[Federal Register: November 24, 2010 (Volume 75, Number 226)]
[Notices]
[Page 71777-71781]
[DOCID:fr24no10-143]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63337; File No. SR-NYSEAmex-2010-104]

Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Expanding the Delta
Hedging Exemption Available for Equity Options Position Limits and
Adopting a Delta Hedging Exemption From Certain Index Options Position
Limits

November 18, 2010.
    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 November 5, 2010, NYSE Amex LLC (the ``Exchange'' or ``NYSE
Amex'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to (i) expand the delta hedging exemption
available for equity options position limits and (ii) adopt a delta
hedging exemption from certain index options position limits. The text
of the proposed rule change is available at the Exchange, the
Commission's Public Reference Room, on the Commission's Web site at
http://www.sec.gov, and http://www.nyse.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 Exchange has prepared
summaries, set forth in Sections A, B and C below, of the most
significant parts of such statements.

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

1. Purpose
I. Expansion of Delta-Based Equity Hedge Exemption
    On March 4, 2008,\3\ the Exchange submitted a proposed rule change
with the Commission establishing an exemption from equity options
position and exercise limits for positions held by Exchange members,
member organizations and certain of their affiliates, that are ``delta
neutral'' \4\ under a ``Permitted Pricing Model,'' \5\ subject to
certain conditions (``Exemption''). The Exchange is proposing to amend
certain of its rules to expand its exemption from equity options
position and exercise limits and adopt a delta hedging exemption from
certain index options position limits.\6\
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    \3\ See Securities Exchange Act Release No. 57502 (March 14,
2008), 73 FR 15225 (March 21, 2008) (SR-Amex-2008-18).
    \4\ The term ``delta neutral'' is defined in Rule 904,
Commentary .10(a) as referring to an equity option position that is
hedged, in accordance with a Permitted Pricing Model, by a position
in the underlying security or one or more instruments relating to
the underlying security, for the purpose of offsetting the risk that
the value of the option position will change with incremental
changes in the price of the security underlying the option position.
    \5\ Permitted Pricing Model is defined in Rule 904, Commentary
.10(e).
    \6\ The amendments proposed herein are similar to changes
approved for the Chicago Board Options Exchange (``CBOE''). See
Securities Exchange Act Release No. 62190 (May 27, 2010), 75 FR
31826 (June 4, 2010) (SR-CBOE-2010-021). See also Securities
Exchange Act Release No. 56970 (December 14, 2007), 72 FR 72428
(December 20, 2007) (SR-CBOE-2007-099). The exemption was extended
to certain customers whose accounts are carried by a member. See
Securities Exchange Act Release No. 60555 (August 21, 2009), 74 FR
43741 (August 27, 2009) (SR-CBOE-2009-039). This proposed rule
filing is being done pursuant to an industry-wide initiative, under
the auspices of the Intermarket Surveillance Group (``ISG''), to
establish comparable delta-hedge exemption rules among exchanges.
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    The ``options contract equivalent of the net delta'' of a hedged
equity option position is subject to the position limits under Rule
904, Commentary .10, subject to the availability of other
exemptions.\7\ Currently, the Exemption only is available for
securities that directly underlie the applicable option

position. This means that with respect to options on exchange-traded
funds (``ETF options''), index options overlying the same index on
which the ETF is based currently cannot be combined with the ETF
options to calculate a net delta for purposes of the Exemption.
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    \7\ The term ``options contract equivalent of the net delta'' is
defined in Rule 904, Commentary .10(c) as the net delta divided by
the number of shares underlying the option contract. The term ``net
delta'' is defined in the same rule to mean, at any time, the number
of shares (either long or short) required to offset the risk that
the value of an equity option position will change with incremental
changes in the price of the security underlying the option position,
as determined in accordance with a Permitted Pricing Model.
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    Many ETF options overlie exchange-traded funds that track the
performance of an index. For example, options on Standard & Poor's
Depositary Receipts (``SPY'') track the performance of the S&P 500
index. Market participants often hedge SPY options with options on the
S&P 500 Index (``SPX options'') or with other financial instruments
based on the S&P 500 Index for risk management purposes. The Exchange
believes that in order for eligible market participants to more fully
benefit from the Exemption as it relates to ETF options, securities and
other instruments that are based on the same underlying ETF or the same
index on which the ETF is based should also be included in any
determination of an ETF option position's net delta or whether the
options position is hedged delta neutral.\8\
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    \8\ However, this would not include baskets of securities for
purposes of the Exemption.
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    Accordingly, the Exchange proposes to expand the Exemption by
amending Rule 904, Commentary .10(a) to permit equity option positions
for which the underlying security is an ETF that is based on the same
index as an index option to be combined with an index option position
for calculation of the delta-based equity hedge exemption. The proposed
rule would allow financial products such as securities index options,
index futures, and options on index futures to be included along with
the ETF in an equity option's net delta calculation. So for example,
the proposed rule would allow SPY options to be hedged not only with
SPY shares, but with S&P 500 options, S&P 500 futures, options on S&P
500 futures or any other instrument that tracks the performance of or
is based on the S&P 500 index. This would be accomplished by including
such positions with a related index option position in accordance with
the Delta-Based Index Hedge Exemption rule proposed below.
    Index options and equity options (i.e., ETF options) that are
eligible to be combined for computing a delta-based hedge exemption,
along with all securities and/or other instruments that are based on or
track the performance of the same underlying security or index, will be
grouped and the net delta and options contract equivalent of the net
delta will be calculated for each respective option class based on
offsets realized from the grouping as a whole.
    The Exchange proposes to amend the definition of ``net delta'' in
Rule 904, Commentary .10(b) to mean, at any time, the number of shares
and/or other units of trade \9\ (either long or short) required to
offset the risk that the value of an equity option position will change
with incremental changes in the price of the security underlying the
option position, as determined in accordance with a Permitted Pricing
Model. The Exchange proposes to amend the definition of the ``option
contract equivalent of the net delta'' to mean the net delta divided by
the number of shares that equate to one option contract on a delta
basis.
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    \9\ ``Other units of trade'' would include, for example, options
or futures contracts hedging the relevant option position. When
determining whether an ETF option hedged with other instruments such
as ETF or index options is delta neutral, the relative size of the
ETF option when compared to the other product is taken into
consideration. For example, SPX options are ten (10) times larger
than SPY options thus 1 SPX delta is equivalent to .10 SPY deltas.
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II. Delta-Based Index Hedge Exemption

    Most index options traded on the Exchange are subject to position
and exercise limits, as provided under Rules 904C(b) and 905C(c).\10\
Position limits are imposed, generally, to prevent the establishment of
options positions that can be used or might create incentives to
manipulate or disrupt the underlying market so as to benefit the holder
of the options position.
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    \10\ Rules 904C(b) and 904C(c) provide position limits for Broad
Stock Index Group Options and Stock Index Industry Group Options,
respectively.
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    Index options are often used by market participants such as
institutional investors to hedge large portfolios. Exchange rules
include hedge exemptions to allow certain positions in index options in
excess of the applicable standard position limit if hedged with an
Exchange-approved qualified portfolio.\11\
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    \11\ See Commentary .01-.03 to Rule 904C.
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    The Exchange believes that any limit on the ability of market
participants to use index options to hedge their portfolios exposes
market participants to unnecessary risk on the unhedged portion of
their portfolios. The Exchange proposes to adopt a delta-based
exemption from index option position and exercise limits that is
substantially similar to the delta-based equity hedge exemption under
Rule 904, Commentary .10. A delta-based index hedge exemption would
provide market participants the ability to accumulate an unlimited
number of index options contracts provided that such contracts are
properly delta hedged in accordance with the requirements of the
exemption.
    Proposed Exemption. The Exchange proposes to adopt an exemption
from broad stock index group options position and exercise limits \12\
for positions held by members, member organizations and certain of
their non-member affiliates that are ``delta neutral'' (as defined
below) under a ``Permitted Pricing Model'' (as defined below), subject
to certain conditions (``Index Exemption''). The Index Exemption under
proposed Rule 904C, Commentary .06 would also apply to Industry Index
Options under proposed Rule 904C, Commentary .07.
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    \12\ Exchange Rule 905C establishes exercise limits for an index
option at the same level as the index option's position limit under
index options position limit rules, therefore no changes are
proposed to Rule 905C.
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    The term ``delta neutral'' is defined in proposed Rule 904C,
Commentary .06(a) as referring to an index option position that is
hedged, in accordance with a Permitted Pricing Model, by a position in
one or more correlated instruments for the purpose of offsetting the
risk that the value of the option position will change with incremental
changes in the value of the underlying index. Correlated instruments
would be defined to mean securities and/or other instruments that track
the performance of or are based on the same underlying index as the
index underlying the option position. These definitions would allow
financial products such as ETF options, index futures, options on index
futures and ETFs that track the performance of or are based on the same
underlying index to be included in an index option's net delta
calculation.\13\
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    \13\ See supra note 8.
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    Any index option position that is not delta neutral would be
subject to position and exercise limits, subject to the availability of
other exemptions. Only the ``options contract equivalent of the net
delta'' of such position would be subject to the appropriate position
limit.\14\
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    \14\ Under proposed Rule 904C, Commentary .06(b), the term
``options contract equivalent of the net delta'' is defined as the
net delta divided by units of trade that equate to one option
contract on a delta basis, and the term ``net delta'' is defined as,
at any time, the number of shares and/or other units of trade
(either long or short) required to offset the risk that the value of
an index option position will change with incremental changes in the
value of the underlying index, as determined in accordance with a
Permitted Pricing Model.
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    In addition, members and member organizations could not use the
same positions in correlated instruments in connection with more than
one hedge exemption. Therefore, a position in correlated instruments
used as part of a delta hedging strategy could not also

serve as the basis for any other index hedge exemption.
    Permitted Pricing Model. Under the proposed rule, the calculation
of the delta for any index option position, and the determination of
whether a particular index option position is hedged delta neutral,
must be made using a Permitted Pricing Model. A ``Permitted Pricing
Model'' is defined in proposed Rule 904C, Commentary .06(c) to have the
same meaning as defined in Rule 904, Commentary .10(e), namely, (i) The
pricing model maintained and operated by the Options Clearing
Corporation (``OCC''); and the pricing models maintained and used by
(ii) a member subject to consolidated supervision by the SEC pursuant
to Appendix E of SEC Rule 15c3-1; (iii) a financial holding company
(``FHC'') or a company treated as an FHC under the Bank Holding Company
Act of 1956, or its affiliate subject to consolidated holding company
group supervision; \15\ (iv) an SEC registered OTC derivatives dealer;
\16\ and (v) a national bank.\17\
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    \15\ The pricing model of an FHC or of an affiliate of an FHC
would have to be consistent with: (i) The requirements of the Board
of Governors of the Federal Reserve System (``Fed''), as amended
from time to time, in connection with the calculation of risk-based
adjustments to capital for market risk under capital requirements of
the Fed, provided that the member or member organization or
affiliate of a member or member organization relying on this
exemption in connection with the use of such model is an entity that
is part of such company's consolidated supervised holding company
group; or (ii) the standards published by the Basel Committee on
Banking Supervision, as amended from time to time and as implemented
by such company's principal regulator, in connection with the
calculation of risk-based deductions or adjustments to or allowances
for the market risk capital requirements of such principal regulator
applicable to such company--where ``principal regulator'' means a
member of the Basel Committee on Banking Supervision that is the
home country consolidated supervisor of such company--provided that
the member or member organization or affiliate of a member or member
organization relying on this exemption in connection with the use of
such model is an entity that is part of such company's consolidated
supervised holding company group. See subparagraph (c) of proposed
Rule 904C, Commentary .06, which incorporates Rule 904, Commentary
.10(e).
    \16\ The pricing model of an SEC registered OTC derivatives
dealer would have to be consistent with the requirements of Appendix
F to SEC Rule 15c3-1 and SEC Rule 15c3-4 under the Act, as amended
from time to time, in connection with the calculation of risk-based
deductions from capital for market risk thereunder. Only an OTC
derivatives dealer and no other affiliated entity (including a
member or member organization) would be able to rely on this part of
the Exemption. See subparagraph (c) of proposed Rule 904C,
Commentary .06, which incorporates Rule 904, Commentary .10(e).
    \17\ The pricing model of a national bank would have to be
consistent with the requirements of the Office of the Comptroller of
the Currency, as amended from time to time, in connection with the
calculation of risk-based adjustments to capital for market risk
under capital requirements of the Office of the Comptroller of the
Currency. Only a national bank and no other affiliated entity
(including a member or member organization) would be able to rely on
this part of the Exemption. See subparagraph (c) of proposed Rule
904C, Commentary .06, which incorporates Rule 904, Commentary
.10(e).
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    Aggregation of Accounts. Members, member organizations and non-
member affiliates relying on the Index Exemption would be required to
ensure that the Permitted Pricing Model is applied to all positions in
correlated instruments hedging the relevant option position that are
owned or controlled by the member, member organization or their non-
member affiliates.
    However, the net delta of an index option position held by an
entity entitled to rely on the Index Exemption, or by a separate and
distinct trading unit of such entity, may be calculated without regard
to positions in correlated instruments held by an affiliated entity or
by another trading unit within the same entity, provided that: (i) The
entity demonstrates to the Exchange's satisfaction that no control
relationship, as defined in Rule 904, Commentary .08, exists between
such affiliates or trading units, and (ii) the entity has provided the
Exchange written notice in advance that it intends to be considered
separate and distinct from any affiliate, or, as applicable, which
trading units within the entity are to be considered separate and
distinct from each other for purposes of the Index Exemption.\18\ The
Exchange has set forth in Regulatory Circular Reg 2008-14 the
conditions under which it will deem no control relationship to exist
between affiliated broker-dealers and between separate and distinct
trading units within the same broker-dealer.
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    \18\ See subparagraph (d) of proposed Rule 904C, Commentary .06.
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    Any member, member organization or non-member affiliate relying on
the Index Exemption must designate, by prior written notice to the
Exchange, each trading unit or entity whose options positions are
required by Exchange rules to be aggregated with the options positions
of such member, member organization or non-member affiliate relying on
the Index Exemption for purposes of compliance with Exchange position
or exercise limits.\19\
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    \19\ See proposed Rule 904C, Commentary .06(d)(3).
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    Obligations of Members, Member Organizations and Affiliates. Any
member or member organization relying on the Index Exemption would be
required to provide a written certification to the Exchange that it is
using a Permitted Pricing Model as defined in the rule for purposes of
the Index Exemption. In addition, by such reliance, such member or
member organization would authorize any other person carrying for such
member or member organization an account including, or with whom such
member or member organization has entered into, a position in a
correlated instrument hedging the relevant option position to provide
to the Exchange or OCC such information regarding such account or
position as the Exchange or OCC may request as part of the Exchange's
confirmation or verification of the accuracy of any net delta
calculation under this exemption.\20\
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    \20\ See subparagraph (e) of proposed Rule 904C, Commentary .06.
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    The index option positions of a non-member affiliate relying on the
Index Exemption must be carried by a member or member organization with
which it is affiliated. A member or member organization carrying an
account that includes an index option position for a non-member
affiliate that intends to rely on the Index Exemption would be required
to obtain from such non-member affiliate a written certification that
it is using a Permitted Pricing Model as defined in the rule for
purposes of the index Exemption.\21\
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    \21\ In addition, the member or member organization would be
required to obtain from such non-member affiliate a written
statement confirming that such non-member affiliate: (a) Is relying
on the Index Exemption; (b) will use only a Permitted Pricing Model
for purposes of calculating the net delta of its option positions
for purposes of the Index Exemption; (c) will promptly notify the
member or member organization if it ceases to rely on the Index
Exemption; (d) authorizes the member or member organization to
provide to the Exchange or the OCC such information regarding
positions of the non-member affiliate as the Exchange or OCC may
request as part of the Exchange's confirmation or verification of
the accuracy of any net delta calculation under the Index Exemption;
and (e) if the non-member affiliate is using the OCC Model, has duly
executed and delivered to the Exchange such documents as the
Exchange may require to be executed and delivered to the Exchange as
a condition to reliance on the Exemption. See subparagraph (e)(3) of
proposed Rule 904C, Commentary .06.
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    Reporting. Under proposed Rule 904C, Commentary .06(f), each member
or member organization relying on the Index Exemption would be required
to report, in accordance with Rule 906,\22\ (i) all index option
positions (including those that are delta neutral) that are reportable
thereunder, and (ii) on its own behalf or on behalf of a designated
aggregation unit pursuant to Rule 904C, Commentary .06(d), for each
such account that holds an index option position subject to the Index
Exemption in excess of the levels specified in Rule

904C(b) (and Rule 904C(c), in the case of Stock Index Industry Group
Options) the net delta and the options contract equivalent of the net
delta of such position.
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    \22\ Exchange Rule 906 requires, among other things, that
members and member organizations report to the Exchange aggregate
long or short positions on the same side of the market of 200 or
more contracts of any single class of options contracts dealt in on
the Exchange.
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    Records. Under proposed Rule 904C, Commentary .06(g), each member
or member organization relying on the Index Exemption would be required
to (i) retain, and would be required to undertake reasonable efforts to
ensure that any non-member affiliate of the member or member
organization relying on the Index Exemption retains, a list of the
options, securities and other instruments underlying each options
position net delta calculation reported to the Exchange hereunder, and
(ii) produce such information to the Exchange upon request.\23\
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    \23\ A member or member organization would be authorized to
report position information of its non-member affiliate pursuant to
the written statement required under proposed Rule 904C, Commentary
.06(e)(3)(B)(iv).
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    Reliance on Federal Oversight. As provided under proposed Rule
904C, Commentary .06(c), a Permitted Pricing Model includes proprietary
pricing models used by members, member organizations and affiliates
that have been approved by the SEC, the Fed or another federal
financial regulator. In adopting the proposed Index Exemption the
Exchange would be relying upon the rigorous approval processes and
ongoing oversight of a federal financial regulator. The Exchange notes
that it would not be under any obligation to verify whether a member's,
member organization's or non-member affiliate's use of a proprietary
pricing model is appropriate or yielding accurate results.
    The Exchange will announce the effective date of the proposed rule
change in a regulatory circular to be published no later than 60 days
after Commission approval. The effective date shall be no later than 30
days after publication of the regulatory circular.
2. Statutory Basis
    The Exchange believes that this proposed rule change is consistent
with Section 6(b) of the Securities Exchange Act of 1934 (``Act''),\24\
in general, and furthers the objectives of Section 6(b)(5) of the Act
\25\ in particular, in that it is designed to prevent fraudulent and
manipulative acts and practices, promote just and equitable principles
of trade, remove impediments to and perfect the mechanism of a free and
open market and a national market system, and, in general, to protect
investors and the public interest. The Exchange believes that allowing
correlated instruments to be included in the calculation of an equity
option's net delta would enable eligible market participants to more
fully realize the benefit of the delta based equity hedge exemption.
The proposed delta-based index hedge exemption would be substantially
similar to the delta-based equity hedge exemption under Rule 904,
Commentary .10. Also, the Commission has previously stated its support
for recognizing options positions hedged on a delta neutral basis as
properly exempted from positions limits.\26\
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    \24\ 15 U.S.C. 78f(b).
    \25\ 15 U.S.C. 78f(b)(5).
    \26\ See Securities Exchange Act Release No. 40594 (October 23,
1998), 63 FR 59362, 59380 (November 3, 1998) (adopting rules
relating to OTC Derivatives Dealers).
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B. Self-Regulatory Organization's Statement on Burden on Competition

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

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

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

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

    Because the foregoing rule change does not: (1) Significantly
affect the protection of investors or the public interest; (2) impose
any significant burden on competition; and (3) become operative for 30
days after the date of this filing, or such shorter time as the
Commission may designate, it has become effective pursuant to Section
19(b)(3)(A) of the Act \27\ and Rule 19b-4(f)(6) thereunder.\28\
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    \27\ 15 U.S.C. 78s(b)(3)(A).
    \28\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under 19b-4(f)(6) normally may not
become operative prior to 30 days after the date of filing.\29\
However, Rule 19b-4(f)(6)(iii) \30\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the 30-day operative delay. The Commission believes
that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest. The Commission notes
that it has approved a substantially similar proposal filed by the
Chicago Board Options Exchange, Incorporated,\31\ and therefore
believes that no significant purpose is served by a 30-day operative
delay. For these reasons, the Commission designates the proposed rule
change to be operative upon filing with the Commission.\32\
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    \29\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self-regulatory organization submit to
the Commission written notice of its 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.
    \30\ Id.
    \31\ See Securities Exchange Act Release No. 62190 (May 27,
2010), 75 FR 31826 (June 4, 2010) (SR-CBOE-2010-21). See also
Securities Exchange Act Release Nos. 62504 (July 15, 2010), 75 FR
42797 (July 22, 2010) (SR-PHLX-2010-93); and 63077 (October 12,
2010), 75 FR 63870 (October 18, 2010) (SR-ISE-2010-97).
    \32\ For the purposes 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).
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    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.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number SR-NYSEAmex-2010-104 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEAmex-2010-104. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's 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 on official business days between the hours of 10 a.m.
and 3 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 Number SR-NYSEAmex-2010-104 and should
be submitted on or before December 15, 2010.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\33\
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    \33\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-29592 Filed 11-23-10; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 83, Number 143 (Wednesday, July 25, 2018)]
[Notices]
[Pages 35296-35300]
[FR Doc No: 2018-15849]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83674; File No. SR-CboeEDGX-2018-025]

Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change to
Exchange Rule 11.6, Definitions, To Amend the Operation of the Super
Aggressive Order Instruction

July 19, 2018.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on July 11, 2018, Cboe EDGX Exchange, Inc. (the ``Exchange'' or
``EDGX'') 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 Exchange
has designated this proposal as a ``non-controversial'' proposed rule
change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6) thereunder,\4\ which renders it effective upon filing with the
Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

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

    The Exchange filed a proposal to amend the operation of the Super
Aggressive order instruction under paragraph (n)(2) of Exchange Rule
11.6.
    The text of the proposed rule change is available at the Exchange's
website at www.markets.cboe.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend the description of the Super
Aggressive instruction under paragraph (n)(2) of Exchange Rule 11.6,
Routing/Posting Instructions to: (i) Specify that an incoming order
with a Post Only instruction that locks a resting order with a Super
Aggressive instruction must include a Displayed instruction for the
order with a Super Aggressive instruction to engage in a liquidity swap
and execute against that incoming order; and (ii) modify language from
the description of the Super Aggressive instruction that states if an
order that does not contain a Super Aggressive instruction maintains
higher priority than one or more Super Aggressive eligible orders, the
Super Aggressive eligible order(s) with lower priority will not be
converted and the incoming order with a Post Only instruction will be
posted or cancelled in accordance with Exchange Rule 11.6(n)(4).\5\
---------------------------------------------------------------------------

    \5\ The Exchange also proposes to remove the extraneous word
``solely'' from the second sentence of Rule 11.6(n)(2). The removal
of this word does not alter the operation of the Super Aggressive
order instruction.
---------------------------------------------------------------------------

    Super Aggressive is an optional order instruction that directs the
System \6\ to route an order when an away Trading Center locks or
crosses the limit price of the order resting on the EDGX Book.\7\ When
an order with a Super Aggressive instruction is locked by an incoming
order with a Post Only instruction that does not remove liquidity
pursuant to Rule 11.6(n)(4),\8\ the order with a Super Aggressive
instruction is converted to an executable order and will remove
liquidity against such incoming order.
---------------------------------------------------------------------------

    \6\ The term ``System'' is defined as ``the electronic
communications and trading facility designated by the Board through
which securities orders of Users are consolidated for ranking,
execution and, when applicable, routing away.'' See Exchange Rule
1.5(cc).
    \7\ See Exchange Rule 1.5(d).
    \8\ The Exchange will execute an order with a Post Only
instruction priced at or above $1.00 in certain circumstances where
the value of such execution when removing liquidity equals or
exceeds the value of such execution if the order instead posted to
the EDGX Book and subsequently provided liquidity, including the
applicable fees charged or rebates provided. See Exchange Rule
11.6(n)(4).
---------------------------------------------------------------------------

    First, the Exchange proposes to modify the behavior of the Super
Aggressive instruction to require that the incoming order with a Post
Only instruction that locks a resting order with a Super Aggressive
instruction must include a Displayed instruction for an execution to
occur. The Super Aggressive instruction is generally utilized for best
execution purposes because it enables the order to immediately attempt
to access displayed liquidity on another Trading Center that is either
priced equal to or better than the order with a Super Aggressive
instruction's limit price. The Super Aggressive instruction also
enables the order to execute against an equally priced incoming order
with a Post Only instruction that would otherwise not execute by being
willing to act as the liquidity remover in such a scenario. Today, the
incoming order with a Post Only instruction may include either a
Displayed or Non-Displayed instruction for it to engage in a liquidity
swap with an order with a Super Aggressive instruction resting on the
EDGX Book.
    Consistent with the Super Aggressive instruction to access
liquidity displayed on other Trading Centers, the Exchange proposes to
amend the Super Aggressive instruction such that an order with such
instruction will execute against an equally priced incoming order with
a Post Only instruction only when such order is to be displayed on the
EDGX Book. The order with a Super Aggressive instruction would continue
to act as a liquidity remover in such a scenario. Should such an
equally priced incoming order with a Post Only instruction not include
a Displayed instruction, the resting order with a Super Aggressive
instruction would remain on the EDGX Book and await an execution where
it may act as a liquidity provider. The incoming order with a Post Only
instruction and a Non-Displayed instruction would be posted to the EDGX
Book at its limit price, creating an internally locked non-displayed
book. As is the case today, an execution would continue to occur where
an incoming order with a Post Only instruction is priced more
aggressively than the order with a Super Aggressive instruction resting
on the EDGX Book, regardless of whether the incoming order included a
Displayed or Non-Displayed instruction.\9\
---------------------------------------------------------------------------

    \9\ See id.
---------------------------------------------------------------------------

    The Exchange notes that Users seeking to act as a liquidity remover
once resting on the EDGX Book in all cases (i.e., seeking to execute
against incoming Post Only orders regardless of the display
instruction) may attach the Non-Displayed Swap (``NDS'') instruction to
their order.\10\ The NDS instruction is similar to the Super Aggressive
instruction, in that it also is an optional order instruction that a
User may include on an order that directs the Exchange to have such
order, when resting on the EDGX Book, execute against an incoming order
with a Post Only instruction rather than have it be locked by the
incoming order. Today, because orders with either instruction (i.e.,
Super Aggressive and NDS) will execute against incoming orders with a
Post Only instruction regardless of whether the order is to be
displayed, the instructions are currently identical with two
exceptions. First, an order with a Super Aggressive instruction will
not convert into a liquidity removing order and execute against an
order with a Post Only instruction if there is an order on the order
book with priority over such order that does not also contain a Super
Aggressive instruction. As further described below, the Exchange is
proposing to modify this feature of the Super Aggressive instruction.
The second current distinction between the two instructions, which
would remain, is that an order with a Super Aggressive instruction can
be displayed on the Exchange whereas an order with the NDS instruction
must be non-displayed. As amended, the additional distinction between
the two instructions would be whether an order would become a liquidity
removing order against any order with a Post Only instruction that
would lock it (i.e., NDS) or only when the order with a Post Only
instruction that would lock it also contains a Displayed instruction
(i.e., Super Aggressive).
---------------------------------------------------------------------------

    \10\ See Exchange Rule 11.6(n)(7).
---------------------------------------------------------------------------

    The below examples illustrate the proposed behavior. Assume the
National Best Bid and Offer (``NBBO'') is $10.00 by $10.10. An order to
buy is displayed on the EDGX Book at $10.00 with a Super Aggressive
instruction. There are no other orders resting on the EDGX Book. An
order to sell at $10.00 with a Post Only and Displayed instruction is
entered. The incoming order to sell would execute against the resting
order to buy at $10.00, the

locking price, because the incoming order included a Displayed
instruction. The order to buy would act as the liquidity remover and
the order to sell would act as the liquidity adder. However, no
execution would occur if the incoming order to sell included a Non-
Displayed instruction. Instead, the incoming order to sell would be
posted non-displayed to the EDGX Book at $10.00, its limit price,
causing the EDGX Book to be internally locked.
    Second, the Exchange proposes to enable an incoming order with a
Post Only instruction and Displayed instruction to execute against an
equally priced non-displayed order with a Super Aggressive instruction
where a non-displayed order without a Super Aggressive instruction
maintains time priority over the Super Aggressive eligible order at
that price. In such case, the non-displayed, non-Super Aggressive order
seeks to remain a liquidity provider and would cede time priority to
the order with a Super Aggressive instruction, which is willing to act
as a liquidity remover to facilitate the execution. The Exchange
proposes to effect this change by modifying language in the description
of the Super Aggressive instruction to state that if an order displayed
on the EDGX Book does not contain a Super Aggressive instruction and
maintains higher priority than one or more Super Aggressive eligible
orders, the Super Aggressive eligible order(s) with lower priority will
not be converted and the incoming order with a Post Only instruction
will be posted or cancelled in accordance with Exchange Rule
11.6(n)(4). Thus, an order with a Super Aggressive instruction, whether
displayed on the Exchange or non-displayed, will never execute ahead of
a displayed order that maintains time priority.
    The Super Aggressive instruction is designed to facilitate
executions that would otherwise not occur due to the Post Only
instruction requirement to not remove liquidity. Users entering orders
with the Super Aggressive instruction tend to be fee agnostic because
an order with a Super Aggressive instruction is willing to route to an
away Trading Center displaying an equally or better priced order (i.e.,
pay a fee at such Trading Center). Meanwhile, an order without the
Super Aggressive instruction elects to remain on the EDGX Book as the
liquidity provider until it may execute against an incoming order that
would act as the liquidity remover. Therefore, enabling the Super
Aggressive order to execute against an incoming order, regardless of
whether a non-displayed order without a Super Aggressive instruction
maintains priority, is consistent with the User's intent for both
orders--one choses to remain the liquidity provider and forgo the
execution while the other is willing to execute irrespective of whether
it is the liquidity provider or remover. The Exchange notes that
similar behavior occurs for orders utilizing the NDS instruction,\11\
which also seeks to engage in a liquidity swap against incoming orders
with a Post Only instruction. The Exchange, however, has proposed to
retain the existing limitation with respect to orders displayed on the
EDGX Book.
---------------------------------------------------------------------------

    \11\ See Exchange Rule 11.6(n)(7). See also Securities Exchange
Act Release No. 80841 (June 1, 2017), 82 FR 26559 (June 7, 2017)
(SR-BatsEDGX-2017-25) (including an example where an order cedes
execution priority to an order with an NDS instruction).
---------------------------------------------------------------------------

    The following example illustrates the operation of an order with a
Super Aggressive instruction under the proposed rule change. Assume the
NBBO is $10.00 by $10.04. There is a non-displayed Limit Order to buy
resting on the EDGX Book at $10.03 (``Order A''). A second non-
displayed Limit Order to buy at $10.03 is then entered with a Super
Aggressive instruction and has time priority behind the first Limit
Order (``Order B''). An order to sell with a Post Only instruction
priced at $10.03 is entered. Under current behavior, the incoming sell
order with a Post Only instruction would not execute against Order A
and would post to the EDGX Book \12\ because the value of such
execution against the resting buy order when removing liquidity does
not equal or exceed the value of such execution if the order instead
posted to the EDGX Book and subsequently provided liquidity, including
the applicable fees charged or rebates provided. Further, the incoming
sell order with a Post Only instruction could not execute against Order
B because Order A is on the EDGX Book and maintains time priority over
Order B. Under the proposed change, the incoming sell order, if it
contained a Displayed instruction, would execute against Order B and
Order B would become the remover of liquidity while the incoming sell
order with a Post Only instruction would become the liquidity provider.
In such case, Order A cedes priority to Order B because Order A did not
also include a Super Aggressive instruction \13\ and thus the User that
submitted the order did not indicate the preference to be treated as
the remover of liquidity in favor of an execution; instead, by not
using Super Aggressive, a User indicates the preference to remain
posted on the EDGX Book as a liquidity provider. However, if the
incoming sell order was priced at $10.02, it would receive sufficient
price improvement to execute upon entry against all resting buy Limit
Orders in time priority at $10.03.\14\ Also, if Order A was displayed
on the EDGX Book, no execution would occur, as the proposed change
would only apply to non-displayed liquidity.
---------------------------------------------------------------------------

    \12\ Such order would be posted to the EDGX Book in accordance
with the Exchange's re-pricing instructions to comply with Rule
610(d) of Regulation NMS. See Exchange Rule 11.6(l)(1). See also 242
CFR 242.610(d).
    \13\ This behavior is consistent with the operation of the
Exchange's NDS instruction. See supra note 11.
    \14\ The execution occurs here because the value of the
execution against the buy order when removing liquidity exceeds the
value of such execution if the order instead posted to the EDGX Book
and subsequently provided liquidity, including the applicable fees
charged or rebates provided. See supra note 8.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act \15\ in general, and furthers the objectives of Section
6(b)(5) of the Act \16\ in particular, in that it is designed to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system and, in general, to
protect investors and the public interest.
---------------------------------------------------------------------------

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

    The proposed changes to the Super Aggressive order instruction are
designed to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system and,
in general, to protect investors and the public interest. The Super
Aggressive instruction is an optional feature that is intended to
reflect the order management practices of various market participants.
The proposal to limit the execution of an order with a Super Aggressive
instruction to execute against incoming orders with a Post Only
instruction that also contain a Displayed instruction promotes just and
equitable principles of trade because it enables Users to elect an
order instruction consistent with their intent to execute only against
displayed orders, in part, for best execution

purposes. The amended Super Aggressive instruction would ensure
executions at the best available price displayed on another Trading
Center or against an incoming order that would have been displayed on
the EDGX Book. Users seeking to act as a liquidity remover once resting
on the EDGX Book and execute against an incoming order with a Post Only
and Non-Displayed instruction may attach the NDS instruction to their
order.\17\
---------------------------------------------------------------------------

    \17\ See Exchange Rule 11.6(n)(7).
---------------------------------------------------------------------------

    The proposed change to the Super Aggressive instruction also
removes impediments to and perfects the mechanism of a free and open
market and a national market system because it is designed to
facilitate executions that would otherwise not occur due to the Post
Only instruction requirement to not remove liquidity. The proposal
enables non-displayed Super Aggressive orders to execute against an
incoming order, regardless of whether another non-displayed order
without a Super Aggressive instruction maintains priority consistent
with the User's intent for both orders--one chooses to remain the
liquidity provider and forgo the execution while the other is willing
to execute irrespective of whether it is the liquidity provider or
remover. The non-Super Aggressive order seeks to remain a liquidity
provider and cede its time priority to the order with a Super
Aggressive instruction, which is willing to act as a liquidity remover
to facilitate the execution. It also enables an order without the Super
Aggressive instruction to remain on the EDGX Book as a liquidity
provider, consistent with the expected operation of their resting
order. The Exchange notes that similar behavior occurs for orders
utilizing the NDS \18\ instruction, which also seeks to engage in a
liquidity swap against incoming orders with a Post Only instruction.
Finally, by limiting the proposed change to non-displayed orders, the
proposal remains consistent with NDS and also retains existing
functionality with respect to the handling of displayed orders.
---------------------------------------------------------------------------

    \18\ See supra note 11.
---------------------------------------------------------------------------

    For the reasons set forth above, the Exchange believes the proposal
removes impediments to and perfects the mechanism of a free and open
market and a national market system, and, in general, protects
investors and the public interest.

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

    The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act, as amended. On
the contrary, the proposed changes to the Super Aggressive order
instruction are intended to improve the usefulness of the instruction
and to align its operation with the intention of the User, resulting in
enhanced competition through increased usage and execution quality on
the Exchange. Thus, to the extent the change is intended to improve
functionality on the Exchange to encourage Users to direct their orders
to the Exchange, the change is competitive, but the Exchange does not
believe the proposed change will result in any burden on intermarket
competition as it is a minor change to available functionality. The
proposed changes to the Super Aggressive order instruction also promote
intramarket competition because they will facilitate the execution of
orders that would otherwise remain unexecuted consistent with the
intent of the User entering the order, thereby increasing the efficient
functioning of the Exchange. Further, the Super Aggressive order
instruction will remain available to all Users in the same way it is
today. Thus, Users can continue to choose between various optional
order instructions, including Super Aggressive, NDS, and others,
depending on the order handling they prefer the Exchange to utilize.
Therefore, the Exchange does not believe the proposed rule change will
result in any burden on intramarket competition that is not necessary
or appropriate in furtherance of the purposes of the Act.

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

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

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

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \19\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\20\
---------------------------------------------------------------------------

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

    A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of the filing. However,
Rule 19b-4(f)(6)(iii) \21\ permits the Commission to designate a
shorter time if such action is consistent with the protection of
investors and the public interest. In its filing, EDGX requested that
the Commission waive the 30-day operative delay so that the Exchange
can implement the proposed rule change promptly after filing. The
Exchange stated that the proposal to allow an order with a Super
Aggressive instruction to execute against an incoming Post Only order
only if the Post Only order is displayable is consistent with the use
of the Super Aggressive instruction to access liquidity displayed on
other Trading Centers. Further, according to the Exchange, users
seeking to execute against incoming non-displayable Post Only orders
will continue to be able to attach the NDS order instruction, as well
as other order instructions that may permit such executions. In
addition, the Exchange stated that the proposed priority change where
non-displayed orders without a Super Aggressive instruction would cede
priority to non-displayed orders with a Super Aggressive instruction is
similar to, and consistent with, the Exchange's priority ceding
functionality for orders with an NDS instruction and would facilitate
executions that would otherwise not occur due to an incoming Post Only
order's requirement not to remove liquidity. The Commission believes
that waiver of the 30-day operative delay is consistent with the
protection of investors and the public interest, as the proposed rule
change relates to optional functionality that is consistent with
existing functionality and, if selected by Exchange users, may enable
them to better manage their orders and may increase order interaction
on the Exchange. Accordingly, the Commission hereby waives the 30-day
operative delay and designates the proposed rule change operative upon
filing.\22\
---------------------------------------------------------------------------

    \21\ 17 CFR 240.19b-4(f)(6)(iii).
    \22\ For purposes only of waiving the 30-day operative delay,
the Commission has also 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 the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if

it appears to the Commission that such action is: (i) Necessary or
appropriate in the public interest; (ii) for the protection of
investors; or (iii) otherwise in furtherance of the purposes of the
Act. If the Commission takes such action, the Commission shall
institute proceedings to determine whether the proposed rule should be
approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-CboeEDGX-2018-025 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-CboeEDGX-2018-025. 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-CboeEDGX-2018-025, and should be
submitted on or before August 15, 2018.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
---------------------------------------------------------------------------

    \23\ 17 CFR 200.30-3(a)(12) and (59).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-15849 Filed 7-24-18; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 81, Number 238 (Monday, December 12, 2016)]
[Notices]
[Pages 89454-89455]
[FR Doc No: 2016-29619]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project Nos. 1855-049, 1892-029, 1904-077, 2077-106, 2323-214]

TransCanada Hydro Northeast Inc.; TC Hydro Inc.; Notice of
Application for Transfer of Licenses and Soliciting Comments and
Motions To Intervene

    On November 18, 2016, the above mentioned transferor and TC Hydro
Inc. (transferee) filed an application for transfer of licenses for the
following projects.

------------------------------------------------------------------------
     Project No.          Project name                Location
------------------------------------------------------------------------
P-1855-049..........  Bellows Falls         Connecticut River, Cheshire
                       Project.              and Sullivan counties, NH
                                             and Windham and Windsor
                                             counties, VT.
P-1892-029..........  Wilder Project......  Connecticut River, Windsor
                                             and Orange counties, VT and
                                             Grafton County, NH.
P-1904-077..........  Vernon Project......  Connecticut River, Grafton
                                             County, NH and Caledonia
                                             County, VT.
P-2077-106..........  Mile Falls            Connecticut River, Grafton
                       Hydroelectric         County, NH and Caledonia
                       Project.              County, VT.
P-2323-214..........  Deerfield River       Windham and Bennington,
                       Project.              counties, VT and Franklin
                                             and Berkshire counties, MA.
------------------------------------------------------------------------

    The transferor and transferee seek Commission approval to transfer
the licenses for the above mentioned projects from the transferor to
the transferee.
    Applicant Contacts: For Transferor and Transferee: Ms. Erin A.
O'Dea, Legal Counsel, TransCanada U.S. Northeast, 110 Turnpike Road,
Suite 300, Westborough, MA 01581, Phone:<PHONE_NUMBER>, Email:
<EMAIL_ADDRESS>And John A. Whittaker, IV, Winston & Strawn
LLP, and 1700 K Street NW., Washington, DC 20006-3817, Phone: 202-282-
5766, Email<EMAIL_ADDRESS>    FERC Contact: Patricia W. Gillis,<PHONE_NUMBER>.
    Deadline for filing comments and motions to intervene: 30 days from
the issuance date of this notice, by the Commission. The Commission
strongly encourages electronic filing. Please file motions to intervene
and comments using the Commission's eFiling system at http://www.ferc.gov/docs-filing/efiling.asp. Commenters can submit

brief comments up to 6,000 characters, without prior registration,
using the eComment system at http://www.ferc.gov/docs-filing/ecomment.asp. You must include your name and contact information at the
end of your comments. For assistance, please contact FERC Online
Support at<EMAIL_ADDRESS>(866) 208-3676 (toll free), or
(202) 502-8659 (TTY). In lieu of electronic filing, please send a paper
copy to: Secretary, Federal Energy Regulatory Commission, 888 First
Street NE., Washington, DC 20426. The first page of any filing should
include docket number P-1855-049, P-1892-029, P-1904-077, P-2077-106,
or P-2323-214.

    Dated: December 2, 2016.
Kimberly D. Bose,
Secretary.
[FR Doc. 2016-29619 Filed 12-9-16; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register Volume 78, Number 215 (Wednesday, November 6, 2013)]
[Proposed Rules]
[Pages 66666-66668]
[FR Doc No: 2013-26571]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2013-0937; Directorate Identifier 2013-CE-029-AD]
RIN 2120-AA64

Airworthiness Directives; Diamond Aircraft Industries GmbH
Airplanes

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

ACTION: Notice of proposed rulemaking (NPRM).

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

SUMMARY: We propose to adopt a new airworthiness directive (AD) for
certain Diamond Aircraft Industries GmbH Models DA 42 NG and DA 42 M-NG
airplanes. This proposed AD results from mandatory continuing
airworthiness information (MCAI) originated by an aviation authority of
another country to identify and correct an unsafe condition on an
aviation product. The MCAI describes the unsafe condition as the
failure of the alternator indication system to indicate warning when
one alternator is inoperative. We are issuing this proposed AD to
require actions to address the unsafe condition on these products.

DATES: We must receive comments on this proposed AD by December 23,
2013.

ADDRESSES: You may send comments by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590.
     Hand Delivery: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.
    For service information identified in this proposed AD, contact
Diamond Aircraft Industries GmbH, N.A. Otto-

Stra[szlig]e 5, A-2700 Wiener Neustadt, Austria, telephone: +43 2622
26700; fax: +43 2622 26700 1369; email<EMAIL_ADDRESS>
Internet: http://www.diamond-air.at. You may review copies of the
referenced service information at the FAA, Small Airplane Directorate,
901 Locust, Kansas City, Missouri 64106. For information on the
availability of this material at the FAA, call<PHONE_NUMBER>.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating it in Docket No. FAA-
2013-0937; or in person at the Docket Management Facility between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD
docket contains this proposed AD, the regulatory evaluation, any
comments received, and other information. The street address for the
Docket Office (telephone<PHONE_NUMBER>) is in the ADDRESSES section.
Comments will be available in the AD docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Mike Kiesov, Aerospace Engineer, FAA,
Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri
64106; telephone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite you to send any written relevant data, views, or
arguments about this proposed AD. Send your comments to an address
listed under the ADDRESSES section. Include ``Docket No. FAA-2013-0937;
Directorate Identifier 2013-CE-029-AD'' at the beginning of your
comments. We specifically invite comments on the overall regulatory,
economic, environmental, and energy aspects of this proposed AD. We
will consider all comments received by the closing date and may amend
this proposed AD because of those comments.
    We will post all comments we receive, without change, to http://regulations.gov in Docket No. FAA-2013-0937, including any personal
information you provide. We will also post a report summarizing each
substantive verbal contact we receive about this proposed AD.

Discussion

    The European Aviation Safety Agency (EASA), which is the Technical
Agent for the Member States of the European Community, has issued AD
No.: 2013-0224, dated September 19, 2013 (referred to after this as
``the MCAI''), to correct an unsafe condition for the specified
products. The MCAI states:

    During maintenance troubleshooting of the DA 42 NG alternator
indication system it has been discovered that, with one alternator
inoperative, the system did not give a warning indication as
described in the Airplane Flight Manual.
    Subsequent investigation results showed that the voltage
regulator warning circuit, which is part of the engine, monitors Bus
Voltage and is the only trigger for the alternator fail
annunciation. As a result, one alternator may fail but the related
voltage regulator does not trigger the alternator fail annunciation
as the voltage is being held at the regular level by the second
alternator on board.
    The remaining generating system indication for the pilot is
unaffected. The ampere-meter is indicating a load on each alternator
and in case of a Low Voltage condition a caution message will be
displayed.
    This condition, if not corrected, could lead to an undetected
loss of one engine alternator and reduced capability of the
electrical generating power system, possibly impairing safe
continuation of the flight.
    Prompted by this event, Diamond Aircraft Industries (DAI)
introduced at airframe level an additional independent alternator
fail caution trigger by using the G1000 ampere-meter signals. The
trigger is set once an alternator provides less than 5A and thus
indicates electrical power supply failure to the ship system.
    DAI issued Mandatory Service Bulletin (MSB) 42NG-003/12
providing instructions for installation of the Secondary
Configuration Card Part Number (P/N) 010-12074-02 ``Additional ALTN
FAIL trigger'' with system software P/N 010-00670-10 applicable for
all DA 42 NG and DA 42 M-NG aeroplanes.
    In addition, model DA 42 M-NG now incorporates an output of the
GEA 71 to activate the alternator fail relay. DAI issued Mandatory
Service Bulletin (MSB) 42MNG-006 to provide instructions for
installation of that additional control cable P/N D62-2510-97-00-SB.
    For the reasons described above, this AD requires installation
of the Secondary Configuration Card P/N 010-12074-02 ``Additional
ALTN FAIL trigger'' and System Software P/N 010-00670-10 for all DA
42 NG and DA 42 M-NG aeroplanes and installation of GEA Alternator
fail control cable P/N D62-2510-97-00-SB on certain model DA 42 M-NG
aeroplanes.
    This AD also prohibits installation of System Software prior to
P/N 010-00670-10.

You may examine the MCAI on the Internet at http://www.regulations.gov
by searching for and locating it in Docket No. FAA-2013-0937.

Relevant Service Information

    Diamond Aircraft Industries GmbH has issued Mandatory Service
Bulletin No. MSB 42NG-003/12; Mandatory Service Bulletin MSB 42MNG-006;
and Work Instruction WI-MSB 42MNG-006, all dated July 8, 2013. The
actions described in this service information are intended to correct
the unsafe condition identified in the MCAI.

FAA's Determination and Requirements of the Proposed AD

    This product has been approved by the aviation authority of another
country, and is approved for operation in the United States. Pursuant
to our bilateral agreement with this State of Design Authority, they
have notified us of the unsafe condition described in the MCAI and
service information referenced above. We are proposing this AD because
we evaluated all information and determined the unsafe condition exists
and is likely to exist or develop on other products of the same type
design.

Costs of Compliance

    We estimate that this proposed AD will affect 26 products of U.S.
registry. We also estimate that it would take about 2 work-hours per
product to comply with the basic requirements of this proposed AD. The
average labor rate is $85 per work-hour. Required parts would cost
about $115 per product.
    Based on these figures, we estimate the cost of the proposed AD on
U.S. operators to be $7,410, or $285 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 proposed 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 proposed AD would not have federalism
implications under Executive Order 13132. This proposed AD would 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 this proposed
regulation:
    (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.

List of Subjects in 14 CFR Part 39

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

The Proposed Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA proposes to amend 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:

Diamond Aircraft Industries GmbH: Docket No. FAA-2013-0937;
Directorate Identifier 2013-CE-029-AD.

(a) Comments Due Date

    We must receive comments by December 23, 2013.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Diamond Aircraft Industries GmbH Models DA 42
NG and DA 42 M-NG airplanes, all serial numbers certificated in any
category, except those that have Supplemental Type Certificate (STC)
SA02725NY (http://rgl.faa.gov/Regulatory_and_Guidance_Library/rgstc.nsf/0/286A29A0C46D66048625764900624649?OpenDocument&Highlight=sa02725ny)
incorporated.

    Note 1 to paragraph (c) of this AD: STC SA02725NY uses a
different electrical system architecture and the unsafe condition
addressed in this AD does not apply to that system.

(d) Subject

    Air Transport Association of America (ATA) Code 24: Electric
Power.

(e) Reason

    This AD was prompted by mandatory continuing airworthiness
information (MCAI) originated by an aviation authority of another
country to identify and correct an unsafe condition on an aviation
product. The MCAI describes the unsafe condition as failure of the
alternator indication system to indicate warning when one alternator
is inoperative. We are issuing this proposed AD to prevent the
undetected loss of one engine alternator, which could result in
reduced capability of the electrical generating power system.

(f) Actions and Compliance

    Unless already done, do the following actions as specified in
paragraphs (f)(1) through (f)(3) of this AD, including all
subparagraphs:
    (1) For all DA 42 NG airplanes: Within 12 months after the
effective date of this AD, install Secondary Configuration Card part
number (P/N) 010-12074-02 ``Additional ALTN FAIL trigger'' and
System Software P/N 010-00670-10 following the Accomplishment/
Instructions section of Diamond Aircraft Industries GmbH Mandatory
Service Bulletin No. MSB 42NG-003/13, dated October 11, 2013; or the
Accomplishment/Instructions section of Diamond Aircraft Industries
GmbH Mandatory Service Bulletin No. MSB 42NG-003/12, dated July 8,
2013.
    (2) For DA 42 M-NG airplanes, serial numbers (S/Ns) 42.339,
42.MN001 through 42.MN0026, and all S/Ns modified through Optional
Service Bulletin (OSB) 42-081, using Work Instruction (WI) OSB-42-
081 up to Revision 1 inclusive: Within 100 hours time-in-service
after the effective date of this AD or within 12 months after the
effective date of this AD, whichever occurs first:
    (i) Install GEA Alternator fail control cable P/N D62-2510-97-
00-SB following the Instructions section of Diamond Aircraft
Industries GmbH Work Instruction WI-MSB 42MNG-006, dated July 8,
2013, as specified in the Accomplishments/Instructions section of
Diamond Aircraft Industries GmbH Mandatory Service Bulletin No. MSB
42MNG-006, July 8, 2013; and
    (ii) Install Secondary Configuration Card P/N 010-12074-02
``Additional ALTN FAIL trigger'' and System Software P/N 010-00670-
10 following the Accomplishment/Instructions section of Diamond
Aircraft Industries GmbH Mandatory Service Bulletin No. MSB 42NG-
003/13, dated October 11, 2013; or the Accomplishment/Instructions
section of Diamond Aircraft Industries GmbH Mandatory Service
Bulletin No. MSB 42NG-003/12, dated July 8, 2013.
    (3) For all airplanes: As of the effective date of this AD, do
not install on any airplane System Software prior to P/N 010-00670-
10.

(g) Other FAA AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
Standards Office, FAA, has the authority to approve AMOCs for this
AD, if requested using the procedures found in 14 CFR 39.19. Send
information to ATTN: Mike Kiesov, Aerospace Engineer, FAA, Small
Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri
64106; telephone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>Before using any approved AMOC on any airplane
to which the AMOC applies, notify your appropriate principal
inspector (PI) in the FAA Flight Standards District Office (FSDO),
or lacking a PI, your local FSDO.
    (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.

(h) Related Information

    Refer to MCAI European Aviation Safety Agency (EASA) AD No.:
2013-0224, dated September 19, 2013; Diamond Aircraft Industries
GmbH Optional Service Bulletin OSB 42-081/1; Diamond Aircraft
Industries GmbH Work Instruction WI-OSB 42-081, Rev. 1, both dated
December 23, 2010; Diamond Aircraft Industries GmbH Optional Service
Bulletin OSB 42-081; and Diamond Aircraft Industries GmbH Work
Instruction WI-OSB 42-081, Rev. 0, both dated March 17, 2010, for
related information. You may examine the MCAI on the Internet at
http://www.regulations.gov by searching for and locating it in
Docket No. FAA-2013-0937. For service information related to this
AD, contact Diamond Aircraft Industries GmbH, N.A. Otto-Stra[szlig]e
5, A-2700 Wiener Neustadt, Austria, telephone: +43 2622 26700; fax:
+43 2622 26700 1369; email<EMAIL_ADDRESS>Internet:
http://www.diamond-air.at. You may review copies of the referenced
service information at the FAA, Small Airplane Directorate, 901
Locust, Kansas City, Missouri 64106. For information on the
availability of this material at the FAA, call<PHONE_NUMBER>.

    Issued in Kansas City, Missouri, on October 30, 2013.
Earl Lawrence,
Manager, Small Airplane Directorate, Aircraft Certification Service.
[FR Doc. 2013-26571 Filed 11-5-13; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 80, Number 150 (Wednesday, August 5, 2015)]
[Notices]
[Page 46612]
[FR Doc No: 2015-19311]

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SECURITIES AND EXCHANGE COMMISSION

[File No. 500-1]

In the Matter of Wonder International Education and Investment
Group Corp.; Order of Suspension of Trading

August 3, 2015.
    It appears to the Securities and Exchange Commission
(``Commission'') that there is a lack of current and accurate
information concerning the securities of Wonder International Education
and Investment Group Corp. (CIK No.<PHONE_NUMBER>) (``WIEI'') because WIEI
has not filed any periodic reports since it filed a Form 10-Q for the
quarter ended September 30, 2013 on November 14, 2013. The company has
not filed audited financials since July 25, 2013, when it filed its
amended Form 10-K for the year ended December 31, 2012. In particular,
it appears to the Commission that there is a lack of accurate and
reliable information concerning WIEI's financial condition and the
current status of its business. WIEI is an Arizona corporation
originally based in Scottsdale, Arizona. Its stock is quoted on OTC
Link, operated by OTC Markets Group Inc., under the ticker: WIEI. The
Commission is of the opinion that the public interest and the
protection of investors require a suspension of trading in the
securities of the above-listed company.
    Therefore, it is ordered, pursuant to Section 12(k) of the
Securities Exchange Act of 1934, that trading in the securities of the
above-listed company is suspended for the period from 9:30 a.m. EDT on
August 3, 2015, through 11:59 p.m. EDT on August 14, 2015.

    By the Commission.
Brent J. Fields,
Secretary.
[FR Doc. 2015-19311 Filed 8-3-15; 11:15 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 73 (Monday, April 16, 2012)]
[Notices]
[Pages 22615-22616]
[FR Doc No: 2012-9012]

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

SECURITIES AND EXCHANGE COMMISSION

Submission for OMB Review; Comment Request

Upon written request, copies available from: Securities and Exchange
Commission, Office of Investor Education and Advocacy, Washington, DC
20549-0213.

Extension:
    Rule 15g-4; OMB Control No. 3235-0393; SEC File No. 270-347.

    Notice is hereby given that pursuant to the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (Commission) has submitted to the Office of Management and
Budget (``OMB'') a request for extension of the existing collection of
information provided for in Rule 15g-4--Disclosure of compensation to
brokers or dealers (17 CRF 240.15g-4) under the Securities Exchange Act
of 1934 (15 U.S.C. 78a et seq.).
    Rule 15g-4 requires brokers and dealers effecting transactions in
penny stocks for or with customers to disclose the amount of
compensation received by the broker-dealer in connection with the
transaction. The purpose of the rule is to increase the level of
disclosure to investors concerning penny stocks generally and specific
penny stock transactions.
    The Commission estimates that approximately 209 broker-dealers will
spend an average of 87 hours annually to comply with this rule. Thus,
the total compliance burden is approximately 18,200 burden-hours per
year.
    Rule 15g-4 contains record retention requirements. Compliance with
the rule is mandatory. The required records are available only to the
examination staff of the Commission and the self regulatory
organizations of which the broker-dealer is a member. The commission
may not conduct or sponsor a collection of information unless it
displays a currently valid OMB control number. No person shall be
subject to any penalty for failing to comply with a collection of
information subject to the PRA that does not display a valid OMB
control number.
    Background documentation for this information collection may be
viewed at the following Web site, www.reginfo.gov. Comments should be
directed to: (i) Desk Officer for the Securities and Exchange
Commission, Office of Information and Regulatory Affairs, Office of
Management and Budget, Room 10102, New Executive Office Building,
Washington, DC 20503 or by sending an email to:

<EMAIL_ADDRESS>and (ii) Thomas Bayer, Director/Chief
Information Officer, Securities and Exchange Commission, c/o Remi
Pavlik-Simon, 6432 General Green Way, Alexandria, VA 22312 or send an
email to<EMAIL_ADDRESS>Comments must be submitted to OMB within
30 days of this notice.

     Dated: April 10, 2012.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-9012 Filed 4-13-12; 8:45 am]
BILLING CODE 8011-01-P