[Federal Register Volume 78, Number 85 (Thursday, May 2, 2013)]
[Notices]
[Pages 25739-25740]
[FR Doc No: 2013-10370]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings

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

Filings Instituting Proceedings

    Docket Numbers: RP13-810-000.
    Applicants: Equitrans, L.P.
    Description: Update System Map to be effective 5/23/2013.
    Filed Date: 4/23/13.
    Accession Number: 20130423-5064.
    Comments Due: 5 p.m. ET 5/6/13.

    Docket Numbers: RP13-811-000.
    Applicants: TransColorado Gas Transmission Company L.
    Description: Negotiated Rate Contract Name Change to be effective
5/23/2013.
    Filed Date: 4/23/13.
    Accession Number: 20130423-5101.
    Comments Due: 5 p.m. ET 5/6/13.

    Docket Numbers: RP13-812-000.
    Applicants: Transcontinental Gas Pipe Line Company,
    Description: Negotiated Rates--Mid South Expansion Phase II to be
effective 6/1/2013.
    Filed Date: 4/23/13.
    Accession Number: 20130423-5183.
    Comments Due: 5 p.m. ET 5/6/13.

    Any person desiring to intervene or protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00
p.m. Eastern time on the specified comment date. Protests may be
considered, but intervention is necessary to become a party to the
proceeding.
    The filings are accessible in the Commission's eLibrary system by
clicking on the links or querying the docket number.
    eFiling is encouraged. More detailed information relating to filing
requirements, interventions, protests, and service can be found at:
http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other
information, call<PHONE_NUMBER> (toll free). For TTY, call (202) 502-
8659.

    Dated: April 24, 2013.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2013-10370 Filed 5-1-13; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 83, Number 185 (Monday, September 24, 2018)]
[Notices]
[Pages 48306-48307]
[FR Doc No: 2018-20733]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. RM98-1-000]

Records Governing Off-the-Record Communications; Public Notice

    This constitutes notice, in accordance with 18 CFR 385.2201(b), of
the receipt of prohibited and exempt off-the-record communications.
    Order No. 607 (64 FR 51222, September 22, 1999) requires Commission
decisional employees, who make or receive a prohibited or exempt off-
the-record communication relevant to the merits of a contested
proceeding, to deliver to the Secretary of the Commission, a copy of
the communication, if written, or a summary of the substance of any
oral communication.
    Prohibited communications are included in a public, non-decisional
file associated with, but not a part of, the decisional record of the
proceeding. Unless the Commission determines that the prohibited
communication and any responses thereto should become a part of the
decisional record, the prohibited off-the-record communication will not
be considered by the Commission in reaching its decision. Parties to a
proceeding may seek the opportunity to respond to any facts or
contentions made in a prohibited off-the-record communication, and may
request that the Commission place the prohibited communication and
responses thereto in the decisional record. The Commission will grant
such a request only when it determines that fairness so requires. Any
person identified below as having made a prohibited off-the-record
communication shall serve the document on all parties listed on the
official service list for the applicable proceeding in accordance with
Rule 2010, 18 CFR 385.2010.
    Exempt off-the-record communications are included in the decisional
record of the proceeding, unless the communication was with a
cooperating agency as described by 40 CFR 1501.6, made under 18 CFR
385.2201(e)(1)(v).
    The following is a list of off-the-record communications recently
received by the Secretary of the Commission. The communications listed
are grouped by docket numbers in ascending order. These filings are
available for electronic review at the Commission in the Public
Reference Room or may be viewed on the Commission's website at http://www.ferc.gov using the eLibrary link. Enter the docket number,
excluding the last three digits, in the docket number field to access
the document. For assistance, please contact FERC Online Support at
[email protected] or toll free at<PHONE_NUMBER>, or for TTY,
contact<PHONE_NUMBER>.

----------------------------------------------------------------------------------------------------------------
             Docket No.                  File date                      Presenter or requester
----------------------------------------------------------------------------------------------------------------
Prohibited
    1. CP16-10-000..................       9-14-2018  Pipeliners Union 798.
Exempt
    1. P-1855-000, P-1892-000, P-          9-3-2018.  U.S. Congress.\1\
     1904-000, P-1889-000, P-2485-
     000, P-1904-000.
    2. P-516-000....................       9-11-2018  U.S. Congressman Joe Wilson.
    3. CP17-41-000..................       9-12-2018  FERC Staff.\2\
    4. CP15-93-000..................       9-12-2018  U.S. Congressman Bob Gibbs.
    5. P-2299-000, P-14581-000......       9-13-2018  FERC Staff.\3\
    6. CP18-46-000..................       9-13-2018  FERC Staff.\4\
    7. EL15-95-000..................       9-14-2018  State of New Jersey.\5\
    8. P-199-205....................       9-17-2018  FERC Staff.\6\
----------------------------------------------------------------------------------------------------------------
\1\ Senators Jeanne Shaheen, Margaret Wood Hassan, Patrick Leahy, and Bernard Sanders. Congressmen Anne McLane
  Kuster and Peter Welch.
\2\ Conference Call Notes for meeting on September 6, 2018 with Environmental Resources Management, Inc. and
  Eagle LNG Partners Jacksonville, LLC.
\3\ Memo reporting email conversation on September 9, 2018 with John Devine, Turlock and Modesto Irrigation
  Districts Consultant, with HDR Engineering.
\4\ Memo for project conference call on September 10, 2018 with Adelphia Gateway, L.L.C.
\5\ Senator Christopher J. Connors. Assemblymen Brian E. Rumpf and Dianne C. Gove.
\6\ Email conversation dated September 17, 2018 with Patrick Opay with the National Oceanic and Atmospheric
  Administration.

    Dated: September 18, 2018.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2018-20733 Filed 9-21-18; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register Volume 79, Number 248 (Monday, December 29, 2014)]
[Notices]
[Pages 78119-78121]
[FR Doc No: 2014-30275]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73894; File No. SR-BX-2014-060]

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Ports

December 19, 2014.
    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 December 15, 2014, NASDAQ OMX BX, Inc. (``BX'' or ``Exchange'')
filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I, II,
and III, below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

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

    The Exchange proposes to amend chapter XV, section 3 entitled ``BX
Options Market--Access Services.'' Specifically, the Exchange is
proposing to adopt additional port fees.
    While the changes proposed herein are effective upon filing, the
Exchange has designated the amendments become operative on January 2,
2015.
    The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaqomxbx.cchwallstreet.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 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 purpose of this filing is to adopt Port Fees for the following
ports: Order Entry Ports,\3\ CTI Ports,\4\ BX Depth Ports,\5\ BX TOP
Ports,\6\ and Order Entry DROP Ports,\7\ (collectively ``BX Ports'').
The Exchange proposes to assess a $200 Port Fee for each of the BX
Ports on a per port, per month, per mnemonic basis. The Exchange would
also note that BX Depth and BX Top Port Fees will be assessed to non-BX
Participants and BX Participants. Additionally, the Exchange will note
that it will continue to assess no fee for SQF Ports \8\ by placing the
SQF Port Fee in new chapter XV, section 3(b) along with the new BX Port
Fees.
---------------------------------------------------------------------------

    \3\ The Order Entry Port Fee is a connectivity fee in connection
with routing orders to the Exchange via an external order entry
port. BX Participants access the Exchange's network through order
entry ports. A BX Participant may have more than one order entry
port.
    \4\ CTI offers real-time clearing trade updates. A real-time
clearing trade update is a message that is sent to a member after an
execution has occurred and contains trade details. The message
containing the trade details is also simultaneously sent to The
Options Clearing Corporation. The trade messages are routed to a
member's connection containing certain information. The
administrative and market event messages include, but are not
limited to: system event messages to communicate operational-related
events; options directory messages to relay basic option symbol and
contract information for options traded on the Exchange; complex
strategy messages to relay information for those strategies traded
on the Exchange; trading action messages to inform market
participants when a specific option or strategy is halted or
released for trading on the Exchange; and an indicator which
distinguishes electronic and non-electronically delivered orders.
    \5\ BX Depth is a data feed that provides quotation information
for individual orders on the BX book, last sale information for
trades executed on BX, and Order Imbalance Information as set forth
in BX Rules chapter VI, section 8. BX Depth is the options
equivalent of the BX TotalView/ITCH data feed that BX offers under
BX Rule 7023 with respect to equities traded on BX. As with
TotalView, members use BX Depth to ``build'' their view of the BX
book by adding individual orders that appear on the feed, and
subtracting individual orders that are executed. See chapter VI,
section 1 at subsection (a)(3)(A).
    \6\ BX TOP Port is a data feed that provides the BX Best Bid and
Offer (``BBO'') and last sale information for trades executed on BX.
The BBO and last sale information are identical to the information
that BX sends to the Options Price Regulatory Authority (``OPRA'')
and which OPRA disseminates via the consolidated data feed for
options. BX TOP Port is the options equivalent of the BX Basic data
feed offered for equities under BX Rule 7047. See chapter VI,
section 1 at subsection (a)(3)(B).
    \7\ The DROP interface provides real time information regarding
orders sent to BX and executions that occurred on BX. The DROP
interface is not a trading interface and does not accept order
messages.
    \8\ SQF ports are ports that receive inbound quotes at any time
within that month. The SQF Port allows a BX Participant to access
information such as execution reports and other relevant data
through a single feed. For example, this data would show which
symbols are trading on BX and the current state of an options symbol
(i.e., open for trading, trading, halted or closed). Auction
notifications and execution reports are also available. BX Market
Makers rely on data available through the SQF Port to provide them
the necessary information to perform market making activities.
---------------------------------------------------------------------------

    Each BX Options Participant is assigned a Market Participant
Identifier or ``mnemonic'' \9\ and in some cases, certain BX
Participants request multiple mnemonics for purposes of accounting for
trading activity. These mnemonics identify users at a particular BX
Participant. The Exchange bills its Port Fees based on the number of
mnemonics configured for each port. By way of example, if a BX
Participant, ABC, requested 2 ports from the Exchange and further
requested that each port be configured to be accessed by 4 mnemonics or
in some cases account numbers,\10\ the BX Participant would be billed
for 8 ports at the rate of $550 [sic] per port for that month. All
billing is captured at the Participant level. BX Participants may
choose to have multiple mnemonics or in some case multiple account
numbers for the convenience of conducting their business, however only
one mnemonic and one account number is required to conduct business on
BX.
---------------------------------------------------------------------------

    \9\ A mnemonic is a unique identifier consisting of a four
character alpha code.
    \10\ Account numbers are assigned by the Exchange and associated
with particular BX Participants.
---------------------------------------------------------------------------

    Today, the NASDAQ Options Market LLC (``NOM'') assesses port fees
for similar ports, with the exception of SQF. The Exchange desires to
commence assessing such fees on BX at this time, with the exception of
SQF as it desires to continue to encourage BX Market Makers to
participate in this market.
2. Statutory Basis
    BX believes that the proposed rule change is consistent with the
provisions of section 6 of the Act,\11\ in general, and with section
6(b)(4) and 6(b)(5) of the Act,\12\ in particular, in that it provides
for the equitable allocation of reasonable dues, fees and other charges
among members and issuers and other persons using any facility or
system which BX operates or controls, and is not designed to permit
unfair discrimination between customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f.
    \12\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that adopting Port Fees for the BX Ports at
$200 per port, per month, per mnemonic is reasonable because it would
allow the Exchange to recoup fees associated with offering the BX
Ports. The BX Port Fees reflect a portion of the costs that the
Exchange bears with respect to offering and maintaining the BX Ports.
The Port Fees are reasonable because they enable the Exchange to
offset, in part, its connectivity costs associated with making such
ports available, including costs based on gateway software and hardware
enhancements and resources dedicated to gateway development, quality
assurance, and support. The Exchanges port fees are lower than the
costs for ports at other options exchanges \13\ as BX Options is a
relatively new market and the Exchange seeks to remain competitive with
more mature options markets.
---------------------------------------------------------------------------

    \13\ Miami International Securities Exchange LLC (``MIAX'')
assesses ports fees that range from $1,000 to $5,000 depending on
connectivity levels. See MIAX's Fee Schedule. ISE Gemini, LLC (``ISE
Gemini'') assesses port fees that range from $750-$12,500 depending
on connectivity levels. See ISE Gemini's Fee Schedule. Finally, C2
Options Exchange, Incorporated (``C2'') assesses port fees that
range from $500-$1,000 depending on connectivity levels. See C2's
Fee Schedule.
---------------------------------------------------------------------------

    The Exchange believes that Port Fees for the BX Ports at $200 per
port, per month, per mnemonic is equitable and not unfairly
discriminatory because the

Exchange will assess the same fees for all BX Ports to all BX
Participants.
    The Exchange believes that continuing to assess no fee for SQF
Ports, while assessing fees for other BX Ports, is reasonable because
the Exchange desires to incentivize more BX Market Makers to engage in
market marking activities on the Exchange. The proposal would provide
all BX Market Makers with the opportunity to maintain lower costs while
also obtaining and utilizing the appropriate number of SQF to conduct
their business.
    The Exchange believes that continuing to assess no fee for SQF
Ports, while assessing fees for other BX Ports, is equitable and not
unfairly discriminatory because SQF Ports are utilized particularly by
BX Market Makers in connection with their market making activities.
Unlike other BX Participants, BX Market Makers add value to the market
through continuous quoting \14\ and a commitment of capital. The
Exchange has traditionally assessed BX Market Makers lower transaction
fees as compared to other BX Participants because BX Market Makers have
obligations to make continuous markets, engage in a course of dealings
reasonably calculated to contribute to the maintenance of a fair and
orderly market, and not make bids or offers or enter into transactions
that are inconsistent with a course of dealings.\15\ Also, because of
the volume of message traffic, BX Market Makers that utilize SQF Ports
require more technology infrastructure and more ports than BX
Participants that are not engaged in market making.
---------------------------------------------------------------------------

    \14\ Pursuant to chapter VII (Market Participants), section 5
(Obligations of Market Makers), in registering as a market maker, an
Options Participant commits himself to various obligations.
Transactions of a Market Maker in its market making capacity must
constitute a course of dealings reasonably calculated to contribute
to the maintenance of a fair and orderly market, and Market Makers
should not make bids or offers or enter into transactions that are
inconsistent with such course of dealings. See chapter VII, section
5.
    \15\ See chapter VII, section 5.
---------------------------------------------------------------------------

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

    BX 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 believes the proposed BX Port
fees are fair and equitable, and therefore, will not unduly burden any
particular group of market participants trading on the Exchange. The
Exchange's proposal to adopt fees for the BX Ports would be applied in
a uniform manner to all BX Participants. The proposed fees are designed
to ensure a fair and reasonable use of Exchange resources by allowing
the Exchange to recoup a certain portion of connectivity costs, while
continuing to offer competitive rates to BX Participants given the
market is not a mature market.
    With respect to the SQF Port Fee, the Exchange believes that
continuing to assess no fee for SQF Ports, while assessing fees for
other BX Ports, does not impose an undue burden on competition because
SQF Ports are utilized particularly by BX Market Makers that add value
to the market through continuous quoting \16\ and a commitment of
capital. The Exchange has traditionally assessed BX Market Makers lower
transaction fees as compared to other BX Participants because BX Market
Makers have obligations to make continuous markets, engage in a course
of dealings reasonably calculated to contribute to the maintenance of a
fair and orderly market, and not make bids or offers or enter into
transactions that are inconsistent with a course of dealings.\17\
---------------------------------------------------------------------------

    \16\ See note 14.
    \17\ See note 15.
---------------------------------------------------------------------------

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to section
19(b)(3)(A)(ii) of the Act.\18\ At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

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-BX-2014-060 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BX-2014-060. 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-BX-2014-060 and should be
submitted on or before January 20, 2015.\19\
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.
Brent J. Fields,
Secretary.
[FR Doc. 2014-30275 Filed 12-24-14; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: July 18, 2007 (Volume 72, Number 137)]
[Notices]
[Page 39388-39389]
[DOCID:fr18jy07-35]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. CP07-410-000]

Equitrans, L.P.; Notice of Application

July 6, 2007.
    Take notice that on June 27, 2007 Equitrans, L.P. (Equitrans), 225
North Shore Drive, Pittsburgh, Pennsylvania, 15212, filed in Docket No.
CP07-410-001, an application pursuant to section 7(b) of the Natural
Gas Act (NGA), to abandon, approximately 71.57 miles of 8-inch diameter
pipeline, two (2) appurtenant compressor stations and related
facilities in Allegheny, Cambria, Indiana and Westmoreland Counties,
Pennsylvania, all as more fully set forth in the application on file
with the Commission and open to public inspection. This filing may also
be viewed on the Commission's website at: http://www.ferc.gov using the

``eLibrary'' link. Enter the docket number, excluding the last three
digits, in the docket number field to access the document. For
assistance, call<PHONE_NUMBER> or TTY,<PHONE_NUMBER>.
    Any questions regarding this application should be directed to
David K. Dewey, Vice President & General Counsel, Equitrans, L.P., 225
North Shore Drive, Pittsburgh, Pennsylvania, 15212, telephone (412)
395-2566, fax<PHONE_NUMBER>
    Pursuant to Sec.  157.9 of the Commission's rules, 18 CFR 157.9,
within 90 days of this Notice the Commission staff will either:
complete its environmental assessment (EA) and place it into the
Commission's public record (eLibrary) for this proceeding; or issue a
Notice of Schedule for Environmental Review. If a Notice of Schedule
for Environmental Review is issued, it will indicate, among other
milestones, the anticipated date for the Commission staff's issuance of
the final environmental impact statement (FEIS) or EA for this
proposal. The filing of the EA in the Commission's public record for
this proceeding or the issuance of a Notice of Schedule for
Environmental

Review will serve to notify federal and state agencies of the timing
for the completion of all necessary reviews, and the subsequent need to
complete all federal authorizations within 90 days of the date of
issuance of the Commission staff's FEIS or EA.
    There are two ways to become involved in the Commission's review of
this project. First, any person wishing to obtain legal status by
becoming a party to the proceedings for this project should, on or
before the comment date stated below, file with the Federal Energy
Regulatory Commission, 888 First Street, NE., Washington, DC 20426, a
motion to intervene in accordance with the requirements of the
Commission's Rules of Practice and Procedure (18 CFR 385.214 or
385.211) and the Regulations under the NGA (18 CFR 157.10). A person
obtaining party status will be placed on the service list maintained by
the Secretary of the Commission and will receive copies of all
documents filed by the applicant and by all other parties. A party must
submit 14 copies of filings made with the Commission and must mail a
copy to the applicant and to every other party in the proceeding. Only
parties to the proceeding can ask for court review of Commission orders
in the proceeding.
    However, a person does not have to intervene in order to have
comments considered. The second way to participate is by filing with
the Secretary of the Commission, as soon as possible, an original and
two copies of comments in support of or in opposition to this project.
The Commission will consider these comments in determining the
appropriate action to be taken, but the filing of a comment alone will
not serve to make the filer a party to the proceeding. The Commission's
rules require that persons filing comments in opposition to the project
provide copies of their protests only to the party or parties directly
involved in the protest.
    Persons who wish to comment only on the environmental review of
this project should submit an original and two copies of their comments
to the Secretary of the Commission. Environmental commentors will be
placed on the Commission's environmental mailing list, will receive
copies of the environmental documents, and will be notified of meetings
associated with the Commission's environmental review process.
Environmental commentors will not be required to serve copies of filed
documents on all other parties. However, the non-party commentors will
not receive copies of all documents filed by other parties or issued by
the Commission (except for the mailing of environmental documents
issued by the Commission) and will not have the right to seek court
review of the Commission's final order.
    The Commission strongly encourages electronic filings of comments,
protests and interventions in lieu of paper using the ``eFiling'' link
at: http://www.ferc.gov. Persons unable to file electronically should

submit an original and 14 copies of the protest or intervention to the
Federal Energy regulatory Commission, 888 First Street, NE.,
Washington, DC 20426.
    This filing is accessible on-line at: http://www.ferc.gov, using

the ``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the web site that enables subscribers to receive e-mail
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For

TTY, call<PHONE_NUMBER>.
    Comment Date: 5 p.m. Eastern Time on July 27, 2007.

Kimberly D. Bose,
Secretary.
 [FR Doc. E7-13820 Filed 7-17-07; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 80, Number 166 (Thursday, August 27, 2015)]
[Proposed Rules]
[Pages 51968-51970]
[FR Doc No: 2015-21098]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2015-3148; Directorate Identifier 2014-NM-254-AD]
RIN 2120-AA64

Airworthiness Directives; Airbus Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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

SUMMARY: We propose to adopt a new airworthiness directive (AD) for
certain Airbus Model A320-212, -214, -232, and -233 airplanes. This
proposed AD was prompted by a report of a crack found during an
inspection of the pocket radius of the fuselage frame. This proposed AD
would require repetitive low frequency eddy current inspections or
repetitive high frequency eddy current inspections of this area, and
repair if necessary. The repair terminates the repetitive inspections.
We are proposing this AD to detect and correct any cracking of the
pocket radius, which could lead to in-flight decompression of the
airplane and possible injury to the passengers.

DATES: We must receive comments on this proposed AD by October 13,
2015.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, 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, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
    For service information identified in this proposed AD, contact
Airbus, Airworthiness Office--EIAS, 1 Rond Point Maurice Bellonte,
31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61
93 44 51; email<EMAIL_ADDRESS>Internet http://www.airbus.com. You may view this referenced service information at the
FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA.
For information on the availability of this material at the FAA, call
425-227-1221.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-
3148; 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
Operations office (telephone<PHONE_NUMBER>) is in the ADDRESSES section.
Comments will be available in the AD docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Sanjay Ralhan, Aerospace Engineer,
International Branch, ANM-116, Transport Airplane Directorate, FAA,
1601 Lind Avenue SW., Renton, WA 98057-3356; telephone<PHONE_NUMBER>;
fax<PHONE_NUMBER>.

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-2015-3148;
Directorate Identifier 2014-NM-254-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 based on those comments.
    We will post all comments we receive, without change, to http://www.regulations.gov, 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 Union, has issued EASA
Airworthiness Directive 2014-0278, dated December 19, 2014 (referred to
after this as the Mandatory Continuing Airworthiness Information, or
``the MCAI''), to correct an unsafe condition for certain Airbus Model
A320-212, -214, -232, and -233 airplanes. The MCAI states:

    An operator reported finding a crack during an inspection in
accordance with the instructions of Airbus Alert Operators
Transmission (AOT) A53N007-14. What was found, a 170 mm through-
thickness crack in the pocket radius between frame 36 and 37 above
stringer 6 on left hand (LH) side lap joint, was not the aim of the
AOT inspection. Prior to this finding, the operator reported noise
in the affected area during several weeks.
    This condition, if not detected and corrected, could lead to in-
flight decompression of the aeroplane, possibly resulting in injury
to occupants.
    To address this unsafe condition, Airbus published AOT A53N009-
14 to provide inspection and repair instructions to detect and
prevent crack propagation.
    EASA decided to agree on a sampling inspection to determine
whether additional aeroplanes need to be inspected.
    For the reasons described above, this [EASA] AD requires, for
the selected aeroplanes, repetitive Low Frequency Eddy Current
(LFEC) or High Frequency Eddy Current (HFEC) inspections of the
pocket radii [for cracks] located between fuselage frames 35 and 40,
above stringer 6 on both LH and right hand (RH) sides and, depending
on findings, accomplishment of repair instructions.
    This [EASA] AD is considered an interim action and further
[EASA] AD action may follow.

    You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-
3148.

Related Service Information Under 1 CFR Part 51

    We reviewed Airbus Alert Operators Transmission A53N009-14, dated
December 17, 2014. The service information describes procedures for
repetitive inspections of the pocket radii located between fuselage
frames 35 and 40, above stringer 6 on both the left- and right-hand
sides, and repair if necessary. This service information is reasonably
available because the interested parties have access to it through
their normal course of business or by the means identified in the
ADDRESSES section of this NPRM.

FAA's Determination and Requirements of This 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 the State of Design Authority, we have
been notified of the unsafe condition described in the MCAI and service
information referenced above. We are proposing this AD because we
evaluated all pertinent information and determined an 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 affects 1 airplane of U.S.
registry.
    We also estimate that it would take about 3 work-hours per product
to comply with the basic requirements of this proposed AD. The average
labor rate is $85 per work-hour. Based on these figures, we estimate
the cost of this proposed AD on U.S. operators to be $255, or $255 per
product.
    We have received no definitive data that would enable us to provide
cost estimates for the on-condition actions specified in this proposed
AD.

Authority for This Rulemaking

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

Regulatory Findings

    We determined that this 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 airworthiness
directive (AD):

Airbus: Docket No. FAA-2015-3148; Directorate Identifier 2014-NM-
254-AD.

(a) Comments Due Date

    We must receive comments by October 13, 2015.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Airbus Model A320-212 airplanes having
manufacturer serial number (MSN) 1011; Airbus Model A320-214
airplanes having MSNs 1009, 1026 and 1030; Airbus Model A320-232
airplanes having MSN 0977; and Airbus Model A320-233 airplanes
having MSNs 1007 and 1013, certificated in any category.

(d) Subject

    Air Transport Association (ATA) of America Code 53, Fuselage.

(e) Reason

    This AD was prompted by a report of a crack found during an
inspection of the pocket radius of the fuselage frame. We are
issuing this AD to detect and correct any cracking of the pocket
radius, which could lead to in-flight decompression of the airplane
and possible injury to the passengers.

(f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) Repetitive Inspections

    (1) Within 750 flight cycles or 4 months, whichever occurs first
after the effective date of this AD: Do a low frequency eddy current
(LFEC) inspection or a high frequency eddy current (HFEC) inspection
for cracking of the pocket radii located between fuselage frames 35
and 40, above stringer 6 on both the left- and right-hand sides, in
accordance with the instructions of Airbus Alert Operators
Transmission (AOT) A53N009-14, dated December 17, 2014. Repeat the
inspection, thereafter, at intervals not to exceed the times
specified in paragraphs (g)(1)(i) and (g)(1)(ii) of this AD.
    (i) For the LFEC inspection performed on the outside: Repeat the
inspection at intervals not to exceed 1,000 flight cycles.
    (ii) For the HFEC inspection performed on the inside: Repeat the
inspection at intervals not to exceed 2,000 flight cycles.

(h) Corrective Action

    If, during any inspection required by paragraph (g) of this AD,
any crack is found, before further flight, accomplish the repair in
accordance with the instructions of Airbus AOT A53N009-14, dated
December 17, 2014; except if the crack is beyond the structural
repair manual limits as specified in Airbus AOT A53N009-14, dated
December 17, 2014, before further flight, repair using a method
approved by the Manager, International Branch, ANM-116, Transport
Airplane Directorate, FAA; or the European Aviation Safety Agency
(EASA); or Airbus's EASA Design Organization Approval (DOA).

(i) Terminating Action

    Repair of an airplane as required by paragraph (h) of this AD
terminates the repetitive inspections required by paragraph (g) of
this AD for the repaired area only.

(j) Other FAA AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
International Branch, ANM-116, FAA, has the authority to approve
AMOCs for this AD, if requested using the procedures found in 14 CFR
39.19. In accordance with 14 CFR 39.19, send your request to your
principal inspector or local Flight Standards District Office, as
appropriate. If sending information directly to the International
Branch, send it to ATTN: Sanjay Ralhan, Aerospace Engineer,
International Branch, ANM-116, Transport Airplane Directorate, FAA,
1601 Lind Avenue SW., Renton, WA 98057-3356; telephone<PHONE_NUMBER>;
fax<PHONE_NUMBER>. Information may be emailed to<EMAIL_ADDRESS>Before using any approved AMOC, notify your
appropriate principal inspector, or lacking a principal inspector,
the manager of the local flight standards district office/
certificate holding district office. The AMOC approval letter must
specifically reference this AD.
    (2) Contacting the Manufacturer: For any requirement in this AD
to obtain corrective actions from a manufacturer, the action must be
accomplished using a method approved by the Manager, International
Branch, ANM-116, Transport Airplane Directorate, FAA; or the EASA;
or Airbus's EASA DOA. If approved by the DOA, the approval must
include the DOA-authorized signature.

 (k) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information
(MCAI) EASA Airworthiness Directive 2014-0278, dated December 19,
2014, for related information. This MCAI may be found in the AD
docket on the Internet at http://www.regulations.gov by searching
for and locating Docket No. FAA-2015-3148.
    (2) For service information identified in this AD, contact
Airbus, Airworthiness Office--EIAS, 1 Rond Point Maurice Bellonte,
31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5
61 93 44 51; email<EMAIL_ADDRESS>Internet http://www.airbus.com. You may view this service information at the FAA,
Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA.
For information on the availability of this material at the FAA,
call<PHONE_NUMBER>.

    Issued in Renton, Washington, on August 19, 2015.
Kevin Hull,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2015-21098 Filed 8-26-15; 8:45 am]
 BILLING CODE 4910-13-P


[Federal Register: September 7, 2010 (Volume 75, Number 172)]
[Notices]
[Page 54421-54422]
[DOCID:fr07se10-92]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

Sixth Meeting: RTCA Special Committee 223: Airport Surface
Wireless Communications

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

ACTION: Notice of RTCA Special Committee 223: Airport Surface Wireless
Communications meeting.

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

SUMMARY: The FAA is issuing this notice to advise the public of a
meeting of RTCA Special Committee 223: Airport Surface Wireless
Communications.

DATES: The meeting will be held September 28-30, 2010 from 0900 a.m.-
1600 p.m.

ADDRESSES: The meeting will be held at EUROCONTROL, Rue de la Fusee 96,
Meeting Room VEGA, Brussels, Belgium.

FOR FURTHER INFORMATION CONTACT: RTCA Secretariat, 1828 L Street, NW.,
Suite 805, Washington, DC, 20036; telephone<PHONE_NUMBER>; fax (202)
833-9434; Web site http://www.rtca.org.

SUPPLEMENTARY INFORMATION: Pursuant to section 10(a)(2) of the Federal
Advisory Committee Act (Pub. L. 92-463, 5 U.S.C., Appendix 2), notice
is hereby given for a RTCA Special Committee 223: Airport Surface
Wireless Communications meeting. The agenda will include:
     0900 a.m.--Opening Plenary
      Welcome and Introductions
      Approval of the Agenda
      Minutes of Last Meeting
      Coordination with Other GROUPs (EUROCAE, RTCA, ICAO,
SESAR, WMF)
      Report on ad-hoc committee work with WIMAX Forum (ITT)
     AeroMACS System Profile
      Status of US Profile Development (Harris)
      SJU/WG-82 Draft Profile Presentation (ECTL)
      Develop combined Draft Profile
     Presentations
      Overview of terrestrial communication networks (FAA)
      User Services and Applications (FAA)
      NASA Cleveland Test Bed Test Results (ITT)
      Channel Model Considerations for AeroMACS (Uni Lancaster)
      SANDRA SP 6.2 Simulation Results (DLR, Uni Salzburg)
      Further presentations (to be coordinated)
     Refinement of TOR of WG-82

     AOB
     Summary and Next Meeting
    Attendance is open to the interested public but limited to space
availability. With the approval of the chairmen, members of the public
may present oral statements at the meeting. Persons wishing to present
statements or obtain information should contact the person listed in
the FOR FURTHER INFORMATION CONTACT section. Members of the public may
present a written statement to the committee at any time.

    Issued in Washington, DC, on September 1, 2010.
Robert L. Bostiga,
RTCA Advisory Committee.
[FR Doc. 2010-22238 Filed 9-3-10; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register: December 23, 2005 (Volume 70, Number 246)]
[Notices]
[Page 76337-76344]
[DOCID:fr23de05-116]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52969; File No. SR-NYSE-2005-38]

Self-Regulatory Organizations; New York Stock Exchange, Inc.;
Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto to
Rules 104 (``Dealings by Specialists'') and 123E (``Specialist
Combination Review Policy'') To Change the Exchange's Capital
Requirements for Specialist Organizations.

 December 16, 2005.
    Pursuant to section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Exchange Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is
hereby given that on May 26, 2005, the New York Stock Exchange, Inc.
(``NYSE'' or the ``Exchange'') filed with the Securities and Exchange
Commission (``SEC'' or

the ``Commission'') a proposed rule change. On November 22, 2005, NYSE
amended the proposed rule change, replacing it in its entirety
(``Amendment No. 1''). The amended proposed rule change is described in
Items I, II, and III below, which have been substantially prepared by
the Exchange. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a et seq.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    The New York Stock Exchange, Inc. (``NYSE'' or the ``Exchange'')
hereby proposes amendments to Rules 104 (``Dealings by Specialists'')
and 123E (``Specialist Combination Review Policy'') to change the
capital requirement of specialist organizations. The text of the
proposed rule change is set forth below. Italics indicate additions;
brackets indicate deletions.
* * * * *
Rule 104. Dealings by Specialists
    (a)-(b) No Change
    * * *
Supplementary Material:
Functions of Specialists
    .10 through .17 No Change
Capital Requirements of Specialists [(effective June 1, 1971.)]
.20 [Regular s]Specialist[s] Organizations--Minimum Capital
Requirements.--
    [(1) A member registered as a regular specialist at an active post
must be able to assume maintain a position of 150 trading units in each
common stock in which he is registered.
    (2) A member registered as a regular specialist at an active post
must be able to assume a position of 30 trading units in each
convertible preferred stock, of 1200 shares in each of the 100 share
trading unit non-convertible preferred stocks and of 300 shares in each
of the 10 share unit non-convertible preferred stocks in which he is
registered.
    (3) The position which a member registered as a regular specialist
at an active post must be able to assume, for each stock in which he is
registered that is not included in (1) or (2) above, shall be
determined by the Exchange. Such determinations shall be based upon the
structure and characteristics of the security and shall be the amount
prescribed in (1) or (2) above for the type of stock with the most
similar structure and characteristics.
    (4) A member registered as a regular specialist at the inactive
Post must have, at all times, net liquid assets of at least $150,000.
    (5) With respect to any Investment Company Unit (as defined in
paragraph 703.16 of the Listed Company Manual) or a Trust Issued
Receipt, a member registered as a regular specialist [at an active
post] shall maintain net liquid assets equivalent to $500,000 for each
such security in which the specialist is registered.]
    (1) A specialist organization that is only registered in Exchange
Traded Funds shall maintain the greater of $500,000 for each Exchange
Traded Fund or $1,000,000.
    ([6]2) [Notwithstanding .30 of this Rule, e] Each [member
registered as a regular] specialist organization [at an active post]
must [be able to] maintain net liquid assets which shall be the greater
of $1,000,000 or the requirements set forth in Rule 104.21, except for
those specialist organizations that are only registered in Exchange
Traded Funds, as set forth in 104.20(1) above. [establish that he can
meet, with his own net liquid assets, a minimum capital requirement
which shall be the greater of $1,000,000 or 25% of the position
requirements as set forth in Paragraphs (1), (2) and (3) above, except
as determined by the Exchange in unusual circumstances.]
    (3) The Division of Member Firm Regulation must be informed
immediately by a specialist organization [, in each instance, of his
inability] whenever it is unable to comply with the [provisions]
requirements set forth in [the above Paragraphs] Rules 104.20 or .21,
as applicable.
    ([7]4) [For those members registered as a regular specialist
subject to the Net Capital Rule (SEA Rule 15c3-1), t] The term ``net
liquid assets'' refers to excess net capital computed in accordance
with Rule 15c3-1, promulgated under the Securities Exchange Act of 1934
(the ``Exchange Act'') and the provisions of Exchange Rule 325
(``Capital Requirements'') with the following adjustments:
    (i) Additions for haircuts and undue concentration charges taken
pursuant to Section (c)(2)(vi)(M) of Rule 15c3-1 on specialty
securities in dealer accounts;
    [(ii) Additions for any other haircuts on long positions which are
deposited or pledged as collateral for funds borrowed to finance dealer
transactions or positions in specialist securities;]
    ([i]ii) Deductions for floor brokerage and/or commissions
receivable;
    ([iv]iii) Deductions for clearing organization deposits; and
    (iv) Deductions for any cash surrender value of life insurance
policies allowable under [the Net Capital Rule] Rule 15c3-1, under the
Exchange Act.
    [(8) For members registered as a regular specialist not subject to
the Net Capital Rule, ``net liquid assets'' is defined as the excess of
cash, net credit balances at clearing broker(s), and readily marketable
securities over all liabilities.]
    (5) In the event that two or more specialist[s] organizations are
associated with each other and deal for the same specialist account,
the [above] capital requirements enumerated in Rules 104.20 and .21
shall apply to such specialist[s] organizations as one unit, rather
than to each specialist organization individually. Any joint account
must be approved by the Divisions of Market Surveillance and Member
Firm Regulation.
.21 [Concentration Measure] Specialist Organizations--Additional
Capital Requirements.--
Notwithstanding the provisions of (1) through (5) in Rule 104.20 above,
if a regular specialist entity's market share exceeds 5% of any of the
following concentration measures:
    (1) All listed common stock (current);
    (2) The 250 most active listed common stocks (over the previous 12
months);
    (3) The total share volume of stock trading on the Exchange (over
the previous 12 months); or
    (4) The total dollar value of stock trading on the Exchange (over
the previous 12 months)

such entity shall maintain net liquid assets equivalent to the
following applicable requirements:
    (i) $4 million for each specialist security contained in the DJIA;
    (ii) $2 million for each specialist security contained in the S&P
100, not contained in (i);
    (iii) $1 million for each specialist security contained in the S&P
500, not contained in (i) or (ii);
    (iv) $500 thousand for each specialist common stock, excluding bond
funds, not contained in (i), (ii) or (iii);
    (v) $100 thousand for each specialist security not included in (i)
through (iv), excluding warrants.
    (vi) $500,000 for each specialist security that is an Investment
Company Unit (as defined in paragraph 703.16 of the Listed Company
Manual) or a Trust Issued Receipt.]
    (1) Each specialist organization subject to Rule 104.21 must
maintain minimum net liquid assets equal to:
    (i) $1,000,000 for each one tenth of one percent (.1%) of Exchange
transaction dollar volume in its

registered securities, exclusive of Exchange Traded Funds, plus
$500,000 for each Exchange Traded Fund; and
    (ii) A market risk add-on, which shall be calculated as follows:
    (a) The specialist organization may use an Exchange-approved value-
at-risk (VaR) model to calculate its market risk add-on. The VaR model
must have a 99%, one-tailed confidence level with price changes
equivalent to a ten business day movement in rates and prices. To
calculate the market risk add-on, the specialist organization
multiplies the VaR of specialist dealer and related positions by the
appropriate multiplication factor, which is set at a minimum of three.
The results of quarterly backtesting determine which of the
multiplication factors contained in Table 1 of Rule 104.22 a specialist
organization must use; or
    (b) For those specialist organizations not utilizing VaR or whose
models have not been approved by the NYSE, three times the average of
the prior twenty business days' securities haircuts on its specialist
dealer's positions computed pursuant to Rule 15c3-1(c)(2)(vi),
exclusive of paragraph (N), under the Exchange Act.
    (2) A specialist organization may apply to the Exchange for
authorization to use a VaR model to calculate its market risk add-on,
in lieu of calculating the average of the prior twenty business days'
capital requirement for securities haircuts under Exchange Act Rule
15c3-1(c)(2)(vi), exclusive of paragraph (N). Once a specialist
organization has been granted approval by the Exchange to use a VaR
model, it shall continue to compute its net liquid asset market risk
add-on using VaR, unless a change is approved upon application to the
Exchange. To apply for authorization to use a VaR model pursuant to
NYSE Rule 104.21(1)(ii)(a), a specialist must submit in writing the
following information to Member Firm Regulation with its application:
    (a) A description of the mathematical models to be used to compute
its market risk add-on;
    (b) A description of the requirements as set forth in Exchange Rule
104.22; and
    (c) Any other material the Exchange may request.
    (3) Notwithstanding the requirements of Rule 98(b)(vii) (Capital
Requirements Met Separately), the specialist organization's net liquid
assets needed to meet the requirements in Rules 104.20 and .21 must be
dedicated exclusively to specialist dealer activities, and must not be
used for any other purpose without the express written consent of the
Exchange.
.22 [Combinations of Specialist Entities]Definitions and Model Approval
Process
    [A specialist entity resulting from the merger, consolidation,
acquisition, or other combination of specialist assets:
    (i) subject to the concentration measure requirements of Rule
104.21, shall maintain net liquid assets in accordance with those
provisions, or equivalent to the aggregate net liquid assets of the
specialist entities prior to their combination, whichever is greater;
    (ii) not subject to the concentration measure requirements of Rule
104.21, shall maintain net liquid assets according to the provisions of
Rule 104.20, or equivalent to the aggregate net liquid assets of the
specialist entities prior to their combination, whichever is greater.]
    (1) For purposes of this Rule 104, specialist organizations must
define the term ``Exchange transaction dollar volume'' consistent with
the most recent Statistical Data, calculated and provided by the NYSE
on a monthly basis.
    (2) For a specialist organization's VaR model to be approved, it
must meet the following minimum qualitative and quantitative
requirements:
    (a) Qualitative Requirements.
    (i) The VaR model used to calculate the market risk add-on for a
position, along with a system of internal risk management controls to
assist the specialist organization in managing the risks associated
with its business activities, must be integrated into the daily
internal risk management system of the specialist organization;
    (ii) The VaR model must be reviewed both periodically and annually
by qualified independent member organization personnel or a qualified
third party; and
    (iii) For purposes of computing the market risk add-on, the
specialist organization must determine the appropriate multiplication
factor as follows:
    (A) As soon as possible, but no later than three months after the
specialist organization begins using the VaR model to calculate their
market risk add-on, the specialist organization must conduct
backtesting of the model by comparing its actual daily net trading
profit or loss with the corresponding VaR measure generated by the VaR
model, using a 99 percent, one-tailed confidence level with price
changes equivalent to a one business day movement in rates and prices,
for each of the past 250 business days, or other period as may be
appropriate for the first year of its use;
    (B) On the last business day of each quarter, the specialist
organization must identify the number of backtesting exceptions of the
VaR model, that is, the number of business days in the past 250
business days, or other period as may be appropriate for the first year
of its use, for which the actual net trading loss, if any, exceeds the
corresponding VaR measure; and
    (C) The specialist organization must use the multiplication factor
indicated in Table 1 below in determining its market risk add-on until
it obtains the next quarter's backtesting results;

   Table 1.--Multiplication Factor Based on the Number of Backtesting
                       Exceptions of the VaR Model
------------------------------------------------------------------------
                                                          Multiplication
                  Number of exceptions                        factor
------------------------------------------------------------------------
4 or fewer..............................................            3.00
5.......................................................            3.40
6.......................................................            3.50
7.......................................................            3.65
8.......................................................            3.75
9.......................................................            3.85
10 or more..............................................            4.00
------------------------------------------------------------------------

    (iv) For purposes of incorporating specific risk into a VaR model,
a specialist organization must demonstrate that it has methodologies in
place to capture liquidity, event, and default risk adequately for each
position. Furthermore, the models used to calculate deductions for
specific risk must:
    (A) Explain the historical price variation in the portfolio;
    (B) Capture concentration (magnitude and changes in composition);
    (C) Be robust to an adverse environment; and
    (D) Be validated through backtesting.
    (b) Quantitative Requirements.
    (i) For purposes of determining market risk add-on, the VaR model
must use a 99 percent, one-tailed confidence level with price changes
equivalent to a ten-business day movement in rates and prices;
    (ii) The VaR model must use an effective historical observation
period of at least one year. The specialist organization must consider
the effects of market stress in its construction of the model.
Historical data sets must be updated at least monthly and reassessed
whenever market prices or volatilities change significantly; and
    (iii) The VaR model must take into account and incorporate all
significant, identifiable market risk factors applicable to positions
in the accounts of the specialist organization, including:

    (A) Risks arising from the non-linear price characteristics of
derivatives and the sensitivity of the market value of those positions
to changes in the volatility of the derivatives' underlying rates and
prices;
    (B) Empirical correlations with and across risk factors or,
alternatively, risk factors sufficient to cover all the market risk
inherent in the positions in the dealer accounts of the specialist
organization; and
    (C) Specific risk for individual positions.
.23 Maintaining a Fair and Orderly Market.--
    Solely for the purpose of maintaining a fair and orderly market,
the Exchange may, for a period not to exceed 5 business days, allow a
specialist entity to continue to operate despite such specialist
entity's non-compliance with the provisions of Rules 104.2[1]0 [and] or
104.2[2]1.
.24 Relief specialists.--
    (1) The requirements with respect to a member registered as a full
time relief specialist, i.e., one who may be called upon to act as a
relief specialist for an entire business day, shall be, net liquid
assets of $150,000. [or a joint account with the regular specialist in
the stock. Any joint account must be approved by Regulation &
Surveillance.]
    (2) There is no requirement with respect to a member registered as
a part-time relief specialist, i.e., one who may be called upon to act
as a relief specialist for less than the entire business day, usually
for lunch periods, etc. Dealings effected by a part-time relief
specialist while relieving the regular specialist must be made for the
account of the regular specialist whom he is relieving.
    [Specialists may meet the above requirements either with their own
capital or by availing themselves of the financing privileges provided
by Sec.  220.04(g) of Regulation T or Sec.  221.3(o) of Regulation U of
the Board of Directors of the Federal Reserve System ] 8121, 8218 which
are explained at .30, below.]
    [.30 Financing of specialists.--Under Sec.  220.04(g) of Regulation
T and Sec.  221.3(o) Regulation U of the Board of Directors of the
Federal Reserve System ] 8121, 8218, a member may have his transactions
as a specialist financed on a basis which is mutually satisfactory to
the specialist and the creditor. He may finance such transactions by
borrowing from a bank on terms which are mutually agreeable; he may
have a member organization finance such transactions in a special
account on a margin basis which is mutually satisfactory to the
specialist and the carrying organization; or he may have a joint
account with the carrying organization for the purpose of having his
specialist transactions financed on a margin basis which is mutually
satisfactory.]
    [Each specialist who makes such an arrangement must inform The
Market Surveillance Division of the name of the creditor and the terms
of the arrangement. The Market Surveillance Division must be informed
immediately by telephone of the intention: (1) To terminate or change
an existing financing arrangement (confirmed subsequently in writing);
or (2) to issue a margin call. (This Rule does not in any manner alter
a member's notification requirements to Regulation & Surveillance.) The
specialist is required to submit to that Department on Form SPC (see
.40 below) an initial report at such time as the arrangement becomes
operative, and monthly reports thereafter.]
    [.40 Reports on Form SPC.--Each specialist who arranges to have his
specialist transactions carried by a member organization on a margin
basis lower than that required by the Board of Directors of the Federal
Reserve System for regular margin accounts, must file with The Market
Surveillance Division a report of Form SPC, (1) as of the first date
that such arrangement becomes operative, i.e., when the margin in the
specialist's account first fails to meet the requirements of the Board
of Directors of the Federal Reserve System for regular margin accounts,
(2) as of the date previous to the first date that the arrangement
becomes operative, and (3) monthly thereafter, as of the last ledger
date of the month, including the month in which the arrangement first
becomes operative.
    Similar reports must be filed by each specialist who, for the
purpose of financing his transactions as a specialist, arranges with a
bank to have a loan value extended to him in an amount greater than
that permitted for the financing of his non-specialist transactions.
General Instructions
    The report of a joint account may be prepared and forwarded by any
participant. Forms may be obtained from Market Surveillance Division.
Reports should be filed with that Department as promptly as possible
after the ledger date as of which the report is prepared.
Specific Instructions
    For specific instruction see the reverse side of Form SPC.]
    [.50 Income records.--Each specialist and specialist organization
shall submit, for the confidential use of the Exchange, such
information relating to his or its specialty business as may be
requested by the Exchange.
    Each specialist and specialist organization shall keep its records
showing the data set forth below so that they will be readily available
when the Exchange requests them for its confidential use for the
purpose of surveillance and study of specialists' operations:
    (i) total ``actual'' commission income earned in all specialty
stock;
    (ii) share volume executed as agent by specialty stock; and
    (iii) dealer profit and loss by specialty stock.
    Dealer profit and loss data must reflect, by specialty stock, any
gain or loss occurring within an investment account.]
     * * *
Rule 123E. Specialist Combination Review Policy
    (a)--(e) No Change
    (f) [Proponents of a] A specialist unit combination subject to
review by either the Quality of Markets Committee or the Market
Performance Committee under this policy must [agree that] result in:
    (i) [the] total [amount of] capital [which each unit had separately
prior to the proposed combination shall not be reduced, regardless of
whether it would exceed the combined unit's new capital requirement] of
the combined unit meeting, at a minimum: (a) the requirements of Rules
104.20-104.21, (b) be acceptable to the Exchange, and (c) the combined
unit's capital requirement may be temporarily revised at the discretion
of the Exchange; and
    (ii) all required specialist capital be accounted for separately
from any other capital, and be used solely for the specialist business.
* * * * *

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

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

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

(1) Purpose
    Exchange specialist organizations must maintain net liquid assets
as required by NYSE Rule 104, and in addition, must satisfy the net
capital requirements prescribed in Rule 15c3-1,\4\ promulgated under
the Securities Exchange Act of 1934 (the ``Exchange Act'').\5\ NYSE
Rule 325 requires members and member organizations to comply with
Exchange Act Rule 15c3-1 and also requires notification to the Exchange
whenever tentative net capital has declined below defined levels. In
addition, Rule 325 gives the Exchange the authority, at any time, to
prescribe greater net capital or net worth requirements than those
explicitly prescribed by the rule, or to require more stringent
treatment of items when computing net capital, net worth and, by
implication, net liquid assets. Further, the NYSE can restrict the
business activities of specialist organizations consistent with good
business practices and its obligation to maintain a fair and orderly
market. Such restrictions may include prohibitions against business
expansion and business reduction requirements.
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    \4\ 17 CFR 240.15c3-1.
    \5\ 15 U.S.C. 78a et seq.
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    The Exchange proposes to amend Rules 104 and 123E to change the
capital requirement of specialist organizations. The Exchange believes
that if the proposed amendments are adopted, Rule 104 would more
accurately address market risks and volatility. Further, the changes to
Rule 123E would eliminate the ``marriage penalty'' capital requirement
for specialist organization combinations.
    (i) Difference Between Net Capital and Net Liquid Assets. According
to the Exchange, ``Net capital'' is a regulatory measure of the prudent
level of liquid assets required for a broker-dealer.
    However, the Exchange contends that the term ``net liquid assets''
refers to liquidity in the form of cash and cash equivalents that is
immediately available (or within twenty four hours) to a specialist
organization for the continuing purchase and sale of securities in
which a specialist is registered, in support of the specialist book,
and market maintenance. The Exchange believes that net liquid assets
are a shorter-term form of liquidity that is meant to be available to
the specialist organization pursuant to its daily activities of
maintaining a fair and orderly market on the Exchange.
    The Exchange believes that specialist organizations' unique
liquidity needs dictate the general form of the net liquid asset
requirement. Further, the Exchange believes that it is important for
all specialist organizations and market participants to know that
specialists have sufficient liquidity to support the specialist book
and market maintenance activities. Therefore, the Exchange contends
that a specialist organization's net liquid asset requirement functions
to ensure that the specialist continues to operate; whereas a broker-
dealer's net capital requirement functions to ensure that, if the
broker-dealer were liquidated, the broker-dealer's obligations to its
customers and creditors would be satisfied.
    (ii) Background. (a) Position-Based Capital Requirements (Rule
104.20). Exchange Rule 104.20 (``Regular Specialists'') sets position
requirements a specialist organization must be able to assume in each
stock that it is allocated. For each Investment Company Unit or Trust
Issued Receipt for which a specialist organization is registered, it
must maintain net liquid assets equivalent to $500,000. The rule also
sets a minimum capital requirement, which is the greater of $1,000,000
or 25% of the current position requirements.
    (b) Concentration Requirements (Rule 104.21). Specialist
organizations are also subject to NYSE Rule 104.21 (``Concentration
Measure Requirements'') if a specialist organization's market share
exceeds 5% of certain ``concentration measures.'' \6\
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    \6\ (1) All listed common stock; (2) The 250 most active listed
common stocks (over the previous twelve months); (3) Total share
volume of stock trading on the Exchange (over the previous twelve
months); or (4) Total dollar value of stock trading on the Exchange
(over the previous twelve months).
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    Further, a specialist organization must maintain the following net
liquid assets: (i) $4 million for each specialist security contained in
the Dow Jones Industrial Average; (ii) $2 million for each specialist
security contained in the S&P 100, not contained in (i); (iii) $1
million for each specialist security contained in the S&P 500, not
contained in (i) or (ii); (iv) $500,000 for each specialist common
stock, Investment Company Unit (including Exchange Traded Funds) or a
Trust Issued Receipt, excluding bond funds, not contained in (i), (ii)
or (iii); and (v) $100,000 for each specialist security not included in
(i) through (iv), excluding warrants.
    (c) Combinations of Specialist Entities (Rule 104.22). When two or
more specialist organizations combine as the result of a merger,
consolidation, acquisition or other combination of assets, NYSE Rule
104.22 (``Combinations of Specialists Entities''), commonly referred to
as the ``marriage penalty,'' generally requires the maintenance of:
    (a) net liquid assets in accordance with Rule 104.21, or equivalent
to the aggregate net liquid assets of the respective specialist
entities prior to their combination, whichever is greater; or
    (b) for those combinations not subject to Rule 104.21, net liquid
assets pursuant to Rule 104.20, or the equivalent of the aggregate net
liquid assets of the respective specialist entities prior to their
combination, whichever is greater.
    (d) Specialist Combination Review Policy (Rule 123E(f)(i)).
Exchange Rule 123E(f) currently requires proponents of a specialist
unit combination to agree that: (i) The total amount of capital which
each unit had separately prior to the proposed combination shall not be
reduced regardless of whether it would exceed the combined unit's new
capital requirement; and (ii) all required specialist capital be
accounted for separately from any other capital and be used solely for
the specialist business.
    NYSE Rule 123E(f)(i) applies a ``marriage penalty,'' similar to
that set forth in Exchange Rule 104.22, to a combination of specialist
organizations by requiring a higher capital requirement of the combined
unit, rather than allowing a possible reduction of capital, in line
with the new combined specialist organization's capital requirement.
Rule 123E(f)(i) does not recognize the benefits derived from such
combinations, nor does it compensate for excess capital that may have
been in each specialist organization prior to the merger.
    (iii) Issues/Concerns With the Current Capital Requirements. In mid
December 1987--soon after the 1987 major stock market correction--there
were 55 specialist organizations on the Floor of the Exchange. By the
year 2000, when Exchange Rule 104.22 was adopted, those specialist
organizations had merged, consolidated, acquired or combined to reduce
that number to 25. By April 2005, further consolidation had reduced the
number of specialist organizations to seven.\7\
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    \7\ Because of the marriage penalty the capital requirements for
the remaining seven specalist organizations represent the combined
amount of capital requirements of the 25 specialist organizations
that since 2000 were merged, consolidated, acquired or combined. The
Exchange believes that the current capital requirement does not
recognize the benefits derived from such consolidation.

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

    The Exchange believes that the position-based requirement
methodology set forth in NYSE Rule 104.20 is no longer appropriate in a
marketplace where there are seven specialist organizations with
sizeable capital bases and sophisticated risk management systems. The
Exchange contends that concentration requirements set forth currently
in Exchange Rule 104.21 significantly increase specialist
organizations' capital requirements: However, there is no gradual
increase in the requirement. Once a specialist organization's market
share exceeds 5% of any of the concentration measures they immediately
are subject to the rule. The Exchange believes that this creates an
unintended disincentive for a specialist organization to increase its
market share.
    The marriage penalty imposed by Rules 104.22 and 123E(f)(i)
effectively subjects specialist organizations that have merged to the
combined net liquid asset requirements of the two entities, although
the Exchange contends that the incremental risk assumed may not be
commensurate with the amount of net liquid assets required to be
maintained. The Exchange believes that the current net liquid assets
requirement for such specialist organizations is based neither upon the
amount of risk a specialist organization is taking, nor upon the dollar
value or volatility of its portfolio.
    (iv) Proposed Amendments. The Exchange is proposing that NYSE Rule
104.20 (to be re-titled ``Specialist Organizations--Minimum Capital
Requirements'') be amended to adopt risk-based requirements in lieu of
the outdated and irrelevant position requirements, with the exception
of Exchange Traded Funds (``ETFs''). For ETFs, the Exchange is
proposing to amend Rule 104.20 to clarify that specialist organizations
that are registered solely in ETFs maintain the greater of $500,000 for
each ETF or $1,000,000.
    Proposed amendments to NYSE Rule 104.21 (to be re-titled
``Specialist Organizations--Additional Capital Requirements'') would
require a specialist organization to meet, with its own net liquid
assets, a minimum capital requirement equal to:
    (i) $1,000,000 for each one tenth of one percent (.1%) of Exchange
transaction dollar volume in its specialty securities, plus $500,000
for each Exchange Traded Fund; and
    (ii) A market risk add-on, which is calculated as either:
    (a) An Exchange-approved value-at-risk (VaR) \8\ model to calculate
its requirement for market risk; or
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    \8\ The Exchange believes that value-at-risk is a generally
accepted method of measuring risk for financial organizations and
notes that it is primarily used to establish trading limits and to
stress test models and limits. It uses standard statistical
techniques to design trading strategies and to correlate past risks
with future risks to set trading limimts and thereby to minimize
potential losses. Value-at-risk models assess market risk based on
the probability distribution for a portfolio's market value.
---------------------------------------------------------------------------

    (b) For those not utilizing VaR or whose models have not been
approved by the NYSE, three times the average of the prior twenty
business day's securities haircuts on its specialist dealer's
positions.
    The Exchange believes this proposal utilizes the more generally
recognized and, effective risk measurement tools employed by financial
services firms, and increasingly by the Commission with particular
respect to larger organizations, such as Consolidated Supervised
Entities (``CSE''),\9\ whose financial impact upon the market is
significant.
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    \9\ See Exchange Act Rule 15c3-1(c)(15) which, as part of the
SEC's Consolidated Supervised Entity (``CSE'') rules, establishes a
voluntary method of computing net capital for large broker-dealers
that are part of a CSE. Eligibility to use the alternative/CSE
method is conditioned upon a broker-dealer's compliance with several
requirements, including comprehensive internal risk management
procedures that address the firm's market, credit, liquidity and
operations risk.
---------------------------------------------------------------------------

    The Exchange is proposing definitions and guidelines for the model
approval process in proposed Rule 104.22 (to be re-titled ``Definitions
and Model Approval Process''). The model approval process is designed
after the SEC's rules for consolidated supervised entities and includes
qualitative and quantitative requirements for a specialist
organization's VaR model. Some of these requirements include: (1) the
VaR model must be integrated into the specialist organization's
internal risk management system; (2) the VaR model must be reviewed
both periodically and annually; and (3) methodologies to capture
liquidity, event and default risk adequately for each position.
    Specialists' internal risk management systems must generally be
consistent with standards outlined in the Commission's CSE rules,
particularly SEA Rule 15c3-4. Once a specialist organization has been
granted approval by the Exchange to use a VaR model, it may continue to
compute its net liquid asset requirement using VaR, unless a change is
approved upon application to the Exchange. The Exchange will, from time
to time, revisit and examine approved net liquid asset models and may,
for good cause and consistent with standards set forth in the
Commission's CSE rules, increase or decrease the market risk add-on
requirement. The Exchange will provide prompt subsequent notice to the
Commission of any such adjustments.
    The Exchange is proposing to add a section requiring that a
specialist organization's net liquid assets needed to meet the
requirements in NYSE Rules 104.20 and .21 must be dedicated exclusively
to specialist dealer activities, and must not be used for any other
purpose without the express written consent of the Exchange. This is
currently required under Rule 123(f)(ii) when specialist organizations
combine, and the Exchange believes it should be expanded to all
specialist organizations' required net liquid assets.
    The Exchange is proposing to eliminate the marriage penalty of NYSE
Rule 104.22 in its entirety. With a net liquid assets requirement based
upon a specialist organization's traded volume on the Floor of the
Exchange combined with an add-on for market risk requirement, the
Exchange believes that it is not appropriate or necessary to
arbitrarily increase a specialist organization's requirement when it
combines with another.
    The Exchange is also proposing to eliminate the marriage penalty of
NYSE Rule 123E(f)(i) by requiring the specialist organization to
maintain net liquid assets in accordance with the specialist capital
requirements of Exchange Rule 104.20 to .21, and granting the Exchange
discretion to temporarily revise the combined unit's requirements.
    The Exchange is also proposing to delete specialist organization
financing sections 104.30 (``Financing of Specialists''), 104.40
(``Reports on Form SPC'') and 104.50 (``Income Records''). The deletion
of Rule 104.30 is proposed to reflect the current reality that net
liquid asset requirements must be met from specialists' own books and
records and not from an account carried by a third party. The deletion
of Rule 104.30 would render Rule 104.40 irrelevant. The recordkeeping
requirements of Rule 104.50 have been rendered irrelevant in light of
NYSE Rule 440 (``Books and Records'') which incorporates, by reference,
Securities and Exchange Act Rules 17a-3 and 17a-4.
    Finally, the filing includes several minor technical amendments to
the rules for purposes of clarity and consistency.
    (v) Discussion. The Exchange believes that current net liquid asset
requirements impose excessively high capital requirements on
specialists that are not based upon the amount of risk

a specialist takes or the volatility of its portfolio. As a result, the
Exchange believes that the rules impose unjustified costs on existing
specialists and discourage new entrants to the market. The Exchange
contends that under this proposal, current rules based on classes of
allocated securities and capital penalties for mergers among
specialists would be replaced by rules that focus on market stress and
volatility, and market share measured by total dollar volume traded.
The Exchange further contends that the new rules may encourage new
specialist organizations to begin operations on the Floor of the
Exchange.
    (a) Correlation Between Specialist Organization Inventory Positions
and the Market. The Exchange contends that changes in specialist
organizations' inventory positions are highly correlated to changes in
price movements in the broader market. They base their conclusion on
data, compiled from September 1998 through October 2004, that compares
aggregate long and short specialist position data with market
movements, as represented by the S&P 500.\10\ The Exchange found that,
on average, specialist organizations bought $75 million of securities
for each 1% decline in prices and sold $75 million in securities for
each 1% increase in prices. The greatest price decline in one day over
this six year period was 6.2% on the S&P 500, which occurred on April
14, 2000. Total specialist net liquid assets decreased $16 million as a
result of this market move.
---------------------------------------------------------------------------

    \10\ The NYSE performed an analysis of specialist risk exposure
in volatile trading scenarios over a period of years with its member
specialist organizations, including simulations of how specialist
capital levels would fare if faced with extremely volatile
situations similar to the October 19, 1987 market correction, and
other ``worst case'' consecutive day price declines.
---------------------------------------------------------------------------

    (b) Worst-Case Market Risk Scenario for Specialist Organizations.
Utilizing the historical worst-case scenario,\11\ and assuming
specialist organizations open the trading day with a $100 million net
long position and incur a non-stop 30% market decline, the Exchange
determined that a cumulative loss of $377 million would result
(assuming specialist organizations' purchases of $75 million for each
1% decline in the market). Consequently, the Exchange believes that if
specialist organizations started with $1.1 billion of net liquid
assets, they should have sufficient capital and liquidity during normal
markets and be able to withstand worst case market shocks without
interruption to their businesses. The Exchange believes that the
remaining net liquid assets of $723 million provides buying power \12\
of $2.9 billion, which should provide adequate liquidity in a normal
market.\13\
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    \11\ A prime example of a worst-case scenario is the consecutive
day declines that occurred in October 1987 when the DJIA dropped 31%
and the S&P lost 29%. On October 16, 1987, 55 NYSE specialist
organizations had net liquid assets totaling $808 million. These
assets dropped by $196 million to $612 million at the close on
October 19, 1987. Buying power decreased from $2.3 billion to $1.1
billion. One half of this buying power was concentrated in eight
specialist organizations. Twenty-three specialist organizations had
less than $5 million of buying power and thirteen specialist
organizations had no buying power. In comparison, the 1929 crash
resulted in a four consecutive day decline in the DJIA of 16%.
    \12\ Buying power is the total market value of securities in
which a specialist is registered that can be purchased and/or sold
on margin by the specialist organization, without depositing
additional funds into the specialist organization's dealer account
carried by another broker-dealer.
    \13\ In such a scenario, the Exchange would have the flexibility
under Exchange Rules 325 and 326 to prescribe greater net capital or
net worth requirements, and/or restricting a specialist
organization's business activities.
---------------------------------------------------------------------------

    (c) Market Risk/Net Liquid Asset Requirements. Therefore, based on
the above analysis, the Exchange believes that maintaining a minimum of
approximately $1.1 billion of net liquid assets across all specialist
organizations would provide a prudent level of capitalization for
normal business operations with sufficient reserve in the event of
severe shocks to the market. The Exchange intends to reassess this
proposed requirement annually based upon market volatility as well as
the dollar volume of total shares traded by all specialist
organizations to determine its continuing adequacy.
    The Exchange contends that this proposal also encompasses a
methodology whereby a specialist organization's risk measurement system
is considered in determining required capital standards. In order to
use a VaR model to calculate the specialist organization's net liquid
asset requirement, the specialist must incorporate the VaR methodology
into its risk management practices. The Exchange will be required to
evaluate those risk management practices at specialist organizations,
including a review of each firm's infrastructure for monitoring and
controlling market risk, before they will be allowed to utilize VaR
model requirements.
    As the proposal is based on dollar volumes traded and average
inventory positions, as well as average haircuts, the Exchange believes
it does not unduly penalize a specialist organization for taking on
larger positions in adverse market conditions. The Exchange believes
that utilizing value-at-risk modeling as a component of the net liquid
asset requirement creates an incentive for specialist organizations to
develop state of the art risk measurement systems, as well as hedge
their positions, thereby limiting potential losses.
    d. Financing of Specialists. Under current Rule 104.30, specialist
organizations can finance their transactions pursuant to Regulations T
and U of the Federal Reserve System. Pursuant to the section, a
specialist organization must notify the Market Surveillance Department
of the name of the creditor and the terms of the arrangement. The
Exchange proposes to delete the section in its entirety since it is no
longer relevant as specialist organizations can currently arrange for
credit under other existing Exchange rules.
    e. Reports on Form SPC. Under current Rule 104.40, specialist
organizations that finance their transactions on a margin basis lower
than that required by the Federal Reserve for regular margin accounts,
must file Form SPC with the Market Surveillance Department. Similar
reports must be filed by specialist organizations that arrange for a
bank to have a loan value extended to the non-specialist organization
in an amount greater than that permitted for the financing of the non-
specialist transactions. The Exchange purposes to delete the section in
its entirety as it would no longer be applicable in the absence of Rule
104.30.
    f. Income Records. Under current Rule 104.50, specialist
organizations must keep and produce, at the request of the Exchange,
information on commission income, share volume, and dealer profit and
loss. The Exchange proposes to delete the section in its entirety as it
is no longer applicable with the adoption of Rule 440 (Books and
Records), which incorporates by reference Rules 17a-3 and 17a-4, under
the Exchange Act.
2. Statutory Basis
    The statutory basis for this proposed rule change is section
6(b)(5) \14\ of the Exchange Act. The proposed amendments to Exchange
Rules 104 and 123E are consistent with the requirements of section
6(b)(5), which requires that the rules of the Exchange must be
designed, among other things, to promote just and equitable principles
of trade, to remove impediments to and perfect the mechanism of a free
and open market and national market system, and, in general, to protect
investors and the public interest. The proposed amendments are
consistent

with the Section in that they encompass a methodology whereby risk
management is considered in determining required capital standards--
similar to recent Commission amendments to Exchange Act Rule 15c3-1
regarding the alternative method for computing net capital for broker-
dealers that are part of a consolidated supervised entity.\15\
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78f(b)(5).
    \15\ See Release No. 34-49830 (S7-21-03).
---------------------------------------------------------------------------

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 Exchange 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

    Within 35 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 Exchange consents, the Commission will:
    (A) By order approve such 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 e-mail to<EMAIL_ADDRESS>Please include File

Number SR-NYSE-2005-38 on the subject line.

Paper Comments

    Send paper comments in triplicate to Jonathan G. Katz, Secretary,
Securities and Exchange Commission, 100 F Street, NE., Washington, DC
20549-9303. All submissions should refer to File Number SR-NYSE-2005-
38.
    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 inspection and copying in the Commission's
Public Reference Room. Copies of such filing also will be available for
inspection and copying at the principal office of the NYSE. 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
submission should refer to File Number SR-NYSE-2005-38 and should be
submitted on or before January 13, 2006.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. E5-7769 Filed 12-22-05; 8:45 am]

BILLING CODE 8010-01-P