[Federal Register Volume 88, Number 211 (Thursday, November 2, 2023)]
[Notices]
[Pages 75343-75344]
[FR Doc No: 2023-24245]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98819; File No. 4-795]

Order Granting Broker-Dealers Exemptive Relief, Pursuant to
Section 36(a) and Rule 15c2-11(g) Under the Securities Exchange Act of
1934, From Rule 15c2-11 for Fixed-Income Securities Sold in Compliance
With the Safe Harbor of Rule 144A Under the Securities Act of 1933

October 30, 2023.

I. Introduction

    The Securities and Exchange Commission (``Commission'') adopted 17
CFR 240.15c2-11 (``Rule 15c2-11'') under the Securities Exchange Act of
1934 (``Exchange Act'') in 1971.\1\ In September 2020, the Commission
adopted amendments to Rule 15c2-11 to, among other things, provide
greater transparency to investors and other market participants by
requiring brokers or dealers to have in their records specified
information about the issuer and its security that is current and
publicly available before a broker-dealer can begin quoting that
security.\2\ Rule 15c2-11 governs the publication of quotations for
securities \3\ in a quotation medium other than a national securities
exchange, i.e., over-the-counter (``OTC'') securities, other than
exempted securities \4\ and municipal securities.\5\ Rule 15c2-11 sets
forth certain information review and recordkeeping requirements for
brokers and dealers to initiate or resume quotations for securities in
the OTC market. Under 17 CFR 240.15c2-11(a)(1)(i), a broker or dealer,
before it may publish any quotation for a security or, directly or
indirectly, submit any such quotation for publication, in a quotation
medium other than a national securities exchange, must obtain, have in
its records, and review key, basic information regarding the subject
security and its issuer, as specified in 17 CFR 240.15c2-11(b)
(``paragraph (b) information''), that is ``current'' and ``publicly
available.'' \6\ In addition, based upon a review of the applicable
paragraph (b) information, together with any other supplemental
documents and information specified in 17 CFR 240.15c2-11(c), the
broker or dealer must have a reasonable basis under the circumstances
for believing that the paragraph (b) information is accurate in all
material respects and is from a reliable source.\7\ Further, the
reviewing broker or dealer must also preserve documents and information
that are required to be obtained under the applicable paragraphs (a),
(b), and (c) of Rule 15c2-11.\8\
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    \1\ Initiation or Resumption of Quotations by a Broker or Dealer
Who Lacks Certain Information, Release No. 34-9310 (Sept. 13, 1971),
36 FR 18641 (Sept. 18, 1971).
    \2\ See Publication or Submission of Quotations Without
Specified Information, Release No. 34-89891 (Sept. 16, 2020), 85 FR
68124, 68125 (Oct. 27, 2020) (``2020 Rule 15c2-11 Release'').
    \3\ The term ``security'' is defined under section 3(a)(10) of
the Exchange Act and specifically includes, among others, notes,
bonds, debentures, and certificates of deposit, which are commonly
known as fixed-income securities. 15 U.S.C. 78c(a)(10), (79). For
purposes of this order, the term ``fixed-income security'' shall
mean any note, bond, debenture, certificate of deposit for a
security, certificate of deposit, or asset-backed security. See id.
    \4\ See 15 U.S.C. 78o(c)(2)(A). The term ``exempted security''
includes, among others, certain government securities, such as
securities which are direct obligations of, or obligations
guaranteed as to principal or interest by, the United States. See 15
U.S.C. 78c(a)(12), (42).
    \5\ 17 CFR 240.15c2-11(f)(4). The term ``municipal security''
includes, among others, securities which are direct obligations of,
or obligations guaranteed as to principal or interest by, a State or
any political subdivision thereof, or any agency or instrumentality
of a State or any political subdivision thereof, or any municipal
corporate instrumentality of one or more States. See 15 U.S.C.
78c(a)(29).
    \6\ See 17 CFR 240.15c2-11(a)(1)(i)(A), (B). The terms
``current'' and ``publicly available'' are defined in paragraphs
(e)(2) and (e)(5) of Rule 15c2-11, respectively, and have the same
meaning in this order.
    \7\ See 17 CFR 240.15c2-11(a)(1)(i)(C). See also 2020 Rule 15c2-
11 Release, 85 FR at 68125. These rule amendments, among other
things, expanded the scope of Rule 15c2-11's requirements for
obtaining and reviewing specified information. Broker-dealers may
publish initial quotations in reliance on the publicly available
determination of a ``qualified interdealer quotation system'' that
it complied with the information review requirement set forth in
Rule 15c2-11(a)(2)(i) through (iii). See 17 CFR 15c2-11(a)(1)(ii).
    \8\ See 17 CFR 240.15c2-11(d)(1)(i)(A). See also 2020 Rule 15c2-
11 Release, 85 FR at 68131, 68162.
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    Following the Commission's 2020 adoption of amendments to Rule
15c2-11, certain market participants stated that Rule 15c2-11's
information review and recordkeeping requirements should not apply with
regard to quotations for fixed-income securities that are sold in
compliance with the safe harbor in 17 CFR 230.144A (``Rule 144A'') \9\
under the Securities Act of 1933 \10\ (``Rule 144A fixed-income
securities''). In particular, on November 22, 2022, the National
Association of Manufacturers and the Kentucky Association of
Manufacturers submitted a petition to the Commission pursuant to 17 CFR
201.192(a) of the Commission's Rules of Practice \11\ for a rulemaking
to amend Rule 15c2-11, to expressly exempt from Rule 15c2-11 Rule 144A
fixed-income securities (``Petition''). The Petition also requested, in
the alternative, that the Commission expressly exempt Rule 144A fixed-
income securities from Rule 15c2-11 pursuant to the exemptive authority
set forth in 17 CFR 240.15c2-11(g).\12\
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    \9\ 17 CFR 230.144A. See also No. 33-6862 (Apr. 23, 1990), 55 FR
17933, 17939 n.55 (Apr. 30, 1990) (``Rule 144A Adopting Release'')
(noting the applicability of Rule 15c2-11 to Rule 144A offerings).
    \10\ 15 U.S.C. 77a.
    \11\ 17 CFR 201.192(a).
    \12\ See, e.g., Letter from Andrew Pincus to Vanessa Countryman,
Petition for Rulewriting and Application for Exemption from Rule
15c2-11 (Nov. 22, 2022), https://www.sec.gov/files/rules/petitions/2022/petamend-rule-15c211-4795.pdf.
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    For the reasons discussed below, this Order exempts Rule 144A
fixed-income securities from Rule 15c2-11, thus effectively granting
the alternative relief sought in the Petition.

II. Discussion of Exemptive Relief

    Section 36 of the Exchange Act authorizes the Commission to,
conditionally or unconditionally, exempt any person, security, or
transaction, or any class or classes of persons, securities, or
transactions, from any provision or provisions of the Exchange Act, or
of any rule or regulation thereunder, to the extent that such exemption
is necessary or appropriate in the public interest, and is consistent
with the protection of investors.\13\ Paragraph (g) of Rule 15c2-11
under the Exchange Act similarly provides that the Commission may,
conditionally or unconditionally, exempt any person, security, or
transaction, or any class or classes of persons, securities, or
transactions, from any provision or provisions of Rule 15c2-11 to the
extent that such exemption is necessary or appropriate in the public
interest, and is consistent with the protection of investors.\14\
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    \13\ 15 U.S.C. 78mm.
    \14\ 17 CFR 240.15c2-11(g).
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    This exemptive relief is limited to Rule 144A fixed-income
securities.\15\

Because the exemption applies only to fixed-income securities issued in
accordance with the requirements of Rule 144A, it is limited to resales
of securities to an investor base that ``can be conclusively assumed to
be sophisticated,'' \16\ is able to obtain certain basic financial
information concerning the issuers' business, and has extensive
experience in the private resale market for restricted securities.\17\
Under the requirements of Rule 144A, securities can be sold only to
``qualified institutional investors'' (or purchasers that the seller or
a person acting on its behalf reasonably believes are qualified
institutional investors), which, with the exception of registered
dealers, must in the aggregate own and invest on a discretionary basis
at least $100 million in securities of issuers that are not affiliated
with such a qualified institutional buyer.\18\ Furthermore, in the case
of issuers that do not file periodic reports under the Exchange Act or
furnish home country information to the Commission pursuant to 17 CFR
240 12g3-2(b), Rule 144A requires that any prospective purchaser of
Rule 144A fixed-income securities has the right to obtain from the
issuer reasonably current financial information (``Rule 144A
information''): \19\
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    \15\ The Petition was limited to Rule 144A fixed-income
securities and expressly excluded equity securities sold in
compliance with the safe harbor in Rule 144A. See Petition at n.1.
Moreover, the amendments to Rule 15c2-11 have applied to Rule 144A
equity securities since the compliance date of those amendments
which was September 2021. Accordingly, this exemption does not
address equity securities sold in compliance with the safe harbor in
Rule 144A.
    \16\ Accredited Investor Definition, Release No. 33-10824 (Aug.
26, 2020), 85 FR 64234, 64236 (Oct. 9, 2020) (``Accredited Investor
Release'') (citing Resale of Restricted Securities; Changes to
Method of Determining Holding Period of Restricted Securities Under
Rules 144 and 145, Release No. 33-6806 (Oct. 25, 1988), 53 FR 44016
(Nov. 1, 1988)) (``1988 Rule 144A Proposing Release'').
    \17\ 1988 Rule 144A Proposing Release, 53 FR at 44028.
    \18\ 17 CFR 230.144A(a)(1) (definition of ``qualified
institutional buyer'').
    \19\ 17 CFR 230.144A(d)(4).

    [A] very brief statement of the nature of the business of the
issuer and the products and services it offers; and the issuer's
most recent balance sheet and profit and loss and retained earnings
statements, and similar financial statements for such part of the
two preceding fiscal years as the issuer has been in operation (the
financial information should be audited to the extent possible).\20\
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    \20\ Id. With respect to asset-backed securities, the Commission
has interpreted the information requirement to mandate provision of
``basic, material information concerning the structure of the
securities and distributions thereon, the nature, performance and
servicing of the assets supporting the securities, and any credit
enhancement mechanism associated with the securities.'' See Rule
144A Adopting Release, 55 FR at 17939.

    The availability of the Rule 144A information can be used by
prospective qualified institutional buyers to make better informed
investment decisions and assess potential risks in investing in the
security. While the Rule 144A information that is required to be
provided to qualified institutional buyers upon request is not the
current publicly available information defined in paragraph (b) of Rule
15c2-11, the Rule 144A information serves the same purpose of investor
protection.
    The Commission finds it is appropriate in the public interest, and
consistent with the protection of investors, to exempt brokers and
dealers from the requirements of Rule 15c2-11, with respect to Rule
144A fixed-income securities.

III. Conclusion

    Accordingly, it is hereby ordered, pursuant to section 36(a) of the
Exchange Act \21\ and Rule 15c2-11(g) under the Exchange Act,\22\ that
a broker or dealer is exempt from the requirements of Rule 15c2-11 with
respect to a fixed-income security to be sold in compliance with the
safe harbor in Rule 144A \23\ under the Securities Act of 1933.\24\
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    \21\ 15 U.S.C.78mm(a).
    \22\ 17 CFR 240.15c2-11(g).
    \23\ 17 CFR 230.144A.
    \24\ 15 U.S.C. 77a et seq.
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    This exemptive relief is subject to modification or revocation at
any time by the Commission but will be in effect unless and until the
Commission determines that modification or revocation is necessary or
appropriate in furtherance of the purposes of the Exchange Act, or the
relief is otherwise superseded by future Commission action such as a
rulemaking addressing the Rule 144A safe harbor or issues pertaining to
the fixed income markets more generally.
    Persons relying on this exemption are directed to the anti-fraud
and anti-manipulation provisions of the Exchange Act, particularly
sections 9(a) and 10(b), and 17 CFR 240.10b-5 thereunder.\25\
Responsibility for compliance with these and any other applicable
provisions of the Federal securities laws must rest with the persons
relying on this exemption. This order should not be considered a view
with respect to any other question that the proposed transactions or
quotations may raise, including, but not limited to the adequacy of the
disclosure concerning, and the applicability of other Federal or State
laws to, the proposed transactions or quotations.
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    \25\ 15 U.S.C. 78i(a), 78j(b); 17 CFR 240.10b-5.

    By the Commission.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-24245 Filed 11-1-23; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 79, Number 162 (Thursday, August 21, 2014)]
[Rules and Regulations]
[Pages 49426-49427]
[FR Doc No: 2014-19822]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 25

[Docket No. FAA-2013-0901; Special Conditions No. 25-536-SC]

Special Conditions: Airbus Model A350-900 Airplanes; Flight-
Envelope Protection: High-Speed Limiting

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final special conditions.

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SUMMARY: These special conditions are issued for Airbus Model A350-900
series airplanes. These airplanes will have a novel or unusual design
feature associated with high speed limiting. The applicable
airworthiness regulations do not contain adequate or appropriate safety
standards for this design feature. These special conditions contain the
additional safety standards that the Administrator considers necessary
to establish a level of safety equivalent to that established by the
existing airworthiness standards.

DATES: Effective date: September 22, 2014.

FOR FURTHER INFORMATION CONTACT: Joe Jacobsen, FAA, Airplane and
Flightcrew Interface Branch, ANM-111, Transport Airplane Directorate,
Aircraft Certification Service, 1601 Lind Avenue SW., Renton,
Washington 98057-3356; telephone<PHONE_NUMBER>; facsimile (425) 227-
1320.

SUPPLEMENTARY INFORMATION:

Background

    On August 25, 2008, Airbus applied for a type certificate for their
new Model A350-900 airplane. Later, Airbus requested, and the FAA
approved, an extension to the application for FAA type certification to
November 15, 2009. The Model A350-900 airplane has a conventional
layout with twin wing-mounted Rolls-Royce Trent XWB engines. It
features a twin-aisle, 9-abreast, economy-class layout, and
accommodates side-by-side placement of LD-3 containers in the cargo
compartment. The basic Model A350-900 airplane configuration
accommodates 315 passengers in a standard two-class arrangement. The
design cruise speed is Mach 0.85 with a maximum take-off weight of
602,000 lbs.
    The longitudinal-control law design of the Airbus Model A350-900
airplane incorporates an overspeed protection system in the normal
mode, which prevents the pilot from inadvertently or intentionally
exceeding a speed approximately equivalent to VFC or
attaining VDF. Current Title 14 Code of Federal Regulations
(14 CFR) part 25 sections do not relate to a high-speed-limiting
protection system that might preclude or modify flying-qualities
assessments in the overspeed region. However, the requirements of Sec.
25.253 (high-speed characteristics) and its related policy are
applicable to the Model A350-900 airplane and are not affected by this
special condition.

Type Certification Basis

    Under 14 CFR 21.17, Airbus must show that the Model A350-900
airplane meets the applicable provisions of part 25, as amended by
Amendments 25-1 through 25-129.
    If the Administrator finds that the applicable airworthiness
regulations (i.e., 14 CFR part 25) do not contain adequate or
appropriate safety standards for the Airbus Model A350-900 airplane
because of a novel or unusual design feature, special conditions are
prescribed under Sec.  21.16.
    Special conditions are initially applicable to the model for which
they are issued. Should the type certificate for that model be amended
later to include any other model that incorporates the same or similar
novel or unusual design feature, the special conditions would also
apply to the other model under Sec.  21.101.
    In addition to the applicable airworthiness regulations and special
conditions, the Model A350-900 airplane must comply with the fuel-vent
and exhaust-emission requirements of 14 CFR part 34, and the noise-
certification requirements of 14 CFR part 36. The FAA must issue a
finding of regulatory adequacy under section 611 of Public Law 92-574,
the ``Noise Control Act of 1972.''
    The FAA issues special conditions, as defined in 14 CFR 11.19,
under Sec.  11.38, and they become part of the type-certification basis
under Sec.  21.17(a)(2).

Novel or Unusual Design Features

    The Model A350-900 airplane incorporates the following novel or
unusual design features: an overspeed protection system that prevents
the pilot from inadvertently or intentionally exceeding a speed
approximately equivalent to VFC, or attaining
VDF.
    At VMO + 10 knots or MMO + 0.02 knots, an
automatic nose-up pitch is applied with phase advance in the event of
high acceleration. The speed stabilizes at VD-10kts/
MD-0.02 if the stick is full forward, or the speed will
return below VMO/MMO if the stick is released.

Discussion

    This special condition establishes requirements to ensure that
operation of the high-speed-limiting protection system does not impede
normal attainment of speeds up to the overspeed warning. Its main
features are:
    1. It protects the airplane against high-speed/high Mach-number
flight conditions beyond VMO/MMO.
    2. It does not interfere with flight at VMO/
MMO, even in turbulent air.
    3. It still provides load-factor limitation through the ``pitch
limiting'' function described below.
    4. It restores positive static stability beyond VMO/
MMO.
    These special conditions contain the additional safety standards
that the Administrator considers necessary to establish a level of
safety equivalent to that established by the existing airworthiness
standards.

Discussion of Comments

    Notice of proposed special conditions No. 25-13-23-SC for the
Airbus Model A350-900 airplane was published in the Federal Register on
January 8, 2014 (79 FR 1336). An anonymous comment was received January
16, 2014. The commenter was concerned about high-level windshears, and
the potential violation of Reduced Vertical Separation Minimums (RVSM)
airspace restrictions that might accompany a nose-up input of a high-
speed protection system. In addition, the commenter was concerned about
system failures or malfunctions leading to unintended control
consequences and the pilot's ability to appropriately counteract those
control anomalies.
    The FAA would like to clarify that this special condition only
addresses one aspect of high-speed limiting designs. Many other
regulations, such as 14 CFR 25.1301 and 25.1309, address the proper
intended function and failure scenarios of such a system. Therefore,

the anonymous comment is beyond the scope of this special condition,
and is already accounted for and considered in the basic regulatory-
compliance process.

Applicability

    As discussed above, these special conditions apply to Airbus Model
A350-900 airplanes. Should Airbus apply later for a change to the type
certificate to include another model incorporating the same novel or
unusual design feature, the special conditions would apply to that
model as well.

Conclusion

    This action affects only certain novel or unusual design features
on Airbus Model A350-900 series airplanes. It is not a rule of general
applicability.

List of Subjects in 14 CFR Part 25

    Aircraft, Aviation safety, Reporting and recordkeeping
requirements.

    The authority citation for these special conditions is as follows:

    Authority:  49 U.S.C. 106(g), 40113, 44701, 44702, 44704.

The Special Conditions

0
Accordingly, pursuant to the authority delegated to me by the
Administrator, the following special conditions are issued as part of
the type-certification basis for Airbus Model A350-900 series
airplanes.
    In addition to Sec.  25.143, the following requirements apply:
Operation of the high-speed limiter during all routine and descent-
procedure flight must not impede normal attainment of speeds up to
overspeed warning.

    Issued in Renton, Washington, on August 15, 2014.
Jeffrey E. Duven,
Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2014-19822 Filed 8-20-14; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register: November 10, 2005 (Volume 70, Number 217)]
[Notices]
[Page 68421]
[DOCID:fr10no05-74]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. RP99-220-018]

Great Lakes Gas Transmission Limited Partnership; Notice of
Negotiated Rate Agreement

November 3, 2005.
    Take notice that on October 31, 2005, Great Lakes Gas Transmission
Limited Partnership (Great Lakes) filed for disclosure, a
transportation service agreement pursuant to Great Lakes Rate Schedule
FT entered into by Great Lakes and Nexen Marketing U.S.A. Inc. (Nexen)
(FT Service Agreement).
    Great Lakes states that the FT Service Agreement being filed
reflects a negotiated rate arrangement between Great Lakes and Nexen
commencing November 1, 2005.
    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 and 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 in accordance with the provisions of
Sec.  154.210 of the Commission's regulations (18 CFR 154.210). Anyone
filing an intervention or protest must serve a copy of that document on
the Applicant. Anyone filing an intervention or protest on or before
the intervention or protest date need not serve motions to intervene or
protests on persons other than the Applicant.
    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 online 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>.

Magalie R. Salas,
Secretary.
[FR Doc. E5-6213 Filed 11-9-05; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register: July 11, 2007 (Volume 72, Number 132)]
[Notices]
[Page 37747]
[DOCID:fr11jy07-59]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. RP07-508-000]

Columbia Gulf Transmission Company; Notice of Proposed Changes in
FERC Gas Tariff

July 3, 2007.
    Take notice that on June 29, 2007, Columbia Gulf Transmission
Company (Columbia Gulf) tendered for filing as part of its FERC Gas
Tariff, Second Revised Volume No. 1, the following tariff sheets, with
an effective date of August 1, 2007:

Eighth Revised Sheet No. 193.
Ninth Revised Sheet No. 194.

    Columbia Gulf states that it is proposing to revise Section 14.3 of
the General Terms and Conditions (GTC) of its Tariff in order to
discontinue the practice (under GTC Section 14.3(e)) of allowing
releasing shippers to include in Release Notices a requirement that
potential replacement shippers bid on parcels of capacity on both
Columbia Gulf and Columbia Gas Transmission Corporation which are being
packaged for bidding purposes.
    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 and 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 in accordance with the provisions of
Section 154.210 of the Commission's regulations (18 CFR 154.210).
Anyone filing an intervention or protest must serve a copy of that
document on the Applicant. Anyone filing an intervention or protest on
or before the intervention or protest date need not serve motions to
intervene or protests on persons other than the Applicant.
    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>.

Kimberly D. Bose,
Secretary.
[FR Doc. E7-13454 Filed 7-10-07; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 87, Number 189 (Friday, September 30, 2022)]
[Rules and Regulations]
[Pages 59299-59302]
[FR Doc No: 2022-21206]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[Docket Number USCG-2022-0799]
RIN 1625-AA00

Safety Zone; Atlantic Ocean, Cape Canaveral Offshore Launch Area,
Cape Canaveral, FL

AGENCY: Coast Guard, DHS.

ACTION: Temporary interim rule and request for comments.

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SUMMARY: The Coast Guard is establishing a temporary safety zone for
waters of the Atlantic Ocean, adjacent to Cape Canaveral, FL. This
safety zone would implement a special activities provision of the
William M. (Mac) Thornberry National Defense Authorization Act for
Fiscal Year 2021. The Coast Guard is establishing this zone for the
launch of the Artemis I rocket, which is being launched by the National
Aeronautics and Space Administration (NASA). The temporary safety zone
will be located within the Coast Guard District Seven area of
responsibility offshore of Cape Canaveral, Florida. This temporary
interim rule prohibits U.S.-flagged vessels from entering the temporary
safety zone unless authorized by the District Commander, or the Captain
of the Port of the Seventh Coast Guard District or a designated
representative. Foreign-flagged vessels are encouraged to remain
outside the safety zone. This action is necessary to protect vessels
and waterway users from the potential hazards created by launch of the
Artemis I rocket, flying over the U.S. Exclusive Economic Zone (EEZ).

DATES: This temporary interim rule is effective without actual notice
September 30, 2022 through December 31, 2022. For the purposes of
enforcement, actual notice will be used from September 27, 2022 until
September 30, 2022.

ADDRESSES: You may submit comments identified by docket number USCG-
2022-0799 using the Federal Decision Making Portal at https://www.regulations.gov. See the ``Public Participation and Request for
Comments'' portion of the SUPPLEMENTARY INFORMATION section for further
instructions on submitting comments.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
call or email LT Ryan Gilbert, District Seven, Waterways Management
Division, U.S. Coast Guard; telephone<PHONE_NUMBER>, email
[email protected].

SUPPLEMENTARY INFORMATION:

I. Table of Abbreviations

BNM Broadcast Notice to Mariners
CFR Code of Federal Regulations
COTP Captain of the Port
DHS Department of Homeland Security
EEZ Exclusive Economic Zone
FAA Federal Aviation Administration
FL Florida
FR Federal Register
MSIB Marine Safety Information Bulletin
NASA National Aeronautics and Space Administration
NM Nautical Mile
NOE Notice of Enforcement
NPRM Notice of Proposed Rulemaking
RNA Regulated Navigation Area
Sec.  Section
U.S. United States
U.S.C. United States Code

II. Background Information and Regulatory History

    On January 1, 2021, the William M. (Mac) Thornberry National
Defense Authorization Act for Fiscal Year 2021 (Pub. L. 116-283)
(Authorization Act) was enacted. Section 8343 (134 Stat. 4710) calls
for the Coast Guard to conduct a 2-year pilot program to establish and
implement a process to establish safety zones to address special
activities,\1\ including space activities carried out by United States
(U.S.) citizens in the U.S. Exclusive Economic Zone (EEZ).\2\ Terms
used to describe space activities, including launch, are defined in 51
U.S.C. 50902.
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    \1\ Special Activities means space activities, including launch
and reentry, as such terms are defined in section 50902 of Title 51,
United States Code, carried out by United States citizens.
    \2\ The Coast Guard defines the U.S. exclusive economic zone in
33 CFR 2.30(a). Territorial sea is defined in 33 CFR 2.22.
---------------------------------------------------------------------------

    The Coast Guard has long monitored space activities impacting the
maritime domain and taken actions to ensure the safety of vessels and
the public as needed during space launch operations. In conducting this
activity, the Coast Guard engages with other government agencies,
including the Federal Aviation Administration (FAA) and National
Aeronautics and Space Administration (NASA). This engagement is
necessary to ensure statutory and regulatory obligations are met to
ensure the safety

of launch operations and waterway users.
    The Coast Guard has an existing permanent regulated navigation area
(RNA) that prevents vessels from operating in the waters adjacent to
the Cape Canaveral launch area; however, that area only extends to the
limits of the territorial seas.\3\ With this temporary interim rule,
the Coast Guard is establishing a temporary safety zone in the Atlantic
Ocean in the U.S. EEZ that will abut the existing RNA near Cape
Canaveral, FL. The Coast Guard intends to activate the existing RNA in
Sec.  165.775 concurrently with the temporary safety zone established
by this temporary interim rule for the launch of the Artemis I rocket.
---------------------------------------------------------------------------

    \3\ See 33 CFR 165.775.
---------------------------------------------------------------------------

    The Artemis I is the first launch of the Artemis Program, and the
only Artemis rocket launch anticipated until May of 2024. It is being
launched to conduct a test flight for future missions to the moon, and
the mission will include orbiting the moon. The Artemis rocket is much
larger than most rockets that have been launched from the Eastern Range
in Cape Canaveral, FL in recent years. While it is of a similar size to
the Space Shuttle and Apollo rockets, an untested rocket of this size
has not been launched from Cape Canaveral in decades. As the rocket is
much larger, and has never been launched before, there is a higher risk
profile than with a typical launch. Additionally, based on the historic
nature of this launch it is expected that there will be additional
recreational boating traffic; therefore, it has been determined that
the best way to reduce risk is to establish this offshore safety zone
abutting the established RNA.
    The Coast Guard is issuing this temporary interim rule without
prior notice and opportunity to comment pursuant to authority under
section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C.
553(b)). This provision authorizes an agency to issue a rule without
prior notice and opportunity to comment when the agency for good cause
finds that those procedures are ``impracticable, unnecessary, or
contrary to the public interest.'' Under 5 U.S.C. 553(b)(B), the Coast
Guard finds that good cause exists for not publishing a notice of
proposed rulemaking (NPRM) with respect to this temporary interim rule
because doing so would be impracticable. This safety zone must be
established by September 27, 2022, in order to protect vessels and
waterway users from the potential hazards associated with the next
scheduled launch of the Artemis I rocket.
    Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause
exists for making this temporary interim rule effective less than 30
days after publication in the Federal Register. Delaying the effective
date of this temporary interim rule would be contrary to the rule's
objectives of ensuring the protection of vessels and waterway users in
the U.S. EEZ from the potential hazards created by the next scheduled
launch operation.
    We are soliciting comments on this rulemaking. If we determine that
changes to this rulemaking action are necessary, the Coast Guard will
consider comments received in a subsequent temporary interim rule or
temporary final rule.

III. Legal Authority and Need for Rule

    The Coast Guard is issuing this temporary interim rule under
section 8343 of the Authorization Act. The Seventh District Commander
has determined that there are potential hazards in the U.S. EEZ created
by the launch of the Artemis I rocket. The purpose of this temporary
interim rule is to ensure safety of vessels and waterway users before,
during, and after the scheduled launch.

IV. Discussion of the Rule

    This temporary interim rule establishes a temporary safety zone
with an effective date starting with the next scheduled launch on
September 27, 2022 through December 31, 2022. However, the temporary
safety zone would only be subject to enforcement for 5 to 6 hours for
the Artemis I rocket launch from Cape Canaveral, FL. The Coast Guard
will inform the public of the activation of the temporary safety zone
through a Notice of Enforcement (NOE) that will be issued once the
Coast Guard receives notification of the launch date from NASA. The
Coast Guard intends to enforce the temporary safety zone for the
Artemis I rocket launch with assets on scene to ensure the temporary
safety zone is cleared of persons and vessels.
    The temporary safety zone will cover certain navigable waters in
the path of the rocket being launched. The safety zone will cover
approximately 720 square miles, and is rectangular in shape. It will
directly abut the RNA established in Sec.  165.775. U.S.-flagged
vessels will be prohibited from entering the temporary safety zone
unless authorized by the District Commander or the Captain of the Port
(COTP) of the Seventh Coast Guard District or a designated
representative. Foreign-flagged vessels are encouraged to remain
outside the safety zone. The coordinates of the safety zone are
provided in the regulatory text.
    No U.S. flagged vessel will be permitted to enter the safety zone
without obtaining permission from the District Commander, the COTP, or
a designated representative.
    Once the Artemis I rocket has been launched, the safety zone will
no longer be needed. At that time, the Coast Guard will notify the
public of the cancellation of the safety zone through a Broadcast
Notice to Mariners (BNM), and through social media.

V. Regulatory Analyses

    We developed this temporary interim rule after considering numerous
statutes and Executive orders related to rulemaking. Below we summarize
our analyses based on a number of these statutes and Executive orders,
and we discuss First Amendment rights of protestors.

A. Regulatory Planning and Review

    Executive Orders 12866 and 13563 direct agencies to assess the
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits. This temporary interim rule has not been designated a
``significant regulatory action,'' under Executive Order 12866.
Accordingly, this temporary interim rule has not been reviewed by the
Office of Management and Budget (OMB).
    This regulatory action determination is based on the size,
location, duration, and scope of the temporary safety zone. The
temporary safety zone is limited in size and location to only to the
areas where Artemis I rocket launch may pose a danger to vessels
outside the RNA. The temporary safety zone is limited in scope, as
vessel traffic will be able to safely transit around the zone. The
safety zone is expected to be enforced for approximately 5 to 6 hours
for each launch window. After the launch has been completed, and there
is no longer any danger to vessels from the Artemis I rocket, the Coast
Guard will cancel the safety zone and notify waterway users and vessels
of its cancellation. The safety zone will ensure the protection of
vessels and waterway users from the potential hazards created by the
launch of the Artemis I rocket.

B. Impact on Small Entities

    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as
amended, requires Federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small

businesses, not-for-profit organizations that are independently owned
and operated and are not dominant in their fields, and governmental
jurisdictions with populations of less than 50,000. The Coast Guard
certifies under 5 U.S.C. 605(b) that this temporary interim rule will
not have a significant economic impact on a substantial number of small
entities.
    While some owners or operators of vessels intending to transit the
safety zone may be small entities, for the reasons stated in section
V.A. above, this temporary interim rule will not have a significant
economic impact on any vessel owner or operator.
    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Public Law 104-121), we want to assist small
entities in understanding this temporary interim rule. If the temporary
interim rule would affect your small business, organization, or
governmental jurisdiction and you have questions concerning its
provisions or options for compliance, please call or email the person
listed in the FOR FURTHER INFORMATION CONTACT section.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this temporary interim rule or
any policy or action of the Coast Guard.

C. Collection of Information

    This temporary interim rule will not call for a new collection of
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3520).

D. Federalism and Indian Tribal Governments

    A temporary interim rule has implications for federalism under
Executive Order 13132, Federalism, if it has a substantial direct
effect on the States, on the relationship between the National
Government and the States, or on the distribution of power and
responsibilities among the various levels of government. We have
analyzed this temporary interim rule under that Order and have
determined that it is consistent with the fundamental federalism
principles and preemption requirements described in Executive Order
13132.
    Also, this temporary interim rule does not have tribal implications
under Executive Order 13175, Consultation and Coordination with Indian
Tribal Governments, because it does not have a substantial direct
effect on one or more Indian tribes, on the relationship between the
Federal Government and Indian tribes, or on the distribution of power
and responsibilities between the Federal Government and Indian tribes.

E. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this temporary interim rule
will not result in such an expenditure, we do discuss the effects of
this temporary interim rule elsewhere in this preamble.

F. Environment

    We have analyzed this temporary interim rule under Department of
Homeland Security Directive 023-01, Rev. 1, associated implementing
instructions, and Environmental Planning COMDTINST 5090.1 (series),
which guide the Coast Guard in complying with the National
Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have
determined that this action is one of a category of actions that do not
individually or cumulatively have a significant effect on the human
environment. This temporary interim rule involves enforcement of a
safety zone for approximately 5 to 6 hours during the duration of the
rocket launch of the Artemis I rocket. The zone will be activated as
many times as it is needed until the rocket is launched, or 11:59 p.m.
on December 31, 2022, whichever comes first. It is categorically
excluded from further review under paragraph L60(a) of Appendix A,
Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of
Environmental Consideration supporting this determination is available
in the docket. For instructions on locating the docket, see the
ADDRESSES section of this preamble.

G. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters.
Protesters are asked to call or email the person listed in the FOR
FURTHER INFORMATION CONTACT section to coordinate protest activities so
that your message can be received without jeopardizing the safety or
security of people, places or vessels.

V. Public Participation and Request for Comments

    We view public participation as essential to effective rulemaking,
and will consider all comments and material received during the comment
period. Your comment can help shape the outcome of this rulemaking. If
you submit a comment, please include the docket number for this
rulemaking, indicate the specific section of this document to which
each comment applies, and provide a reason for each suggestion or
recommendation.
    Submitting comments. We encourage you to submit comments through
the Federal Decision Making Portal at https://www.regulations.gov. To
do so, go to https://www.regulations.gov, type USCG-2022-0799 in the
search box and click ``Search.'' Next, look for this document in the
Search Results column, and click on it. Then click on the Comment
option. If you cannot submit your material by using https://www.regulations.gov, call or email the person in the FOR FURTHER
INFORMATION CONTACT section of this proposed rule for alternate
instructions.
    Viewing material in docket. To view documents mentioned in this
proposed rule as being available in the docket, find the docket as
described in the previous paragraph, and then select ``Supporting &
Related Material'' in the Document Type column. Public comments will
also be placed in our online docket and can be viewed by following
instructions on the https://www.regulations.gov Frequently Asked
Questions web page. We review all comments received, but we will only
post comments that address the topic of the proposed rule. We may
choose not to post off-topic, inappropriate, or duplicate comments that
we receive.
    Personal information. We accept anonymous comments. Comments we
post to https://www.regulations.gov will include any personal
information you have provided. For more about privacy and submissions
to the docket in response to this document, see DHS's eRulemaking
System of Records notice (85 FR 14226, March 11, 2020).

List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and
recordkeeping requirements, Security measures, Waterways.

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 165 as follows:

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS

0
1. The authority citation for part 165 is revised to read as follows:

    Authority:  46 U.S.C. 70034, 70051; section 8343 of Pub. L. 116-
283, 134 Stat. 3388, 4710; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5;
Department of Homeland Security Delegation No. 00170.1, Revision No.
01.2.

0
2. Add Sec.  165.T07-0799 to read as follows:

Sec.  165.T07-0799  Safety Zone; Atlantic Ocean, Cape Canaveral
Offshore Launch Area, Cape Canaveral, FL.

    (a) Location. The following area is a safety zone: All waters of
the Atlantic Ocean, from surface to bottom, encompassed by a line
connecting the following points beginning at Point 1: 28[deg]47'51'' N,
080[deg]27'43.4'' W, thence to Point 2: 28[deg]59'24.5'' N,
080[deg]03'37.4'' W, thence to Point 3: 28[deg]29'1.2'' N,
079[deg]53'33.7'' W, thence to Point 4: 28[deg]30'38.3'' N,
080[deg]18'13.9'' W, following along the 12 nautical mile line back to
Point 1. These coordinates are based on WGS 84.
    (b) Definitions. As used in this section, designated representative
means a Coast Guard Patrol Commander, including a Coast Guard coxswain,
petty officer, or other officer operating a Coast Guard vessel, U.S.
Space Force range safety personnel, and Federal, State, and local
officers designated by or assisting the District Commander or the
Captain of the Port (COTP) in the enforcement of the safety zone.
    (c) Regulations. (1) Under the general safety zone regulations in
subpart C of this part, U.S.-flagged vessels may not enter the safety
zone described in paragraph (a) of this section unless authorized by
the District Commander, the COTP, or a designated representative. All
foreign-flagged vessels are encouraged to remain outside the safety
zone.
    (2) To seek permission to enter, transit through, anchor in or
remain within the safety zone contact Sector Jacksonville by telephone
at<PHONE_NUMBER> or the District Commander's or the COTP's
representative via VHF-FM radio on channel 16. Those in the safety zone
must comply with all lawful orders or directions given to them by the
District Commander, the COTP, or a designated representative.
    (d) Notification of enforcement. (1) The District Commander, or the
COTP, or a designated representative will inform the public of the
activation of the safety zone described in paragraph (a) of this
section by Notice of Enforcement that will be issued once the Coast
Guard receives notification of the launch date from NASA.
    (2) The Coast Guard intends to enforce the temporary safety zone
for the Artemis I rocket launch with assets on scene to ensure the
temporary safety zone is cleared of persons and vessels.
    (3) Once the Artemis I rocket has been launched, the safety zone
will no longer be needed. At that time, the Coast Guard will notify the
public of the cancellation of the safety zone through a Broadcast
Notice to Mariners on VHF-FM channel 16, and through social media.
    (e) Effective period. This section is effective from 12:01 a.m. on
September 27, 2022, through 11:59 p.m. on December 31, 2022.

    Dated: September 22, 2022.
Brendan C. McPherson,
Rear Admiral U.S. Coast Guard, Commander, Seventh Coast Guard District.
[FR Doc. 2022-21206 Filed 9-29-22; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 88, Number 95 (Wednesday, May 17, 2023)]
[Notices]
[Pages 31508-31509]
[FR Doc No: 2023-10438]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2020-N-2226]

Cheese Products Deviating From Identity Standard; Temporary
Permit for Market Testing

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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

SUMMARY: The Food and Drug Administration (FDA or we) is announcing the
extension of a temporary permit issued to Bongards Creameries (the
applicant) to market test several pasteurized standardized cheeses that
deviate from the U.S. standards of identity for cheese products. The
extension allows the applicant to continue to evaluate commercial
viability of the products and to collect data on consumer acceptance of
the products, in support of a petition to amend the standard of
identity for cheese products. We also invite other interested parties
to participate in the market test.

DATES: The new expiration date of the permit will be either the
effective date of a final rule amending the standard of identity of
cheese products that may result from the petition or 30 days after
denial of the petition.

FOR FURTHER INFORMATION CONTACT: Marjan Morravej, Center for Food
Safety and Applied Nutrition (HFS-820), Food and Drug Administration,
5001 Campus Dr., College Park, MD 20740,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: In accordance with Sec.  130.17 (21 CFR

130.17), we issued a temporary permit to Bongards Creameries, 250 Lake
Drive East, Chanhassen, MN 55317, to market test products that deviate
from the standards of identity for cheese products under Sec. Sec.
133.167, 133.169, 133.170, and 133.173 (21 CFR 133.167, 133.169,
133.170, and 133.173) (85 FR 80118, December 11, 2020). We issued the
permit to facilitate market testing of products that deviate from the
requirements of the standard of identity for cheese products issued
under section 401 of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 341). The permit covers limited interstate marketing tests of
cheese products.
    The test products deviate from the standards of identity for cheese
products under Sec. Sec.  133.167, 133.169, 133.170, and 133.173. For
the purpose of this permit, natamycin, which is not permitted under the
standards of identity for these cheese products, would be added as a
mold inhibitor in the standardized cheeses. The inhibitor would be
incorporated into blended and processed cheese just prior to
pasteurization and further cast into slices (or packaging into loaves
or other final forms as in the case of pasteurized process cheese
spread). Natamycin, which is stable under typical thermal processing
conditions for pasteurized cheeses, would be added directly to cheese
blends just prior to pasteurization, as is done with other mold
inhibitors such as sorbic acid, sodium propionate, and their approved
variants. The final concentration of natamycin would not exceed 20
parts per million and would be effective at producing process and
blended slices with a shelf life of up to 150 days before seeing mold
growth.
    The test products meet all the requirements of the standard with
the exception of this deviation.
    On December 22, 2022, the applicant asked us to extend the
temporary permit so the applicant could have more time to market test
the cheese products and gain additional consumer acceptance in support
of the petition to amend the standard for cheese products. We find that
it is in the interest of consumers to extend the permit for continued
market testing of the cheese products to gain additional information on
consumer expectations and acceptance. Therefore, under Sec.  130.17(i),
we are extending the temporary permit granted to Bongards Creameries
for temporary marketing of a maximum of 100 million pounds (45,359,237
kilograms) of cheese products to provide continued market testing of
the specified amount of product for the applicant on an annual basis.
The new expiration date of the permit will be either the effective date
of a final rule amending the standard of identity for cheese products
that may result from the petition or 30 days after denial of the
petition. All other conditions and terms of this permit remain the
same.
    In addition, we invite interested persons to participate in the
market test under the conditions of the permit, except for the
designated area of distribution. Any person who wishes to participate
in the extended market test must notify, in writing, the Branch Chief,
Product Evaluation Labeling Branch, Division of Food Labeling and
Standards, Office of Nutrition and Food Labeling, Center for Food
Safety and Applied Nutrition, via [email protected]. The
notification must describe the test products and the area of
distribution, specify and justify the amount requested, and include the
labeling that will be used for the test product (i.e., a draft label
for each size of container and each brand of product to be market
tested) (see Sec.  130.17(c)). The information panels on the labels of
the test products must bear nutrition labeling in accordance with 21
CFR 101.9. Each of the ingredients used in the food must be declared on
the label as required by 21 CFR part 101.

    Dated: May 10, 2023.
Lauren K. Roth,
Associate Commissioner for Policy.
[FR Doc. 2023-10438 Filed 5-16-23; 8:45 am]
BILLING CODE 4164-01-P


[Federal Register Volume 82, Number 202 (Friday, October 20, 2017)]
[Notices]
[Pages 48869-48870]
[FR Doc No: 2017-22756]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81881; File No. SR-GEMX-2017-44]

Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Its
Schedule of Fees To Increase the Monthly Cap on the Fees Assessed for
Specialized Quote Feed and SQF Purge Ports That Market Makers Utilize
To Connect to the Exchange

October 16, 2017.
    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 October 2, 2017, Nasdaq GEMX, LLC (``GEMX'' or ``Exchange'') 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 the Exchange. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
---------------------------------------------------------------------------

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

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

    The Exchange proposes to amend its Schedule of Fees to increase the
monthly cap on the fees assessed for Specialized Quote Feed (``SQF'')
\3\ and SQF Purge \4\ Ports that Market Makers \5\ utilize to connect
to the Exchange.
---------------------------------------------------------------------------

    \3\ SQF is an interface that allows market makers to connect and
send quotes, sweeps and auction responses into the Exchange. Data
includes the following: (1) Options Auction Notifications (e.g.,
opening imbalance, Flash, PIM, Solicitation and Facilitation or
other information); (2) Options Symbol Directory Messages; (3)
System Event Messages (e.g., start of messages, start of system
hours, start of quoting, start of opening); (4) Option Trading
Action Messages (e.g., halts, resumes); (5) Execution Messages; (6)
Quote Messages (quote/sweep messages, risk protection triggers or
purge notifications).
    \4\ SQF Purge is a specific port for the SQF interface that only
receives and notifies of purge requests from the market maker.
    \5\ The term ``Market Makers'' refers to ``Competitive Market
Makers'' and ``Primary Market Makers'' collectively. See GEMX Rule
100(a)(25).
---------------------------------------------------------------------------

    The text of the proposed rule change is available on the Exchange's
Web site at www.ise.com, at the principal office of the Exchange, and
at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange is proposing to amend its Schedule of Fees to increase
the monthly cap on the fees assessed for Specialized Quote Feed
(``SQF'') \6\ and SQF Purge \7\ Ports that Market Makers \8\ utilize to
connect to the Exchange. Currently, the Exchange charges monthly SQF
and SQF Purge Port Fees of $1,250 per port, and caps these fees for
Market Makers utilizing these ports at $12,500 per month (``SQF Fee
Cap''). The Exchange now proposes to increase the SQF Fee Cap from
$12,500 to $17,500. The monthly $1,250 per port fees for SQF and SQF
Purge Ports will remain unchanged.
---------------------------------------------------------------------------

    \6\ SQF is an interface that allows market makers to connect and
send quotes, sweeps and auction responses into the Exchange. Data
includes the following: (1) Options Auction Notifications (e.g.,
opening imbalance, Flash, PIM, Solicitation and Facilitation or
other information); (2) Options Symbol Directory Messages; (3)
System Event Messages (e.g., start of messages, start of system
hours, start of quoting, start of opening); (4) Option Trading
Action Messages (e.g., halts, resumes); (5) Execution Messages; (6)
Quote Messages (quote/sweep messages, risk protection triggers or
purge notifications).
    \7\ SQF Purge is a specific port for the SQF interface that only
receives and notifies of purge requests from the market maker.
    \8\ The term ``Market Makers'' refers to ``Competitive Market
Makers'' and ``Primary Market Makers'' collectively. See GEMX Rule
100(a)(25).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\9\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\10\ in particular, in that it provides
for the equitable allocation of reasonable dues, fees, and other
charges among members and issuers and other persons using any facility,
and is not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that increasing the SQF Fee Cap from $12,500
to $17,500 is reasonable because it better aligns the fees collected
from Market Makers utilizing the SQF and SQF Purge Ports with the costs
associated with maintaining and supporting the ports, as well as the
initial investment in such ports for the Exchange. The Exchange also
believes that the proposed increase of the SQF Fee Cap is reasonable
because it will allow the Exchange to recoup costs while continuing to
cap infrastructure costs for Market Makers that subscribe to a large
number of ports due to their larger market making footprint on the
Exchange. Without such a cap, Market Makers may be inhibited from
expanding their activity on the Exchange. As a general principal, the
Exchange believes that greater participation on the Exchange by members
improves market quality for all market participants. Thus, in arriving
at a fee cap of $17,500, the Exchange balanced the desire to improve
market quality against the need to cover costs and make a profit.
Lastly, the Exchange notes that its affiliate, Nasdaq Phlx

(``Phlx''), offers its members a monthly fee cap of $42,000 for its
active SQF ports.\11\
---------------------------------------------------------------------------

    \11\ See Phlx Pricing Schedule, VII. Other Member Fees, B. Port
Fees.
---------------------------------------------------------------------------

    The Exchange believes that the proposed increase of the SQF Fee Cap
is equitable and not unfairly discriminatory because the fee cap will
apply uniformly to all Market Makers utilizing SQF and SQF Purge Ports.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange operates in a
highly competitive market in which market participants can readily
favor competing venues if they deem fee levels at a particular venue to
be excessive, or rebate opportunities available at other venues to be
more favorable. In such an environment, the Exchange must continually
adjust its fees to remain competitive with other exchanges and with
alternative trading systems that have been exempted from compliance
with the statutory standards applicable to exchanges. Because
competitors are free to modify their own fees in response, and because
market participants may readily adjust their order routing practices,
the Exchange believes that the degree to which fee changes in this
market may impose any burden on competition is extremely limited.
    In this instance, the proposed increase in the SQF Fee Cap would
not burden competition because it would apply uniformly to all Market
Makers utilizing SQF and SQF Purge Ports. Accordingly, the Exchange
does not believe that the proposed fee changes herein will impair the
ability of members or competing order execution venues to maintain
their competitive standing in the financial markets.

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)(ii) of the Act.\12\ 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: (i) Necessary or appropriate in the public
interest; (ii) for the protection of investors; or (iii) 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.
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    \12\ 15 U.S.C. 78s(b)(3)(A)(ii).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-GEMX-2017-44 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-GEMX-2017-44. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-GEMX-2017-44 and should be
submitted on or before November 13, 2017.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-22756 Filed 10-19-17; 8:45 am]
 BILLING CODE 8011-01-P


reasonable and consistent with Section 6(b)(5) of the Act for the
Exchange to exempt them from the new requirements.
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    \209\ The Commission notes, moreover, that, in the case of
limited partnerships and open-end registered management investment
companies, Rule 10C-1 itself provides exemptions from the
independence requirements of the Rule. The Commission notes that
controlled companies are provided an automatic exemption from the
application of the entirety of Rule 10C-1 by Rule 10C-1(b)(5). The
additional Nasdaq provisions requiring listed companies to have a
two-member compensation committee and a written committee charter,
will, of course, not apply to the exempted entities, which are
currently required to have neither a compensation committee nor the
Alternative Option.
    \210\ See supra Section II.B.4.
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    Specifically with regard to investment companies, the Commission
received one comment letter supporting the Exchange's proposal to
exempt such companies from the Rule 10C-1 requirements.\211\ As the
commenter noted, although Rule 10C-1 exempts certain entities,
including registered open-end management investment companies, from the
enhanced independence requirements for members of compensation
committees, it did not explicitly exempt other types of registered
management investment companies, including closed-end funds, from any
of the requirements of Rule 10C-1. Under the Nasdaq proposal, both
closed-end and open-end funds would be exempt from all the requirements
of the rule.
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    \211\ See ICI Letter.
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    The commenter supported this aspect of the proposal, stating that
both open-end and closed-end funds typically are externally managed and
do not employ executives or by their nature have employees. The
commenter believed that such funds are adequately governed by other
federal regulation with respect to corporate governance matters,
generally, and compensation matters, specifically.\212\ The Commission
believes that this exemption is reasonable because the Investment
Company Act of 1940 already assigns important duties of investment
company governance, such as approval of the investment advisory
contract, to independent directors, and because such entities were
already generally exempt from Nasdaq's existing compensation committee
requirements. The Commission notes that, as the commenter stated, that
almost all registered investment companies do not employ executives or
employees or have compensation committees.
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    \212\ Id.
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    The Commission notes that Nasdaq proposes, however, to amend its
current rule for foreign private issuers, which allows such issuers to
follow their home country practice in lieu of the Exchange's standards
regarding a company's compensation decision-making process. The current
rule includes the proviso that the issuer must disclose its reliance on
the exemption. Nasdaq proposes to conform its rules in this regard with
the provision of Rule 10C-1 permitting a foreign private issuer to
follow home country practice only when it meets the additional
condition that the issuer disclose the reasons why it does not have an
independent compensation committee.

F. Transition to the New Rules for Companies Listed as of the Effective
Date

    The Commission believes that the deadlines for compliance with the
proposal's various provisions are reasonable and should afford listed
companies adequate time to make the changes, if any, necessary to meet
the new standards. The Commission notes that the provision in the
original proposal requiring companies to comply with certain of the
requirements immediately has been revised in Amendment No. 1 to allow
companies until July 1, 2013 to satisfy these requirements.\213\ The
Commission also believes that the revised deadline proposed in
Amendment No. 1, which gives companies until the earlier of their first
annual meeting after January 15, 2014, or October 31, 2014, to comply
with the remaining provisions is more clear-cut than the deadline in
the original proposal and also matches the deadline set forth by the
New York Stock Exchange in its proposed rule change to comply with Rule
10C-1.\214\
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    \213\ See supra notes 73-74 for the provisions to which the new
transition date applies.
    \214\ See Securities Exchange Act Release No. 68011 (October 9,
2012), 77 FR 62541 (October 15, 2012) (Notice of File No. SR-NYSE-
2012-49).
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G. Phase-In Schedules: IPOs; Companies That Lose their Exemptions;
Companies Transferring From Other Markets

    The Commission believes that it is reasonable for Nasdaq to allow,
with

respect to IPOs, companies emerging from bankruptcy, companies ceasing
to be controlled companies, and companies transferring from other
markets, the same phase-in schedule for compliance with the new
requirements as is permitted under its current compensation-related
rules.
    The Commission also believes that the phase-in schedule for
companies that cease to be Smaller Reporting Companies, as revised in
Amendment No. 1, affords such companies ample time to come into
compliance with the full panoply of rules that apply to other
companies. In the Commission's view, the revised schedule also offers
such companies more clarity in determining when they will be subject to
the heightened requirements.

V. Accelerated Approval of Amendment Nos. 1 and 2 to the Proposed Rule
Change

    The Commission finds good cause, pursuant to Section 19(b)(2) of
the Act,\215\ for approving the proposed rule change, as modified by
Amendment Nos. 1 and 2, prior to the 30th day after the date of
publication of notice in the Federal Register. The change made to the
proposal by Amendment No. 1 to set forth in detail the requirements of
Rule 10C-1(b)(2)-(4) explicitly in the Exchange's rules, rather than
incorporating these details by reference as in the original
proposal,\216\ is not a substantive one and merely codifies the
original intent of that provision. Moreover, the change improves the
proposal because it brings together the full set of the Exchange's
rules on compensation committees in one place, thereby easing
compliance for listed companies and benefiting investors seeking an
understanding of an issuer's obligations with regard to determining
executive compensation.
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    \215\ 15 U.S.C. 78s(b)(2).
    \216\ See supra note 49 and accompanying text.
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    The change made by Amendment No. 1 to require companies currently
listed on Nasdaq to comply with certain of the new rules by July 1,
2013 rather than immediately, as originally proposed,\217\ reasonably
affords companies more time to take the steps necessary for compliance.
The change to require such companies to comply with the remaining
provisions by the earlier of their first annual meeting after January
15, 2014, or October 31, 2014, rather than by the deadline originally
proposed,\218\ still allows ample time for companies to adjust to the
new rules, and accords with the deadline set by NYSE in its proposed
rule change to comply with Rule 10C-1, which was published at the same
time as the Nasdaq proposal.\219\
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    \217\ See supra note 74 and accompanying text.
    \218\ See supra note 78 and accompanying text.
    \219\ The Commission received one comment letter relating to
this provision in the NYSE proposal, in which the commenter
supported this transition period for compliance with the new
compensation committee independence standards but believed that a
longer period should be provided to implement the other listing
standards that NYSE proposed. See Letter to Elizabeth M. Murphy,
Secretary, Commission, from Robert B. Lamm, Chair, Securities Law
Committee, The Society of Corporate Secretaries & Governance
Professionals, concerning File No. SR-NYSE-2012-49, dated December
7, 2012.
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    The revision made by Amendment No. 1 to the phase-in rules for
companies that cease to be Smaller Reporting Companies \220\
establishes a schedule that is easier to understand, while still
affording such companies adequate time to come into compliance. The
Commission notes that the Start Date of the phase-in period for such a
company is six months after the Determination Date, and the company is
given no less than another six months from the Start Date to gain
compliance with the rules from which it had been previously exempt.
Moreover, with respect to the enhanced independence standards for
compensation committee members (relating to fees and affiliation with
the company), only one member must meet these standards within six
months after the Start Date. The company is given nine months from the
Start Date (i.e., fifteen months from the Determination Date) to have a
majority of committee members meeting the standards, and a full year
from the Start Date (i.e., eighteen months from the Determination Date)
to fully comply with the standards.
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    \220\ See supra note 85 and accompanying text.
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    The addition by Amendment No. 1 of a preamble to proposed Rule
5605(d) to set forth the obligations of a company during the transition
period until the new rules apply introduces no substantive change.\221\
It merely mirrors the instructions in the preamble to the Sunsetting
Provisions, providing clarity for listed companies. The inclusion in
Amendment No. 1 of language in Nasdaq's rules that requires a
compensation committee to conduct the independence assessment with
respect to ``any compensation consultant, legal counsel or other
adviser that provides advice to the compensation committee, other than
in-house counsel'' merely reflects an instruction in Rule 10C-1
itself.\222\ Finally, the addition of further guidance by Amendment No.
1 merely clarifies that nothing in the Exchange's rules requires a
compensation adviser to be independent, only that the compensation
committee consider the independence factors before selecting or
receiving advice from a compensation adviser,\223\ and is not a
substantive change.
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    \221\ See supra note 73.
    \222\ See supra note 194 and accompanying text.
    \223\ See supra note 56 and accompanying text.
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    Amendment No. 2 excluded advisers that provide certain types of
services from the independence assessment.\224\ As discussed above, the
Commission has already determined to exclude such advisers from the
disclosure requirement regarding compensation advisers in Regulation S-
K because these types of services do not raise conflict of interest
concerns. For all the reasons discussed above, the Commission finds
good cause to accelerate approval of the proposed changes made by
Amendment Nos. 1 and 2.
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    \224\ See supra notes 59-60 and accompanying text.
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VI. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing and whether Amendment Nos. 1 and 2
are consistent with the Act. Comments may be submitted by any of the
following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2012-109 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2012-109. This
file number should be included on the subject line if email is used.
    To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the

public in accordance with the provisions of 5 U.S.C. 552, will be
available for Web site viewing and printing in the Commission's Public
Reference Room on official business days between the hours of 10:00
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of Nasdaq. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-NASDAQ-2012-109, and should
be submitted on or before February 12, 2013.

VII. Conclusion

    In summary, and for the reasons discussed in more detail above, the
Commission believes that the rules being adopted by Nasdaq, taken as
whole, should benefit investors by helping listed companies make
informed decisions regarding the amount and form of executive
compensation. Nasdaq's new rules will help to meet Congress's intent
that compensation committees that are responsible for setting
compensation policy for executives of listed companies consist only of
independent directors.
    Nasdaq's rules also, consistent with Rule 10C-1, require
compensation committees of listed companies to assess the independence
of compensation advisers, taking into consideration six specified
factors. This should help to assure that compensation committees of
Nasdaq-listed companies are better informed about potential conflicts
when selecting and receiving advice from advisers. Similarly, the
provisions of Nasdaq's standards that require compensation committees
to be given the authority to engage and oversee compensation advisers,
and require the listed company to provide for appropriate funding to
compensate such advisers, should help to support the compensation
committee's role to oversee executive compensation and help provide
compensation committees with the resources necessary to make better
informed compensation decisions.
    For the foregoing reasons, the Commission finds that the proposed
rule change, as modified by Amendment Nos. 1 and 2, is consistent with
the Act and the rules and regulations thereunder applicable to a
national securities exchange, and, in particular, with Section 6(b)(5)
of the Act.\225\
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    \225\ 15 U.S.C. 78f(b)(5).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\226\ that the proposed rule change, SR-NASDAQ-2012-109, as
modified by Amendment Nos. 1 and 2, is approved.
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    \226\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\227\
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    \227\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-01107 Filed 1-18-13; 8:45 am]
BILLING CODE 8011-01-P