitted by Oklahoma meets the applicable requirements of CAA section
112(l)(5) and 40 CFR part 63, subpart E.
    As more fully discussed in section XIII of this document, the
proposed delegation to ODEQ to implement and enforce certain NESHAP
extends to sources or activities located in certain areas of Indian
country, as defined in 18 U.S.C. 1151.

VII. How will statutory and regulatory interpretations be made?

    If this NESHAP delegation update is finalized as proposed, ODEQ
will obtain concurrence from the EPA on any matter involving the
interpretation of section 112 of the CAA or 40 CFR parts 61 and 63 to
the extent that implementation, administration, or enforcement of these
sections have not been covered by prior EPA determinations or guidance.

VIII. What authority does the EPA have?

    We retain the right, as provided by CAA section 112(l)(7) and 40
CFR 63.90(d)(2), to enforce any applicable emission standard or
requirement under section 112. In addition, the EPA may enforce any
federally approved State rule, requirement, or program under 40 CFR
63.90(e) and 63.91(c)(1)(i). The EPA also has the authority to make
certain decisions under the General Provisions (subpart A) of parts 61
and 63. We are proposing to delegate to the ODEQ some of these
authorities, and retaining others, as explained in sections V and VI
above. In addition, the EPA may review and disapprove State
determinations and subsequently require corrections. See 40 CFR
63.91(g)(1)(ii). The EPA also has the authority to review ODEQ's
implementation and enforcement of approved rules or programs and to
withdraw approval if we find inadequate implementation or enforcement.
See 40 CFR 63.96.
    Furthermore, we retain the authority in an individual emission
standard that may not be delegated according to provisions of the
standard. Finally, we retain the authorities stated in the original
delegation agreement. See ``Provisions for the Implementation and
Enforcement of NSPS and NESHAP in Oklahoma,'' effective March 25, 1982,
a copy of which is included in the docket

for this action. A table of currently delegated NESHAP standards and
how the updated NESHAP delegation would look if this proposal is
finalized may be found in the Technical Support Document (TSD) included
in the docket for this action. The table also shows the authorities
that cannot be delegated to any state or local agency.

IX. What information must ODEQ provide to the EPA?

    ODEQ must provide any additional compliance related information to
the EPA, Region 6, Office of Enforcement and Compliance Assurance,
within 45 days of a request under 40 CFR 63.96(a). In receiving
delegation for specific General Provisions authorities, ODEQ must
submit to EPA Region 6 on a semi-annual basis, copies of determinations
issued under these authorities. See 40 CFR 63.91(g)(1)(ii). For part 63
standards, these determinations include: Sec.  63.1, Applicability
Determinations; Sec.  63.6(e), Operation and Maintenance Requirements--
Responsibility for Determining Compliance; Sec.  63.6(f), Compliance
with Non-Opacity Standards--Responsibility for Determining Compliance;
Sec.  63.6(h), Compliance with Opacity and Visible Emissions
Standards--Responsibility for Determining Compliance; Sec.
63.7(c)(2)(i) and (d), Approval of Site-Specific Test Plans; Sec.
63.7(e)(2)(i), Approval of Minor Alternatives to Test Methods; Sec.
63.7(e)(2)(ii) and (f), Approval of Intermediate Alternatives to Test
Methods; Sec.  63.7(e)(iii), Approval of Shorter Sampling Times and
Volumes When Necessitated by Process Variables or Other Factors; Sec.
63.7(e)(2)(iv), (h)(2) and (3), Waiver of Performance Testing; Sec.
63.8(c)(1) and (e)(1), Approval of Site-Specific Performance Evaluation
(Monitoring) Test Plans; Sec.  63.8(f), Approval of Minor Alternatives
to Monitoring; Sec.  63.8(f), Approval of Intermediate Alternatives to
Monitoring; Sec. Sec.  63.9 and 63.10, Approval of Adjustments to Time
Periods for Submitting Reports; Sec.  63.10(f), Approval of Minor
Alternatives to Recordkeeping and Reporting; and Sec.  63.7(a)(4),
Extension of Performance Test Deadline.

X. What is the EPA's oversight role?

    The EPA must oversee ODEQ's decisions to ensure the delegated
authorities are being adequately implemented and enforced. We will
integrate oversight of the delegated authorities into the existing
mechanisms and resources for oversight currently in place. If, during
oversight, we determine that ODEQ has made decisions that decrease the
stringency of the delegated standards, then ODEQ shall be required to
take corrective actions and the source(s) affected by the decisions
will be notified, as required by 40 CFR 63.91(b) and (g)(1)(ii). We
will initiate withdrawal of the program or rule if the corrective
actions taken are insufficient. See 51 FR 20648 (June 6, 1986).

XI. Should sources submit notices to the EPA or ODEQ?

    For the delegated NESHAP standards and authorities covered by this
proposed action, if finalized, sources would submit all of the
information required pursuant to the general provisions and the
relevant subpart(s) of the delegated NESHAP (40 CFR parts 61 and 63)
directly via electronic submittal to online EPA database portals that
are specified in each rule, and also as paper submittals to the ODEQ at
the following address: Oklahoma Department of Environmental Quality,
707 North Robinson, P.O. Box 1677, Oklahoma City, Oklahoma 73101-1677.
The ODEQ is the primary point of contact with respect to delegated
NESHAP. The EPA Region 6 proposes to waive the requirement that
courtesy notifications and reports for delegated standards be submitted
to the EPA in addition to ODEQ in accordance with 40 CFR 63.9(a)(4)(ii)
and 63.10(a)(4)(ii).\2\ For those standards and authorities not
delegated as discussed above, sources must continue to submit all
appropriate information to the EPA.
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    \2\ This waiver only extends to the submission of copies of
notifications and reports; the EPA does not waive the requirements
in delegated standards that require notifications and reports be
submitted to an electronic database (e.g., 40 CFR part 63, subpart
HHHHHHH).
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XII. How will unchanged authorities be delegated to ODEQ in the future?

    As stated in previous NESHAP delegation actions, the EPA has
approved Oklahoma's mechanism of incorporation by reference of NESHAP
standards into ODEQ regulations, as they apply to both part 70 and non-
part 70 sources. See, e.g., 61 FR 4224 (February 5, 1996) and 66 FR
1584 (January 9, 2001). Consistent with the EPA regulations and
guidance,\3\ ODEQ may request future updates to Oklahoma's NESHAP
delegation by submitting a letter to the EPA that appropriately
identifies the specific NESHAP which have been incorporated by
reference into State rules, reaffirms that it still meets up-front
approval delegation criteria for part 70 sources, and demonstrates that
ODEQ maintains adequate authorities and resources to implement and
enforce the delegated NESHAP requirements for all sources. We will
respond in writing to the request stating that the request for
delegation is either approved or denied. A Federal Register action will
be published to inform the public and affected sources of the updated
delegation, indicate where source notifications and reports should be
sent, and amend the relevant portions of the Code of Federal
Regulations identifying which NESHAP standards have been delegated to
the ODEQ.
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    \3\ See Harardous Air Pollutants: Amendments to the Approval of
State Programs and Delegation of Federal Authorities, Final Rule (65
FR 55810, September 14, 2000); and ``Straight Delegation Issues
Concerning Sections 111 and 112 Requirements and Title V,'' by John
S. Seitz, Director of Air Qualirty Planning and Standards, EPA,
dated December 10, 1993.
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XIII. Impact on Areas of Indian Country

    Following the U.S. Supreme Court decision in McGirt v Oklahoma, 140
S. Ct. 2452 (2020), the Governor of the State of Oklahoma requested
approval under Section 10211(a) of the Safe, Accountable, Flexible,
Efficient Transportation Equity Act of 2005: A Legacy for Users, Public
Law 109-59, 119 Stat. 1144, 1937 (August 10, 2005) (``SAFETEA''), to
administer in certain areas of Indian country (as defined at 18 U.S.C.
1151) the State's environmental regulatory programs that were
previously approved by the EPA outside of Indian country.\4\ The
State's request excluded certain areas of Indian country further
described below.
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    \4\ A copy of the Governor's July 22, 2020 request can be found
in the docket for this proposed rulemaking.
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    On October 1, 2020, the EPA approved Oklahoma's SAFETEA request to
administer all of the State's EPA-approved environmental regulatory
programs, including the delegated portions of the NESHAP program, in
the requested areas of Indian country.\5\ As requested by Oklahoma, the
EPA's approval under SAFETEA does not include Indian country lands,
including rights-of-way running through the same, that: (1) Qualify as
Indian allotments, the Indian titles to which have not been
extinguished, under 18 U.S.C. 1151(c); (2) are held in trust by the
United States on behalf of an individual Indian or Tribe; or (3) are
owned in fee by a Tribe, if the Tribe (a) acquired that fee title to
such land, or an area that included such land, in accordance with a
treaty with the United States to which such Tribe was a party, and (b)
never allotted the land to a member or citizen of the Tribe

(collectively ``excluded Indian country lands'').
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    \5\ A copy of EPA's October 1, 2020 approval can be found in the
docket for this proposed rulemaking.
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    EPA's approval under SAFETEA expressly provided that to the extent
EPA's prior approvals of Oklahoma's environmental programs excluded
Indian country, any such exclusions are superseded for the geographic
areas of Indian country covered by the EPA's approval of Oklahoma's
SAFETEA request.\6\ The approval also provided that future revisions or
amendments to Oklahoma's approved environmental regulatory programs
would extend to the covered areas of Indian country (without any
further need for additional requests under SAFETEA).
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    \6\ EPA's prior approvals relating to Oklahoma's NESHAP
delegation frequently noted that the NESHAP delegation was not
approved to apply in areas of Indian country located in the State.
See, e.g., 83 FR 53183 (October 22, 2018). Such prior expressed
limitations are superseded by the EPA's approval of Oklahoma's
SAFETEA request.
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    As explained above, the EPA is proposing to approve an update to
the Oklahoma NESHAP delegation. Consistent with the EPA's October 1,
2020 SAFETEA approval, if this action is finalized as proposed,
Oklahoma's delegation of the NESHAP program will apply to all areas of
Indian country within the State of Oklahoma, other than the excluded
Indian country lands.\7\
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    \7\ In accordance with Executive Order 13990, EPA is currently
reviewing our October 1, 2020 SAFETEA approval and is engaging in
further consultation with tribal governments and discussions with
the State of Oklahoma as part of this review. EPA also notes that
the October 1, 2020 approval is the subject of a pending challenge
in federal court. (Pawnee v. Regan, No. 20-9635 (10th Cir.)).
Pending completion of EPA's review, EPA is proceeding with this
proposed action in accordance with the October 1, 2020 approval.
EPA's final action on the NESHAP delegation update will address the
scope of the State's program with respect to Indian country, and may
make any appropriate adjustments, based on the status of our review
at that time. If EPA's final action on Oklahoma's NESHAP delegation
update is taken before our review of the SAFETEA approval is
complete, EPA may make further changes to the approval of Oklahoma's
NESHAP delegation to reflect the outcome of the SAFETEA review.
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XIV. Proposed Action

    In this action, the EPA is proposing to approve an update to the
Oklahoma NESHAP delegation that would provide the ODEQ with the
authority to implement and enforce certain newly incorporated NESHAP
promulgated by the EPA and amendments to existing standards currently
delegated, as they existed though June 30, 2019. This proposed
delegation to ODEQ extends to sources and activities located in certain
areas of Indian country, as explained in section XIII above.

XV. Statutory and Executive Order Reviews

    Under the CAA, the Administrator has the authority to approve
section 112(l) submissions that comply with the provisions of the Act
and applicable Federal regulations. In reviewing section 112(l)
submissions, the EPA's role is to approve state choices, provided that
they meet the criteria and objectives of the CAA and of the EPA's
implementing regulations. Accordingly, this proposed action would
merely approve the State's request as meeting Federal requirements and
does not impose additional requirements beyond those imposed by state
law. For that reason, this proposed action:
     Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Orders
12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21,
2011);
     Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the CAA; and
     Does not provide the EPA with the discretionary authority
to address, as appropriate, disproportionate human health or
environmental effects, using practicable and legally permissible
methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
    This proposal to approve Oklahoma's request to update the NESHAP
delegation will apply, if finalized as proposed, to certain areas of
Indian country as discussed in section XIII above, and therefore has
tribal implications as specified in Executive Order 13175 (65 FR 67249,
November 9, 2000). However, this action will neither impose substantial
direct compliance costs on federally recognized tribal governments, nor
preempt tribal law. This action will not impose substantial direct
compliance costs on federally recognized tribal governments because no
actions will be required of tribal governments. This action will also
not preempt tribal law as no Oklahoma tribe implements a regulatory
program under the CAA, and thus does not have applicable or related
tribal laws. Consistent with the EPA Policy on Consultation and
Coordination with Indian Tribes (May 4, 2011), the EPA has offered
consultation to tribal governments that may be affected by this action.

List of Subjects

40 CFR Part 61

    Environmental protection, Administrative practice and procedure,
Air pollution control, Arsenic, Benzene, Beryllium, Hazardous
substances, Mercury, Intergovernmental relations, Reporting and
recordkeeping requirements, Vinyl chloride.

40 CFR Part 63

    Environmental protection, Administrative practice and procedure,
Air pollution control, Hazardous substances, Intergovernmental
relations, Reporting and recordkeeping requirements.

    Authority: 42 U.S.C. 7401 et seq.

    Dated: August 18, 2021.
David Garcia,
Director, Air and Radiation Division, Region 6.
[FR Doc. 2021-18164 Filed 8-27-21; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 85, Number 205 (Thursday, October 22, 2020)]
[Notices]
[Pages 67387-67392]
[FR Doc No: 2020-23361]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90212; File No. SR-CBOE-2020-099]

Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Rule 5.34 in Connection With Its Debit/Credit Price Reasonability Check

October 16, 2020,
    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 October 13, 2020, Cboe Exchange, Inc. (the ``Exchange'' or
``Cboe Options'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I
and II below, which Items have been prepared by the Exchange. The
Exchange filed the proposal pursuant to Section 19(b)(3)(A)(iii) of the
Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes
to amend Rule 5.34 in connection with its debit/credit price
reasonability check. The text of the proposed rule change is provided
in Exhibit 5.
    The text of the proposed rule change is also available on the
Exchange's website (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the
Secretary, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposed to amend Rule 5.34(b)(3), which provides for
its debit/credit price reasonability check. Specifically, the proposed
rule change amends Rule 5.34(b)(3)(A) in connection with two-legged
strategies that have one A.M.-settled leg and one P.M.-settled leg with
the same expiration date.\5\ The proposed rule change also codifies the
definition of diagonal spreads in Rule 5.34(b)(1)(E), which is already
a strategy described in Rule 5.34(b)(3) and handled by the System in
connection with the debit/credit reasonability check, the codified
definition of which was inadvertently omitted in the rule filing that
allowed the System to apply the debit/credit reasonability check to
diagonal spreads.\6\
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    \5\ The proposed rule change also updates the definition of
vertical spread in Rule 5.34(b)(1)(A) and the definition of calendar
spread in Rule 5.34(b)(1)(D) in light of the proposed change to Rule
5.34(b)(3)(A).
    \6\ See Securities Exchange Release No. 88923 (May 21, 2020), 85
FR 32086 (May 28, 2020) (SR-CBOE-2020-046).
---------------------------------------------------------------------------

    Pursuant to the debit/credit price reasonability check, the
Exchange

cancels or rejects a complex order (or unexecuted portion) that is a
limit order for a debit strategy with a net credit price that exceeds a
pre-set buffer, a limit order (or unexecuted portion) for a credit
strategy with a net debit price that exceeds a pre-set buffer, or a
market order (or unexecuted portion) for a credit strategy that would
execute at a net debit price that exceeds a pre-set buffer (the pre-set
buffers are determined by the Exchange on a class and strategy (i.e.,
vertical, calendar, butterfly, orders with different expiration dates
and exercise prices) basis). The System defines a complex order as a
debit (credit) if all pairs and loners are debits (credits).\7\ For
purposes of the credit/debit price reasonability check, a ``pair'' is a
pair of legs in an order for which both legs are calls or both legs are
puts, one leg is a buy and one leg is a sell, and the legs have the
same expiration date but different exercise prices (i.e., vertical),\8\
the same exercise price but different expiration dates (i.e.,
calendar),\9\ or the exercise price for the call (put) with the farther
expiration date is lower (higher) than the exercise price for the
nearer expiration date (which is a diagonal pair). A ``loner'' is any
leg in an order that the System cannot pair with another leg in the
order.
---------------------------------------------------------------------------

    \7\ See Rule 5.34(b)(3)(B)(i) and (ii). The System also
determines certain call and put butterfly spreads as debits and
credits.
    \8\ See also Rule 5.34(b)(1)(A), which defines a ``vertical
spread'' as a two-legged complex order with one leg to buy a number
of calls (puts) and one leg to sell the same number of calls (puts)
with the same expiration date but different exercise prices.
    \9\ See also Rule 5.34(b)(1)(D), which defines a ``calendar
spread'' as a two-legged complex order with one leg to buy a number
of calls (puts) and one leg to sell the same number of calls (puts)
with the same exercise price but different expiration dates.
---------------------------------------------------------------------------

    The System determines whether an order is a debit or credit based
on general options volatility and pricing principles, which the
Exchange understands are used by market participants in their option
pricing models. With respect to options with the same underlying:
     If two calls (puts) have the same expiration date, the
price of the call (put) with the lower (higher) exercise price is more
than the price of the call (put) with the higher (lower) exercise
price; and
     if two calls (puts) have the same exercise price, the
price of the call (put) with the nearer expiration is less than the
price of the call (put) with the farther expiration.
    In other words, a call (put) with a lower (higher) exercise price
is generally more expensive than a call (put) with a higher (lower)
exercise price, because the ability to buy stock at a lower price is
more valuable than the ability to buy stock at a higher price, and the
ability to sell stock at a higher price is more valuable than the
ability to sell stock at a lower price. A call (put) with a farther
expiration is generally more expensive than the price of a call (put)
with a nearer expiration, because locking in a price further into the
future involves more risk for the buyer and seller and thus is more
valuable, making an option (call or put) with a farther expiration more
expensive than an option with a nearer expiration. Based on the
principles described above and pursuant to Rule 5.34(b)(3)(B)(iii), the
System pairs calls (puts) under the current debit/credit reasonability
check, as follows:
    (1) The System first pairs legs to the extent possible within each
expiration date, pairing one leg with the leg that has the next highest
exercise price.
    (2) The System then pairs legs to the extent possible across
expiration dates, pairing one call (put) with the call (put) that has
the next nearest expiration date and the same or next lower (higher)
exercise price.
    (3) A pair of calls is a credit (debit) if the exercise price of
the buy (sell) leg is higher than the exercise price of the sell (buy)
leg (if the pair has the same expiration date) or if the expiration
date of the sell (buy) leg is farther than the expiration date of the
buy (sell) leg (if the exercise price of the sell (buy) leg is the same
as or lower than the exercise price of the buy (sell) leg).
    (4) A pair of puts is a credit (debit) if the exercise price of the
sell (buy) leg is higher than the exercise price of the buy (sell) leg
(if the pair has the same expiration date) or if the expiration date of
the sell (buy) leg is farther than the expiration date of the buy
(sell) leg (if the exercise price of the sell (buy) leg is the same as
or higher than the exercise price of the buy (sell) leg).
    (5) A loner to buy is a debit, and a loner to sell is a credit.
    Additionally, the System does not apply the debit/credit price
reasonability check to an order for which the System cannot define
whether it is a debit or credit.
    As indicated above, the debit/credit reasonability check allows the
Exchange to determine a pre-set buffer on a class-by-class and strategy
basis (i.e., vertical, calendar, butterfly, orders with different
expiration dates and exercise prices). This flexibility allows the
Exchange to appropriately respond to the different trading
characteristics and market conditions that have unique impact across
different classes and different strategies. For example, the Exchange
understands that in certain market conditions, particularly in volatile
conditions, the general pricing principles described above may not
apply to certain classes or strategies. It is possible that the leg
with the farther expiration may be trading at a discount and thus is
worth less than the leg with the nearer term expiration, and thus
entering a diagonal or calendar strategy as a debit may be consistent
with the then-current market. Specifically, certain classes may exhibit
backwardation,\10\ which occurs when series with the farther
expirations are worth less than series with the nearer term
expirations. In such conditions, the Exchange may deem it appropriate
to increase the buffer to permit these orders to be accepted for
electronic processing. While an order with a diagonal or calendar
strategy entered as a debit in normal market conditions may appear
erroneous and be appropriately rejected, in volatile market conditions,
such an order entered as a debit may be accurately reflecting the
market. As such, the flexibility to establish pre-set buffers on a
class and strategy basis currently permits the Exchange to provide a
calendar or diagonal strategy order entered as a debit with electronic
execution opportunities, as applicable, by modifying the buffer of
these strategies with legitimate debit prices that are consistent with
then-current market conditions. In this way, the System may accept such
orders while maintaining the check's protection for classes and
strategies whose pricing is not impacted by these market conditions and
are not experiencing backwardation.
---------------------------------------------------------------------------

    \10\ Specifically, European-settled options (which is a group of
classes) may experience backwardation. For example, SPX is a
European style option that may be impacted by backwardation in
unusual or volatile market conditions. Accordingly, the Exchange
regularly sets widened buffers for SPX diagonal pairs.
---------------------------------------------------------------------------

    As stated above, for purposes of the debit/credit reasonability
check, the System defines a vertical spread order as a two-legged
complex order with one leg to buy a number of calls (puts) and one leg
to sell the same number of calls (puts) with the same expiration date
but different exercise prices,\11\ and a calendar spread order as a
two-legged complex order with one leg to buy a number of calls (puts)
and one leg to sell the same number of calls (puts) with the same
exercise price but different expiration dates.\12\ The Exchange notes

that while the expiration date of the legs of a vertical or calendar
spread with an A.M.-settled leg and a P.M.-settled leg may be the same,
the last trading date of the two legs differs. For example, an S&P 500
Index (``SPX'') option/SPX Weekly (``SPXW'') vertical spread would
contain the same expiration date, yet SPX options are A.M.-settled,
thus they stop trading on the Thursday prior to Friday expiration, and
SPXW options are P.M.-settled, thus they stop trading at the close on
Friday expiration. As a result, the time to expiration of trading for
each leg is different, which the Exchange understands is what market
participants consider when pricing options with an A.M.-settled/P.M.-
settled vertical strategy, similar to the pricing of a diagonal spread,
or when pricing options with an A.M.-settled/P.M.-settled calendar
strategy--in other words, market participants consider these legs to
have different expiration dates. When applying the debit/credit
reasonability check, however, the System currently considers a strategy
with one P.M.-settled leg and one A.M.-settled leg with the same
expiration date and different exercise prices to be a vertical
strategy, rather than a diagonal strategy., [sic] and it rejects a
strategy with one P.M.-settled leg and one A.M.-settled leg with the
same expiration date and same exercise prices because it does not
recognize this strategy as a calendar strategy. More specifically, the
System and the Rules do not currently consider the difference in time
between the actual close of trading for the A.M.-settled leg and the
actual close of trading the following day for the P.M.-settled leg--it
considers only that the legs have the same expiration date. As a
result, the System does not determine the credit (debit) net price for
vertical or calendar spread orders with a pair(s) of A.M.-settled/P.M.-
settled legs using the same pricing principles for the debit/credit
reasonability check that the Exchange understands market participants
use for these strategies, as market participants consider these spreads
to have different expiration dates, and thus to be diagonals (rather
than verticals) or calendars for pricing purposes. That is, if a sell
(buy) leg is P.M.-settled (i.e., is ``farther out'' in time until
trading actually ceases) and is a call (put) with an exercise price
that is the same as or lower (higher) than the exercise price of the
buy (sell) A.M.-settled leg (thus making the P.M.-settled leg more
expensive), the System would not treat this as a diagonal spread, nor
recognize it as a calendar spread, pursuant to Rule
5.34(b)(3)(B)(iii)(c) and (d), even though market participants would
price these spreads as a diagonal (if the legs have different exercise
prices) or calendar (if the legs have the same exercise price) from a
pricing perspective.
---------------------------------------------------------------------------

    \11\ See Rule 5.34(b)(1)(A).
    \12\ See Rule 5.34(b)(1)(D).
---------------------------------------------------------------------------

    Specifically, a vertical spread with A.M.-settled/P.M.-settled legs
essentially emulates the manner in which a diagonal strategy executes,
given that each leg in a diagonal strategy ceases trading at different
times (because they have different expiration dates) and diagonal
spread legs, like vertical spread legs, also have different exercise
prices. Likewise, a spread with A.M.-settled/P.M.-settled legs with the
same exercise price essentially emulates the manner in which a calendar
spread executes, given that each leg in a calendar strategy ceases
trading at different times (because they have different expiration
dates). Under the proposal, the debit/credit reasonability check logic
and Exchange-determined buffers, where applicable, would apply in the
same manner as they do today for calendar and diagonal spreads, as
applicable, to spreads with a pair(s) of A.M.-settled/P.M.-settled
legs. Therefore, the proposed rule change amends Rule 5.34(b)(3)(A) to
provide that, for the purposes of the debit/credit price reasonability
check, the System considers a two-legged strategy with one P.M.-settled
leg and one A.M.-settled leg with the same expiration date to be a
diagonal spread (where both legs have different expiration dates and
different exercise prices), rather than a vertical spread, or a
calendar spread (where both legs have the same exercise price).\13\ As
a result, the System will apply to such vertical strategies, which are
generally priced using the same principles as diagonal spreads and may
be adjusted to reflect backwardation (as described above), the same
debit/credit check logic and pre-set buffers that it currently applies
to diagonal spreads. In addition, the System will apply to such
strategies, which are generally priced using the same principles as
calendar spreads, the same debit/credit check logic and pre-set buffers
that it currently applies to calendar spreads and not reject such
strategies because the legs have the same expiration dates and exercise
prices. The Exchange believes the enhancing the debit/credit price
reasonability check to consider a spread that contains a pair of A.M.-
settled/P.M. settled legs with the same expiration date as a diagonal
or calendar, as appropriate, will cause the System to apply more
accurate pricing principles to them when determining whether to accept
or reject strategies with A.M.-settled/P.M.-settled legs.
---------------------------------------------------------------------------

    \13\ See supra note 5.
---------------------------------------------------------------------------

    Regarding vertical spreads with A.M.-settled/P.M.-settled legs with
the same expiration date and different exercise prices, currently, if
the System receives such a vertical spread order, and the exercise
price for the sell leg is lower than the exercise price of the buy leg
with a debit price, the System will determine this to be a credit and
reject it (assuming it is outside of the buffer). However, if the class
is experiencing backwardation, the debit price may be appropriate. As
discussed above, the Exchange may widen the buffer for such a class in
such circumstances for calendars and diagonals to account for the
backwardation. Therefore, if the System receives a spread with A.M.-
settled/P.M.-settled legs in a class experiencing backwardation during
unusual or volatile market conditions, the System would apply a
different buffer to that spread than it would apply to a diagonal
spread. While the A.M.-settled/P.M.-settled vertical spread would
likely have been priced using the same pricing principles as the
diagonal spread, the System would reject the vertical spread order,
despite it likely having a legitimate price, while accepting the
diagonal order with a similarly legitimate price. Pursuant to the
proposed rule change the strategy described above would be handled as a
diagonal and will have the opportunity to be accepted and executed.
Similarly, the System will recognize a spread with A.M.-settled/P.M.-
settled legs with the same expiration date and the same exercise price
as a calendar spread and not reject such spread order.
    The Exchange notes that it announces any changes to the parameters
of the debit/credit reasonability check to market participants by
Exchange notice pursuant to Rule 1.5. The Exchange notes too that it
will continue to regularly monitor the application of the debit/credit
price reasonability check, including the number of orders rejected as a
result of the check, as well as continue to monitor orders that may be
executed at erroneous prices pursuant to Rule 6.5. The Exchange
currently considers all of these factors, as well as market conditions,
investor demand, and other relevant factors when determining whether to
modify the debit/credit reasonability check buffer or other risk
control parameters in order to attempt to create an appropriate balance
between protection against executions at potentially erroneous prices
and provision of execution opportunities for legitimately priced
orders.

    In addition to this, the proposed rule change codifies the
definition of diagonal spreads in the current spread definitions in
Rule 5.34(b)(1). Specifically, proposed Rule 5.34(b)(1)(E) provides
that a ``diagonal'' spread is a two-legged complex order with one leg
to buy a number of calls (puts) and one leg to sell the same number of
calls (puts) with different expiration dates and different exercise
prices. As noted above, diagonal spreads are currently described within
Rule 5.34(b) and the System currently applies the debit/credit
reasonability check and Exchange-determined buffers to diagonal spreads
pursuant to Rule 5.34(b)(3)(A).\14\ The Exchange merely inadvertently
omitted codifying the definition of diagonal spreads in a previous rule
filing that updated Rule 5.34 to allow the System to apply the debit/
credit reasonability check to diagonals.\15\
---------------------------------------------------------------------------

    \14\ In light of the proposed codified definition, the Exchange
updates the current description of a diagonal in Rule 5.34(b)(3)(A)
to, instead, refer to ``diagonal'', as well as adds this reference
to the description of a diagonal in Rule 5.34(b)(3)(B)(iii).
    \15\ See supra note 6.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\16\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \17\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \18\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78f(b).
    \17\ 15 U.S.C. 78f(b)(5).
    \18\ Id.
---------------------------------------------------------------------------

    In particular, the Exchange believes the proposed rule change will
remove impediments to and perfects the mechanism of a free and open
market and national market system by applying the current debit/credit
price reasonability check logic for diagonal spreads (which have
different expiration dates and thus cease trading on different dates,
as well as different exercise prices) to spread orders with A.M.-
settled/P.M.-settled legs that have different exercise prices but the
same expiration date (and are thus currently defined as verticals) but
similarly cease trading on different dates. Additionally, it will allow
the System to recognize spreads with A.M.-settled/P.M.-settled legs
that have the same exercise price and the same expiration date, but
likewise cease trading on different dates, to be calendar spreads
(which have different expiration dates and the same exercise price). By
considering these particular orders to be diagonals rather than
verticals, or to be calendars, the Exchange will apply the same buffers
to vertical strategies that have legs that stop trading at different
times (i.e., one leg is A.M-settled and one leg is P.M.-settled) as it
applies to diagonal strategies (which also have legs that stop trading
at different times), and will apply the same buffers to strategies that
have legs that stop trading at different times (i.e., one leg is A.M-
settled and one leg is P.M.-settled) and the same exercise price as it
applies to calendar strategies. This handling of vertical spreads is
appropriate in classes in which market conditions may cause the P.M.-
settled leg (with the farther time until trading expiration) to trade
at a discount and be worth less than the A.M.-settled leg (with the
nearer time until trading expiration). By considering a vertical
strategy with A.M.-settled/P.M.-settled legs with the same expiration
date as diagonal rather than a vertical, for purposes of the debit/
credit price reasonability check, the proposed rule change will provide
the same execution opportunities for legitimately priced vertical
strategies with A.M.-settled/P.M.-settled legs in certain classes as it
may for diagonal strategies in certain classes given then-current
market conditions. Additionally, this handling of strategies with A.M.-
settled/P.M.-settled legs with the same expiration date and different
exercise prices as calendar spreads will provide those orders with
opportunities to be accepted and executed, rather than be rejected
because the debit/credit price reasonability checks views the orders as
having legs with the same expiration dates and exercise prices and thus
does not recognize it as a calendar spread.
    As a result, the proposed rule change ultimately protects investors
by continuing to prevent execution of spreads with A.M.-settled/P.M.-
settled legs that cease trading on different days at potentially
erroneous prices, while also providing additional execution
opportunities for those spreads that may be legitimately priced given
then-current market conditions but may currently be rejected when these
orders are treated as vertical spreads for the purposes of the debit/
credit reasonability check, or are not recognized as calendar spreads.
This proposed application of the debit/credit price reasonability check
promotes just and equitable principles of trade, as it is based on the
same general option and volatility pricing principles the System
currently uses to pair calls and puts for other complex orders that
also stop trading on different days, and will result in the handling of
strategies with legs that stop trading on different days in the same
manner during unusual or volatile market conditions.
    In addition to this, the Exchange notes that the proposed rule
change would not raise any novel or unique issues for investors as the
debit/credit reasonability check logic and Exchange-determined buffers,
where applicable, would apply to strategies with A.M.-settled/P.M.-
settled legs in the same manner as they do today for calendar and
diagonal spreads, which also have legs that stop trading on different
dates. The Exchange will continue to announce any changes to the
parameters of the debit/credit reasonability check to market
participants by Exchange notice, to regularly monitor the application
of the debit/credit price reasonability check and for orders that may
be executed at erroneous prices, to consider market conditions,
investor demand, and other relevant factors when determining whether to
modify the debit/credit reasonability check buffer or other risk
control parameter amount in order to appropriately balance providing
protection against executions at potentially erroneous prices and
providing execution opportunities for legitimately priced orders.
    In addition to this, the proposed rule change to codify the
definition of diagonal spreads in Rule 5.34(b) would generally protect
investors by adding clarity to the Rules regarding a strategy that is
already described within the Rules and to which the System currently
applies the debit/credit reasonability check and Exchange-determined
price buffers.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not

necessary or appropriate in furtherance of the purposes of the Act. The
proposed rule change will not impose any burden on intramarket
competition, because the debit/credit price reasonability check will
continue to apply to all incoming complex orders of all TPHs in the
same manner. The proposed rule change would allow the System to apply
the logic and pre-set buffers to vertical spreads with A.M.-settled/
P.M.-settled legs (and thus stop trading on different dates) that it
already applies to other spreads that contain legs that stop trading on
different dates and have different exercise prices (i.e., diagonals),
as well as to apply the logic and pre-set buffers to spreads with A.M.-
settled/P.M.-settled legs (and thus stop trading on different dates)
that it already applies to other spreads that contain legs that stop
trading on different dates and have the same exercise prices (i.e.,
calendars). This, in turn, will allow the System to apply the
appropriate Exchange-determined buffer to such vertical orders, which
the Exchange understands market participants price more similarly to a
diagonal spread as opposed to a vertical spread, or to such calendar
orders, given the difference in the actual trading days on which each
leg stops trading, thus allowing for legitimately priced strategies
with A.M.-settled/P.M.-settled legs to execute as intended.
    The proposed rule change does not impose any burden on intermarket
competition, as it is an enhancement to a price protection mechanism
the System applies to complex orders submitted to the Exchange to
determine whether they should be accepted for potential execution on
the Exchange. The Exchange believes the proposed rule change would
provide all market participants with additional execution opportunities
when appropriate while still providing protection from anomalous or
erroneous executions. To the extent that market participants find the
proposed application of the debit/credit reasonability check to their
vertical and calendar spreads with A.M.-settled/P.M.-settled legs more
favorable for execution of their legitimately priced orders, other
exchanges may adopt functionality to similarly handle such complex
strategies.
    Additionally, the proposed rule change to codify the definition of
diagonal spreads to the Rules is a nonsubstantive, noncompetitive
change that merely provides additional clarity within the Rules
regarding a term/strategy that is already described in the Rules and
that the System already accounts for pursuant to the Rules.

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

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

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

    The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \19\ and Rule 19b-4(f)(6) thereunder.\20\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
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, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \21\ and Rule 19b-
4(f)(6)(iii) thereunder.\22\
---------------------------------------------------------------------------

    \19\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \20\ 17 CFR 240.19b-4(f)(6).
    \21\ 15 U.S.C. 78s(b)(3)(A).
    \22\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \23\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\24\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. The Exchange states that
market participants have voiced concerns regarding the System rejecting
their legitimately priced A.M.-settled/P.M.-settled calendar spreads
and vertical spreads, especially closer in time to A.M./P.M. expiration
dates. The Exchange believes that waiver of the operative delay will
protect investors by allowing the Exchange to apply a potentially
widened buffer to A.M.-settled/P.M.-settled vertical spreads during
volatile market conditions, and by allowing the System to recognize and
accept A.M.-settled/P.M.-settled spreads with the same expiration date
and exercise price as calendar spreads, rather than rejecting them. As
discussed above, the Exchange states that because the component legs of
an A.M.-settled/P.M.-settled vertical spread cease trading on different
days, market participants price A.M.-settled/P.M.-settled vertical
spreads more similarly to diagonal spreads. In addition, market
participants treat A.M.-settled/P.M.-settled spreads with component
legs that have the same exercise price and expiration date as calendar
spreads, although the System currently does not recognize them as
calendar spreads. The Commission believes that waiver of the operative
delay will allow the Exchange to modify the debit/credit price
reasonability check so that it applies to A.M.-settled/P.M.-settled
calendar and vertical spreads in a manner that is consistent with
market participants' pricing of these spreads, and could help to ensure
that the price check does not reject appropriately priced A.M.-settled/
P.M.-settled calendar and vertical spreads. In addition, the Commission
believes that adding a definition of diagonal spread will help to
clarify the operation of the rule. For these reasons, the Commission
believes that waiver of the 30-day operative delay is consistent with
the protection of investors and the public interest. According, the
Commission hereby waives the 30-day operative delay and designates the
proposal operative upon filing.\25\
---------------------------------------------------------------------------

    \23\ 17 CFR 240.19b-4(f)(6).
    \24\ 17 CFR 240.19b-4(f)(6)(iii).
    \25\ For purposed only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of this proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-CBOE-2020-099 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CBOE-2020-099. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-CBOE-2020-099, and should be submitted
on or before November 12, 2020.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\26\
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    \26\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-23361 Filed 10-21-20; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 86, Number 240 (Friday, December 17, 2021)]
[Notices]
[Page 71636]
[FR Doc No: 2021-27370]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings

    Take notice that the Commission has received the following Natural
Gas Pipeline Rate and Refund Report filings:

Filings Instituting Proceedings

    Docket Numbers: PR22-10-000.
    Applicants: Permian Highway Pipeline LLC.
    Description: Submits tariff filing per 284.123(b),(e)/: 2021 PHP
Fuel Filing to be effective 10/1/2021.
    Filed Date: 12/9/2021.
    Accession Number: 20211209-5000.
    Comments/Protests Due: 5 p.m. ET 12/30/21.

    Docket Numbers: RP22-405-000.
    Applicants: Ozark Gas Transmission, L.L.C.
    Description: Compliance filing: Ozark Gas Transmission NAESB
Compliance Filing to be effective 6/1/2022.
    Filed Date: 12/10/21.
    Accession Number: 20211210-5081.
    Comment Date: 5 p.m. ET 12/22/21.

    Docket Numbers: RP22-406-000.
    Applicants: ANR Pipeline Company.
    Description: Sec.  4(d) Rate Filing: ANR Creditworthiness to be
effective 1/10/2022.
    Filed Date: 12/10/21.
    Accession Number: 20211210-5123.
    Comment Date: 5 p.m. ET 12/22/21.

    Docket Numbers: RP22-407-000.
    Applicants: Rockies Express Pipeline LLC.
    Description: Sec.  4(d) Rate Filing: REX 2021-12-10 Negotiated Rate
Agreement to be effective 12/11/2021.
    Filed Date: 12/10/21.
    Accession Number: 20211210-5131.
    Comment Date: 5 p.m. ET 12/22/21.

    Docket Numbers: RP22-408-000.
    Applicants: Freebird Gas Storage, L.L.C.
    Description: Sec.  4(d) Rate Filing: Updates to Freebird Gas
Storage LLC FERC Gas Tariff to be effective 1/9/2022.
    Filed Date: 12/10/21.
    Accession Number: 20211210-5160.
    Comment Date: 5 p.m. ET 12/22/21.

    Any person desiring to intervene or protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00
p.m. Eastern time on the specified comment date. Protests may be
considered, but intervention is necessary to become a party to the
proceeding.
    The filings are accessible in the Commission's eLibrary system by
clicking on the links or querying the docket number.
    eFiling is encouraged. More detailed information relating to filing
requirements, interventions, protests, service, and qualifying
facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call<PHONE_NUMBER>
(toll free). For TTY, call<PHONE_NUMBER>.

    Dated: December 13, 2021.
Debbie-Anne A. Reese,
Deputy Secretary.
[FR Doc. 2021-27370 Filed 12-16-21; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 78, Number 58 (Tuesday, March 26, 2013)]
[Notices]
[Pages 18413-18414]
[FR Doc No: 2013-06875]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69186; File No. SR-BOX-2013-12]

Self-Regulatory Organizations; BOX Options Exchange LLC; Notice
of Filing and Immediate Effectiveness of Proposed Rule Change To Add
Interpretive Material to Rule 7080 in Connection With the
Implementation of the Limit Up-Limit Down Plan

March 20, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on March 8, 2013, BOX Options Exchange LLC (``BOX'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II, below, which Items
have been prepared by the Exchange. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
---------------------------------------------------------------------------

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

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

    The Exchange proposes to add Interpretive Material to Rule 7080 in
connection with the implementation of Limit Up-Limit Down procedures
for securities that underlie options traded on BOX. The text of the
proposed rule change is available from the principal office of the
Exchange, at the Commission's Public Reference Room and also on the
Exchange's Internet Web site at http://boxexchange.com.

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

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

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

1. Purpose
    Previously, the Commission approved a National Market System Plan
to Address Extraordinary Market Volatility across the equities markets
(as amended, the ``Plan'').\3\ The purpose of the proposed rule change
is to implement joint industry principles across the options exchanges
to address the implementation of the Plan. In particular, the proposed
rule change will address the trading conditions for options on BOX
Market LLC (the Exchange's options trading facility, ``BOX''), when an
underlying equity security enters a Limit State, or Straddle State, as
those terms are defined within the Plan.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 67091 (May 31, 2012)
77 FR 33498 (June 6, 2012) (the ``Limit Up-Limit Down Release'').
---------------------------------------------------------------------------

    The Exchange currently allows the entry of market orders, which are
orders to buy or sell at the best price available at the time of
execution (``Market Orders'').\4\ The purpose of this proposed rule
change is to add to the Exchange Rules new IM-7080-1 (Trading
Conditions During Limit State or Straddle State) to provide for how the
Exchange will treat orders during occurrences when an underlying NMS
stock is in a Limit State or a Straddle State. IM-7080-1 will provide
that if the underlying security has entered a Limit State or Straddle
State as those terms are defined within the Plan, certain conditions
shall apply during the Limit State or Straddle State. Specifically, all
Market Orders and BOX-Top Orders will be rejected and any resting
Market Orders and BOX-Top Orders will be cancelled.
---------------------------------------------------------------------------

    \4\ See BOX Rule 7110(c).
---------------------------------------------------------------------------

    The Limit Up/Limit-Down Plan is designed to prevent executions from
occurring outside of dynamic price bands disseminated to the public by
the single plan processor as defined in the Limit Up-Limit Down Plan.
Under the Plan, a Limit State will be declared if the national best
offer equals the lower price band and does not cross the national best
bid, or the national best bid equals the upper price band and does not
cross the national best offer. A Straddle State is when the national
best bid (offer) is below (above) the lower (upper) price band and the
security is not in a Limit State, and trading in that security deviates
from normal trading characteristics such that declaring a trading pause
would support the Plan's goal to address extraordinary market
volatility. Accordingly, when the underlying security is in a Limit
State or Straddle State, there will not be a reliable price for the
security to serve as a benchmark for the price of the related option.
    In such a state, the Exchange does not believe that it should
permit the execution of Market Orders or BOX-Top Orders, which are un-
priced orders that execute at the best price available at the time the
Exchange receives such orders. However, limit orders, which are orders
to buy or sell at the price stated or better (``Limit Orders'), contain
a limit price that will protect them from being executed at inferior
prices.\5\ Limit Orders will not be rejected during the Limit or
Straddle State.\6\
---------------------------------------------------------------------------

    \5\ Id.
    \6\ The Exchange will not reject pending transactions in the
Exchange's Facilitation or Solicitation Mechanisms (BOX Rule 7270),
as all such transactions are initiated with a limit price. Market
Orders received via the Exchange's Price Improvement mechanism (BOX
Rule 7150) will be rejected, while Limit Orders will be accepted.
However, if the PIP auction commences before the underlying has
moved into a Limit or Straddle State it will not be terminated or
canceled, as market conditions were reasonable when the auction
started. Subject to regulatory approval, the Exchange expects to
launch a Complex Order Offering. See Securities Exchange Act Release
No. 69027 (March 4, 2013), 78 FR 15093 (March 8, 2013) (SR-BOX-2013-
01) (Notice of Filing Regarding Complex Orders). When this
functionality is approved Complex Orders that are Market Orders will
be also be rejected when the underlying enters a Limit or Straddle
State.
---------------------------------------------------------------------------

    The Exchange believes that the rejection of Market Orders or BOX-
Top Orders when the underlying security is subject to a Limit State or
Straddle State will help to maintain a fair and efficient marketplace
for the execution of options. Furthermore, the Exchange will reject all
incoming Market Orders or BOX-Top Orders during the opening of in the
event that the underlying NMS stock is open, but has entered into a
Limit State or Straddle State. When this occurs, any resting Market
Orders will be eliminated and new Market Orders

will be rejected during the pre-opening. The series will open as
scheduled, but Market Orders and BOX-Top Orders will continue to be
rejected until the underlying NMS stock stays out of a Limit or
Straddle State.
    Lastly, the Exchange proposes that current IM-7080-1 regarding
Trading Pause be renumbered to IM-7080-2.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Securities Exchange Act of 1934
(the ``Act''),\7\ in general, and furthers the objections of Section
6(b)(4) of the Act,\8\ in particular, in that it is designed to promote
just and equitable principles of trade, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general to protect investors and the public interest.
Specifically, the Exchange believes that the proposal is designed to
help maintain fair and orderly markets by imposing certain modified
conditions for Market Orders and BOX-Top Orders during times of
uncertainty regarding the price of the underlying security due to
extraordinary market volatility in such underlying security.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    When the underlying equity security is in a Limit State or Straddle
State, there will not be a reliable price for the security to serve as
a benchmark for the price of the option. This circumstance raises
particular concerns for the quality of execution for retail customers
buying or selling options. Accordingly, the Exchange and its options
exchange competitors are proposing rules that will treat listed options
on the subject underlying security in a uniform fashion across the
various markets. As such, the Exchange believes it is in the interests
of the public and for investor protection to reject Market Orders and
BOX-Top Orders and cancel such resting orders when the underlying
equity security enters a Limit State or Straddle State.

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

    The Exchange and its options exchange competitors are proposing
rules designed to treat listed options on any underlying equity
security affected as part of the Plan in a uniform fashion across the
various markets. As such, the Exchange believes the proposals among the
various options exchanges will impact all market participants equally,
and will benefit market participants in periods of extraordinary market
volatility and as consistent with the purposes of the Act. For this
reason, the Exchange does not believe that the proposed rule change
will impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.

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 Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
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, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) of the Act \11\ to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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 No. SR-BOX-2013-12 on the subject line.

Paper comments

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

All submissions should refer to File No. SR-BOX-2013-12. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File No. SR-BOX-2013-12 and should be
submitted on or before April 16, 2013.

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

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

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-06875 Filed 3-25-13; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 78, Number 47 (Monday, March 11, 2013)]
[Rules and Regulations]
[Pages 15279-15280]
[FR Doc No: 2013-05193]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2012-1106; Directorate Identifier 2012-NM-084-AD;
Amendment 39-17341; AD 2013-03-06]
RIN 2120-AA64

Airworthiness Directives; Airbus Airplanes

AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).

ACTION: Final rule.

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

SUMMARY: We are adopting a new airworthiness directive (AD) for all
Airbus Model A330-200 Freighter, -200, and -300 series airplanes; and
Model A340-200, -300, -500, and -600 series airplanes. This AD was
prompted by a report that erroneous height indication by one radio
altimeter with engaged flare and retard mode, in case of go-around,
might lead to a temporary loss of airplane longitudinal control. This
AD requires revising the airplane flight manual. We are issuing this AD
to ensure that the flightcrew applies the appropriate operational
procedures in the event of an erroneous indication of the radio
altimeter, which could result in temporary loss of airplane
longitudinal control.

DATES: This AD becomes effective April 15, 2013.
    The Director of the Federal Register approved the incorporation by
reference of certain publications listed in this AD as of April 15,
2013.

ADDRESSES: You may examine the AD docket on the Internet at http://www.regulations.gov or in person at the U.S. Department of
Transportation, Docket Operations, M-30, West Building Ground Floor,
Room W12-140, 1200 New Jersey Avenue SE., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Vladimir Ulyanov, Aerospace Engineer,
International Branch, ANM-116, Transport Airplane Directorate, FAA 1601
Lind Avenue SW., Renton, Washington 98057-3356; telephone (425) 227-
1138; fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR
part 39 to include an AD that would apply to the specified products.
That NPRM was published in the Federal Register on October 25, 2012 (77
FR 65146). That NPRM proposed to correct an unsafe condition for the
specified products. The Mandatory Continuing Airworthiness Information
(MCAI) states:

    Airbus performed tests to investigate the consequences of one
radio altimeter providing an erroneous indication.
    These tests concluded that with engaged flare and retard mode,
in case of go-around, the situation may lead to a temporary loss of
aeroplane longitudinal control.
    To address this condition, Airbus issued a new Airplane Flight
Manual (AFM) operational procedure.
    For the reasons described above, this [European Aviation Safety
Agency] AD requires amendment of the applicable AFM to ensure that
the flight crew applies the appropriate operational procedures.

    You may obtain further information by examining the MCAI in the AD
docket.

Comments

    We gave the public the opportunity to participate in developing
this AD. We considered the comment received. Air Line Pilots
Association, International, supported the NPRM (77 FR 65146, October
25, 2012).

Explanation of Changes Made to This AD

    We have revised paragraph (g) and Note 1 to paragraph (g) of this
AD to remove reference to inserting a copy of this AD into the AFM as a
method of complying with the requirements of paragraph (g) of this AD.
Inserting a copy of this AD into the AFM does not address the unsafe
condition identified in this AD. This language was erroneously included
in the NPRM (77 FR 65146, October 25, 2012), and has, therefore, been
removed from this AD.

Conclusion

    We reviewed the available data, including the comment received, and
determined that air safety and the public interest require adopting the
AD with the changes described previously--and minor editorial changes.
We have determined that these minor changes:
     Are consistent with the intent that was proposed in the
NPRM (77 FR 65146, October 25, 2012) for correcting the unsafe
condition; and
     Do not add any additional burden upon the public than was
already proposed in the NPRM (77 FR 65146, October 25, 2012).

Costs of Compliance

    We estimate that this AD will affect 64 products of U.S. registry.
We also estimate that it will take about 1 work-hour per product to
comply with the basic requirements of this AD. The average labor rate
is $85 per work-hour. Based on these figures, we estimate the cost of
this AD to the U.S. operators to be $5,440, or $85 per product.

Authority for This Rulemaking

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

Regulatory Findings

    We determined that this AD will not have federalism implications
under Executive Order 13132. This AD will not have a substantial direct
effect on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.
    For the reasons discussed above, I certify that this AD:
    1. Is not a ``significant regulatory action'' under Executive Order
12866;

    2. Is not a ``significant rule'' under the DOT Regulatory Policies
and Procedures (44 FR 11034, February 26, 1979);
    3. Will not affect intrastate aviation in Alaska; and
    4. Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.
    We prepared a regulatory evaluation of the estimated costs to
comply with this AD and placed it in the AD docket.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov; or in person at the Docket Operations office
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains the NPRM (77 FR 65146, October 25,
2012), the regulatory evaluation, any comments received, and other
information. The street address for the Docket Operations office
(telephone<PHONE_NUMBER>) is in the ADDRESSES section. Comments will
be available in the AD docket shortly after receipt.

List of Subjects in 14 CFR Part 39

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

Adoption of the Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new AD:

2013-03-06 Airbus: Amendment 39-17341. Docket No. FAA-2012-1106;
Directorate Identifier 2012-NM-084-AD.

(a) Effective Date

    This airworthiness directive (AD) becomes effective April 15,
2013.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Airbus Model A330-223F and -243F airplanes;
Model A330-201, -202, -203, -223, -243, -301, -302, -303, -321, -
322, -323, -341, -342, and -343 airplanes; and Model A340-211, -212,
-213, -311, -312, -313, -541, and -642 airplanes; certificated in
any category; all manufacturer serial numbers.

(d) Subject

    Air Transport Association (ATA) of America Code 34, Navigation.

(e) Reason

    This AD was prompted by a report that erroneous height
indication by one radio altimeter with engaged flare and retard
mode, in case of go-around, might lead to a temporary loss of
airplane longitudinal control. We are issuing this AD to ensure that
the flightcrew applies the appropriate operational procedures in the
event of an erroneous indication of the radio altimeter, which could
result in temporary loss of airplane longitudinal control.

(f) Compliance

    You are responsible for having the actions required by this AD
performed within the compliance times specified, unless the actions
have already been done.

(g) Airplane Flight Manual (AFM) Revision

    Within 30 days after the effective date of this AD, revise the
applicable section of the Airbus A330/A340 AFM to include the
information in Airbus Temporary Revision TR37, Issue 1.0, dated June
15, 2010; or Airbus Temporary Revision TR38, Issue 1.0, dated June
15, 2010; to the Airbus A330/A340 AFM. This may be done by inserting
Airbus Temporary Revision TR37, Issue 1.0, dated June 15, 2010; or
Airbus Temporary Revision TR38, Issue 1.0, dated June 15, 2010; in
the AFM.

    Note 1 to paragraph (g) of this AD: When the information in
Airbus Temporary Revision TR37, Issue 1.0, dated June 15, 2010; or
Airbus Temporary Revision TR38, Issue 1.0, dated June 15, 2010; to
the Airbus A330/A340 AFM has been included in the applicable section
of the general revisions of the AFM, the general revisions may be
inserted into the AFM, provided the relevant information in the
general revisions is identical to that in Airbus Temporary Revision
TR37, Issue 1.0, dated June 15, 2010; or Airbus Temporary Revision
TR38, Issue 1.0, dated June 15, 2010.

(h) Other FAA AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
International Branch, ANM-116, FAA, has the authority to approve
AMOCs for this AD, if requested using the procedures found in 14 CFR
39.19. In accordance with 14 CFR 39.19, send your request to your
principal inspector or local Flight Standards District Office, as
appropriate. If sending information directly to the International
Branch, send it to ATTN: Vladimir Ulyanov, Aerospace Engineer,
International Branch, ANM-116, Transport Airplane Directorate, FAA
1601 Lind Avenue SW., Renton, Washington 98057-3356; telephone (425)
227-1138; fax<PHONE_NUMBER>. Information may be emailed to<EMAIL_ADDRESS>Before using any approved AMOC, notify
your appropriate principal inspector, or lacking a principal
inspector, the manager of the local flight standards district
office/certificate holding district office. The AMOC approval letter
must specifically reference this AD.
    (2) Airworthy Product: For any requirement in this AD to obtain
corrective actions from a manufacturer or other source, use these
actions if they are FAA-approved. Corrective actions are considered
FAA-approved if they are approved by the State of Design Authority
(or their delegated agent). You are required to assure the product
is airworthy before it is returned to service.

(i) Related Information

    Refer to MCAI European Aviation Safety Agency Airworthiness
Directive 2012-0069, dated April 24, 2012, and the service
information specified in paragraphs (i)(1) and (i)(2) of this AD,
for related information.
    (1) Airbus Temporary Revision TR37, Issue 1.0, dated June 15,
2010, to the Airbus A330/A340 AFM.
    (2) Airbus Temporary Revision TR38, Issue 1.0, dated June 15,
2010, to the Airbus A330/A340 AFM.

(j) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless the AD specifies otherwise.
    (i) Airbus Temporary Revision TR37, Issue 1.0, dated June 15,
2010, to the Airbus A330/340 Airplane Flight Manual.
    (ii) Airbus Temporary Revision TR38, Issue 1.0, dated June 15,
2010, to the Airbus A330/340 Airplane Flight Manual.
    (3) For service information identified in this AD, contact
Airbus SAS--Airworthiness Office--EAL, 1 Rond Point Maurice
Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96;
fax +33 5 61 93 45 80; email<EMAIL_ADDRESS>
Internet http://www.airbus.com.
    (4) You may review copies of the service information at the FAA,
Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA.
For information on the availability of this material at the FAA,
call<PHONE_NUMBER>.
    (5) You may view this service information that is incorporated
by reference at the National Archives and Records Administration
(NARA). For information on the availability of this material at
NARA, call<PHONE_NUMBER>, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Renton, Washington, on January 28, 2013.
Ali Bahrami,
Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2013-05193 Filed 3-8-13; 8:45 am]
BILLING CODE 4910-13-P