[Federal Register Volume 81, Number 220 (Tuesday, November 15, 2016)]
[Notices]
[Pages 80125-80132]
[FR Doc No: 2016-27363]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79258; File No. SR-BOX-2016-50]

Self-Regulatory Organizations; BOX Options Exchange LLC; Notice
of Filing of Proposed Rule Change To Amend Rule 5050 Series of Options
Contracts Open for Trading To Provide for the Listing and Trading on
the Exchange of RealDayTM Options Pursuant to a Pilot Program

November 8, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on October 26, 2016, BOX Options Exchange LLC (the ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the self-regulatory organization. The
Commission is publishing this notice to solicit comments on the
proposed rule 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 amend Rule 5050 to provide for the listing
and trading on the Exchange of RealDay\TM\ Options pursuant to a pilot
program. 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
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its rules to provide for the listing
and trading on the Exchange of a new type of standardized option
product on the SPDR[supreg] S&P 500[supreg] Exchange Traded Fund
(``ETF'') (this security is known by its symbol ``SPY'') called
RealDay\TM\ Options (``RealDay Options'') pursuant to a pilot program
ending 12 months after approval of all necessary changes to the
applicable BOX Rules has been received from the Securities and Exchange
Commission (the ``SEC'' or ``Commission''). RealDay Options will
possess many of the characteristics of existing standardized options
with some important variations. Most notably, at the commencement of
trading of a particular RealDay Option and until the close of trading
on the last trading day before its expiration, the numerical value of
the strike price will not be known. However, the formula used to
calculate the strike price will be fixed and known from the time of
listing.\3\
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    \3\ The Exchange notes that this is not a new concept. See
Chicago Board Options Exchange, Incorporated (``CBOE'') Rule
24.1(aa).
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    RealDay Options are a propriety product that are designed and
exclusively licensed by the RealDay Options Corporation.\4\ RealDay
Options will be exclusively listed on BOX. RealDay Options are designed
to have an active period, where the numerical value of the strike
prices is known, for exactly one trading day but can be listed far in
advance of their expiration date. Although the active period is only
one trading day, RealDay options can still be traded during the
anticipatory period which is the period of time from listing until the
close of trading on the trading day prior to expiration. The Exchange
believes that there is interest for options designed to cover a single
trading day across all market participants, including institutional
investors and the public. RealDay Options are true, or real, one-day
options, because they are forward-start (or delayed start \5\) options
whose strike increments and strike price setting formula are fixed from
the time they are listed, but whose numerical strike prices are
determined based on the formula which uses the closing price of SPY
from the last trading day before expiration. This unique structure of
having the strike intervals and strike price setting formula fixed from
the time they are listed but not knowing the numerical value of the
strike price until the exercise price setting date--which is after the
close of trading on the last trading day before expiration--is what
makes these options one-day options.
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    \4\ The RealDay Options Corporation is a design and product
development company specializing in innovative exchange-listed
derivative instruments. For more information visit http://realdayoptions.com/.
    \5\ Delayed start options are options that do not have an
exercise price when first introduced for trading, but instead have
an exercise price setting formula pursuant to which the exercise
price will be fixed on a specified future date. The price setting
formula is fixed and known from the time of listing.
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    Initially, RealDay Options will only be listed on SPY but the
Exchange may seek to list RealDay Options on additional securities in
the future,\6\ provided that the Exchange receives the necessary
approval from the Commission. The Exchange has selected SPY as the
initial security to list RealDay Options on due to the vast liquidity
in the security. Specifically, SPY is the largest and most actively
traded ETF in the United States. According to State Street Global
Advisor, the Trustee of SPY, as of October 5, 2016, the total net
assets of SPY were approximately $198 billion, and the weighted average
market capitalization of the portfolio components was approximately
$146 billion.\7\ For the three months ending October 5, 2016, the
average daily volume in SPY shares was approximately 85 million.\8\
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    \6\ The Exchange would use the SEC's form 19b-4 approval process
in order to list RealDay Options on additional securities.
    \7\ See https://www.spdrs.com/product/fund.seam?ticker=SPY.
    \8\ Calculated using data from Yahoo as of October 5, 2016.
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    RealDay Options will be P.M. cash-settled and have European-style
exercise provisions.\9\ These options may expire every trading day,
including days on which monthly options series, Short Term Options
Series, and Quarterly Options Series on SPY expire. The Exchange
believes that cash settlement is more appropriate than physical
settlement and therefore is best suited for this product. Physical
settlement possesses certain risks with respect to volatility and
movement of the underlying security at expiration that the recipient
may need to hedge against. Cash settlement does not have any of these
risks associated with the underlying security. If an issue with the
delivery of the underlying security arises, it may become more
expensive to reverse due to a change in the price of the underlying
security; such risk does not exist with reversing a cash payment.
Additionally, with physical settlement, the recipient has to sell the
underlying security if they desire cash, which would cause them to
incur costs associated with liquidating the position and has risks
related to movement of the underlying price before it can be
liquidated. Further, if RealDay Options were physically settled, an
investor would need to carry the security overnight and liquidate the
next trading day; this would defeat the purpose of having an option
where the active period is designed to cover only a single trading day.
If an investor had to liquate the next trading day, there would be a
risk that the price of the security could change overnight before the
investor would be able to liquidate their position.\10\ The Exchange
notes that there are still certain risks with cash settlement, however,
these risks are minimal and will continue to be monitored. The Exchange
notes that cash settlement for options is not a unique feature and
other options exchanges have cash settled options.\11\ Additionally,
the Exchange has discussed RealDay Options with market participants and
they have expressed

their preference for the product to be cash-settled.
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    \9\ See Proposed Rule 5050(f)(4).
    \10\ If an investor was required to wait until the next trading
day to liquidate, RealDay Options would essentially be A.M.-settled
options instead of P.M.-settled, as designed.
    \11\ See e.g. NASDAQ's FX Options and CBOE's SPX Options.
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    RealDay Options are P.M.-settled due to the nature of the product.
Specifically, RealDay Options are designed to cover a single trading
day due to the fact they are only active for one trading day. The only
way to ensure that the option covers one trading day is to have it be
P.M.-settled, as opposed to A.M.-settlement where additional factors
may have an effect on the settlement price. Specifically, A.M.-settled
options use the opening price for settlement which means they will
price in after-hours news and events and therefore do not cover only
one trading day. If RealDay Options were A.M.-settled, they would not
cover only a single trading day because the settlement price would
include events occurring after the close, which is not the intended
goal of RealDay Options. Additionally, the Exchange notes that standard
options in SPY are already P.M.-settled.
Listing
    Although RealDay Options are designed to cover one trading day,
they will be listed at least two weeks prior to their expiration but no
greater than nine (9) months prior to their expiration.\12\ The options
are in essence divided into two periods: The anticipatory period and
the active period.\13\ The anticipatory period is the period of time
from the day the option is listed up until the close of trading on the
last trading day before expiration. The active period is the expiration
day of the option. During the anticipatory period the strike intervals
and strike price setting formula are known, but not the numerical value
of the strike prices, because they depend on the closing price of SPY
from the last trading day before expiration. RealDay Options may still
be traded in the anticipatory period in the same manner as standard
options on SPY. The fact that the numerical strike prices will only be
known for the active period, which is one trading day, is how RealDay
Options are designed to be active for one trading day.
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    \12\ See Proposed Rule 5050(f).
    \13\ See Exhibit 3-2 for a chart illustrating the two periods.
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Strike Prices
    The numerical value of the strike prices for RealDay Options will
not be known until the close of trading on the last trading day before
expiration, although the strike intervals and strike price setting
formula will be fixed from inception.\14\ As described in greater
detail below, the formula will involve multiplying the closing price of
SPY from the last trading day before expiration (``Strike Setting
Price'') by the Strike Multiplier.\15\ The Exchange notes that
calculating strike prices based on a previous close is not an entirely
new concept.\16\ In effect, the strike price will stay at the same
percentage relationship to the price of SPY from the time of listing.
Further, the Exchange may only list up to a maximum of seven strike
prices for each expiration date. The seven strike prices will consist
of up to three (3) strike prices with a price greater than the Strike
Setting Price, three (3) strike prices with a price less than the
Strike Setting Price, and one (1) strike price equal to the Strike
Setting Price.\17\ The Exchange will have discretion in determining the
number of strike prices it will list per expiration, provided that the
strike prices listed satisfy the restrictions above. Additionally, the
Exchange must list the strike price that is equal to the Strike Setting
Price for every RealDay Option expiration. For example, the Exchange
could not list four (4) strike prices at a price greater than the
Strike Setting Price, one (1) strike price equal to the Strike Setting
Price and two (2) options that have a strike price less than the Strike
Setting Price. However, the Exchange could list three (3) strike prices
at a price greater than the Strike Setting Price, one (1) strike price
equal to the Strike Setting Price and two (2) strike prices that are
less than the Strike Setting Price.
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    \14\ See Proposed Rule 5050(f)(8).
    \15\ The ``Strike Multiplier'' is the decimal equivalent of the
percentage strike of the specific option. The Strike Multiplier will
be expressed with three decimal places. For example, an option that
is equal to the Strike Setting price would be 100%, making the
Strike Multiplier 1.000.
    \16\ See CBOE Rule 24.9(d). The exercise price of CBOE Delayed
Start Options Series is determined in relation to the closing price
of the underlying index on the date on which the exercise price is
fixed.
    \17\ See Proposed Rule 5050(f)(2).
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    The Exchange may, in its sole discretion, determine to not list in-
the-money (``ITM'') put or call options for any of the seven (7) strike
prices.\18\ The ITM puts that the Exchange may decide to not list are
those corresponding to the three strike prices that are greater than
the Strike Setting Price and the ITM call options are those
corresponding to the three strike prices that are less than the Strike
Setting Price. The Exchange notes that nothing in its Rules prohibits
the Exchange from deciding to list only a put or call option for a
specific strike price. The Exchange also notes that the listing of only
a put or call option for a specific strike price will allow for quote
mitigation. Additionally, the Exchange believes it will be beneficial
to have this discretion because it will allow the Exchange to limit the
number of instruments listed. Additionally, the Exchange believes that
the value of RealDay Options is in the instruments that are at-the-
money (``ATM'') and out-of-the-money (``OTM'').
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    \18\ See Proposed Rule 5050(f)(2)(ii).
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    As is the case with other options that the Exchange lists, the
Exchange may add additional strike prices after the initial listing of
a RealDay Option, provided that the Exchange does not list more than
the seven strike prices as described above. For example, if the
Exchange lists a RealDay Option at the beginning of March with only the
strike price equal to the Strike Setting Price that expires on June 29,
2017, the Exchange could list up to six additional strike prices at the
beginning of June for the same expiration.\19\ When listing the
additional strike prices, the Exchange must follow the guidelines above
with respect to only being allowed to list up to three strike prices
above and three strike prices below the Strike Setting Price.
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    \19\ For example, on June 1, 2017, the Exchange could list three
strike prices greater than the Strike Setting Price and three strike
prices lower than the Strike Setting Price. The threes [sic] strike
prices greater than the Strike Setting Price will be the strike
prices calculated by adding 0.5%, 1.0%, and 1.5%, respectively, to
the Strike Setting Price. The three strike prices less than the
strike Setting Price will be the strike prices calculated by
subtracting 0.5%, 1.0%, and 1.5%, respectively, from the Strike
Setting Price.
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    The strike price formula will be used after the close of trading on
the last trading day before expiration in order to calculate the
numerical values of the strike prices. Specifically, the strike prices
will be determined by multiplying the Strike Setting Price by the
Strike Multiplier. Additionally, the strike prices will have fixed
strike intervals of 0.50%; therefore the Exchange's general strike
price interval rules shall not apply to RealDay Options.\20\ This means
there will be one strike price equal to 100% of the Strike Setting
Price.\21\ The three strike prices greater than then Strike Setting
Price will be determined by adding 0.5%, 1.0%, and 1.5%,\22\
respectively, to the Strike Setting Price. The three strike prices less
than the Strike Setting Price will be determined by subtracting 0.5%,
1.0%, and 1.5%,\23\ respectively, from the Strike Setting Price. The
strike prices will be rounded to the nearest

minimum trading increment, if necessary.
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    \20\ See Proposed Rule 5050(f)(3).
    \21\ The Strike Multiplier would be 1.000.
    \22\ The Strike Multipliers would be 1.005, 1.010 and 1.015,
respectively.
    \23\ The Strike Multiplies would be 0.995, 0.990 and 0.985
respectively.
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Example #1
    On Tuesday, SPY's closing price is 180.15, which will be the Strike
Setting Price. RealDay Options on SPY expiring on the next trading day,
Wednesday, may have the following strike prices computed by multiplying
the Strike Setting Price by the Strike Multiplier.

------------------------------------------------------------------------
                                     Formula  (strike
             Option              setting price *  strike   Strike prices
                                       multiplier)
------------------------------------------------------------------------
Strike Setting Price +1.5%.....           180.15 * 1.015          182.85
Strike Setting Price +1.0%.....           180.15 * 1.010          181.95
Strike Setting Price +0.5%.....           180.15 * 1.005          181.05
Strike Setting Price...........           180.15 * 1.000          180.15
Strike Setting Price -0.5%.....           180.15 * 0.995          179.25
Strike Setting Price -1.0%.....           180.15 * 0.990          178.35
Strike Setting Price -1.5%.....           180.15 * 0.985          177.45
------------------------------------------------------------------------

    If SPY does not open for trading on the trading day before the
options expiration date, then the last available closing price for SPY
will be the Strike Setting Price. For Example, if a RealDay Option is
expiring on Friday but SPY does not open for trading on Thursday, which
is the last trading day before the expiration date, the Strike Setting
Price used for the RealDay Option expiring on Friday will be the
closing price of SPY from Wednesday, provided that SPY is open for
trading on Wednesday.
    The Exchange is proposing to list RealDay Options on SPY with the
symbol ``SPYZ.'' During the anticipatory period, the strike prices will
be listed as the Strike Multiplier, since the numerical value of the
strike price is not yet known. The table below illustrates how this
will work.

------------------------------------------------------------------------
                                                           Strike price
                                                              during
                         Option                            anticipatory
                                                          period (strike
                                                            multiplier)
------------------------------------------------------------------------
Strike Setting Price +1.5%..............................           1.015
Strike Setting Price +1.0%..............................           1.010
Strike Setting Price +0.5%..............................           1.005
Strike Setting Price....................................           1.000
Strike Setting Price -0.5%..............................           0.995
Strike Setting Price -1.0%..............................           0.990
Strike Setting Price -1.5%..............................           0.985
------------------------------------------------------------------------

    The Exchange believes that using three decimal places will minimize
the potential for investor confusion.\24\ Specifically, since three
decimal places is unique and not currently used for options, investors
will be on notice and aware that the Strike Multiplier does not
represent a strike price of a typical standard option. The Exchange
notes that it will also provide information and education to market
participants via circular prior to the launch of RealDay Options to
further minimize any investor confusion. Additionally, since the
Exchange will never list RealDay Options on an underlying security with
a price below $10.00, there will be no confusion that the decimal
equivalent is actually a strike price around $1.00. For example, if the
underlying security was trading around $2.00, a strike price of 1.005
during the anticipatory period may be confused as a strike price equal
to $1.005 instead of .05% above the Strike Setting Price. Below is an
example of how RealDay Options will be listed.
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    \24\ The Exchange notes that it has confirmed with data vendors,
the Options Clearing Corporation and various market participants to
confirm that they will be able to handle three decimal places when
RealDay Options are launched. The Exchange also explained what the
three decimal places would represent.

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                                   Symbol       Strike (%)        CALL/PUT               Expiration date
----------------------------------------------------------------------------------------------------------------
SPYZ 161021C1.000............  SPYZ                  100     CALL.............  10/21/2016
SPYZ 161021C.995.............  SPYZ                   99.50  CALL.............  10/21/2016
----------------------------------------------------------------------------------------------------------------

    After the close of trading on the last trading day before
expiration, the decimal will be converted into the numerical strike
price by multiplying the Strike Setting Price by the Strike
Multiplier.\25\ For example, if SPY closes at $190.00 on the last
trading day before expiration, the 1.005 strike price will be converted
to $190.95 ($190.00 * 1.005).
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    \25\ An adjustment to the Strike Setting Price may be needed in
order to remove the effects of corporate actions, such as cash
dividends. If a dividend is declared, the Strike Setting Price would
be adjusted by subtracting the declared dividend before multiplying
it by the Strike multiplier.
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    Although the Exchange will have some discretion in determining the
exact number of strike prices that can be listed, the Exchange will
follow additional procedures \26\ based on the price of the underlying
security. Specifically, if the underlying security is at or above
$25.00 per share, the Exchange may list all seven strike prices. If the
underlying security is at or below $10.00 per share, the Exchange will
not list any RealDay Option on the underlying security. If the
underlying security is between $10.00 and $25.00 per share, the
Exchange will only list one strike price. In such a case, the one
strike price will be equal to the Strike Setting Price.
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    \26\ See Proposed Rule 5050(f)(2).
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    These unique strike price features are designed to minimize
excessive quoting traffic that would come from listing standard options
that expire every trading day and are listed at least two weeks prior
to their expiration. If the Exchange were to list standard options on
an underlying security that expire every trading day, there would be an
enormous increase in quoting trading traffic due to the sheer number of
strike prices that would have to be listed for each series. This is in
part due to the fact that the price of the underlying security will
fluctuate between when a standard option is listed and its expiration
date. For example, on March 1, 2016 there were 127 strike prices listed
for the weekly SPY option expiring on March 4, 2016 and 232 strike
prices listed for the standard SPY option expiring on March 18, 2016.
The number of strike prices further increases as the options expiration
date

approaches, as well as in response to any price swings. Listing a
maximum of seven strike prices, instead of over 100 strike prices for
each expiration date, is designed to mitigate issues associated with
RealDay Option quoting traffic interfering with Exchange messaging by
minimizing the additional quoting traffic. Additionally, having the
strike prices based on a percentage of the underlying security up to
the expiration date will eliminate any issue around the underlying
security moving drastically from the period of time between listing and
expiration, which would lead to the need to list additional strike
prices so that there are strike prices near the price of the underlying
security.
Exercise and Settlement
    The exercise and settlement price will be calculated based on the
closing price of SPY on the trading day of expiration. The exercise-
settlement amount is equal to the difference between the settlement
price and the exercise price of the option multiplied by 100. Exercise
will result in the delivery of cash on the business day following
expiration.
Example #2
    On Monday, a trader purchased a 1.005 (0.50%) call for expiration
on Thursday. The Strike Multiplier is 1.005. When he purchased the call
he did not know the numerical value of the strike price, only that he
will get a call option whose strike price is fixed at 0.50% above the
close of SPY on Wednesday. On Wednesday, SPY closed at 177.43 (the
Strike Setting Price). All RealDay strike prices for expiration on
Thursday are determined as follows:

------------------------------------------------------------------------
                                              Strike
                 Option                     multiplier     Strike price
------------------------------------------------------------------------
Strike Setting Price +1.5%..............           1.015          180.09
Strike Setting Price +1.0%..............           1.010          179.20
Strike Setting Price +0.5%..............           1.005          178.32
Strike Setting Price....................           1.000          177.43
Strike Setting Price -0.5%..............           0.995          176.54
Strike Setting Price -1.0%..............           0.990          175.66
Strike Setting Price -1.5%..............           0.985          174.77
------------------------------------------------------------------------

    Since the trader purchased the RealDay SPY 1.005 call, the strike
price is now set at 178.32. Upon the close on Thursday, if SPY has
risen above 178.32, the option expires in the money. Assume that SPY
closes at 178.75 on Thursday, the call option purchased by the trader
will be $0.43 in the money (178.75 - 178.32 = 0.43), and the trader
will receive $43.00 (100 * 0.43).
    If SPY does not open for trading on the trading day of expiration,
then the last available closing price for SPY will be used to determine
the settlement price of the expiring RealDay Options. Specifically, if
SPY does not open for trading, at the close of trading on expiration,
RealDay Options will have an exercise price that is equal to the
closing price from the last trading day before expiration. This will
result in all RealDay Options expiring either ATM, OTM, or ITM;
depending on whether an ATM, OTM, or ITM option was purchased. This is
due to the nature of options that are designed to have an active period
of one trading day. For example, if a trader purchases an ATM RealDay
call option, which is equal to the closing price of SPY from the last
trading day before expiration (1.000 call), and SPY does not open for
trading on the expiration day of that RealDay Options, then the call
option purchased by the trader would expire ATM. This is because the
exercise price would be equal to the closing price which, in this case,
is equal to the closing price from the last trading day before
expiration, since SPY did not open for trading on the expiration day.
This is the same procedure used for standard options. Specifically,
when an option does not open for trading on an expiration date, the
last available closing price is used for settlement purposes.

Contract Specifications

    The contract specifications for RealDay Options are set forth in
Exhibit 3-1. RealDay Options will be European-style and P.M. cash-
settled. As mentioned above, the Exchange believes that having a P.M.
settlement is the best way to adequately represent the goal of RealDay
Options, which are designed to cover one trading day. The Exchange does
not believe that having a P.M. settlement will raise any issues since
the market for SPY is so large that any attempt to alter the closing
price would be extremely difficult and would subject the manipulator to
regulatory scrutiny. As previously mentioned, BOX is only proposing to
list RealDay Options on SPY, the most actively traded ETF in the U.S.
Due to the vast liquidity and diversity in market participants trading
SPY, any attempt to manipulate the closing price of SPY would be near
impossible to accomplish. Additionally, the Exchange has surveillance
measures in place to monitor such behavior. RealDay Options will
overlie 100 shares of SPY in the same manner as standard options on
SPY. The Exchange's standard trading hours for SPY options will apply
to trading in RealDay Options.
    With respect to margin requirements \27\ for RealDay Options, the
Exchange proposes to apply margin requirements for the purchase and
sale of RealDay Options that are identical to the margin requirements
for standard options on SPY.\28\ Margin requirements for RealDay
Options will be calculated in the same manner as margins for standard
options on SPY. Margins should be calculated in the same manner during
the anticipatory and active periods. The Exchange notes that even
though the numerical value of the strike price is not known until the
close of trading on the trading day before expiration, the margins will
still be calculated the same way as standard options. Specifically, the
strike price used for calculating the margin will just be the numerical
value of the strike price using the current price of SPY for the strike
setting formula. For example, if on Monday, a RealDay SPY Call Option
with a strike of 100% expiring on Friday is purchased where the price
of SPY is $200, the strike price used for calculating margins will be
$200 (100% * current SPY price).
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    \27\ Options Participants and associated persons are bound by
the initial and maintenance margin requirements of either the CBOE
or the New York Stock Exchange. See Rule 10120, see also CBOE Rule
12.3.
    \28\ See Proposed Rule 5050(f)(6).
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    The minimum trading increments for RealDay Options will be the same
as the minimum trading increments applicable to standard options on
SPY.\29\ Specifically, RealDay Options on SPY will have a minimum
trading increment

of $0.01. The Exchange believes that, since SPY options have a minimum
trading increment of $0.01, also having a minimum trading increment of
$0.01 for RealDay Options on SPY will avoid investor confusion. The
Exchange notes that this is similar to the treatment of Mini Options
for which the minimum trading increment is the same as the minimum
trading increment permitted for standard options on the same underlying
security.\30\
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    \29\ See Proposed Rule 5050(f)(5).
    \30\ See IM-5050-10(d) to Rule 5050.
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Position Limits
    The Exchange proposes that the position limits for RealDay Options
will be the same as the position limits for standard options on
SPY.\31\ For example, the Exchange proposes that there shall be no
position or exercise limits for RealDay Options on SPY. As noted above,
RealDay Options will settle using the published closing price from SPY.
Given that there are currently no position limits for SPY options,\32\
the Exchange believes it is appropriate for there to be no position or
exercise limits for RealDay Options on SPY. Since the removal of any
position limits on SPY is subject to a pilot program, if the pilot is
discontinued or cancelled and therefore SPY becomes subject to position
limits, then RealDay Options would become subject to the same position
limits as SPY options. Positions in RealDay Options shall be aggregated
with positions in all other options on SPY.
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    \31\ See Proposed Rule 5050(f)(10).
    \32\ See Securities Exchange Act Release No. 67936 (September
27, 2012), 77 FR 60491 (October 3, 2012) (Notice of Filing and
Immediate Effectiveness of SR-BOX-2012-013).
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Customer Trading
    Section 4000 of the Exchange's rules is designed to protect public
customer trading and shall apply to trading in RealDay Options.
Specifically, Rules 4020(a) and (b) prohibit Order Flow Providers
(``OFP'') \33\ from accepting a Public Customer order to purchase or
write an option, including RealDay Options, unless such customer's
account has been approved in writing by a designated Options Principal
of the OFP. Additionally, Rule 4040 regarding suitability is designed
to ensure that options, including RealDay Options, are sold only to
customers capable of evaluating and bearing the risks associated with
trading in the instrument. Further, Rule 4050 permits OFPs to exercise
discretionary power with respect to trading options, including RealDay
Options, in a Public Customer's account only if the OFP has received
prior written authorization from the customer and the account has been
accepted in writing by a designated Options Principal. Finally, Rule
4030 Supervision of Accounts, Rule 4060 Confirmation to Public
Customers, and Rule 4100 Delivery of Current Options Disclosure
Documents and Prospectus, will also apply to trading in RealDay
Options.
---------------------------------------------------------------------------

    \33\ See Rule 100(a)(45). The terms ``Order Flow Provider'' or
``OFP'' mean those Options Participants representing as agent
Customer Orders on BOX and those non-Market Maker Participants
conducting proprietary trading.
---------------------------------------------------------------------------

Surveillance
    The Exchange has an adequate surveillance program in place for
RealDay Options and intends to apply the same program procedures that
it applies to the Exchange's other options products. The Exchange does
not believe that it will have any issues with the surveillance of
RealDay Options. Although there are certain differences with RealDay
Options as compared to standard options, the Exchange believes its
current surveillance procedures will adequately monitor RealDay
Options. Additionally, the Exchange is also a member of the Intermarket
Surveillance Group (``ISG'') under the Intermarket Surveillance Group
Agreement dated June 20, 1994. The ISG members work together to
coordinate surveillance and investigative information sharing in the
stock and options markets.
    Per the proposed rule change, RealDay Options will be settled using
a calculation based on the daily closing prices of SPY. The Exchange
believes that manipulating the settlement price will be difficult based
on the size of the market for SPY. As discussed above, the Exchange is
only proposing to list RealDay Options on SPY, which is the most
actively traded ETF in the United States. The vast liquidity of the
equities markets ensures a multitude of market participants at any
given time. Due to the high level of participation among market makers
that can enter quotes in SPY, the Exchange believes it would be very
difficult for a single participant to alter the closing price in any
significant way without exposing the would-be manipulator to regulatory
scrutiny and financial costs. This is especially true for SPY given the
vast amount of liquidity in the ETF.
    The Exchange believes that there is no additional risk of
manipulation of RealDay Options as compared to other P.M.-settled
options. RealDay Options will be listed on the most actively traded ETF
and should dispel any concerns of manipulation. Due to the vast
liquidity in SPY and the diverse group of market participants that
trade SPY, any potential manipulator would be subject to regulatory
scrutiny.
    The Exchange represents that it has the necessary system capacity
to support additional quotations and messages that will result from the
listing and trading of RealDay Options. The Exchange believes that by
limiting the listing of RealDay Options to only seven (7) strike prices
per expiration, the Exchange will minimize the system capacity required
to list them. Additionally, the Exchange believes that having the
discretion to not list ITM call or put options will further minimize
the required system capacity.
Standardized Options
    Rule 9b-1 under the Act establishes a disclosure framework for
standardized options that are traded on a national securities exchange
and cleared through a registered clearing agency.\34\ The exchange on
which a standardized option is listed and traded must prepare an
Options Disclosure Document (``ODD'') that, among other things,
identifies the issuer and describes the uses, mechanics, and risk of
options trading, in language that can be easily understood by the
investing public. The ODD is treated as a substitute for the
traditional prospectus. Pursuant to Rule 9b-1 of the Act, use of the
ODD is limited to standardized options. The Exchange believes that
RealDay Options are covered by the current language of the ODD.
Specifically, the June 2008 Supplement to the ODD added a definition
for delayed start options.\35\ The ODD describes delayed start options
as ``an option that does not have an exercise price when first
introduced for trading but instead has an exercise price setting
formula pursuant to which the exercise price will be fixed on a
specified future date.'' \36\ Although the Exchange believes that
RealDay Options are covered by the current language of the ODD, BOX
respectfully requests that the Commission designate RealDay Options as
standardized options. The Exchange notes that the Commission has
previously designated options

similar to RealDay Options as standardized options.\37\
---------------------------------------------------------------------------

    \34\ ``Standardized options'' are defined in Rule 9b-1(a)(4) as
``options contracts trading on a national securities exchange, an
automated quotation system of a registered securities association,
or a foreign securities exchange which relate to options classes the
terms of which are limited to specific expiration dates and exercise
prices, or such other securities as the Commission may, by order,
designate.'' See 17 CFR 240.9b-1(a)(4).
    \35\ See pg. 129 of the Characteristics & Risks of Standardized
Options, located at http://www.optionsclearing.com/about/publications/character-risks.jsp.
    \36\ Id.
    \37\ See Securities Exchange Act Release No. 56855 (November 28,
2007), 72 FR 68613 (December 5, 2007)(Order Approving Proposed Rule
Change as Modified by Amendment No. 1 Thereto to List and Trade
Delayed Start Option Series).
---------------------------------------------------------------------------

Market Participation
    The Exchange believes that RealDay Options will be a useful tool
for all market participants. The unique strike price setting structure
and the fact that RealDay Options may expire every trading day will
allow investors to hedge single day events, including the release of an
economic report or a company's earnings release (``event days'').
Although the Exchange believes that these event days will be more
active as compared to the non-event days, the Exchange still believes
that investors will see value, including obtaining exposure to implied
volatility, as described in greater detail below, and trade RealDay
Options expiring on non-event days. Additionally, market participants
can capture interday realized volatility when they are bundled as
consecutive at-the-money straddles.
    Additionally, the Exchange believes that market participants will
find value in trading RealDay Options during both the anticipatory
period and active period. During the anticipatory period investors can
trade RealDay Options in order to get exposure to implied volatility
and during the active period RealDay Options will act and be traded in
the same manner as standard options. Market participants can obtain
exposure to implied volatility by initiating a position and then
liquidating it prior to the expiration day.
    The Exchange believes that Market Makers will be able to price and
quote RealDay Options effectively. Since RealDay Options will not have
their strike prices set until the day before expiration, the Exchange
believes that the models Market Makers use to price and quote RealDay
Options will be simpler than the models they use for standard options.
Specifically, Market Makers will not have to account for price
movements in SPY or time to expiration; basically Market Makers will
just have to deal with implied volatility when pricing RealDay Options.
Pilot Program
    As proposed, the proposal would become effective on a pilot program
basis for a period of twelve months.\38\ If the Exchange were to
propose an extension of the program or should the Exchange propose to
make the program permanent, then the Exchange would submit a filing to
the Commission proposing such amendments to the program. The Exchange
notes that any positions established under the pilot would not be
impacted by the expiration of the pilot. For example, a position in a
RealDay Option series that expires beyond the conclusion of the pilot
period could be established during the 12-month pilot. If the pilot
program were not extended, then the position could continue to exist.
However, the Exchange notes that any further trading in the series
would be restricted to transactions where at least one side of the
trade is a closing transaction.
---------------------------------------------------------------------------

    \38\ See Proposed Rule 5050(f)(9).
---------------------------------------------------------------------------

    The Exchange proposes to submit a pilot program report to the
Commission two months prior to the expiration date of the Pilot Program
(the ``pilot report''). The pilot report would contain an analysis of
volume, open interest, and trading patterns. The analysis would examine
trading in RealDay Options. In addition, for certain series, the pilot
report would provide analysis of price volatility and trading activity
in additional option series. In addition to the pilot report, the
Exchange would provide the Commission with periodic interim reports
while the pilot is in effect that would contain some, but not all, of
the information contained in the pilot report. The pilot report would
be provided to the Commission on a confidential basis.
    The pilot report would contain the following volume and open
interest data for RealDay Options:
    (1) Daily contract trading volume aggregated for all trades, for
all option series with less than 31 days until expiration;
    (2) daily contract trading volume aggregated by expiration date,
for all option series with less than 31 days until expiration;
    (3) daily contract trading volume for each individual series;
    (4) daily open interest aggregated for all series, for all option
series with less than 31 days until expiration;
    (5) daily open interest aggregated for all series by expiration
date, for all option series with less than 31 days until expiration;
    (6) daily open interest for each individual series;
    (7) statistics on the distribution of trade sizes;
    (8) type of market participant trading (e.g., contract trading
volume for each market participant type); and
    (9) 5-minute returns, level changes, and trading volume for the S&P
500 Index, VIX, SPY, IVV, and expiring RealDay options between open and
close for the first and second Wednesday of the month that is a trading
day and trading days when standard SPY options expire.
    In addition to the pilot report, the Exchange would periodically
provide the Commission with interim reports of the information listed
in items (1) through (9) above as required by the Commission while the
pilot is in effect. These interim reports would also be provided on a
confidential basis.
Additional Changes
    The Exchange also proposes to amend Rule 5050(a). Specifically, the
Exchange proposes to amend the rule to state that the Exchange will fix
a specific expiration date and exercise price for RealDay Options, as
provided in proposed Rule 5050(f).
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act \39\ in general, and furthers the objectives of Section
6(b)(5) of the Act \40\ 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 introduction of
RealDay Options will attract order flow to the Exchange, increase the
variety of listed options to investors, and provide a valuable hedge
tool to investors.
---------------------------------------------------------------------------

    \39\ 15 U.S.C. 78f(b).
    \40\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes the proposed rule change will further the
Exchange's goal of introducing new and innovative products to the
marketplace. The Exchange believes that listing RealDay Options will
provide an opportunity for investors to hedge, or speculate on, the
market risk associated with single day events. The proposed rule change
will allow the Exchange to list options that will allow traders to
manage risk associated with certain events, such as a company's
earnings or the release of an economic report. The Exchange believes
that RealDay Options will give traders an unprecedented ability to
hedge against single day events. As the Exchange previously noted, the
concept of a delayed start options is not a new proposal. Specifically,
CBOE has rules covering delayed start options.\41\ Additionally, the
ODD already has language covering delayed start options.\42\
---------------------------------------------------------------------------

    \41\ See supra notes 3 and 16.
    \42\ See supra note 35.

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

    Finally, the Exchange represents that it has an adequate
surveillance program in place to detect manipulative trading in RealDay
Options. The Exchange believes that by initially limiting RealDay
Options to only SPY, it will reduce the chances of manipulation due to
the robust market and liquidity in SPY. The Exchange also represents
that it has the necessary systems capacity to support the new options
series; and as stated in the filing, the Exchange has rules in place
designed to protect public customer trading.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange notes that the
proposed rule change will facilitate the listing and trading of a novel
option product that will enhance competition among market participants,
to the benefit of investors and the marketplace.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) by order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule
change should be 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-BOX-2016-50 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-BOX-2016-50. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-BOX-2016-50 and should be
submitted on or before December 6, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\43\
---------------------------------------------------------------------------

    \43\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2016-27363 Filed 11-14-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 85, Number 220 (Friday, November 13, 2020)]
[Notices]
[Page 72676]
[FR Doc No: 2020-25089]

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

DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Internal Agency Docket No. FEMA-4566-DR; Docket ID FEMA-2020-0001]

Delaware; Major Disaster and Related Determinations

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

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

SUMMARY: This is a notice of the Presidential declaration of a major
disaster for the State of Delaware (FEMA-4566-DR), dated October 2,
2020, and related determinations.

DATES: The declaration was issued October 2, 2020.

FOR FURTHER INFORMATION CONTACT: Dean Webster, Office of Response and
Recovery, Federal Emergency Management Agency, 500 C Street SW,
Washington, DC 20472,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: Notice is hereby given that, in a letter
dated October 2, 2020, the President issued a major disaster
declaration under the authority of the Robert T. Stafford Disaster
Relief and Emergency Assistance Act, 42 U.S.C. 5121 et seq. (the
``Stafford Act''), as follows:

    I have determined that the damage in certain areas of the State
of Delaware resulting from Tropical Storm Isaias during the period
of August 4 to August 7, 2020, is of sufficient severity and
magnitude to warrant a major disaster declaration under the Robert
T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C.
5121 et seq. (the ``Stafford Act''). Therefore, I declare that such
a major disaster exists in the State of Delaware.
    In order to provide Federal assistance, you are hereby
authorized to allocate from funds available for these purposes such
amounts as you find necessary for Federal disaster assistance and
administrative expenses.
    You are authorized to provide Public Assistance in the
designated areas and Hazard Mitigation throughout the State.
Consistent with the requirement that Federal assistance be
supplemental, any Federal funds provided under the Stafford Act for
Public Assistance and Hazard Mitigation will be limited to 75
percent of the total eligible costs.
    Further, you are authorized to make changes to this declaration
for the approved assistance to the extent allowable under the
Stafford Act.

    The Federal Emergency Management Agency (FEMA) hereby gives notice
that pursuant to the authority vested in the Administrator, under
Executive Order 12148, as amended, Timothy S. Pheil, of FEMA is
appointed to act as the Federal Coordinating Officer for this major
disaster.
    The following areas of the State of Delaware have been designated
as adversely affected by this major disaster:

    Kent County for Public Assistance.
    All areas within the State of Delaware are eligible for
assistance under the Hazard Mitigation Grant Program.

    The following Catalog of Federal Domestic Assistance Numbers
(CFDA) are to be used for reporting and drawing funds: 97.030,
Community Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis
Counseling; 97.033, Disaster Legal Services; 97.034, Disaster
Unemployment Assistance (DUA); 97.046, Fire Management Assistance
Grant; 97.048, Disaster Housing Assistance to Individuals and
Households In Presidentially Declared Disaster Areas; 97.049,
Presidentially Declared Disaster Assistance--Disaster Housing
Operations for Individuals and Households; 97.050, Presidentially
Declared Disaster Assistance to Individuals and Households--Other
Needs; 97.036, Disaster Grants--Public Assistance (Presidentially
Declared Disasters); 97.039, Hazard Mitigation Grant.

Pete Gaynor,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2020-25089 Filed 11-12-20; 8:45 am]
BILLING CODE 9111-23-P


[Federal Register Volume 87, Number 93 (Friday, May 13, 2022)]
[Notices]
[Pages 29360-29361]
[FR Doc No: 2022-10246]

=======================================================================
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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

[Docket No. USCG-2022-0274]

Certificate of Alternative Compliance for the CGMA CGM DAKA

AGENCY: Coast Guard, DHS.

ACTION: Notification of issuance of a certificate of alternative
compliance.

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

SUMMARY: The Coast Guard announces that the U.S. Coast Guard Fourteenth
District Prevention Division has issued a certificate of alternative
compliance from the International Regulations for Preventing Collisions
at Sea, 1972 (72 COLREGS), for the CGMA CGM DAKA (IMO 9436070). We are
issuing this notice because its publication is required by statute. Due
to the construction and placement of the forward cargo crane creating a
blind sector 1,000 meters immediately ahead of the bow of the vessel
over a range of approximately 1-2 degrees, CGMA CGM DAKA cannot fully
comply with the light, shape, or sound signal provisions of the 72
COLREGS without interfering with the vessel's design and construction.
This notification of issuance of a certificate of alternative
compliance promotes the Coast Guard's marine safety mission.

DATES: The Certificate of Alternative Compliance was issued on 14
February 2022.

FOR FURTHER INFORMATION CONTACT: For information or questions about
this notice call or email Mr. George Butler, District Fourteen (dpi),
U.S. Coast Guard;<PHONE_NUMBER>, [email protected].

SUPPLEMENTARY INFORMATION: The United States is signatory to the
International Maritime Organization's International Regulations for
Preventing Collisions at Sea, 1972 (72 COLREGS), as amended. The
special construction or purpose of some vessels makes them unable to
comply with the light, shape, or sound signal provisions of the 72
COLREGS. Under statutory law \1\ and Coast Guard regulation,\2\ a
vessel's owner, builder, operator, or agent may

apply for a certificate of alternative compliance (COAC) and may
instead meet alternative requirements.\3\
---------------------------------------------------------------------------

    \1\ 33 U.S.C. 1605(c).
    \2\ 33 CFR 81.3.
    \3\ 33 CFR 81.5.
---------------------------------------------------------------------------

    For vessels of special construction or purpose, the cognizant Coast
Guard District Office in which the vessel is being built or operated
determines whether the vessel for which the COAC is sought complies as
closely as possible with the 72 COLREGS, and the Chief of the
Prevention Division decides whether to issue the COAC which must
specify the required alternative installation. If the Coast Guard
issues a COAC, under the governing statute \4\ and regulations,\5\ the
Coast Guard must publish notice of this action. Once issued, a COAC
remains valid until information supplied in the COAC application or the
COAC terms become inapplicable to the vessel.
---------------------------------------------------------------------------

    \4\ 33 U.S.C. 1605(c).
    \5\ 33 CFR 81.18.
---------------------------------------------------------------------------

    The Fourteenth District Prevention Division, U.S. Coast Guard,
certifies that the CGMA CGM DAKA (IMO 9436070) is a vessel of special
construction or purpose, and that, with respect to the position of the
forward cargo crane creating a blind sector 1,000 meters immediately
ahead of the bow of the vessel over a range of approximately 1-2
degrees, it is not possible to comply fully with the requirements of
the provisions enumerated in the 72 COLREGS, without interfering with
the normal operation, construction, or design of the vessel. The U.S.
Coast Guard Fourteenth District Prevention Division further finds and
certifies that the construction and placement of the forward cargo
crane creating a blind sector 1,000 meters immediately ahead of the bow
of the vessel over a range of approximately 1-2 degrees, are in the
closet possible compliance with the applicable provisions of the 72
COLREGS.\6\
---------------------------------------------------------------------------

    \6\ 33 U.S.C. 1605(a); 33 CFR 81.9.
---------------------------------------------------------------------------

    This notice is issued under authority of 33 U.S.C. 1605(c) and 33
CFR 81.18.

    Dated: April 25, 2022.
Ulysses S. Mullins,
Captain, U.S. Coast Guard, Chief, Prevention Division, Fourteenth Coast
Guard District.
[FR Doc. 2022-10246 Filed 5-12-22; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 79, Number 32 (Tuesday, February 18, 2014)]
[Notices]
[Pages 9225-9226]
[FR Doc No: 2014-03458]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2014-N-0161]

Determination That GANITE (Gallium Nitrate) Injectable and Five
Other Drug Products Were Not Withdrawn From Sale for Reasons of Safety
or Effectiveness

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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

SUMMARY: The Food and Drug Administration (FDA) has determined

that the drug products listed in this document were not withdrawn from
sale for reasons of safety or effectiveness. This determination means
that FDA will not begin procedures to withdraw approval of abbreviated
new drug applications (ANDAs) that refer to these drug products, and it
will allow FDA to continue to approve ANDAs that refer to the products
as long as they meet relevant legal and regulatory requirements.

FOR FURTHER INFORMATION CONTACT: Amy Hopkins, Center for Drug
Evaluation and Research, Food and Drug Administration, 10903 New
Hampshire Ave., Bldg. 51, rm. 6207, Silver Spring, MD 20993-0002, 301-
796-5418.

SUPPLEMENTARY INFORMATION: In 1984, Congress enacted the Drug Price
Competition and Patent Term Restoration Act of 1984 (Public Law 98-417)
(the 1984 amendments), which authorized the approval of duplicate
versions of drug products approved under an ANDA procedure. ANDA
applicants must, with certain exceptions, show that the drug for which
they are seeking approval contains the same active ingredient in the
same strength and dosage form as the ``listed drug,'' which is a
version of the drug that was previously approved. ANDA applicants do
not have to repeat the extensive clinical testing otherwise necessary
to gain approval of a new drug application (NDA).
    The 1984 amendments include what is now section 505(j)(7) of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)(7)), which
requires FDA to publish a list of all approved drugs. FDA publishes
this list as part of the ``Approved Drug Products With Therapeutic
Equivalence Evaluations,'' which is generally known as the ``Orange
Book.'' Under FDA regulations, a drug is removed from the list if the
Agency withdraws or suspends approval of the drug's NDA or ANDA for
reasons of safety or effectiveness or if FDA determines that the listed
drug was withdrawn from sale for reasons of safety or effectiveness (21
CFR 314.162).
    Under Sec.  314.161(a) (21 CFR 314.161(a)), the Agency must
determine whether a listed drug was withdrawn from sale for reasons of
safety or effectiveness: (1) Before an ANDA that refers to that listed
drug may be approved, (2) whenever a listed drug is voluntarily
withdrawn from sale and ANDAs that refer to the listed drug have been
approved, and (3) when a person petitions for such a determination
under 21 CFR 10.25(a) and 10.30. Section 314.161(d) provides that if
FDA determines that a listed drug was withdrawn from sale for safety or
effectiveness reasons, the Agency will initiate proceedings that could
result in the withdrawal of approval of the ANDAs that refer to the
listed drug.
    FDA has become aware that the drug products listed in the table in
this document are no longer being marketed.

------------------------------------------------------------------------
       Application no.                Drug                Applicant
------------------------------------------------------------------------
NDA 019961..................  GANITE (gallium       Chapter 7 Trustee of
                               nitrate)              Genta Inc., 1628
                               Injectable;           John Kennedy Blvd.,
                               Injection, 25         Philadelphia, PA
                               milligrams (mg)/      19103
                               milliliter (mL).
NDA 020707..................  SKELID (tiludronate   Sanofi Aventis US
                               disodium) Tablet;     LLC, 55 Corporate
                               Oral, Equivalent to   Dr., Bridgewater,
                               (EQ) 200 mg Base.     NJ 08807.
NDA 022023..................  EMEND (fosaprepitant  Merck and Co Inc.,
                               dimeglumine)          RY33 200, P.O. Box
                               Powder;               2000, Rahway, NJ
                               Intravenous, EQ 115   07065.
                               mg Base/Vial.
NDA 050039..................  GARAMYCIN             Schering Plough
                               (gentamicin sulfate   Corp., 2000
                               ophthalmic            Galloping Hill Rd.,
                               solution) Solution;   Mail Stop K 6 1,
                               Drops, EQ 0.3% Base.  Kenilworth, NJ
                                                     07033.
NDA 202343..................  JUVISYNC (simvastin;  Merck Sharp and
                               sitagliptin           Dohme Corp., 351
                               phosphate) Tablet;    North Sumneytown
                               Oral, 10 mg, EQ 100   Pike, UG 2CD 015,
                               mg Base; 20 mg, EQ    P.O. Box 1000,
                               100 mg Base; 40 mg,   North Wales, PA
                               EQ 100 mg Base; 10    19454.
                               mg, EQ 50 mg Base;
                               20 mg, EQ 50 mg
                               Base; 40 mg, EQ 50
                               mg Base.
ANDA 071259.................  TRIMETHOPRIM          TEVA Pharmaceuticals
                               (trimethoprim)        USA Inc., 650
                               Tablet; Oral, 200     Cathill Rd.,
                               mg.                   Sellersville, PA
                                                     18960-1512.
------------------------------------------------------------------------

    FDA has reviewed its records and, under Sec.  314.161, has
determined that the drug products listed in this document were not
withdrawn from sale for reasons of safety or effectiveness.
Accordingly, the Agency will continue to list the drug products listed
in this document in the ``Discontinued Drug Product List'' section of
the Orange Book. The ``Discontinued Drug Product List'' identifies,
among other items, drug products that have been discontinued from
marketing for reasons other than safety or effectiveness.
    Approved ANDAs that refer to the NDAs and ANDAs listed in this
document are unaffected by the discontinued marketing of the products
subject to those NDAs and ANDAs. Additional ANDAs that refer to these
products may also be approved by the Agency if they comply with
relevant legal and regulatory requirements. If FDA determines that
labeling for these drug products should be revised to meet current
standards, the Agency will advise ANDA applicants to submit such
labeling.

    Dated: February 12, 2014.
Leslie Kux,
Assistant Commissioner for Policy.
[FR Doc. 2014-03458 Filed 2-14-14; 8:45 am]
BILLING CODE 4160-01-P


[Federal Register: March 28, 2008 (Volume 73, Number 61)]
[Rules and Regulations]
[Page 16515-16517]
[DOCID:fr28mr08-1]

========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.

========================================================================

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2007-0389; Directorate Identifier 2007-NM-222-AD;
Amendment 39-15450; AD 2008-07-09]
RIN 2120-AA64

Airworthiness Directives; Various Transport Category Airplanes
Equipped With Auxiliary Fuel Tanks Installed in Accordance With Certain
Supplemental Type Certificates

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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

SUMMARY: We are adopting a new airworthiness directive (AD) for various
transport category airplanes. This AD requires deactivation of
Southeast Aero-Tek, Inc., auxiliary fuel tanks. This AD results from
fuel system reviews conducted by the manufacturer, which identified
potential unsafe conditions for which the manufacturer has not provided
corrective actions. We are issuing this AD to prevent the potential of
ignition sources inside fuel tanks, which, in combination with
flammable fuel vapors, could result in fuel tank explosions and
consequent loss of the airplane.

DATES: This AD is effective May 2, 2008.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://
www.regulations.gov; 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 AD, the regulatory evaluation,
any comments received, and other information. The address for the
Docket Office (telephone<PHONE_NUMBER>) is the Document Management
Facility, U.S. Department of Transportation, Docket Operations, M-30,
West Building, Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE.,
Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Robert Bosak, Aerospace Engineer,
Propulsion and Services Branch, ACE-118A, FAA, Atlanta Aircraft
Certification Office, One Crown Center, 1895 Phoenix Boulevard, Suite
450, Atlanta, Georgia 30349; telephone<PHONE_NUMBER>; fax (770) 703-
6097.

SUPPLEMENTARY INFORMATION:

Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR
part 39 to include an airworthiness directive (AD) that would apply to
various transport category airplanes equipped with auxiliary fuel tanks
installed in accordance with certain supplemental type certificates
(STCs). That NPRM was published in the Federal Register on January 2,
2008 (73 FR 84). That NPRM proposed to require deactivation of
Southeast Aero-Tek, Inc., auxiliary fuel tanks.

Comments

    We gave the public the opportunity to participate in developing
this AD. We considered the comment received from the one commenter.

Request To Clarify Proposed Applicability

    FedEx Express requests that we clarify the applicability statement
in the NPRM to state that the AD does not apply to airplanes where
auxiliary tanks were removed by an FAA-approved method. FedEx states
that the unsafe condition does not exist on these airplanes.
    We agree that the unsafe condition does not exist on the airplanes
FedEx describes. We have included a statement in paragraph (c) of the
final rule that excludes these airplanes.

Explanation of Change to Product Identification Line

    We have changed the product identification line of the AD from
``Various Transport Category Airplanes'' to ``Southeast Aero-Tek,
Inc.'' In ADs written against products with an STC, that statement is
intended to identify the name of the STC holder.

Conclusion

    We reviewed the relevant data, considered the comment received, and
determined that air safety and the public interest require adopting the
AD with the changes described previously. We also determined that these
changes will not increase the economic burden on any operator or
increase the scope of the AD.

Costs of Compliance

    The following table provides the estimated costs for the 37 U.S.-
registered airplanes to comply with this AD. Based on these figures,
the estimated costs for U.S. operators could be as high as $239,760 to
prepare and report the deactivation procedures, and $133,200 to
deactivate tanks.

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                     Average labor
              Action                  Work hours     rate per hour          Parts             Individual cost
----------------------------------------------------------------------------------------------------------------
Report............................               1             $80  None.................  $80, per STC.
Preparation of tank deactivation                80              80  None.................  $6,400, per STC.
 procedure.
Physical tank deactivation........              30              80  $1,200...............  $3,600, per airplane.
----------------------------------------------------------------------------------------------------------------

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

    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 DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979), and
    (3) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.
    You can find our regulatory evaluation and the estimated costs of
compliance in the AD Docket.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Safety.

Adoption of the Amendment

0
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:

2008-07-09 Southeast Aero-Tek, Inc.: Amendment 39-15450. Docket No.
FAA-2007-0389; Directorate Identifier 2007-NM-222-AD.

Effective Date

    (a) This airworthiness directive (AD) is effective May 2, 2008.

Affected ADs

    (b) None.

Applicability

    (c) This AD applies to airplanes, certificated in any category,
equipped with auxiliary fuel tanks installed in accordance with
specified supplemental type certificates (STCs), as identified in
Table 1 of this AD. This AD does not apply to any airplane where an
auxiliary fuel tank was installed in accordance with an STC
identified in Table 1 of this AD and subsequently removed by an FAA-
approved method.

                      Table 1.--Affected Airplanes
------------------------------------------------------------------------
                 Airplanes                      Auxiliary tank STC(s)
------------------------------------------------------------------------
Boeing Model 727-100 series airplanes.....  ST01587AT
Boeing Model 727-200 and -200F series       SA2033NM, SA1474SO
 airplanes.
McDonnell Douglas Model DC-9-14 airplanes.  SA1334NM
McDonnell Douglas Model DC-9-32, DC-9-32    SA1710SO, SA1358NM
 (VC-9C), DC-9-32F, DC-9-33F, and DC-9-32F
 (C-9A, C-9B) airplanes.
------------------------------------------------------------------------

Unsafe Condition

    (d) This AD results from fuel system reviews conducted by the
manufacturer, which identified potential unsafe conditions for which
the manufacturer has not provided corrective actions. We are issuing
this AD to prevent the potential of ignition sources inside fuel
tanks, which, in combination with flammable fuel vapors, could
result in fuel tank explosions and consequent loss of the airplane.

Compliance

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

Report

    (f) Within 45 days after the effective date of this AD, submit a
report to the Manager, Atlanta Aircraft Certification Office (ACO),
FAA. The report must include the information listed in paragraphs
(f)(1) and (f)(2) of this AD. Under the provisions of the Paperwork
Reduction Act (44 U.S.C. 3501 et seq.), the Office of Management and
Budget (OMB) has approved the information collection requirements
contained in this AD, and assigned OMB Control Number 2120-0056.
    (1) The airplane registration and auxiliary tank STC number
installed.
    (2) The usage frequency in terms of total number of flights per
year and total number of flights per year for which the auxiliary
tank is used.

Prevent Usage of Auxiliary Fuel Tanks

    (g) On or before December 16, 2008, deactivate the auxiliary
fuel tanks, in accordance with a deactivation procedure approved by
the Manager, Atlanta ACO. Any auxiliary tank component that remains
on the airplane must be secured and must have no effect on the
continued operational safety and airworthiness of the airplane.
Deactivation may not result in the need for additional instructions
for continued airworthiness.

    Note 1: Appendix A of this AD provides criteria that should be
included in the deactivation procedure. The proposed deactivation
procedures should be submitted to the Manager, Atlanta ACO, as soon
as possible to ensure timely review and approval.

    Note 2: For technical information, contact Randy Smith,
President, Southeast Aero-Tek, Inc., 675 Oleander Drive, Merritt
Island, Florida 32952; telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>.

Alternative Methods of Compliance (AMOCs)

    (h)(1) The Manager, Atlanta ACO, FAA, has the authority to
approve AMOCs for this AD, if requested in accordance with the
procedures found in 14 CFR 39.19.
    (2) To request a different method of compliance or a different
compliance time for this AD, follow the procedures in 14 CFR 39.19.
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.

Material Incorporated by Reference

    (i) None.

Appendix A--Deactivation Criteria

    The auxiliary fuel tank deactivation procedure required by
paragraph (g) of this AD should address the following actions.
    (1) Permanently drain auxiliary fuel tanks, and clear them of
fuel vapors to eliminate the possibility of out-gassing of fuel
vapors from the emptied auxiliary tank.
    (2) Disconnect all electrical connections from the fuel quantity
indication system (FQIS), fuel pumps if applicable, float switches,
and all other electrical connections required for auxiliary tank
operation, and stow them at the auxiliary tank interface.
    (3) Disconnect all pneumatic connections if applicable, cap them
at the pneumatic source, and secure them.
    (4) Disconnect all fuel feed and fuel vent plumbing interfaces
with airplane original equipment manufacturer (OEM) tanks, cap them
at the airplane tank side, and secure them in accordance with a
method approved by the FAA; one approved method is specified in
Advisory Circular 25-8 Fuel Tank Flammability Minimization. In order
to eliminate the possibility of structural deformation during cabin
decompression, leave open and secure the disconnected auxiliary fuel
tank vent lines.
    (5) Pull and collar all circuit breakers used to operate the
auxiliary tank.

    (6) Revise the weight and balance document, if required, and
obtain FAA approval.
    (7) Amend the applicable sections of the applicable airplane
flight manual (AFM) to indicate that the auxiliary fuel tank is
deactivated. Remove auxiliary fuel tank operating procedures to
ensure that only the OEM fuel system operational procedures are
contained in the AFM. Amend the Limitations Section of the AFM to
indicate that the AFM Supplement for the STC is not in effect. Place
a placard in the flight deck indicating that the auxiliary tank is
deactivated. The AFM revisions specified in this paragraph may be
accomplished by inserting a copy of this AD into the AFM.
    (8) Amend the applicable sections of the applicable airplane
maintenance manual to remove auxiliary tank maintenance procedures.
    (9) After the auxiliary fuel tank is deactivated, accomplish
procedures such as leak checks and pressure checks deemed necessary
before returning the airplane to service. These procedures must
include verification that the airplane FQIS and fuel distribution
systems have not been adversely affected.
    (10) Include with the operator's proposed procedures any
relevant information or additional steps that are deemed necessary
by the operator to comply with the deactivation and return the
airplane to service.

    Issued in Renton, Washington, on March 20, 2008.
Dionne Palermo,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
 [FR Doc. E8-6298 Filed 3-27-08; 8:45 am]

BILLING CODE 4910-13-P