[Federal Register Volume 76, Number 117 (Friday, June 17, 2011)]
[Notices]
[Pages 35498-35503]
[FR Doc No: 2011-15015]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64652; File No. SR-NASDAQ-2011-075]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Regarding BONO SM and ITTO Market Data

June 13, 2011.
    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 May 31, 2011, The NASDAQ Stock Market LLC (``NASDAQ'') filed with
the Securities and Exchange Commission (``SEC'' or ``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by NASDAQ. 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

    NASDAQ proposes changes to add new Rule 7054 (NASDAQ Options Market
Data Distributor Fees) setting forth the fees for options market data
feeds known as Best of NASDAQ Options and NASDAQ ITCH to Trade Options.
    While the proposed fee changes are effective upon filing, the
Exchange has designated these changes to be operative on July 1, 2011.
    The text of the proposed rule change is available at http://www.nasdaq.cchwallstreet.com, at NASDAQ's principal office, 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, NASDAQ 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. NASDAQ 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 add new Rule 7054 setting forth the fees
for options market data feeds known as Best of NASDAQ Options (``BONO
SM'') and NASDAQ ITCH to Trade Options (``ITTO'').
Background
    The Exchange recently modified Chapter VI, Section 1(a)(3) of the
NASDAQ Options Market (``NOM'') Rules to specify the names and content
of the two data feeds that are the subject of this filing, BONO
SM and ITTO.\3\
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    \3\ Securities Exchange Act Release No. 63983 (February 25,
2011), 76 FR 12178 (March 4, 2011) (SR-NASDAQ-2011-032) (notice of
filing and immediate effectiveness to offer, among other things,
BONO SM and ITTO market data for free). The filing also
offered NASDAQ Options Depth at Price (DAP) and NASDAQ Options Net
Order Imbalance (NOIView) for free; this proposal does not affect
the DAP and NOIView data feeds. Chapter VI, Section 1(a)(3) states
generally that the NOM trading system includes data feeds that can
be used to display without attribution to Participants' MPIDs
Displayed Orders on both the bid and offer side of the market for
price levels then within the NASDAQ Options Market using the minimum
price variation applicable to that security.
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    ITTO is currently described in the Exchange's option rules at
subsection (a)(3)(B) of Chapter VI, Section 1 as a data feed that
provides quotation information for individual orders on the NOM book,
last sale information for trades executed on NOM, and Order Imbalance
Information as set forth in NOM Rules Chapter VI, Section 8. ITTO is
the options equivalent of the NASDAQ TotalView/ITCH data feed that
NASDAQ offers under NASDAQ Rule 7023 with respect to equities traded on
NASDAQ. As with TotalView, members use ITTO to ``build'' their view of
the NOM book by adding individual orders that appear on the feed, and
subtracting individual orders that are executed.
    BONO SM is currently described in subsection (a)(3)(A)
of Chapter VI, Section 1 as a data feed that provides the NOM Best Bid
and Offer (``NBBO'') and last sale information for trades executed on
NOM. The NBBO and last sale information are identical to the
information that NOM sends the Options Price Regulatory Authority
(``OPRA'') and which OPRA disseminates via the consolidated data feed
for options. BONO is the options equivalent of the NASDAQ Basic data
feed offered for equities under NASDAQ Rule 7047.
The Proposal
    The Exchange has been offering the BONO SM and ITTO
options market data feeds free of charge. The Exchange now proposes to
institute Rule 7054 setting forth fees for recipients of BONO
SM and ITTO data, with a free trial offer for certain data
recipients.
    The definitions of BONO SM and ITTO are established in
new Rule 7054. Proposed Rule 7054(d) states that BONO SM is
a data feed that provides the NBBO and last sale information for trades
executed on NOM. Proposed Rule 7054(e) states that ITTO is a data feed
that provides quotation information for individual orders on the NOM
book, last sale information for trades executed on NOM, and Order
Imbalance Information as set forth in NOM Rules Chapter VI, Section
8.\4\
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    \4\ The language of subsections (d) and (e) within Rule 7054 is
identical to the language that describes BONO SM and ITTO
in NOM option rules at Chapter VI, Section 1(a)(3)(A) and (B).
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    Using elements of the current fee structure for recipients of
NASDAQ TotalView and NASDAQ Basic,\5\ which are similar on the equities
side to BONO SM and ITTO, the Exchange proposes to charge
monthly fees for firms that are distributors of BONO SM and
ITTO market data. Proposed Rule 7054(b) states that a ``distributor''
of NASDAQ options market data is any entity that receives a feed or
data file of NASDAQ data directly from NASDAQ or indirectly through
another entity and then distributes the data either internally (within
that entity) or externally (outside that entity). Proposed subsection
(b) also states that all distributors would be required to execute a
NASDAQ distributor agreement. The amount of the monthly fees would
depend on whether a distributor is an ``Internal Distributor'' or
``External Distributor.'' \6\
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    \5\ See Rules 7023 and 7047.
    \6\ Thus, a distributor may pay either ``Internal Distributor''
or ``External Distributor'' fees.
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    An Internal Distributor is a firm that is permitted by agreement
with the Exchange to provide BONO SM and ITTO data to
internal users (i.e., users within their own organization). Under the
proposal, Internal Distributors of BONO SM and ITTO data
would be charged a monthly fee of $1,500 per firm.
    An External Distributor is a firm that is permitted by agreement
with the Exchange to provide BONO SM and ITTO data to both
internal users and to external users (i.e., users outside of their own
organization). External Distributors would be charged a monthly fee of
$2,000 per firm. The fee paid by an

External Distributor includes the Internal Distributor Fee. The fee
paid by an Internal Distributor or an External Distributor would allow
access to both the BONO SM and ITTO data feeds.
    The Exchange also proposes to assess user fees for BONO
SM and ITTO data on a per-user basis.\7\ These fees would
vary based on whether they are for Professional users or Non-
Professional users. Proposed Rule 7054 (f) states that the term ``Non-
Professional'' shall have the same meaning as in NASDAQ Rule
7011(b)(2). Rule 7011(b)(2) defines a ``Non-Professional'' as a natural
person who is neither: (A) Registered or qualified in any capacity with
the Commission, the Commodities Futures Trading Commission, any state
securities agency, any securities exchange or association, or any
commodities or futures contract market or association; (B) engaged as
an ``investment adviser'' as that term is defined in Section 201(11) of
the Investment Advisors Act of 1940 (whether or not registered or
qualified under that Act); nor (C) employed by a bank or other
organization exempt from registration under federal or state securities
laws to perform functions that would require registration or
qualification if such functions were performed for an organization not
so exempt.\8\ A Professional user is any user that is not a Non-
Professional.
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    \7\ While the user fees would be paid by firms (Internal
Distributors and External Distributors), some portion of the fees
may be passed through to users inside or outside the firms (that is,
to internal or external users).
    \8\ The Exchange believes that Non-Professional users of market
data, in contrast to Professional data users and distributors, often
tend to be individual consumers, smaller retail investors, and
public customers.
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    For BONO SM data, the proposed per-user fees are $5 per
Professional user; and $1 per Non-Professional user. For ITTO data, the
proposed per-user fees are $10 per Professional user; and $1 per Non-
Professional user.
    The Exchange notes that for many years, exchanges have engaged in
and the Commission has accepted the practice of price differentiation,
both in the context of market data as well as in the context of
executions. With respect to market data, NASDAQ and NYSE Euronext
(``NYSE'') in their capacities as network processors and exchanges have
differentiated in pricing between Professional and Non-Professional
market data users, often charging Professionals many times more than
Non-Professionals for using the same data. For example, NASDAQ
currently charges Non-Professional users (subscribers) $60 a month for
NASDAQ Depth Data received via a Managed Depth Solution and
Professional users $300 a month.\9\ Also, NASDAQ currently charges Non-
Professionals $15 per terminal for its NASDAQ Depth Data via a
standalone terminal, while Professional investors pay roughly five
times the Non-Professional rate.\10\ This reflects the value of the
service to various constituencies (i.e., lower prices are charged to
consumers with more elastic demand) and allows both types of investors
to contribute to the high fixed costs of operating an exchange
platform. The Exchange believes that this differentiation for
Professional and Non-Professional data usage, as the differentiation
for Professional and Non-Professional users proposed in this filing, is
completely consistent with past Commission precedent and economic
theory.\11\
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    \9\ See Rule 7026.
    \10\ See Rule 7023.
    \11\ In economic terms, charging lower fees to non-professional
consumers increases overall economic welfare by increasing output--
in this case, providing more data to more investors--and avoids two
equally undesirable alternatives: (i) requiring the firm to charge
uniformly high prices that constrict demand, or (ii) insisting on
uniformly low prices at marginal cost (potentially zero or close to
zero) that do not allow the firm to cover its fixed costs and
thereby lead to bankruptcy.
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    The Exchange also proposes to assess a monthly non-display
enterprise license fee. Proposed Rule 7054(c) states that an
``enterprise license'' entitles a distributor to provide BONO
SM or ITTO market data pursuant to this rule to an unlimited
number of non-display devices \12\ within the firm without any per user
charge. Under the proposal, distributors of BONO SM and ITTO
data may, if they choose to subscribe to a non-display enterprise
license, be charged a monthly enterprise license fee or $2,500.
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    \12\ Non-display devices do not graphically show (display) BONO
SM or ITTO market data but instead use the data for
performance of analytic or calculative functions (e.g. algorithms).
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    The non-display enterprise license is in addition to other
distributor fees. Thus, a firm that has a non-display enterprise
license could pay an Internal Distributor fee and distribute data to
limitless number of non-user display devices (devices within the firm)
pursuant to the license without incurring further fees for each
internal user. However, the enterprise license does not allow external
distribution without incurring an External Distributor fee and external
per user fees, if applicable under the circumstances.
    Finally, the Exchange proposes a 30-Day Free Trial Offer in
subsection (g) of Rule 7054.\13\ In particular, the 30-day waiver of
the user fees for NASDAQ options market data pursuant to the rule
extends to all new individual (non-firm) users (subscribers) and
potential new individual users. This fee waiver period will be applied
on a rolling basis, determined by the date on which a new individual
(non-distributor or firm) user or potential individual user is first
entitled by a distributor to receive access to NASDAQ options market
data. Subsection (g) provides that a distributor may only provide this
waiver to a specific individual user one time.
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    \13\ For other Exchange data products that offer a 30-day free
trial, see Rules 7023, 7044 and 7036. See also Rules 7049 and 7055.
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    The Exchange notes that the categories of BONO SM and
ITTO market data and fees compare favorably with similar products
offered by other markets such as International Stock Exchange
(``ISE''), NYSE, NASDAQ OMX PHLX (``Phlx''), and Chicago Board Options
Exchange (``CBOE''). For example, ISE offers market data products that
are similar to BONO SM: a data feed that shows the top of
the market entitled TOP Quote Feed,\14\ and a data feed that shows the
top five price levels entitled Depth of Market.\15\ NYSE offers a
market data product for Arca and Amex that is similar to BONO
SM and ITTO: a feed that shows top of book, last sale, and
depth of quote and is entitled NYSE Arca Book for Options.\16\ Phlx
offers a market data feed entitled TOPO that is similar to BONO
SM and shows orders and quotes at the top of the market, as
well as trades; and a TOPO Plus Orders feed that is similar to ITTO and
shows the data in the TOPO data feed as well as the depth of
orders.\17\ A subsidiary of CBOE for

which CBOE charges fees offers a market data feed that is similar to
BONO SM and shows BBO, last sale, and top of book data.\18\
And BATS offers Multicast PITCH, which is their depth of market and
last sale feed similar to ITTO.\19\
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    \14\ The ISE TOP Quote Feed has a monthly base access fee of
$5,000 applicable to professionals and non-professionals plus a $10
variable device fee for professionals and a no device fee for
internal use professionals; or a flat fixed enterprise fee of $2,500
for professionals and a $2,000 fee for internal use professionals.
The Exchange notes that the monthly fees for the ISE TOP Quote Feed
are higher than those proposed in this filing.
    \15\ The ISE Depth of Market Feed has a monthly base access fee
of $5,000 applicable to professionals and non-professionals plus a
$50 variable device fee for professionals and a $5 per device fee
for external distribution non-professionals; or a flat fixed
enterprise fee of $7,500 for internal use professionals, $12,500 for
external use professionals, and $10,000 for non-professionals. The
Exchange notes that the monthly fees for ISE Depth of Market are
higher than those proposed in this filing for a more robust product.
    \16\ The fee for NYSE Arca Book for Options is $750 per month.
    \17\ TOPO Plus Orders has a monthly fee of $4,000 for internal
distributors or $5,000 for external distributors plus a monthly fee
of $1 per non-professional subscribers (users) and $20 for
professional subscribers. The Exchange notes that the monthly fees
for TOPO Plus Orders are higher than those proposed in this filing.
See Securities Exchange Act Release No. 62194 (May 28, 2010), 75 FR
31830 (June 4, 2010) (SR-Phlx-2010-48)(order approving proposal
related to TOPO Plus Orders market data fees).
    \18\ The subsidiary is identified as Market Data Express, LLC
(``MDX'') by CBOE, which indicates that the feed will also provide
data regarding contingency orders and complex strategies. The
monthly fee charged by CBOE for the data is $3,500 plus a $25 per
user or device fee. See Securities Exchange Act Release No. 63997
(March 1, 2011), 76 FR 12388 (March 7, 2011) (SR-CBOE-2011-014)
(notice of filing and immediate effectiveness). In the filing, CBOE
specifically references as similar products the Phlx TOPO Plus
Orders feed and the ISE Depth of Market Feed.
    \19\ BATS offers Multicast PITCH without charge ostensibly to
attract order flow to that exchange.
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    The Exchange believes that the continued availability of BONO\SM\
and ITTO data feeds enhances transparency, fosters competition among
orders and markets, and enables buyers and sellers to obtain better
prices.
2. Statutory Basis
    NASDAQ believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\20\ in general and with
Sections 6(b)(5) of the Act,\21\ in particular in that it is designed
to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, to foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest.
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    \20\ 15 U.S.C. 78f.
    \21\ 15 U.S.C. 78f(b)(5).
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    In adopting Regulation NMS, the Commission granted self-regulatory
organizations like NASDAQ and broker-dealers increased authority and
flexibility to offer new and unique market data to the public. It was
believed that this authority would expand the amount of data available
to consumers, and also spur innovation and competition for the
provision of market data. NASDAQ believes that this proposal is in
keeping with those principles by promoting increased transparency
through the dissemination of more useful proprietary data and also by
clarifying its availability to various market participants.
    Additionally, NASDAQ has made a voluntary decision to make this
market data available. NASDAQ is not required by the Exchange Act in
the first instance to make the data available, unlike the best bid and
offer which must be made available under the Act. NASDAQ has chosen to
make the noted data available to improve market quality, to attract
order flow, and to increase transparency; and will continue to make the
data available until such time as NASDAQ changes its rule.
    NASDAQ believes that its ITTO and BONO,SM which includes
the NBBO and last sale information for trades executed on NOM in
BONO,SM are precisely the sort of market data products that
the Commission envisioned when it adopted Regulation NMS. The
Commission concluded that Regulation NMS--by lessening regulation of
the market in proprietary data--would itself further the Act's goals of
facilitating efficiency and competition:

    [E]fficiency is promoted when broker-dealers who do not need the
data beyond the prices, sizes, market center identifications of the
NBBO and consolidated last sale information are not required to
receive (and pay for) such data. The Commission also believes that
efficiency is promoted when broker-dealers may choose to receive
(and pay for) additional market data based on their own internal
analysis of the need for such data.\22\

    \22\ Securities Exchange Act Release No. 51808 (June 9, 2005),
70 FR 37496 (June 29, 2005).
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    By removing ``unnecessary regulatory restrictions'' on the ability
of exchanges to sell their own data, Regulation NMS advanced the goals
of the Act and the principles reflected in its legislative history. If
the free market should determine whether proprietary data is sold to
broker-dealers at all, it follows that the price at which such data is
sold should be set by the market as well.
    The recent decision of the United States Court of Appeals for the
District of Columbia Circuit in NetCoaliton v. SEC, No. 09-1042 (D.C.
Cir. 2010) upheld the Commission's reliance upon competitive markets to
set reasonable and equitably allocated fees for market data. ``In fact,
the legislative history indicates that the Congress intended that the
market system `evolve through the interplay of competitive forces as
unnecessary regulatory restrictions are removed' and that the SEC wield
its regulatory power `in those situations where competition may not be
sufficient,' such as in the creation of a `consolidated transactional
reporting system.' NetCoaltion, at 15 (quoting H.R. Rep. No. 94-229, at
92 (1975), as reprinted in 1975 U.S.C.C.A.N. 321, 323).
    The court agreed with the Commission's conclusion that ``Congress
intended that `competitive forces should dictate the services and
practices that constitute the U.S. national market system for trading
equity securities.' '' \23\
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    \23\ NetCoaliton v. SEC at p. 16.
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    The Court in NetCoalition, although upholding the Commission's
conclusion that competitive forces may be relied upon to establish the
fairness of prices, nevertheless concluded that the record in that case
did not adequately support the Commission's conclusions as to the
competitive nature of the market for NYSEArca's data product at issue
in that case. As discussed previously and explained below in NASDAQ's
Statement on Burden on Competition, however, NASDAQ believes that there
is substantial evidence of competition in the marketplace for data that
was not in the record in the NetCoalition case, and that the Commission
is entitled to rely upon such evidence in concluding that the fees
established in this filing are the product of competition, and
therefore in accordance with the relevant statutory standards.\24\
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    \24\ It should also be noted that Section 916 of Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010 (``Dodd-Frank
Act'') has amended paragraph (A) of Section 19(b)(3) of the Act, 15
U.S.C. 78s(b)(3) to make it clear that all exchange fees, including
fees for market data, may be filed by exchanges on an immediately
effective basis. Although this change in the law does not alter the
Commission's authority to evaluate and ultimately disapprove
exchange rules if it concludes that they are not consistent with the
Act, it unambiguously reflects a conclusion that market data fee
changes do not require prior Commission review before taking effect,
and that a formal proceeding with regard to a particular fee change
is required only if the Commission determines that it is necessary
or appropriate to suspend the fee and institute such a proceeding.
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    Competitive products similar to BONO SM and ITTO are, as
previously discussed, offered by other exchanges, albeit sometimes at
higher prices. ISE offers two data products similar to BONO
SM that are called TOP Quote Feed, Depth of Market and have
fees higher that those proposed in this filing.\25\ NYSE offers a
market data product similar to BONO SM and ITTO called NYSE
Arca Book of Options that has market data for NYSE Arca and NYAE Amex.
Phlx offers a market data product that is similar to ITTO.\26\ CBOE
offers a market data product that is similar to BONO.SM \27\
BATS offers a market data product similar to ITTO.

Moreover, the Exchange notes that, as a substitute for exchange data,
consolidated market data (e.g. last sale, NBBO, current quotes) are
also available from securities information processors such as OPRA.
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    \25\ For the fees related to ISE TOP Quote Feed and Depth of
Market, see supra notes 14 and 15.
    \26\ For the fees related to NYSE Arca Book of Options and Phlx
TOPO Plus Orders, see supra notes 16 and 17.
    \27\ For the fees related to the CBOE market data product, see
supra note 18.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    NASDAQ does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended. NASDAQ's ability to
price its BONO SM and ITTO products is constrained by (1)
Competition between exchanges and other trading platforms that compete
with each other in a variety of dimensions; (2) the existence of
inexpensive real-time consolidated data and free delayed consolidated
data; and (3) the inherent contestability of the market for proprietary
last sale data. NASDAQ believes that the Dodd-Frank Act amendments to
Section 19 materially alter the scope of the Commission's review of
future market data filings, by creating a presumption that all fees may
take effect immediately, without prior analysis by the Commission of
the competitive environment. Even in the absence of this important
statutory change, however, NASDAQ believes that a record may readily be
established to demonstrate the competitive nature of the market in
question.
    The market for market data products is competitive and inherently
contestable because there is fierce competition for the inputs
necessary to the creation of proprietary data and strict pricing
discipline for the proprietary products themselves. Numerous exchanges
compete with each other for listings, trades, and market data itself,
providing virtually limitless opportunities for entrepreneurs who wish
to produce and distribute their own market data. This proprietary data
is produced by each individual exchange, as well as other entities, in
a vigorously competitive market. Broker-dealers currently have numerous
alternative venues for their order flow, including ten self-regulatory
organization (``SRO'') markets, as well as internalizing broker-dealers
(``BDs'') and various forms of alternative trading systems (``ATSs'')
and electronic communication networks (``ECNs''). For example, the
Exchange has noted that numerous other U.S. options exchanges offer
market data products that are substantially similar to the ITTO and
BONO SM products, which the Exchange must consider in its
pricing discipline in order to compete for listings, trades, and the
market data itself.
    The large number of SROs, BDs, and ATSs that currently produce
proprietary data or are currently capable of producing it provides
further pricing discipline for proprietary data products. Each SRO,
ATS, and BD is currently permitted to produce proprietary data
products, and many currently do or have announced plans to do so,
including ISE, CBOE, NYSE (NYSE Amex and NYSE Arca), Phlx, and BATS.
Indeed, the Exchange has discussed a host of products that are similar
to ITTO and BONO,SM including: ISE's TOP Quote Feed and
Depth of Market feed; NYSE's Arca Book of Options feed; Phlx's TOPO
Plus Orders feed; BATS' Multicast PITCH feed; and CBOE's recently fee
liable data feed through MDX.
    Furthermore, any ATS or BD can combine with any other ATS, BD, or
multiple ATSs or BDs to produce joint proprietary data products.
Additionally, order routers and market data vendors can facilitate
single or multiple broker-dealers' production of proprietary data
products. The potential sources of proprietary products are virtually
limitless.
    The fact that proprietary data from ATSs, BDs, and vendors can by-
pass SROs is significant in two respects. First, non-SROs can compete
directly with SROs for the production and sale of proprietary data
products, as BATS and Arca did before registering as exchanges by
publishing proprietary book data on the Internet. Second, because a
single order or transaction report can appear in an SRO proprietary
product, a non-SRO proprietary product, or both, the data available in
proprietary products is exponentially greater than the actual number of
orders and transaction reports that exist in the marketplace.
    Market data vendors provide another form of price discipline for
proprietary data products because they control the primary means of
access to end users. Vendors impose price restraints based upon their
business models. For example, vendors such as Bloomberg and Reuters
that assess a surcharge on data they sell may refuse to offer
proprietary products that end users will not purchase in sufficient
numbers. Internet portals, such as Yahoo, impose a discipline by
providing only data that will enable them to attract ``eyeballs'' that
contribute to their advertising revenue. Retail broker-dealers, such as
Schwab and Fidelity, offer their customers proprietary data only if it
promotes trading and generates sufficient commission revenue. Although
the business models may differ, these vendors' pricing discipline is
the same: They can simply refuse to purchase any proprietary data
product that fails to provide sufficient value. NASDAQ and other
producers of proprietary data products must understand and respond to
these varying business models and pricing disciplines in order to
market proprietary data products successfully.
    In addition to the competition and price discipline described
above, the market for proprietary data products is also highly
contestable because market entry is rapid, inexpensive, and profitable.
The history of electronic trading is replete with examples of entrants
that swiftly grew into some of the largest electronic trading platforms
and proprietary data producers: Archipelago, Bloomberg Tradebook,
Island, RediBook, Attain, TracECN, BATS Trading and Direct Edge. A
proliferation of ATSs operate profitably with fragmentary shares of
consolidated market volume.
    Regulation NMS, by deregulating the market for proprietary data,
has increased the contestability of that market. While broker-dealers
have previously published their proprietary data individually,
Regulation NMS encourages market data vendors and broker-dealers to
produce proprietary products cooperatively in a manner never before
possible. Multiple market data vendors already have the capability to
aggregate data and disseminate it on a profitable scale, including
Bloomberg, and Thomson-Reuters.
    The court in NetCoalition concluded that the Commission had failed
to demonstrate that the market for market data was competitive based on
the reasoning of the Commission's NetCoalition order because, in the
court's view, the Commission had not adequately demonstrated that the
depth-of-book data at issue in the case is used to attract order flow.
NASDAQ believes, however, that evidence not before the court clearly
demonstrates that availability of depth data attracts order flow.
    Competition among platforms has driven NASDAQ continually to
improve its platform data offerings and to cater to customers' data
needs. For example, NASDAQ has been offering front end applications
such as its NetView and ITCH equity data products and ITTO and BONO
SM options data products to help customers utilize data. Yet
another example of the continuous effort by exchanges to improve
platform data is Phlx's TOPO Plus Orders and TOPO data products.

    Moreover, the Exchange believes that the decision whether and on
which platform to post an order will depend on the attributes of the
platform where the order can be posted, including the execution fees,
data quality and price and distribution of its data products. Without
trade executions, exchange data products cannot exist. Data products
are valuable to many end users only insofar as they provide information
that end users expect will assist them or their customers in making
trading decisions.
    In the recent filing approving the aforementioned Phlx TOPO Plus
Orders data feed,\28\ the Commission recognized the intense competition
among exchanges, particularly as related to options market data,
stating:
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    \28\ See Securities Exchange Act Release No. 62194 (May 28,
2010), 75 FR 31830 (June 4, 2010) (SR-Phlx-2010-48) (order approving
proposal related to TOPO Plus Orders market data fees).
---------------------------------------------------------------------------

    Phlx currently competes with seven other options exchanges for
order flow. Attracting order flow is an essential part of Phlx's
competitive success. If Phlx cannot attract order flow to its market,
it will not be able to execute transactions. If Phlx cannot execute
transactions on its market, it will not generate transaction revenue.
If Phlx cannot attract orders or execute transactions on its market, it
will not have market data to distribute, for a fee or otherwise, and
will not earn market data revenue and thus not be competitive with
other exchanges that have this ability. This compelling need to attract
order flow imposes significant pressure on Phlx to act reasonably in
setting its fees for Phlx market data, particularly given that the
market participants that will pay such fees often will be the same
market participants from whom Phlx must attract order flow. These
market participants include broker-dealers that control the handling of
a large volume of customer and proprietary order flow. Given the
portability of order flow from one exchange to another, any exchange
that sought to charge unreasonably high data fees would risk alienating
many of the same customers on whose orders it depends for competitive
survival.
    The primary competition and anti-trust regulator in the U.S., the
Antitrust Division of the U.S. Department of Justice (the ``Antitrust
Division''), has recognized the intensely competitive nature of
exchange market data. When analyzing competition among exchanges,
Assistant Attorney General Christine Varney recently stated:
    If the acquisition [of NYSE by NASDAQ and ICE] proceeded, it would
have eliminated substantial competition in the following ways * * *
NASDAQ and NYSE also compete head to head to offer real-time equity
data products. These data products include the best bid and offer of
every exchange and information on each equity trade, including the last
sale. Post-merger, the [new] firm would have the ability to raise the
cost of real-time proprietary equity data and the firm would be less
likely to develop new, innovative, real-time data products.\29\
---------------------------------------------------------------------------

    \29\ See Remarks as Prepared for Delivery by Assistant Attorney
General Christine Varney Regarding NASDAQ OMX Group Inc. and
Intercontinental Exchange Inc. Abandoning Their Bid for NYSE
Euronext (May 16, 2011).
---------------------------------------------------------------------------

    In establishing the price for the BONO SM and ITTO
products, NASDAQ considered the competitiveness of the market for data
and all of the implications of that competition. NASDAQ believes that
it has considered all relevant factors and has not considered
irrelevant factors in order to establish a fair, reasonable, and not
unreasonably discriminatory fees and an equitable allocation of fees
among all users. The existence of alternatives to ITTO and
BONO,SM including noted competitive products by other
exchanges and real-time consolidated last sale and NBBO data, free
delayed consolidated data, and even proprietary data from other
sources, ensures that NASDAQ cannot set unreasonable fees, or fees that
are unreasonably discriminatory, without losing business to these
alternatives.\30\ NASDAQ believes that this demonstrates the
consistency of these fees with applicable statutory standards.
---------------------------------------------------------------------------

    \30\ The Exchange notes also that competitiveness in the market
data field (as in other areas such as, for example, securities
offerings and pricing) encourages--and often requires--exchanges to
be innovative and forward-thinking in terms of market data product
offerings.
---------------------------------------------------------------------------

    Accordingly, NASDAQ does not believe that the proposed rule change
will result in any burden on competition that is not necessary or
appropriate in furtherance of the purpose of the Act.

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

    Written comments were neither solicited nor received.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\31\ 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.
---------------------------------------------------------------------------

    \31\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2011-075 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2011-075. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro/shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for Web site
viewing and printing in the Commission's Public Reference Room, 100 F
Street, NE., Washington, DC 20549, on official business days between
the hours of 10 a.m. and 3 p.m. Copies of such filing will also be
available for inspection and copying at the principal office of the
Exchange. All comments received will be posted without change; the
Commission does not edit personal

identifying information from submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File No. SR-NASDAQ-2011-075 and should be submitted on
or before July 8, 2011.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\32\
---------------------------------------------------------------------------

    \32\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-15015 Filed 6-16-11; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 82, Number 163 (Thursday, August 24, 2017)]
[Proposed Rules]
[Pages 40080-40081]
[FR Doc No: 2017-17755]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Docket No. FAA-2017-0145; Airspace Docket No. 17-AGL-4]

Proposed Amendment of Class E Airspace; Burlington, WI

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: This action proposes to modify Class E airspace extending
upward from 700 feet above the surface at Burlington Municipal Airport,
Burlington, WI. This action is necessary due to the decommissioning of
the Burbun VHF omnidirectional range (VOR), and cancellation of the VOR
approach procedure, and would enhance the safety and management of
instrument flight rules (IFR) operations at the airport, as the FAA
transitions to performance-based navigation as part of the Next
Generation Air Transportation System (NextGen) to accommodate new
standard instrument approach procedures for instrument flight rules
(IFR) operations at the airport. This action would also update the
geographic coordinates of the airport.

DATES: Comments must be received on or before October 10, 2017.

ADDRESSES: Send comments on this proposal to the U.S. Department of
Transportation, Docket Operations, West Building Ground Floor, Room
W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590; telephone
(202) 366-9826, or 1-800-647-5527. You must identify FAA Docket No.
FAA-2017-0145 and Airspace Docket No. 17-AGL-4, at the beginning of
your comments. You may also submit comments through the Internet at
http://www.regulations.gov. You may review the public docket containing
the proposal, any comments received, and any final disposition in
person in the Dockets Office between 9:00 a.m. and 5:00 p.m., Monday
through Friday, except Federal holidays.
    FAA Order 7400.11A, Airspace Designations and Reporting Points, and
subsequent amendments can be viewed online at http://www.faa.gov/air_traffic/publications/. For further information, you can contact the
Airspace Policy Group, Federal Aviation Administration, 800
Independence Avenue SW., Washington, DC 20591; telephone: (202) 267-
8783. The Order is also available for inspection at the National
Archives and Records Administration (NARA). For information on the
availability of FAA Order 7400.11A at NARA, call<PHONE_NUMBER>, or go
to http://www.archives.gov/federal_register/code_of_federal-regulations/ibr_locations.html.
    FAA Order 7400.11, Airspace Designations and Reporting Points, is
published yearly and effective on September 15.

FOR FURTHER INFORMATION CONTACT: Walter Tweedy, Federal Aviation
Administration, Operations Support Group, Central Service Center, 10101
Hillwood Parkway, Fort Worth, TX, 76177; telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Background

    The request to decommission the Burbun VOR was requested by the
Plans and Program office in the FAA's Central Service Center. The
Burbun VOR was one of the VORs on the list to be decommissioned within
the VOR Minimum Operating Network published in the Federal Register (81
FR 48694, July 26, 2016). As part of NextGen, the number of
conventional navaids would be reduced while more efficient area
navigation (RNAV) routes and procedures are implemented throughout the
National Airspace System.

Authority for This Rulemaking

    The FAA's authority to issue rules regarding aviation safety is
found in Title 49 of the United States Code. Subtitle I, Section 106
describes the authority of the FAA Administrator. Subtitle VII,
Aviation Programs, describes in more detail the scope of the agency's
authority. This rulemaking is promulgated under the authority described
in Subtitle VII, Part A, Subpart I, Section 40103. Under that section,
the FAA is charged with prescribing regulations to assign the use of
airspace necessary to ensure the safety of aircraft and the efficient
use of airspace. This regulation is within the scope of that authority
as it would amend Class E airspace extending upward from 700 feet above
the surface at Burlington Municipal Airport, Burlington, WI.

Comments Invited

    Interested parties are invited to participate in this proposed
rulemaking by submitting such written data, views, or arguments, as
they may desire. Comments that provide the factual basis supporting the
views and suggestions presented are particularly helpful in developing
reasoned regulatory decisions on the proposal. Comments are
specifically invited on the overall regulatory, aeronautical, economic,
environmental, and energy-related aspects of the proposal.
Communications should identify both docket numbers and be submitted in
triplicate to the address listed above. Commenters wishing the FAA to
acknowledge receipt of their comments on this notice must submit with
those comments a self-addressed, stamped postcard on which the
following statement is made: ``Comments to Docket No. FAA-2017- 0145/
Airspace Docket No. 17-AGL-4.'' The postcard will be date/time stamped
and returned to the commenter.
    All communications received on or before the specified closing date
for comments will be considered before taking action on the proposed
rule. The proposal contained in this notice may be changed in light of
the comments received. A report summarizing each substantive public
contact with FAA personnel concerned with this rulemaking will be filed
in the docket.

Availability of NPRMs

    An electronic copy of this document may be downloaded through the
Internet at http://www.regulations.gov. Recently published rulemaking
documents can also be accessed through the FAA's Web page at http://www.faa.gov/air_traffic/publications/airspace_amendments/.
    You may review the public docket containing the proposal, any
comments received, and any final disposition in person in the Dockets
Office (see the ADDRESSES section for the address and phone number)
between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal
holidays. An informal docket may also be examined during normal
business hours at the Federal Aviation Administration, Air Traffic
Organization, Central Service Center, Operations Support Group, 10101
Hillwood Parkway, Fort Worth, TX, 76177.

Availability and Summary of Documents for Incorporation by Reference

    This document proposes to amend FAA Order 7400.11A, Airspace
Designations and Reporting Points, dated August 3, 2016, and effective
September 15, 2016. FAA Order 7400.11A is publicly available as listed
in the ADDRESSES section of this document. FAA Order 7400.11A lists
Class A, B, C, D, and E airspace areas, air traffic service routes, and
reporting points.

The Proposal

    The FAA is proposing an amendment to Title 14 Code of Federal
Regulations (14 CFR) part 71 by modifying Class E airspace extending
upward from 700 feet above the surface within a 6.4-mile radius
(reduced from a 7.4-mile radius) of Burlington Municipal Airport,
Burlington, WI. Airspace redesign is necessary due to the
decommissioning of the Burbun VOR, cancellation of the VOR approach and
updating the geographic coordinates of the airport to coincide with the
FAA's aeronautical database. This action would enhance the safety and
management of the standard instrument approach procedures for (RNAV)
IFR operations at the airport.
    Class E airspace designations are published in paragraph 6005 of
FAA Order 7400.11A, dated August 3, 2016, and effective September 15,
2016, which is incorporated by reference in 14 CFR 71.1. The Class E
airspace designations listed in this document will be published
subsequently in the Order.

Regulatory Notices and Analyses

    The FAA has determined that this proposed regulation only involves
an established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current, is
non-controversial and unlikely to result in adverse or negative
comments. It, therefore: (1) Is not a ``significant regulatory action''
under Executive Order 12866; (2) is not a ``significant rule'' under
DOT Regulatory Policies and Procedures (44 FR 11034; February 26,
1979); and (3) does not warrant preparation of a regulatory evaluation
as the anticipated impact is so minimal. Since this is a routine matter
that will only affect air traffic procedures and air navigation, it is
certified that this proposed rule, when promulgated, would not have a
significant economic impact on a substantial number of small entities
under the criteria of the Regulatory Flexibility Act.

Environmental Review

    This proposal will be subject to an environmental analysis in
accordance with FAA Order 1050.1F, ``Environmental Impacts: Policies
and Procedures'' prior to any FAA final regulatory action.

List of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (air).

The Proposed Amendment

    Accordingly, pursuant to the authority delegated to me, the Federal
Aviation Administration proposes to amend 14 CFR part 71 as follows:

PART 71--DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND REPORTING POINTS

0
1. The authority citation for 14 CFR part 71 continues to read as
follows:

     Authority:  49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O.
10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.

Sec.  71.1  [Amended]

0
2. The incorporation by reference in 14 CFR 71.1 of FAA Order 7400.11A,
Airspace Designations and Reporting Points, dated August 3, 2016, and
effective September 15, 2016, is amended as follows:

Paragraph 6005 Class E Airspace Areas Extending Upward From 700
Feet or More Above the Surface of the Earth.

* * * * *

AGL WI E5 Burlington, WI [Amended]

Burlington Municipal Airport, WI
    (Lat. 42[deg]41'27'' N., long. 88[deg]18'17'' W.)

    That airspace extending upward from 700 feet above the surface
within a 6.4-mile radius of Burlington Municipal Airport.

    Issued in Fort Worth, Texas on August 16, 2017.
Walter Tweedy,
Acting Manager, Operations Support Group, ATO Central Service Center.
[FR Doc. 2017-17755 Filed 8-23-17; 8:45 am]
 BILLING CODE 4910-13-P


[Federal Register Volume 84, Number 97 (Monday, May 20, 2019)]
[Proposed Rules]
[Pages 22771-22774]
[FR Doc No: 2019-10344]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R04-OAR-2017-0758; FRL-9993-73-Region 4]

Air Plan Approval; Kentucky: Jefferson County Definitions and
Federally Enforceable District Origin Operating Permits

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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

SUMMARY: The Environmental Protection Agency (EPA) is proposing to
approve State Implementation Plan (SIP) revisions submitted under cover
letters dated December 21, 2016, and August 25, 2017, by the
Commonwealth of Kentucky, through the Energy and Environment Cabinet
(Cabinet). The proposed SIP revisions were submitted by the Cabinet on
behalf of the Louisville Metro Air Pollution Control District (LMAPCD
or District) and make amendments to Jefferson County's regulations
regarding definitions and the federally enforceable district origin
operating permit (FEDOOP) program. EPA is proposing to approve the
revisions modifying these regulations pursuant to the Clean Air Act
(CAA or Act).

DATES: Comments must be received on or before June 19, 2019.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-
OAR-2017-0758 at http://www.regulations.gov. Follow the online
instructions for submitting comments. Once submitted, comments cannot
be edited or removed from Regulations.gov. EPA may publish any comment
received to its public docket. Do not submit electronically any
information you consider to be Confidential Business Information (CBI)
or other information whose disclosure is restricted by statute.
Multimedia submissions (audio, video, etc.) must be accompanied by a
written comment. The written comment is considered the official comment
and should include discussion of all points you wish to make. EPA will
generally not consider comments or comment contents located outside of
the primary submission (i.e., on the web, cloud, or other file sharing
system). For additional submission methods, the full EPA public comment
policy, information about CBI or multimedia submissions, and general
guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: D. Brad Akers, Air Regulatory
Management Section, Air Planning and Implementation Branch, Air and
Radiation Division, U.S. Environmental Protection Agency, Region 4, 61
Forsyth Street, SW, Atlanta, Georgia 30303-8960. Mr. Akers can be
reached via telephone at<PHONE_NUMBER> or via electronic mail at
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. What action is EPA proposing?

    EPA is proposing to approve changes to the Jefferson County portion
of the Kentucky SIP that were provided to EPA through letters dated
December 21, 2016 and August 25, 2017.1 2 Both submittals
make changes to Regulation 1.02,--``Definitions,'' to incorporate
various new definitions and revise existing definitions. The August 25,
2017, submittal also makes changes to Regulation 2.17,--``Federally
Enforceable District Origin Operating Permits [FEDOOP],'' to make
clarifying and administrative edits to this portion of the minor source
operating permit program. The changes addressed in this proposed
rulemaking also correct typographical errors, make minor administrative
and clarifying edits, and

recodify sections of the existing rules. In this action, EPA is
proposing to approve these SIP revisions that make changes to Jefferson
County's definitions and FEDOOP regulations because they are consistent
with the CAA.
---------------------------------------------------------------------------

    \1\ EPA notes that the Agency received the SIP revision dated
August 25, 2017 on August 29, 2017.
    \2\ In 2003, the City of Louisville and Jefferson County
governments merged and the ``Jefferson County Air Pollution Control
District'' was renamed the ``Louisville Metro Air Pollution Control
District.'' However, each of the regulations in the Jefferson County
portion of the Kentucky SIP still has the subheading ``Air Pollution
Control District of Jefferson County.'' Thus, to be consistent with
the terminology used in the SIP, we refer throughout this notice to
regulations contained in the Jefferson County portion of the
Kentucky SIP as the ``Jefferson County'' regulations.
---------------------------------------------------------------------------

    At this time, EPA is not acting on the following changes included
under the same August 25, 2017, cover letter: Regulation 2.02,--``Air
Pollution Regulation Requirements and Exemptions''; and Regulation
2.03--``Permit Requirements--Non-Title V Construction and Operating
Permits and Demolition/Renovation Permits,'' renamed as ``Authorization
to Construct or Operate; Demolition/Renovation Notices and Permit
Requirements.'' EPA will address these changes to the Jefferson County
regulations governing minor source operating and construction
permitting and major source permitting in a separate action. EPA took
final action to approve the changes to Regulation 2.05,--``Prevention
of Significant Deterioration of Air Quality,'' included under the same
cover letter, on April 10, 2019 (84 FR 14268). The changes to
Regulation 3.01,--``Ambient Air Quality Standards,'' included under the
same cover letter, were approved on May 11, 2018 (83 FR 21907).

II. Analysis of State's Submittals

A. Regulation 1.02,--``Definitions''

1. August 25, 2017: Regulation 1.02, Version 13
    This SIP revision includes several changes to the definitions as
follows: (1) Adds a definition for ``administrative permit revision'';
(2) adds a definition for ``emissions unit'' or ``facility''; (3) adds
a definition for ``insignificant activity''; (4) adds a definition for
``minor permit revision''; (5) adds a definition for ``minor source'';
(6) adds a definition for ``regulated air pollutant''; (7) adds a
definition for ``responsible official''; (8) adds a definition for
``significant permit revision''; (9) adds a definition for ``trivial
activities''; (10) adds a definition for ``twelve month rolling
period'' or ``12-month rolling period''; and (11) makes other
clarifying and administrative edits to definitions throughout the
Section, including renumbering. Several of these definitions are
discussed in further detail below.
    The definitions of ``administrative permit revision,'' ``minor
permit revision,'' and ``significant permit revision'' included in
Regulation 1.02 generally mirror the federal provisions for
``administrative permit amendments,'' ``minor permit modification
procedures,'' and ``significant modification procedures'' at 40 CFR
70.7(d)(1), 70.7(e)(2)(i)(A), and 70.7(e)(4)(i), respectively, which
are part of the title V permitting program for major operating
permits.\3\ The District's added terms are used in SIP-approved
Regulation 2.07,--``Public Notification for Title V, PSD, and Offset
Permits; SIP Revisions; and Use of Emission Reduction Credits,'' which
sets forth permitting public participation procedures. EPA notes that
these public participation procedures are consistent with applicable
Federal requirements.
---------------------------------------------------------------------------

    \3\ LMAPCD has equivalent definitions in its non-SIP Regulation
2.16,--``Title V Operating Permits,'' which governs the title V
(part 70) operating permit program for major sources.
---------------------------------------------------------------------------

    The August 25, 2017, submittal also adds the definitions for
``insignificant activities'' and ``trivial activities.'' Specifically,
the submittal adds to Regulation 1.02 the definition of ``insignificant
activities'' to list activities already exempted from permitting
requirements under the current, SIP-approved version of Regulation
2.02, and to make that definition consistent with the District's
definitions for its title V permitting program at Regulation 2.16--
``Title V Operating Permits.'' The full list of insignificant
activities is included for SIP approval as Appendix A to Regulation
1.02. The submittal also adds the definition of ``trivial activities''
to provide the District with authority to maintain a list of
inconsequential activities.\4\ As discussed in greater detail in
Section II.B below, the effect of these revisions--in conjunction with
proposed revisions to Regulation 2.17--is to require that an applicant
for a FEDOOP must identify all insignificant activities in its permit
application, but to exempt trivial activities from the application
requirements.\5\ EPA believes these changes will not interfere with any
applicable requirement concerning attainment and reasonable further
progress (as defined in section 171 of the Act), or any other
applicable requirement.
---------------------------------------------------------------------------

    \4\ The District's current list of ``trivial activities'' is
available at https://louisvilleky.gov/sites/default/files/air_pollution_control_district/documents/forms/trivial.pdf, and is
included in the docket for this action.
    \5\ EPA notes that the terms ``insignificant activities'' and
``trivial activities'' are also referenced in proposed revisions to
Regulations 2.02 and 2.03, which are also included in the August 21,
2017, submittal. As explained above, EPA will act on those changes
in a separate action.
---------------------------------------------------------------------------

    The August 25, 2017, SIP revision also adds a definition for
``minor source'' at Regulation 1.02, Section 1.44. Under that
definition, minor sources are those sources that are subject to neither
Regulation 2.16 (for the title V program), nor Regulation 2.17 (for the
FEDOOP program), meaning the sources do not have potential to emit
(PTE) above the major source thresholds for criteria air pollutants and
their precursors nor hazardous air pollutants. This is considered a
``true'' minor source, whereas minor sources that would have a PTE
above major source thresholds except for some federally enforceable
limit, such as those sources subject to Regulation 2.17, are generally
referred to as ``synthetic minor sources.''
    The August 25, 2017, submittal also adds a definition for
``regulated air pollutant'' at Regulation 1.02, Section 1.69, which
mirrors the federal definition for the title V program at 40 CFR 70.2,
as included in Jefferson County's EPA-approved title V program at
Regulation 2.16. The definition included at Regulation 1.02 describes
which pollutants are regulated by the Act. This definition is also
largely consistent with the definition of ``regulated NSR pollutant''
in EPA's major source permitting regulations, but is not meant to
satisfy the same purpose.\6\
---------------------------------------------------------------------------

    \6\ EPA has proposed to approve the definition of ``regulated
NSR pollutant,'' as incorporated by reference in Regulation 2.05, as
of February 1, 2019. See 84 FR 1016.
---------------------------------------------------------------------------

    Under the current federally-approved SIP, the definition for
``regulated air pollutant'' is not referenced in any other regulation.
However, in its August 25, 2017, submittal, the District requests that
EPA incorporate a revision to Regulation 2.03 that would reference the
definition of ``regulated air pollutant'' for purposes of determining
whether a source qualifies for a combined construction and operation
permit. As explained above, EPA will act on changes to Regulation 2.03
in a later action and will analyze the definition of ``regulated air
pollutant'' as it applies to Regulation 2.03 at that time.
    The submittal also revises the definition for ``construction'' to
exclude the term ``modification.'' This change is made because the term
``modification'' is defined elsewhere in Regulation 1.02 and appears
redundant in the definition of ``construction.'' Moreover, because the
District's regulations otherwise prohibit both the construction and
modification of an affected facility without a permit, EPA does not
believe that this change will impact the implementation of the
District's minor NSR program.\7\
---------------------------------------------------------------------------

    \7\ The Jefferson County regulations includes separate
definitions of ``construction'' applicable to major sources. First,
the regulations include a definition at Regulation 2.04,--
``Construction or Modification of Major Sources in or Impacting upon
Non-Attainment Areas (Emission Offset Requirements)'' that is
consistent with the federal definition at 40 CFR
51.165(a)(1)(xviii). Additionally, the District incorporates by
reference the federal definition of ``construction,'' codified at 40
CFR 52.21(b)(8), at Regulation 2.05,--``Prevention of Significant
Deterioration of Air Quality'' for major NSR permitting.

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

    LMAPCD also adds a definition for ``emissions unit'' or
``facility'' and ``responsible official.'' These terms are consistent
with EPA's definitions for the title V program at 40 CFR 70.2 for
``emissions unit'' and ``responsible official,'' respectively. Finally,
there are several administrative edits made to definitions throughout
Regulation 1.02 to renumber existing definitions, correct typographical
errors, and make formatting changes. EPA preliminarily finds that the
changes to Regulation 1.02, as discussed herein, are consistent with
the CAA.
2. December 21, 2016 Submittal: Regulation 1.02, Version 14
    The December 21, 2016, submittal transmits Regulation 1.02, version
14 to EPA for approval.\8\ The only changes made to Regulation 1.02 in
this submittal are to incorporate changes to the definition of volatile
organic compounds (VOC), and to make other administrative edits to
definitions throughout the Section. Tropospheric ozone, commonly known
as smog, occurs when VOC and nitrogen oxides (NOX) react in
the atmosphere in the presence of sunlight. Because of the harmful
health effects of ozone, EPA and state governments implement rules to
limit the amount of certain VOC and NOX that can be released
into the atmosphere. VOC have different levels of reactivity; they do
not react at the same speed or do not form ozone to the same extent.
Section 302(s) of the CAA specifies that EPA has the authority to
define the meaning of ``VOC,'' and hence what compounds shall be
treated as VOC for regulatory purposes.
---------------------------------------------------------------------------

    \8\ The December 21, 2016, SIP revision includes version 14 of
Regulation 1.02, but was submitted before version 13 was submitted.
Regulation 1.02, version 13 was submitted on August 25, 2017. The
December 21, 2016, submittal includes two separate redline/strikeout
documents for Regulation 1.02. The first document, beginning on page
13 of the pdf submittal, shows all changes made in versions 11, 12,
13, and 14 of that rule. The second document, beginning on page 27
of the pdf submittal, shows only those changes made in version 14.
EPA previously approved versions 11 and 12. See 81 FR 87815
(December 6, 2016); 82 FR 35101 (July 28, 2017). Accordingly, we are
only proposing to approve changes included in versions 13 and 14 of
Regulation 1.02--as submitted on August 25, 2017, and December 21,
2016, respectively--in this action.
---------------------------------------------------------------------------

    EPA determines whether a given carbon compound has ``negligible''
reactivity by comparing the compound's reactivity to the reactivity of
ethane. It has been EPA's policy that compounds of carbon with
negligible reactivity need not be regulated to reduce ozone and should
be excluded from the regulatory definition of VOC. See 42 FR 35314
(July 8, 1977), 70 FR 54046 (September 13, 2005). EPA lists these
compounds in its regulations at 40 CFR 51.100(s) and excludes them from
the definition of VOC. The chemicals on this list are often called
``negligibly reactive.'' EPA may periodically revise the list of
negligibly reactive compounds to add or delete compounds.
    On November 29, 2004 (69 FR 69298), and August 1, 2016 (81 FR
50330), EPA issued final rules revising the definition of VOC by adding
new compounds, t-Butyl acetate and 1,1,2,2-Tetrafluoro-1-(2,2,2-
trifluoroethoxy) ethane (also denoted as HFE-347pcf2), to the list of
those considered to be negligibly reactive compounds. Subsequently, on
February 25, 2016 (81 FR 9339), EPA issued a final rule removing
recordkeeping, emissions reporting, photochemical dispersion modeling,
and inventory requirements for t-Butyl acetate. LMAPCD's SIP-approved
definition currently includes t-butyl acetate as a compound exempted
from the definition of VOC. The December 21, 2016, SIP revision removes
the recordkeeping, emissions reporting, photochemical dispersion
modeling, and inventory requirements for t-Butyl acetate, consistent
with EPA's February 25, 2016, final rule (81 FR 9339). The December 21,
2016, SIP revision also adds 1,1,2,2-Tetrafluoro-1-(2,2,2-
trifluoroethoxy) ethane, also known as HFE-347pcf2, to the list of
negligibly reactive compounds to be consistent with federal
regulations. These compounds are excluded from the VOC definition on
the basis that they make a negligible contribution to tropospheric
ozone formation.
    Pursuant to CAA section 110(l), the Administrator shall not approve
a revision of a plan if the revision would interfere with any
applicable requirement concerning attainment and reasonable further
progress, or any other applicable requirement of the Act. Jefferson
County's addition of exemptions from the definition of VOCs, and the
removal of recordkeeping, emissions reporting, photochemical dispersion
modeling, and inventory requirements for t-Butyl acetate are approvable
under section 110(l) because they reflect changes to federal
regulations based on findings that: The exempted compounds are
negligibly reactive; for t-Butyl acetate, that there was no evidence it
was being used at levels that cause concern for ozone formation; and,
the data that had been collected under the recordkeeping, emissions
reporting, photochemical dispersion modeling, and inventory
requirements had proven to be of limited utility in judging its
cumulative impact. For further details and justification, see EPA's
February 25, 2016 and August 1, 2016, rulemakings and the docket
information supporting those prior actions.

B. Regulation 2.17,--``Federally Enforceable District Origin Operating
Permit (FEDOOP) Program''

    The August 25, 2017, submittal makes several changes to Regulation
2.17,--``Federally Enforceable District Origin Operating Permits.''
This program is intended to regulate the issuance of non-title V
permits that include a federally enforceable permit condition, limit,
or provision. This is generally used for sources which would otherwise
trigger major source requirements, especially for title V purposes,
except for the voluntary application of federally enforceable
conditions that place limitations on emissions, materials, or
production rates such that the PTE is held below major source
applicability. The most significant changes included in the August 25,
2017, submittal are to include provisions for Section 4,--``Permit
Applications,'' to describe the required content of FEDOOP
applications, including the treatment of ``insignificant activities''
and ``trivial activities.''
    As noted in Section II.A of this proposed rulemaking, the
District's August 25, 2017, revision to Regulation 1.02 includes the
addition of definitions for ``insignificant activities'' and ``trivial
activities,'' as well as an Appendix listing applicable insignificant
activities. Here, the District also requests a change to its FEDOOP
rule at Regulation 2.17, Section 4.2, which requires permit applicants
to include insignificant activities in the FEDOOP application. Section
4.2 also allows the applicant to exclude information that is not needed
to determine: Which applicable requirements apply; whether the activity
complies with applicable requirements; and, whether the stationary
source is major. However, the applicant must include information
related to any applicable restriction on the size of production rate of
the affected facility. In addition to the requirements related to
insignificant activities, the District also adds Section 4.3, which
allows a permit applicant to omit trivial activities from the
application.
    EPA notes that the District's proposed changes at Regulation 2.17,
Section 4--as applicable to sources subject to FEDOOP requirements--are
consistent

with EPA's permit application requirements for title V sources. See 40
CFR 70.5(c). Specifically, as is the case under Regulation 2.17,
Section 4.2, 40 CFR 70.5(c) allows for the omission of insignificant
activities from a permit application, but still requires inclusion of
information related to an exemption for size or production rate, as
well as information needed to determine the applicability of any
applicable requirement. In addition, EPA believes the inclusion of
insignificant activities in the FEDOOP permit process is SIP-
strengthening, and that the exclusion of trivial activities will not
impact implementation of the FEDOOP program. For these reasons, EPA is
proposing to approve these changes.
    The August 25, 2017, submittal also includes a change at Regulation
2.17, Section 3.8 to include a 5-year term for which FEDOOPs remain in
effect. This time period is a clarifying amendment to inform the public
and facilities that FEDOOPs must be renewed every 5 years. This time
period is consistent with the federal title V permitting program.
Additionally, the addition of Section 3.8 includes a reference to
Section 6.2, which describes the permit shield, meaning that as long as
an administratively complete permit application has been received for
issuance or renewal, then the failure to have a permit is not a
violation of the rules until such a time that LMAPCD takes final action
on the permit application. This shield provision is not being modified
in this submittal, but the reference to it in Section 3.8 is
appropriate to acknowledge what permit terms and conditions remain in
effect while a permit renewal is being processed. The other changes to
Regulation 2.17 are ministerial in nature.

III. Incorporation by Reference

    In this document, EPA is proposing to include in a final EPA rule
regulatory text that includes incorporation by reference. In accordance
with requirements of 1 CFR 51.5, EPA is proposing to incorporate by
reference Jefferson County's Regulation 1.02,--``Definitions,'' version
14, state effective September 21, 2016, \9\ which makes various changes
to applicable definitions, and Regulation 2.17,--``Federally
Enforceable District Origin Operating Permits,'' version 4, February
15, 2017, which adds provisions describing permit application content
for these types of permits. EPA has made, and will continue to make,
these materials generally available through www.regulations.gov and at
the EPA Region 4 office (please contact the person identified in the
FOR FURTHER INFORMATION CONTACT section of this preamble for more
information).
---------------------------------------------------------------------------

    \9\ The District approved version 13 of Regulation 1.02 on July
2, 2013, and version 14 on September 21, 2016. The State forwarded
the regulations to EPA in the opposite order. Version 14 become
state effective on September 21, 2016, and version 13 became state
effective on February 15, 2017. Although the most recent State
approval adopts version 13, EPA understands the State's intent is to
incorporate version 14 of the regulation into the SIP. For that
reason, EPA is proposing to incorporate by reference Regulation 1.02
as of version 14's state-effective date, September 21, 2016. EPA may
include an explanation describing this situation in 40 CFR
52.920(c), Table 2 if the Agency finalizes the changes proposed in
this action.
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IV. Proposed Action

    EPA is proposing to approve changes to the Jefferson County portion
of the Kentucky SIP that were provided to EPA through two letters dated
December 21, 2016, and August 25, 2017, to change applicable
definitions and provisions for the FEDOOP program. These changes are
consistent with the CAA.

V. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP
submission that complies with the provisions of the Act and applicable
Federal regulations. See 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in
reviewing SIP submissions, EPA's role is to approve state choices,
provided that they meet the criteria of the CAA. This action merely
proposes to approve state law as meeting Federal requirements and does
not impose additional requirements beyond those imposed by state law.
For that reason, these proposed actions:
     Are not significant regulatory actions subject to review
by the Office of Management and Budget under Executive Orders 12866 (58
FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
     Are not Executive Order 13771 (82 FR 9339, February 2,
2017) regulatory actions because SIP approvals are exempted under
Executive Order 12866;
     Do not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Are certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     Do not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Do not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Are not economically significant regulatory actions based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     Are not significant regulatory actions subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Are not subject to requirements of section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the CAA; and
     Do not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).

The SIP is not approved to apply on any Indian reservation land or in
any other area where EPA or an Indian tribe has demonstrated that a
tribe has jurisdiction. In those areas of Indian country, the rule does
not have tribal implications as specified by Executive Order 13175 (65
FR 67249, November 9, 2000), nor will it impose substantial direct
costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon
moNOXide, Incorporation by Preference, Lead, Nitrogen
dioxide, Ozone, Particulate matter, Reporting and recordkeeping
requirements, Sulfur oxides, Volatile organic compounds.

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

    Dated: May 6, 2019.
Mary S. Walker,
Acting Regional Administrator, Region 4.
[FR Doc. 2019-10344 Filed 5-17-19; 8:45 am]
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[Federal Register Volume 79, Number 37 (Tuesday, February 25, 2014)]
[Notices]
[Page 10600]
[FR Doc No: 2014-03996]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Summary Notice No. PE-2014-14]

Petition for Exemption; Summary of Petition Received

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of petition for exemption received.

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SUMMARY: This notice contains a summary of a petition seeking relief
from specified requirements of 14 CFR. The purpose of this notice is to
improve the public's awareness of, and participation in, this aspect of
FAA's regulatory activities. Neither publication of this notice nor the
inclusion or omission of information in the summary is intended to
affect the legal status of the petition or its final disposition.

DATE: Comments on this petition must identify the petition docket
number and must be received on or before March 17, 2014.

ADDRESSES: You may send comments identified by Docket Number FAA-2014-
0052 using any of the following methods:
     Government-wide rulemaking Web site: Go to http://www.regulations.gov and follow the instructions for sending your
comments electronically.
     Mail: Send comments to the Docket Management Facility;
U.S. Department of Transportation, 1200 New Jersey Avenue SE., West
Building Ground Floor, Room W12-140, Washington, DC 20590.
     Fax: Fax comments to the Docket Management Facility at
202-493-2251.
     Hand Delivery: Bring comments to the Docket Management
Facility in Room W12-140 of the West Building Ground Floor at 1200 New
Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
    Privacy: We will post all comments we receive, without change, to
http://www.regulations.gov, including any personal information you
provide. Using the search function of our docket Web site, anyone can
find and read the comments received into any of our dockets, including
the name of the individual sending the comment (or signing the comment
for an association, business, labor union, etc.). You may review DOT's
complete Privacy Act Statement in the Federal Register published on
April 11, 2000 (65 FR 19477-78).
    Docket: To read background documents or comments received, go to
http://www.regulations.gov at any time or to the Docket Management
Facility in Room W12-140 of the West Building Ground Floor at 1200 New
Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Alphonso Pendergrass<PHONE_NUMBER>
    This notice is published pursuant to 14 CFR 11.85.

    Issued in Washington, DC, on February 20, 2014.
Lirio Liu,
Director, Office of Rulemaking.

Petition For Exemption

    Docket No.: FAA-2014-0052
    Petitioner: Sierra Pacific Airlines (SPA)
    Section of 14 CFR Affected: Sec.  121.1117(e)(1)
    Description of Relief Sought: Petitioner seeks relief from an
interim compliance date of December 26, 2014, to modify 50 percent of
its fleet to incorporate Ignition Mitigation Means or Flammability
Reduction Means as required by section 121.1117(e)(1).

[FR Doc. 2014-03996 Filed 2-24-14; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 79, Number 194 (Tuesday, October 7, 2014)]
[Notices]
[Pages 60552-60553]
[FR Doc No: 2014-23840]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73281; File No. SR-NYSEArca-2014-110]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change Amending Rule 6.2A To Authorize the Exchange To
Share Any User-Designated Risk Settings in Exchange Systems With the
Clearing Member That Clears Transactions on Behalf of the User

October 1, 2014.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on September 19, 2014, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

    The Exchange proposes to amend Rule 6.2A (Access to and Conduct on
OX) to authorize the Exchange to share any User-designated risk
settings in Exchange systems with the Clearing Member that clears
transactions on behalf of the User. The text of the proposed rule
change is available on the Exchange's Web site at www.nyse.com, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend Rule 6.2A (Access to and Conduct on
OX) to authorize the Exchange to share any User-designated risk
settings in Exchange systems with the Clearing Member that clears
transactions on behalf of the User.
    Rule 6.2A states that ``[u]nless otherwise provided in the Rules,
no one but a User shall effect any transaction on OX.'' \4\ OX is ``the
Exchange's electronic order delivery, execution and reporting system
for designated option issues through which orders and quotes of Users
are consolidated for execution and/or display.'' \5\ The Exchange
proposes to amend the current rule by adding the following sentence:
``The Exchange may share any User-designated risk settings in OX with
the Clearing Member that clears transactions on behalf of the User.''
\6\ A ``User'' is ``any OTP Holder, OTP Firm or Sponsored Participant
that is authorized to obtain access to OX pursuant to Rule 6.2A.'' \7\
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    \4\ See Rule 6.2A.
    \5\ See Rule 6.1A(13) [sic].
    \6\ See proposed Rule 6.2A.
    \7\ See Rule 6.1A(19) [sic].
---------------------------------------------------------------------------

    Each User that transacts through a Clearing Member on the Exchange
executes a Clearing Letter of Consent, which ``shall be deemed a letter
of guarantee, letter of authorization, or notice of consent pursuant to
NYSE Arca Rules and may be relied upon by NYSE Arca, Inc., the
[National Securities Clearing Corporation], the [Options Clearing
Corporation], and their respective members.'' \8\ The Exchange believes
that because Clearing Members that execute a Clearing Letter of Consent
guarantee all transactions of those Users, and therefore bear the risk
associated with those transactions, it is appropriate for Clearing
Members to have knowledge of what risk settings a User may utilize
within Exchange systems.
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    \8\ See NYSE Arca Options OTP Application, Section 8 (Clearing
Letter of Consent), available here, https://www.nyse.com/publicdocs/nyse/markets/arca-options/NYSE_Arca_Options_OTP_Firm_Application.pdf.
---------------------------------------------------------------------------

    At this time, the risk settings covered by this proposal are set
forth in Rule 6.40 (Risk Limitation Mechanism).\9\ Pursuant to Rule
6.40(b)-(d), Users may set certain risk control thresholds in the Risk
Limitation Mechanism, which are designed to mitigate the potential
risks of multiple executions against a User's trading interest that, in
today's highly automated and electronic trading environment, can occur
simultaneously across multiple series and multiple option classes. As
proposed, the Exchange may share a User's Risk Limitation Mechanism
settings with the Clearing Member that guarantees the User's
transactions on the Exchange, and therefore has a financial interest in
understanding the risk tolerance of the User.
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    \9\ The Exchange may adopt additional rules providing for User-
enabled risk settings that would be covered under this proposal. The
Exchange will announce via Trader Update any additional risk
settings (i.e., other than Rule 6.40(b)-(d)) that are adopted and
covered by proposed Rule 6.2A.
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    Because the Clearing Letter of Consent codifies relationships
between each User and Clearing Member, the Exchange is on notice of
which Clearing Members have relationships with which Users. The
proposed rule change would simply provide the Exchange with authority
to directly provide Clearing Members with information that may
otherwise be available to such Clearing Members by virtue of their
relationship with the respective Users.
2. Statutory Basis
    The statutory basis for the proposed rule change is Section 6(b)(5)
of the Securities Exchange Act of 1934 (the ``Act''), in general, and
furthers the objectives of Section 6(b)(5),\10\ which requires the
rules of an exchange to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system and, in general, to protect investors and the
public interest.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change removes
impediments to and perfects the mechanism of a free and open market by
codifying that the Exchange can directly

furnish to Clearing Members that guarantee that User's transactions on
the Exchange the User-designated risk settings in OX, including Risk
Limitation Mechanism settings, which are designed to mitigate the
potential risks of multiple executions against a User's trading
interest that, in today's highly automated and electronic trading
environment, can occur simultaneously across multiple series and
multiple option classes. The Exchange believes that the proposal is
consistent with the protection of investors and the public interests
because it will permit Clearing Members with a financial interest in a
User's risk settings to better monitor and manage the potential risks
assumed by Users with whom the Clearing Member has entered into a
Clearing Letter of Consent, thereby providing Clearing Members with
greater control and flexibility over setting their own risk tolerance
and exposure.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change is
not designed to address any competitive issues, but would provide
authority for the Exchange to directly share risk settings with
Clearing Members regarding the Users with whom the Clearing Member has
executed a Clearing Letter of Consent so the Clearing Member can better
monitor and manage the potential risks assumed by these Users, thereby
providing them with greater control and flexibility over setting their
own risk tolerance and exposure. Nonetheless, the proposal does not
pose an undue burden on non-Clearing Members because, unlike Clearing
Members, non-Clearing Members do not guarantee the execution of the
User transactions on the Exchange. The proposal is structured to offer
the same enhancement to all Clearing Members, regardless of size, and
would not impose a competitive burden on any participant.

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

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

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSEArca-2014-110 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-NYSEArca-2014-110. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549-1090, on official business days between the hours
of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be
available for inspection and copying at the principal office of the
Exchange. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
NYSEArca-2014-110, and should be submitted on or before October 28,
2014.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-23840 Filed 10-6-14; 8:45 am]
BILLING CODE 8011-01-P