[Federal Register Volume 88, Number 67 (Friday, April 7, 2023)]
[Rules and Regulations]
[Pages 20732-20735]
[FR Doc No: 2023-07090]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2022-0889; Project Identifier AD-2021-00614-T;
Amendment 39-22373; AD 2023-05-04]
RIN 2120-AA64

Airworthiness Directives; The Boeing Company Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: The FAA is adopting a new airworthiness directive (AD) for all
The Boeing Company Model 787-8, 787-9, and 787-10 airplanes. This AD
was prompted by reports of ram air turbine (RAT) pump barrel assembly
failures, which caused the RAT to fail to provide hydraulic power. The
failures were determined to be caused by variations in the bronze metal
used during manufacturing, which can result in varying fatigue
properties. This AD requires an inspection or records review to
determine the part number of the RAT pump and control module (PCM) and
of the RAT assembly, and replacement of any RAT PCM or any RAT assembly
having certain part numbers. This AD also prohibits the installation of
affected parts. The FAA is issuing this AD to address the unsafe
condition on these products.

DATES: This AD is effective May 12, 2023.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in this AD as of May 12,
2023.

ADDRESSES:
    AD Docket: You may examine the AD docket at regulations.gov under
Docket No. FAA-2022-0889; or in person at Docket Operations between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD
docket contains this final rule, any comments received, and other
information. The address for Docket Operations is U.S. Department of
Transportation, Docket Operations, M-30, West Building Ground Floor,
Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590.
    Material Incorporated by Reference:
     For service information identified in this final rule,
contact Boeing Commercial Airplanes, Attention: Contractual & Data
Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA
90740-5600; telephone<PHONE_NUMBER>; website myboeingfleet.com.
     You may view this service information at the FAA,
Airworthiness Products Section, Operational Safety Branch, 2200 South
216th St., Des Moines, WA. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>. It is also available at
regulations.gov under Docket No. FAA-2022-0889.

FOR FURTHER INFORMATION CONTACT: Douglas Tsuji, Senior Aerospace
Engineer, Systems and Equipment Section, FAA, Seattle ACO Branch, 2200
South 216th St, Des Moines, WA 98198; phone:<PHONE_NUMBER>; email:
[email protected].

SUPPLEMENTARY INFORMATION:

Background

    The FAA issued a notice of proposed rulemaking (NPRM) to amend 14
CFR part 39 by adding an AD that would apply to all The Boeing Company
Model 787-8, 787-9, and 787-10 airplanes. The NPRM published in the
Federal Register on September 21, 2022 (87 FR 57653). The NPRM was
prompted by reports of RAT pump barrel assembly failures, which caused
the RAT to fail to provide hydraulic power. The failures were
determined to be caused by variations in the bronze metal used during
manufacturing, which can result in varying fatigue properties. In the
NPRM, the FAA proposed to require an inspection or records review to
determine the part number of the RAT PCM and of the RAT assembly, and
replacement of any RAT PCM or any RAT assembly having certain part
numbers. In the NPRM, the FAA also proposed to prohibit the
installation of affected parts. The FAA is issuing this AD to address
fatigue or cracking of the RAT hydraulic pump bronze cylinder block.
This condition, if not addressed, could cause failure of the RAT pump
and subsequent loss of backup hydraulic power for the flight controls,
which can result in loss of continued safe flight and landing.

Discussion of Final Airworthiness Directive

Comments

    The FAA received comments from the Air Line Pilots Association,
International (ALPA) who supported the NPRM without change.
    The FAA received additional comments from United Airlines (UAL),
who supported the NPRM and also had additional comments, and from
Boeing. The following presents the comments received on the NPRM and
the FAA's response to each comment.

Request To Revise a RAT Assembly Part Number

    Boeing requested that paragraphs (j)(1) and (2) of the proposed AD
be revised to specify RAT assembly part number (P/N) 7000011H08,
instead of P/N 700011H08.
    The FAA agrees with the commenter's request to fix this
typographical error and has revised paragraphs (j)(1) and (2) of this
AD accordingly.

Request To Revise the Applicability

    Boeing requested that the proposed AD be revised to specify that it
applies only to the airplanes identified in Boeing Alert Requirements
Bulletin B787-81205-SB290039-00 RB, Issue 002, dated October 26, 2021,
instead of all Model 787-8, 787-9, and 787-10 airplanes. Boeing claimed
that Model 787 airplanes delivered after the incorporation of CN-
AA82746B were configured with the current version of the RAT assembly
and PCM. Boeing added that, by design and process, there are no
alternative installation configurations permitted either in production
or in service.
    The FAA disagrees with the commenter's request. As stated in the
NPRM, the FAA considers the RAT PCMs and RAT assemblies to be rotable
parts, and has determined that these parts could later be installed on
airplanes that were initially delivered with acceptable RAT PCMs and
RAT assemblies, thereby subjecting those airplanes to the unsafe
condition. The FAA acknowledges there is a low possibility that
airplanes delivered with the latest parts have had those parts
replaced, but the possibility does exist. The FAA has not changed this
AD regarding this issue.

Request To Clarify Related AD

    UAL requested clarification of how the requirements of AD 2016-07-
25, Amendment 39-18470 (71 FR 21720, April 13, 2016) (AD 2016-07-25)
impact the requirements of the proposed AD. UAL noted that Boeing Alert
Requirements Bulletin B787-81205-SB290039-00 RB, Issue 002, dated
October 26, 2021, provides an alternative method of compliance (AMOC)
for AD 2016-07-25 to incorporate Boeing Alert Requirements Bulletin
B787-81205-SB290039-00 RB, Issue 002, dated October 26, 2021, on
aircraft in the applicability of AD 2016-07-05.
    The FAA agrees to clarify. AD 2016-07-25 will not affect this AD.
AD 2016-07-25 requires changes to the RAT assembly's volume fuse to
address potential failure of the RAT pump at low speeds. AD 2016-07-25
requires installation of a new RAT assembly, P/N 7000011H08, with a
compliance time of within 36 months after May 18, 2016. This AD
requires replacing any RAT assembly having P/N 7000011H08 with P/N
7000011H09. The RAT assembly P/N 7000011H09 incorporates the previous
volume fuse changes and the new pump barrel changes. The AMOC to AD
2016-07-25 associated with Boeing Alert Requirements Bulletin B787-
81205-SB290039-00 RB Issue 002, dated October 26 2021, essentially
allows installation of the RAT assembly having P/N 7000011H09 in lieu
of P/N 7000011H08. The FAA has not changed this AD regarding this
issue.

Conclusion

    The FAA reviewed the relevant data, considered any comments
received, and determined that air safety requires adopting this AD as
proposed. Accordingly, the FAA is issuing this AD to address the unsafe
condition on these products. Except for minor editorial changes, and
any other changes described previously, this AD is adopted as proposed
in the NPRM. None of the changes will increase the economic burden on
any operator.

Related Service Information Under 1 CFR Part 51

    The FAA reviewed Boeing Alert Requirements Bulletin B787-81205-
SB290039-00 RB, Issue 002, dated October 26, 2021. This service
information specifies procedures for replacing any RAT PCM having part
number (P/N) 7001267H06 with P/N 7001267H07, and replacing any RAT
assembly having P/N 7000011H08 with P/N 7000011H09. This service
information is reasonably available because the interested parties have
access to it through their normal course of business or by the means
identified in ADDRESSES.

Costs of Compliance

    The FAA estimates that this AD affects 148 airplanes of U.S.
registry. The FAA estimates the following costs to comply with this AD:

                                      Estimated Costs for Required Actions
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per       Cost on U.S.
               Action                        Labor cost           Parts cost        product         operators
----------------------------------------------------------------------------------------------------------------
Inspection or records review........  1 work-hour x $85 per                $0              $85          $12,580
                                       hour = $85.
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                                      Estimated Costs for Optional Actions
----------------------------------------------------------------------------------------------------------------
                Action                        Labor cost               Parts cost            Cost per product
----------------------------------------------------------------------------------------------------------------
Replace RAT PCM......................  5 work-hours x $85 per   Up to $95,210..........  Up to $95,635.
                                        hour = $425.
Replace RAT assembly.................  5 work-hours x $85 per   Up to $680,912.........  Up to $681,337.
                                        hour = $425.
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Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.
    The FAA is issuing this rulemaking under the authority described in

Subtitle VII, Part A, Subpart III, Section 44701: General requirements.
Under that section, Congress charges the FAA with promoting safe flight
of civil aircraft in air commerce by prescribing regulations for
practices, methods, and procedures the Administrator finds necessary
for safety in air commerce. This regulation is within the scope of that
authority because it addresses an unsafe condition that is likely to
exist or develop on products identified in this rulemaking action.

Regulatory Findings

    This AD will not have federalism implications under Executive Order
13132. This AD will not have a substantial direct effect on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government.
    For the reasons discussed above, I certify that this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Will not affect intrastate aviation in Alaska, and
    (3) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

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

The Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive:

2023-05-04 The Boeing Company: Amendment 39-22373; Docket No. FAA-
2022-0889; Project Identifier AD-2021-00614-T.

(a) Effective Date

    This airworthiness directive (AD) is effective May 12, 2023.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to all The Boeing Company Model 787-8, 787-9,
and 787-10 airplanes, certificated in any category.

(d) Subject

    Air Transport Association (ATA) of America Code 29, Hydraulic
power.

(e) Unsafe Condition

    This AD was prompted by reports of ram air turbine (RAT)
assembly failures, which caused the RAT to fail to provide hydraulic
power. The failures were determined to be caused by variations in
the bronze metal used during manufacturing, which can result in
varying fatigue properties. The FAA is issuing this AD to address
fatigue or cracking of the RAT hydraulic pump bronze cylinder block.
This condition, if not addressed, could cause failure of the RAT
pump and subsequent loss of backup hydraulic power for the flight
controls, which can result in loss of continued safe flight and
landing.

(f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) Inspection

    For airplanes with an original airworthiness certificate or
original export certificate of airworthiness issued on or before the
effective date of this AD: Within 60 months after the effective date
of this AD, inspect the RAT pump and control module (PCM) and the
RAT assembly to determine the part number. A review of airplane
maintenance records is acceptable in lieu of this inspection if the
RAT PCM and the RAT assembly part numbers can be conclusively
determined from that review.

(h) Replacements

    If, during the inspection required by paragraph (g), any RAT PCM
having part number (P/N) 7001267H06 or any RAT assembly having P/N
7000011H08 is found: Except as specified by paragraph (i) of this
AD, at the applicable times specified in the ``Compliance''
paragraph of Boeing Alert Requirements Bulletin B787-81205-SB290039-
00 RB, Issue 002, dated October 26, 2021, do all applicable actions
identified in, and in accordance with, the Accomplishment
Instructions of Boeing Alert Requirements Bulletin B787-81205-
SB290039-00 RB, Issue 002, dated October 26, 2021.
    Note 1 to paragraph (h): Guidance for accomplishing the actions
required by this AD can be found in Boeing Alert Service Bulletin
B787-81205-SB290039-00, Issue 002, dated October 26, 2021, which is
referred to in Boeing Alert Requirements Bulletin B787-81205-
SB290039-00 RB, Issue 002, dated October 26, 2021.

(i) Exception to Service Information Specifications

    Where Boeing Alert Requirements Bulletin B787-81205-SB290039-00
RB, Issue 002, dated October 26, 2021, uses the phrase ``the Issue
001 date of Requirements Bulletin B787-81205-SB290039-00 RB,'' this
AD requires using ``the effective date of this AD.''

(j) Parts Installation Prohibition

    (1) For airplanes with an original airworthiness certificate or
original export certificate of airworthiness issued after the
effective date of this AD: Installation of a RAT PCM, part number
(P/N) 7001267H06, or RAT assembly, P/N 7000011H08, is prohibited as
of the effective date of this AD.
    (2) For airplanes with an original airworthiness certificate or
original export certificate of airworthiness issued on or before the
effective date of this AD, installation of a RAT PCM, P/N
7001267H06, or RAT assembly, P/N 7000011H08, is allowed until the
actions required by paragraph (h) of this AD are accomplished.

(k) Credit for Previous Actions

    This paragraph provides credit for the actions specified in
paragraph (h) of this AD, if those actions were performed before the
effective date of this AD using Boeing Alert Requirements Bulletin
B787-81205-SB290039-00 RB, Issue 001, dated November 3, 2020.

(l) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Seattle ACO Branch, FAA, has the authority to
approve AMOCs for this AD, if requested using the procedures found
in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request
to your principal inspector or responsible Flight Standards Office,
as appropriate. If sending information directly to the manager of
the certification office, send it to the attention of the person
identified in paragraph (m)(1) of this AD. Information may be
emailed to: [email protected].
    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the responsible Flight Standards Office.
    (3) An AMOC that provides an acceptable level of safety may be
used for any repair, modification, or alteration required by this AD
if it is approved by The Boeing Company Organization Designation
Authorization (ODA) that has been authorized by the Manager, Seattle
ACO Branch, FAA, to make those findings. To be approved, the repair
method, modification deviation, or alteration deviation must meet
the certification basis of the airplane, and the approval must
specifically refer to this AD.

(m) Additional Information

    (1) For more information about this AD, contact Douglas Tsuji,
Senior Aerospace Engineer, Systems and Equipment Section, FAA,
Seattle ACO Branch, 2200 South 216th St., Des Moines, WA 98198;
phone:<PHONE_NUMBER>; email: [email protected].
    (2) Service information identified in this AD that is not
incorporated by reference is available at the addresses specified in
paragraphs (n)(3) and (4) of this AD.

(n) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.

    (2) You must use this service information as applicable to do
the actions required by this AD, unless the AD specifies otherwise.
    (i) Boeing Alert Requirements Bulletin B787-81205-SB290039-00
RB, Issue 002, dated October 26, 2021.
    (ii) [Reserved]
    (3) For service information identified in this AD, contact
Boeing Commercial Airplanes, Attention: Contractual & Data Services
(C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-
5600; telephone<PHONE_NUMBER>; website myboeingfleet.com.
    (4) You may view this service information at the FAA,
Airworthiness Products Section, Operational Safety Branch, 2200
South 216th St., Des Moines, WA. For information on the availability
of this material at the FAA, call<PHONE_NUMBER>.
    (5) You may view this service information that is incorporated
by reference at the National Archives and Records Administration
(NARA). For information on the availability of this material at
NARA, [email protected], or go to: www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued on March 5, 2023.
Christina Underwood,
Acting Director, Compliance & Airworthiness Division, Aircraft
Certification Service.
[FR Doc. 2023-07090 Filed 4-6-23; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register: March 26, 2009 (Volume 74, Number 57)]
[Notices]
[Page 13305]
[DOCID:fr26mr09-133]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

Agency Information Collection Activity Seeking OMB Approval

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice.

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SUMMARY: The FAA invites public comments about our intention to request
the Office of Management and Budget's (OMB) revision of a current
information collection. The Federal Register Notice with a 60-day
comment period soliciting comments on the following collection of
information was published on October 31, 2008, vol. 73, no. 212, pages
65005. The information is collected from holders of FAA production
approvals and selected suppliers to obtain their input on how well the
agency is performing the administration and conduct of the Aircraft
Certification Systems Evaluation Program (ACSEP).

DATES: Please submit comments by April 27, 2009.

FOR FURTHER INFORMATION CONTACT: Carla Mauney at<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Federal Aviation Administration (FAA)

    Title: ACSEP Evaluation Customer Feedback Report.
    Type of Request: Extension without change of a currently approved
collection.
    OMB Control Number: 2120-0605.
    Form(s): Form 8100-7.
    Affected Public: An estimated 200 Respondents.
    Frequency: This information is collected on occasion.
    Estimated Average Burden per Response: Approximately 30 minutes per
response.
    Estimated Annual Burden Hours: An estimated 100 hours annually.
    Abstract: The information is collected from holders of FAA
production approvals and selected suppliers to obtain their input on
how well the agency is performing the administration and conduct of the
Aircraft Certification Systems Evaluation Program (ACSEP).

ADDRESSES: Interested persons are invited to submit written comments on
the proposed information collection to the Office of Information and
Regulatory Affairs, Office of Management and Budget. Comments should be
addressed to the attention of the Desk Officer, Department of
Transportation/FAA, and sent via electronic mail to oira_
<EMAIL_ADDRESS>or faxed to<PHONE_NUMBER>, or mailed to the
Office of Information and Regulatory Affairs, Office of Management and
Budget, Docket Library, Room 10102, 725 17th Street, NW., Washington,
DC 20503.
    Comments are invited on: Whether the proposed collection of
information is necessary for the proper performance of the functions of
the Department, including whether the information will have practical
utility; the accuracy of the Department's estimates of the burden of
the proposed information collection; ways to enhance the quality,
utility, and clarity of the information to be collected; and ways to
minimize the burden of the collection of information on respondents,
including the use of automated collection techniques or other forms of
information technology.

    Issued in Washington, DC, on March 16, 2009.
Carla Mauney,
FAA Information Collection Clearance Officer, IT Enterprises Business
Services Division, AES-200.
[FR Doc. E9-6182 Filed 3-25-09; 8:45 am]

BILLING CODE 4910-13-M


[Federal Register: July 15, 2010 (Volume 75, Number 135)]
[Notices]
[Page 41264]
[DOCID:fr15jy10-110]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62430; File No. SR-ISE-2010-69]

Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Relating To Amending the Direct Edge ECN Fee Schedule;
Correction

AGENCY: Securities and Exchange Commission.

ACTION: Notice; correction.

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SUMMARY: The Securities and Exchange Commission published a document in
the Federal Register of July 8, 2010, concerning a Notice of Filing and
Immediate Effectiveness of Proposed Rule Change Relating to Amending
the Direct Edge ECN Fee Schedule by the International Securities
Exchange, LLC; The document contained a typographical error in several
section designations.

FOR FURTHER INFORMATION CONTACT: Yvonne Fraticelli, Division of Trading
and Markets, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549,<PHONE_NUMBER>.

Correction

    In the Federal Register of July 8, 2010, in FR Doc. 2010-16668, on
page 39313, in the first line of the second column, correct the section
designation to read ``II.'', and on page 39314, fifth line from the
bottom of the first column and in the Solicitation of Comments heading
in the second column, correct the section designations to read ``III.''
and ``IV.'', respectively.

    Dated: July 9, 2010.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-17215 Filed 7-14-10; 8:45 am]
BILLING CODE 8010-01-P


[Federal Register Volume 82, Number 31 (Thursday, February 16, 2017)]
[Notices]
[Page 10947]
[FR Doc No: 2017-03111]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80022; File No. SR-NYSE-2016-72]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Designation of a Longer Period for Commission Action on
Proposed Rule Change Amending Its Listing Standards for Special Purpose
Acquisition Companies

February 10, 2017.
    On December 8, 2016, the New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend its listing standards for Special Purpose
Acquisition Companies (``SPAC'') to: (1) No longer require a
shareholder vote and to refine existing procedures to affect business
combination; and (2) adjust the quantitative requirements for initial
and continued listing. The proposed rule change was published for
comment in the Federal Register on December 29, 2016.\3\ The Commission
received no comments on the proposal.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 79676 (December 22,
2016), 81 FR 96150 (December 29, 2016) (``Notice'').
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    Section 19(b)(2) of the Act \4\ provides that within 45 days of the
publication of notice of the filing of a proposed rule change, or
within such longer period up to 90 days as the Commission may designate
if it finds such longer period to be appropriate and publishes its
reasons for so finding, or as to which the self-regulatory organization
consents, the Commission shall either approve the proposed rule change,
disapprove the proposed rule change, or institute proceedings to
determine whether the proposed rule change should be disapproved. The
45th day after publication of the notice for this proposed rule change
is February 12, 2017. The Commission is extending this 45-day time
period.
    The Commission finds it appropriate to designate a longer period
within which to take action on the proposed rule change so that it has
sufficient time to consider the proposal. Accordingly, the Commission,
pursuant to Section 19(b)(2) of the Act,\5\ designates March 29, 2017,
as the date by which the Commission shall either approve or disapprove,
or institute proceedings to determine whether to disapprove, the
proposed rule change (File No. SR-NYSE-2016-72).
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    \4\ 15 U.S.C. 78s(b)(2).
    \5\ Id.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(31).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-03111 Filed 2-15-17; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 83, Number 53 (Monday, March 19, 2018)]
[Notices]
[Pages 12063-12066]
[FR Doc No: 2018-05453]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82868; File No. SR-MIAX-2018-08]

Self-Regulatory Organizations; Miami International Securities
Exchange LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Its Fee Schedule

March 13, 2018.
    Pursuant to the provisions of Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on February 28, 2018, Miami International
Securities Exchange LLC (``MIAX Options'' or ``Exchange'') filed with
the Securities and Exchange Commission (``Commission'') a proposed rule
change as described in Items I, II, and III below, which Items have
been prepared by the Exchange. The Commission is publishing this notice
to solicit comments on the proposed rule change from interested
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange is filing a proposal to amend the MIAX Options Fee
Schedule (the ``Fee Schedule'').
    The text of the proposed rule change is available on the Exchange's
website at http://www.miaxoptions.com/rule-filings, at MIAX's principal
office, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend the Fee Schedule to modify certain
aspects of the following fees that apply to MIAX Options Market Makers:
(i) The Monthly Trading Permit fees; and (ii) the MEI Port fees.
    The Exchange issues Trading Permits that confer the ability to
transact on the Exchange.\3\ Currently, the Exchange assesses the
following monthly fees for MIAX Options Market Maker Trading Permits:
(i) $7,000 for Market Maker Assignments in up to 10 option classes or
up to 20% of option classes by volume; (ii) $12,000 for Market Maker
Assignments in up to 40 option classes or up to 35% of option classes
by volume; (iii) $17,000 for Market Maker Assignments in up to 100
option classes or up to 50% of option classes by volume; and (iv)
$22,000.00 for Market Maker Assignments in over 100 option classes or
over 50% of option classes by volume up to all option classes listed on
MIAX Options.\4\ For the calculation of these monthly Trading Permit
fees, the number of classes is defined as the greatest number of
classes the Market Maker was assigned to quote in on any given day
within the calendar month and the class volume percentage is based on
the total national average daily volume in classes listed on MIAX
Options in the prior calendar quarter.\5\ Newly listed option classes
are excluded from the calculation of the monthly Market Maker Trading
Permit fee until the calendar quarter following their listing, at which
time the newly listed option classes will be included in both the per
class count and the percentage of total national average daily volume.
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    \3\ There is no limit on the number of Trading Permits that may
be issued by the Exchange; however, the Exchange has the authority
to limit or decrease the number of Trading Permits it has determined
to issue provided it complies with the provisions set forth in Rule
200(a) and Section 6(c)(4) of the Exchange Act. See 15 U.S.C.
78(f)(c)(4). For a complete description of MIAX Options Trading
Permits, see MIAX Rule 200.
    \4\ See the Fee Schedule, Section 3(b).
    \5\ The Exchange will use the following formula to calculate the
percentage of total national average daily volume that the Market
Maker assignment is for purposes of the Market Maker trading permit
fee for a given month:
    Market Maker assignment percentage of national average daily
volume = [total volume during the prior calendar quarter in a class
in which the Market Maker was assigned]/[total national volume in
classes listed on MIAX Options in the prior calendar quarter].
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    The Exchange assesses Market Makers the monthly Trading Permit fee
based on the greatest number of classes listed on MIAX Options that the
Market Maker was assigned to quote on any given day within a calendar
month and the applicable fee rate that is the lesser of either the per
class basis or percentage of total national average daily volume
measurement. Members receiving Trading Permits during the month will be
assessed Trading Permit fees according to this schedule, except that
the calculation of the Trading Permit fee for the first month in which
the Trading Permit is issued will be pro-rated based on the number of
trading days occurring after the date on which the Trading Permit was
in effect during that first month divided by the total number of
trading days in such month multiplied by the monthly rate.
    The Exchange now proposes to modify its Trading Permit fees that
apply to the Market Makers who fall within the following Trading Permit
fee levels, which represent the 3rd and 4th levels of the fee table:
(i) Market Maker Assignments in up to 100 option classes or up to 50%
of option classes by volume; and (ii) Market Maker Assignments in over
100 option classes or over 50% of option classes by volume up to all
option classes listed on MIAX Options. Specifically, the Exchange
proposes for these Monthly Trading Permit Fee levels, if the Market
Maker's total monthly executed volume during the relevant month is less
than 0.075% of the total monthly executed volume reported by OCC in the
market maker account type for MIAX-listed option classes for that
month, then the fee will be $15,500 instead of the fee otherwise
applicable to such level.
    The purpose of this proposed change is to provide a lower fixed
cost to those Market Makers who are willing to quote the entire
Exchange market (or substantial amount of the Exchange market), as
objectively measured by either number of classes assigned or national
ADV, but who do not otherwise execute a significant amount of volume on
the Exchange. The Exchange believes that, by offering lower fixed costs
to Market Makers that execute less volume, the Exchange will retain and
attract smaller-scale Market Makers, which are an integral component of
the option marketplace, but have been decreasing in number in recent
years, due to industry consolidation and lower market maker
profitability. Since these

smaller-scale Market Makers utilize less Exchange capacity due to lower
overall volume executed, the Exchange believes it is reasonable and
equitable to offer such Market Makers a lower fixed cost. The Exchange
notes that other options exchanges assess certain of their membership
fees at different rates, based upon a member's participation on that
exchange,\6\ and, as such, this concept is not novel. The proposed
changes to the Trading Permit fees for Market Makers who fall within
the 3rd and 4th levels of the fee table are based upon a business
determination of current Market Maker assignments and trading volume.
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    \6\ Cboe BZX Options Exchange (``BZX Options'') assesses the
Participant Fee, which is a membership fee, according to a member's
ADV. See Cboe BZX Options Exchange Fee Schedule under ``Membership
Fees''. The Participant Fee is $500 if the member ADV is under 5000
and $1,000 if the member ADV is equal to or over 5000. Id.
---------------------------------------------------------------------------

    The Exchange also proposes to modify its MEI Port fees assessable
to certain Market Makers. Currently, MIAX Options assesses monthly MEI
Port fees on Market Makers based upon the number of classes or class
volume accessed by the Market Maker. Market Makers are allocated two
(2) Full Service MEI Ports \7\ and two (2) Limited Service MEI Ports
per matching engine \8\ to which they connect. The Exchange currently
assesses the following MEI Port fees: (a) $5,000 for Market Maker
Assignments in up to 5 option classes or up to 10% of option classes by
volume; (b) $10,000 for Market Maker Assignments in up to 10 option
classes or up to 20% of option classes by volume; (c) $14,000 for
Market Maker Assignments in up to 40 option classes or up to 35% of
option classes by volume; (d) $17,500 for Market Maker Assignments in
up to 100 option classes or up to 50% of option classes by volume; and
(e) $20,500 for Market Maker Assignments in over 100 option classes or
over 50% of option classes by volume up to all option classes listed on
MIAX Options.\9\ The Exchange also currently charges $100 per month for
each additional Limited Service MEI Port per matching engine for Market
Makers over and above the two (2) Limited Service MEI Ports per
matching engine that are allocated with the Full Service MEI Ports. The
Full Service MEI Ports, Limited Service MEI Ports and the additional
Limited Service MEI Ports all include access to the Exchange's Primary
and Secondary data centers and its Disaster Recovery center. For the
calculation of the monthly MEI Port fees that apply to Market Makers,
the number of classes is defined as the greatest number of classes the
Market Maker was assigned to quote in on any given day within the
calendar month and the class volume percentage is based on the total
national average daily volume in classes listed on MIAX Options in the
prior calendar quarter.\10\ Newly listed option classes are excluded
from the calculation of the monthly MEI Port fee until the calendar
quarter following their listing, at which time the newly listed option
classes will be included in both the per class count and the percentage
of total national average daily volume.
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    \7\ Full Service MEI Ports provide Market Makers with the
ability to send Market Maker quotes, eQuotes, and quote purge
messages to the MIAX Options System. Full Service MEI Ports are also
capable of receiving administrative information. Market Makers are
limited to two Full Service MEI Ports per matching engine.
    \8\ A ``matching engine'' is a part of the MIAX Options
electronic system that processes options quotes and trades on a
symbol-by-symbol basis. Some matching engines will process option
classes with multiple root symbols, and other matching engines will
be dedicated to one single option root symbol (for example, options
on SPY will be processed by one single matching engine that is
dedicated only to SPY). A particular root symbol may only be
assigned to a single designated matching engine. A particular root
symbol may not be assigned to multiple matching engines.
    \9\ See the Fee Schedule, Section 5(d)(ii).
    \10\ The Exchange will use the following formula to calculate
the percentage of total national average daily volume that the
Market Maker assignment is for purposes of the MEI Port fee for a
given month:
    Market Maker assignment percentage of national average daily
volume = [total volume during the prior calendar quarter in a class
in which the Market Maker was assigned]/[total national volume in
classes listed on MIAX Options in the prior calendar quarter].
---------------------------------------------------------------------------

    The Exchange assesses Market Makers the monthly MEI Port fees based
on the greatest number of classes listed on MIAX Options that the
Market Maker was assigned to quote on any given day within a calendar
month and the applicable fee rate that is the lesser of either the per
class basis or percentage of total national average daily volume
measurement.
    The Exchange now proposes to modify its MEI Port fees that apply to
the Market Makers who fall within the following MEI Port fee levels,
which represent the 4th and 5th levels of the fee table: Market Makers
who have (i) Assignments in up to 100 option classes or up to 50% of
option classes by volume and (ii) Assignments in over 100 option
classes or over 50% of option classes by volume up to all option
classes listed on MIAX Options. Specifically, the Exchange proposes for
these Monthly MEI Port Fee levels, if the Market Maker's total monthly
executed volume during the relevant month is less than 0.075% of the
total monthly executed volume reported by OCC in the market maker
account type for MIAX-listed option classes for that month, then the
fee will be $14,500 instead of the fee otherwise applicable to such
level.
    The purpose of this proposed change is to provide a lower fixed
cost to those Market Makers who are willing to quote the entire
Exchange market (or substantial amount of the Exchange market), as
objectively measured by either number of classes assigned or national
ADV, but who do not otherwise execute a significant amount of volume on
the Exchange. The Exchange believes that, by offering lower fixed costs
to Market Makers that execute less volume, the Exchange will retain and
attract smaller-scale Market Makers, which are an integral component of
the option industry marketplace, but have been decreasing in number in
recent years, due to industry consolidation and lower market maker
profitability. Since these smaller-scale Market Makers utilize less
Exchange capacity due to lower overall volume executed, the Exchange
believes it is reasonable and appropriate to offer such Market Makers a
lower fixed cost. The Exchange notes that other options exchanges
assess certain of their membership fees at different rates, based upon
a member's participation on that exchange,\11\ and, as such, this
concept is not novel. The proposed changes to the MEI Port fees for
Market Makers who fall within the 4th and 5th levels of the fee table
are based upon a business determination of current Market Maker
assignments and trading volume.
---------------------------------------------------------------------------

    \11\ See supra note 6. Also, regarding port fees specifically,
Nasdaq Phlx LLC (``Phlx'') capped its Active SQF Port fee at $500
per month for smaller member organizations that they defined as
``Phlx Only Members'' and that had ``50 or less SQT assignments
affiliated with their member organizations'' so that ``the Exchange
may provide an equal opportunity to all members to access the
Specialized Quote Fee (``SQF'') data at a lower cost.'' See
Securities Exchange Act Release No. 64381 (May 3, 2011), 76 FR 26777
(May 9, 2011) (SR-Phlx-2011-57). Phlx currently caps all Active SQF
Port fees assessed to members at $42,000 per month. See the Nasdaq
Phlx LLC Pricing Schedule, Article VII, Section B. Phlx more
recently capped the total fees assessable to PSX Participants at
$30,000 per month and stated as reasoning that ``[t]he Exchange
believes that the proposed fee cap will make PSX a more attractive
venue for Participants, and help PSX both retain and attract new
Participants.'' See Securities Exchange Act Release No. 78665
(August 24, 2016), 81 FR 59693 (August 30, 2016) (SR-Phlx-2016-85).
See the Nasdaq Phlx LLC Pricing Schedule, Article VIII.
---------------------------------------------------------------------------

    The proposed rule changes are scheduled to become operative on
March 1, 2018.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \12\

in general, and furthers the objectives of Section 6(b)(4) of the Act
\13\ in particular, in that it provides for the equitable allocation of
reasonable dues, fees and other charges among Exchange members and
issuers and other persons using any facility or system which the
Exchange operates or controls. The Exchange also believes the proposal
furthers the objectives of Section 6(b)(5) of the Act \14\ in that it
is designed to promote just and equitable principles of trade, to
remove impediments to and perfect the mechanism of a free and open
market and a national market system, and, in general to protect
investors and the public interest and is not designed to permit unfair
discrimination between customer, issuers, brokers and dealers.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(4).
    \14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed amendments to the Trading
Permit fees are consistent with Section 6(b)(4) of the Act in that they
are reasonable, equitable and not unfairly discriminatory. The proposed
amendments to the Trading Permit fees are reasonable in that, by
offering lower fixed costs to Market Makers that execute less volume,
the Exchange will retain and attract smaller-scale Market Makers, which
are an integral component of the option industry marketplace, but have
been decreasing in number in recent years, due to industry
consolidation and lower market maker profitability. Since these
smaller-scale Market Makers utilize less Exchange capacity due to lower
overall volume executed, the Exchange believes it is reasonable and
appropriate to offer such Market Makers a lower fixed cost who are
willing to quote the majority or entirety of the market. The Exchange
also believes that its proposal is consistent with Section 6(b)(5) of
the Act \15\ because it will be uniformly applied to all Market Makers
that execute less volume on the Exchange, as determined and measured by
a uniform, objective, quantitative volume amount. The proposed Trading
Permit fees are fair and equitable and not unreasonably discriminatory
because they apply equally to all similarly situated Market Makers
regardless of type and access to the Exchange is offered on terms that
are not unfairly discriminatory.
---------------------------------------------------------------------------

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

    The Exchange believes that the proposed amendments to the MEI Port
fees are consistent with Section 6(b)(4) of the Act in that they are
reasonable, equitable and not unfairly discriminatory. The proposed
amendments to the MEI Port fees are reasonable in that, by offering
lower fixed costs to Market Makers that execute less volume, the
Exchange will retain and attract smaller-scale Market Makers, which are
an integral component of the option industry marketplace, but have been
decreasing in number in recent years, due to industry consolidation and
lower market maker profitability. Since these smaller-scale Market
Makers utilize less Exchange capacity due to lower overall volume
executed, the Exchange believes it is reasonable and appropriate to
offer such Market Makers (who are willing to quote the majority or
entirety of the market) a lower fixed cost. The Exchange also believes
that its proposal is consistent with Section 6(b)(5) of the Act \16\
because it will be uniformly applied to all Market Makers that execute
less volume on the Exchange, as determined and measured by a uniform,
objective, quantitative volume amount. The proposed MEI Port fees are
fair and equitable and not unreasonably discriminatory because they
apply equally to all similarly situated Market Makers regardless of
type and access to the Exchange is offered on terms that are not
unfairly discriminatory.
---------------------------------------------------------------------------

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

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 believes that the
proposed rule changes will increase both intermarket and intramarket
competition by enabling smaller-scale Market Makers who are willing to
quote the entire marketplace (or a substantial amount of the entire
marketplace) to access the Exchange at a lower fixed cost. By offering
lower fixed costs to Market Makers that execute less volume, the
Exchange believes that it will retain and attract smaller-scale Market
Makers, which are an integral component of the option industry
marketplace, but have been decreasing in number in recent years, due to
industry consolidation and lower market maker profitability. Since
these smaller-scale Market Makers utilize less Exchange capacity due to
lower overall volume executed, the Exchange believes it is reasonable
and appropriate to offer such Market Makers a lower fixed cost.
    The Exchange notes that it 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. In such an
environment, the Exchange must continually adjust its fees to remain
competitive with other exchanges and to attract order flow to the
Exchange. The Exchange believes that the proposed rule changes reflect
this competitive environment because they modify the Exchange's fees in
a manner that continues to encourage market participants to register as
Market Makers on the Exchange, to provide liquidity and to attract
order flow. To the extent that this purpose is achieved, all the
Exchange's market participants should benefit from the improved market
liquidity.

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

    Written comments were neither solicited nor received.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act,\17\ and Rule 19b-4(f)(2) \18\ thereunder.
At any time within 60 days of the filing of the proposed rule change,
the Commission summarily may temporarily suspend such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act. If the Commission takes such
action, the Commission shall institute proceedings to determine whether
the proposed rule should be approved or disapproved.
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \18\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-MIAX-2018-08 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-MIAX-2018-08. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-MIAX-2018-08 and should be submitted on
or before April 9, 2018.
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-05453 Filed 3-16-18; 8:45 am]
BILLING CODE 8011-01-P