[Federal Register Volume 83, Number 163 (Wednesday, August 22, 2018)]
[Notices]
[Pages 42545-42552]
[FR Doc No: 2018-18062]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83866; File No. SR-FINRA-2018-029]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend FINRA Rule 7620A Relating to Fees
Applicable to the FINRA/Nasdaq Trade Reporting Facilities

August 16, 2018.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on August 10, 2018, Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission (``SEC''
or ``Commission'') the proposed rule change as described in Items I,
II, and III below, which Items have been prepared by FINRA. FINRA has
designated the proposed rule change as ``establishing or changing a
due, fee or other charge'' under Section 19(b)(3)(A)(ii) of the Act \3\
and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal
effective upon receipt of this filing by the Commission. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    FINRA is proposing to amend FINRA Rule 7620A to modify certain fees
applicable to members that use the FINRA/Nasdaq Trade Reporting
Facility Carteret (the ``FINRA/Nasdaq TRF Carteret'') and the FINRA/
Nasdaq Trade Reporting Facility Chicago (the ``FINRA/Nasdaq TRF
Chicago'') (collectively, the ``FINRA/Nasdaq TRFs'').\5\
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    \5\ The Commission recently approved a proposed rule change to
adopt rules relating to the establishment of the FINRA/Nasdaq TRF
Chicago. See Securities Exchange Act Release No. 83559 (June 29,
2018), 83 FR 31589 (July 6, 2018) (Order Approving File No. SR-
FINRA-2018-013). Among other things, the proposed rule change
amended the Rule 7600A Series to provide that the schedules of
credits and fees apply to reporting activity that occurs on either
or both of the FINRA/Nasdaq TRFs and that a participant's
eligibility for any volume-based credits or fee caps will be
determined based upon its aggregate reporting volume between the two
FINRA/Nasdaq TRFs. SR-FINRA-2018-013 will be effective on the date
that the FINRA/Nasdaq TRF Chicago commences operation, which FINRA
anticipates will be in September 2018.
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    The text of the proposed rule change is available on FINRA's
website at

http://www.finra.org, at the principal office of FINRA and at the
Commission's Public Reference Room.

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

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

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

1. Purpose
    The FINRA/Nasdaq TRFs are facilities of FINRA that are operated by
Nasdaq, Inc. (``Nasdaq'') and utilize Automated Confirmation
Transaction Service technology. In connection with the establishment of
the FINRA/Nasdaq TRFs, FINRA and Nasdaq entered into a limited
liability company agreement (the ``LLC Agreement''). Under the LLC
Agreement, FINRA, the ``SRO Member,'' has sole regulatory
responsibility for the FINRA/Nasdaq TRFs. Nasdaq, the ``Business
Member,'' is primarily responsible for the management of the FINRA/
Nasdaq TRFs' business affairs, including establishing pricing for use
of the FINRA/Nasdaq TRFs, to the extent those affairs are not
inconsistent with the regulatory and oversight functions of FINRA.
Additionally, the Business Member is obligated to pay the cost of
regulation and is entitled to the profits and losses, if any, derived
from the operation of the FINRA/Nasdaq TRFs.
    Pursuant to the FINRA Rule 7600A Series, participants in the FINRA/
Nasdaq TRFs are charged fees and may qualify for fee caps (Rule 7620A)
and also may qualify for revenue sharing payments for trade reporting
to the FINRA/Nasdaq TRFs (Rule 7610A). These rules are administered by
Nasdaq, in its capacity as the Business Member and operator of the
FINRA/Nasdaq TRFs on behalf of FINRA,\6\ and Nasdaq collects all fees
on behalf of the FINRA/Nasdaq TRFs.
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    \6\ FINRA's oversight of this function performed by the Business
Member is conducted through a recurring assessment and review of TRF
operations by an outside independent audit firm.
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    Pursuant to FINRA Rule 7620A, participants in the FINRA/Nasdaq TRFs
are subject to four categories of fees, each of which is applicable to
transactions on the three Tapes: \7\ (1) Media/Executing Party; (2)
Non-Media/Executing Party; (3) Media/Contra Party; and (4) Non-Media/
Contra Party.\8\ Rule 7620A provides that for any category of fees, a
participant will qualify for a cap on the fees they [sic] would
otherwise pay to report trades to a particular Tape during a given
month, provided that during the month, the participant separately has a
daily average number of Media/Executing Party trades of at least 2,500
in that same Tape. Additionally, the Rule provides for a special fee
cap program--known as the ``Media/Contra Cap''--for participants that
make markets in an alternative trading system (``ATS'').
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    \7\ Market data is transmitted to three tapes based on the
listing venue of the security: New York Stock Exchange securities
(``Tape A''), NYSE American and regional exchange securities (``Tape
B''), and Nasdaq Stock Market securities (``Tape C'').
    \8\ Media eligible trade reports are those that are submitted to
the FINRA/Nasdaq TRFs for public dissemination by the Securities
Information Processors. By contrast, non-media trade reports are not
submitted to the FINRA/Nasdaq TRFs for public dissemination, but are
submitted for regulatory and/or clearance and settlement purposes.
    Pursuant to the Rule's Supplementary Material, the ``Executing
Party (EP)'' is defined as the member with the trade reporting
obligation under FINRA rules, and the ``Contra (CP)'' is defined as
the member on the contra side of a trade report.
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    Nasdaq, as the Business Member, has determined to make several
adjustments to the schedule of fees and caps that applies to
participants in the FINRA/Nasdaq TRFs. As discussed below, the overall
aims of the proposed adjustments are to: (1) Align the activity-based
fees and cap levels with the rising costs of operating, maintaining,
and improving the FINRA/Nasdaq TRF Carteret and, going forward, the
FINRA/Nasdaq TRF Chicago; (2) re-calibrate the fee structure so that it
provides for a more equitable allocation of fees among Executing
Parties and Contra Parties; (3) ensure that all FINRA/Nasdaq TRF
participants, regardless of the level of their reporting or contra
activity, bear at least some baseline responsibility for the costs of
their participation; and (4) clarify the fee structure. Nasdaq also
intends for the proposed adjustments to generate profits for itself as
the Business Member. FINRA is proposing to amend Rule 7620A
accordingly.
    Specifically, the proposed rule change would: (1) Raise the
threshold daily average number of Media/Executing Party trades that are
necessary for a participant to qualify for a fee cap program during a
month; (2) lower uncapped monthly charges for reporting Media/Executing
Party and Non-Media/Executing Party trades and raise the caps on such
fees, if applicable; (3) raise the caps on Media/Contra Party and Non-
Media/Contra Party fees, if applicable; (4) raise the level of the cap
that applies to ATS market makers; (5) establish a new fee cap program
known as the ``ATS Market Maker Combined Activity Cap''; (6) establish
a new fixed monthly fee known as the ``Participation Fee''; and (7)
establish a special pricing tier for participants whose trade reporting
activity to the FINRA/Nasdaq TRF consists of substantially all retail
orders (``Retail Participants''). The proposed rule change also would
re-organize the fee schedule and make other clarifying changes to Rule
7620A. Each of these proposals is described in detail below.
Cap Qualifying Activity
    The proposed rule change would raise the level of ``Cap Qualifying
Activity''--i.e., the daily average number of Media/Executing Party
trades that a participant must report to the FINRA/Nasdaq TRFs in a
given month to qualify for caps on its trade reporting fees as set
forth elsewhere in the fee schedule. Presently, the level of Cap
Qualifying Activity is 2,500 for reports in each of Tapes A, B, and C.
Nasdaq, as the Business Member, has determined to raise these threshold
numbers to 5,000 in each Tape.
    The levels of Cap Qualifying Activity have not increased since they
were introduced in 2010,\9\ at a time when reporting volume on the
FINRA/Nasdaq TRF Carteret was significantly lower than it is now.
Indeed, average daily executions on the FINRA/Nasdaq TRF Carteret have
increased by approximately 47 percent since 2012 even as cap thresholds
have remained static. Meanwhile, the cost of operating the FINRA/Nasdaq
TRF Carteret has increased by approximately 16 percent. These costs
have increased for various reasons, including but not limited to
inflation, investments that Nasdaq has made in upgrading and improving
the facility, and also increased operational and maintenance costs that
have flowed from rising levels of trade reporting activity. Nasdaq has
advised that raising the levels of Cap Qualifying Activity will help to
re-align the thresholds with rising volumes and costs.
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    \9\ See Securities Exchange Act Release No. 61817 (March 31,
2010), 75 FR 17810 (April 7, 2010) (Notice of Filing and Immediate
Effectiveness of File No. SR-FINRA-2010-011).
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Media/Executing Party and Non-Media/Executing Party Fees and Caps
    The proposed rule change would amend the schedule of fees and
associated caps for both Media/

Executing Party and Non-Media/Executing Party trade reports. For both
types of trade reports, Nasdaq, as the Business Member, has determined
to lower the uncapped fee from $0.018 to $0.015 per side. Nasdaq also
has determined to modify the formulas for calculating the maximum
amount of fees that a participant will pay to report these trades if
the participant achieves Cap Qualifying Activity. Presently, the
formulas for the Media/Executing Party cap and the Non-Media/Executing
Party cap are, respectively: $0.018 x (the required average daily
number of Media/Executing Party Trades for Tape A, B, or C) x (the
number of trading days during the month); and $0.018 x 2,500 x (the
number of trading days during the month). Nasdaq has determined to
lower the fee in the cap formulas from $0.018 to $0.013 and raise the
average daily number of trade reports needed to qualify for the cap
from 2,500 to 5,000. Finally, the proposed rule change would simplify
the formula for the Media/Executing Party Cap by stating expressly the
average daily number of Media/Executing Party trades necessary to
qualify for the cap--5,000--rather than merely describe that number, as
it does now.
    Nasdaq has advised that the proposed changes are aimed at
rationalizing Media (Non-Media)/Executing Party fee caps with the 47
percent increase in reporting activity to the FINRA/Nasdaq TRFs [sic]
and the 16 percent increase in costs associated with the operation of
the TRF that have occurred over the past six years. However, Nasdaq
also proposes downward adjustments to the uncapped rates for reporting
Media/Executing Party trades to dampen the financial impact of the
increase in the cap upon participants that will no longer qualify for
it under the proposed rule change.
Media/Contra Party and Non-Media/Contra Party Fees and Caps
    The proposed rule change would raise the caps for both Media/Contra
Party and Non-Media/Contra Party trades while keeping the uncapped
monthly charge of $0.013 per side the same. For both types of trades,
Nasdaq, as the Business Member, has determined to modify the cap
formulas so that, instead of being $0.013 x 2,500 x (the number of
trading days during the month), the formulas will be $0.013 x 5,000 x
(the number of trading days during the month). The rationale for this
increase is the same as is described above.
Media/Contra Cap
    FINRA Rule 7620A provides for a monthly ``Media/Contra'' fee cap of
$5,000 per Tape (A, B or C) that applies to all trades (i.e., Media/
Executing Party, Non-Media/Executing Party, Media/Contra and Non-Media/
Contra) under the Rule. Eligibility for this fee cap is based on a
FINRA member's trade reporting of Media/Contra trades to the FINRA/
Nasdaq TRFs and its participation as a market maker on an ATS. To
qualify as a market maker on an ATS, a FINRA member must maintain a
two-sided quote for each security that the FINRA member maintains
interest in within each ATS and display a quotation size of at least
one normal unit of trading (specific for each security), and it must
attest to these qualifications in writing. The FINRA member must also
attest that it will continue to meet the ATS-based requirements to be
eligible for the fee cap.\10\ To qualify for the cap, a FINRA member
must have its Media/Contra Party trades equal, or exceed, 35% of its
total volume on the FINRA/Nasdaq TRFs. The FINRA member also must be
contra to a minimum of 1 million trades in Tape A, 500,000 trades in
Tape C, and 250,000 trades in Tape B to qualify for the fee cap in the
securities of the Tapes, respectively.
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    \10\ As set forth in the Rule, Nasdaq will periodically audit
FINRA members that choose to participate to ensure compliance with
the attestation.
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    Nasdaq, as the Business Member, has determined to modify the Media/
Contra Party fee cap program by increasing the maximum monthly per Tape
charge applicable to qualifying participants. Specifically, the maximum
monthly charge will increase from $5,000 per Tape per month to $10,000
per Tape per month. Nasdaq, as the Business Member, has determined that
the existing cap level, which has not changed since it was introduced
in 2015, no longer bears a reasonable relationship to the volume of
qualifying participant reporting activity that occurs on the FINRA/
Nasdaq TRFs [sic]. The volume of market maker Media/Contra Party
reports to the FINRA/Nasdaq TRFs [sic] is growing rapidly. From January
2016 through June 2017, the firms that presently qualify for the cap
increased their activity on the FINRA/Nasdaq TRF Carteret by 60%. Their
activity presently exceeds the minimum qualifying threshold for the cap
by more than fourfold.
    In addition, the proposed rule change would change the name of this
cap to the ``ATS Market Maker Media/Contra Party Cap'' to more
accurately describe the program, add clarity to the fee schedule and
avoid potential confusion with the other Media/Contra cap.
ATS Market Maker Combined Media Activity Cap
    Nasdaq, as the Business Member, has determined to establish a new
fee cap program, entitled the ``ATS Market Maker Combined Media
Activity Cap.'' The purpose of the proposed cap is to foster new
reportable business activities among FINRA members that do not qualify
for the existing FINRA/Nasdaq TRFs [sic] fee cap program.
    For example, a participant may be a new FINRA member or it may
engage in new off-exchange business activities, such as the
establishment of a single-dealer platform or an ATS. In the initial
stages of these business activities, the participant may not qualify
for the existing fee cap programs because the participant may not
achieve the requisite daily average number of Media/Executing Party
trades during a month or because it may not reliably maintain the
requisite volume of Media/Contra Party activity to qualify for the
Media/Contra Party cap (which, as noted above, would cap both its
Executing Party and Contra Party fees).
    The proposed ATS Market Maker Combined Media Activity Cap will
provide assistance to such a participant by capping the combined FINRA/
Nasdaq TRFs fees (i.e., Media/Executing Party, Media/Contra, Non-Media/
Executing Party and Non-Media/Contra) that the participant would
otherwise pay while the participant ramps up its new reportable
activity to levels that would enable it to qualify for existing fee cap
programs with higher qualification thresholds, such as the Media/
Executing Party cap and the Media/Contra Party cap.
    To qualify for the proposed ATS Market Maker Combined Media
Activity Cap, a participant must: (1) Qualify as a market maker on an
ATS (as defined below); (2) engage in both Executing Party and Contra
Party activities; and (3) average at least 2,500 Media/Executing Party
trades in a given Tape per day during a month. If the participant meets
this threshold, then the participant will pay for that month, on a per
Tape basis, the lesser of $7,500 or the sum of all the participant's
combined monthly Executing Party and Contra Party fees for that Tape
during the month (as calculated using the regular uncapped Media/
Executing Party, Non-Media/Executing Party, Media/Contra Party, and
Non-Media/Contra Party rates). If the participant's average daily
Media/Executing Party trade reports reach at least 5,000 in a given
Tape in a given month, then the participant will no longer qualify for
the proposed ATS Market Maker Combined Media Activity

Cap in that Tape in that month and, instead, will qualify for the
regular cap programs for that month. If the participant does not reach
2,500 Media/Executing Party trades in a given Tape per day during a
month, the firm will be subject to the regular uncapped fee schedule or
to other fee caps that may be applicable to it for that month.\11\
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    \11\ If a participant qualifies for the ATS Market Maker
Combined Media Activity Cap in month 1 and then graduates out of the
Combined Cap program in month 2 due to the fact that the
participant's average daily Media/Executing Party trade reports in a
given Tape in month 2 exceed 5,000, the participant will once again
qualify for the ATS Market Maker Combined Media Activity Cap in
month 3 if its average daily Media/Executing Party trade reports
during month 3 fall back below 5,000.
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    As with the ATS Market Maker Media/Contra Party Cap, a participant
qualifies as a market maker on an ATS by maintaining a two-sided quote
for each security that the FINRA member maintains interest in within
each ATS and by displaying a quotation size of at least one normal unit
of trading (specific for each security). Additionally, as with the
existing ATS Market Maker Media/Contra Party cap, the participant must
attest to its market maker qualifications in writing and must re-
certify its qualifications every six months.\12\ Nasdaq will
periodically audit participants to ensure that their attestations are
accurate and that they qualify for the ATS Market Maker Combined
Activity Cap.
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    \12\ The form of attestation that firms will be required to
submit to Nasdaq under the proposed rule change is attached to this
filing at Exhibit 3.
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Participation Fee
    Nasdaq, as the Business Member, has determined to assess a new
fixed monthly Participation Fee of $350 that will apply to each
participant in the FINRA/Nasdaq TRFs.\13\ The Participation Fee will
help defray certain shared and common costs associated with the
operation of the FINRA/Nasdaq TRFs, including overhead costs and the
costs of developing, maintaining, and upgrading shared technology.\14\
Nasdaq believes that all users of the FINRA/Nasdaq TRFs--both large and
small--should bear at least some responsibility for the upkeep of the
FINRA/Nasdaq TRFs.\15\ The Participation Fee represents a baseline
share of this responsibility. Responsibility for costs in excess of the
proposed Participation Fee will continue to be recovered from
participants through trade reporting fees in proportion to the volume
of their activities on the FINRA/Nasdaq TRFs. The Participation Fee is
distinct from the fee that Nasdaq separately charges under its rules to
port into the FINRA/Nasdaq TRFs.
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    \13\ The Participation Fee will be assessed on each registered
participant, irrespective of whether the participant is identified
(as Executing Party or Contra Party) in any trade report submitted
to the FINRA/Nasdaq TRF in a given month. Participants that use
multiple Market Participant Identifiers or ``MPIDs'' for purposes of
reporting to the FINRA/Nasdaq TRF in accordance with Rule 6160 will
not be assessed a Participation Fee for each separate MPID.
    \14\ Because the Participation Fee covers costs that are common
to and allocated specifically to either FINRA/Nasdaq TRF, a
participant will pay only a single Participation Fee even if it
participates in both the FINRA/Nasdaq TRF Carteret and FINRA/Nasdaq
TRF Chicago.
    \15\ As discussed below, Retail Participants will be exempt from
paying the Participation Fee.
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Retail Participant Pricing Program
    Nasdaq, as the Business Member, has determined to establish a new
pricing program for participants that qualify as ``Retail
Participants'' due to the fact that substantially all of their trade
reporting activity to the FINRA/Nasdaq TRFs constitutes ``Retail
Orders.'' \16\ For purposes of this pricing program, a ``Retail Order''
is an order that originates from a natural person, provided that, prior
to submission, no change is made to the terms of the order with respect
to price or side of market and the order does not originate from a
trading algorithm or any other computerized methodology.\17\
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    \16\ In defining a ``Retail Participant,'' the proposal derives
from a similar concept set forth in Nasdaq's Designated Retail Order
pricing program and its corresponding Designated Retail Order
Attestation Form. See Securities Exchange Act Release No. 75375
(July 7, 2015), 80 FR 40098 (July 13, 2015) (Notice of Filing and
Immediate Effectiveness of File No. SR-NASDAQ-2015-066). The Nasdaq
Designated Retail Order Attestation Form provides that to qualify
for the Designated Retail Order pricing program, an applicant must
attest that ``substantially all orders submitted to the Exchange by
the Applicant would meet the qualifications for such orders under
the Retail Order rule.'' See https://nasdaqtrader.com/content/ProductsServices/Trading/AttestationForm.pdf. FINRA will refine the
definition of a Retail Participant if it proves to be unworkable in
practice.
    \17\ The definition of a ``Retail Order'' derives from the
definition of a ``Designated Retail Order'' in Nasdaq Rule 7018.
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    The purpose of this retail pricing program is to help Retail
Participants to control their costs associated with reporting trades to
the FINRA/Nasdaq TRFs and, in doing so, to limit or reduce any such
costs that Retail Participants pass on to their retail customers. Such
retail customers generally include individuals who trade less
frequently and have fewer trades reported to the FINRA/Nasdaq TRFs than
do other categories of customers; therefore, it is fair and reasonable
to charge Retail Participants and their customers less than these other
categories of participants and customers.\18\
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    \18\ In other contexts, the Commission has approved pricing
programs aimed at benefitting retail investors. See, e.g.,
Securities Exchange Act Release No. 68937 (February 15, 2013), 78 FR
12397 (February 22, 2013) (Order Approving File No. SR-NASDAQ-2012-
129 (Nasdaq retail price improvement pilot program); and Securities
Exchange Act Release No. 67347 (July 3, 2012), 77 FR 40673 (July 10,
2012) (Order Approving File Nos. SR-NYSE-2011-55 and SR-NYSEAmex-
2011-84) (NYSE and NYSE Amex retail liquidity pilot programs).
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    A Retail Participant will be subject to the following fee schedule
when it reports trades to the FINRA/Nasdaq TRF. For Media/Executing
Party (Non-Media/Executing Party) fees, the monthly charge for a Retail
Participant will be $0.018 multiplied by the number of Media/Executing
Party (Non-Media/Executing Party) trades that the Retail Participant
reports to the FINRA/Nasdaq TRFs during that month. Such fees will be
capped for a given month once the Retail Participant reports to the
FINRA/Nasdaq TRFs, on average, at least 2,500 Media/Executing Party
trades per day in Tapes A, B, or C during that month. If capped for
trades in a particular Tape, Media/Executing Party (Non-Media/Executing
Party) fees for a Retail participant will equal $0.018 multiplied by
2,500 multiplied by the number of trading days during that month.
Additionally, Retail Participants will be exempt from paying the $350
per month Participant Fee.
    The foregoing preserves for Retail Participants the existing Media/
Executing Party (Non-Media/Executing Party) fee schedules, cap
thresholds, and cap formulas. It excludes Retail Participants from the
adjustments that Nasdaq, as the Business Member, is otherwise proposing
to make to the fee schedules and caps and the addition of the
Participant Fee. In other words, the average daily trade threshold for
Retail Participants to qualify for the Media/Executing Party (Non-
Media/Executing Party) cap will remain at 2,500 Media/Executing Party
trade reports and will not rise to 5,000, as it will for other
participants. However, Retail Participants also will not be subject to
proposed decreases in the $0.018 per trade report fee that other
participants will experience.
    As to Media/Contra Party (Non-Media/Contra Party) fees, the monthly
charge for a Retail Participant will be the same as that which applies
to all other participants: $0.013 multiplied by the number of Media/
Contra Party (Non-Media/Contra Party) trades that the participant
reports to the FINRA/Nasdaq TRFs during the month. However, the
threshold for Retail Participants to

qualify for a cap on Media/Contra Party (Non-Media Contra Party) fees
will differ from that which will apply to other participants. Retail
Participants will continue to qualify for a cap (on a per Tape basis)
on Media/Contra Party (Non-Media/Contra Party) fees during a given
month if they report to the FINRA/Nasdaq TRFs, on average, at least
2,500 Media/Executing Party trades per day in Tapes A, B, or C, whereas
the cap threshold for other participants will rise to an average of
5,000 Media/Executing Party trades per day. If capped, Media/Contra
Party (Non-Media/Contra Party) fees for a Retail Participant will equal
$0.013 multiplied by 2,500 multiplied by the number of trading days
during that month. Other participants will pay a maximum charge of
$0.13 multiplied by 5,000 multiplied by the number of trading days
during the month.
    To qualify as a Retail Participant and receive pricing under the
Retail Participant fee schedule, a participant must complete and submit
to Nasdaq, as the Business Member, an application. The application form
will require the participant to attest to its qualifications as a
Retail Participant on the FINRA/Nasdaq TRFs in which it is a
participant and for which it seeks Retail Participant pricing.\19\ The
participant must also attest to its reasonable expectation that it will
maintain its qualifications for a one year period following the date of
attestation. Once a participant has been designated as a Retail
Participant, it must complete and submit a written attestation to
Nasdaq on an annual basis to retain its status as such. A Retail
Participant must inform Nasdaq promptly if at any time it ceases to
qualify or it reasonably expects that it will cease to qualify as a
Retail Participant.\20\
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    \19\ Thus, a participant in both FINRA/Nasdaq TRFs that seeks
Retail Participant pricing on both TRFs must attest to their
qualifications as such on both TRFs.
    \20\ The form of application and attestation that firms will be
required to submit to Nasdaq under the proposed rule change is
attached to this filing at Exhibit 3.
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General Reorganization and Clarification
    Finally, the proposed rule change would clarify and simplify Rule
7620A. Presently, the Rule is complex and potentially confusing as to
the requirements for and interaction among the various cap programs.
The proposed rule change would add prefatory language to the Rule to
explain more clearly how the fees and cap programs work. As discussed
above, the proposed rule change would add a title to the schedule of
the daily average Media/Executing Party trade reporting activity needed
to qualify for a cap--``Cap Qualifying Activity.'' In addition, the
amended Rule would be reorganized so that its provisions are listed in
a more logical order and would segregate Comparison/Accept fees from
the other ``Standard Fees'' (renamed as ``Other Fees''). Lastly, as
discussed above, the proposed rule change would rename the special
Media/Contra cap program that applies only to ATS market makers so that
it is more clearly differentiated from the regular Media/Contra Party
cap.
    FINRA has filed the proposed rule changes for immediate
effectiveness. The operative date will be September 1, 2018.
2. Statutory Basis
    FINRA believes that the proposed rule changes [sic] are consistent
with the provisions of Section 15A(b)(5) of the Act,\21\ which
requires, among other things, that FINRA rules provide for the
equitable allocation of reasonable dues, fees and other charges among
members and issuers and other persons using any facility or system that
FINRA operates or controls.
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    \21\ 15 U.S.C. 78o-3(b)(5).
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    The proposed rule change is reasonable to: (1) Raise from 2,500 to
5,000 the Cap Qualifying Activity that a participant needs to achieve
to qualify for a Media (Non-Media)/Executing Party cap or a Media (Non-
Media)/Contra Party cap under Rule 7620A; (2) raise the overall \22\
maximum charges under each of these cap programs; and (3) raise the
maximum monthly charge under the ATS Market Maker Media/Contra Cap from
$5,000 to $10,000 per Tape. These caps and cap formulas have not keep
[sic] pace with the rapid growth of trade reporting volume on the
FINRA/Nasdaq TRF Carteret since they were introduced or with the
corresponding increase in costs associated with operating, maintaining,
and upgrading the FINRA/Nasdaq TRF Carteret. Nasdaq, as the Business
Member, advises FINRA that a re-calibration of Rule 7620A will help
Nasdaq to continue to accommodate the costs associated with rising
trade reporting volumes while also making substantial enhancements to
the technology, functionality, and performance of the Facilities [sic].
---------------------------------------------------------------------------

    \22\ Overall, the proposed rule change will increase the maximum
charges under the Media (Non-Media)/Executing Party fee caps even
though the per trade portions of the fee cap formulas will decrease
from $0.018 to $0.013.
---------------------------------------------------------------------------

    These proposed increases are also reasonable because they will also
help to allocate responsibility for the upkeep of the FINRA/Nasdaq TRFs
more equitably among Executing Parties and Contra Parties. Over time,
the fee burden associated with the FINRA/Nasdaq TRF Carteret has
shifted disproportionately to Contra Parties; the proposed re-
allocation will help ensure that Executing Parties pay their fair share
of fees.
    Nasdaq advises that it expects to earn a profit from the proposed
changes, but it believes that such profit represents a reasonable
return on its work in support of and investments in the FINRA/Nasdaq
TRFs, and that the extent of such profit will be subject to and
constrained by competitive pressures. As the Commission has recognized,
``[i]f competitive forces are operative, the self-interest of the
exchanges themselves will work powerfully to constrain unreasonable or
unfair behavior,'' \23\ and ``the existence of significant competition
provides a substantial basis for finding that the terms of an
exchange's fee proposal are equitable, fair, reasonable, and not
unreasonably or unfairly discriminatory.'' \24\ In this instance, the
proposed fee increases will be subject to significant competition from
the FINRA/NYSE TRF, which has proven itself able to increase its market
share relative to the FINRA/Nasdaq TRF Carteret as a result of pricing
and other competitive adjustments. As the Commission has held in the
past, the presence of competition provides a substantial basis for a
finding that the proposal will be an equitable allocation of reasonable
dues, fees and other charges.\25\
---------------------------------------------------------------------------

    \23\ See Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770 at 74781 (December 9, 2008) (Order Setting Aside
Action by Delegated Authority and Approving File No. SR-NYSEArca-
2006-21).
    \24\ Id. at 74781-82.
    \25\ Id.
---------------------------------------------------------------------------

    Finally, and except as described below, these proposals to adjust
fee levels and fee caps are equitable and not unfairly discriminatory
because they will apply to all similarly situated participants.
    The establishment of a special schedule of fees and fee caps for
``Retail Participants,'' for whom the existing system of trade
reporting fees, cap thresholds, and cap formulas will continue to
apply, is reasonable, equitable, and not unfairly discriminatory.
Although the proposed rule change would make a distinction in pricing
in favor of Retail Participants and retail investors, the Act only
prohibits unfair discrimination. In this instance, FINRA believes that
the establishment of a distinct category of Retail Participant pricing
is fair because

customers of Retail Participants generally include individuals who
trade less frequently and report fewer trades to the FINRA/Nasdaq TRFs
than do other categories of customers. FINRA believes that such
customers, and the participants that serve them, should not bear
primary financial responsibility for helping the FINRA/Nasdaq TRFs to
recover rising costs and to account for increasing reporting activity.
Moreover, maintaining the existing fee schedule for Retail Participants
will help the FINRA/Nasdaq TRFs to maintain its [sic] competitive
standing for Retail Participants and their retail trade reporting
activity. FINRA believes that the proposed qualifications for Retail
Participants are reasonably tailored to ensure that they include only
those that exclusively or almost exclusively handle retail trading
activity. Finally, FINRA notes that the Commission has, in other
contexts, approved programs like this one that are intended to
specifically benefit retail firms.\26\
---------------------------------------------------------------------------

    \26\ See n.18, supra.
---------------------------------------------------------------------------

    The proposal to establish a new ATS Market Maker Combined Media
Activity Cap is reasonable as a means of fostering the establishment
and growth among FINRA members of new businesses that involve
reportable activity, such as single-dealer platforms and ATSs. In the
early stages of these businesses, participants many not yet qualify for
the existing fee cap programs because they may not yet conduct enough
business as Executing Parties to qualify for the Media/Executing Party
cap or otherwise meet the qualifications for the Media/Contra Party
cap. The proposed cap will help these participants to establish and
grow their businesses by limiting the fees that they will otherwise
incur as they grow.
    Furthermore, the proposed ATS Market Maker Combined Media Activity
Cap is available to all FINRA members that use the FINRA/Nasdaq TRFs
and meet the threshold requirements to qualify for the terms of the fee
cap. While only some participants will qualify for the proposed cap and
thus see a reduction in their FINRA/Nasdaq TRF trade reporting fees,
Nasdaq, as the Business Member, has advised FINRA that the proposed cap
is not unfairly discriminatory because the proposed fee cap is targeted
to benefit those participants that have a small but growing volume of
Executing Party activity on the FINRA/Nasdaq TRFs. Nasdaq advises FINRA
that it is not unfairly discriminatory to limit participation to market
makers with a daily average number of Media/Executing Party trades of
less than 5,000 because participants with at least 5,000 Media/
Executing Party trades will be eligible to graduate to the Media/
Executing Party Cap.
    The proposed establishment of a fixed monthly Participation Fee is
a reasonable means of ensuring that all participants in the FINRA/
Nasdaq TRFs (other than Retail Participants, as discussed above) bear a
share of financial responsibility for funding their use of the
Facility, even if the extent of their use is minimal. Indeed, the
FINRA/Nasdaq TRFs incur (or, in the case of the FINRA/Nasdaq TRF
Chicago, will incur) costs associated with the mere addition and
maintenance of participants' accounts that are independent of the
participants' usage of those accounts to report trades. FINRA believes
that it is equitable and non-discriminatory to assess a Participation
Fee to help the FINRA/Nasdaq TRFs to recover these costs from all
participants.
    Finally, FINRA believes that it is reasonable to reorganize and
clarify Rule 7620A so that it is easier to comprehend and presented in
a more logical order. The proposal to reorganize and restate the Rule
is also equitable and not unfairly discriminatory in that the proposal
will apply to all similarly situated participants in the FINRA/Nasdaq
TRFs.

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

    FINRA does not believe that the proposed rule changes will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
Regulatory Need
    Nasdaq, as the Business Member and operator of the FINRA/Nasdaq
TRFs, collects all fees on behalf of the FINRA/Nasdaq TRFs. As
discussed above, Nasdaq has observed an increase in off exchange
volumes and the associated cost of operating and improving the FINRA/
Nasdaq TRFs, and thus determined to make several adjustments to the
schedule of fees and caps to align those with the costs.
Economic Baseline
    As discussed above, pursuant to FINRA Rule 7620A, participants in
the FINRA/Nasdaq TRFs [sic] are currently subject to four categories of
fees, each of which is applicable to transactions on the three Tapes:
(1) Media/Executing Party; (2) Non-Media/Executing Party; (3) Media/
Contra Party; (4) and Non-Media/Contra Party. The Rule also provides
fee caps for participants for a particular Tape during a given month,
separately for Media/Executing Party trades and Media/Contra Party
trades.
Economic Impact
    The proposed rule change entails several changes to the fee and cap
structure. The potential marginal impact of each proposed change is
discussed below.
    Nasdaq has determined to raise the threshold for the ``Cap
Qualifying Activity''--i.e., the daily average number of Media/
Executing Party trades that a participant must report to the FINRA/
Nasdaq TRFs in a given month to qualify for caps on its trade reporting
fees, from 2,500 reports in each of Tapes A, B, and C to 5,000 reports.
Such increase in the cap qualifying activity will increase reporting
fees for participants who currently meet the threshold for the cap.
Assuming that the participants do not alter the number of reports, some
participants may have activity below the threshold and may no longer be
eligible for the fee caps. Such participants would potentially
experience a larger impact from the proposed increase.
    Under the proposed calculation for the Media/Executing Party and
Non-Media/Executing fee, the cap would effectively increase by
approximately 44%, from $990 ($0.018 x 2,500 x 22) to $1,430 ($0.013 x
5,000 x 22), assuming 22 trading days in a month. Based on the
reporting activity from the fourth quarter of 2017 and assuming that
reporting activity would remain similar, under the proposed increase in
fees and the cap, 27 participants would potentially be impacted from
such increase in the cap and thus would pay more in reporting fees
under the proposed change. Similarly, under the proposed calculation
for the Media/Contra Party and Non-Media/Contra Party fee, the cap
would increase 100%, from $715 ($0.013 x 2,500 x 22) to $1,430 ($0.013
x 5,000 x 22), again assuming 22 trading days in a month.
    An analysis of the participants show [sic] that the firms impacted
by the cap qualifier for Media/Executing Party and Non-Media/Executing
activity are the same firms who would potentially incur the 100%
increase on the Contra Party fees. Under the combined capped activity,
the cost increase would be 68%, on average, for the participants who
report both Executing Party and Contra Party trades. The proposed
increase in the maximum monthly ``Media/Contra'' fee from $5,000 per
Tape per month to $10,000 per Tape per month would potentially impact a
few number [sic] of qualifying participants, but could provide savings
in the future if they qualify for the ATS Market

Maker Combined Media Activity Cap discussed above.
    The ATS Market Maker Combined Media Activity Cap would initially
benefit only a small number of ATSs due to their reporting activity.
The reporting fees would potentially decrease by 25%, from $30,000 to
$22,500 under the ATS Market Maker Combined Media Activity Cap.
However, the fees could potentially decrease by approximately 43% if
reporting activity increases.
    The proposed participant fee would be assessed on all participants
equally and would raise the overall reporting fees by $350 per month
regardless of the reporting activity. Retail Participants would be
exempt from paying this fee.
    The proposed rule change establishes a ``Retail Participant Pricing
Program'' for participants whose trade reporting activity to the FINRA/
Nasdaq TRFs constitutes ``Retail Orders.'' Under the proposed program,
reporting activity to be eligible for the cap would be lower compared
to that for non-retail participants. Retail Participants would
potentially benefit from the proposed program, and incur relatively
lower costs, consistent with relatively fewer trades that are
considered retail.
    FINRA analyzed data provided by Nasdaq that contain fees incurred
by 545 participants in the final quarter of 2017, and projected fees
that were estimated under the proposed fee and cap schedule assuming
that the reporting behavior would be the same under the current and the
proposed schedule. On a net basis, i.e., after incorporating the
proposed changes in the fees and caps and the Participation Fee, 17
participants would experience a reduction in the total fees incurred,
with an average estimate of $722. Another 13 participants would be
expected to see no change in the fees incurred, and these participants
appear to be those that would be eligible for the Retail Participant
Program. The remaining 515 participants would incur an estimated fee
increase of $598 per month. However, for 489 participants out of the
515, the increase is solely due to the proposed Participation Fee of
$350.
    The potential net impact of the proposed rule change depends on
whether participants alter their reporting activity across TRFs to be
eligible for the fee caps. To the extent that the proposed increases
impose a burden on participants, they may choose to shift their
reporting to other TRFs. The net impact would also depend on whether
the proposed fee caps create an optimal reporting strategy to be
eligible for a specific cap to maximize the overall savings for all
trade types reported to the FINRA/Nasdaq TRFs.
    Investors may also potentially incur costs to the extent that
participants choose to pass some or all of the fee increase to their
customers.
    Finally, FINRA notes that the proposed fee and fee cap changes
occur within the context of a competitive environment in which the
various trade reporting facilities vie for market share. If any
existing or prospective participant in either FINRA/Nasdaq TRF
determines that the new fees or fee cap thresholds are too high or are
unfavorable relative to fees and fee cap programs applicable to the
FINRA/NYSE TRF, such participants may choose to report to the FINRA/
NYSE TRF in lieu of the FINRA/Nasdaq TRFs, in which case the FINRA/
Nasdaq TRFs will lose market share. Likewise, the FINRA/NYSE TRF is
free to adjust its fees and fee cap programs, or to modify its
functionality, in response to the changes proposed herein to render
them more attractive relative to the FINRA/Nasdaq TRFs. FINRA notes,
however, that in certain instances, differences in the relative
functionalities among the FINRA/Nasdaq and FINRA/NYSE TRFs may impact
participants' decisions to report to the FINRA/NYSE TRF, even if the
participants find the FINRA/NYSE TRF fees and fee cap programs to be
preferable.
Alternatives Considered
    No other alternatives were considered for the proposed rule change.

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \27\ and paragraph (f)(2) of Rule 19b-4
thereunder.\28\ At any time within 60 days of the filing of the
proposed rule change, the Commission summarily may temporarily suspend
such rule change if it appears to the Commission that such action is
necessary or appropriate in the public interest, for the protection of
investors, or otherwise in furtherance of the purposes of the Act. If
the Commission takes such action, the Commission shall institute
proceedings to determine whether the proposed rule should be approved
or disapproved.
---------------------------------------------------------------------------

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

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-FINRA-2018-029 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-FINRA-2018-029. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of FINRA. All comments received
will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-FINRA-2018-029, and should be submitted
on or before September 12, 2018.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\29\
---------------------------------------------------------------------------

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

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-18062 Filed 8-21-18; 8:45 am]
 BILLING CODE P


[Federal Register Volume 81, Number 173 (Wednesday, September 7, 2016)]
[Notices]
[Pages 61681-61682]
[FR Doc No: 2016-21418]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Privacy Act of 1974: Notice of Altered Systems of Records

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of altered systems of records.

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

SUMMARY: The Federal Energy Regulatory Commission (the Commission),
under the requirements of the Privacy Act of 1974, 5 U.S.C. 552a, is
publishing a description of an altered system of records (FERC-46).

ADDRESSES: Comments should be directed to the following address: Office
of the General Counsel, General and Administrative Law Division,
Federal Energy Regulatory Commission, 888 First Street NE., Washington,
DC 20426.

DATES: The proposed revised system will become effective October 17,
2016 unless further notice is given. The Commission will publish a new
notice if the effective date is delayed to review comments or if
changes are made based on comments received. To be assured of
consideration, comments should be received on or before October 7,
2016.

FOR FURTHER INFORMATION CONTACT: Kathryn Allen, Office of the General
Counsel, General and Administrative Law Division, Federal Energy
Regulatory Commission, 888 First Street NE., Washington, DC 20426,
(202) 502-8585.

SUPPLEMENTARY INFORMATION:

I. Report on the Altered Systems

A. Background

    The Privacy Act of 1974, 5 U.S.C. 552a, requires that each agency
publish a notice of the existence and character of each new or altered
``system of records.'' 5 U.S.C. 552a(a)(5). This Notice identifies and
describes the Commission's altered systems of records. A copy of this
report has been distributed to the Speaker of the House of
Representatives and the President of the Senate as the Act requires.

    The Commission has adopted an altered system of records under the
Privacy Act of 1974. The notice includes for this systems of records
the name; location; categories of individuals on whom the records are
maintained; categories of records in the system; authority for
maintenance of the system; each routine use; the policies and practices
governing storage, retrievability, access controls, retention and
disposal; the title and business address of the agency official
responsible for the system of records; procedures for notification,
access and contesting the record; and the source for the records in the
system. 5 U.S.C. 552(a)(4).

B. New or Altered System of Records

    FERC-46 Commission Freedom of Information Act and Privacy Act
Request Files http://www.ferc.gov/privacy/sorn-maps.pdfhttp://www.ferc.gov/privacy/sorn-fpps.pdf.

FERC-46 SYSTEM NAME:
    Commission Freedom of Information Act and Privacy Act Request
Files.

SECURITY CLASSIFICATION:
    Unclassified

SYSTEM LOCATION:
    Federal Energy Regulatory Commission, Office of External Affairs,
888 First Street NE., Washington, DC 20426

CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM:
    All individuals requesting records from FERC under the provisions
of the Freedom of Information Act (FOIA) and the Privacy Act (PA) of
1974.

CATEGORIES OF RECORDS IN THE SYSTEM:
    Requester's name and address, request number, description of
request, billing information, tracking information, and all
correspondence with the requester.

AUTHORITY FOR MAINTENANCE OF THE SYSTEM:
    5 U.S.C. 552, 552a; Executive Order 12009.

PURPOSE(S):
    To record, track and maintain a complete record of events and
ensure proper document control of time sensitive responses to FOIA and
PA inquiries.

ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM, INCLUDING CATEGORIES
OF USERS AND THE PURPOSES OF SUCH USES:
    To maintain a tracking system to expedite responses within the
statutory time limits for the FOIA requests; to contact FOIA
requesters; to prepare an annual report to the U.S. Department of
Justice for submission to Congress each fiscal year under section
552(e) of the Freedom of Information Act; to prepare periodic activity
reports for the Director, Office of External Affairs, to serve as a
point of reference for all events and documents pertinent to the
request in case of litigation; and to provide the National Archives and
Records Administration, Office of Government Information Services
(OGIS) to the extent necessary with information to fulfill its
responsibilities in 5 U.S.C. 552(h), to review administrative agency
policies, procedures and compliance with FOIA and to facilitate OGIS
offering of mediation services to resolve disputes between persons
making FOIA requests and administrative agencies.

DISCLOSURE TO CONSUMER REPORTING AGENCIES:
    None.

POLICIES AND PRACTICES FOR STORING, RETRIEVING, ACCESSING, RETAINING,
AND DISPOSING OF RECORDS IN THE SYSTEM:
STORAGE:
    Records are maintained in electronic and paper format. Electronic
records are stored in computerized databases and/or on computer disc.
Paper records and records on computer disc are stored in locked file
rooms and/or file cabinets.

RETRIEVABILITY:
    The records are retrieved by the names of the individual requester,
affiliation (where applicable), and subject matter.

SAFEGUARDS:
    Records are maintained in lockable metal file cabinets in a
lockable room with a key distributed to those whose official duties
require access. Computer data is secured by password. The building is
guarded and monitored by security personnel, cameras, ID checks, and
other physical security measures.

RETENTION AND DISPOSAL:
    The retention period is two years after completion date if the
information is released or six years after completion date if any or
all information is withheld from the requester. Computer records are
deleted and paper records are shredded and destroyed.

SYSTEM MANAGER(S) AND ADDRESS:
    FOIA Liaison, Office of External Affairs, Federal Energy Regulatory
Commission, 888 First Street NE., Washington, DC 20426.

NOTIFICATION PROCEDURE:
    Requests from individuals to determine if a system of records
contains information about them should be directed to the System
Manager.

RECORD ACCESS PROCEDURES:
    Requests for access to records should be directed to the Director,
Office of External Affairs, Federal Energy Regulatory Commission, 888
First Street NE., Washington, DC 20426.

CONTESTING RECORD PROCEDURES:
    Same as notification procedure above.

RECORD SOURCE CATEGORIES:
    The subject individual; system manager; FERC staff, and the
Director, Office of External Affairs.

EXEMPTIONS CLAIMED FOR THE SYSTEM:
    None.

    Dated: August 30, 2016
Kimberly D. Bose,
Secretary.
[FR Doc. 2016-21418 Filed 9-6-16; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register Volume 79, Number 195 (Wednesday, October 8, 2014)]
[Notices]
[Pages 60891-60892]
[FR Doc No: 2014-24011]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No. FMCSA-2014-0335]

Parts and Accessories Necessary for Safe Operation; Application
for an Exemption From Dealers Choice Truckaway System, Inc.

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Notice of application for exemption; request for comments.

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

SUMMARY: FMCSA requests public comment on an application for exemption
from Dealers Choice Truckaway System, Inc. (Truckmovers) to allow the
use of plastic blocks to build up the height of the front end of a
towed vehicle in driveaway-towaway operations. The Federal Motor
Carrier Safety Regulations (FMCSRs) permit the use of ``hardwood blocks
of good quality'' for this purpose but the use of materials other than
hardwood blocks is not addressed. Truckmovers believes the use of
ultra-high molecular polyethylene plastic blocks will maintain a level
of safety that is equivalent to the level of safety achieved without
the exemption. Truckmovers is requesting the temporary exemption in
advance of petitioning FMCSA to conduct a rulemaking to amend 49 CFR
393.71(k)(4) to allow the use of vehicle support blocks made of any
suitable material to support the weight of vehicles when towing
multiple vehicles in driveaway-towaway operations.

DATES: Comments must be received on or before November 7, 2014.

ADDRESSES: You may submit comments bearing the Federal Docket
Management System (FDMS) Docket ID FMCSA-2014-0335 using any of the
following methods:
     Web site: http://www.regulations.gov. Follow the
instructions for submitting comments on the Federal electronic docket
site.
     Fax: 1-202-493-2251.
     Mail: Docket Management Facility, U.S. Department of
Transportation, Room W12-140, 1200 New Jersey Avenue SE., Washington,
DC 20590-0001.
     Hand Delivery: Ground Floor, Room W12-140, DOT Building,
1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m.
e.t., Monday-Friday, except Federal holidays.
    Instructions: All submissions must include the Agency name and
docket number for this notice. For detailed instructions on submitting
comments and additional information on the exemption process, see the
``Public Participation'' heading below. Note that all comments received
will be posted without change to http://www.regulations.gov, including
any personal information provided. Please see the ``Privacy Act''
heading for further information.
    Docket: For access to the docket to read background documents or
comments received, go to http://www.regulations.gov or to Room W12-140,
DOT Building, 1200 New Jersey Avenue SE., Washington, DC, between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    Privacy Act: Anyone is able to search the electronic form of all
comments received into any of our dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review DOT's
complete Privacy Act Statement in the Federal Register published on
April 11, 2000 (65 FR 19476) or you may visit http://www.regulations.gov.
    Public participation: The http://www.regulations.gov Web site is
generally available 24 hours each day, 365 days each year. You may find
electronic submission and retrieval help and guidelines under the
``help'' section of the http://www.regulations.gov Web site as well as
the DOT's http://docketsinfo.dot.gov Web site. If you would like
notification that we received your comments, please include a self
addressed, stamped envelope or postcard or print the acknowledgment
page that appears after submitting comments online.

FOR FURTHER INFORMATION CONTACT: Mr. Luke W. Loy, Vehicle and Roadside
Operations Division, Office of Bus and Truck Standards and Operations,
MC-PSV,<PHONE_NUMBER>; Federal Motor Carrier Safety Administration,
1200 New Jersey Avenue SE., Washington, DC 20590-0001.

SUPPLEMENTARY INFORMATION:

Background

    Section 4007 of the Transportation Equity Act for the 21st Century
(TEA- 21) [Pub. L. 105-178, June 9, 1998, 112 Stat. 401] amended 49
U.S.C. 31315 and 31136(e) to provide authority to grant exemptions from
the Federal Motor Carrier Safety Regulations (FMCSRs). On August 20,
2004, FMCSA published a final rule (69 FR 51589) implementing section
4007. Under this rule, FMCSA must publish a notice of each exemption
request in the Federal Register (49 CFR 381.315(a)). The Agency must
provide the public with an opportunity to inspect the information
relevant to the application, including any safety analyses that have
been conducted. The Agency must also provide an opportunity for public
comment on the request.
    The Agency reviews the safety analyses and the public comments and
determines whether granting the exemption would likely achieve a level
of safety equivalent to or greater than the level that would be
achieved by the current regulation (49 CFR 381.305). The decision of
the Agency must be published in the Federal Register (49 CFR
381.315(b)). If the Agency denies the request, it must state the reason
for doing so. If the decision is to grant the exemption, the notice
must specify the person or class of persons receiving the exemption and
the regulatory provision or provisions from which an exemption is
granted. The notice must specify the effective period of the exemption
(up to 2 years) and explain the terms and conditions of the exemption.
The exemption may be renewed (49 CFR 381.315(c) and 49 CFR 381.300(b)).

Truckmovers Application for Exemption

    Truckmovers applied for an exemption from 49 CFR 393.71(k)(4) to
allow the use of plastic support blocks in lieu of hardwood blocks to
increase the height of a towed vehicle in driveaway-towaway operations.
A copy of the application is included in the docket referenced at the
beginning of this notice.
    In its application, Truckmovers states that without the proposed
exemption it will not be able to utilize plastic support blocks because
49 CFR 393.71(k)(4) specifically identifies the use of hardwood blocks
to build up the height of the front end of a towed vehicle in
driveaway-towaway operations. Truckmovers provided information
regarding the development of ultra-high molecular polyethylene plastic
blocks with a compression rating of 3,300 psi, which can withstand
extreme heat and cold. These plastic blocks are not susceptible to
decomposition and erosion like wood blocks, allowing for their re-use.
The high compression

strength of the plastic does not allow the blocks to be over-tightened
when secured with cargo securement devices, while wood can be over-
tightened, can crack and can become loose in transit. For the reasons
stated above, Truckmovers requests that its operators be permitted to
use the ultra-high molecular polyethylene plastic support blocks to
increase the height of a towed vehicle in driveaway-towaway operations,
instead of utilizing hardwood blocks as specified in the current
regulation. Truckmovers believes that the use of ultra-high molecular
polyurethane plastic blocks, in lieu of hardwood support blocks, will
maintain a level of safety that is equivalent to the level of safety
achieved without the exemption.

Request for Comments

    In accordance with 49 U.S.C. 31315 and 31136(e), FMCSA requests
public comment from all interested persons on Truckmovers application
for an exemption from 49 CFR 393.73(k)(4). All comments received before
the close of business on the comment closing date indicated at the
beginning of this notice will be considered and will be available for
examination in the docket at the location listed under the ADDRESSES
section of this notice.
    Comments received after the comment closing date will be filed in
the public docket and will be considered to the extent practicable. In
addition to late comments, FMCSA will continue to file relevant
information in the public docket that becomes available after the
comment closing date. Interested persons should continue to examine the
public docket for new material.

    Issued on: October 1, 2014.
Larry W. Minor,
Associate Administrator for Policy.
[FR Doc. 2014-24011 Filed 10-7-14; 8:45 am]
BILLING CODE 4910-EX-P


[Federal Register Volume 84, Number 156 (Tuesday, August 13, 2019)]
[Notices]
[Pages 40126-40127]
[FR Doc No: 2019-17228]

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DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

[Docket Number FRA-2013-0081]

Petition for Special Approval

    Under part 211 of title 49 Code of Federal Regulations (CFR), this
document provides the public notice that on June 6, 2019, the
Association of American Railroads (AAR) petitioned the Federal Railroad
Administration (FRA) for a special approval of certain industry
standards in accordance with the Federal railroad safety regulations
contained at 49 CFR 231.33, Procedure for special approval of existing
industry safety appliance standards, and 49 CFR 231.35, Procedure for
modification of an approved industry safety appliance standard for new
railcar construction. FRA assigned the petition Docket Number FRA-2013-
0081.
    AAR, on behalf of itself and its member railroads, submitted a
petition for special approval of existing industry safety appliance
standards contained in 49 CFR part 231, and minor edits to AAR Standard
S-2044 and its appendices that have been previously approved by FRA.
Specifically, AAR requests approval of the standards and specifications
delineated in AAR Standard S-2044, Appendices E3, Safety Appliances for
Tank Cars with Side Ladders and Low Side-Mounted Hand Brakes, and E4,
Safety Appliances for Tank Cars with End Ladders and Low Side-Mounted
Handbrakes. Appendices E3 and E4 were not included in the version of
AAR Standard S-2044 approved September 26, 2018, and are entirely new.
Additionally, AAR seeks approval of minor edits to previously-approved
S-2044 and its appendices, as shown in Attachment 2 to the petition.
AAR S-2044 and its appendices have been developed to serve as
requirements for safety appliance arrangements. The revised standard
and its appendices are to be applied to new railroad freight cars, if
approved by FRA.
    A copy of the petition, as well as any written communications
concerning the petition, is available for review online at
www.regulations.gov and in person at the Department of Transportation's
(DOT) Docket Operations Facility, 1200 New Jersey Avenue SE, W12-140,
Washington, DC 20590. The Docket Operations Facility is open from 9
a.m. to 5 p.m., Monday through Friday, except Federal Holidays.
    Interested parties are invited to participate in these proceedings
by submitting written views, data, or comments. FRA does not anticipate
scheduling a public hearing about these proceedings since the facts do
not appear to warrant a hearing. If any interested party desires an
opportunity for oral comment, they should notify FRA, in writing,
before the end of the comment period and specify the basis for their
request.
    All communications concerning these proceedings should identify the
appropriate docket number and may be submitted by any of the following
methods:
     Website: http://www.regulations.gov/. Follow the online
instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: Docket Operations Facility, U.S. Department of
Transportation, 1200 New Jersey Avenue SE, W12-140, Washington, DC
20590.
     Hand Delivery: 1200 New Jersey Avenue SE, Room W12-140,
Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal Holidays.
    Communications received by September 27, 2019, will be considered
by FRA before final action is taken. Comments received after that date
will be considered if practicable.
    Anyone can search the electronic form of any written communications
and comments received into any of our dockets by the name of the
individual submitting the comment (or signing the document, if
submitted on behalf of an

association, business, labor union, etc.). Under 5 U.S.C. 553(c), DOT
solicits comments from the public to better inform its processes. DOT
posts these comments, without edit, including any personal information
the commenter provides, to www.regulations.gov, as described in the
system of records notice (DOT/ALL-14 FDMS), which can be reviewed at
https://www.transportation.gov/privacy. See also https://www.regulations.gov/privacyNotice for the privacy notice of
regulations.gov.

    Issued in Washington, DC.
John Karl Alexy,
Associate Administrator for Railroad Safety, Chief Safety Officer.
[FR Doc. 2019-17228 Filed 8-12-19; 8:45 am]
 BILLING CODE 4910-06-P