[Federal Register: July 15, 2009 (Volume 74, Number 134)]
[Notices]
[Page 34335]
[DOCID:fr15jy09-84]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket Nos. EL09-52-001]

 City of Riverside, CA; Notice of Filing

July 8, 2009.
    Take notice that on July 2, 2009, the City of Riverside, California
(Riverside) filed a revised version of Appendix I to its Transmission
Owner Tariff, and a revised version of page 7 from Exhibit No. RPU-3--
City of Riverside Transmission Revenue Requirement Calculations, which
reflect a reduction of calculations in the proposed Transmission
Revenue Requirement as a result of its Offer of Settlement filed on
July 1, 2009 by Southern California Edison Company in Docket No. ER08-
1343-000, et al. Riverside also requests any necessary waivers by the
Commission to allow this filing to become effective July 1, 2009.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211, 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed on or before the comment date.
Anyone filing a motion to intervene or protest must serve a copy of
that document on the Applicant and all the parties in this proceeding.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://
www.ferc.gov. Persons unable to file electronically should submit an
original and 14 copies of the protest or intervention to the Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, DC
20426.
    This filing is accessible on-line at http://www.ferc.gov, using the
``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive e-mail
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For
TTY, call<PHONE_NUMBER>.
    Comment Date: 5 p.m. Eastern Time on July 23, 2009.

Kimberly D. Bose,
Secretary.
 [FR Doc. E9-16730 Filed 7-14-09; 8:45 am]

BILLING CODE 6717-01-P


Comment Info: =================

General Comment:A 75 day time period to review the proposed regulations is insufficent and we are requesting that the review period be extended to 180 days.  Thank you.


[Federal Register Volume 76, Number 133 (Tuesday, July 12, 2011)]
[Notices]
[Pages 40920-40921]
[FR Doc No: 2011-17415]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2011-N-0494]

Agency Information Collection Activities; Proposed Collection;
Comment Request; Data To Support Communications To Educate Consumers on
How To Safely Purchase Drugs Online

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is announcing an
opportunity for public comment on the proposed collection of certain
information by the Agency. Under the Paperwork Reduction Act of 1995
(the PRA), Federal Agencies are required to publish notice in the
Federal Register concerning each proposed collection of information and
to allow 60 days for public comment in response to the notice. This
notice solicits comments on a generic clearance on ``Data to Support
Communications to Educate Consumers on How to Safely Purchase Drugs
Online.'' This data collection will obtain baseline knowledge of the
Internet users' knowledge, attitudes, and practices with regard to
online pharmacies, and then will collect ongoing data for tracking
changes in knowledge, attitudes, and practices as a

function of an integrated public outreach campaign FDA will roll out to
educate consumers on how to safely purchase drugs online.

DATES: Submit either electronic or written comments on the collection
of information by September 12, 2011.

ADDRESSES: Submit electronic comments on the collection of information
to http://www.regulations.gov. Submit written comments on the
collection of information to the Division of Dockets Management (HFA-
305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061,
Rockville, MD 20852. All comments should be identified with the docket
number found in brackets in the heading of this document.

FOR FURTHER INFORMATION CONTACT:  Elizabeth Berbakos, Office of
Information Management, Food and Drug Administration, 1350 Piccard Dr.,
P150-400B,<PHONE_NUMBER><EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Under the PRA (44 U.S.C. 3501-3520), Federal
Agencies must obtain approval from the Office of Management and Budget
(OMB) for each collection of information they conduct or sponsor.
``Collection of information'' is defined in 44 U.S.C. 3502(3) and 5 CFR
1320.3(c) and includes Agency requests or requirements that members of
the public submit reports, keep records, or provide information to a
third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A))
requires Federal Agencies to provide a 60-day notice in the Federal
Register concerning each proposed collection of information before
submitting the collection to OMB for approval. To comply with this
requirement, FDA is publishing notice of the proposed collection of
information set forth in this document.
    With respect to the following collection of information, FDA
invites comments on these topics: (1) Whether the proposed collection
of information is necessary for the proper performance of FDA's
functions, including whether the information will have practical
utility; (2) the accuracy of FDA's estimate of the burden of the
proposed collection of information, including the validity of the
methodology and assumptions used; (3) ways to enhance the quality,
utility, and clarity of the information to be collected; and (4) ways
to minimize the burden of the collection of information on respondents,
including through the use of automated collection techniques, when
appropriate, and other forms of information technology.

Data To Support Communications To Educate Consumers on How To Safely
Purchase Drugs Online--(OMB Control Number 0910--New)

    FDA has planned an integrated public outreach campaign to improve
the safe use of online pharmacies for drug purchases. In order to
effectively evaluate this campaign, FDA must understand individuals'
knowledge, attitudes, and practices with regard to online pharmacies
both at the start of the campaign and on an ongoing basis. This will
enable FDA to gauge progress toward educating the public on safely
purchasing from online pharmacies. An online survey panel will be
employed to collect this information, which serves the need for direct
and quantitative measurement of our target population, and which, as a
quantitative research tool has some major benefits:
     To focus on our target population of adults who use the
Internet.
     To collect data quickly and efficiently with minimal cost
to the government.
     To reduce burden to the public by providing a means to
complete the survey at a time and place of their choosing.
    FDA will use online data collection to establish a baseline and
evaluate the success of its messages and distribution methods for its
outreach campaign, which educates consumers about how to safely
purchase drugs online. Additionally, FDA will use this method to help
tailor messages and communications vehicles to have both a more
powerful and desired impact on target audiences. The data will not be
used for the purposes of making policy or regulatory decisions.
    FDA estimates the burden of this collection of information as
follows:

                                                     Table 1--Estimated Annual Reporting Burden \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Number of
                              Activity                                  Number of      responses per     Total annual    Average burden    Total hours
                                                                       respondents       respondent       responses       per response
--------------------------------------------------------------------------------------------------------------------------------------------------------
Survey Study.......................................................           5,000                1            5,000    .33 (20 min.)            1,650
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with this collection of information.

    Annually, FDA projects one survey study. FDA is requesting this
data collection burden so as not to restrict the Agency's ability to
gather information on public sentiment for its proposals in its
regulatory and communications programs.

    Dated: July 6, 2011.
Leslie Kux,
Acting Assistant Commissioner for Policy.
[FR Doc. 2011-17415 Filed 7-11-11; 8:45 am]
BILLING CODE 4160-01-P


[Federal Register Volume 76, Number 242 (Friday, December 16, 2011)]
[Rules and Regulations]
[Pages 78161-78162]
[FR Doc No: 2011-32258]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[Docket No. USCG-2011-0228]

Safety Zone, Brandon Road Lock and Dam to Lake Michigan Including
Des Plaines River, Chicago Sanitary and Ship Canal, Chicago River, and
Calumet-Saganashkee Channel, Chicago, IL

AGENCY: Coast Guard, DHS.

ACTION: Notice of enforcement of regulation.

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SUMMARY: The Coast Guard will enforce a segment of the Safety Zone;
Brandon Road Lock and Dam to Lake Michigan including Des Plaines River,
Chicago Sanitary and Ship Canal, Chicago River, Calumet-Saganashkee
Channel on all waters of the Chicago Sanitary and Ship Canal from Mile
Marker 296.1 to Mile Marker 296.7 at various times from December 21,
2011 until December 22, 2011. This action is necessary to protect the
waterways, waterway users, and vessels from hazards associated with the
U.S. Army Corps of Engineers' maintenance operations of dispersal
barrier IIB. During these operations, dispersal barriers IIA and IIB
will be running simultaneously at 2.3 volts per inch necessitating the
restriction to reduce potential safety hazards.
    During the enforcement period, entry into, transiting, mooring,
laying-up or anchoring within the enforced area of

this safety zone by any person or vessel is prohibited unless
authorized by the Captain of the Port, Sector Lake Michigan, or his or
her designated representative.

DATES: The regulations in 33 CFR 165.930 will be enforced from 7 a.m.
to 11 a.m. and from 1 p.m. to 5 p.m. on December 21-22, 2011.

FOR FURTHER INFORMATION CONTACT: If you have questions on this notice,
call or email CWO Jon Grob, Prevention Department, Coast Guard Sector
Lake Michigan, telephone<PHONE_NUMBER>, email address
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: The Coast Guard will enforce a segment of
the Safety Zone; Brandon Road Lock and Dam to Lake Michigan including
Des Plaines River, Chicago Sanitary and Ship Canal, Chicago River,
Calumet-Saganashkee Channel, Chicago, IL, listed in 33 CFR 165.930, on
all waters of the Chicago Sanitary and Ship Canal from Mile Marker
296.1 to Mile Marker 296.7 at the following times:
    (1) On December 21-22, 2011, from 7 a.m. until 11 a.m. and from 1
p.m. until 5 p.m.
    This enforcement action is necessary because the Captain of the
Port, Sector Lake Michigan has determined that the U.S. Army Corps of
Engineers' dispersal barrier maintenance and simultaneous operations of
Barriers IIA and IIB pose risks to life and property. The combination
of vessel traffic and the maintenance operations in the water makes the
controlling of vessels through the impacted portion of the Chicago
Sanitary and Ship Canal necessary to prevent injury and property loss.
    In accordance with the general regulations in Sec.  165.23 of this
part, entry into, transiting, mooring, laying up or anchoring within
the enforced area of this safety zone by any person or vessel is
prohibited unless authorized by the Captain of the Port, Sector Lake
Michigan, or his or her designated representative.
    This notice is issued under authority of 33 CFR Sec.  165.930 and 5
U.S.C. 552(a). In addition to this notice in the Federal Register, the
Captain of the Port, Sector Lake Michigan, will also provide notice
through other means, which may include, but are not limited to,
Broadcast Notice to Mariners, Local Notice to Mariners, local news
media, distribution in leaflet form, and on-scene oral notice.
    Additionally, the Captain of the Port, Sector Lake Michigan, may
notify representatives from the maritime industry through telephonic
and email notifications.

    Dated: November 21, 2011.
M.W. Sibley,
Captain, U.S. Coast Guard, Captain of the Port, Sector Lake Michigan.
[FR Doc. 2011-32258 Filed 12-15-11; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 81, Number 217 (Wednesday, November 9, 2016)]
[Proposed Rules]
[Page 78756]
[FR Doc No: 2016-27089]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

Proposed Modification of the San Francisco, CA, Class B Airspace
Area; Public Meetings

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of meetings.

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SUMMARY: This notice announces three fact-finding informal airspace
meetings to solicit information from airspace users and others
concerning a proposal to amend the Class B airspace area at San
Francisco, CA. The purpose of these meetings is to provide interested
parties an opportunity to present views, recommendations, and comments
on any proposed change to the airspace. All comments received during
these meetings will be considered prior to any revision or issuance of
a notice of proposed rulemaking.

DATES: The meetings will be held on Monday, January 30, 2017, from 5:30
p.m. to 8:30 p.m.; Tuesday January 31, 2017 from 5:30 p.m. to 8:30
p.m.; and Wednesday February 1 from 5 p.m. to 8 p.m. Doors open 30
minutes prior to the beginning of each meeting. Comments must be
received on or before March 16, 2017.

ADDRESSES: The meetings will be held at the following locations:
    January 30, 2017: Burlingame Public Library, Lane Room, 480
Primrose Rd., Burlingame, CA 94010 (Seating capacity: 80).
    January 31, 2017: Martin Luther King Library, Room 225, 150 E. San
Fernando St., San Jose, CA 95112 (Seating capacity: 150).
    February 1, 2017: Port of Oakland Building, First-Floor Exhibit
Room, 530 Water St., Oakland, CA 94607 (seating capacity: 70).
    Comments: Send comments on the proposal, in triplicate, to: Tracey
Johnson, Manager, Operations Support Group, Western Service Center, Air
Traffic Organization, Federal Aviation Administration, 1601 Lind Avenue
SW., Renton, WA 98057, or by fax to<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Rick Cot[eacute], FAA Support
Specialist, Northern California TRACON, 11365 Douglas Road, Mather, CA
95655,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Meeting Procedures

    (a) The meetings will be informal in nature and will be conducted
by one or more representatives of the FAA Northern California TRACON. A
representative from the FAA will present a briefing on the planned
modification to the Class B airspace at San Francisco, CA. Each
participant will be given an opportunity to deliver comments or make a
presentation, although a time limit may be imposed to accommodate
closing times. Only comments concerning the plan to modify the San
Francisco Class B airspace will be accepted.
    (b) The meetings will be open to all persons on a space-available
basis (seating capacity listed with addresses). There will be no
admission fee to attend and participate.
    (c) Any person wishing to make a presentation to the FAA panel will
be asked to sign in and estimate the amount of time needed for such
presentation. This will permit the panel to allocate an appropriate
amount of time for each presenter.
    (d) Position papers or other handout material relating to the
substance of these meetings will be accepted. Participants wishing to
submit handout material should present an original and two copies
(three copies total) to the presiding officer. There should be
additional copies of each handout available for other attendees.
    (e) These meetings will not be formally recorded. However, a
summary of comments made at the meeting will be filed in the docket.

Agenda for the Meetings

--Sign-in
--Presentation of Meeting Procedures
--Informal Presentation of the Planned Class B Airspace Area
Modifications
--Solicitation of Public Comments
--Drop box for written comments

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

    Issued in Washington, DC, on November 1, 2016.
Leslie M. Swann,
Acting Manager, Airspace Policy Group.
[FR Doc. 2016-27089 Filed 11-8-16; 8:45 am]
BILLING CODE 4910-13-P


Page 1 of 3 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D. C. 20460 May 5, 2004 OFFICE OF WATER Mr. Tim Westman Muskegon County Wastewater Treatment Plant 8301 White Road Muskegon, MI 49442 Phone: ( 616) 788 2311 Dear Mr. Westman:

The Clean Water Act ( CWA) requires that EPA periodically review existing effluent guidelines, pretreatment standards, and standards of performance for new sources and to revise them " if appropriate" or, in the case of new source performance standards, " as technology and alternatives change." As the project manager for the technology based effluent guidelines planning process ( see www. epa. gov/ guide/ plan. html), I am assembling the final Effluent Guidelines Program Plan for 2004/ 2005. The final Plan will describe EPA's effluent guidelines program, current development efforts, and the analyses that will help EPA to decide whether to revise or establish effluent guidelines and/ or pretreatment standards for particular industries.

As part of this planning process, we are reviewing the Organic Chemicals, Plastics, Synthetics, and Fibers ( OCPSF) effluent limitation guideline, codified in 40 CFR Part 414. We are using information reported to the Toxic Release Inventory ( TRI) to evaluate current discharges from OCPSF facilities. The 2000 TRI shows that a subset of OCPSF facilities ( those with a primary SIC Code 2865) discharged more than 850,000 pounds of aniline to POTWs. We are trying to obtain additional information on OCPSF discharges of aniline and other pollutants to POTWs to understand the impact, if any, of these discharges on POTWs.

In the 2000 TRI, two facilities reported discharging OCPSF generated wastewaters to your collection system. In particular, these facilities reported the following discharges:

Pounds of Aniline Discharged to the Muskegon County Wastewater Treatment Plant As Reported in the 2000 TRI Facility Name Facility Location Pounds of Aniline Reported Sun Chemical Muskegon, MI 33,001 Lomac, LLC Muskegon, MI 10 Page 2 of 3 As a result, we would like to obtain any readily available information on discharges from these facilities to your facility as well as any associated impacts. This information and your knowledge will help us better formulate policy options for the final Effluent Guidelines Program Plan. In particular, we request the following data and information ( if available):

A. General information about discharges from the Sun Chemical and Lomac, LLC facilities to your POTW.

1. The pretreatment permits for these facilities and any supporting documentation equivalent to a fact sheet that describes the development of the current permit limits; 2. Recent compliance monitoring data for these facilities ( for all pollutants monitored and flow) for the past twelve months; and 3. Any particular issues or concerns presented by discharges from these facilities, even if these concerns are not related to aniline.

B. Information about the aniline impact on your treatment plant:

1. A list of any other manufacturers of dyes or aniline known to discharge aniline to your POTW, and 2. Any interference problems experienced by your treatment plant from aniline.

C. Description of your treatment plant:

1. The annual average flow treated by your POTW in 2000, 2. The wastewater treatment scheme at your POTW, and 3. Any recent aniline discharge monitoring data ( last twelve months) from your POTW.

We would like to obtain this information within the next month as we are in the process of finalizing our current plan. Please send this information to me using one of the addresses listed below:

USPS Mailing Address: FedEx Delivery Address:

Carey A. Johnston, P. E. Carey A. Johnston, P. E. U. S. EPA, Office of Water U. S. EPA, Office of Water Mail Code: 4303T EPA West 6231G 1200 Pennsylvania Avenue NW 1301 Constitution Avenue NW Washington, DC 20460 Washington, DC 20004 Page 3 of 3 Please contact me at ( 202) 566 1014 or johnston. carey@ epa. gov if you have any questions about this request or the effluent guidelines planning process in general. Your POTW is under no obligation to answer these questions. However, any information you supply will help us understand discharges from OCPSF to POTWs, which will lead to better formulated policy options for the final Effluent Guidelines Program Plan. Thank you.

Sincerely,

Carey A. Johnston, P. E. U. S. EPA, Office of Water


[Federal Register Volume 81, Number 26 (Tuesday, February 9, 2016)]
[Notices]
[Pages 6905-6908]
[FR Doc No: 2016-02442]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 31980; 812-14433]

Medallion Financial Corp.; Notice of Application

February 3, 2016.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application for an order under section 6(c) of the
Investment Company Act of 1940 (the ``Act'') for an exemption from
sections 23(a), 23(b) and 63 of the Act, and under sections 57(a)(4)
and 57(i) of the Act and rule 17d-1 under the Act permitting certain
joint transactions otherwise prohibited by section 57(a)(4) of the Act.

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SUMMARY: Summary of the Application: Applicant, Medallion Financial
Corp. (the ``Company''), requests an order to permit it to issue
restricted shares of its common stock to its officers and

employees under the terms of an employee compensation plan.

DATES: Filing Dates: The application was filed on March 17, 2015, and
amended on July 15, 2015, September 24, 2015, and December 11, 2015.
    Hearing or Notification of Hearing: An order granting the
application will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicant with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on February 29, 2016, and should be accompanied by proof of
service on applicant, in the form of an affidavit or, for lawyers, a
certificate of service. Pursuant to Rule 0-5 under the Act, hearing
requests should state the nature of the writer's interest, any facts
bearing upon the desirability of a hearing on the matter, the reason
for the request, and the issues contested. Persons who wish to be
notified of a hearing may request notification by writing to the
Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street NE., Washington, DC 20549-1090. Applicant, Marisa T. Silverman,
General Counsel, Medallion Financial Corp., 437 Madison Avenue, 38th
Floor, New York, NY 10022.

FOR FURTHER INFORMATION CONTACT: Laura L. Solomon, Senior Counsel, at
(202) 551-6915, or Daniele Marchesani, Branch Chief, at<PHONE_NUMBER>,
(Chief Counsel's Office, Division of Investment Management).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or for an
applicant using the Company name box, at http://www.sec.gov/search/search.htm, or by calling<PHONE_NUMBER>.

Applicant's Representations

    1. The Company, a Delaware corporation, is an internally managed,
non-diversified, closed-end investment company that has elected to be
regulated as a business development company (``BDC'') under the Act.\1\
The Company is a specialty finance company that has a leading position
in originating, acquiring, and servicing loans that finance taxicab
medallions and various types of commercial businesses. The Company
currently operates its business through three wholly-owned consolidated
subsidiaries and one wholly-owned unconsolidated portfolio company.
Shares of the Company's common stock are traded on the NASDAQ Global
Select Market under the symbol ``TAXI.'' As of March 10, 2015, there
were 24,771,864 shares of the Company's common stock outstanding. As of
that date, the Company had 151 employees, including employees of its
wholly-owned subsidiaries (``Wholly-Owned Subsidiaries'').
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    \1\ The Company was incorporated in Delaware in 1995 and
commenced operations on May 29, 1996, in connection with the closing
of its initial public offering and simultaneous acquisition of three
established finance companies. Section 2(a)(48) defines a BDC to be
any closed-end investment company that operates for the purpose of
making investments in securities described in sections 55(a)(1)
through 55(a)(3) of the Act and makes available significant
managerial assistance with respect to the issuers of such
securities.
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    2. The Company currently has a eight-member board of directors (the
``Board'') of whom three are ``interested persons'' of the Company
within the meaning of section 2(a)(19) of the Act and five are not
interested persons (the ``Non-interested Directors''). The Company has
six directors who are neither officers nor employees of the Company.
    3. The Company believes that its successful performance depends on
its ability to offer fair compensation packages to its professionals
that are competitive with those offered by other investment management
businesses. The Company believes that the ability to offer equity-based
compensation to its professionals is vital to the Company's future
growth and success. The Company wishes to adopt the 2015 Employee
Restricted Stock Plan (the ``Plan'') providing for the periodic
issuance of shares of restricted stock (i.e., stock that, at the time
of issuance, is subject to certain forfeiture restrictions, and thus is
restricted as to its transferability until such forfeiture restrictions
have lapsed) (the ``Restricted Stock'') for its employees and officers,
and employees of its Wholly-Owned Subsidiaries (each a ``Participant,''
and collectively, the ``Participants'').\2\
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    \2\ The Plan, except as noted in the application, will operate
in a manner identical to the operation of the 2009 Employee Plan
that is the subject of a prior order received by the Company. See
Medallion Financial Corp., Investment Company Act Release Nos. 29201
(Apr. 1, 2010) (notice) and 29258 (Apr. 26, 2010) (order).
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    4. The Plan will authorize the issuance of shares of Restricted
Stock subject to certain forfeiture restrictions. These restrictions
may relate to continued employment or service on the Board, achievement
of specified performance objectives, or other restrictions deemed by
the Committee (as defined below) to be appropriate.\3\ The Restricted
Stock will be subject to restrictions on transferability and other
restrictions as required by the Committee. Except to the extent
restricted under the terms of the Plan, a Participant granted
Restricted Stock will have all the rights of any other stockholder,
including the right to vote the Restricted Stock and the right to
receive dividends. During the restriction period, the Restricted Stock
generally may not be sold, transferred, pledged, hypothecated,
margined, or otherwise encumbered by the Participant. Except as
otherwise provided for in a Participant's employment agreement or as
the Board may determine, upon termination of a Participant's employment
or service on the Board during the applicable restriction period,
Restricted Stock for which forfeiture restrictions have not lapsed at
the time of such termination shall be forfeited.
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    \3\ The Compensation Committee of the Board (the ``Committee'')
is comprised solely of the Non-interested Directors.
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    5. The maximum amount of Restricted Stock that may be issued under
the Plan will be 10% of the outstanding shares of common stock of the
Company on the effective date of the Plan plus 10% of the number of
shares of the Company's common stock issued or delivered by the Company
(other than pursuant to compensation plans) during the term of the
Plan.\4\ The Plan limits the total number of shares that may be awarded
to any single Participant in a fiscal year to 200,000 shares. In
addition, no Restricted Stock Participant may be granted more than 25%
of the shares reserved for issuance under the Plan. The Plan will be
administered by the Committee, which, upon approval of the required
majority, as defined in section 57(o) of the Act,\5\ of the Board, will
award shares of Restricted Stock to the Participants from time to time
as part of the Participants' compensation based on a Participant's
actual or expected performance and value to the Company.
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    \4\ For purposes of calculating compliance with this limit, the
Company will count as Restricted Stock all shares of its common
stock that are issued pursuant to the Plan less any shares that are
forfeited back to the Company and cancelled as a result of
forfeiture restrictions not lapsing.
    \5\ The term ``required majority,'' when used with respect to
the approval of a proposed transaction, plan, or arrangement, means
both a majority of a BDC's directors or general partners who have no
financial interest in such transaction, plan, or arrangement and a
majority of such directors or general partners who are not
interested persons of such company.
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    6. Each issuance of Restricted Stock under the Plan will be
approved by the required majority, as defined in section 57(o) of the
Act, of the Company's directors on the basis that the issuance

is in the best interests of the Company and its stockholders. The date
on which the required majority approves an issuance of Restricted Stock
will be deemed the date on which the subject Restricted Stock is
granted.
    7. The Plan has been approved by the Committee, as well as the
Board, including the required majority as defined in section 57(o) of
the Act. The Plan will be submitted for approval to the Company's
stockholders, and will become effective upon such approval, subject to
and following receipt of the order.

Applicant's Legal Analysis

Sections 23(a) and (b), Section 63

    1. Under section 63 of the Act, the provisions of section 23(a) of
the Act generally prohibiting a registered closed-end investment
company from issuing securities for services or for property other than
cash or securities are made applicable to BDCs. This provision would
prohibit the issuance of Restricted Stock as a part of the Plan.
    2. Section 23(b) generally prohibits a closed-end management
investment company from selling its common stock at a price below its
current net asset value (``NAV''). Section 63(2) makes section 23(b)
applicable to BDCs unless certain conditions are met. Because
Restricted Stock that would be granted under the Plan would not meet
the terms of section 63(2), sections 23(b) and 63 prohibit the issuance
of the Restricted Stock.
    3. Section 6(c) provides that the Commission may, by order upon
application, conditionally or unconditionally exempt any person,
security, or transaction, or any class or classes of persons,
securities or transactions, from any provision of the Act, if and to
the extent that the exemption is necessary or appropriate in the public
interest and consistent with the protection of investors and the
purposes fairly intended by the policy and provisions of the Act.
    4. The Company requests an order pursuant to section 6(c) of the
Act granting an exemption from the provisions of sections 23(a) and (b)
and section 63 of the Act.\6\ The Company states that the concerns
underlying those sections include: (a) Preferential treatment of
investment company insiders and the use of options and other rights by
insiders to obtain control of the investment company; (b) complication
of the investment company's structure that made it difficult to
determine the value of the company's shares; and (c) dilution of
stockholders' equity in the investment company. The Company states that
the Plan does not raise concerns about preferential treatment of the
Company's insiders because the Plan is a bona fide compensation plan of
the type common among corporations generally. In addition, section
61(a)(3)(B) of the Act permits a BDC to issue to its officers,
directors and employees, pursuant to an executive compensation plan,
warrants, options and rights to purchase the BDC's voting securities,
subject to certain requirements. The Company states that, for reasons
that are unclear, section 61 and its legislative history do not address
the issuance by a BDC of restricted stock as incentive compensation.
The Company states, however, that the issuance of Restricted Stock is
substantially similar, for purposes of investor protection under the
Act, to the issuance of warrants, options, and rights as contemplated
by section 61. The Company also asserts that the Plan would not become
a means for insiders to obtain control of the Company because the
number of shares of the Company issuable under the Plan would be
limited as set forth in the application. Moreover, no individual
Restricted Stock Participant could be issued more than 25% of the
shares reserved for issuance under the Plan.
---------------------------------------------------------------------------

    \6\ The Company asks that the order apply also to any future
officers and employees of the Company and future employees of the
Company's Wholly-Owned Subsidiaries that are eligible to receive
Restricted Stock under the Plan. Additionally, to the extent that
the Company creates or acquires additional Wholly-Owned
Subsidiaries, and to the extent that such future Wholly-Owned
Subsidiaries have employees to whom the relief requested herein
would otherwise apply, the Company asks that such relief, if
granted, be extended to such employees of any future Wholly-Owned
Subsidiaries.
---------------------------------------------------------------------------

    5. The Company further states that the Plan will not unduly
complicate the Company's structure because equity-based compensation
arrangements are widely used among corporations and commonly known to
investors. The Company notes that the Plan will be submitted to its
stockholders for their approval. The Company represents that a concise,
``plain English'' description of the Plan, including its potential
dilutive effect, will be provided in the proxy materials that will be
submitted to the Company's stockholders. The Company also states that
it will comply with the proxy disclosure requirements in Item 10 of
Schedule 14A under the Securities Exchange Act of 1934 (the ``Exchange
Act''). The Company further notes that the Plan will be disclosed to
investors in accordance with the requirements of the Form N-2
registration statement for closed-end investment companies, and
pursuant to the standards and guidelines adopted by the Financial
Accounting Standards Board for operating companies. In addition, the
Company will comply with the disclosure requirements for executive
compensation plans applicable to operating companies under the Exchange
Act.\7\ The Company thus concludes that the Plan will be adequately
disclosed to investors and appropriately reflected in the market value
of the Company's shares.
---------------------------------------------------------------------------

    \7\ The Company will comply with the amendments to the
disclosure requirements for executive and director compensation,
related party transactions, director independence and other
corporate governance matters, and security ownership of officers and
directors to the extent adopted and applicable to BDCs. See
Executive Compensation and Related Party Disclosure, Securities Act
Release No. 8655 (Jan. 27, 2006) (proposed rule); Executive
Compensation and Related Party Disclosure, Securities Act Release
No. 8732A (Aug. 29, 2006) (final rule and proposed rule), as amended
by Executive Compensation Disclosure, Securities Act Release No.
8765 (Dec. 22, 2006) (adopted as interim final rules with request
for comments).
---------------------------------------------------------------------------

    6. The Company acknowledges that, while awards granted under the
Plan would have a dilutive effect on the stockholders' equity in the
Company, that effect would be outweighed by the anticipated benefits of
the Plan to the Company and its stockholders. The Company asserts that
it needs the flexibility to provide the requested equity-based employee
compensation in order to be able to compete effectively with other
financial services firms for talented professionals. These
professionals, the Company suggests, in turn are likely to increase the
Company's performance and stockholder value. The Company also asserts
that equity-based compensation would more closely align the interests
of the Company's employees with those of its stockholders. In addition,
the Company states that its stockholders will be further protected by
the conditions to the requested order that assure continuing oversight
of the operation of the Plan by the Company's Board.

Section 57(a)(4), Rule 17d-1

    7. Section 57(a) proscribes certain transactions between a BDC and
persons related to the BDC in the manner described in section 57(b)
(``57(b) persons''), absent a Commission order. Section 57(a)(4)
generally prohibits a 57(b) person from effecting a transaction in
which the BDC is a joint participant absent such an order. Rule 17d-1,
made applicable to BDCs by section 57(i), proscribes participation in a
``joint enterprise or other joint arrangement or profit-sharing plan,''
which includes a stock option or purchase plan. Employees and directors
of a BDC are

57(b) persons. Thus, the issuance of shares of Restricted Stock could
be deemed to involve a joint transaction involving a BDC and a 57(b)
person in contravention of section 57(a)(4). Rule 17d-1(b) provides
that, in considering relief pursuant to the rule, the Commission will
consider (i) whether the participation of the company in a joint
enterprise is consistent with the Act's policies and purposes and (ii)
the extent to which that participation is on a basis different from or
less advantageous than that of other participants.
    8. The Company requests an order pursuant to section 57(a)(4) and
rule 17d-1 to permit the Company to grant shares of Restricted Stock
pursuant to the Plan. The Company states that the Plan, although
benefiting the Participants and the Company in different ways, is in
the interests of the Company's stockholders because the Plan will help
align the interests of the Company's employees and officers with those
of its stockholders, which will encourage conduct on the part of those
employees and officers designed to produce a better return for the
Company's stockholders.

Applicant's Conditions

    Applicant agrees that the order granting the requested relief will
be subject to the following conditions:
    1. The Plan will be authorized by the Company's stockholders.
    2. Each issuance of Restricted Stock to a Participant will be
approved by the required majority, as defined in section 57(o) of the
Act, of the Company's directors on the basis that such issuance is in
the best interest of the Company and its stockholders.
    3. The amount of voting securities that would result from the
exercise of all of the Company's outstanding warrants, options, and
rights, together with any Restricted Stock issued pursuant to the Plan,
at the time of issuance shall not exceed 25% of the outstanding voting
securities of the Company, except that if the amount of voting
securities that would result from the exercise of all of the Company's
outstanding warrants, options, and rights issued to the Company's
directors, officers, and employees, together with any Restricted Stock
issued pursuant to the Plan, would exceed 15% of the outstanding voting
securities of the Company, then the total amount of voting securities
that would result from the exercise of all outstanding warrants,
options, and rights, together with any Restricted Stock issued pursuant
to the Plan, at the time of issuance shall not exceed 20% of the
outstanding voting securities of the Company.
    4. The maximum amount of shares of Restricted Stock that may be
issued under the Plan will be 10% of the outstanding shares of common
stock of the Company on the effective date of the Plan plus 10% of the
number of shares of the Company's common stock issued or delivered by
the Company (other than pursuant to compensation plans) during the term
of the Plan.
    5. The Board will review the Plan at least annually. In addition,
the Board will review periodically the potential impact that the
issuance of Restricted Stock under the Plan could have on the Company's
earnings and NAV per share, such review to take place prior to any
decisions to grant Restricted Stock under the Plan, but in no event
less frequently than annually. Adequate procedures and records will be
maintained to permit such review. The Board will be authorized to take
appropriate steps to ensure that the grant of Restricted Stock under
the Plan would not have an effect contrary to the interests of the
Company's stockholders. This authority will include the authority to
prevent or limit the granting of additional Restricted Stock under the
Plan. All records maintained pursuant to this condition will be subject
to examination by the Commission and its staff.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-02442 Filed 2-8-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 76, Number 181 (Monday, September 19, 2011)]
[Notices]
[Pages 58065-58068]
[FR Doc No: 2011-23909]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65330; File No. SR-BX-2011-046]

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Suspension of
and Order Instituting Proceedings To Determine Whether To Approve or
Disapprove a Proposed Rule Change To Amend the BOX Fee Schedule With
Respect to Credits and Fees for Transactions in the BOX Price
Improvement Period

September 13, 2011.

I. Introduction

    On July 15, 2011, NASDAQ OMX BX, Inc. (the ``Exchange'') filed with
the Securities and Exchange Commission (the ``Commission''), pursuant
to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Exchange
Act'' or ``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule
change to amend the Fee Schedule of the Boston Options Exchange Group,
LLC (``BOX'') to increase the credits and fees for certain transactions
in the BOX Price Improvement Period (``PIP'').\3\ The proposed rule
change was immediately effective upon filing with the Commission
pursuant to Section 19(b)(3)(A) of the Act.\4\ Notice of filing of the
proposed rule change was published in the Federal Register on August 3,
2011.\5\
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ The PIP is a mechanism in which a BOX Options Participant
submits an agency order on behalf of a customer for price
improvement, paired with a contra-order guaranteeing execution of
the agency order at or better than the National Best Bid or Offer
(``NBBO''). The contra-order could be for the account of the Options
Participant, or an order solicited from someone else. The agency
order is exposed for a one-second auction in which other BOX Options
Participants may submit competing interest at the same price or
better. The initiating BOX Options Participant is guaranteed 40% of
the order (after public customers) at the final price for the PIP
order, assuming it is at the best price. See Chapter V, Section 18
of the BOX Rules.
    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ See Securities Exchange Act Release No. 64981 (July 28,
2011) 76 FR 46858 (``Notice'').
---------------------------------------------------------------------------

    Under Section 19(b)(3)(C) of the Act, the Commission is (1) hereby
temporarily suspending File No. SR-BX-2011-046, and (2) instituting
proceedings to determine whether to approve or disapprove File No. SR-
BX-2011-046.

II. Summary of the Proposed Rule Change

    The Exchange proposes to increase the credits and fees for certain
transactions in the PIP by modifying Section 7d of the BOX Fee
Schedule. Specifically, the Exchange proposes to: (1) Increase both the
credits and the fees for PIP transactions in classes that are not
subject to the Penny Pilot (``Non-Penny classes'') from $0.30 to $0.75
per contract; and (2) increase both the credits and the fees for PIP
transactions in Penny Pilot classes where the trade price is equal to
or greater than $3.00 per contract (other than in QQQQ, SPY, and IWM)
from $0.30 to $0.75 per contract. The credits and the fees for PIP
transactions in QQQQ, SPY, and IWM and in all other Penny Pilot classes
where the trade price is less than $3.00 per contract will remain at
$0.30 per contract. The credits are paid by the Exchange on the agency
order that is submitted to the PIP auction on behalf of a customer. The
fees are charged by the Exchange to the order that is executed against
the agency order, whether such order is a paired order submitted by the
BOX Options Participant that also submitted the agency order or an
order submitted by another BOX Options Participant in response to the
PIP auction. The credits and fees are in addition to any applicable
trading fees, as described in Sections 1 through 3 of the BOX Fee
Schedule.\6\
---------------------------------------------------------------------------

    \6\ Sections 1 through 3 of the Box Fee Schedule include a $0.25
per contract transaction fee for contracts traded in the PIP.
Depending on its average daily volume (``ADV''), a Participant who
initiates PIP auctions may be charged a lower per contract fee. See
Section 7d. of the Box Fee Schedule. See also infra note 9.
---------------------------------------------------------------------------

III. Suspension of SR-BX-2011-046

    Pursuant to Section 19(b)(3)(C) of the Act,\7\ at any time within
60 days of the date of filing a proposed rule change pursuant to
Section 19(b)(1) of the Act,\8\ the Commission summarily may
temporarily suspend the change in the rules of a self-regulatory
organization 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.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(C).
    \8\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------

    The Commission believes it is appropriate to evaluate the effect of
the proposed rule change on competition among different types of market
participants and on market quality, particularly with respect to the
net fee differential that it would place on BOX Options Participants
that respond to a PIP auction (``PIP Responders'') compared to a BOX
Options Participant that initiated the PIP auction (``PIP Initiator'').
Under the proposed rule change, the Exchange would charge

both the PIP Initiator and the PIP Responder the same fee for executing
an order in the PIP. However, if the PIP Initiator also submits the
agency order into the PIP, the PIP Initiator receives the rebate paid
to the agency order that is auctioned in the PIP. As a result, if the
fee the PIP Initiator pays is aggregated with the rebate the PIP
Initiator receives for the agency order (i.e., a ``net'' fee), the PIP
Initiator would pay a lower net fee compared to PIP Responders. For
example, under the proposal, a PIP Initiator that executes 100% of the
PIP Order in a Non-Penny class would be charged a $0.10 per contract
base transaction fee (at the highest volume tier) \9\ plus a liquidity
provider fee of $0.75 per contract, and would receive a credit for
removing liquidity of $0.75 for the agency order. This results in a net
fee of $0.10 per contract to a PIP Initiator who executes 100% of its
customer's order. In contrast, a PIP Responder in a Non-Penny class
would be charged a $0.25 per contract base transaction fee plus the
liquidity provider fee of $0.75 per contract, for a net fee of $1.00
per contract. Comparing the net fees charged to PIP Initiators to those
charged to PIP Responders, the largest potential disparity is $0.90 per
contract.
---------------------------------------------------------------------------

    \9\ See Section 7d. of the BOX Fee Schedule. Section 7d.
includes a tiered fee schedule that is assessed on PIP Initiators
based on each PIP Initiator ADV for executions in the PIP. This
charge ranges from $0.10 per contract for a PIP Initiator with an
ADV of 150,001 or greater contracts to $0.25 per contract for a PIP
Initiator with an ADV of less than 20,001 contracts.
---------------------------------------------------------------------------

    In its filing, the Exchange notes its belief that the changes to
the PIP transaction fees and credits are ``competitive, fair and
reasonable, and non-discriminatory in that they apply to all categories
of participants and across all account types.'' \10\ The Exchange
further argues that the proposed fee change is reasonable because it
``is fair and reasonable as applied only to the specified classes and
transactions because such options trade at minimum increments of $0.05
or $0.10, providing greater opportunity for market participants to
offer additional price improvement.'' \11\ In addition, the Exchange
noted that it believes the proposed ``credit will attract additional
order flow to BOX and to the PIP in particular, to the benefit of all
market participants.'' \12\ The Exchange also stated that the proposal
``will allow the fees charged on BOX to remain competitive with other
exchanges as well as apply such fees in a manner which is equitable
among all BOX Participants.'' \13\
---------------------------------------------------------------------------

    \10\ See Notice, supra note 5, at 46858.
    \11\ See id. at 46859.
    \12\ See id.
    \13\ See id.
---------------------------------------------------------------------------

    To date, the Commission has received four comment letters on the
Exchange's proposed rule change.\14\ Three commenters recommend that
the Commission temporarily suspend SR-BX-2011-046 and institute
proceedings to disapprove the filing.\15\ The fourth commenter supports
the Exchange's proposed rule change and urges the Commission not to
institute proceedings to disapprove the filing.\16\ The Commission also
has received a letter from the Exchange responding to the comments
received.\17\
---------------------------------------------------------------------------

    \14\ See letters to Elizabeth Murphy, Secretary, Commission,
from John C. Nagel, Managing Director and General Counsel, Citadel
Securities LLC (``Citadel''), dated August 12, 2011 (``Citadel
Letter''); Andrew Stevens, Legal Counsel, IMC Financial Markets
(``IMC''), dated August 15, 2011 (``IMC Letter''); Michael J. Simon,
Secretary, International Securities Exchange (``ISE''), dated August
22, 2011 (``ISE Letter''), and Christopher Nagy, Managing Director
Order Strategy, TD Ameritrade, Inc. (``TD Ameritrade''), dated
September 12, 2011 (``TD Ameritrade Letter'').
    \15\ See Citadel Letter, supra note 14, at 4; IMC Letter, supra
note 14, at 4; and ISE Letter, supra note 14, at 5.
    \16\ See TD Ameritrade Letter, supra note 14, at 2.
    \17\ See letter to Elizabeth Murphy, Secretary, Commission, from
Anthony D. McCormick, Chief Executive Officer, Boston Options
Exchange, dated September 9, 2011 (``BOX Letter'').
---------------------------------------------------------------------------

    Citadel argues that the magnitude of the disparity between the fees
an initiator pays and the fees a competitive responder pays, on a net
basis, make it ``economically prohibitive for anyone other than the
initiator to respond'' to a PIP auction. Citadel also provides
statistics suggesting that increases to the BOX PIP fees \18\ are
``reducing price improvement opportunities for customers and turning
the PIP and BOX into an NBBO internalization engine.'' \19\ Based on
its analysis, Citadel argues that the fees proposed by SR-BX-2011-046
are ``solely structured to benefit one group of BOX participants over
another,'' and thus are discriminatory and an undue burden one
competition.\20\
---------------------------------------------------------------------------

    \18\ See Securities Exchange Act Release Nos. 62632 (August 3,
2010), 75 FR 47869 (August 9, 2010) (SR-BX-2010-049) (instituting
the PIP pricing structure) and 64198 (April 6, 2011), 76 FR 20426
(April 12, 2011) (SR-BX-2011-020) (increasing the fee and credit).
    \19\ See Citadel Letter, supra note 14, at 3. Citadel's
statistics show that, since February 2011, the average price
improvement per contract and average percentage of contracts price
improved in PIP auctions has declined every month. See id. at 3.
    \20\ Id.
---------------------------------------------------------------------------

    IMC also notes its belief that the BOX PIP fee structure unduly
burdens competition and unreasonably discriminates amongst
participants.\21\ It argues that the increase in fees is borne solely
by PIP competitive responders and ``will deter anyone other than the
initiator from providing liquidity via the PIP.'' \22\ IMC believes
that ``the BOX has thus erected an unreasonable barrier to
participation, effectively barring certain participants from competing
with PIP initiators.'' \23\ IMC believes that BOX's fee structure is
designed to reduce competition and increase internalization in the PIP,
which in turn results in ``reduced opportunities for meaningful price
improvement.'' \24\
---------------------------------------------------------------------------

    \21\ See IMC Letter, supra note 14, at 1-2.
    \22\ See IMC Letter, supra note 14, at 2.
    \23\ See id.
    \24\ See IMC Letter, supra note 14, at 3.
---------------------------------------------------------------------------

    ISE challenges BOX's assertion that the fees proposed in SR-BX-
2011-046 have a uniform application across all members, noting that the
differential fees between PIP Initiators and competitive responders is
between $0.75 and $0.90 per contract.\25\ ISE also argues that SR-BX-
2011-046 is deficient in that it fails to: provide an adequate basis to
determine that the proposed rule change is consistent with the Act
because it does not address the pricing differential for participants
who seek to compete with a PIP Initiator, discuss the burden on
competition imposed by the pricing structure, or provide support for
its assertion that the fee change will allow it to compete with other
exchanges.\26\
---------------------------------------------------------------------------

    \25\ See ISE Letter, supra note 14, at 1.
    \26\ See ISE Letter, supra note 14, at 5.
---------------------------------------------------------------------------

    TD Ameritrade applauds the proposed rule change, noting that it has
already seen significant benefits to its retail investors.\27\ TD
Ameritrade notes that its clients received over $600,000 in price
improvement over the NBBO on BOX in August 2011 and believes that its
customer experience on the BOX strongly indicates that healthy and
robust competition exists within the PIP.\28\ TD Ameritrade states that
the BOX fee structure provides incentives for market participants to
submit customer order flow to BOX and thus, continues to create a
greater opportunity for retail customers to receive additional price
improvement.\29\
---------------------------------------------------------------------------

    \27\ See TD Ameritrade Letter, supra note 14, at 1.
    \28\ See id.
    \29\ See id. TD Ameritrade suggests that the Commission should
recognize that price improvement opportunities in the options
markets are not transparent and easy to compare from exchange to
exchange and notes its belief that there should be more order
execution information transparency in the options markets. See TD
Ameritrade Letter, supra note 14, at 2.
---------------------------------------------------------------------------

    In its response letter, BOX argues that its market model and fee
structure are intended to benefit retail customers.\30\ BOX responds to
the assertions that the fee structure is discriminatory and

impedes competition by providing PIP statistics showing that the
retention rate (the amount of an agency order allocated to a PIP
Initiator) in nickel classes in July 2011was approximately 38%.\31\ BOX
notes that this retention rate is lower than the 40% guarantee
permitted to be allocated to an initiating participant and states that
this statistic indicates ``definitive competition within the PIP.''
\32\ It also notes that average price improvement per contract in PIP
transactions increased from $0.0062 in July 2011 to $0.0087 in August
2011, in part as a result of the proposed rule change.\33\ BOX responds
to the assertion that Initiating Participant can offset any fee with a
credit by stating that ``most PIP transactions are initiated by a
market maker acting independently of a Participant acting as agent for
a customer order.'' \34\ Further BOX states that its fee structure in
the PIP is more transparent than payment for order flow (``PFOF'')
arrangements and notes its belief that the credit to remove liquidity
on BOX is generally less than what firms receive through PFOF.\35\ BOX
states that since the PIP began operating in 2004, customers have
received more than $355 million in savings through better executions on
BOX, including $7.3 million in August 2011, and states its belief that
the proposal is consistent with the public interest, and with the
Exchange Act.\36\
---------------------------------------------------------------------------

    \30\ See BOX Letter, supra note 17, at 2.
    \31\ See BOX Letter, supra note 17, at 1.
    \32\ See id.
    \33\ See id.
    \34\ BOX Letter, supra note 17, at 1.
    \35\ See BOX Letter, supra note 17, at 2.
    \36\ See id.
---------------------------------------------------------------------------

    The Commission intends to assess whether the potential resulting
fee disparity between PIP Initiators and PIP Responders (as high as
$0.90 per contract) is consistent with the statutory requirements
applicable to a national securities exchange under the Act, as
described below. In particular, the Commission will assess whether the
proposal satisfies the standards under the Exchange Act and the rules
thereunder requiring, among other things, that exchange rules: provide
for the equitable allocation of reasonable fees among members, issuers,
and other persons using its facilities; not be designed to permit
unfair discrimination between customers, issuers, brokers, or dealers;
and do not impose any burden on competition not necessary or
appropriate in furtherance of the purposes of the Exchange Act.
    Therefore, the Commission finds that it is appropriate in the
public interest, for the protection of investors, and otherwise in
furtherance of the purposes of the Act, to temporarily suspend the
proposed rule change.

IV. Proceedings To Determine Whether To Approve or Disapprove SR-BX-
2011-046

    The Commission is instituting proceedings pursuant to Sections
19(b)(3)(C) \37\ and 19(b)(2) of the Act \38\ to determine whether the
Exchange's proposed rule change should be approved or disapproved.
Pursuant to Section 19(b)(2)(B) of the Act,\39\ the Commission is
providing notice of the grounds for disapproval under consideration. As
discussed above, under the proposal, the PIP Initiator could pay a
lower net fee compared to PIP Responders. The Exchange Act and the
rules thereunder require that exchange rules provide for the equitable
allocation of reasonable fees among members, issuers, and other persons
using its facilities; that exchange rules not be designed to permit
unfair discrimination between customers, issuers, brokers, or dealers;
and that exchange rules do not impose any burden on competition not
necessary or appropriate in furtherance of the purposes of the Exchange
Act. The Commission intends to assess whether BOX's proposal is
consistent with these and other Exchange Act standards.
---------------------------------------------------------------------------

    \37\ 15 U.S.C. 78s(b)(3)(C). Once the Commission temporarily
suspends a proposed rule change, Section 19(b)(3)(C) of the Act
requires that the Commission institute proceedings under Section
19(b)(2)(B) to determine whether a proposed rule change should be
approved or disapproved.
    \38\ 15 U.S.C. 78s(b)(2).
    \39\ 15 U.S.C. 78s(b)(2)(B). Section 19(b)(2)(B) of the Act also
provides that proceedings to determine whether to disapprove a
proposed rule change must be concluded within 180 days of the date
of publication of notice of the filing of the proposed rule change.
Id. The time for conclusion of the proceedings may be extended for
up to 60 days if the Commission finds good cause for such extension
and publishes its reasons for so findings. Id.
---------------------------------------------------------------------------

    The Commission believes it is appropriate in the public interest to
institute disapproval proceedings at this time in view of the
significant legal and policy issues raised by the proposal. Institution
of disapproval proceedings does not indicate, however, that the
Commission has reached any conclusions with respect to the issues
involved. The sections of the Act and the rules thereunder that are
applicable to the proposed rule change include:
     Section 6(b)(4) of the Act, which requires that the rules
of a national securities exchange ``provide for the equitable
allocation of reasonable dues, fees, and other charges among its
members and issuers and other persons using its facilities,'' \40\
---------------------------------------------------------------------------

    \40\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

     Section 6(b)(5) of the Act, which requires, among other
things, that the rules of a national securities exchange not be
``designed to permit unfair discrimination between customers, issuers,
brokers, or dealers,'' \41\ and
---------------------------------------------------------------------------

    \41\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

     Section 6(b)(8) of the Act, which requires that the rules
of a national securities exchange ``not impose any burden on
competition not necessary or appropriate in furtherance of the purposes
of [the Exchange Act].'' \42\
---------------------------------------------------------------------------

    \42\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

V. Commission's Solicitation of Comments

    The Commission requests written views, data, and arguments with
respect to the concerns identified above as well as any other relevant
concerns. Such comments should be submitted by November 3, 2011.
Rebuttal comments should be submitted by November 18, 2011. 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.\43\
---------------------------------------------------------------------------

    \43\ 15 U.S.C. 78s(b)(2). Section 19(b)(2) of the Act 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).
---------------------------------------------------------------------------

    The Commission asks that commenters address the sufficiency and
merit of the Exchange's statements in support of the proposal, in
addition to any other comments they may wish to submit about the
proposed rule change. For example, the Commission seeks comment and
specific data on the following:
     Whether, as stated by commenters, the fee structure in the
PIP and this proposed fee change, in particular, have impacted or will
impact incentives to compete in the PIP and, if so, how specifically
have or will the fee structure in the PIP and this proposed fee change
impacted incentives to compete;
     Whether the proposed fee change will affect the quality of
execution of customer orders in the PIP or the broader market quality,
such as quoted spreads or overall execution quality; and if so, how and
what type of impact will this have;
     Whether the proposed fee change and PIP fee structure
reduce the benefits

of exposing an order \44\ and thus potentially create a de facto
internalization mechanism; and if so, whether, and if so, how, this
will adversely impact overall market quality and customer execution
quality and whether a de facto internalization mechanism should be of
concern to the Commission;
---------------------------------------------------------------------------

    \44\ The Commission has recognized the benefits of exposure to
the market, noting in the context of facilitation mechanisms that an
``auction [in which an order is exposed to the market] provides some
assurance that the customer's order is executed at the best price
any member in that market is willing to offer.'' Competitive
Developments in the Options Markets, Securities Exchange Act Release
No. 49175, 69 FR 6124 (February 9, 2004), at 6130. The Commission
also noted that ``[r]ules or practices that permit or encourage
internalization may also reduce intramarket price competition and,
therefore, cause spreads to widen.'' Id.
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     Whether the proposed fee change, by facilitating
internalization of orders on BOX, could or would lead to a shift of
order flow from other exchanges and, if so, what is the nature and
volume of such order flow and what is the extent to which such order
flow currently receives price improvement at the other exchanges or is
executed at prices that merely match the NBBO;
     Whether BOX's other fees, specifically the fee to add
liquidity to the BOX book,\45\ have an impact on the application or
effects of this proposed fee change, and if so, how and what the impact
is or will be;
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    \45\ As of September 1, 2011, BOX charges a $0.65 fee for adding
liquidity in the Non-Penny classes and a $0.22 fee for adding
liquidity in the Penny Pilot classes. See Section 7a. of the BOX Fee
Schedule, available at http://www.bostonoptions.com/pdf/BOX_Fee_Schedule.pdf.
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     Whether the filing for SR-BX-2011-046 was sufficient under
Section 19(b) of the Act to address issues regarding the effects of the
proposed fee change on competition in the PIP;
     Whether the PIP fees, either on a net basis or otherwise,
are comparable to any fees or charges on other exchanges, including any
PFOF fees and rebates, and, if so, how;
     Whether credits paid on the agency order that is submitted
to the PIP auction on behalf of a customer are passed on to the
customer or retained by the PIP Initiator and, if passed on, in what
form; and
     Whether the Commission should evaluate all fees and all
rebates (including PFOF fees and rebates) at all exchanges on a net or
aggregate basis to assess their effects on competition or to otherwise
assess their consistency with the Exchange Act.

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number SR-BX-2011-046 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BX-2011-046. The 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-2011-046 and should be
submitted on or before November 3, 2011. Rebuttal comments should be
submitted by November 18, 2011.

VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(3)(C) of the
Act,\46\ that File No. SR-BX-2011-046, be and hereby is, temporarily
suspended. In addition, the Commission is instituting proceedings to
determine whether the proposed rule change should be approved or
disapproved.
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    \46\ 15 U.S.C. 78s(b)(3)(C).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\47\
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    \47\ 17 CFR 200.30-3(a)(57) and (58).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-23909 Filed 9-16-11; 8:45 am]
BILLING CODE 8011-01-P