[Federal Register: March 9, 2010 (Volume 75, Number 45)]
[Rules and Regulations]
[Page 10658-10664]
[DOCID:fr09mr10-4]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2009-0452; Directorate Identifier 2007-NM-326-AD;
Amendment 39-16223; AD 2010-05-13]
RIN 2120-AA64

Airworthiness Directives; The Boeing Company Model 737-100, -200,
-200C, -300, -400, and -500 Series Airplanes

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

ACTION: Final rule.

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SUMMARY: The FAA is superseding an existing airworthiness directive
(AD) that applies to all Model 737-100, -200, -200C, -300, -400, and -
500 series airplanes. That AD currently requires a one-time inspection
for scribe lines and cracks in the fuselage skin at certain lap joints,
butt joints, external repair doublers, and other areas; and related
investigative/corrective actions if necessary. This new AD expands the
area to be inspected and, for certain airplanes, requires earlier
inspections for certain inspection zones. This AD results from
additional detailed analysis of fuselage skin cracks adjacent to the
skin lap joints on airplanes that had scribe lines. The analysis
resulted in different inspection zones, thresholds and repetitive
intervals, and airplane groupings. We are issuing this AD to prevent
rapid decompression of the airplane due to fatigue cracks resulting
from scribe lines on pressurized fuselage structure.

DATES: This AD becomes effective April 13, 2010.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in the AD as of April 13,
2010.

ADDRESSES: For service information identified in this AD, contact
Boeing Commercial Airplanes, Attention: Data & Services Management,
P.O. Box 3707, MC 2H-65, Seattle, Washington 98124-2207; telephone 206-
544-5000, extension 1; fax<PHONE_NUMBER>; e-mail<EMAIL_ADDRESS>
Internet https://www.myboeingfleet.com.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://
www.regulations.gov; or in person at the Docket Management Facility
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains this AD, the regulatory evaluation,
any comments received, and other information. The address for the
Docket Office (telephone<PHONE_NUMBER>) is the Document Management
Facility, U.S. Department of Transportation, Docket Operations, M-30,
West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE.,
Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Wayne Lockett, Aerospace Engineer,
Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office
(ACO), 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone
(425) 917-6447; fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Discussion

    The FAA issued a notice of proposed rulemaking (NPRM) to amend 14
CFR part 39 to include an AD that supersedes AD 2006-07-12, Amendment
39-14539 (71 FR 16211, March 31, 2006). The existing AD applies to all
Model 737-100, -200, -200C, -300, -400, and -500 series airplanes. That
NPRM was published in the Federal Register on May 20, 2009 (74 FR
23664). That NPRM proposed to expand the area to be inspected and, for
certain airplanes, require earlier inspections for certain inspection
zones.

Comments

    We provided the public the opportunity to participate in the
development of this AD. We have considered the comments that have been
received on the NPRM.

Support for the NPRM

    Air Transport Association (ATA), on behalf of its members Alaska
Airlines and United Airlines (United), agrees with the assessment and
states that those two members will comply with the requirements of the
NPRM.

Request To Change Reference in Paragraph (g)(2) of the NPRM

    Boeing requests that we change paragraph (g)(2) of the NPRM to
refer to paragraph (i) of the NPRM instead of paragraph (h) of the
NPRM. Boeing notes that this section is in the Restatement of
Requirements of AD 2006-07-12, and making this change matches the
original AD requirements.
    We agree to change the reference from paragraph (h) to paragraph
(i) of this AD for the reasons stated previously.

Request To Clarify Area of Inspection in Paragraph (r) of the NPRM

    Boeing requests that we remove the parenthetical phrase ``(adjacent
to lap joints on skin panels that do not have bonded doublers)'' from
paragraph (r) of the NPRM. Boeing states that this statement is not
true in all cases. Boeing notes that in some cases the skins under the
lap joints in Zones 4 and 5 are bonded, but they are closed pockets
that are not chem-milled all the way through the thickness.
    We agree to remove the parenthetical phrase from paragraph (r) of
this AD for the reasons stated previously.

Request To Clarify Instructions for Inspections Under the Edge of
Hinges on the Main Cargo Door

    Boeing requests that we clarify the instructions for inspections
under the edge of hinges on the main cargo door. Boeing notes that
Boeing Alert Service Bulletin 737-53A1262, Revision 3, dated October
16, 2008, does not give specific instructions for inspections of scribe
lines found under the edge of the hinge on the main cargo door. Boeing
requests that we add a statement to provide instructions for
inspections in this area. Boeing states that the lap joint inspection
method specified in Boeing Alert Service Bulletin 737-53A1262, Revision
3, dated October 16, 2008, applies to the hinge detail.
    We agree that additional clarification is necessary. We have added
paragraph (s)(4)(iv) to the AD to provide additional instructions for
inspections along the lower edge of the main cargo door for the reasons
that the commenter provided. We also determined that this change does
not increase the economic burden on any operator or increase the scope
of the AD.

Request To Revise Paragraph (t) of the NPRM

    Lufthansa requests that we revise paragraph (t) of the NPRM.
Lufthansa requests that we clarify whether Zones 4 and 5 are derived
from the former Zones 1, 2, and 3 as identified in the initial release
of Boeing Alert Service Bulletin 737-53A1262, dated December 9, 2004.
Lufthansa requests that we accept inspections performed in Zones 1, 2,
and 3 in accordance with Boeing Alert Service Bulletin 737-53A1262,
dated December 9, 2004, as acceptable for compliance with the
requirements of paragraphs (q) and (r) of the NPRM.
    We agree. The new zones were created by moving specific areas from
the existing Zones 1, 2, and 3, and have been inspected as required by
AD 2006-07-12. We have revised paragraph (t) of this AD to give credit
for inspections accomplished before the effective date of this AD as
acceptable for compliance for the requirements of paragraphs (q) and
(r) of this AD.

Request To Provide an Additional Grace Period

    Lufthansa requests that we provide an additional grace period.
Lufthansa notes that areas that were shifted to a more critical zone
must be inspected within 4,500 flight cycles after the effective date
of the AD or before reaching the applicable zonal inspection threshold,
whichever occurs later. For any of the new critical zones that are
inspected in accordance with the requirements of the full Limited
Return to Service (LRTS) program because of previous scribe line
findings in the adjacent zone on the same lap splice between two butt
joints, Lufthansa requests that we extend the grace period to reach the
next heavy maintenance event to do the inspection. Lufthansa states
that this may be valid only for airplanes and areas where the
requirements of the full LRTS are applied.
    We disagree with the request to extend the grace period. The 4,500-
flight-cycle grace period applies only to the initial scribe line
inspections and does not apply to airplanes with scribe lines that are
currently being monitored in the LRTS program. Operators may request an
alternative method of compliance (AMOC) in accordance with the
requirements of paragraph (y) of this AD. We have not changed the AD in
regard to this issue.

Request To Clarify Procedures for Scribe Lines Outside Structural
Repair Manual (SRM) Limits

    Lufthansa requests that we clarify procedures for areas with scribe
lines that have become ``no zone'' (i.e., areas on the fuselage where
scribe line inspections are not required) and are inspected in
accordance with the LRTS program described in Boeing Alert Service
Bulletin 737-53A1262, Revision 3, dated October 16, 2008. Lufthansa
notes that the scribe damage in the ``no zone'' may be out of the SRM
limits and may need to be repaired before further flight because the
LRTS is no longer applicable.
    We disagree that additional procedures are necessary. Note 5 in
paragraph 3.A. in the Accomplishment Instructions of Boeing Alert
Service Bulletin 737-53A1262, Revision 3, dated October 16, 2008,
provides instructions on how to proceed with

scribe lines in any area that is not shown in Zone 1, 2, 3, 4, or 5. We
have not changed the AD in regard to this issue.

Request To Verify Inspection Threshold

    ATA, on behalf of its member United, requests that we verify the
inspection threshold. United notes that the inspection threshold
specified in FAA Approval Letter 120S-06-141 is the accumulation of
40,000 to 50,000 flight cycles. United states that neither the AMOC nor
Boeing Alert Service Bulletin 737-53A1262, Revision 3, dated October
16, 2008, requires this terminating inspection to be accomplished after
the accumulation of 40,000 flight cycles. United requests that we
verify that this inspection cannot be performed before the accumulation
of 40,000 flight cycles.
    We agree that clarification may be necessary, and we agree to
verify the threshold. This inspection cannot be performed for credit
before the accumulation of 40,000 total flight cycles. After reviewing
the scribe line damage adjacent to the lap joints, we determined that
the terminating inspection performed in accordance with Boeing Service
Bulletin 737-53-1179, Revision 2, dated October 25, 2006, mandated by
AD 2003-14-06, Amendment 39-13225 (68 FR 42956, July 21, 2003), should
be accomplished again in accordance with AD 2003-14-06 in the areas of
known scribe lines after the accumulation of 40,000 total flight
cycles. This inspection is designed to ensure that the underlying
substructure is intact and would have no effect on the LRTS program. We
have not changed the AD regarding this issue.

Request To Clarify Whether Inspection is Required

    ATA, on behalf of its member United, asks that we clarify whether
the inspection required by paragraph (g) of the NPRM is required if
operators have accomplished the terminating action in accordance with
AMOC 120S-06-209 for AD 2003-14-06.
    We agree that clarification is necessary. We have approved the
inspection methods specified in FAA Approval Letter 120S-06-209, dated
April 13, 2006, as an AMOC to the terminating action requirements of
paragraph (b) of AD 2003-14-06. Paragraph 12.a.(2), of Part 12 of the
Accomplishment Instructions of Boeing Service Bulletin 737-53A1262,
Revision 1, dated March 1, 2007; Revision 2, dated September 20, 2007;
and Revision 3, dated October 16, 2008; specify internal inspections in
accordance with Boeing Service Bulletin 737-53-1179, Revision 2, dated
October 25, 2001, except for airplanes inspected internally in
accordance with paragraph (b) of AD 2003-14-06. Inspections
accomplished in accordance with FAA Approval Letter 120S-06-209, dated
April 13, 2006, are approved as an acceptable alternative method of
compliance to the internal inspections specified in Paragraph 12.a.(2)
of Part 12 of the Accomplishment Instructions of Boeing Service
Bulletin 737-53A1262, Revision 1, dated March 1, 2007; Revision 2,
dated September 20, 2007; and Revision 3, dated October 16, 2008; and
required by paragraph (b) of AD 2003-14-06. We have added a reference
to previously approved AMOCs in paragraph (x) of this AD.

Request To Clarify Butt-to-Butt Inspection Requirements

    ATA, on behalf of its member United, requests that we clarify that
the butt-to-butt inspection is only for areas where a scribe line is
found within 0.063 inches of the upper skin areas in a zone.
    We agree that clarification may be necessary. Figure 128 of Boeing
Alert Service Bulletin 737-53A1262, Revision 3, dated October 16, 2008,
indicates that butt-to-butt inspections are required for all scribe
lines within 0.10 inch of the lap joint upper skin. We have not changed
the AD regarding this issue.

Request To Issue Similar Rulemaking

    The National Transportation Safety Board (NTSB) notes that while
the NPRM addresses scribe-type damage on Model 737 airplanes, it is
concerned that this type of damage is not limited to Model 737
airplanes. The NTSB urges that we conduct similar analyses and issue
similar rulemaking for other makes and models of airplanes.
    We acknowledge the NTSB's concerns. This issue is a long-term
durability issue that is not limited to any particular airplane model.
We are currently working to address scribe line issues on other
airplanes. The effect on each airplane model varies with each model's
design characteristics and the conditions under which they have been
operated. We have been in contact with other governing regulatory
agencies and manufacturers, and we may consider further rulemaking as a
result of these efforts. We have not changed the AD in regard to this
issue.

Explanation of Change Made to This AD

    Boeing Commercial Airplanes has received an Organization
Designation Authorization (ODA), which replaces their previous
designation as a Delegation Option Authorization (DOA) holder. We have
revised paragraph (y)(3) of this AD to delegate the authority to
approve an alternative method of compliance for any repair required by
this AD to the Boeing Commercial Airplanes ODA.

Conclusion

    We have carefully reviewed the available data, including the
comments that have been received, and determined that air safety and
the public interest require adopting the AD with the changes described
previously. We have determined that these changes will neither increase
the economic burden on any operator nor increase the scope of the AD.

Explanation of Change to Costs of Compliance

    Since issuance of the NPRM, we have increased the labor rate used
in the Costs of Compliance from $80 per work-hour to $85 per work-hour.
The Costs of Compliance information, below, reflects this increase in
the specified hourly labor rate.

Costs of Compliance

    There are about 2,685 airplanes of the affected design in the
worldwide fleet. The following table provides the estimated costs,
including the costs for the new inspection areas in Zones 4 and 5, for
U.S. operators to comply with this AD.

                                                        Estimated Costs Required by AD 2006-07-12
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                                                                                Number of U.S.-
                 Zone                                Action                 Work hours     Average labor     Cost per       registered      Fleet cost
                                                                                rate per hour     airplane        airplanes
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.....................................  Sealant removal.................              66             $85          $5,610             787      $4,415,070
                                        Inspection......................               4              85             340              87         267,580
2.....................................  Sealant removal.................              38              85           3,230             787       2,542,010
                                        Inspection......................              29              85           2,465             787       1,939,955

3.....................................  Sealant removal.................              88              85           7,480             787       5,886,760
                                        Inspection......................              38              85           3,230             787       2,542,010
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                                                   Estimated Costs Required by New Actions of This AD
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                                                                                Number of U.S.-
                 Zone                                Action                 Work hours     Average labor     Cost per       registered      Fleet cost
                                                                                rate per hour     airplane        airplanes
--------------------------------------------------------------------------------------------------------------------------------------------------------
4.....................................  Sealant removal.................              15             $85          $1,275             787     $ 1,003,425
                                        Inspection......................               1              85              85             787          66,895
5.....................................  Sealant removal.................              31              85           2,635             787       2,073,745
                                        Inspection......................               2              85             170             787         133,790
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Authority for This Rulemaking

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

Regulatory Findings

    We have determined that this AD will not have federalism
implications under Executive Order 13132. This AD will not have a
substantial direct effect on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government.
    For the reasons discussed above, I certify that this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866;
    (2) Is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979); and
    (3) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.
    We prepared a regulatory evaluation of the estimated costs to
comply with this AD and placed it in the AD docket. See the ADDRESSES
section for a location to examine the regulatory evaluation.

List of Subjects in 14 CFR Part 39

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

Adoption of the Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA amends 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority: 49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13  [Amended]

0
2. The Federal Aviation Administration (FAA) amends Sec.  39.13 by
removing amendment 39-14539 (71 FR 16211, March 31, 2006) and by adding
the following new airworthiness directive (AD):

2010-05-13 The Boeing Company: Amendment 39-16223. Docket No. FAA-
2009-0452; Directorate Identifier 2007-NM-326-AD.

Effective Date

    (a) This AD becomes effective April 13, 2010.

Affected ADs

    (b) This AD supersedes AD 2006-07-12, Amendment 39-14539.

Applicability

    (c) This AD applies to all The Boeing Company Model 737-100, -
200, -200C, -300, -400, and -500 series airplanes, certificated in
any category.

Subject

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

Unsafe Condition

    (e) This AD results from reports of fuselage skin cracks
adjacent to the skin lap joints on airplanes that had scribe lines.
Scribe line damage can also occur at many other locations, including
butt joints, external doublers, door scuff plates, the wing-to-body
fairing, and areas of the fuselage where decals have been applied or
removed. We are issuing this AD to prevent rapid decompression of
the airplane due to fatigue cracks resulting from scribe lines on
pressurized fuselage structure.

Compliance

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

Restatement of Requirements of AD 2006-07-12

Inspection

    (g) Do a detailed inspection for scribe lines and cracks in the
fuselage skin at certain lap joints, butt joints, external repair
doublers, and other areas, in accordance with the Accomplishment
Instructions of Boeing Alert Service Bulletin 737-53A1262, dated
December 9, 2004, except as provided by paragraphs (h), (k), (l),
(m), (n), and (o) of this AD. Except as required by paragraph (q) of
this AD, do the actions at the time specified in paragraph 1.E.,
``Compliance,'' of Boeing Alert Service Bulletin 737-53A1262, dated
December 9, 2004, except as required by paragraph (j) of this AD.
Acceptable inspection exemptions are described in paragraph 1.E.1.
of Boeing Alert Service Bulletin 737-53A1262, dated December 9,
2004.
    (1) If no scribe line is found, no further work is required by
this paragraph.
    (2) If any scribe line is found: Do all applicable investigative
and corrective actions at the time specified in paragraph 1.E. of
Boeing Alert Service Bulletin 737-53A1262, dated December 9, 2004,
by doing all applicable actions specified in Boeing

Alert Service Bulletin 737-53A1262, dated December 9, 2004, except
as required by paragraph (i) of this AD.

    Note 1: A detailed inspection is defined in Note 10 of Boeing
Alert Service Bulletin 737-53A1262, dated December 9, 2004, under
paragraph 3.A., ``General Information.'' Specific magnification
requirements may be specified in the steps of the Work Instructions.

Exceptions to and Clarification of Service Bulletin 737-53A1262
Procedures

    (h) Paragraph (g) of this AD requires accomplishment of Parts 1
through 11 of Boeing Alert Service Bulletin 737-53A1262, dated
December 9, 2004. Parts 12 and 13 of Boeing Alert Service Bulletin
737-53A1262, dated December 9, 2004, may be accomplished, if
applicable, to allow temporary return to service. This AD does not
require accomplishment of Part 14 of Boeing Alert Service Bulletin
737-53A1262, dated December 9, 2004, although the FAA-approved
procedures described in Part 14 are acceptable for continued
operation with scribe lines found before the applicable compliance
time.
    (i) If any scribe line or crack is found during any inspection
required by paragraph (g) of this AD, and Boeing Alert Service
Bulletin 737-53A1262, dated December 9, 2004, specifies to contact
Boeing for appropriate action: Before further flight, inspect or
repair scribe lines and repair cracks using a method approved in
accordance with the procedures specified in paragraph (y) of this
AD.
    (j) Where Boeing Alert Service Bulletin 737-53A1262, dated
December 9, 2004, specifies a compliance time after the issuance of
that service bulletin, this AD requires compliance within the
specified compliance time after May 5, 2006 (the effective date of
AD 2006-07-12).
    (k) Certain figures are incorrectly identified in Boeing Alert
Service Bulletin 737-53A1262, dated December 9, 2004. The figure
cited in Part 8, step 3, should be Figure 39, not Figure 38. The
figure cited in Part 9, step 4, should be Figure 38, not Figure 39.
    (l) If the operator's records show that the airplane has never
been stripped and repainted under the dorsal fin fairing since
delivery from The Boeing Company, then this AD does not require
inspections of the butt joint, lap joint, and repair, as specified
in paragraph (g) of this AD, in the areas under the dorsal fin
fairing.
    (m) Figure 37 of Boeing Alert Service Bulletin 737-53A1262,
dated December 9, 2004, defines ``Restricted Zones'' at door cutouts
as the only affected structure. Paragraph (g) of this AD considers
this area to also include Zone 1B.
    (n) In Figure 1, sheets 2 and 3, of Boeing Alert Service
Bulletin 737-53A1262, dated December 9, 2004, the first condition
for the initial compliance threshold for Areas B, C, and E is for
areas where the cutout modification shown in Boeing Service Bulletin
737-53A1177 was accomplished. Paragraph (g) of this AD considers
this condition to also include Zone 1B.
    (o) In Figure 1, sheets 2 and 3, of Boeing Alert Service
Bulletin 737-53A1262, dated December 9, 2004, the second condition
for the initial compliance threshold for Areas B, C, and E is for
areas where the cutout modification shown in Boeing Service Bulletin
737-53A1177 was not accomplished. Paragraph (g) of this AD considers
this condition to apply only to Zone 1A.

Reporting Requirement

    (p) For airplanes on which inspections have been done in
accordance with Boeing Alert Service Bulletin 737-53A1262, dated
December 9, 2004: At the applicable time specified in paragraph
(p)(1) or (p)(2) of this AD, submit a report of positive findings of
cracks found during the inspection required by paragraph (g) of this
AD to the Boeing Commercial Airplane Group, P.O. Box 3707, Seattle,
Washington 98124-2207. Alternatively, operators may submit reports
to their Boeing Company field service representatives. The report
shall contain, as a minimum, the following information: Airplane
serial number, flight cycles at time of discovery, location(s) and
extent of positive crack findings. Under the provisions of the
Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.), the Office
of Management and Budget (OMB) has approved the information
collection requirements contained in this AD and has assigned OMB
Control Number 2120-0056.
    (1) If the inspection was done before May 5, 2006: Send the
report within 30 days after May 5, 2006.
    (2) If the inspection was done after May 5, 2006: Send the
report within 30 days after the inspection is done.

New Requirements of This AD

Inspection

    (q) As of the effective date of this AD, the actions for Zones
1, 2, and 3, as specified in paragraph (g) of this AD, must be done
in accordance with the Accomplishment Instructions of Boeing Alert
Service Bulletin 737-53A1262, Revision 3, dated October 16, 2008,
and at the applicable times specified in paragraph 1.E.,
``Compliance,'' of Boeing Alert Service Bulletin 737-53A1262,
Revision 3, dated October 16, 2008, except as specified in paragraph
(s) of this AD.

    Note 2:  Paragraph 1.E.5. of Boeing Alert Service Bulletin 737-
53A1262, Revision 3, dated October 16, 2008, provides a grace period
for airplanes that have exceeded the revised thresholds.

Inspection of Zones 4 and 5

    (r) Do a detailed inspection for scribe lines and cracks in
Zones 4 and 5, as specified in Boeing Alert Service Bulletin 737-
53A1262, Revision 3, dated October 16, 2008. Except as provided by
paragraph (s) of this AD, do the actions in accordance with the
Accomplishment Instructions of Boeing Alert Service Bulletin 737-
53A1262, Revision 3, dated October 16, 2008, and at the applicable
time specified in paragraph 1.E., ``Compliance,'' of Boeing Alert
Service Bulletin 737-53A1262, Revision 3, dated October 16, 2008, or
within 4,500 flight cycles after the effective date of this AD,
whichever occurs later.
    (1) If no scribe line or crack is found: No further work is
required by this paragraph.
    (2) If any scribe line or crack is found: Do all applicable
investigative and corrective actions at the time specified in
paragraph 1.E. of Boeing Alert Service Bulletin 737-53A1262,
Revision 3, dated October 16, 2008, by doing all applicable actions
specified in the Accomplishment Instructions of Boeing Alert Service
Bulletin 737-53A1262, Revision 3, dated October 16, 2008, except as
required by paragraph (s)(1) of this AD.

Exceptions to Specifications of Boeing Alert Service Bulletin 737-
53A1262, Revision 3, dated October 16, 2008

    (s) The following exceptions to Boeing Alert Service Bulletin
737-53A1262, Revision 3, dated October 16, 2008, apply to this AD:
    (1) If any scribe line or crack is found during any inspection
required by this AD, and Boeing Alert Service Bulletin 737-53A1262,
Revision 3, dated October 16, 2008, specifies to contact The Boeing
Company for appropriate action: Before further flight, inspect or
repair scribe lines and repair cracks using a method approved in
accordance with the procedures specified in paragraph (y) of this
AD.
    (2) Where Boeing Alert Service Bulletin 737-53A1262, Revision 3,
dated October 16, 2008, specifies a compliance time after the
issuance of that service bulletin, this AD requires compliance
within the specified compliance time after the effective date of
this AD.
    (3) If the operator's records show that the airplane has never
been stripped and repainted under the dorsal fin fairing since
delivery from The Boeing Company, then this AD does not require
inspections of the butt joint, lap joint, and repair, as specified
in paragraphs (g), (q), and (r) of this AD, in the areas under the
dorsal fin fairing.
    (4) For airplanes in Groups 3 and 29, as identified in Boeing
Alert Service Bulletin 737-53A1262, Revision 3, dated October 16,
2008: At the applicable times specified in paragraphs (s)(4)(i),
(s)(4)(ii), and (s)(4)(iii) of this AD, perform a detailed
inspection for scribe lines and cracks on the main cargo door along
the lower edge of the upper hinge, around external repairs, and
around decals, in accordance with the Accomplishment Instructions of
Boeing Alert Service Bulletin 737-53A1262, Revision 3, dated October
16, 2008, except as provided by paragraph (s)(4)(iv) of this AD, or
using a method approved in accordance with the procedures specified
in paragraph (y) of this AD. If no scribe line or crack is found, no
further work is required by this paragraph. If any scribe line or
crack is found, do all applicable related investigative and
corrective actions at the time specified in paragraph 1.E. of Boeing
Alert Service Bulletin 737-53A1262, Revision 3, dated October 16,
2008, by doing all applicable actions specified in the
Accomplishment Instructions of Boeing Alert Service Bulletin 737-
53A1262, Revision 3, dated October 16, 2008, except as required by
paragraphs (s)(1), (s)(2), and (s)(3) of this AD.
    (i) For areas along the lower edge of the door hinge from body
station (BS) 360 to BS 500, the initial compliance threshold is to
be determined using Zone 1B.

    (ii) For external repairs, the initial compliance threshold is
to be determined using Zone 1B.
    (iii) For decals, the initial compliance threshold is to be
determined using Zone 2.
    (iv) When accomplishing scribe line inspections along the lower
edge of the main cargo door hinge, consider the hinge-to-skin detail
inspection to be equivalent to a lap joint detail inspection and use
the lap joint inspection methods in accordance with Boeing Alert
Service Bulletin 737-53A1262, Revision 3, dated October 16, 2008.
    (5) For Group 11 airplanes, as specified in Boeing Alert Service
Bulletin 737-53A1262, Revision 3, dated October 16, 2008: Stringer
20R between BS 727C and BS 727D+10 is in Zone 1B.

Actions Accomplished in Accordance With Previous Service
Information

    (t)(1) Actions accomplished before the effective date of this AD
in accordance with Boeing Alert Service Bulletin 737-53A1262, dated
December 9, 2004, are acceptable for compliance with the
corresponding requirements of paragraphs (q) and (r) of this AD.
    (2) Actions accomplished before the effective date of this AD in
accordance with Boeing Service Bulletin 737-53A1262, Revision 1,
dated March 1, 2007; or Revision 2, dated September 20, 2007; are
acceptable for compliance with the corresponding requirements of
paragraphs (g), (q), and (r) of this AD.

Clarification of Procedures in the Service Bulletin

    (u) For airplanes on which inspections are done as of the
effective date of this AD: This AD requires accomplishment of Parts
1 through 11, 15, and 16 of the Accomplishment Instructions of
Boeing Alert Service Bulletin 737-53A1262, Revision 3, dated October
16, 2008. Parts 12 and 13 of the Accomplishment Instructions of
Boeing Alert Service Bulletin 737-53A1262, Revision 3, dated October
16, 2008, may be accomplished, if applicable, to allow temporary
return to service. This AD does not require accomplishment of Part
14 of the Accomplishment Instructions of Boeing Alert Service
Bulletin 737-53A1262, Revision 3, dated October 16, 2008, although
the FAA-approved procedures described in Part 14 are acceptable for
continued operation with scribe lines found before the applicable
compliance time.

Report

    (v) For airplanes on which inspections are done in accordance
with the service information identified in Table 1 of this AD: At
the applicable time specified in paragraph (v)(1) or (v)(2) of this
AD, submit a report of positive findings of cracks found during the
inspections required by paragraphs (q), (r), and (s)(4) of this AD
to the Boeing Commercial Airplane Group, P.O. Box 3707, Seattle,
Washington 98124-2207. Alternatively, operators may submit reports
to their Boeing Company field service representatives. The report
must contain, as a minimum, the following information: airplane
serial number, flight cycles at time of discovery, location(s) and
extent of positive crack findings. Under the provisions of the
Paperwork Reduction Act (44 U.S.C. 3501 et seq.), the Office of
Management and Budget (OMB) has approved the information collection
requirements contained in this AD and has assigned OMB Control
Number 2120-0056.
    (1) For an inspection done before the effective date of this AD:
Send the report within 30 days after the effective date of this AD.
    (2) For an inspection done after the effective date of this AD:
Send the report within 30 days after the inspection is done.

                      Table 1--Service Information
------------------------------------------------------------------------
 Boeing Service Information      Revision                Date
------------------------------------------------------------------------
Boeing Alert Service                       3  October 16, 2008.
 Bulletin 737-53A1262.
Boeing Service Bulletin 737-               1  March 1, 2007.
 53A1262.
Boeing Service Bulletin 737-               2  September 20, 2007.
 53A1262.
------------------------------------------------------------------------

Repair Plan in Lieu of Required Inspections

    (w) A repair plan approved by a Boeing Company Authorized
Representative or Designated Engineering Representative before the
effective date of this AD is acceptable for compliance with the
requirements of paragraphs (g)(2), (i), (q), (r), (s)(1), and (s)(4)
of this AD, provided the approval was documented via FAA Form 8110-3
or 8100-9, and scribe line damage identified in the title of the
form.

Exceptions and Clarification

    (x) Paragraph 12.a.(2) of Part 12 of the Accomplishment
Instructions of Boeing Service Bulletin 737-53A1262, Revision 1,
dated March 1, 2007; Revision 2, dated September 20, 2007; and
Boeing Alert Service Bulletin 737-53A1262, Revision 3, dated October
16, 2008; specifies internal inspections in accordance with Boeing
Service Bulletin 737-53-1179, Revision 2, dated October 25, 2001,
except for airplanes inspected internally in accordance with
paragraph (b) of AD 2003-14-06, Amendment 39-13225. Inspections
accomplished in accordance with AMOCs previously approved to
paragraph (b) of AD 2003-14-06, are approved as an acceptable
alternative method of compliance to the internal inspections
specified in Part 12 of Boeing Alert Service Bulletin 737-53A1262,
Revision 1, dated March 1, 2007; Revision 2, dated September 20,
2007; and Revision 3, dated October 16, 2008.

Alternative Methods of Compliance (AMOCs)

    (y)(1) The Manager, Seattle Aircraft Certification Office (ACO),
FAA, has the authority to approve AMOCs for this AD, if requested in
accordance with the procedures found in 14 CFR 39.19. Send
information to ATTN: Wayne Lockett, Aerospace Engineer, Airframe
Branch, ANM-120S, FAA, Seattle ACO, 1601 Lind Avenue, SW., Renton,
Washington 98057-3356; telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>.
Or, e-mail information to<EMAIL_ADDRESS>    (2) To request a different method of compliance or a different
compliance time for this AD, follow the procedures in 14 CFR 39.19.
Before using any approved AMOC on any airplane to which the AMOC
applies, notify your principal maintenance inspector (PMI) or
principal avionics inspector (PAI), as appropriate, or lacking a
principal inspector, your local Flight Standards District Office.
The AMOC approval letter must specifically reference this AD.
    (3) An AMOC that provides an acceptable level of safety may be
used for any repair required by this AD, if it is approved by the
Boeing Commercial Airplanes Organization Designation Authorization
(ODA) that has been authorized by the Manager, Seattle ACO, to make
those findings. For a repair method to be approved, the repair must
meet the certification basis of the airplane, and the approval must
specifically refer to this AD.

Material Incorporated by Reference

    (z) You must use Boeing Alert Service Bulletin 737-53A1262,
Revision 3, dated October 16, 2008; to do the actions required by
this AD, unless the AD specifies otherwise.
    (1) The Director of the Federal Register approved the
incorporation by reference of Boeing Alert Service Bulletin 737-
53A1262, Revision 3, dated October 16, 2008, under 5 U.S.C. 552(a)
and 1 CFR part 51.
    (2) For service information identified in this AD, contact
Boeing Commercial Airplanes, Attention: Data & Services Management,
P.O. Box 3707, MC 2H-65, Seattle, Washington 98124-2207; telephone
206-544-5000, extension 1; fax<PHONE_NUMBER>; e-mail
<EMAIL_ADDRESS>Internet https://www.myboeingfleet.com.
    (3) You may review copies of the service information at the FAA,
Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton,
Washington. For information on the availability of this material at
the FAA, call<PHONE_NUMBER> or<PHONE_NUMBER>.
    (4) You may also review copies of the service information that
is incorporated by reference at the National Archives and Records
Administration (NARA). For information on the availability of this

material at NARA, call<PHONE_NUMBER>, or go to: http://
www.archives.gov/federal_register/code_of_federal_regulations/
ibr_locations.html.

    Issued in Renton, Washington, on February 24, 2010.
Jeffrey E. Duven,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2010-4511 Filed 3-8-10; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 83, Number 81 (Thursday, April 26, 2018)]
[Notices]
[Pages 18285-18288]
[FR Doc No: 2018-08722]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. AD18-8-000; Docket No. EL18-26-000]

Reform of Affected System Coordination in the Generator
Interconnection Process, EDF Renewable Energy, Inc. v. Midcontinent
Independent System Operator, Inc., Southwest Power Pool, Inc., and PJM
Interconnection, L.L.C.; Notice Inviting Post-Technical Conference
Comments

    On April 3 and April 4, 2018, Federal Energy Regulatory Commission
(Commission) staff conducted a technical conference to discuss issues
related to affected systems that have been raised in the complaint
filed by EDF Renewable Energy, Inc. against Midcontinent Independent
System Operator, Inc., Southwest Power Pool, Inc., and PJM
Interconnection, L.L.C. in Docket No. EL18-26-000 and in the
Commission's Notice of Proposed Rulemaking (Generator Interconnection
NOPR) on the interconnection process in Docket No. RM17-8-000.
    All interested persons are invited to file initial and reply post-
technical conference comments on the questions listed in the
Supplemental Notice of Technical Conference issued in this proceeding
on March 26, 2018 and the questions listed in the attachment to this
notice. Commenters need not respond to all topics or questions asked.
Commenters may reference material previously filed in this docket but
are encouraged to submit new or additional information rather than
reiterate information that is already in the record.

In particular, commenters are encouraged, when possible, to provide
examples in support of their answers. Initial and reply comments are
due within 30 days and 45 days, respectively, from the date of this
notice.
    For more information about this notice, please contact:

Myra Sinnott (Technical Information), Office of Energy Policy and
Innovation,<PHONE_NUMBER>, [email protected].
Kathleen Ratcliff (Technical Information), Office of Energy Market
Regulation,<PHONE_NUMBER>, [email protected].
Lina Naik (Legal Information), Office of the General Counsel, (202)
502-8882, [email protected].

    Dated: April 19, 2018.
Nathaniel J. Davis, Sr.,
 Deputy Secretary.

Post-Technical Conference Questions for Comment

    For any of the following questions, please also describe any issues
presented when an affected system is a non-public utility transmission
provider.

General Affected Systems Coordination Processes

    1. Please describe any affected system coordination processes and
guidance available for your market or balancing authority area,
including, but not limited to, tariff provisions, joint operating
agreements (JOA), and business practice manuals (BPM).
    2. Please explain the role of the host transmission provider in
managing the coordination and communication between an interconnection
customer and an affected system during the course of an interconnection
request process. If the interconnection customer has primary
responsibility to coordinate and communicate with the affected system,
please explain how the host transmission provider ensures that affected
system matters are addressed before proceeding with an interconnection
for which affected system impacts have been raised.
    3. With respect to Midcontinent Independent System Operator, Inc.
(MISO), Southwest Power Pool, Inc. (SPP), and PJM Interconnection,
L.L.C. (PJM) specifically, once the need for an affected system study
is determined, please describe how each RTO then coordinates with the
other RTO to consider the affected system impacts due to an
interconnection request on the host system. Please include the steps in
the process and any timelines and other procedural matters, and
reference any tariff, JOA, BPM, and/or other provisions that describe
the process for such coordination.
    4. Should there be a pro forma affected system study agreement that
provides for firm timelines for the affected system to provide the
relevant studies? If so, what terms and conditions should it contain,
and what entities should be parties to the affected system study
agreement (e.g., host transmission provider, host transmission owner,
affected system, interconnection customer)? What modifications would
need to be made to such a study agreement to accommodate a non-public
utility affected system?
    5. Regardless of whether the Commission proceeds with development
of a pro forma affected systems study agreement, should MISO, SPP, and
PJM develop a common affected systems study agreement? If so, what
terms and conditions should this agreement contain, and what entities
should be parties to the agreement (e.g., host transmission provider,
host transmission owner, affected system, interconnection customer)? If
possible, please provide a sample of a commonly used affected systems
study agreement.
    6. As part of the affected systems study agreement, if affected
systems were allowed to charge interconnection customers an
administrative fee for conducting affected system studies, in addition
to receiving reimbursement for the actual costs of conducting affected
system studies, would such a fee motivate affected systems that lack
resources, such as full-time employees, to conduct affected system
studies in a more timely manner? If so, how should the fee be
determined and what milestones of the affected system should be tied to
the fee? Should such an administrative fee be tied to the affected
system providing its study results by a certain date?
    7. Describe any planned or in-process affected system coordination
improvement efforts taking place in your market or balancing authority
area (through a stakeholder process, etc.). Please provide links or
directions to any publicly available materials related to these
improvement efforts.

Modeling and Study Procedures Used for Affected Systems Information

    1. Please explain how Network Resource Interconnection Service
(NRIS) and Energy Resource Interconnection Service (ERIS) are modeled
both when conducting studies on your system and when conducting studies
as an affected system, and provide a reference to where that
information is located in your tariff. Are the standards (e.g. shift
factors, contingency lists) for modeling NRIS and ERIS available to
customers, and if so, where is this information located?
    2. Explain the reasons an affected system would study an
interconnection request made in a host system using NRIS criteria when
the interconnection customer is only requesting NRIS in the host
system. What are the benefits and drawbacks to studying and also
requiring an interconnection customer seeking NRIS in the host system
to be responsible for network upgrade costs in an affected system in
the same manner as an interconnection customer who requests NRIS in the
affected system?
    3. Explain the reasons an affected system could or should study an
interconnection request using ERIS criteria when the interconnection
customer is requesting NRIS in the host system. If you believe affected
system transmission providers should study NRIS requests as ERIS,
please include an explanation of how ERIS criteria address reliability
concerns associated with an NRIS interconnection request in both the
host and affected systems.
    4. Should there be a standard approach to determine if an
interconnection customer requesting NRIS in the host system is studied
as NRIS or ERIS on an affected system? If so, what should the standard
be and why?
    5. If there is no generic reform that dictates how affected systems
study interconnection customers who request NRIS on the host system,
should MISO, SPP, and PJM develop a standard approach to determining
whether such an interconnection customer should be studied as NRIS or
ERIS on the affected system(s) during the modeling process? If so, what
should the standard be and why?
    6. Please explain the process used to calculate generation shift
factors, including how and where the reference bus is selected, when
conducting an affected system study for interconnection requests made
in a host system.
    7. What are the dispatch assumptions used in affected systems
studies? Are the dispatch assumptions the same for already
interconnected resources on the host system that affect flows on the
affected system and resources already interconnected in the affected
system? Are these dispatch assumptions consistent with the assumptions
an affected system uses when it performs an interconnection request
within its footprint? Are the dispatch assumptions an affected system
uses in affected system studies provided to

interconnection customers? To the extent already interconnected
resources on the host system are assumed to be dispatched at full
output, what is the rationale for that assumption?
    8. What criteria do transmission providers use to determine whether
an interconnection request on the host system requires an affected
system study on an affected system? Please provide references to
tariff, JOA, BPM, and any other provisions that include this criteria.
If the determination is based on ``engineering judgment,'' is this
judgment adequately explained to the interconnection customer? If so,
in what form does the interconnection customer receive that
information? If there is a disagreement regarding this determination,
is there a process for the customer to challenge it? If so, please
provide a detailed description of that process.
    9. Should MISO, SPP, and PJM be required to use the same criteria
to determine whether an interconnection request on the host system
requires an affected system study on an affected system?
    10. Please comment on the possibility of implementing jointly
developed interconnection-wide transmission models between transmission
providers in affected system studies to detect topology changes to a
transmission provider's region that might not be visible by the
affected systems until the next interconnection-wide model update.
    11. When an affected system studies an interconnection request,
should it model its entire footprint or a sub-region(s) of its system?
If a sub-region(s) would be sufficient, please explain what criteria
would be used to determine the sub-region(s) in an affected system that
are impacted by an interconnection request in a host system.
    12. What are the benefits and drawbacks for the interconnection
customer, the host transmission provider and the affected system to an
affected system studying all interconnection requests in a host system
study cluster or queue to determine affected system impacts? Is there a
way the host system could employ some type of pre-screening process to
limit affected systems analysis to only those requests that may impact
an affected system? What criteria should be used in such a pre-
screening process?
    13. At what point in the interconnection process should
interconnection customers be required to provide relevant modeling data
to best avoid delays in both the host interconnection and affected
system study processes?

Timing of Affected System Coordination

    1. Does the host system's interconnection process include an
opportunity for the host system and interconnection customer to review
an affected system study and discuss the results with the host system
or affected system, as necessary, before the interconnection process
either requires a financial milestone payment or execution of an
interconnection agreement? If so, please provide references to the
relevant tariff or manual descriptions of this opportunity. Is this
opportunity to review included in the host system's interconnection
queue timeline? If so, how much time is allowed?
    2. Should all host system transmission providers be required to
align their interconnection study process schedules with any relevant
affected systems in order to allow for both host system and affected
system studies to occur on the same timeline? Would such alignment
improve the timing at which an interconnection customer receives
affected system study results? What actions could the host system,
affected system, and interconnection customer take to better align the
completion of affected system study results? Should the Commission
require that an interconnection customer receive affected system study
results at the same time it receives a host system's system impact
study results? If so, would there be any concerns with that approach?
    3. Should MISO, SPP, and PJM be required to adopt a common timeline
for conducting affected systems studies and providing results to
interconnection customers and/or the host transmission provider? If
not, why not? If so, please explain how this common timeline could be
implemented. For example, would each RTO begin affected system studies
at certain set dates throughout the year and commit to providing
results by certain set dates, or are there other ways of implementing a
common timeline? Please also provide an example of how this common
timeline could be developed--that is, by providing sample tariff, JOA,
BPM, or other language.
    4. Should affected systems be required to adhere to a time limit or
point in the host system's interconnection process (such as when a
generator interconnection agreement (GIA) is tendered or system impact
study data is provided by the host system to the interconnection
customer) by which the affected system should notify the
interconnection customer and/or host transmission provider of network
upgrade costs?
    5. Should affected system study results be aligned with the host
system's system impact study results to allow interconnection customers
to have an estimate of all of their potential network upgrade costs
prior to proceeding in the queue with an at-risk financial payment?
Alternatively, if an interconnection customer is required to proceed
with an at-risk financial payment or move forward with an
interconnection agreement without having the affected system study
results, should the affected system or host system be required to
provide the interconnection customer with an option for a refund of its
payment if it withdraws due to late-received affected system study
results?
    6. Please comment on the potential for an alternative affected
system study process in which the host system obtains the model from
the affected system and performs the impact analysis on the affected
system for interconnection customers itself, with the host system
following up with the affected system to verify results. Would such an
approach be beneficial or practicable? Would the additional analysis
and verification add time to the interconnection process? Should the
host system be compensated for performing the impact analysis?
    7. Should the Commission require that time be allowed to
potentially identify and consider either alternatives to the dispatch
assumptions or adjustments to the interconnection request that could
mitigate the cost of a network upgrade on an affected system? If so,
what duration of time would be sufficient?
    8. With respect to MISO, SPP, and PJM specifically, should the
Commission require that time be allowed to potentially identify and
consider either alternatives to the dispatch assumptions or adjustments
to the interconnection request that could mitigate the cost of a
network upgrade on an affected system? If so, what duration of time
would be sufficient? Even if a common timeline is not required by the
Commission, should MISO, SPP, and PJM nevertheless be required to build
time into their own interconnection processes to allow for further
consideration of affected system study results and potential mitigation
measures as an alternative to the network upgrades included in an
affected system study? For example, should interconnection customers in
MISO be allowed more than 15 days

after receipt of affected system study results to decide to proceed to
the next phase of the definitive planning phase (DPP)?
    9. Should MISO perform fewer affected systems studies than the
three studies currently required as part of the three-phase DPP
process? If so, which phase(s) in the DPP is most important to the
analysis of potential impacts on affected systems? Should an
interconnection customer in MISO be permitted to proceed to the next
DPP phase even if an affected system study is not ready and therefore
not included in the system impact study of the prior phase?

Allocation of Affected System Costs

    1. Are there improvements that could be made to transmission
planning processes to better identify transmission projects that
benefit host systems and/or affected systems but that are currently
identified only in interconnection studies and affected system studies?
If so, please explain how such improvements should be made? What are
the benefits and drawbacks of such an approach?
    2. If study results from affected systems are significantly
delayed, and the interconnection customer is required to proceed in the
process without affected system study results, should the customer
still be responsible for the full cost of an affected system upgrade?
Should there be a time after which the affected system has ``lost its
chance'' to have the interconnection customer be responsible for the
network upgrade? If so, how would the affected system then address the
need for the network upgrade?
    3. How should costs be allocated among affected system and host
system interconnection customers in instances where a major network
upgrade on a transmission provider's system is only identified through
an affected system study and not identified in the host system studies?
Should host system interconnection customers be responsible for any
portion of those network upgrade costs? Should an interconnection
customer needing such an affected system upgrade have the ability to
challenge the assignment of network upgrade costs? Please also discuss
this issue specifically in the context of the Cooper South constraint
in SPP.
    4. Should the host system and affected system be required to
conduct a ``least-cost alternative'' analysis for identified affected
system upgrades? If so, please explain how that will improve the issues
with affected systems.
    5. If the same network upgrade is required by interconnection
requests on both a host system and an affected system, is there cost
sharing among the interconnection customers? Does this cost sharing
extend to lower-queued customers, whether they are host system
customers or affected system customers?
    6. How are interconnection requests made on an affected system
aligned with host system interconnection requests for the purpose of
determining queue order and cost responsibility? For instance, where
the affected system uses a cluster study approach, are interconnection
requests external to the affected system integrated into the affected
system's current cluster study with queue priority and cost
responsibility equivalent to the other interconnection requests in the
cluster?
    7. Should MISO, SPP, and PJM be required to develop a network
upgrade construct that avoids a ``higher-queued'' penalty, whereby
network upgrade costs are assigned to higher-queued projects (earlier
in time) rather than to lower-queued projects (later in time)? How do
MISO, SPP, and PJM determine whether affected system interconnection
customers or host system interconnection customers are responsible for
the cost of a specific network upgrade? Please list the tariff, JOA, or
BPM provisions that may govern this process.
    8. With respect to MISO, SPP, and PJM specifically, should they be
required to develop a unified approach to determine queue priority in
affected systems analysis to determine cost responsibility for network
upgrade costs?
    9. Please describe whether interconnection customers that fund
network upgrades on an affected system and pursuant to an affected
system study receive transmission credits, transmission rights, or any
other consideration for funding those network upgrades on the affected
system. Please provide any tariff or other provisions that govern this
issue.
    10. Please describe whether interconnection customers that fund
network upgrades on an affected system and pursuant to an affected
system study in MISO, SPP, or PJM receive transmission credits,
transmission rights, or any other consideration for funding those
network upgrades on the affected system. Please provide any tariff,
JOA, BPM or other provisions that govern this issue. Does any disparity
in approaches between MISO, SPP, and PJM impact the interconnection
customers and/or affected system study process? If so, how?

[FR Doc. 2018-08722 Filed 4-25-18; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register Volume 88, Number 75 (Wednesday, April 19, 2023)]
[Notices]
[Pages 24242-24246]
[FR Doc No: 2023-08223]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97305; File No. SR-PEARL-2023-17]

Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the MIAX
Pearl Options Fee Schedule

April 13, 2023.
    Pursuant to the provisions of 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 April 3, 2023, MIAX PEARL, LLC (``MIAX Pearl''
or ``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') a proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    The Exchange is filing a proposal to amend the MIAX Pearl Options
Fee Schedule (the ``Fee Schedule'') to amend fees for historical Open-
Close Report to: (i) add a fee for ad hoc requests for end-of-day data
and no longer provide such data free of charge; (ii) respond to
requests for ad hoc intra-day data and adopt a new fee for such
requests; and (iii) adopt academic discounts for requests for ad hoc
historical end-of-day and intra-day Open-Close data.
    The text of the proposed rule change is available on the Exchange's
website at http://www.miaxoptions.com/rule-filings/pearl at MIAX
Pearl'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, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

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

1. Purpose
    The Exchange adopted a new data product for options known as the
Open-Close Report,\3\ which the Exchange made available for purchase to
Exchange Members \4\ and non-Members on June 1, 2021.\5\ The Open-Close
Report is described under Exchange Rule 531(b)(1). The Exchange now
proposes to amend fees for historical Open-Close Report to: (i) add a
fee for ad hoc requests for end-of-day data and no longer provide such
data free of charge; (ii) respond to requests for ad hoc intra-day data
and adopt a new fee for such requests; and (iii) adopt academic
discounts for requests for ad hoc historical end-of-day and intra-day
Open-Close data. The Exchange previously filed this proposal on March
23, 2023 (SR-PEARL-2023-14). On April 3, 2023, the Exchange withdrew
SR-PEARL-2023-14 and resubmitted this proposal.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 91964 (May 21,
2021), 86 FR 28667 (May 27, 2021) (SR-PEARL-2021-24) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Adopt a New Historical Market Data Product To Be Known as the Open-
Close Report).
    \4\ The term ``Member'' means an individual or organization that
is registered with the Exchange pursuant to Chapter II of these
Rules for purposes of trading on the Exchange as an ``Electronic
Exchange Member'' or ``Market Maker.'' Members are deemed
``members'' under the Exchange Act. See Exchange Rule 100.
    \5\ See Securities Exchange Act Release No. 92137 (June 9,
2021), 86 FR 31748 (June 15, 2021) (SR-PEARL-2021-26) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend the MIAX Pearl Options Fee Schedule To Adopt Fees for the
Open-Close Report).
---------------------------------------------------------------------------

General
    By way of background, the Exchange offers two versions of the Open-
Close Report, an end-of-day summary and intra-day report.\6\ The end-
of-day version is a volume summary of trading activity on the Exchange
at the option level by origin (Priority Customer, Non-Priority
Customer, Firm, Broker-Dealer, and Market Maker),\7\ side of the market
(buy or sell), contract volume, and transaction type (opening or
closing). The Priority Customer, Non-Priority Customer volume is
further broken down into trade size buckets (less than 100 contracts,
100-199 contracts, greater than 199 contracts). The Open-Close Report
data is proprietary Exchange trade data and does not include trade data
from any other exchange. It is also a historical data product and not a
real-time data feed. The Exchange notes that Open-Close Report data is
not necessary for trading and subscribing to the Open-Close Report is
completely optional.
---------------------------------------------------------------------------

    \6\ The intraday Open-Close Report provides similar information
to that of Open-Close Data but will be produced and updated every 10
minutes during the trading day. Data is captured in ``snapshots''
taken every 10 minutes throughout the trading day and is available
to subscribers within five minutes of the conclusion of each 10-
minute period.
    \7\ See Exchange Rule 100.
---------------------------------------------------------------------------

    Members and non-Members may purchase the Open-Close Report on a
monthly basis. The Exchange currently assess a monthly fee of $600 per
month for subscribing to the end-of-day summary Open-Close Report and
$2,000 per month for subscribing to the intra-day Open-Close Report.
For mid-month subscriptions, new subscribers are currently charged for
the full calendar month for which they subscribe and will be provided
Open-Close Report data for each trading day of the calendar month from
the day on which they subscribed and receive data for each trading day
of the calendar month prior to the day on which they subscribe.
End-of-Day Ad Hoc Request (Historical Data)
    The Exchange currently provides Members and Non-Members who request
on an ad hoc basis historical end-of-day Open-Close Report data free of
charge. The Exchange initially proposed to provide such data for free
because it only recently launched the Open-Close Report and had minimal
amount of historical end-of-day data. The Exchange also wanted to
support the introduction of the new product through such a pricing
incentive to attract additional subscribers.
    An ad hoc request may be for any number of months beginning with
June 2021, the month in which the Exchange first made the Open-Close
Report available. For example, a market participant may request end-of-
day Open-Close Report data for the month of June 2021 or July 2021, or
may request such data for both June and July 2021 and would not be
currently charged a fee for such request(s). The Exchange notes that
other exchanges that provide similar data products allow for ad hoc
requests of their end-of-day data for a fee.\8\ Similar to other
exchanges, the

Exchange now proposes to charge a fee of $500 per request per month for
ad-hoc requests for end-of-day historical data.\9\
---------------------------------------------------------------------------

    \8\ See Price List--U.S. Derivatives Data for Nasdaq PHLX, LLC
(``PHLX''), The Nasdaq Stock Market, LLC (``Nasdaq''), Nasdaq ISE,
LLC (``ISE''), and Nasdaq GEMX, LLC (``GEMX''), available at http://www.nasdaqtrader.com/Trader.aspx?id=DPPriceListOptions#web.
Particularly, PHLX offers ``Nasdaq PHLX Options Trade Outline
(PHOTO)'' and assesses $400 for historical end-of-day data; Nasdaq
offers the ``Nasdaq Options Trade Outline (NOTO)'' and assesses $250
for historical end-of-day data; ISE offers the ``Nasdaq ISE Open/
Close Trade Profile'' and assesses $600 per month for historical
end-of-day data and $27,500 for complete history; and GEMX offers
the ``Nasdaq GEMX Open/Close Trade Profile'' and assesses $400 for
historical end-of-day data. Cboe EDGX Exchange, Inc. (``EDGX'') and
Cboe BZX Exchange, Inc. (``BZX'') both assess $400 for historical
end-of-day data per request per month. See the EDGX fee schedule
available at http://markets.cboe.com/us/options/membership/fee_schedule/edgx/ and the BZX fee schedule available at http://markets.cboe.com/us/options/membership/fee_schedule/bzx/.
    \9\ Id.
---------------------------------------------------------------------------

    The Exchange currently makes the historical end-of-day Open-Close
data available fifteen (15) days after the end of the month for which
it is requested. The Exchange implemented this delay because historical
end-of-day Open-Close Report data was free of charge and the Exchange
sought to not encourage subscribers to request historical end-of-day
Open-Close Report data over a paid subscription. Now that the Exchange
proposes to charge a fee for historical end-of-day Open-Close Report
data, it believes the fifteen (15) day delay in making the data
available is no longer necessary and proposes to remove this language
from its Fee Schedule.
Intra-Day Ad Hoc Request (Historical Data)
    The Exchange now proposes to provide Members and Non-Members who
request on an ad hoc basis historical intra-day Open-Close Report data
for a fee of $1,000 per request per month. When the Exchange proposed
to provide for ad-hoc requests for end-of day data, it did not also
propose to allow for ad hoc requests for intra-day Open-Close Report
data.\10\ Based on interest from Members and non-Members, the Exchange
now proposes to do so for the above proposed fee.
---------------------------------------------------------------------------

    \10\ See Securities Exchange Act Release No. 93019 (September
16, 2021), 86 FR 52705 (September 22, 2021) (SR-PEARL-2021-41).
---------------------------------------------------------------------------

    As it currently specifies for historical end-of-day Open-Close
data, an ad hoc request may be for any number of months beginning with
June 2021, the month in which the Exchange first made the Open-Close
Report available. Similarly, the Exchange will provide historical
intra-day Open-Close data for the same time period. The Exchange notes
that other exchanges that provide similar data products allow for ad
hoc requests of their intra-day data for a fee.\11\
---------------------------------------------------------------------------

    \11\ See Price List--U.S. Derivatives Data for PHLX, ISE, and
GEMX, available at http://www.nasdaqtrader.com/Trader.aspx?id=DPPriceListOptions#web. Particularly, PHLX offers
``Nasdaq PHLX Options Trade Outline (PHOTO)'' and assesses $1,000
for historical intra-day data; ISE offers the ``Nasdaq ISE Open/
Close Trade Profile'' and assesses $1,000 per month for historical
intra-day; and GEMX offers the ``Nasdaq GEMX Open/Close Trade
Profile'' and assesses $750 for historical end-of-day data. EDGX and
BZX both assess $750 for historical intra-day data per request per
month. See the EDGX fee schedule available at http://markets.cboe.com/us/options/membership/fee_schedule/edgx/ and the
BZX fee schedule available at http://markets.cboe.com/us/options/membership/fee_schedule/bzx/.
---------------------------------------------------------------------------

Academic Discounts for Ad Hoc Historical End-of-Day and Intra-Day Open-
Close Report Data
    The Exchange also proposes to adopt an academic discount for ad-hoc
requests of historical months of these data sets. Specifically, the
Exchange proposes to charge qualifying academic purchasers per request
$1,500 per year for the first year (instead of $6,000 per year) and
$125 per month thereafter for historical end-of-day Open-Close Report
data covering all of the Exchange's securities. Further, the Exchange
proposes to charge qualifying academic purchasers per request $3,000
per year for the first year (instead of $12,000 per year) and $250 per
month thereafter for historical intra-day Open-Close Report data
covering all of the Exchange's securities.
    Particularly, the Exchange believes that academic institutions and
researchers provide a valuable service for the Exchange in studying and
promoting the options market. Though academic institutions and
researchers have need for granular options data sets, they do not trade
upon the data for which they subscribe. The Exchange believes the
proposed reduced fee for qualifying academic purchasers of historical
end-of-day Open-Close Report data and intra-day Open-Close Report data
will encourage and promote academic studies of its market data by
academic institutions. In order to qualify for the academic pricing, an
academic purchaser must: (1) be an accredited academic institution or
member of the faculty or staff of such an institution, and (2) use the
data in independent academic research, academic journals and other
publications, teaching and classroom use, or for other bona fide
educational purposes (i.e. academic use). Furthermore, use of the data
must be limited to faculty and students of an accredited academic
institution, and any commercial or profit-seeking usage is excluded.
Academic pricing will not be provided to any purchaser whose research
is funded by a securities industry participant. Academic users
interested in qualifying will be required to submit a brief
application.\12\ Exchange Business Development personnel will have the
discretion to review and approve such applications and request
additional information when it deems necessary.
---------------------------------------------------------------------------

    \12\ The Exchange notes that it will have an academic user
application available on the Exchange's website soon but it has not
received any such requests from potential academic users at the time
of this filing (or the previous filing).
---------------------------------------------------------------------------

    The Exchange notes that competing exchanges currently offer
academic discounts for similar data sets on those exchanges.\13\ The
Exchange recognizes the high value of academic research and educational
instruction and publications, and believes that the proposed academic
discounts for historical end-of-day Open-Close Report data and intra-
day Open-Close Report data will encourage the promotion of academic
research of the options industry, which will serve to benefit all
market participants while also opening up a new potential user base
among students. Finally, the Exchange notes that academic purchasers'
ad hoc requests of historical end-of-day Open-Close and intra-day Open-
Close data would be educational in use and purpose, and not vocational.
---------------------------------------------------------------------------

    \13\ See supra note 8, BZX, EDGX, and ISE fee schedules; see
also Cboe Exchange, Inc. (``Cboe'') Options Fee Schedule, Livevol
Fees, Open Close Data available at https://cdn.cboe.com/resources/membership/Cboe_FeeSchedule.pdf.
---------------------------------------------------------------------------

Implementation Date
    The Exchange intends to implement the proposed fee changes
immediately.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\14\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\15\ in particular, in that it
is designed 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 to protect investors and the public
interest, and that it is not designed to permit unfair discrimination
among customers, brokers, or dealers. The Exchange also believes that
its proposed changes to its Fee Schedule concerning fees for the Open-
Close Report is consistent with Section 6(b) of the Act \16\ in
general, and furthers the objectives of Section 6(b)(4) of the Act \17\
in particular, in that it is

an equitable allocation of dues, fees and other charges among its
members and other recipients of Exchange data.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(5).
    \16\ 15 U.S.C. 78f(b).
    \17\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    In adopting Regulation NMS, the Commission granted self-regulatory
organizations (``SROs'') 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. Particularly, the Open-Close Report further
broadens the availability of U.S. option market data to investors
consistent with the principles of Regulation NMS. The data product also
promotes increased transparency through the dissemination of the Open-
Close Report. Particularly, information regarding opening and closing
activity across different option series during the trading day may
indicate investor sentiment, which may allow market participants to
make better informed trading decisions throughout the day. Subscribers
to the data may also be able to enhance their ability to analyze option
trade and volume data and create and test trading models and analytical
strategies. The Exchange believes the Open-Close Report provides a
valuable tool that subscribers can use to gain comprehensive insight
into the trading activity in a particular series, but also emphasizes
such data is not necessary for trading and completely optional.
Moreover, other exchanges offer a similar data product.\18\ This
proposal seeks to provide historical Open-Close Report data to market
participants by amending the fees for the Open-Close Report to: (i) add
a fee of $500 per request per month for ad hoc requests for end-of-day
historical data; (ii) respond to requests for ad hoc intra-day data and
adopt a fee of $1,000 per request per month for such requests; and
(iii) adopt academic discounts for requests for ad hoc historical end-
of-day and intra-day Open-Close data. The Exchange operates in a highly
competitive environment. Indeed, there are currently 16 registered
options exchanges that trade options. Based on publicly available
information, for the month of March 2023, no single options exchange
had more than approximately 13% of the equity options market share and
the Exchange represented only approximately 6.96% of the equity options
market share for the month of March 2023.\19\ The Commission has
repeatedly expressed its preference for competition over regulatory
intervention in determining prices, products, and services in the
securities markets. Particularly, in Regulation NMS, the Commission
highlighted the importance of market forces in determining prices and
SRO revenues and, also, recognized that current regulation of the
market system ``has been remarkably successful in promoting market
competition in its broader forms that are most important to investors
and listed companies.'' \20\ Making similar data products available to
market participants fosters competition in the marketplace, and
constrains the ability of exchanges to charge supra-competitive fees.
In the event that a market participant views one exchange's data
product as more or less attractive than the competition they can and do
switch between similar products.
---------------------------------------------------------------------------

    \18\ See supra notes 8 and 11.
    \19\ See the Exchange's ``The market at a glance,'' available at
https://www.miaxoptions.com/ (last visited April 3, 2023).
    \20\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
---------------------------------------------------------------------------

    The Exchange believes its proposal to respond to requests and add
fees for ad hoc requests for historical end-of-day and intra-day data
and adopt academic discounts for such requests is reasonable as the
proposed rates are similar to fees assessed by other exchanges that
provide data in response to ad hoc request for their similar data
products.\21\ The Exchange believes its proposal is reasonable and not
unfairly discriminatory because the Exchange now has almost two years
of historical Open-Close Report data to provide to market participants
that request historical intra-day or end-of-day Open-Close Report data
since the Exchange began offering the Open-Close Report in June 2021.
Further, the Exchange notes that no competing exchange provides their
own historical Open-Close report data free of charge.\22\ Indeed,
proposing fees that are excessively higher than established fees for
similar data products would simply serve to reduce demand for the
Exchange's data product, which as noted, is entirely optional. Like the
Exchange's Open-Close Report, other exchanges offer similar data
products that each provide insight into trading on those markets and
may likewise aid in assessing investor sentiment. Although each of
these similar Open-Close data products provide only proprietary trade
data and not trade data from other exchanges, it is possible investors
are still able to gauge overall investor sentiment across different
option series based on open and closing interest on any one
exchange.\23\ Similarly, market participants may be able to analyze
option trade and volume data, and create and test trading models and
analytical strategies using only Open-Close data relating to trading
activity on one or more of the other markets that provide similar data
products. As such, if a market participant views another exchange's
historical end-of-day or intra-day Open-Close data as more attractive
than the Exchange's historical end-of-day or intra-day Open-Close
Report data, then such market participant can merely choose not to
request such data from the Exchange and instead purchase another
exchange's historical end-of-day or intra-day Open-Close data, which
offer similar data points, albeit based on that other market's trading
activity.
---------------------------------------------------------------------------

    \21\ See supra notes 8 and 11.
    \22\ See id.
    \23\ The Exchange notes that its Open-Close Report data product
does not include data on any exclusive, singly-listed option series.
---------------------------------------------------------------------------

    The Exchange also believes its proposal is reasonable as it would
further support its offer of the Open-Close Report, which is designed
to aid investors by providing insight into trading on the Exchange.
Providing market data, such as the Open-Close Report, is also a means
by which exchanges compete to attract business. Subscribers that
receive end-of-day Open-Close data, and now intra-day Open-Close data
as a result of this proposal, in response to an ad hoc request may use
such data to evaluate the usefulness of the Exchange's Open-Close
Report and decide, based on that data, whether to subscribe to the
Open-Close Report on a monthly basis. To the extent that the Exchange
is successful in attracting subscribers for the Open-Close Report
through this proposal, it may earn trading revenues and further enhance
the value of its data products. If the market deems the proposal to be
unfair or inequitable, firms can diminish or discontinue their use of
the data and/or avail themselves of similar products offered by other
exchanges.\24\ The Exchange therefore believes that its proposal
reflects the competitive environment and would be properly assessed on
Member or non-Member subscribers. The Exchange also believes the
proposal is equitable and not unfairly discriminatory as it would apply
equally to all users who choose to purchase or receive such data.
---------------------------------------------------------------------------

    \24\ See supra notes 8 and 11.
---------------------------------------------------------------------------

    The Exchange believes its proposal is equitably allocated because a
wide variety of market participants may choose to request historical
Open-Close Report intra-day or end-of-day data,

including but not limited to individual customers, buy-side investors
and investment banks, all of which will be charged the same rates for
the monthly data requests depending on the type of request (i.e.,
intra-day or end-of-day ad hoc historical requests). The Exchange
reiterates that the decision as to whether or not to make an ad hoc
request for historical end-of-day or intra-day data Open-Close Report
data is entirely optional and available for all market participants.
Indeed, no market participant is required to make such ad hoc request
for historical end-of-day or intra-day Open-Close Report data, and the
Exchange is not required to make historical end-of-day or intra-day
Open-Close Report data available to all investors. The Exchange is
voluntarily making a subset of existing Open-Close Report data
available via ad hoc requests for intra-day and end-of-day data under
this proposal at the request of customers, and market participants may
choose to receive this data based on their own business needs and for
the proposed fees specified herein. Potential purchasers of ad hoc data
may request the data at any time if they believe it to be valuable or
may decline to subscribe such data.
    The Exchange believes it is reasonable to remove the mandatory
fifteen (15) day waiting period in order to receive historical ad hoc
end-of-day Open-Close data because the Exchange initially implemented
this delay because it made historical end-of-day Open-Close Report data
free and sought to not encourage subscribers to request historical end-
of-day Open-Close Report data over a paid subscription. Now that the
Exchange proposes to charge a fee for historical end-of-day Open-Close
Report data and because no other options exchange imposes similar delay
requirements for the same data, the Exchange believes the fifteen (15)
day waiting period is no longer necessary and is reasonable to remove
this language from the Fee Schedule.
    The Exchange believes that the discount for qualifying academic
purchasers of the ad hoc historical end-of-day Open-Close and intra-day
Open-Close Report data is reasonable because academic users are not
able to monetize access to the data as they do not trade on the data
set. The Exchange believes the proposed discount will allow for more
academic institutions and faculty members to purchase historical end-
of-day Open-Close and intra-day Open-Close Report data, and, as a
result, promote research and studies of the options industry to the
benefit of all market participants. The Exchange believes that the
proposed discount is equitable and not unfairly discriminatory because
it will apply equally to all academic users that submit applications
and meet the accredited academic institution or faculty member and
academic use criteria. As stated above, qualified academic users will
subscribe to the data set for educational use and purposes and are not
permitted to use the data for commercial or monetizing purposes, nor
can qualify if they are funded by an industry participant. As a result,
the Exchange believes the proposed discount is equitable and not
unfairly discriminatory because it maintains equal treatment for all
industry participants or other subscribers that use the data for
vocational, commercial or other for-profit purposes.

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

    The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. Rather, the
Exchange believes that the proposal will promote competition by
permitting the Exchange to enhance the value of a data product that is
similar to those offered by other competitor options exchanges.\25\ The
Exchange made historical end-of-day and intra-day Open-Close Report
data available in order to keep pace with changes in the industry and
evolving customer needs, and believes that providing such data to
market participants that make requests for it will continue to
contribute to robust competition among national securities exchanges.
At least eight other U.S. options exchanges offer historical end-of-day
and intra-day Open-Close report data on an ad hoc basis with fees that
are substantially similar to the Exchange's proposed fees herein. As a
result, the Exchange believes this proposed rule change permits fair
competition among national securities exchanges. While the proposed
academic discount is a fee reduction that applies only to qualifying
academic purchasers, the Exchange believes that academic purchasers'
research and publications as a result of access to historical market
data benefits all market participants.
---------------------------------------------------------------------------

    \25\ See supra notes 8 and 11.
---------------------------------------------------------------------------

    Furthermore, the Exchange operates in a highly competitive
environment, and its ability to price ad hoc requests for end-of-day
and intra-day Open-Close Report data is constrained by competition
among exchanges that offer similar fees for similar ad hoc requests for
end-of-day and intra-day Open-Close report data to their customers. The
Exchange notes that there are currently a number of similar products
available to market participants and investors. At least eight other
U.S. options exchanges offer similar fees for ad hoc requests for end-
of-day and intra-day Open-Close report data that is substantially
similar to the fees for ad hoc requests for end-of-day and intra-day
Open-Close Report data proposed in this filing, which the Exchange must
consider in its pricing discipline in order to compete for the market
data.\26\ For example, proposing fees that are excessively higher than
established fees for similar ad hoc requests for historical end-of-day
and intra-day Open-Close Report data on the Exchange would simply serve
to reduce demand for the Exchange's data product, which as discussed,
market participants are under no obligation to utilize. In this
competitive environment, potential purchasers are free to choose which,
if any, similar product to purchase to satisfy their need for market
information. As a result, the Exchange believes this proposed rule
change permits fair competition among national securities exchanges.
---------------------------------------------------------------------------

    \26\ See, e.g. Cboe Options Fee Schedule, Livevol Fees, Open-
Close Data, available at https://cdn.cboe.com/resources/membership/Cboe_FeeSchedule.pdf. See also supra note 8, ISE fee schedule.
---------------------------------------------------------------------------

    The Exchange also does not believe the proposal would cause any
unnecessary or inappropriate burden on intermarket competition as other
exchanges are free to introduce their own comparable data product and
lower their prices for ad hoc historical requests to better compete
with the Exchange's offering. The Exchange does not believe the
proposed rule change would cause any unnecessary or inappropriate
burden on intramarket competition. Particularly, the proposal would
apply uniformly to any market participant, in that it does not
differentiate between requests for ad hoc historical Open-Close Report
data, other than for qualifying academic users. The proposal allows any
interested Member or non-Member to request on an ad hoc basis
historical end-of-day or intra-day Open-Close Report databased on their
business needs.

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,\27\ and Rule 19b-4(f)(2) \28\ thereunder.
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.
---------------------------------------------------------------------------

    \27\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \28\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-PEARL-2023-17 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-PEARL-2023-17. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-PEARL-2023-17, and should be submitted
on or before May 10, 2023.
    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\29\
---------------------------------------------------------------------------

    \29\ 17 CFR 200.30-3(a)(12).

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-08223 Filed 4-18-23; 8:45 am]
BILLING CODE 8011-01-P