[Federal Register Volume 82, Number 179 (Monday, September 18, 2017)]
[Rules and Regulations]
[Pages 43491-43494]
[FR Doc No: 2017-19704]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 55

[OAR-2004-0091; FRL-9962-56-Region 9]

Outer Continental Shelf Air Regulations; Consistency Update for
California

AGENCY:  Environmental Protection Agency (EPA)

ACTION:  Final rule.

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SUMMARY:  The Environmental Protection Agency (EPA) is finalizing the
updates of the Outer Continental Shelf (``OCS'') Air Regulations
proposed in the Federal Register on June 17, 2016 and December 12,
2016. Requirements applying to OCS sources located within 25 miles of
States' seaward boundaries must be updated periodically to remain
consistent with the requirements of the corresponding onshore area
(``COA''), as mandated by section 328(a)(1) of the Clean Air Act, as
amended in 1990 (``the Act''). The portions of the OCS air regulations
that are being updated pertain to the requirements for OCS sources for
which the Santa Barbara County Air Pollution Control District (``Santa
Barbara County APCD'') and Ventura County Air Pollution Control
District (``Ventura County APCD'') are the designated COA. The intended
effect of approving the OCS requirements for the Santa Barbara County
APCD and Ventura County APCD is to regulate emissions from OCS sources
in accordance with the requirements onshore. The changes to the
existing requirements discussed in this document will be incorporated
by reference into the Code of Federal Regulations and listed in the
appendix to the OCS air regulations.

DATES:  This rule is effective on October 18, 2017. The incorporation
by reference of certain publications listed in this rule is approved by
the Director of the Federal Register as of October 18, 2017.

ADDRESSES:  EPA has established docket number OAR-2004-0091 for this
action. The index to the docket is available electronically at
www.regulations.gov and in hard copy at EPA Region IX, 75 Hawthorne
Street, San Francisco, California. While all documents in the docket
are listed in the index, some information may be publicly available
only at the hard copy location (e.g., copyrighted material), and some
may not be publicly available in either location (e.g., CBI). To
inspect the hard copy materials, please schedule an appointment during
normal business hours with the contact listed in the FOR FURTHER
INFORMATION CONTACT section.

FOR FURTHER INFORMATION CONTACT: Christine Vineyard, Air Division (Air-
4), U.S. EPA Region 9, 75 Hawthorne Street, San Francisco, CA 94105,
(415) 947-4125<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document, the terms ``we,''
``us,'' or ``our'' refer to U.S. EPA.
    Organization of this document: The following outline is provided to
aid in locating information in this preamble.

I. Proposed Action
II. Public Comments and EPA Responses
III. EPA Action
IV. Incorporation by Reference
V. Statutory and Executive Order Reviews

I. Proposed Action

    On June 17, 2016 (81 FR 39607) and December 12, 2016 (81 FR 39607),
EPA proposed to incorporate various Santa Barbara County APCD and
Ventura County APCD air pollution control requirements into the OCS Air
Regulations at 40 CFR part 55. We are incorporating these requirements
in response to the submittal of these rules by the Districts. EPA has
evaluated the proposed requirements to ensure that they are rationally
related to the attainment or maintenance of federal or state ambient
air quality standards or Part C of title I of the Act, that they are
not designed expressly to prevent exploration and development of the
OCS and that they are applicable to OCS sources. 40 CFR 55.1. EPA has
also evaluated the rules to ensure that they are not arbitrary or
capricious. 40 CFR 55.12(e).
    Section 328(a) of the Act requires that EPA establish requirements
to control air pollution from OCS sources located within 25 miles of
states' seaward boundaries that are the same as onshore requirements.
To comply with this statutory mandate, EPA must incorporate applicable
onshore rules into part 55 as they exist onshore. This limits EPA's
flexibility in deciding which requirements will be incorporated into
part 55 and prevents EPA from making substantive changes to the
requirements it incorporates. As a result, EPA may be incorporating
rules into part 55 that do not conform to all of EPA's state
implementation plan (SIP) guidance or certain requirements of the Act.
Consistency updates may result in the inclusion of state or local rules
or regulations into part 55, even though the same rules may ultimately
be disapproved for inclusion as part of the SIP. Inclusion in the OCS
rule does not imply that a rule meets the requirements of the Act for
SIP approval, nor does it imply that the rule will be approved by EPA
for inclusion in the SIP.

II. Public Comments and EPA Responses

    EPA's proposed actions provided 30-day public comment periods.
During these periods, we received no comments on the proposed actions.

III. EPA Action

    No comments were submitted. Therefore, as authorized in section
328(a)(1) of the Act, 42 U.S.C. 7627, the EPA is taking final action to
incorporate the proposed changes into 40 CFR part 55. Section 328(a) of
the Act requires that EPA establish requirements to control air
pollution from OCS sources located within 25 miles of states' seaward
boundaries that are the same as onshore requirements. To comply with
this statutory mandate, EPA must incorporate applicable onshore rules
into Part 55 as they exist onshore.

IV. Incorporation by Reference

    In this rule, the EPA is finalizing regulatory text that includes
incorporation by reference. In accordance with requirements of 1 CFR
51.5, the EPA is finalizing the incorporation by reference of the Santa
Barbara County APCD and Ventura County APCD requirements described in
the amendments to 40 CFR part 55 set forth below. The EPA has made, and
will continue to make, these documents available through
www.regulations.gov and at the EPA Region IX Office (please contact the
person identified in the FOR FURTHER INFORMATION CONTACT section of
this preamble for more information).

V. Statutory and Executive Order Reviews

    Under the Clean Air Act, the Administrator is required to establish
requirements to control air pollution from OCS sources located within
25 miles of States' seaward boundaries that are the same as onshore air
control requirements. To comply with this statutory mandate, EPA must
incorporate applicable onshore rules into part 55 as they exist
onshore. 42 U.S.C. 7627(a)(1); 40 CFR 55.12. Thus, in promulgating OCS
consistency updates, EPA's role is to maintain consistency between OCS
regulations and the regulations of onshore areas, provided that they
meet the criteria of the Clean Air Act. Accordingly, this action simply
updates the existing OCS requirements to make them consistent with
requirements onshore, without the exercise of any policy discretion by
EPA. For that reason, this action:
     Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Order
12866 (58 FR 51735, October 4, 1993);
     Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Publ. L. 104-4);
     Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the Clean Air Act; and
     Does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this rule does not have tribal implications as
specified by Executive Order 13175 (65 FR 67249, November 9, 2000),
because it does not have a substantial direct effect on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes, nor does it impose
substantial direct compliance costs on tribal governments, nor preempt
tribal law.
    Under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501
et seq., an agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless it displays
a currently valid OMB control number. OMB has approved the information
collection requirements contained in 40 CFR part 55 and, by extension,
this update to the rules, and has assigned OMB control number 2060-
0249. Notice of OMB's approval of EPA Information Collection Request
(``ICR'') No. 1601.07 was published in the Federal Register on February
17, 2009 (74 FR 7432). The approval expires January 31, 2012. As EPA
previously indicated (70 FR 65897-65898 (November 1, 2005)), the annual
public reporting and recordkeeping burden for collection of information
under 40 CFR part 55 is estimated to average 549 hours per response,
using the definition of burden provided in 44 U.S.C. 3502(2).
    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a report containing this action and
other required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2).
    Under section 307(b)(1) of the Clean Air Act, petitions for
judicial review of this action must be filed in the United States Court
of Appeals for the appropriate circuit by November 17, 2017. Filing a
petition for reconsideration by the Administrator of this final rule
does not affect the finality of this action for the purposes of
judicial review nor does it extend the time within which a petition for
judicial review may be filed, and shall not postpone the effectiveness
of such rule or action. This action may not be challenged later in
proceedings to enforce its requirements. (See section 307(b)(2)).

List of Subjects in 40 CFR Part 55

    Environmental protection, Administrative practice and procedures,
Air pollution control, Hydrocarbons, Incorporation by reference,
Intergovernmental relations, Nitrogen dioxide, Nitrogen oxides, Outer
continental shelf, Ozone, Particulate matter, Permits, Reporting and
recordkeeping requirements, Sulfur oxides.

    Dated: April 20, 2017.
Alexis Strauss,
Acting Regional Administrator, Region IX.

    Title 40 of the Code of Federal Regulations, Part 55, is amended as
follows:

PART 55--OUTER CONTINENTAL SHELF AIR REGULATIONS

0
1. The authority citation for part 55 continues to read as follows:

    Authority:  Section 328 of the Clean Air Act (42 U.S.C. 7401 et
seq.) as amended by Public Law 101-549.

0
2. Section 55.14 is amended by revising paragraphs (e)(3)(ii)(F) and
(H) to read as follows:

Sec.  55.14   Requirements that apply to OCS sources located within 25
miles of States' seaward boundaries, by State.

* * * * *
    (e) * * *
    (3) * * *
    (ii) * * *
    (F) Santa Barbara County Air Pollution Control District
Requirements Applicable to OCS Sources, April 2017.
* * * * *
    (H) Ventura County Air Pollution Control District Requirements
Applicable to OCS Sources, parts 1 and 2, April 2017.
* * * * *

0
3. Appendix A to part 55 is amended by revising paragraphs (b)(6) and
(8) under the heading ``California'' to read as follows:

Appendix A to Part 55--Listing of State and Local Requirements
Incorporated by Reference Into Part 55, by State

* * * * *
California
* * * * *
    (b) * * *
    (6) The following requirements are contained in Santa Barbara
County Air Pollution Control District Requirements Applicable to OCS
Sources, April 2017:

Rule 102 Definitions (Revised 08/25/16)
Rule 103 Severability (Adopted 10/23/78)
Rule 105 Applicability (Revised 08/25/16)
Rule 107 Emergencies (Adopted 04/19/01)
Rule 201 Permits Required (Revised 06/19/08)
Rule 202 Exemptions to Rule 201 (Revised 08/25/16)
Rule 203 Transfer (Revised 04/17/97)
Rule 204 Applications (Revised 08/25/16)
Rule 205 Standards for Granting Permits (Revised 04/17/97)
Rule 206 Conditional Approval of Authority to Construct or Permit to
Operate (Revised 10/15/91)
Rule 207 Denial of Application (Adopted 10/23/78)
Rule 210 Fees (Revised 03/17/05)
Rule 212 Emission Statements (Adopted 10/20/92)
Rule 301 Circumvention (Adopted 10/23/78)
Rule 302 Visible Emissions (Revised 6/1981)
Rule 303 Nuisance (Adopted 10/23/78)
Rule 304 Particulate Matter-Northern Zone (Adopted 10/23/78)
Rule 305 Particulate Matter Concentration-Southern Zone (Adopted 10/
23/78)
Rule 306 Dust and Fumes-Northern Zone (Adopted 10/23/78)
Rule 307 Particulate Matter Emission Weight Rate-Southern Zone
(Adopted 10/23/78)
Rule 308 Incinerator Burning (Adopted 10/23/78)
Rule 309 Specific Contaminants (Adopted 10/23/78)
Rule 310 Odorous Organic Sulfides (Adopted 10/23/78)
Rule 311 Sulfur Content of Fuels (Adopted 10/23/78)
Rule 312 Open Fires (Adopted 10/02/90)
Rule 316 Storage and Transfer of Gasoline (Revised 01/15/09)
Rule 317 Organic Solvents (Adopted 10/23/78)
Rule 318 Vacuum Producing Devices or Systems-Southern Zone (Adopted
10/23/78)
Rule 321 Solvent Cleaning Operations (Revised 06/21/12)
Rule 322 Metal Surface Coating Thinner and Reducer (Adopted 10/23/
78)
Rule 323 Architectural Coatings (Revised 11/15/01)
Rule 323.1 Architectural Coatings (Adopted 06/19/14, Effective 01/
01/15)
Rule 324 Disposal and Evaporation of Solvents (Adopted 10/23/78)
Rule 325 Crude Oil Production and Separation (Revised 07/19/01)
Rule 326 Storage of Reactive Organic Compound Liquids (Revised 01/
18/01)
Rule 327 Organic Liquid Cargo Tank Vessel Loading (Revised 12/16/85)
Rule 328 Continuous Emission Monitoring (Adopted 10/23/78)
Rule 330 Surface Coating of Metal Parts and Products (Revised 06/21/
12)
Rule 331 Fugitive Emissions Inspection and Maintenance (Revised 12/
10/91)
Rule 332 Petroleum Refinery Vacuum Producing Systems, Wastewater
Separators and Process Turnarounds (Adopted 06/11/79)
Rule 333 Control of Emissions from Reciprocating Internal Combustion
Engines (Adopted 06/19/08)
Rule 342 Control of Oxides of Nitrogen (NOX) from
Boilers, Steam Generators and Process Heaters) (Revised 04/17/97)
Rule 343 Petroleum Storage Tank Degassing (Adopted 12/14/93)
Rule 344 Petroleum Sumps, Pits, and Well Cellars (Adopted 11/10/94)
Rule 346 Loading of Organic Liquid Cargo Vessels (Revised 01/18/01)
Rule 349 Polyester Resin Operations (Revised 06/21/12)
Rule 352 Natural Gas-Fired Fan-Type Central Furnaces and Residential
Water Heaters (Revised 10/20/11)
Rule 353 Adhesives and Sealants (Revised 06/21/12)
Rule 359 Flares and Thermal Oxidizers (Adopted 06/28/94)
Rule 360 Emissions of Oxides of Nitrogen from Large Water Heaters
and Small Boilers (Adopted 10/17/02)
Rule 361 Small Boilers, Steam Generators, and Process Heaters
(Adopted 01/17/08)
Rule 370 Potential to Emit--Limitations for Part 70 Sources (Revised
01/20/11)
Rule 505 Breakdown Conditions Sections A.,B.1, and D. only (Adopted
10/23/78)
Rule 603 Emergency Episode Plans (Adopted 06/15/81)
Rule 702 General Conformity (Adopted 10/20/94)
Rule 801 New Source Review--Definitions and General Requirements
(Revised 08/25/16)
Rule 802 New Source Review (Revised 08/25/16)
Rule 804 Emission Offsets (Revised 08/25/16)
Rule 805 Air Quality Impact Analysis, Modeling, Monitoring, and Air
Quality Increment Consumption (Revised 08/25/16)
Rule 806 Emission Reduction Credits (Revised 08/25/16)
Rule 808 New Source Review for Major Sources of Hazardous Air
Pollutants (Adopted 05/20/99)
Rule 809 Federal Minor Source New Source Review (Revised 08/25/16)
Rule 810 Federal Prevention of Significant Deterioration (PSD)
(Revised 06/20/13)
Rule 1301 Part 70 Operating Permits--General Information (Revised
08/25/16)
Rule 1302 Part 70 Operating Permits--Permit Application (Adopted 11/
09/93)
Rule 1303 Part 70 Operating Permits--Permits (Revised 01/18/01)
Rule 1304 Part 70 Operating Permits--Issuance, Renewal, Modification
and Reopening (Revised 01/18/01)
Rule 1305 Part 70 Operating Permits--Enforcement (Adopted 11/09/93)
* * * * *
    (8) The following requirements are contained in Ventura County
Air Pollution Control District Requirements Applicable to OCS
Sources, parts 1 and 2, April 2017:
Rule 2 Definitions (Revised 04/12/11)
Rule 5 Effective Date (Revised 04/13/04)
Rule 6 Severability (Revised 11/21/78)
Rule 7 Boundaries (Adopted 06/14/77)
Rule 10 Permits Required (Revised 04/13/04)
Rule 11 Definition for Regulation II (Amended 03/14/06)
Rule 12 Applications for Permits (Adopted 06/13/95)
Rule 13 Action on Applications for an Authority To Construct
(Adopted 06/13/95)
Rule 14 Action on Applications for a Permit To Operate (Adopted 06/
13/95)
Rule 15.1 Sampling and Testing Facilities (Adopted 10/12/93)
Rule 16 BACT Certification (Adopted 06/13/95)
Rule 19 Posting of Permits (Revised 05/23/72)
Rule 20 Transfer of Permit (Revised 05/23/72)
Rule 23 Exemptions From Permits (Revised 11/12/13)
Rule 24 Source Recordkeeping, Reporting, and Emission Statements
(Revised 09/15/92)
Rule 26 New Source Review--General (Amended 03/14/06)
Rule 26.1 New Source Review--Definitions (Revised 11/14/06)
Rule 26.2 New Source Review--Requirements (Revised 03/14/06)
Rule 26.3 New Source Review--Exemptions (Revised 3/14/06)
Rule 26.6 New Source Review--Calculations (Revised 3/14/06)
Rule 26.8 New Source Review--Permit To Operate (Adopted 10/22/91)
Rule 26.11 New Source Review--ERC Evaluation at Time of Use (Adopted
05/14/02)
Rule 26.12 Federal Major Modifications (Adopted 06/27/06)
Rule 26.13 New Source Review--Prevention of Significant
Deterioration (PSD) (Revised 11/10/15)

Rule 28 Revocation of Permits (Revised 07/18/72)
Rule 29 Conditions on Permits (Revised 03/14/06)
Rule 30 Permit Renewal (Revised 04/13/04)
Rule 32 Breakdown Conditions: Emergency Variances, A., B.1., and D.
only. (Revised 02/20/79)
Rule 33 Part 70 Permits-General (Revised 04/12/11)
Rule 33.1 Part 70 Permits--Definitions (Revised 04/12/11)
Rule 33.2 Part 70 Permits--Application Contents (Revised 04/10/01)
Rule 33.3 Part 70 Permits--Permit Content (Revised 09/12/06)
Rule 33.4 Part 70 Permits--Operational Flexibility (Revised 04/10/
01)
Rule 33.5 Part 70 Permits--Timeframes for Applications, Review and
Issuance (Adopted 10/12/93)
Rule 33.6 Part 70 Permits--Permit Term and Permit Reissuance
(Adopted 10/12/93)
Rule 33.7 Part 70 Permits--Notification (Revised 04/10/01)
Rule 33.8 Part 70 Permits--Reopening of Permits (Adopted 10/12/93)
Rule 33.9 Part 70 Permits--Compliance Provisions (Revised 04/10/01)
Rule 33.10 Part 70 Permits--General Part 70 Permits (Adopted 10/12/
93)
Rule 34 Acid Deposition Control (Adopted 03/14/95)
Rule 35 Elective Emission Limits (Revised 04/12/11)
Rule 36 New Source Review--Hazardous Air Pollutants (Adopted 10/06/
98)
Rule 42 Permit Fees (Revised 04/12/16)
Rule 44 Exemption Evaluation Fee (Revised 04/08/08)
Rule 45 Plan Fees (Adopted 06/19/90)
Rule 45.2 Asbestos Removal Fees (Revised 08/04/92)
Rule 47 Source Test, Emission Monitor, and Call-Back Fees (Adopted
06/22/99)
Rule 50 Opacity (Revised 04/13/04)
Rule 52 Particulate Matter--Concentration (Grain Loading)(Revised
04/13/04)
Rule 53 Particulate Matter--Process Weight (Revised 04/13/04)
Rule 54 Sulfur Compounds (Revised 01/14/14)
Rule 56 Open Burning (Revised 11/11/03)
Rule 57 Incinerators (Revised 01/11/05)
Rule 57.1 Particulate Matter Emissions From Fuel Burning Equipment
(Adopted 01/11/05)
Rule 62.7 Asbestos-Demolition and Renovation (Adopted 06/16/92,
Effective 09/01/92)
Rule 63 Separation and Combination of Emissions (Revised 11/21/78)
Rule 64 Sulfur Content of Fuels (Revised 04/13/99)
Rule 68 Carbon Monoxide (Revised 04/13/04)
Rule 71 Crude Oil and Reactive Organic Compound Liquids (Revised 12/
13/94)
Rule 71.1 Crude Oil Production and Separation (Revised 06/16/92)
Rule 71.2 Storage of Reactive Organic Compound Liquids (Revised 09/
26/89)
Rule 71.3 Transfer of Reactive Organic Compound Liquids (Revised 06/
16/92)
Rule 71.4 Petroleum Sumps, Pits, Ponds, and Well Cellars (Revised
06/08/93)
Rule 71.5 Glycol Dehydrators (Adopted 12/13/94)
Rule 72 New Source Performance Standards (NSPS) (Revised 09/9/08)
Rule 73 National Emission Standards for Hazardous Air Pollutants
(NESHAPS) (Revised 09/9/08)
Rule 74 Specific Source Standards (Adopted 07/06/76)
Rule 74.1 Abrasive Blasting (Revised 11/12/91)
Rule 74.2 Architectural Coatings (Revised 01/12/10)
Rule 74.6 Surface Cleaning and Degreasing (Revised 11/11/03--
effective 07/01/04)
Rule 74.6.1 Batch Loaded Vapor Degreasers (Adopted 11/11/03--
effective 07/01/04)
Rule 74.7 Fugitive Emissions of Reactive Organic Compounds at
Petroleum Refineries and Chemical Plants (Revised 10/10/95)
Rule 74.8 Refinery Vacuum Producing Systems, Waste-Water Separators
and Process Turnarounds (Revised 07/05/83)
Rule 74.9 Stationary Internal Combustion Engines (Revised 11/08/05)
Rule 74.10 Components at Crude Oil Production Facilities and Natural
Gas Production and Processing Facilities (Revised 03/10/98)
Rule 74.11 Natural Gas-Fired Residential Water Heaters--Control of
NOX (Revised 05/11/10)
Rule 74.11.1 Large Water Heaters and Small Boilers (Revised 09/11/
12)
Rule 74.12 Surface Coating of Metal Parts and Products (Revised 04/
08/08)
Rule 74.15 Boilers, Steam Generators and Process Heaters (5 MMBTUs
and greater) (Revised 11/08/94)
Rule 74.15.1 Boilers, Steam Generators and Process Heaters (1 to 5
MMBTUs) (Revised 06/23/15)
Rule 74.16 Oil Field Drilling Operations (Adopted 01/08/91)
Rule 74.20 Adhesives and Sealants (Revised 09/11/12)
Rule 74.23 Stationary Gas Turbines (Revised 1/08/02)
Rule 74.24 Marine Coating Operations (Revised 09/11/12)
Rule 74.24.1 Pleasure Craft Coating and Commercial Boatyard
Operations (Revised 01/08/02)
Rule 74.26 Crude Oil Storage Tank Degassing Operations (Adopted 11/
08/94)
Rule 74.27 Gasoline and ROC Liquid Storage Tank Degassing Operations
(Adopted 11/08/94)
Rule 74.28 Asphalt Roofing Operations (Adopted 05/10/94)
Rule 74.30 Wood Products Coatings (Revised 06/27/06)
Rule 74.31 Metal Working Fluids and Direct-Contact Lubricants
(Adopted 11/12/13)
Rule 75 Circumvention (Revised 11/27/78)
Rule 101 Sampling and Testing Facilities (Revised 05/23/72)
Rule 102 Source Tests (Revised 04/13/04)
Rule 103 Continuous Monitoring Systems (Revised 02/09/99)
Rule 154 Stage 1 Episode Actions (Adopted 09/17/91)
Rule 155 Stage 2 Episode Actions (Adopted 09/17/91)
Rule 156 Stage 3 Episode Actions (Adopted 09/17/91)
Rule 158 Source Abatement Plans (Adopted 09/17/91)
Rule 159 Traffic Abatement Procedures (Adopted 09/17/91)
Rule 220 General Conformity (Adopted 05/09/95)
Rule 230 Notice to Comply (Revised 9/9/08)
* * * * *
[FR Doc. 2017-19704 Filed 9-15-17; 8:45 am]
 BILLING CODE 6560-50-P


[Federal Register Volume 75, Number 236 (Thursday, December 9, 2010)]
[Proposed Rules]
[Pages 76664-76666]
[FR Doc No: 2010-30966]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 774

[Docket No. 101112562-0577-01]

Commerce Control List: Revising Descriptions of Items and Foreign
Availability

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Advance notice proposed rulemaking.

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SUMMARY: As part of the President's export control reform initiative,
the Bureau of Industry and Security (BIS) seeks public comments on how
the descriptions of items controlled on the Commerce Control List (CCL)
of the Export Administration Regulations (EAR) could be more clear and
positive and ``tiered'' in a manner consistent with the control
criteria the Administration has developed as part of the reform effort.
The request for comments on how items on the CCL could be tiered
includes a request for comments on the degree to which a controlled
item provides the United States with a critical, substantial, or
significant military or intelligence advantage; and the availability of
the item outside certain groups of countries.

DATES: Comments must be received by February 7, 2011.

ADDRESSES: Written comments on this notice of inquiry may be sent by e-
mail to<EMAIL_ADDRESS>Include ``Notice of Inquiry--CCL''
in the subject line of the message. Comments may also be submitted by
mail or hand delivery to Timothy Mooney, Office of Exporter Services,
Regulatory Policy Division, Bureau of Industry and Security, Department
of Commerce, 1401 Constitution Avenue, NW., Room 2705, Washington, DC
20230, ATTN: Notice of Inquiry--CCL.

FOR FURTHER INFORMATION CONTACT: Timothy Mooney, Regulatory Policy
Division, Bureau of Industry and Security, Telephone:<PHONE_NUMBER>,
E-mail<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Background

    A core task of the Administration's Export Control Reform
Initiative is to enhance national security by reviewing and revising,
as necessary and to the extent permitted by law and regime obligations,
the lists of items (i.e., commodities, software, and technology)
controlled for export and reexport so that they (1) are clearer and
more ``positive'' in nature and (2) can more easily be screened into
three tiers based upon a set of criteria. The Administration has
developed a three-tiered set of criteria to help determine whether a
license should be required or a license exception should be available
to allow license-free export, reexport, or transfer (in-country) of a
given item, with appropriate conditions, to various destinations. The
three-tiered set of criteria has two primary elements--(a) the degree
to which an item provides the United States with a military or
intelligence advantage and (b) the availability of the item outside the
United States, its close allies and multilateral export control regime
partners.

1. Request for Comments on How To Make the CCL More Clear and
``Positive''

a. Background--The Current Commerce Control List and the Reform Effort
    The Commerce Control List (CCL), which is in Supplement No. 1 to
part 774 of the Export Administration Regulations (EAR) (15 CFR part
774), is the list of items for which BIS controls the export, reexport,
and transfer (in-country). The CCL's ten categories identify controlled
items by five-character Export Control Classification Numbers (ECCNs).
Items that are not listed on the CCL but are still ``subject to the
EAR'' are designated as ``EAR99'' items.
    Most items on the CCL are controlled in accordance with the United
States' commitments to the four multilateral export control regimes,
i.e., the Wassenaar Arrangement on Export Controls for Conventional
Arms and Dual-Use Goods and Technologies, the Missile Technology
Control Regime, the Australia Group, and the Nuclear Suppliers Group.
Members of the regimes have the discretion to clarify the descriptions
of regime-controlled items on their domestic control lists.
    BIS also has items on the CCL that are controlled unilaterally by
the United States, and thus generally has the authority to clarify the
descriptions of those items. For purposes of this notice, a
unilaterally controlled item is any item listed on the CCL that is not
listed on a control list of one of the four multilateral export control
regimes. These unilaterally controlled items are typically listed in
the ``900'' series on the CCL, such as ECCNs 1C998 or 9A980, but many
multilaterally controlled items (i.e., items listed in the ECCNs in the
``000'', ``100'', ``200'' and ``300'' series) also include reasons for
control that are unilateral, such as an item in the ``000'' series that
is controlled for national

security (NS) reasons but is also controlled for antiterrorism (AT)
reasons.
    The CCL is mostly a ``positive'' control list that describes items
using objective criteria, such as qualities to be measured (e.g.,
accuracy, speed, and wavelength), units of measure (e.g., hertz,
horsepower, and microns), or other precise descriptions, rather than
broad, open-ended, subjective, catch-all, or design intent-based
criteria. However, not all ECCNs contain ``positive'' descriptions and
some descriptions could be clearer and more specific. The
Administration wants the lists of items controlled pursuant to export
control laws and regulations (i.e., the CCL and the United States
Munitions List (USML) (22 CFR part 121) of the International Traffic in
Arms Regulations (ITAR) (22 CFR parts 120 through 130)) to be
sufficiently ``positive,'' clear, and precise so that persons,
including persons who are not knowledgeable about U.S. export controls,
who understand the technical parameters, characteristics, and
capabilities of an item ordinarily will be able to determine its export
control classification and jurisdictional status without needing to
consult the government for an interpretation. For these reasons, BIS
seeks public comment on how to improve the descriptions of items on the
CCL that are unclear or that use vague, open-ended, or subjective
criteria.
b. The Types of Comments BIS Seeks Pertaining to the Text of the ECCNs
    If possible, suggestions on ways to improve the descriptions of
items on the CCL should reflect internationally accepted standards and
use industry-standard terms and references. Where objective criteria
are missing from ECCNs, BIS seeks specific suggestions on what
technical parameters, characteristics, thresholds, and capabilities
should be used to describe the item. All suggestions should include
proposed revisions to the text of ECCNs or proposed Technical Notes to
ECCNs that explain terms or phrases used in the ECCN. Suggestions may
include proposed revisions to the text of ECCNs to rearrange the order
of words or technical parameters to make the entries more clear. All
suggestions should contain an explanation, with supporting materials if
available, of why the proposed change is needed to the ECCN and why the
proposed changes would make the ECCN more clear and positive than the
current ECCN.

2. Request for Comments on the ``Tiering'' of Items on the CCL

a. Background--The Criteria Used in the Reform Effort for Evaluating
Controlled Items
    The Administration is considering whether to amend, to the extent
permitted by law and U.S. regime obligations, the lists of export
controlled items--the CCL and the USML--and related licensing policies
to accord with new criteria that focus controls on the most sensitive
items. These criteria would place items listed on these two control
lists into three tiers. Tier 1 items are (a) weapons of mass
destruction (WMD); (b) WMD-capable unmanned delivery system; (c)
plants, facilities, or items specially designed for producing,
processing, or using WMDs, special nuclear materials, or WMD-capable
unmanned delivery systems; or (d) items almost exclusively available
from the United States and which provide a critical military or
intelligence advantage to the United States. Tier 2 items are almost
exclusively available from regime partners or adherents and provide a
substantial military or intelligence advantage to the United States, or
make a substantial contribution to the indigenous development,
production, use, or enhancement of a Tier 1 or Tier 2 item. Tier 3
items are more broadly available and provide a significant military or
intelligence advantage to the United States or make a significant
contribution to the indigenous development, production, use, or
enhancement of a Tier 1, 2, or 3 item, or are otherwise controlled for
national security, foreign policy, or human rights reasons. Thus, an
aspect of the criteria the Administration has developed is the degree
to which a controlled item is available outside of different groups of
countries.
    The following are definitions of several of the key terms and
phrases used in the tiered criteria set forth above. The term ``almost
exclusively available'' means that the item is only available from a
very small number of other countries that have in place effective
export controls on the item. The term ``critical'' means providing a
capability with respect to which the United States cannot afford to
fall to parity and that would pose a grave threat to U.S. national
security if not controlled (i.e., a ``crown jewel''). Examples of
``grave threat to U.S. national security'' include: Armed hostilities
against the United States or its allies; disruption of foreign
relations vitally affecting the national security; the compromise of
vital national defense plans or complex crypto-logic and communications
intelligence systems; the revelation of sensitive intelligence
operations; the disclosure of scientific or technological developments
vital to national security; or critical assistance to foreign
development or acquisition of WMD.
    The term ``substantial'' means providing a capability with respect
to which the United States must maintain parity and that would pose a
serious threat to U.S. national security if not controlled. Examples of
a ``serious threat to the U.S. national security'' include: Disruption
of foreign relations significantly affecting the national security;
substantial impairment of a program or policy directly related to the
national security; revelation of significant military plans or
intelligence operations; compromise of scientific or technological
developments important to national security; or substantial assistance
to foreign development or acquisition of a WMD.
    The term ``significant'' means providing a capability that could be
reasonably expected to cause damage to U.S. national security if not
controlled. Examples of ``damage to U.S. national security'' include:
Disruption of foreign relations affecting the national security;
impairment of a program or policy directly related to the national
security; revelation of military plans or intelligence operations;
compromise of scientific or technological developments relating to
national security; or assistance to foreign development or acquisition
of a WMD.
    The basic premise of this aspect of the Export Control Reform
effort is that if an item type falls within the scope of one of the
criteria's three tiers, the item should be controlled for export,
reexport, and in-country transfer at the level set forth in the
licensing policy the U.S. Government is developing for that tier. The
licensing policies to be assigned to each tier are still under
development but generally, the highest tier of control will carry the
most comprehensive license and compliance requirements. If an item is
determined not to be within the scope of any of the three tiers, it
should not be on a control list. Items that do not meet one of the
primary elements of the tiered criteria, such as being significant for
maintaining a military or intelligence advantage, that must nonetheless
be controlled for a separate foreign policy, statutory, or multilateral
obligation, will be identified as Tier 3 items with the required
licensing policy.

b. The Types of Information BIS Seeks Regarding the How Items on the
CCL Could Be Tiered
    As described above, there are two primary aspects to determining
how an item on the CCL should be tiered--(i) the degree to which the
item provides a military or intelligence advantage to the United States
and (ii) its availability outside of certain groups of countries.
i. Request for Comments on How Items on the CCL Could Be Described
Based on the Tier Criteria
    BIS seeks public comments on whether items on the CCL that are
controlled for other than solely Anti-Terrorism (AT) or Crime Control
(CC) reasons provide a ``critical,'' ``substantial,'' or
``significant'' military or intelligence advantage to the United
States, as these terms are defined above. This includes a request for
comments on how existing ECCNs, down to the subparagraph level, could
be further divided so that their descriptions are divided by technical
or other objective characteristics consistent with the ``critical,''
``substantial,'' and ``significant'' criteria. The U.S. Government will
make the final decisions on what types of CCL-listed items are within
the scope of any of the three tiers and, thus, may or may not accept
suggestions regarding how items should be tiered. Nonetheless, BIS is
interested in the public's comments on the issue of how CCL-listed
items can be described so that they are distinguished even within ECCNs
by tier.
ii. Request for Comments on the Availability of Items on the CCL
    BIS also seeks public comments on whether items with the
capabilities and characteristics described on the CCL, and controlled
for other than solely anti-terrorism (AT) reasons or Crime Control (CC)
reasons, are indigenously developed, produced, or enhanced (a) almost
exclusively in the United States or (b) in destinations other than
Argentina, Australia, Austria, Belgium, Bulgaria, Canada, Croatia, the
Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece,
Hungary, Iceland, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg,
Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Slovakia,
Slovenia, South Korea, Spain, Sweden, Switzerland, Turkey, Ukraine, or
the United Kingdom. For purposes of this notice, ``enhanced'' means
that (a) the basic characteristics, such as accuracy, capability,
performance, or productivity of the item listed on the CCL are improved
to provide greater functionality, and (b) the enhancement is effected
in destinations outside the above-listed destinations. Information
about the availability of these CCL-listed items will help BIS and the
other relevant U.S. Government agencies determine the appropriate tier
for these items.
    Public comments should do more than merely state that specific
items are available outside the United States or this group of
countries. Rather, they should include specific, objectively verifiable
information regarding the availability--that is, the indigenous
development, production, or enhancement of the CCL-listed items. The
types of availability information that will be most useful to BIS
include, for example, those set out in EAR section 768.6, which are
evidence that the item is (i) available-in-fact, (ii) from a non-U.S.
source, (iii) in sufficient quantity, and (iv) of comparable quality.
    For example, a public comment identifying a CCL-listed item as
being manufactured outside the above-listed countries should ideally
include (a) information about its foreign manufacturer(s), (b) relevant
company catalogues or print-outs from company websites that describe
the item's technical capabilities and parameters, and (c) a detailed,
documented explanation of why these parameters equal or exceed those
contained in the relevant ECCN entry. Company claims that are made in
catalogues or Web sites that are based on accepted international
standards or other internationally recognized certification authorities
are more likely to be useful to BIS than claims that are more difficult
to objectively verify.

3. Comments That Are Outside the Scope of This Notice

    As a separate regulatory initiative, BIS and the State Department
are planning to coordinate on the parallel publishing of proposed rules
in the Federal Register that would create a definition of the term
``specially designed'' that would be common within the CCL and that
would replace the definition of ``specifically designed'' in the ITAR.
Accordingly, this notice of inquiry does not solicit comments
pertaining to the use of this term. In addition, this notice does not
seek public comment on whether an item should or should not be
controlled on the CCL, whether the United States should ask any of the
four export control regimes to change the controls on an item, or
whether an item should be controlled differently for export and
reexport to different countries. General comments on the overall reform
process or the other aspects of current export controls are similarly
outside the scope of this inquiry.
    Comments should be submitted to BIS as described in the ADDRESSES
section of this notice by February 7, 2011.

    Dated: December 6, 2010.
Kevin J. Wolf,
Assistant Secretary of Commerce for Export Administration.
[FR Doc. 2010-30966 Filed 12-8-10; 8:45 am]
BILLING CODE 3510-33-P


[Federal Register Volume 80, Number 128 (Monday, July 6, 2015)]
[Rules and Regulations]
[Page 38394]
[FR Doc No: 2015-16530]

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

Coast Guard

33 CFR Part 100

[Docket No. USCG-2015-0376]
RIN 1625-AA08

Special Local Regulations; Annual Events in the Captain of the
Port Detroit Zone

AGENCY: Coast Guard, DHS.

ACTION: Notice of enforcement of regulation.

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SUMMARY: The Coast Guard will enforce the safety zones for annual
marine events in the Captain of the Port Detroit zone on the dates and
times noted below. This action is necessary and intended to ensure
safety of life on the navigable waters immediately prior to, during,
and immediately after marine events. During the aforementioned period,
the Coast Guard will enforce restrictions upon, and control movement
of, vessels in a portion of the Captain of the Port Detroit zone.

DATES: The regulations in 33 CFR 100.921, 33 CFR 100.927, and 33 CFR
100.928 will be enforced on the dates and times noted below.

FOR FURTHER INFORMATION CONTACT: If you have questions on this notice,
call or email LT Jennifer M. Disco, Waterways Branch Chief, Marine
Safety Unit Toledo, 420 Madison Ave., Suite 700, Toledo, OH 43604;
telephone<PHONE_NUMBER>; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: The Coast Guard will enforce the special
local regulations listed in 33 CFR 100.921, 33 CFR 100.927, and 33 CFR
100.928, Special Local Regulations; Annual Events in the Captain of the
Port Detroit Zone, at the following times for the following events:
    (1) Kelley's Island Swim, Lake Erie, Lakeside, OH. The special
local regulation listed in 33 CFR 100.921 will be enforced from 7 a.m.
until 11 a.m. on July 15, 2015. This special local regulation will
encompass all U.S. navigable waters of Lake Erie, Lakeside, OH,
contained by a line connecting the following points: two points on land
at the Lakeside dock, 41[deg]32'51.96'' N./082[deg]45'3.15'' W. and
41[deg]32'52.21'' N./082[deg]45'2.19'' W., and two points on Kelley's
Island at the Kelley's Island Dock, 41[deg]35'24.59'' N./
082[deg]42'16.61'' W., and 41[deg]35'24.44'' N./082[deg]42'16.04'' W.
(NAD 83).
    (2) Dragon Boat Races, Maumee River; Toledo, OH. The special local
regulation listed in 33 CFR 100.927 will be enforced from 6 a.m. to 6
p.m. on June 20, 2015. This special local regulation will encompass all
U.S. navigable waters of the Maumee River, Toledo, OH, bound by a line
extending from a point on land just north of the Cherry Street Bridge
at position 41[deg]39'5.27'' N.; 083[deg]31'34.01'' W. straight across
the river along the Cherry Street bridge to position 41[deg]39'12.83''
N.; 083[deg]31'42.58'' W. and a line extending from a point of land
just south of International Park at position 41[deg]38'46.62'' N.;
083[deg]31'50.54'' W. straight across the river to the shore adjacent
to position 41[deg]38'47.37'' N.; 083[deg]32'2.05'' W. (NAD 83).
    (3) Frogtown Race Regatta, Toledo, OH. The special local regulation
listed in 33 CFR 100.928 will be enforced from 5 a.m. to 7 p.m. on
September 26, 2015. This special local regulation will encompass all
navigable waters of the United States on the Maumee River, Toledo, OH,
from the Norfolk and Southern Railway Bridge at River Mile 1.80 to the
Anthony Wayne Bridge at River Mile 5.16.
    Under the provisions of 33 CFR 100.921, 33 CFR 100.927, and 33 CFR
100.928, vessels transiting within the regulated area shall travel at a
no-wake speed and remain vigilant for event participants and safety
craft. Additionally, vessels shall yield right-of-way for event
participants and event safety craft and shall follow directions given
by the Coast Guard's on-scene representative or by event
representatives during the event. The ``on-scene representative'' of
the Captain of the Port Detroit is any Coast Guard commissioned,
warrant, or petty officer who has been designated by the Captain of the
Port Detroit to act on his behalf. The on-scene representative of the
Captain of the Port Detroit will be aboard either a Coast Guard or
Coast Guard Auxiliary vessel. The Captain of the Port, Sector Detroit
or his designated on scene representative may be contacted via VHF
Channel 16.

    Dated: June 8, 2015.
Scott B. Lemasters,
Captain, U.S. Coast Guard, Captain of the Port Detroit.
[FR Doc. 2015-16530 Filed 7-2-15; 8:45 am]
 BILLING CODE 9110-04-P


[Federal Register Volume 79, Number 56 (Monday, March 24, 2014)]
[Notices]
[Page 16031]
[FR Doc No: 2014-06294]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Internal Agency Docket No. FEMA-4162-DR; Docket ID FEMA-2014-0003]

Alaska; Major Disaster and Related Determinations

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

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SUMMARY: This is a notice of the Presidential declaration of a major
disaster for the State of Alaska (FEMA-4162-DR), dated January 23,
2014, and related determinations.

DATES: Effective Date: January 23, 2014.

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

SUPPLEMENTARY INFORMATION: Notice is hereby given that, in a letter
dated January 23, 2014, the President issued a major disaster
declaration under the authority of the Robert T. Stafford Disaster
Relief and Emergency Assistance Act, 42 U.S.C. 5121 et seq. (the
``Stafford Act''), as follows:

I have determined that the damage in certain areas of the State of
Alaska resulting from severe storms, straight-line winds, and
flooding during the period of November 5-14, 2013, is of sufficient
severity and magnitude to warrant a major disaster declaration under
the Robert T. Stafford Disaster Relief and Emergency Assistance Act,
42 U.S.C. 5121 et seq. (the ``Stafford Act''). Therefore, I declare
that such a major disaster exists in the State of Alaska.
In order to provide Federal assistance, you are hereby authorized to
allocate from funds available for these purposes such amounts as you
find necessary for Federal disaster assistance and administrative
expenses.
    You are authorized to Public Assistance in the designated areas
and Hazard Mitigation throughout the State. Consistent with the
requirement that Federal assistance be supplemental, any Federal
funds provided under the Stafford Act for Hazard Mitigation will be
limited to 75 percent of the total eligible costs. Federal funds
provided under the Stafford Act for Public Assistance also will be
limited to 75 percent of the total eligible costs, with the
exception of projects that meet the eligibility criteria for a
higher Federal cost-sharing percentage under the Public Assistance
Alternative Procedures Pilot Program for Debris Removal implemented
pursuant to section 428 of the Stafford Act.
Further, you are authorized to make changes to this declaration for
the approved assistance to the extent allowable under the Stafford
Act.

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

Bering Strait Regional Education Attendance Area (REAA), Fairbanks
North Star Borough, Lower Kuskokwim REAA, and Lower Yukon REAA for
Public Assistance.
All boroughs and REAAs within the State of Alaska are eligible to
apply for assistance under the Hazard Mitigation Grant Program.
The following Catalog of Federal Domestic Assistance Numbers (CFDA)
are to be used for reporting and drawing funds: 97.030, Community
Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis Counseling;
97.033, Disaster Legal Services; 97.034, Disaster Unemployment
Assistance (DUA); 97.046, Fire Management Assistance Grant; 97.048,
Disaster Housing Assistance to Individuals and Households In
Presidentially Declared Disaster Areas; 97.049, Presidentially
Declared Disaster Assistance--Disaster Housing Operations for
Individuals and Households; 97.050, Presidentially Declared Disaster
Assistance to Individuals and Households--Other Needs; 97.036,
Disaster Grants--Public Assistance (Presidentially Declared
Disasters); 97.039, Hazard Mitigation Grant.

W. Craig Fugate,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2014-06294 Filed 3-21-14; 8:45 am]
BILLING CODE 9111-23-P


[Federal Register Volume 75, Number 237 (Friday, December 10, 2010)]
[Notices]
[Pages 77036-77041]
[FR Doc No: 2010-31078]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63448; File No. SR-BX-2010-059]

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Order
Instituting Proceedings To Determine Whether To Disapprove Proposed
Rule Change, as Modified by Amendment No. 1, To Create a Listing Market
on the Exchange

December 7, 2010.

I. Introduction

    On August 20, 2010, NASDAQ OMX BX (``BX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission''), pursuant
to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'' or
``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule
change to create a new listing market. The proposed rule change was
published for comment in the Federal Register on September 8, 2010.\3\
The Commission received three comments on the proposal.\4\ The
Commission subsequently extended the time period in which to either
approve the proposed rule change, disapprove the proposed rule change,
or institute proceedings to determine whether to disapprove the
proposed rule change, to December 7, 2010.\5\ On December 6, 2010, BX
submitted Amendment No. 1 to the proposed rule change.\6\ This order
institutes proceedings to determine whether to disapprove the proposed
rule change, as modified by Amendment No. 1. Institution of disapproval
proceedings, however, does not indicate that the Commission has
formulated any conclusions with respect to any of the issues involved.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 62818 (September 1,
2010), 75 FR 54665 (``Notice'').
    \4\ See Letters to Elizabeth M. Murphy, Secretary, Commission,
from Tom A. Alberg, Managing Director and Founder, Madrona Venture
Group, dated December 1, 2010 (``Madrona Letter''); Michael R.
Trocchio, Bingham McCutchen LLP, dated October 3, 2010 (``Pink OTC
Markets Letter''); and William F. Galvin, Secretary of the
Commonwealth, Commonwealth of Massachusetts, dated September 28,
2010 (``MSD Letter'').
    \5\ See Securities Exchange Act Release No. 63105 (October 14,
2010), 75 FR 64772 (October 20, 2010).
    \6\ See infra Section II for a description of Amendment No. 1.
---------------------------------------------------------------------------

II. Description of the Proposal \7\
---------------------------------------------------------------------------

    \7\ This description does not review every rule proposed by BX
that has been filed as part of its proposed rule change; rather, it
focuses on the most prominent rules considered in review of the BX's
proposal. See Notice, supra note 3, for a description of the
proposed rule change. See also Exhibit 5 to the Form 19b-4 for all
the rules proposed by BX, available at http://www.sec.gov/rules/sro/bx/2010/34-62818-ex5.pdf.
---------------------------------------------------------------------------

    The Exchange proposes to create a new listing market, to be called
the ``BX Venture Market.'' \8\ The Exchange has stated that it expects
that the securities listed on BX would not be classified as national
market system (``NMS'') securities.\9\ As a result, BX-listed
securities would not be subject to an NMS plan and would not be subject
to Regulation NMS under the Act.\10\ BX-listed securities would trade
on the Exchange and also could trade over-the-counter (``OTC'').\11\
Further, BX-listed securities would be considered penny stocks under
Exchange Act Rule 3a51-1, unless they qualify for an exemption from the
definition of a penny stock.\12\ No ``blue sky'' exemption would be
available under Section 18 of the Securities Act of 1933 or the rule
adopted thereunder,\13\ so companies would be required to satisfy state
law registration requirements and other state laws that regulate the
sale and offering of securities. In addition, BX would not list any
company that meets the quantitative (e.g., financial) requirements for
listing on The NASDAQ Stock Market LLC (``Nasdaq'').
---------------------------------------------------------------------------

    \8\ See Amendment No. 1. As originally proposed, the proposed
rule change provided that a BX-listed company should refer to its
listing as on the ``BX.''
    \9\ See Notice, supra note 3.
    \10\ See 17 CFR 242.600 et seq.
    \11\ OTC trades of BX-listed securities would be reported to the
Financial Industry Regulatory Authority (``FINRA'') OTC Reporting
Facility. See Notice, supra note 3.
    \12\ See 17 CFR 240.3a51-1.
    \13\ 15 U.S.C. 77r; Securities Act Rule 146. In addition, some
state laws and regulations may provide an exemption from certain
registration or ``blue sky'' requirements for companies listed on
the Boston Stock Exchange, based on the higher listing standards
previously applied by the former Boston Stock Exchange. The proposed
listing rules would provide that the Exchange will take action to
delist any company listed on BX that attempts to rely on such an
exemption. Companies would also agree not to rely on any such
exemption as a provision of the BX Listing Agreement.
---------------------------------------------------------------------------

    To qualify for initial listing on BX, a company must be registered
under Section 12(b) of the Act \14\ and be current in its periodic
filings with the Commission. The company would also be required to have
a fully independent audit committee comprised of at least three members
and comply with the requirements of Rule 10A-3 under the Exchange
Act.\15\ The company would be required to have its independent
directors make compensation decisions for executive officers (either by
having the independent directors meet in executive session or by having
them sit on a compensation committee), and independent directors would
be required to meet on a regular basis in executive sessions.\16\ The
company's

audit committee would be required to have a charter setting out its
responsibilities. The audit committee, or another independent body of
the board, would also be required to conduct appropriate review and
oversight of any related party transactions.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78l(b).
    \15\ 17 CFR 240.10A-3. Certain companies listing on BX will be
permitted to phase in compliance with the audit committee and
compensation committee requirements following their listing. With
respect to the audit committee requirements, a company listing in
connection with its initial public offering would be required to
have one independent director on the committee at the time of
listing; a majority of independent members within 90 days of the
date of effectiveness of the company's registration statement; and
all independent members within one year of the date of effectiveness
of the company's registration statement.
    \16\ With respect to the compensation committee requirement, a
company listing in connection with its initial public offering, upon
emerging from bankruptcy, or that otherwise was not subject to a
substantially similar requirement prior to listing (such as a
company only traded in the OTC market) would be required to have one
independent director on the committee at the time of listing; a
majority of independent members within 90 days of listing; and all
independent members within one year of listing.
---------------------------------------------------------------------------

    BX has proposed the following quantitative listing standards for
the initial listing of securities that were not previously listed on a
national securities exchange: (1) $1 million of stockholders' equity or
$5 million total assets; (2) 200,000 publicly held shares; (3) 200
public shareholders, at least 100 of which must be round lot holders;
(4) $2 million market value of listed securities; (5) $1.00 minimum bid
price per share; (6) one year operating history; and (7) two registered
and active market makers. In addition, the company would also be
required to demonstrate that it has a plan to maintain sufficient
working capital for its planned business for at least twelve months
after the first day of listing.
    BX has proposed the following quantitative listing standards for
the initial listing of securities that have previously been listed on a
national securities exchange: (1) 200,000 publicly held shares; (2) 200
public shareholders, at least 100 of which must be round lot holders;
(3) $2 million market value of listed securities; (4) $0.25 minimum bid
price per share; and (5) two registered and active market makers. A
company would be considered to have been previously listed on another
national securities exchange if it was listed on such exchange at any
time during the three months before its listing on BX, or, until
September 30, 2011, if the company was listed on another national
securities exchange at any time between January 1, 2008 and September
30, 2011.\17\
---------------------------------------------------------------------------

    \17\ See Amendment No. 1. As originally proposed, a company
would be considered to have been previously listed on another
national securities exchange if it was listed on such exchange at
any time during the three months before its listing on BX, or until
March 31, 2011, if the company was listed on another national
securities exchange at any time between January 1, 2008 and March
31, 2011.
---------------------------------------------------------------------------

    The Exchange would have the discretionary authority to deny listing
to any otherwise qualified security when it is necessary to preserve
and strengthen the quality of, and public confidence in, its
market.\18\ The Exchange would conduct a public interest review of the
company and significant persons associated with it.\19\ In that regard,
the Exchange stated that it intends to conduct background
investigations of officers and directors and other significant people
associated with a company in connection with its review of applications
for initial listing.\20\ In addition, the Exchange would not approve
for listing or allow the continued listing of ``shell'' companies.
---------------------------------------------------------------------------

    \18\ See infra Section II for examples of circumstances under
which the Exchange would exercise such discretionary authority, as
set out in Amendment No. 1.
    \19\ See infra Section II for a more detailed discussion of
public interest reviews, as set out in Amendment No. 1.
    \20\ See id.
---------------------------------------------------------------------------

    For continued listing on BX, a security would be required to
satisfy the following listing standards: (1) At least 200,000 publicly
held shares; (2) at least 200 public shareholders; (3) market value of
listed securities of at least $1 million; (4) minimum bid price of at
least $0.25 \21\ per share; and (5) at least two registered and active
market makers. If the security does not maintain the minimum $0.25 per
share bid price for twenty consecutive trading days,\22\ Exchange staff
would issue a Staff Delisting Determination and the security would be
suspended from trading on BX. A company could appeal that determination
to a Hearings Panel; however, such an appeal would not stay the
suspension of the security. During the Hearings Panel process, the
security could regain compliance by achieving a $0.25 \23\ per share
minimum bid price while trading on another venue, such as the OTC
market, for ten consecutive days. However, if the company has received
three or more Staff Delisting Determinations for failure to comply with
the minimum bid price requirement in the prior twelve months, the
company could only regain compliance by achieving a closing bid price
of $0.25 per share or more for at least twenty consecutive trading
days.\24\
---------------------------------------------------------------------------

    \21\ See Amendment No. 1. As originally proposed, a BX-listed
company would have been required to maintain a minimum bid price of
at least $0.05 per share.
    \22\ See Amendment No. 1. As originally proposed, if a BX-listed
security does not maintain a minimum bid price of $0.05 per share
for ten consecutive trading days, Exchange staff would issue a Staff
Delisting Determination and the security would be suspended from
trading on BX.
    \23\ See Amendment No. 1. As originally proposed, a BX-listed
company could regain compliance by achieving a $0.05 per share
minimum bid price while trading on another venue for ten consecutive
trading days.
    \24\ See Amendment No. 1. As originally proposed, a BX-listed
company could only regain compliance by achieving a closing bid
price of $0.25 per share for at least ten consecutive trading days.
---------------------------------------------------------------------------

Description of Amendment No. 1

    Amendment No. 1 makes the following modifications to the proposed
rule change:
     Renames the market from ``BX'' to ``BX Venture Market'' to
distinguish the BX Venture Market from Nasdaq, provides that the
Exchange will monitor press releases issued by BX-listed companies and
annually review their Web sites to determine how a company is referring
to its listing, and provides that the Exchange will include information
on its Web site describing the differences between the BX Venture
Market and other national securities exchanges, including Nasdaq;
     Provides that BX will disseminate quotation and
transaction information about BX-listed securities and that this
information will include a market center identifier;
     Provides that BX will require data vendors to identify
when the BX Venture Market is the listing market for a security and
clearly differentiate those securities from securities listed on Nasdaq
or other exchanges or traded OTC when displaying information to
external users on their single security quotation screens;
     States that listings and delistings will be processed by
the staff in Nasdaq's Listing Qualifications Department, who, according
to the Exchange, are extremely experienced in regulatory analysis;
states that BX will hire additional staff if the workload from the new
BX Venture Market proves ``sufficiently high''; and notes that the
staff within the Listing Qualifications Department is now, and will
continue to be, reviewed regularly by Nasdaq's Chief Regulatory Officer
and Regulatory Oversight Committee, and will also be reviewed by BX's
Regulatory Oversight Committee;
     Prohibits the initial or continued listing of a company if
any executive officer or director was involved in any event that
occurred during the prior five years that is required to be disclosed
under Items 401(f)(2)-(8) of Regulation S-K and that, in the case of a
listed company, the company would be provided 30 days to remove the
executive officer or director or be issued a delisting notification;
     Provides that the Exchange would use its discretionary
authority, where appropriate, to deny initial or continued listing in
cases where: (1) An executive officer or director has reported
misconduct that occurred between five and ten years before the
disclosure or misconduct not required to be disclosed under Item 401 of
Regulation S-K; or (2) an individual who is not an executive officer or
director, but who has significant influence or importance to the
company such as a control person or significant shareholder, has a
history of regulatory misconduct;

     Indicates that in connection with initial listing
applications and when a new executive officer or director becomes
associated with a BX-listed company, BX will conduct background
investigations of executive officers, directors, and other significant
associated people using public databases, and will retain outside firms
to assist it in its review as needed, including investigative,
accounting, and law firms, and provides that BX's listing application
will solicit information about certain legal or administrative
proceedings against the company and its officers, directors, and 10% or
greater shareholders;
     Provides that the head of the Exchange's Listing
Department will be involved in all decisions concerning whether to
permit or deny listing to a company based on a public interest concern
and that the Exchange's Chief Regulatory Officer will be required to
approve the initial or continued listing of any company that has
disclosed information about an executive officer, director, or control
person under Items 401(f)(2)-(8) of Regulation S-K that does not
trigger the automatic bar described above;
     Increases the continued listing price from $0.05 to $0.25
per share and provides that the Exchange will issue a Staff Delisting
Determination and suspend a BX-listed security from trading on the
Exchange if such security does not maintain the minimum continued
listing price of $0.25 per share for twenty consecutive trading days,
rather than for the originally proposed ten consecutive trading days;
     Shortens the periods that a non-compliant company may
remain listed by, for example, providing that a Hearings Panel would
only be permitted to grant 90 calendar days for a company to regain
compliance with a listing standard, instead of the 180 calendar days
available on Nasdaq and providing that a company that falls below the
market value of listed securities requirement would be provided a 90
calendar day compliance period, instead of the 180 days available to a
Nasdaq-listed company;
     Undertakes to provide the Commission with: (1) Monthly
reports describing developments on the BX Venture Exchange, including a
list of companies added or removed from the market; and (2) quarterly
reports from the Exchange's Chief Regulatory Officer describing the
listing and surveillance activities of the Exchange;
     Requires listed companies to provide the Exchange with
copies of any ``blue sky memoranda'' prepared in connection with the
issuance of shares, provides that BX will review these memoranda to
assure that the company is not inappropriately relying on such a state
blue sky exemption, agrees to take action to delist any BX-listed
company that attempts to rely on such an exemption, and provides that
companies will agree to not rely on any such exemption as a provision
of the BX listing agreement;
     Represents that FINRA will regulate market activity on the
BX and that FINRA will enhance its review process by calibrating its
surveillance patterns to detect potential issues that may arise in low
priced stocks, noting that FINRA's review will include the trading of
BX-listed securities on the OTC market and that FINRA will review
activity of its member firms quoting on the BX when conducting reviews
of these firms, which will include ``focused exams'' concentrated on
sales practices and firm oversight;
     States that the SMARTS Group, a Nasdaq OMX company, will
create a new suite of quoting and trading patterns to detect suspicious
activity in low priced and less widely traded securities; and
     Provides that BX will disseminate quotation and
transaction information about BX-listed securities via several market
data products to ensure broad dissemination of quotation and last sale
information, and states that it is committed to ensuring that
quotations and transaction information from BX are consolidated with
similar information from OTC quotation and trading supervised by FINRA.

III. Comment Letters

    The Commission received three comment letters on the proposal. The
Massachusetts Securities Division (``MSD'') noted in its letter that,
although BX proposes qualitative listing standards that resemble those
of Nasdaq, the proposed quantitative listing standards will be far
lower.\25\ MSD then noted that the laws of Massachusetts and 11 other
states exempt securities listed on the ``Boston Stock Exchange'' from
their securities laws registration requirements.\26\ MSD stated its
belief that these exemptions were predicated on exchange-listed
companies having met certain minimum quality criteria.\27\ MSD noted
that the proposed rule change states that the BX market is not among
the national securities exchanges enumerated in Section 18(b) of the
Securities Act of 1933 and that the securities listed on BX will not be
preempted securities under that section.\28\ MSD also noted that the
Exchange will require its listed companies to agree not to claim any
state's exchange-listing exemption for their securities and will delist
securities of companies that claim such exemption.\29\ However, MSD
expressed concern that these requirements will not prevent unscrupulous
penny stock promoters or boiler room brokerages from asserting that the
securities they are offering and selling are exempt from state
registration because the securities are listed on the Exchange.\30\ MSD
expressed further concern that because the Exchange is owned by and is
under the supervision of the parent company of Nasdaq, the BX listing
market will inappropriately borrow some of the prestige of Nasdaq,
despite the steps that Nasdaq may take to promote BX as a separate
listing market.\31\
---------------------------------------------------------------------------

    \25\ See MSD Letter, supra note 4, at p. 2.
    \26\ See id.
    \27\ See id.
    \28\ See id.
    \29\ See id.
    \30\ See id.
    \31\ See id. at p. 3.
---------------------------------------------------------------------------

    Pink OTC Markets Inc. (``Pink OTC'') noted that there may be
investor confusion with respect to the differences between Nasdaq-
listed securities and BX-listed securities.\32\ Pink OTC further stated
its belief that it is important that market data relative to BX-listed
securities be disseminated in a manner that makes clear that BX-listed
securities are not NMS securities, nor do they meet the normally higher
listing standards for exchange-listed securities, including those of
Nasdaq.\33\ To alleviate investor confusion, Pink OTC suggested that
ticker symbols for BX-listed securities should differentiate such
securities from other securities that meet the higher listing standards
typically associated with listing on a national securities
exchange.\34\
---------------------------------------------------------------------------

    \32\ See Pink OTC Letter, supra note 4.
    \33\ See id. at p. 2.
    \34\ See id.
---------------------------------------------------------------------------

    Pink OTC also stated its belief that quotation and transaction
reports for BX-listed securities should not be disseminated under any
NMS plan, nor commingled with NMS data by an NMS plan processor.\35\ In
particular, Pink OTC stated its belief that Nasdaq should not be
permitted to disseminate BX-listed securities market data commingled
with the Nasdaq market data it disseminates under the Nasdaq UTP
Plan.\36\
---------------------------------------------------------------------------

    \35\ See id. at p. 3.
    \36\ See id.
---------------------------------------------------------------------------

    With respect to the BX's proposed listing standards, Pink OTC
argued that BX should not be permitted to allow phase-in compliance
with the independent director requirements of

the audit and compensation committees for certain companies.\37\
Finally, Pink OTC recommended that the Commission consider requiring BX
to conduct background checks and other similar reviews of potential
listed companies and not merely rely on the documents presented by an
issuer during the listing process.\38\
---------------------------------------------------------------------------

    \37\ See id. at p. 6.
    \38\ See id. at p. 6-7.
---------------------------------------------------------------------------

    On the other hand, Madrona Venture Group noted that the BX listing
market will have listing requirements and costs that are tailored to
the economic reality of smaller companies, and that this market would
be extremely helpful to young, high growth emerging companies by
offering an alternative listing market for companies that wish to make
an initial public offering, but do not meet the initial quantitative
listing standards of the other national securities exchanges.\39\
Madrona Venture Group also stated its belief that the BX listing market
could bolster capital markets and provide opportunities for small
companies to transition from private to public ownership, to expand
their financial resources, and to raise the capital they need for
continued growth.\40\ Additionally, Madrona Venture Group stated its
belief that the BX listing market would attract companies and capital
that would otherwise be drawn to foreign markets, where regulatory
costs and litigation risks are lower.\41\
---------------------------------------------------------------------------

    \39\ See Madrona Letter, supra note 4, at p. 1.
    \40\ See id.
    \41\ See id. at p. 1-2.
---------------------------------------------------------------------------

IV. Proceedings To Determine Whether To Disapprove SR-BX-2010-059 and
Grounds for Disapproval Under Consideration

    The Exchange's proposal is presented as providing a transparent,
well-regulated marketplace for the listing of companies that are being
delisted from another national securities exchange for failure to meet
quantitative listing standards (including price or other market value
measures) and for companies with smaller market capitalization
contemplating an initial exchange listing. The Exchange believes that a
BX listing could help such companies raise capital, and in turn promote
job creation within the United States. The Exchange also believes that
there are benefits from exchange trading and surveillance.
    For example, the Exchange believes that a BX listing would allow
the securities of companies that are being delisted from another
national securities exchange for failure to meet that exchange's
quantitative listing requirements to continue to trade on a national
securities exchange. This may enable some institutional investors to
continue their ownership stake in those companies, which in turn could
provide greater stability to the companies' shareholder base.\42\ In
addition, the Exchange believes that companies currently traded OTC
could view the BX Venture Market as an aspirational step towards a
listing on another national securities exchange and that the agreement
of such companies to comply with the Exchange's corporate governance
standards along with the application of the Exchange's public interest
authority will provide additional protections to their investors.
Finally, the Exchange believes that the BX Venture Market will be a
more attractive alternative for domestic companies that might otherwise
have considered a listing on non-U.S. junior markets which, according
to the Exchange, generally have less vigorous listing requirements.
---------------------------------------------------------------------------

    \42\ According to the Exchange, many institutional investors
have investment policies that limit their ownership to securities
listed on a national securities exchange, or that prohibit the
ownership of securities that only are traded in the OTC market. See
Notice, supra note 3.
---------------------------------------------------------------------------

    The proposed BX listing standards discussed above, however, are
significantly lower than the listing standards for other exchange-
listed securities.\43\ These lower listing standards on BX may raise
issues as to whether the proposed rule change is consistent with the
Act. Among other things, listing standards must be designed to assure
that there is sufficient liquidity for trading on an exchange and to
reduce the likelihood of manipulation and fraud.\44\ The Commission
believes that the development and enforcement of adequate standards
governing the initial and continued listing of securities on an
exchange are activities of critical importance to the financial markets
and the investing public.\45\ Listing standards serve as a means for an
exchange to screen issuers and to provide listed status only to bona
fide companies that have, or in the case of an initial public offering
will have, sufficient public float, investor base, and trading interest
to provide the depth and liquidity necessary to promote fair and
orderly markets.\46\ Adequate standards are especially important given
the expectations of investors regarding exchange trading and the
imprimatur of listing on a particular market.\47\ Once a security has
been approved for initial listing, continued listing standards allow an
exchange to monitor the status and trading characteristics of that
security to ensure that it continues to meet the exchange's standards
for market depth and liquidity so that fair and orderly markets can be
maintained, and so that only companies suitable for listing remain
listed on a national securities exchange.
---------------------------------------------------------------------------

    \43\ For example, BX would require a BX-listed company to have
only 200,000 publicly held shares, which is significantly lower than
the number of publicly held shares required by exchanges with active
listing programs today. See, e.g., NYSE Amex Company Guide Section
102(a) (requiring a minimum public distribution of 500,000 shares
and 800 public shareholders, or a minimum public distribution of 1
million shares and 400 public shareholders); NASDAQ Stock Market
Rule 5505(a)(2) (requiring a minimum of 1 million publicly held
shares); and NYSE Listed Company Manual Section 102.01A (requiring a
minimum of 1.1 million publicly held shares). Even ``Tier II''
listing standards require listed companies to have at least 250,000
publicly held shares. See, e.g., CBOE Rule 31.6(3) (requiring at
least 1 million publicly held shares for initial listing of research
and development type issuers).
    \44\ See, e.g., Exchange Act Section 6(b)(5).
    \45\ See, e.g., Securities Exchange Act Release No. 61912 (April
15, 2010), 75 FR 21094, 21094 (April 22, 2010) (SR-NYSE-2010-15).
    \46\ See id.
    \47\ See id.
---------------------------------------------------------------------------

    The Commission notes that the Exchange has submitted Amendment No.
1 in an effort to address certain potential concerns with the proposed
rule change. However, at this time and for the reasons noted below, the
Commission is instituting proceedings pursuant to Section 19(b)(2)(B)
of the Act \48\ to determine whether the proposed rule change should be
disapproved. Institution of such proceedings appears appropriate at
this time in view of the legal and policy issues raised by the
proposal. Institution of the proceedings, however, does not indicate
that the Commission has formulated any conclusions with respect to any
of the issues involved. Rather, as described in greater detail below,
the Commission seeks and encourages interested persons to comment on
the proposed rule change.
---------------------------------------------------------------------------

    \48\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

    The section of the Act applicable to the proposed rule change that
provides the grounds for the disapproval (or approval) under
consideration is Section 6(b)(5),\49\ which requires that the rules of
an exchange be designed, among other things, to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to remove impediments to and perfect the mechanism
of a free and open market and a national market system and, in general,
to protect investors and the public interest. Specifically, the

Exchange is proposing initial and continued listing standards that are
significantly lower than those of other exchanges with active listing
markets.\50\ Among other things, this raises issues as to whether BX-
listed securities could be more prone to manipulation by an individual
or a few shareholders who acquire a dominant interest in the publicly-
held shares compared to other exchange-listed securities. This issue is
particularly pronounced with smaller company stocks, which historically
have been the targets of manipulative schemes.\51\
---------------------------------------------------------------------------

    \49\ 15 U.S.C. 78f(b)(5).
    \50\ See supra note 43.
    \51\ See, e.g., Securities Act Release No. 8878 (December 19,
2007), 72 FR 73534, 73536 (December 27, 2007) (S7-10-07) (stating
that ``[i]t has been observed that the securities of smaller public
companies are comparatively more vulnerable to price manipulation
than the securities of larger public companies'').
---------------------------------------------------------------------------

    The proposed rule change also raises issues as to whether investors
will understand that BX-listed securities are very different from other
exchange-listed securities, and could pose substantially more
investment risk than those listed on other markets due, for example, to
their size, financial condition, or limited operational history. This
potential for investor confusion may be compounded because, as
exchange-listed securities, other exchanges could trade them on an
unlisted trading privileges (``UTP'') basis.\52\ Because the smaller
BX-listed securities may be traded UTP on the same platform as larger
companies listed by the primary listings markets, this raises issues as
to whether investors could have even more difficulty distinguishing
between BX-listed securities and other exchange-listed securities.
---------------------------------------------------------------------------

    \52\ Under Exchange Act Section 12(f)(1)(A) and Rule 12f-5
thereunder, a national securities exchange may trade exchange-listed
securities on a UTP basis. See 15 U.S.C. 78l(f)(1)(A) and 17 CFR
240.12f-5. Accordingly, other national securities exchanges would be
able to trade BX-listed securities, without obtaining additional
Commission approval.
---------------------------------------------------------------------------

    At the same time, as noted above, the Commission acknowledges that
the BX listing market would be an alternative to the OTC market and
could provide important benefits to this market segment, including
enhanced regulation and increased price transparency. In particular,
BX's proposed listing standards would be higher than the requirements
for quoting on the OTC Bulletin Board, which does not have any listing
requirements per se, but only requires issuers to remain current in
their filings with the Commission or other applicable regulatory
authorities. For example, as the Exchange notes, the agreement of BX-
listed companies to comply with the Exchange's corporate governance
standards and the application of the Exchange's public interest
authority could provide additional protections to investors than the
protections available at their present trading venue. The Commission
also notes that trading in BX-listed securities would be subject to
regulation through BX's trading rules and surveillance authority.
Additionally, the BX listing market could make it easier for companies
with smaller market capitalization to raise capital, thereby promoting
job creation. Finally, permitting companies with smaller market
capitalization to list on BX could provide them with a viable
alternative for U.S. listing to listing on non-U.S. markets that may be
equivalent to the proposed BX market.

V. Procedure: Request for Written Comments

    The Commission requests that interested persons provide written
submissions of their views, data and arguments with respect to the
issues identified above, as well as any others they may have identified
with the proposal. In particular, the Commission invites the written
views of interested persons concerning whether the proposed rule change
is inconsistent with Section 6(b)(5) or any other provision of the Act,
or the rules and regulations thereunder. Although there do not appear
to be any issues relevant to approval or disapproval which would be
facilitated by an oral presentation of views, data, and arguments, the
Commission will consider, pursuant to Rule 19b-4, any request for an
opportunity to make an oral presentation.\53\
---------------------------------------------------------------------------

    \53\ Section 19(b)(2) of the Act, as amended by the Securities
Acts Amendments of 1975, Public Law 94-29, 89 Stat. 97 (1975),
grants the Commission flexibility to determine what type of
proceeding--either oral or notice and opportunity for written
comments--is appropriate for consideration of a particular proposal
by a self-regulatory organization. See Securities Acts Amendments of
1975, Report of the Senate Committee on Banking, Housing and Urban
Affairs to Accompany S. 249, S. Rep. No. 75, 94th Cong., 1st Sess.
30 (1975).
---------------------------------------------------------------------------

    Interested persons are invited to submit written data, views and
arguments regarding whether the proposed rule change should be
disapproved by January 24, 2011. Any person who wishes to file a
rebuttal to any other person's submission must file that rebuttal by
February 8, 2011.
    The Commission is asking that commenters address the merit of BX's
statements in support of the proposal, in addition to any other
comments they may wish to submit about the proposed rule change.
Specifically, the Commission is requesting comment on the following:
     Do commenters agree with BX's belief that the proposed BX
listing market will provide a transparent, well-regulated marketplace
for companies with smaller market capitalization contemplating an
initial exchange listing and companies delisted from another national
securities exchange for failure to meet quantitative listing standards?
Why or why not?
     Is the proposed vetting and due diligence process of
prospective issuers on the BX listing market sufficient to prevent
companies that might erode investor confidence (due to potential fraud)
in the market from listing? Why or why not?
     Given that BX-listed companies are likely to be smaller
than listed companies on other exchanges, should BX undertake any
additional measures (including additional surveillances) to reduce the
risk of fraudulent and manipulative behavior with respect to the
listing and/or trading of BX-listed securities? Why or why not?
     Do commenters believe there is any likelihood of investor
confusion regarding the BX listing market? Would investors be inclined
to believe that a BX-listed company is listed on Nasdaq? Are the
Exchange's proposed actions to reduce or avoid investor confusion
sufficient? Why or why not? If not, what additional measures should the
Exchange undertake?
     Do the proposed initial and continued listing standards
for the BX listing market assure sufficient liquidity in listed
securities? Why or why not? Are there other listing criteria that
commenters would suggest to better assure sufficient liquidity in
listed securities?
     Are the proposed initial and continued listing standards
for the BX listing market sufficiently designed to reduce the risk that
an individual or small group of shareholders will be in a position to
manipulate the listed security? Why or why not?
     Are the proposed initial and continued listing standards
and the delisting process for the BX listing market sufficiently
designed to prevent stocks that are of a type that historically have
been prone to fraudulent schemes from being listed? Why or why not?
     Do commenters believe that the proposed delisting and
appeals procedures and timeframes are sufficient and appropriate? Are
the timeframes too long or too short? Why or why not?
     Are the proposed corporate governance standards for the BX
listing market sufficiently designed to assure

an appropriate level of corporate governance? Why or why not?
     Do commenters agree with the Exchange's belief that a BX
listing could help companies raise capital and thus promote job
creation within the United States? Why or why not?
     Has BX sufficiently addressed how quotations and
transactions reports relating to BX-listed securities will be
disseminated? Will this result in fragmentation of pricing information
relating to these securities? Will this undermine the ability of
investors to receive best execution? Why or why not?
    Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form http://www.sec.gov/rules/sro.shtml; or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number SR-BX-2010-059 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BX-2010-059. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make publicly available. All
submissions should refer to File Number SR-BX-2010-059 and should be
submitted on or before January 24, 2011.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\54\
---------------------------------------------------------------------------

    \54\ 17 CFR 200.30-3(a)(57).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-31078 Filed 12-9-10; 8:45 am]
BILLING CODE 8011-01-P