[Federal Register Volume 88, Number 237 (Tuesday, December 12, 2023)]
[Notices]
[Pages 86172-86181]
[FR Doc No: 2023-27164]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99093; File No. SR-MRX-2023-22]

Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Legging
Orders

December 6, 2023.
    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 November 28, 2023, Nasdaq MRX, LLC (``MRX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``Commission'')
the proposed rule change as described in Items I and II below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend Options 3, Section 7, Types of
Orders and Order and Quote Protocols, and Options 3, Section 16,
Complex Order Risk Protection.
    The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/mrx/rules, 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 Exchange proposes to amend Options 3, Section 7, Types of
Orders

and Order and Quote Protocols, and Section 16, Complex Order Risk
Protections. Each change is described below.
Options 3, Section 7
    The Exchange proposes to expand the description of Legging Orders
to add detail to describe the current System \3\ functionality. The
proposed amendments reflect the way the System handles Legging Orders
today. The Exchange is not amending its current System functionality
with respect to Legging Orders, rather, the proposed rule text is
intended to add more detail to MRX Options 3, Section 7(k) to conform
the level of detail to Nasdaq Phlx LLC (``Phlx'') Options 3, Sections
7(b)(10) and 14(f)(iii)(C), which describes Phlx's legging orders, as
well as The Miami International Securities Exchange, LLC (``MIAX'')
Rule 518(a)(10), which describes derived orders.
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    \3\ The term ``System'' means the electronic system operated by
the Exchange that receives and disseminates quotes, executes orders
and reports transactions. See Options 1, Section 1(a)(49).
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    Generally, the Exchange proposes to amend the phrase ``regular
limit order book'' in MRX Options 3, Section 7(k) to ``single-leg limit
order book'' to conform the rule text to the manner in which that order
book is described in MRX Options 3, Section 14, Complex Orders.
    Currently, MRX Options 3, Section 7(k) provides,

    Legging Orders. A legging order is a limit order on the regular
limit order book that represents one side of a Complex Options Order
that is to buy or sell an equal quantity of two options series
resting on the Exchange's Complex Order Book. Legging orders are
firm orders that are included in the Exchange's displayed best bid
or offer.
    (1) A legging order may be automatically generated for one leg
of a Complex Options Order at a price: (i) that matches or improves
upon the best displayed bid or offer on the regular limit order
book; and (ii) at which the net price can be achieved when the other
leg is executed against the best displayed bid or offer on the
regular limit order book. A legging order will not be created at a
price that locks or crosses the best bid or offer of another
exchange or during a Posting Period in progress on the same side in
the series, pursuant to Options 3, Section 15 regarding Acceptable
Trade Range.
    (2) A legging order is executed only after all other executable
orders (including any non-displayed size) and quotes at the same
price are executed in full. When a legging order is executed, the
other portion of the Complex Options Order will be automatically
executed against the displayed best bid or offer on the Exchange.
    (3) A legging order is automatically removed from the regular
limit order book if: (i) the price of the legging order is no longer
at the displayed best bid or offer on the regular limit order book,
(ii) execution of the legging order would no longer achieve the net
price of the Complex Options Order when the other leg is executed
against the best displayed bid or offer on the regular limit order
book, (iii) the Complex Options Order is executed in full or in part
on the Complex Order Book, or (iv) the Complex Options Order is
cancelled or modified.

    The Exchange proposes to amend the first paragraph of MRX Options
3, Section 7(k) to instead provide,

    A Legging Order is a Limit Order on the single-leg limit order
book in an individual series that represents one leg of a two-legged
Complex Options Order that is to buy or sell an equal quantity of
two options series resting on the Exchange's Complex Order Book.
Legging Orders are firm orders that are included in the Exchange's
displayed best bid or offer. Legging Orders are not routable and
have a TIF of Day.

    Generally, the Exchange proposes to capitalize the terms ``Legging
Order'' and ``Limit Order'' throughout MRX Options 3, Section 7(k). The
Exchange also proposes to amend the term ``one side of a Complex
Options Order'' to more specifically state, ``one leg of a two-legged
Complex Options Order.'' The Exchange also proposes to add a new
sentence to the end of the paragraph which provides, ``Legging Orders
are not routable and have a TIF of Day.'' Specifying that Legging
Orders, which are an individual component of a Complex Options
Order,\4\ are also not routable will add detail to the description of
the order type and make clear the current System handling. Similarly,
specifying that Legging Orders will be Limit Orders \5\ with a TIF of
Day makes clear the way these orders are currently handled by the
System. Legging Orders are not based on Member instruction and are
intended to facilitate more interaction between the single-leg order
book and the Complex Order Book, resulting in increased execution
opportunities and better execution prices for Complex Orders and for
orders resting on the single-leg order book. For this reason, Legging
Orders do not route and have a TIF of Day to permit Members to interact
with this order type. The Exchange believes the amended rule text
proposed in the first paragraph of MRX Options 3, Section 7(k) more
accurately describes a Legging Order and provides Members with greater
information regarding this order type. Phlx's rules at Options 3,
Section 7(b)(10) similarly describes a Legging Order as ``one leg of a
two-legged Complex Options Order'' and specifies that Phlx's Legging
Orders are not routable and have a time-in-force of Day.
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    \4\ The terms ``Complex Options Order,'' ``Stock-Option Order,''
and ``Stock-Complex Order'' refer to orders for a Complex Options
Strategy, Stock-Option Strategy, and Stock-Complex Strategy,
respectively. The term ``Complex Order'' includes Complex Options
Orders, Stock-Option Orders, and Stock-Complex Orders. See MRX
Options 3, Section 14(a)(5). See also MRX Options 3, Section
14(a)(1)-(3).
    \5\ A Limit Order is an order to buy or sell a stated number of
options contracts at a specified price or better. See MRX Options 3,
Section 7(b).
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    The Exchange proposes to add a new second paragraph to MRX Options
3, Section 7(k) to specifically explain the way the System will
generate a Legging Order. The Exchange proposes to state,

    The System will evaluate whether Legging Orders may be generated
(1) when a Complex Options Order enters the Complex Order Book, and
(2) after a time interval (to be determined by the Exchange, not to
exceed 1 second) when the NBBO or Exchange best bid or offer in any
component of a Complex Options Order changes. The Exchange may
determine to limit the number of Legging Orders generated on an
objective basis and may determine to remove existing Legging Orders
in order to maintain a fair and orderly market in times of extreme
volatility or uncertainty. Legging Orders are treated as having no
Priority Customer capacity on the single-leg order book, regardless
of being generated from Priority Customer Complex Options Orders.

    The Exchange proposes to make clear that the System will evaluate
whether Legging Orders may be generated, which occurs at the time a
Complex Options Order enters the Complex Order Book or after a time
interval (to be determined by the Exchange, not to exceed one second)
\6\ when the NBBO or Exchange best bid or offer in any component of a
Complex Options Order changes. The Exchange proposes to state that it
may determine to limit the number of Legging Orders generated on an
objective basis and may determine to remove existing Legging Orders,
and cease the creation of additional Legging Orders, to maintain a fair
and orderly market in times of extreme volatility or uncertainty. Phlx
has similar rule text in Phlx Options 3, Section 14(f)(iii)(C).\7\

This limitation assists the Exchange in managing the number of Legging
Orders generated to ensure that Legging Orders do not negatively impact
the Exchange's System capacity and performance so that MRX may maintain
a fair and orderly market in times of extreme volatility or
uncertainty. Of note, the Exchange does not limit the generation of
Legging Orders on the basis of the entering Member or the Member
category of the order (i.e., Professional or Priority Customer). Phlx
similarly made this representation when it proposed to adopt rules
related to the generation and execution of ``legging orders.'' \8\
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    \6\ Today, the time interval is set to one hundred milliseconds.
    \7\ Phlx's rule states, in part, in Options 3, Section
14(f)(iii)(C) that, ``. . . The System will evaluate the CBOOK when
a Complex Order enters the CBOOK and at a regular time interval, to
be determined by the Exchange (which interval shall not exceed 1
second), following a change in the national best bid and/or offer
(`NBBO') or Phlx best bid and/or offer (`PBBO') in any component of
a Complex Order eligible to generate Legging Orders, to determine
whether Legging Orders may be generated. The Exchange may determine
to limit the number of Legging Orders generated on an objective
basis and may determine to remove existing Legging Orders in order
to maintain a fair and orderly market in times of extreme volatility
or uncertainty.''
    \8\ See Securities Exchange Act Release No. 73545 (November 6,
2014), 79 FR 67498 (November 13, 2014) (SR-Phlx-2014-54) (Notice of
Filing of Amendment No. 1 and Order Granting Accelerated Approval of
a Proposed Rule Change, as Modified by Amendment No. 1, To Add a New
Complex Order Process Called Legging Orders).
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    Finally, the Exchange proposes to provide that Legging Orders are
treated as having no Priority Customer capacity on the single leg order
book, regardless of being generated from Priority Customer Complex
Options Orders. A Legging Order is handled in the same manner as other
orders on the single-leg order book except as otherwise provided in MRX
Options 3, Section 7(k), and is executed only after all other
executable orders and quotes at the same price are executed in full.
When a Legging Order is executed, the other component of the Complex
Order on the Complex Order Book will be automatically executed against
the best bid or offer on the Exchange. The Exchange believes that a
Legging Order, created for the execution of a Complex Order, should not
be afforded priority over resting orders and quotes on the single-leg
order book, and therefore has determined to protect the priority on the
single-leg order book of such resting orders and quotes. MIAX similarly
executes a derived order only after all other executable orders and
quotes at the same price are executed in full.\9\
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    \9\ See MIAX Rule 518(a)(10)(iv). See also Securities Exchange
Act Release No. 79072 (October 7, 2016), 81 FR 71131 (October 14,
2016) (SR-MIAX-2016-26) (Order Approving a Proposed Rule Change to
Adopt New Rules to Govern the Trading of Complex Orders).
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    The Exchange proposes to amend MRX Options 3, Section 7(k)(1) and
add the title ``Generation of Legging Orders'' to describe the contents
of the paragraph. The Exchange proposes to amend the first sentence
which currently states,

    A legging order may be automatically generated for one leg of a
Complex Options Order at a price: (i) that matches or improves upon
the best displayed bid or offer on the regular limit order book; and
(ii) at which the net price can be achieved when the other leg is
executed against the best displayed bid or offer on the regular
limit order book. A legging order will not be created at a price
that locks or crosses the best bid or offer of another exchange or
during a Posting Period in progress on the same side in the series,
pursuant to Options 3, Section 15 regarding Acceptable Trade Range.

    The Exchange proposes to instead provide in Options 3, Section
7(k)(1),

    A Legging Order may be automatically generated for one or both
leg(s) of a Complex Options Order resting on top of the Complex
Order Book at a price: (i) that matches or improves upon the best
displayed bid or offer on the single-leg limit order book; and (ii)
at which the net price can be achieved when the other leg is
executed against the best displayed bid or offer on the single-leg
limit order book, excluding other Legging Orders. Legging Orders
will be generated and executed in the minimum increment for that
options series.

    The Exchange is proposing to add ``or both leg(s)'' to the first
sentence of MRX Options 3, Section 7(k)(1) to make clear a Legging
Order may be generated for each leg of a two-legged Complex Order. The
Exchange notes that Legging Orders may be generated for each leg of a
two-legged options orders with the same quantity on both legs.
Automatically generating Legging Orders, which will only be executed
after all other executable interest at the same price (including non-
displayed interest) is executed in full, will provide additional
execution opportunities for Complex Orders, without negatively
impacting any investors in the single-leg market. In fact, the
generation of Legging Orders may enhance execution quality for
investors in the single-leg market by improving the price and/or size
of the MRX BBO and by providing additional execution opportunity for
resting orders on the single-leg order book. The generation of Legging
Orders is fully compliant with all regulatory requirements. In
particular, Legging Orders are firm orders that will be displayed at
the MRX BBO. Also, a Legging Order will be automatically removed if it
is no longer displayable at the MRX BBO or if the net price of the
Complex Order can no longer be achieved. Finally, the generation of
Legging Orders is limited in scope, as they may be generated only for
Complex Options Orders with two legs. Additionally, as noted herein,
the Exchange will closely manage and curtail the generation of Legging
Orders to assure that they do not negatively impact system capacity and
performance. Phlx's Legging Orders differ from MRX's Legging Orders in
that, on Phlx, where two legging orders may be generated, only one of
those can execute as part of the execution of a particular complex
order.
    The addition of ``resting on the top of the Complex Order Book'' in
the first sentence of MRX Options 3, Section 7(k)(1) will make clear
that the priority of orders in the Complex Order Book controls with
respect to the generation of Legging Orders. The addition of this
language is intended to provide greater detail with respect to the
generation of Legging Orders.
    The Exchange proposes to amend the second sentence of MRX Options
3, Section 7(k)(1) to add ``excluding other Legging Orders'' to the end
of the sentence to make clear that the price of a Legging Order is not
considered in the BBO for purposes of determining whether the net price
of a Complex Order could be achieved were it to generate a Legging
Order. Below is an example of the manner in which the System calculates
the net price and excludes a Legging Order.
Example #1
Assume
Leg A is quoted 4.20 (100) x 4.25 (100)
Leg B is quoted 4.00 (100) x 4.10 (100)
Leg C is quoted 3.80 (100) x 3.90 (100)
Create A-B strategy, ratio of 1. cBBO \10\ for A-B is 0.10 x 0.25
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    \10\ The cBBO is the net best bid or offer comprised of the best
bids and offers of the individual legs of the complex strategy.
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Create B-C strategy, ratio of 1. cBBO for B-C is 0.10 x 0.30

Generation of Legging Orders
Complex Order is entered to Buy A-B 10 @ 0.20
System generates Legging Order on leg A's bid @ 4.20
System generates Legging Order on Leg B's offer @ 4.05
Complex Order is entered to Buy B-C 10 @ 0.20
System generates Legging Order on leg B's bid @ 4.00
System generates Legging Order on Leg C's offer @ 3.90

Executions
    If Complex Order B-C sold leg C @ 3.90, it would have to buy leg B
for 4.10 or less to satisfy its net price of 0.20. Given that a Legging
Order is available on Leg B's offer at 4.05, this Legging Order on leg
C would have been able to generate at 3.85 instead of 3.90 if the
Legging Order at 4.05 was included in the calculation of possible net
execution price, but since it is not, the Legging Order is generated at
3.90 on Leg C's offer instead of 3.85.\11\
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    \11\ Furthermore, if a single-leg order arrives to buy for 3.90
on Leg C, the B-C strategy trades with the 4.10 offer of Leg B and
the 4.05 Legging Order is removed.

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    The Exchange is removing the last sentence of MRX Options 3,
Section 7(k)(1) \12\ because that concept is being relocated to
proposed new paragraph Options 3, Section 7(k)(2) as described below.
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    \12\ The last sentence of MRX Options 3, Section 7(k)(1) states,
``A legging order will not be created at a price that locks or
crosses the best bid or offer of another exchange or during a
Posting Period in progress on the same side in the series, pursuant
to Options 3, Section 15 regarding Acceptable Trade Range.''
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    Finally, the Exchange proposes to add a sentence to MRX Options 3,
Section 7(k)(1) which states, ``Legging Orders will be generated and
executed in the minimum increment for that options series.'' Options 3,
Section 3 describes the minimum increments for options traded on MRX.
This rule makes clear that the minimum increment rule in MRX Options 3,
Section 3 is applicable to Legging Orders. MIAX Rule 518(a)(10)(iii)
similarly provides that MRX's derived orders will not be created at a
price increment less than the minimum established by Rule 510.\13\
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    \13\ MIAX Rule 510 specifies the minimum increments for options
traded on MIAX.
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    The Exchange proposes to add proposed new paragraph MRX Options 3,
Section 7(k)(2) with the title ``When Legging Orders Will Not Be
Generated'' to describe the contents of the paragraph. The Exchange
proposes to state in proposed MRX Options 3, Section 7(k)(2),

    When Legging Orders Will Not Be Generated. A Legging Order will
not be generated: (i) at a price that locks or crosses the best bid
or offer of another exchange, (ii) if there is a complex auction on
either side in the Complex Options Strategy, or a single-leg auction
on either side in any component of the Complex Options Strategy, or
a Posting Period in progress on the same side in the series,
pursuant to Options 3, Section 15 regarding Acceptable Trade Range;
(iii) if the price of the leg(s) of a Complex Options Order is
outside of the price limits described in Options 3, Section 16(a);
(iv) if there is already a Legging Order in that options series on
the same side of the market at the same price; or (v) for Complex
Orders with 2 option legs, where both legs are buying or both legs
are selling and both legs are calls or both legs are puts, as
described in Options 3, Section 14(d)(3)(A); or (vi) if the Exchange
has not opened; or a particular option series has not opened or such
options series is halted.

This paragraph will describe when Legging Orders will not be generated.
    First, a Legging Order will not be generated at a price that locks
or crosses the best bid or offer of another exchange as stated in the
last sentence of MRX Options 3, Section 7(k)(1). This concept is
consistent with MRX Options 5, Sections 2 and 3 which describe order
protection and locked and crossed markets.\14\
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    \14\ MRX Options 5 is incorporated by reference to ISE Options
5. Specifically, ISE Options 5, Section 2 and 3 apply to MRX.
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    Second, the Exchange proposes to add a provision which states that
a Legging Order will not be generated if there is a complex auction on
either side in the Complex Options Strategy,\15\ or a single-leg
auction on either side in any component of the Complex Options
Strategy, or a Posting Period in progress on the same side in the
series, pursuant to MRX Options 3, Section 15 regarding Acceptable
Trade Range (``ATR'').\16\ The last part of this proposed sentence
concerning ATR was relocated from the last sentence of MRX Options 3,
Section 7(k)(1).
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    \15\ A Complex Options Strategy is the simultaneous purchase
and/or sale of two or more different options series in the same
underlying security, for the same account, in a ratio that is equal
to or greater than one-to-three (.333) and less than or equal to
three-to-one (3.00) and for the purpose of executing a particular
investment strategy. Only those Complex Options Strategies with no
more than the applicable number of legs, as determined by the
Exchange on a class-by-class basis, are eligible for processing. See
MRX Options 3, Section 14(a)(1).
    \16\ ATR is a risk protection which sets dynamic boundaries
within which quotes and orders may trade. ATR is designed to guard
the System from experiencing dramatic price swings by preventing the
immediate execution of quotes and orders beyond the thresholds set
by this risk protection.
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    Third, the Exchange proposes to add a provision which states that a
Legging Order will not be generated if the price of the leg(s) of a
Complex Options Order is outside of the price limits described in MRX
Options 3, Section 16(a). In the instance where a Legging Order
generated is currently outside the price parameter (because the ABBO
has moved), the System will remove the Legging Order that was outside
the price limits pursuant to proposed MRX Options 3, Section
7(k)(2)(iii) and will attempt to re-generate a new Legging Order that
is in the price limits described in MRX Options 3, Section 16(a) as
proposed in MRX Options 3, Section 7(k)(4)(v). Today, MRX Options 3,
Section 16(a) would restrict the execution of a Legging Order through
price limits for Complex Orders. By adding the aforementioned rule text
in proposed new paragraph Options 3, Section 7(k)(2), all limitations
related to the generation of Legging Orders will be memorialized in
Options 3, Section 7(k).\17\
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    \17\ Phlx's rule similarly indicates that a Legging Order is
subject to certain price parameters by stating that a Legging Order
will not be generated if the price of the Complex Order is outside
of the relevant ACE Parameter. See PhlxOptions 3, Section
7(b)(10)(2). The ACE Parameter differs from the price limits
described in MRX Options 3, Section 16(a). Phlx's ACE Parameter
defines a price range outside of which a Complex Order will not be
executed. The ACE Parameter is either a percentage or number as
defined by Phlx and may be set at a different percentage or number
for Complex Orders where one of the components is the underlying
security. The ACE Parameter price range is based on the cNBBO at the
time an order would be executed. A Complex Order to sell will not be
executed at a price that is lower than the cNBBO bid by more than
the ACE Parameter. A Complex Order to buy will not be executed at a
price that is higher than the cNBBO offer by more than the ACE
Parameter. A Complex Order or a portion of a Complex Order that
cannot be executed within the ACE Parameter pursuant to this rule
will be placed on the CBOOK. See Phlx Options 3, Section 16(b)(i).
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    Fourth, the Exchange proposes to add a provision which states that
a Legging Order will not be generated if there is already a Legging
Order in that options series on the same side of the market at the same
price. This provision addresses a situation of overlapping Legging
Orders. Phlx has a similar sentence in Phlx Options 3, Section
7(b)(10)(2).\18\ The addition of this rule text will make clear an
existing limitation to the generation of orders in MRX Options 3,
Section 7(k).
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    \18\ Phlx Options 3, Section 7(b)(10)(2)) states, in part, that
Legging Order will not be generated if there is already a Legging
Order in that series on the same side of the market at the same
price (unless it has priority based on the participant type, under
existing Exchange rules). The phrase ``unless it has priority based
on the participant type, under existing Exchange rules'' is not
being added to MRX's Rule as Options 3, Section 10 which describes
allocation on the single-leg order book, because as stated in
proposed MRX Options 3, Section 7(k), ``Legging Orders are treated
as having no Priority Customer capacity on the single-leg order
book, regardless of being generated from Priority Customer Complex
Options Orders.''.
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    Fifth, the Exchange proposes to add a provision which states that a
Legging Order will not be generated for Complex Orders with two option
legs, where both legs are buying or both legs are selling and both legs
are calls or both legs are puts, as described in MRX Options 3, Section
14(d)(3)(A). This limitation is currently provided for in MRX Options
3, Section 14(d)(3)(A) and is being added to proposed new paragraph MRX
Options 3, Section 7(k)(2) to provide Members with a complete list of
when Legging Orders will not be generated in Options 3, Section 7(k).
    Sixth, the Exchange proposes to add a provision which states that a
Legging Order will not be generated if the Exchange has not opened; or
a particular option series has not opened or such options series is
halted. Since a complex strategy must be available for trading to
generate a Legging Order, the failure of an options series that is a
component of the complex strategy to open or a subsequent halt would
cause Legging Orders not to generate. Phlx has

a similar rule in Phlx Options 3, Section 7(b)(10)(1).\19\
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    \19\ Phlx Options 3, Section 7(b)(10)(1)states, in part, that
Legging Orders will not be generated if the Exchange or a particular
option has not opened, is halted or is otherwise not available for
trading. MRX believes that not opening and a halt are the two
possible scenarios and therefore Phlx's rule and MRX's rule are
substantively the same in this regard.
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    The Exchange proposes to renumber current MRX Options 3, Section
7(k)(2) as (k)(3) and add the title ``Execution of Legging Orders'' to
describe the contents of the paragraph. The Exchange proposes to state
in proposed MRX Options 3, Section 7(k)(3) that,

    A Legging Order is executed only after all other executable
orders (including any non-displayed size) and quotes at the same
price are executed in full. When a Legging Order is executed, the
other leg of the Complex Options Order will be automatically
executed against the displayed best bid or offer on the Exchange and
any other Legging Order not executed as part of the Complex Options
Order will be removed. Two Legging Orders related to the same
Complex Options Order can be generated, and both can execute as part
of the execution of a particular Complex Options Order.

    The Exchange's proposal, similar to Phlx Options 3, Section
7(b)(10)(3)describes current System handling when a Legging Order is
executed and subsequently the other leg of the Complex Order will be
automatically executed against the displayed best bid or offer on the
Exchange, and any other Legging Order based on that Complex Order will
be removed. The Exchange proposes to replace the word ``portion'' with
``leg'' to make the rule text more explicit. The Exchange proposes to
add the phrase ``and any other Legging order not executed as part of
the Complex Options Order will be removed'' to the end of the second
sentence in proposed MRX Options 3, Section 7(k)(3). Phlx has a
substantively similar sentence in Options 3, Section 7(b)(10)(3).\20\
The addition of this phrase is intended to provide additional
information regarding the treatment of unexecuted Legging Orders in MRX
Options 3, Section 7(k). By way of example,
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    \20\ Phlx Options 3, Section 7(b)(10)(3) states, ``A Legging
Order is executed only after all other executable orders (including
any non-displayed size) and quotes at the same price are executed in
full. When a Legging Order is executed, the other leg of the Complex
Order will be automatically executed against the displayed best bid
or offer on the Exchange and any other Legging Order based on that
Complex Order will be removed.'' MRX explicitly states ``not
executed as part of the Complex Options Order'' where Phlx says
``based on that Complex Order.''
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Example #2
Assume:
Complex A-B (ratio 1:1) strategy, ratio of 1 is created
MM Quote for leg A 4.20 (100) x 4.50 (100)
MM Quote for leg B 4.00 (100) x 4.10 (100)
A-B Derived BBO: 0.10 x 0.50
Complex Order to Buy A-B 10 @ net price of 0.45
System generates a Legging Order on leg A's bid for quantity of 10 @
4.45
System generates a Legging Order leg B's offer for quantity of 10 @
4.05
Single-leg order to sell 10 @ 4.45 on Leg A arrives

Execution:
Complex Order A-B Legging Order trades 10 with Single leg order on Leg
A @ 4.45
Complex Order A-B other leg trades 10 with MM Quote on Leg B @ 4.00

Removal of Legging Order:
    Legging Order that was generated for quantity of 10 on Leg B @ 4.05
is removed from the order book.
    Next, the Exchange proposes to add a new sentence to MRX Options 3,
Section 7(k)(3) which states, ``Two Legging Orders related to the same
Complex Options Order can be generated, and both can execute as part of
the execution of a particular Complex Options Order.'' As noted above,
two Legging Orders related to the same Complex Options Order can be
generated, and both can execute as part of the execution of a
particular Complex Options Order. This behavior differs from Phlx where
two legging orders may be generated, but only one of those can execute
as part of the execution of a particular complex order. The Exchange
believes that permitting both Legging Orders to execute as part of the
execution of a particular Complex Options Order will allow more Complex
Orders to execute while the price of the leg(s) will continue to be
bounded by the price limits described in MRX Options 3, Section 16(a).
By way of example,
Example #3
Assume:
Complex A-B strategy, ratio of 1 is created
Complex 2A-B strategy, ratio of 2:1 is created
MM Quote for leg A 4.20 (100) x 4.50 (100
MM Quote for leg B 4.00 (100) x 4.10 (100)
Complex BBO for A-B is 0.10 x 0.50
Complex BBO for 2A-B is 4.30 x 5.00

Leg Generation:
Complex Order to Buy A-B 10 @ 0.45
System generates a Legging Order on leg A's bid @ 4.45
System generates a Legging Order on leg B's offer @ 4.05

Execution:
Complex Order to Sell 2A-B 5 @ 4.85
2A-B Order trades with Legging Order on leg A 10 @ 4.45
2A-B Order trades with the Legging Order on leg B 5 @ 4.05
A-B trades with MM Quote on leg B 5 @ 4.00

    The Exchange proposes to renumber MRX Options 3, Section 7(k)(3) as
(k)(4) and title the paragraph, ``Removal of Generated Legging Orders''
to describe the contents of the paragraph. This paragraph describes
when a Legging Order is automatically removed from the single-leg limit
order book. The Exchange proposes to add a clause to the end of
proposed MRX Options 3, Section 7(k)(4)(i) so that the sentence would
state, ``A Legging Order is automatically removed from the single-leg
limit order book if: (i) the price of the Legging Order is no longer at
the displayed best bid or offer on the single-leg limit order book or
is at a price that locks or crosses the best bid or offer of another
exchange . . .''(emphasis added). Current MRX Options 3, Section
7(k)(1) already notes that a Legging Order will not be created at a
price that locks or crosses the best bid or offer of another exchange.
Adding the same rule text to proposed MRX Options 3, Section 7(k)(4)
will make clear that a Legging Order that locks or crosses an away
market would be removed from the limit order book.
    The Exchange proposes to add a clause to proposed MRX Options 3,
Section 7(k)(4)(ii) to provide that ``A Legging Order is automatically
removed from the single-leg limit order book if . . . (ii) execution of
the Legging Order would no longer achieve that net price of the Complex
Options Order when the other leg is executed against the best displayed
bid or offer on the single-leg limit order book, excluding other
Legging Orders'' (emphasis added). Phlx has a similar sentence in
Options 3, Section 7(b)(10)(4).\21\ A Legging Order is removed if the
BBO on the other leg worsens such that the Complex Order limit price
could no longer be achieved by trading with the quote, even if it could
be achieved by trading with a Legging Order generated by another
Complex Order. The Exchange would not rely solely on the price of
another

Legging Order when calculating the net price of the Complex Options
Order for purposes of determining at which price a Legging Order will
execute. In the below example this point is illustrated in that the
Legging Order could not rely on the 4.05 offer on Leg B derived from
the other Legging Order, rather it must rely on the 4.10 offer on Leg B
derived from the quote.
---------------------------------------------------------------------------

    \21\ Phlx Options 3, Section 7(b)(10)(4)provides, ``if execution
of the Legging Order would no longer achieve the net price of the
Complex Order when the other leg is executed against the Exchange's
best displayed bid or offer on the regular Limit Order book (other
than another Legging Order).'' This language is substantively the
same as MRX's proposed rule text.
---------------------------------------------------------------------------

Example #4
Assume:
Leg A is quoted 4.20 (100) x 4.25 (100)
Leg B is quoted 4.00 (100) x 4.05 (100)
Leg C is quoted 3.80 (100) x 3.90 (100)
Create A-B strategy, ratio of 1 with a cBBO for A-B is 0.15 x 0.25
Create B-C strategy, ratio of 1 with a cBBO for B-C is 0.10 x 0.30

Generation of Legging Orders:
Complex Order is entered to Buy B-C (Buy B, Sell C) 10 @ 0.20
System generates Legging Orders on Leg B's bid @ 4.00 & Leg C's offer @
3.85.
Complex Order is entered to Buy A-B (Buy A, Sell B) 10 @ 0.20
System generates Legging Orders on Leg A's bid @ 4.20 & Leg B's offer @
4.05

Removal of Legging Order:
Market Maker updates their quote for Leg B with a worsened offer: 4.00
(100) x 4.10 (100)

    Even though the displayed best offer for Leg B did not change in
price, it is derived from a Legging Order which is excluded from the
System's calculations in determining whether the net price of this
Complex Order can be achieved if its Legging Order trades. The Legging
Order at 3.85 on Leg C can no longer achieve the Complex Order's net
price were it to execute in addition to the quote for Leg B. The System
will remove the Legging Order at 3.85 on Leg C and will regenerate a
new Legging Order on Leg C at 3.90 and this would allow the Legging
Order to achieve the net price of the Complex Order if it trades along
with the quote on Leg B.
    The Exchange proposes to add a new section ``(v)'' to proposed MRX
Options 3, Section 7(k)(4) which states, ``A Legging Order is
automatically removed from the single-leg limit order book if . . . (v)
the price of the leg(s) of a Complex Options Order is outside of the
price limits described in current MRX Options 3, Section 16(a).'' This
limitation is currently described in MRX Options 3, Section 16(a) and
is being added to this order type to complete the list of cases where a
Legging Order would be removed from the order book in Options 3,
Section 7(k). Phlx has similar rule text in Options 3, Section
7(b)(10)(4).\22\
---------------------------------------------------------------------------

    \22\ Phlx Options 3, Section 7(b)(10)(4)states that ``A Legging
Order is automatically removed from the regular order book: . . .
(v) if the price of the Complex Order is outside the ACE Parameter
of paragraph (i).'' As noted above, Phlx and MRX have different
price parameters.
---------------------------------------------------------------------------

    The Exchange proposes to add new section ``(vi)'' to proposed MRX
Options 3, Section 7(k)(4) which states, ``A Legging Order is
automatically removed from the single-leg limit order book if . . .
(vi) the System receives a complex auction on either side in the
Complex Options Strategy, or the System receives a single-leg auction
on either side in any component of the Complex Options Strategy.'' Phlx
has similar language in Options 3, Section 7(b)(10)(4).\23\ As noted
above, the Exchange believes from a System processing and user
acceptance standpoint, the best practice is to remove the System-
generated Legging Order from the order book during the course of the
auction, as that time is minimal, then the System can attempt to re-
generate a Legging Order once the auction has concluded.
---------------------------------------------------------------------------

    \23\ Id.
---------------------------------------------------------------------------

    Finally, the Exchange proposes to add new section ``(vii)'' to
proposed MRX Options 3, Section 7(k)(4) which states, ``A Legging Order
is automatically removed from the single-leg limit order book if . . .
(vii) a Legging Order is generated by a different Complex Options Order
in the same leg at a better price or the same price for a participant
with a higher price priority.'' As noted in MRX Options 3, Section
7(k)(1), a Legging Order may be automatically generated at a price that
matches or improves upon the best displayed bid or offer on the single-
leg limit order book. The System removes the Legging Order because it
would have been at an inferior price. Phlx Options 3, Section
7(b)(10)(4) has similar language.\24\
---------------------------------------------------------------------------

    \24\ Phlx Options 3, Section 7(b)(10)(4) states that ``A Legging
Order is automatically removed from the regular order book: . . .
(vii) if a Legging Order is generated by a different Complex Order
in the same leg at a better price or the same price for a
participant with a higher price priority . . .''. While Phlx's
Options 3, Section 14 has priority overlays for different market
participants within its allocation model, whereas MRX does not have
similar priority overlays and the remainder of the language is not
necessary.
---------------------------------------------------------------------------

    As revised, the rule text proposed in MRX Options 3, Section
7(k)(4) is intended to cover all circumstances where a Legging Order
would be automatically removed from the single-leg limit order.
Options 3, Section 16
    The Exchange proposes to amend the language in MRX Options 3,
Section 16(a) related to price limits for Complex Orders. As provided
in MRX Options 3, Section 16(a)the legs of a complex strategy may be
executed at prices that are inferior to the prices available on other
exchanges trading the same options series. Notwithstanding the
foregoing, the System will not permit any leg of a complex strategy to
trade through the NBBO for the series or any stock component by a
configurable amount calculated as the lesser of (i) an absolute amount
not to exceed $0.10, and (ii) a percentage of the NBBO not to exceed
500%, as determined by the Exchange on a class, series or underlying
basis. A Member can also include an instruction on a Complex Order that
each leg of the Complex Order is to be executed only at a price that is
equal to or better than the NBBO on the opposite side for the options
series or any stock component, as applicable (``Do-Not-Trade-Through''
or ``DNTT''). The addition of the words ``on the opposite side'' is
intended to make clear the manner in which the System will handle a
DNTT instruction. That is, the System will check that the price is
equal to or better than the NBBO on the opposite side of the options
series or any stock component.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with section
6(b) of the Act,\25\ in general, and furthers the objectives of section
6(b)(5) of the Act,\26\ in particular, in that it is designed to
promote just and equitable principles of trade and to protect investors
and the public interest.
---------------------------------------------------------------------------

    \25\ 15 U.S.C. 78f(b).
    \26\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

Options 3, Section 7
    The Exchange's proposal to amend MRX Options 3, Section 7(k),
Legging Orders, is consistent with the Act because the proposal expands
the description of Legging Orders to describe in more detail the
current legging functionality, thereby increasing transparency with
respect to this order type. The proposed amendments reflect the way
Legging Orders work today. The Exchange is not amending its System
functionality with respect to Legging Orders, rather, the proposed rule
text is intended to be more descriptive and conform the level of detail
in the order type to Phlx Options 3, Section 7(b)(10)which describes
details of Phlx's legging orders and MIAX Rule 518(a)(10), which
describes derived orders.
    Specifying that Legging Orders, which are an individual component
of a Complex Options Order, are ``one leg of

a two-legged Complex Options Order'' and are not routable in the first
paragraph of MRX Options 3, Section 7(k) is consistent with the Act
because these terms better describe a Legging Order. Similarly,
specifying that Legging Orders will be Limit Orders with a TIF of Day
makes clear the way these orders are handled by the System. Legging
Orders are not based on Member instruction and are intended to
facilitate more interaction between the single-leg order book and the
Complex Order Book, resulting in increased execution opportunities and
better execution prices for Complex Orders and for orders resting on
the single-leg order book. For this reason, Legging Orders do not route
and have a TIF of Day to permit Members to interact with this order
type. The Exchange believes the amended rule text more accurately
describes a Legging Order and makes clear to Members the behavior of
Legging Orders. Also, capitalizing the terms ``Legging Order'' and
``Limit Order'' and referring to a ``single-leg'' order book throughout
MRX Options 3, Section 7(k) conforms terms with those of MRX Options 3,
Section 14, Complex Orders.
    The proposed text in the new second paragraph of MRX Options 3,
Section 7(k) makes clear the current System processing for Legging
Orders. Specifically, the proposed rule text makes clear that the
System will evaluate whether Legging Orders may be generated, which
occurs at the time a Complex Options Order enters the Complex Order
Book or after a time interval (to be determined by the Exchange, not to
exceed one second) \27\ when the NBBO or Exchange best bid or offer in
any component of a Complex Options Order changes. Further, the Exchange
proposes to state that it may determine to limit the number of Legging
Orders generated on an objective basis and may determine to remove
existing Legging Orders, and cease the creation of additional Legging
Orders, to maintain a fair and orderly market in times of extreme
volatility or uncertainty. Phlx has similar rule text in Phlx Options
3, Section 14(f)(iii)(C).\28\ The proposed limitation is consistent
with the Act because it assists the Exchange in managing the number of
Legging Orders generated to ensure that Legging Orders do not
negatively impact the Exchange's System capacity and performance so
that MRX may maintain a fair and orderly market in times of extreme
volatility or uncertainty. Of note, the Exchange does not limit the
generation of Legging Orders on the basis of the entering Member or the
Member category of the order (i.e., Professional or Priority Customer).
The Exchange proposes to limit the number of Legging Orders, remove
existing Legging Orders, and cease creation of additional Legging
Orders, in order to permit the Exchange to maintain a fair and orderly
market in times of extreme volatility or uncertainty. This discretion
is consistent with the Act because it assists the Exchange in managing
the number of Legging Orders generated to ensure that Legging Orders do
not negatively impact the Exchange's System capacity and performance.
---------------------------------------------------------------------------

    \27\ Today, the time interval is set to one hundred
milliseconds.
    \28\ Phlx's rule states, in part, in Options 3, Section
14(f)(iii)(C) that, ``. . . The System will evaluate the CBOOK when
a Complex Order enters the CBOOK and at a regular time interval, to
be determined by the Exchange (which interval shall not exceed 1
second), following a change in the national best bid and/or offer
(``NBBO'') or Phlx best bid and/or offer (``PBBO'') in any component
of a Complex Order eligible to generate Legging Orders, to determine
whether Legging Orders may be generated. The Exchange may determine
to limit the number of Legging Orders generated on an objective
basis and may determine to remove existing Legging Orders in order
to maintain a fair and orderly market in times of extreme volatility
or uncertainty.''
---------------------------------------------------------------------------

    The Exchange's proposal to provide that Legging Orders are treated
as having no Priority Customer capacity on the single leg order book,
regardless of being generated from Priority Customer Complex Options
Orders is consistent with the Act and the protection of investor and
the public interest. A Legging Order is handled in the same manner as
other orders on the single-leg order book except as otherwise provided
in MRX Options 3, Section 7(k), and is executed only after all other
executable orders and quotes at the same price are executed in full.
When a Legging Order is executed, the other component of the Complex
Order on the Complex Order Book will be automatically executed against
the best bid or offer on the Exchange. The Exchange believes that a
Legging Order, created for the execution of a Complex Order, should not
be afforded priority over resting orders and quotes on the single-leg
order book, and therefore has determined to protect the priority on the
single-leg order book of such resting orders and quotes. MIAX similarly
executes a derived order only after all other executable orders and
quotes at the same price are executed in full.\29\
---------------------------------------------------------------------------

    \29\ See MIAX Rule 518(a)(10)(iv). See also Securities Exchange
Act Release No. 79072 (October 7, 2016), 81 FR 71131 (October 14,
2016) (SR-MIAX-2016-26) (Order Approving a Proposed Rule Change to
Adopt New Rules to Govern the Trading of Complex Orders).
---------------------------------------------------------------------------

    The Exchange's proposal to amend MRX Options 3, Section 7(k)(1) to
make clear a Legging Order may be generated for each leg of a two-
legged Complex Order is consistent with the Act. Legging Orders may be
generated for each leg of a two-legged options orders with the same
quantity on both legs. Automatically generating Legging Orders promotes
just and equitable principles of trade because these orders will only
be executed after all other executable interest at the same price
(including non-displayed interest) is executed in full. This behavior
is consistent with the Act because it will provide additional execution
opportunities for Complex Orders, without negatively impacting any
investors in the single-leg market. In fact, the generation of Legging
Orders may enhance execution quality for investors in the single-leg
market by improving the price and/or size of the MRX BBO and by
providing additional execution opportunity for resting orders on the
single-leg order book. The generation of Legging Orders is fully
compliant with all regulatory requirements. In particular, Legging
Orders are firm orders that will be displayed at the MRX BBO. Also, a
Legging Order will be automatically removed if it is no longer
displayable at the MRX BBO or if the net price of the Complex Order can
no longer be achieved. Finally, the generation of Legging Orders is
limited in scope, as they may be generated only for Complex Options
Orders with two legs. Additionally, as noted herein, the Exchange will
closely manage and curtail the generation of Legging Orders to assure
that they do not negatively impact system capacity and performance.
Phlx's Legging Orders differ from MRX's Legging Orders in that, on
Phlx, two legging orders may be generated, but only one of those can
execute as part of the execution of a particular complex order.
    The addition of ``resting on the top of the Complex Order Book'' in
the first sentence of MRX Options 3, Section 7(k)(1) is consistent with
the Act because it is consistent with existing Legging Order
functionality that considers the best price on MRX's order book. This
addition will make clear that the priority of orders in the Complex
Order Book controls with respect to the generation of Legging Orders.
    The Exchange's proposal to amend the second sentence of MRX Options
3, Section 7(k)(1) to add ``excluding other Legging Orders'' to the end
of the sentence is consistent with the Act because it makes clear that
the price of a Legging Order is not considered in the BBO for purposes
of determining whether the net price of a Complex

Order could be achieved were it to generate a Legging Order.
    Finally, the Exchange's proposal to add a sentence to MRX Options
3, Section 7(k)(1) which states, ``Legging Orders will be generated and
executed in the minimum increment for that options series'' is
consistent with the Act because MRX Options 3, Section 3 describes the
minimum increments for options traded on MRX. Adding this rule text
will make clear that the minimum increment rule in Options 3, Section 3
is applicable to Legging Orders. MIAX Rule 518(a)(10)(iii) similarly
provides that MRX's derived orders will not be created at a price
increment less than the minimum established by Rule 510.\30\
---------------------------------------------------------------------------

    \30\ MIAX Rule 510 specifies the minimum increments for options
traded on MIAX.
---------------------------------------------------------------------------

    Amending proposed new paragraph MRX Options 3, Section 7(k)(2) to
note that a Legging Order will not be generated at a price that locks
or crosses the best bid or offer of another exchange is already
provided for in the last sentence of current Options 3, Section
7(k)(1). This concept is consistent with the Act in that the Exchange
will not trade through away markets as specified in Options 5, Sections
2 and 3 which describe order protection and locked and crossed markets
rules.
    Adding a provision to proposed new paragraph MRX Options 3, Section
7(k)(2) which states that a Legging Order will not be generated if
there is a complex auction on either side in the Complex Options
Strategy, or a single-leg auction on either side in any component of
the Complex Options Strategy, or a Posting Period in progress on the
same side in the series, pursuant to Options 3, Section 15 regarding
ATR is consistent with the Act. The Exchange believes from a System
processing and user acceptance standpoint, the best practice is to wait
for an auction in that options series to be complete, or for the ATR
Posting Period to complete, as that time is minimal. Phlx's legging
order rule in Options 3, Section 7(b)(10)(2) has the same restriction
as proposed to be added to MRX's Legging Orders rule.\31\
---------------------------------------------------------------------------

    \31\ Phlx Options 3, Section 7(b)(1)(2) provides that ``A
Legging Order will not be created . . .``(ii) if there is an auction
on either side or a Posting Period under Options 3, Section 15
regarding Acceptable Trade Range on the same side in progress in the
series.'' Phlx's rules describe an auction on either side of the
Legging Order while MRX's auction breaks down the auction into
either a complex auction or single-leg auction. Of note, Phlx's
Acceptable Trade Range rule has a Posting Period described in
Options 3, Section 15. MRX does have an Acceptable Trade Range rule
as well in Options 3, Section 15, but that rule differs from Phlx as
there is no Posting Period.
---------------------------------------------------------------------------

    Adding a provision to proposed new paragraph MRX Options 3, Section
7(k)(2) which states that a Legging Order will not be generated if the
price of the leg(s) of a Complex Options Order is outside of the price
limits described in Options 3, Section 16(a) is consistent with the
Act. Today, MRX Options 3, Section 16(a) would restrict the generation
of a Legging Order through price limits for Complex Orders, by adding
this rule text in Options 3, Section 7(k)(2) all limitations related to
the generation of Legging Orders will be memorialized in Options 3,
Section 7(k).\32\
---------------------------------------------------------------------------

    \32\ Phlx's rule similarly indicates that a Legging Order is
subject to certain price parameters by stating that a Legging Order
will not be generated if the price of the Complex Order is outside
of the ACE Parameter of paragraph in subparagraph (i) of Options 3,
Section 14. The ACE Parameter differs from the price limits
described in MRX Options 3, Section 16(a).
---------------------------------------------------------------------------

    Adding a provision to proposed new paragraph MRX Options 3, Section
7(k)(2) which states that a Legging Order will not be generated if
there is already a Legging Order in that options series on the same
side of the market at the same price is consistent with the Act. This
provision addresses a situation of overlapping Legging Orders and
Legging Order dependencies in other components. Phlx has a similar
sentence in Phlx Options 3, Section 7(b)(10)(2). Of note, the phrase
``unless it has priority based on the participant type, under existing
Exchange rules'' from Phlx Options 3, Section 7(b)(10)(2) is not being
added to MRX's Rule as Options 3, Section 10 which describes allocation
on the single-leg order book, because as stated in proposed MRX Options
3, Section 7(k), ``Legging Orders are treated as having no Priority
Customer capacity on the single-leg order book, regardless of being
generated from Priority Customer Complex Options Orders.'' The addition
of this rule text will make clear an existing limitation to the
generation of orders in Options 3, Section 7(k).
    Adding a provision to proposed new paragraph MRX Options 3, Section
7(k)(2) which states that a Legging Order will not be generated for
Complex Orders with two option legs, where both legs are buying or both
legs are selling and both legs are calls or both legs are puts, as
described in Options 3, Section 14(d)(3)(A) is consistent with the Act.
This limitation is already provided for in current MRX Options 3,
Section 14(d)(3)(A) and is being added to proposed new paragraph
Options 3, Section 7(k)(2) to provide Members with a complete list of
when Legging Orders will not be generated in Options 3, Section 7(k).
    Adding a provision to proposed new paragraph MRX Options 3, Section
7(k)(2) which states that a Legging Order will not be generated if the
Exchange has not opened; or a particular option series has not opened
or such options series is halted is consistent with the Act. Since a
complex strategy must be available for trading to generate a Legging
Order, the failure of an options series that is a component of the
complex strategy to open or a subsequent halt would cause Legging
Orders not to generate. Phlx has a similar rule in Phlx Options 3,
Section 7(b)(10)(1).
    Amending proposed MRX Options 3. Section 7(k)(3), similar to Phlx
Options 3, Section 7(b)(10)(3)to describe current System handling when
a Legging Order is executed and subsequently the other leg of the
Complex Order is automatically executed against the displayed best bid
or offer on the Exchange, and, therefore, any other Legging Order based
on that Complex Order is removed is consistent with the Act. This
example demonstrates that the Exchange will execute against the best
bid or offer on the Exchange and will remove Legging Orders. The
proposal to replace the word ``portion'' with ``leg'' will make the
rule text more explicit. Adding the phrase ``and any other Legging
order not executed as part of the Complex Options Order will be
removed'' to the end of the second sentence in proposed Options 3,
Section 7(k)(3) is consistent with the Act because the phrase will
provide additional information regarding the treatment of unexecuted
Legging Orders in Options 3, Section 7(k). Phlx has a substantively
similar sentence in Options 3, Section 7(b)(10)(3).\33\
---------------------------------------------------------------------------

    \33\ Phlx Options 3, Section 7(b)(10)(3)states, ``A Legging
Order is executed only after all other executable orders (including
any non-displayed size) and quotes at the same price are executed in
full. When a Legging Order is executed, the other leg of the Complex
Order will be automatically executed against the displayed best bid
or offer on the Exchange and any other Legging Order based on that
Complex Order will be removed.'' MRX explicitly states ``not
executed as part of the Complex Options Order'' where Phlx says
``based on that Complex Order.''
---------------------------------------------------------------------------

    Amending proposed MRX Options 3, Section 7(k)(3) to add a new
sentence to Options 3, Section 7(k)(3) which states, ``Two Legging
Orders related to the same Complex Options Order can be generated, and
both can execute as part of the execution of a particular Complex
Options Order'' is consistent with the Act. As noted above, two Legging
Orders related to the same Complex Options Order can be generated, and

both can execute as part of the execution of a particular Complex
Options Order. This behavior differs from Phlx where two legging orders
may be generated, but only one of those can execute as part of the
execution of a particular complex order. The Exchange believes that
permitting both Legging Orders to execute as part of the execution of a
particular Complex Options Order will allow more Complex Orders to
execute while the price of the leg(s) will continue to be bounded by
the price limits described in MRX Options 3, Section 16(a).
    Amending proposed MRX Options 3, Section 7(k)(4)(i) to state, ``A
Legging Order is automatically removed from the single-leg limit order
book if: (i) the price of the Legging Order is no longer at the
displayed best bid or offer on the single-leg limit order book or is at
a price that locks or crosses the best bid or offer of another exchange
. . .'' (emphasis added) is consistent with the Act. Current Options 3,
Section 7(k)(2) already notes that a Legging Order will not be created
at a price that locks or crosses the best bid or offer of another
exchange. Adding the same rule text to proposed Options 3, Section
7(k)(4) will make clear that a Legging Order that locks or crosses an
away market would be removed from the limit order book.
    Amending proposed MRX Options 3, Section 7(k)(4)(ii) to add a
clause to current Options 3, Section 7(k)(3) at (ii) to provide that
``A Legging Order is automatically removed from the single-leg limit
order book if . . . (ii) execution of the Legging Order would no longer
achieve that net price of the Complex Options Order when the other leg
is executed against the best displayed bid or offer on the single-leg
limit order book, excluding other Legging Orders'' (emphasis added) is
consistent with the Act. A Legging Order is removed if the BBO on the
other leg worsens such that the Complex Order limit price could no
longer be achieved by trading with the quote, even if it could be
achieved by trading with a Legging Order generated by another Complex
Order. Phlx has a similar sentence in Options 3, Section 7(b)(10)(4).
    Amending proposed MRX Options 3, Section 7(k)(4) to add a new
section ``(v)'' to this paragraph which states, ``A Legging Order is
automatically removed from the single-leg limit order book if . . . (v)
the price of the leg(s) of a Complex Options Order is outside of the
price limits described in current Options 3, Section 16(a)'' is
consistent with the Act. This limitation is currently described in MRX
Options 3, Section 16(a) and is being added to this order type to
complete the list of cases where a Legging Order would be removed from
the order book in Options 3, Section 7(k). Phlx has similar rule text
in Options 3, Section 7(b)(10)(4).
    Amending proposed MRX Options 3, Section 7(k)(4) to add a new
section ``(vi)'' to this paragraph which states, ``A Legging Order is
automatically removed from the single-leg limit order book if . . .
(vi) the System receives a complex auction on either side in the
Complex Options Strategy, or the System receives a single-leg auction
on either side in any component of the Complex Options Strategy'' is
consistent with the Act.
    As noted above, the Exchange believes from a System processing and
user acceptance standpoint, the best practice is to remove the System-
generated Legging Order from the order book during the course of the
auction, as that time is minimal, then the System can attempt to re-
generate a Legging Order once the auction has concluded. Phlx has
similar language in Options 3, Section 7(b)(10)(4).
    Amending proposed MRX Options 3, Section 7(k)(4) to add a new
section ``(vii)'' to this paragraph which states, ``A Legging Order is
automatically removed from the single-leg limit order book if . . .
(vii) a Legging Order is generated by a different Complex Options Order
in the same leg at a better price or the same price for a participant
with a higher price priority.'' As noted in proposed Options 3, Section
7(k)(1), a Legging Order may be automatically generated at a price that
matches or improves upon the best displayed bid or offer on the single-
leg limit order book. The System removes the Legging Order because it
would have been at an inferior price. Phlx Options 3, Section
7(b)(10)(4) has similar language.
Options 3, Section 16
    The Exchange's proposal to amend the language in MRX Options 3,
Section 16(a) related to price limits for Complex Orders is consistent
with the Act and protects investors and the general public by ensuring
that the DNTT instruction causes a Complex Order is to be executed only
at a price that is equal to or better than the NBBO on the opposite
side for the options series or any stock component. The proposed rule
text makes transparent the manner in which the System is currently
handling the DNTT instruction.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
Options 3, Section 7
    The Exchange's proposal to amend MRX Options 3, Section 7(k),
Legging Orders, does not impose an intra-market burden on competition
because all market participants may interact with Legging Orders on the
single-leg order book. The Exchange's proposal to amend MRX Options 3,
Section 7(k), Legging Orders, does not impose an inter-market burden on
competition because other options exchanges may offer Legging Orders
with similar functionality. Enhancing the description of the Legging
Orders functionality will allow MRX to compete effectively with other
options exchanges that offer similar functionality.
    The Exchange's proposal to limit the number of Legging Orders and
the ability to remove existing Legging Orders does not impose an intra-
market burden on competition because the functionality will permit the
Exchange to maintain a fair and orderly market in times of extreme
volatility or uncertainty. Further, the Exchange does not limit the
generation of Legging Orders on the basis of the entering Member or the
Member category of the order (i.e., Professional or Priority Customer).
The Exchange's proposal to limit the number of Legging Orders and the
ability to remove existing Legging Orders does not impose an inter-
market burden on competition because this discretion is consistent with
the treatment of Legging Orders on other options exchanges.\34\
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    \34\ See Phlx Options 3, Section 14(f)(iii)(C).
---------------------------------------------------------------------------

Options 3, Section 16
    The Exchange's proposal to amend the language in MRX Options 3,
Section 16(a) related to price limits for Complex Orders to specify
that a Complex Order must be executed at a price that is equal to or
better than the NBBO on the opposite side for the options series or any
stock component does not impose an intra-market burden on competition
because the System applies this price check to all Members executing
Complex Orders in the same manner. The Exchange's proposal to amend the
language in MRX Options 3, Section 16(a) does not impose an inter-
market burden on competition because any options exchange could offer
similar functionality.

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 Exchange has filed the proposed rule change pursuant to section
19(b)(3)(A)(iii) of the Act \35\ and Rule 19b-4(f)(6) thereunder.\36\
Because the foregoing proposed rule change does not: (i) significantly
affect the protection of investors or the public interest; (ii) impose
any significant burden on competition; and (iii) become operative for
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, it has become effective pursuant to
section 19(b)(3)(A)(iii) of the Act \37\ and subparagraph (f)(6) of
Rule 19b-4 thereunder.\38\
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    \35\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \36\ 17 CFR 240.19b-4(f)(6).
    \37\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \38\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \39\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \40\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has requested that the Commission waive the 30-day operative delay so
that the Exchange may immediately update its rules to provide greater
detail with respect to the generation, execution, and removal of
Legging Orders. The Commission believes that the proposed rule change
presents no novel issues and that waiver of the 30-day operative delay
is consistent with the protection of investors and the public interest.
Accordingly, the Commission hereby waives the operative delay and
designates the proposed rule change operative upon filing.\41\
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    \39\ 17 CFR 240.19b-4(f)(6).
    \40\ 17 CFR 240.19b-4(f)(6)(iii).
    \41\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is 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.

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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
file number SR-MRX-2023-22 on the subject line.

Paper Comments

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

All submissions should refer to file number SR-MRX-2023-22. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for website viewing and
printing in the Commission's Public Reference Room, 100 F Street NE,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-MRX-2023-22 and should be
submitted on or before January 2, 2024.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\42\
---------------------------------------------------------------------------

    \42\ 17 CFR 200.30-3(a)(12), (59).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-27164 Filed 12-11-23; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: July 21, 2010 (Volume 75, Number 139)]
[Notices]
[Page 42474-42475]
[DOCID:fr21jy10-105]

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary of Transportation

[DOT Docket No. DOT-OST-2010-0074]

The Future of Aviation Advisory Committee (FAAC) Subcommittee on
Labor and World-Class Workforce; Notice of Meeting

AGENCY: Office of the Secretary of Transportation, Department of
Transportation.

ACTION: The Future of Aviation Advisory Committee (FAAC) Subcommittee
on Labor and World-Class Workforce; Notice of meeting.

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SUMMARY: The Department of Transportation (DOT), Office of the
Secretary of Transportation, announces a meeting of the FAAC
Subcommittee on Labor and World-Class Workforce, which will be held via
teleconference at

(877) 336-1839, participant code 9757062. This notice announces the
date, time, and location of the meeting, which will be open to the
public. The purpose of the FAAC is to provide advice and
recommendations to the Secretary of Transportation to ensure the
competitiveness of the U.S. aviation industry and its capability to
manage effectively the evolving transportation needs, challenges, and
opportunities of the global economy. The Subcommittee is charged with
ensuring the availability and quality of a workforce necessary to
support a robust, expanding commercial aviation industry in light of
the changing socioeconomic dynamics of the world's technologically
advanced economies. Among other matters, the subcommittee will examine
certain issues affecting the future employment requirements of the
aviation industry: (1) The need for science, technology, engineering
and math (STEM) skills in the industry; (2) the creation of a culture
of dignity and respect in the workplace; and (3) the impact of Next
Generation Air Transportation System on various aviation workforces;
and (4) identifying labor and workforce subject-matter experts who
could brief the subcommittee and the FAAC at its August 25, 2010
meeting in Chicago, Illinois.

DATES: The meeting will be held on August 6, 2010, from 1 p.m. to 4
p.m. Eastern Daylight time.

ADDRESSES: The Labor/World-Class Workforce Subcommittee meeting will be
held via teleconference at<PHONE_NUMBER>, participant code 9757062.
    Public Access: The meeting is open to the public. (See below for
registration instructions.)
    Public Comments: Persons wishing to offer written comments and
suggestions concerning the activities of the FAAC or Labor/World-Class
Workforce Subcommittee should file comments in the Public Docket
(Docket Number DOT-OST-2010-0074 at http://www.regulations.gov) or
alternatively through the<EMAIL_ADDRESS>e-mail. If comments and
suggestions are intended specifically for the Subcommittee on Labor and
World-Class Workforce, the term ``Labor/Workforce'' should be listed in
the subject line of the message. To ensure such comments can be
considered by the subcommittee before its August 6, 2010, meeting,
public comments must be filed by 5 p.m. Eastern Daylight time on
Friday, July 30, 2010.

SUPPLEMENTARY INFORMATION:

Background

    Under section 10(a)(2) of the Federal Advisory Committee Act (5
U.S.C. App. 2), we are giving notice of a virtual meeting via
teleconference of the FAAC Subcommittee on Labor and World-Class
Workforce taking place on August 6, 2010, from 1 p.m. to 4 p.m. Eastern
Daylight time, via teleconference at<PHONE_NUMBER>, participant code
9757062. Background information may be found at the FAAC Web site,
located at http://www.dot.gov/faac/. The agenda includes_
    1. Discussion of topics offered by subcommittee members on the
subject of labor and improving the workforce of the aviation industry.
    2. Establishment of a plan and timeline for further subcommittee
work.
    3. Assignment of research projects to subcommittee members.
    4. Identification of priority issues for the third subcommittee
meeting.
    5. Identification of subject matter experts who could brief the
Subcommittee and the FAAC at its next meeting.

Registration

    The telephone conference can accommodate up to 100 members of the
public. Persons desiring to listen to the discussion must pre-register
through e-mail to<EMAIL_ADDRESS>The term ``Registration: Labor/
Workforce'' must be listed in the subject line of the message, and
access will be limited to the first 100 persons to pre-register and
receive a confirmation of their pre-registration. No arrangements are
being made for audio or video transmission or for oral statements or
questions from the public during the meeting. Minutes of the meeting
will be taken and will be posted on the FAAC Web site at http://
www.dot.gov/faac/.

Request for Special Accommodation

    The DOT is committed to providing equal access to this meeting for
all participants. If you need alternative formats or services because
of a disability, please send a request to<EMAIL_ADDRESS>with the term
``Special Accommodations'' listed in the subject line of the message by
close of business on Friday, July 30, 2010.

FOR FURTHER INFORMATION CONTACT: Terri L. Williams, Director, Center
for Organizational Excellence, Assistant Administrator for Human
Resources, Federal Aviation Administration, 800 Independence Avenue,
SW., Washington, DC 20591;<PHONE_NUMBER>, extension 7472; or Regis P.
Milan, Associate Director, Office of Aviation Analysis, U.S. Department
of Transportation; Room 86W309, 1200 New Jersey Avenue, SE.,
Washington, DC 20590;<PHONE_NUMBER>.

    Issued in Washington, DC, on July 16, 2010.
Pamela Hamilton-Powell,
Designated Federal Official, Future of Aviation Advisory Committee.
[FR Doc. 2010-17825 Filed 7-20-10; 8:45 am]
BILLING CODE P


[Federal Register Volume 83, Number 185 (Monday, September 24, 2018)]
[Notices]
[Page 48300]
[FR Doc No: 2018-20678]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. CP18-506-000]

Portland Natural Gas Transmission System; Notice of Schedule for
Environmental Review of the Portland Xpress Project

    On June 18, 2018, Portland Natural Gas Transmission System filed an
application in Docket No. CP18-506-000 requesting a Certificate of
Public Convenience and Necessity pursuant to Section 7(c) of the
Natural Gas Act to construct and operate certain natural gas pipeline
facilities in Cumberland and York Counties, Maine and Middlesex County,
Massachusetts. The proposed project is known as the Portland Xpress
Project (Project), and it would provide transportation of natural gas
to New England and Atlantic Canada markets by supplying 214,375 million
cubic feet per day (Mcf/d) of natural gas to New England on wholly-
owned PNGTS facilities and 22,339 Mcf/d on the PNGTS and Maritimes
jointly-owned facilities.
    On June 28, 2018, the Federal Energy Regulatory Commission
(Commission or FERC) issued its Notice of Application for the Project.
Among other things, that notice alerted agencies issuing federal
authorizations of the requirement to complete all necessary reviews and
to reach a final decision on a request for a federal authorization
within 90 days of the date of issuance of the Commission staff's
Environmental Assessment (EA) for the Project. This instant notice
identifies the FERC staff's planned schedule for the completion of the
EA for the Project.

Schedule for Environmental Review

    Issuance of EA--November 27, 2018.
    90-day Federal--Authorization Decision Deadline February 25, 2019.
    If a schedule change becomes necessary, additional notice will be
provided so that the relevant agencies are kept informed of the
Project's progress.

Project Description

    The Project would require modifications at the existing Westbrook
Compressor Station in Cumberland County, Maine; the addition of one new
6,300 horsepower gas-fired compression unit at the Eliot Compressor
Station in York County, Maine; and installation of miscellaneous
facilities at the Dracut Meter and Regulator Station in Middlesex
County, Massachusetts.

Background

    On July 12, 2018, the Commission issued a Notice of Intent to
Prepare an Environmental Assessment for the Proposed Portland Xpress
Project and Request for Comments on Environmental Issues (NOI). The NOI
was sent to affected landowners within 0.5 mile of the existing
facilities; federal, state, and local government agencies; elected
officials; environmental and public interest groups; Native American
tribes; other interested parties; and local libraries and newspapers.
In response to the NOI, the Commission received comments regarding
vegetated areas of concern at the Eliot Compressor Station and well
water testing.

Additional Information

    In order to receive notification of the issuance of the EA and to
keep track of all formal issuances and submittals in specific dockets,
the Commission offers a free service called eSubscription. This can
reduce the amount of time you spend researching proceedings by
automatically providing you with notification of these filings,
document summaries, and direct links to the documents. Go to
www.ferc.gov/docs-filing/esubscription.asp.
    Additional information about the Project is available from the
Commission's Office of External Affairs at (866) 208-FERC or on the
FERC website (www.ferc.gov). Using the ``eLibrary'' link, select
``General Search'' from the eLibrary menu, enter the selected date
range and ``Docket Number'' excluding the last three digits (i.e.,
CP18-506), and follow the instructions. For assistance with access to
eLibrary, the helpline can be reached at<PHONE_NUMBER>, TTY (202) 502-
8659, or at [email protected]. The eLibrary link on the FERC
website also provides access to the texts of formal documents issued by
the Commission, such as orders, notices, and rule makings.

    Dated: September 18, 2018.
Kimberly D. Bose,
 Secretary.
[FR Doc. 2018-20678 Filed 9-21-18; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register Volume 84, Number 94 (Wednesday, May 15, 2019)]
[Notices]
[Pages 21765-21766]
[FR Doc No: 2019-09975]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 10934-000]

Sugar River II, LLC; Notice Soliciting Pre-Application Documents
and Notices of Intent To File a Subsequent License Application

    On May 24, 2016, William B. Ruger, Jr., the then licensee for the
Sugar River II Project No. 10934 (project) filed a Notice of Intent
(NOI) to file an application for a subsequent license for the
project.\1\ The existing license for the project expires on April 30,
2021.\2\ On October 6, 2016, Commission staff approved the use of the
traditional licensing process to develop the license application, and
on October 7, 2016, Commission staff issued a public notice of Mr.
Ruger's NOI.
---------------------------------------------------------------------------

    \1\ 18 CFR 16.19(b) (2018).
    \2\ The license for the project was issued with an effective
date of May 1, 1991, for a term of 30 years. William B. Ruger, 55
FERC ] 62,118 (1991).
---------------------------------------------------------------------------

    Pursuant to section 16.20(c) of the Commission's regulations, an
existing licensee with a minor license not subject to sections 14 and
15 of the Federal Power Act must file an application for a subsequent
license at least 24 months prior to the expiration of the current
license, which with respect to the Sugar River II Project, was April
30, 2019.\3\ On April 30, 2019, the current licensee, Sugar River Hydro
II, LLC,\4\ filed a letter stating that it is not filing an application
to relicense the project.
---------------------------------------------------------------------------

    \3\ 18 CFR 16.20(c) (2018).
    \4\ On January 26, 2017, the Commission approved a transfer of
the license for the project from William B. Ruger to Sugar River
Hydro II, LLC. William B. Ruger, Jr. and Sugar River Hydro II, LLC,
158 FERC ] 62,053 (2017).
---------------------------------------------------------------------------

    Pursuant to section 16.25(a) of the Commission's regulations, when
an existing licensee, having previously filed an NOI to file a
subsequent license for a project, subsequently does not file a license
application, the Commission must solicit applications from potential
applicants other than the existing licensee.\5\ Any party interested in
filing a license application or exemption (i.e., a potential applicant)
for the project must file an NOI and pre-application document within 90
days from the date of this notice.\6\ While the integrated

licensing process is the default process for preparing an application
for a subsequent license, a potential applicant may request to use
alternative licensing procedures when it files its NOI.\7\ An
application for a subsequent license or exemption for the Sugar River
II Project No. 10934 must be filed within 18 months of the date of
filing the NOI.
---------------------------------------------------------------------------

    \5\ 18 CFR 16.25(a) (2018).
    \6\ Pursuant to section 16.24(b)(2) of the Commission's
regulations, the existing licensee, Sugar River Hydro II, LLC, is
prohibited from filing an application for a subsequent license or
exemption for the project, either individually or in conjunction
with other entities. 18 CFR 16.24(b)(2) (2018).
    \7\ 18 CFR 5.3(b) (2018).
---------------------------------------------------------------------------

    Questions concerning the process for filing an NOI should be
directed to Michael Watts at<PHONE_NUMBER> or<EMAIL_ADDRESS>
    Dated: May 8, 2019.
Kimberly D. Bose,
Secretary.
[FR Doc. 2019-09975 Filed 5-14-19; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register Volume 82, Number 238 (Wednesday, December 13, 2017)]
[Notices]
[Pages 58599-58600]
[FR Doc No: 2017-26777]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OPPT-2015-0436; FRL-9967-79-OEI]

Agency Information Collection Activities; TSCA Section 4 Test
Rules, Consent Orders, Enforceable Consent Agreements, Voluntary
Testing Agreements, Voluntary Data Submissions, and Exemptions From
Testing Requirements; Submitted to OMB for Review and Approval; Comment
Request

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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

SUMMARY: EPA has submitted the following information collection request
(ICR) to the Office of Management and Budget (OMB) for review and
approval in accordance with the Paperwork Reduction Act (PRA): ``TSCA
Section 4 Test Rules, Consent Orders, Enforceable Consent Agreements,
Voluntary Testing Agreements, Voluntary Data

Submissions, and Exemptions from Testing Requirements'' and identified
by EPA ICR No. 1139.11, OMB Control No. 2070-0033. The ICR, which is
available in the docket along with other related materials, provides a
detailed explanation of the collection activities and the burden
estimate that is only briefly summarized in this document. EPA has
addressed the comments received in response to the previously provided
public review opportunity issued in the Federal Register on March 15,
2016 (81 FR 13790). With this submission, EPA is providing an
additional 30 days for public review.

DATES: Comments must be received on or before January 12, 2018.

ADDRESSES: Submit your comments, identified by Docket ID number EPA-HQ-
OPPT-2015-0436, to both EPA and OMB as follows:
     To EPA online using http://www.regulations.gov (our
preferred method) or by mail to: EPA Docket Center, Environmental
Protection Agency, Mail Code 28221T, 1200 Pennsylvania Ave. NW,
Washington, DC 20460, and
     To OMB via email to [email protected]. Address
comments to OMB Desk Officer for EPA.
    EPA's policy is that all comments received will be included in the
public docket without change, including any personal information
provided, unless the comment includes profanity, threats, information
claimed to be Confidential Business Information (CBI), or other
information whose disclosure is restricted by statute.

FOR FURTHER INFORMATION CONTACT: Colby Lintner, Environmental
Assistance Division (7408M), Office of Pollution Prevention and Toxics,
Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington,
DC 20460-0001; telephone number:<PHONE_NUMBER>; email address: [email protected].

SUPPLEMENTARY INFORMATION:
    Docket: Supporting documents, including the ICR that explains in
detail the information collection activities and the related burden and
cost estimates that are summarized in this document, are available in
the docket for this ICR. The docket can be viewed online at http://www.regulations.gov or in person at the EPA Docket Center, West William
Jefferson Clinton Bldg., Rm. 3334, 1301 Constitution Ave. NW,
Washington, DC. The telephone number for the Docket Center is (202)
566-1744. For additional information about EPA's public docket, visit
http://www.epa.gov/dockets.
    ICR status: OMB approval for this ICR expired on September 1, 2016,
due to administrative error. This action is a request to reinstate OMB
approval for the information collection activities outlined in this
document. Under PRA, 44 U.S.C. 3501 et seq., an agency may not conduct
or sponsor, and a person is not required to respond to, a collection of
information, unless it displays a currently valid OMB control number.
The OMB control numbers are displayed either by publication in the
Federal Register or by other appropriate means, such as on the related
collection instrument or form, if applicable. The display of OMB
control numbers for certain EPA regulations is consolidated in 40 CFR
part 9.
    Abstract: Section 4 of the Toxic Substances Control Act (TSCA) is
designed to assure that chemicals that may pose serious risks to human
health or the environment undergo testing by manufacturers or
processors, and that the results of such testing are made available to
EPA. EPA uses the information collected under the authority of TSCA
section 4 to assess risks associated with the manufacture, processing,
distribution, use or disposal of a chemical, and to support any
necessary regulatory action with respect to that chemical.
    EPA must assure that appropriate tests are performed on a chemical
if it decides: (1) That a chemical being considered under TSCA section
4(a) may pose an ``unreasonable risk'' or is produced in
``substantial'' quantities that may result in substantial or
significant human exposure or substantial environmental release of the
chemical; (2) that additional data are needed to determine or predict
the impacts of the chemical's manufacture, processing, distribution,
use or disposal; and (3) that testing is needed to develop such data.
Rules and consent orders under TSCA section 4 require that one
manufacturer or processor of a subject chemical perform the specified
testing and report the results of that testing to EPA. TSCA section 4
also allows a manufacturer or processor of a subject chemical to apply
for an exemption from the testing requirement if that testing will be
or has been performed by another party. This information collection
applies to reporting and recordkeeping activities associated with the
information that EPA requires industry to provide in response to TSCA
section 4 test rules, consent orders, test rule exemptions and other
data submissions.
    Respondents/affected entities: Entities potentially affected by
this ICR are manufacturers, processors, importers, users, distributors
or disposers of one or more specified chemical substances.
    Respondent's obligation to respond: Mandatory (see 40 CFR part
790).
    Estimated number of respondents: 15 (total).
    Frequency of response: On occasion.
    Total estimated burden: 3,127 hours (per year). Burden is defined
at 5 CFR 1320.3(b).
    Total estimated cost: $9,232,952 (per year), includes $9,010,065
annualized capital investment or maintenance and operational costs.
    Changes in the estimates: There is a decrease of 626,766 hours in
the total estimated respondent burden compared with that identified in
the ICR currently approved by OMB. This decrease reflects EPA's
corrections to the previous renewal of this collection, plus reduced
levels of activity in test rules, methodological corrections and
updates, and requirements for electronic reporting of information. This
change is both the result of a program change (electronic reporting)
and an adjustment (all other factors).

Courtney Kerwin,
Director, Regulatory Support Division.
[FR Doc. 2017-26777 Filed 12-12-17; 8:45 am]
 BILLING CODE 6560-50-P