[Federal Register Volume 81, Number 124 (Tuesday, June 28, 2016)]
[Notices]
[Pages 42027-42030]
[FR Doc No: 2016-15171]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78121; File No. SR-BatsEDGA-2016-12]

Self-Regulatory Organizations; Bats EDGA Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change Related
to Fees

June 22, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on June 8, 2016, Bats EDGA Exchange, Inc. (the ``Exchange'' or
``EDGA'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II
and III below, which Items have been prepared by the Exchange. The
Exchange has designated the proposed rule change as one establishing or
changing a member due, fee, or other charge imposed by the Exchange
under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2)
thereunder,\4\ which renders the proposed rule change effective upon
filing with the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange filed a proposal to amend the fee schedule applicable
to Members \5\ and non-members of the Exchange pursuant to EDGA Rules
15.1(a) and (c) (``Fee Schedule'') to: (i) Add fee codes NA and NB;
(ii) add new Volume Tier 3; and (iii) delete the MidPoint Discretionary
Order Add Volume Tier.
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    \5\ The term ``Member'' is defined as ``any registered broker or
dealer that has been admitted to membership in the Exchange.'' See
Exchange Rule 1.5(n).
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    The text of the proposed rule change is available at the Exchange's
Web site at www.batstrading.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 parts of such statements.

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

1. Purpose
    The Exchange proposes to amend its Fee Schedule to: (i) Add fee
codes NA and NB; (ii) add new Volume Tier 3; and (iii) delete the
MidPoint Discretionary Order Add Volume Tier.
Fee Codes NA and NB
    The Exchange previously filed a proposed rule change with the
Commission to include a Non-Displayed \6\ instruction on orders routed
to an away Trading Center.\7\ The Exchange intends to implement this
functionality on June 1, 2016.\8\ Because other Trading Centers
typically provide different rebates or fees with respect to non-
displayed liquidity the Exchange proposes to amend its Fee Schedule to
add fee codes NA and NB, which would apply to orders routed with a Non-
Displayed instruction. Proposed fee code NA would be applied to orders
that include a Non-Displayed instruction that are routed to and add
liquidity on Bats EDGX Exchange, Inc. (``EDGX''), Bats BZX Exchange,
Inc. (``BZX''), the New York Stock Exchange, Inc. (``NYSE''), NYSE
Arca, Inc. (``NYSE Arca''), NYSE MKT LLC (``NYSE MKT''), or the Nasdaq
Stock Market LLC (``Nasdaq'').\9\ Orders that yield fee code NA would
not be charged a fee nor receive a rebate in both securities priced at
or above $1.00 or below $1.00. Proposed fee code NB would be applied to
orders that include a Non-Displayed instruction and are routed to and
add liquidity on any exchange not listed in proposed fee code NA.
Orders that yield fee code NB would be charged a fee of $0.0030 per
share in securities priced at or above $1.00 and 0.30% of the trade's
total dollar value in securities priced below $1.00.
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    \6\ See Exchange Rule 11.6(e)(2).
    \7\ The Exchange notes that the Exchange also amended its rules
to route orders with a Reserve Quantity (as defined in Rule 11.6(m))
as such to other Trading Centers. See Securities Exchange Act 77189
(February 19, 2016), 81 FR 9571 (February 25, 2016) (SR-EDGX-2016-
08). Orders to be routed with a Non-Displayed instruction or a
Reserve Quantity would be handled in accordance with the rules of
the Trading Center to which they are routed. Id. This proposal does
not impact orders routed with a Reserve Quantity.
    \8\ See Bats Announces Support for Hidden Post-to-Away Routed
Orders, available at http://cdn.batstrading.com/resources/release_notes/2016/Bats-Announces-Support-for-Hidden-Post-to-Away-Routed-Orders.pdf.
    \9\ Today, all orders that are routed to post to an away market
are routed for display on such market and receive the following
rates: (i) Rebate of $0.0015 per share for orders routed to the
NYSE; (ii) rebate of $0.0021 per share for Tapes A and C securities
and a rebate of $0.0022 per share for Tape B securities for orders
routed to NYSE Arca; (iii) rebate of $0.0015 per share for orders
routed to NYSE MKT; (iv) rebate of $0.0015 per share for orders
routed to Nasdaq; and (v) a rebate of $0.0020 per share for orders
routed to EDGX or BZX. See the Exchange's Fee Schedule available at
http://batstrading.com/support/fee_schedule/edgx/. These rates
generally represent a pass through of the rate that Bats Trading,
Inc. (``Bats Trading''), the Exchange's affiliated routing broker-
dealer, is provided for adding displayed liquidity at NYSE, NYSE
Arca, NYSE MKT, Nasdaq, EDGX, or BZX when it does not qualify for a
volume tiered reduced fee or enhanced rebate.
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Proposed Volume Tier 3
    The Exchange determines the liquidity adding reduced fee that it
will charge Members using a tiered pricing structure. Currently, the
Exchange charges reduced fee of $0.0003 per share under two Volume
Tiers described in footnote 4 of the Fee Schedule. To receive Volume
Tier 1's reduced fee, a Member must add an ADV \10\ of at least 1% of
the TCV,\11\ including orders with a Non-Displayed instruction that add
liquidity. To receive Volume Tier 2's reduced fee, a Members must add
an ADV of at least 0.25% of the TCV, including orders with a Non-
Displayed instruction that add liquidity; and removes an ADV of at
least 0.25% of the TCV. The Exchange now propose to add Volume Tier 3
under which a Member would be charged a reduced fee of $0.0003 per
share where that Member adds an ADV of at least 0.15% of TCV, including
non-displayed orders that add liquidity; and has an ``added liquidity''
as a percentage of ``added plus removed liquidity'' of at least 85%.
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    \10\ As defined in the Exchange's Fee Schedule.
    \11\ Id.
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Deletion of MidPoint Discretionary Order Add Volume Tier
    The Exchange currently offers the MidPoint Discretionary Order Add
Volume Tier under which a Member is charged a reduced fee of $0.0003
per share where they add an ADV of at least 0.15% of the TCV including
non-displayed orders that add liquidity; and add or remove an ADV of at
least 500,000 shares yielding fee codes DM or DT.\12\ The Exchange now
proposes to delete the MidPoint Discretionary Order Add Volume Tier.
The Exchange notes that Members that previously qualified for the
MidPoint Discretionary Order Add Volume Tier may achieve the same
reduced fee by satisfying what the Exchange believes to be
substantially similar criteria as the proposed Volume Tier 3 discussed
above, or the existing tiers under footnote 4 of the Fee Schedule.
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    \12\ Fee code DM is appended to MidPoint Discretionary Orders
with a Non-Displayed instruction that add liquidity. Id. Fee code DT
is appended to MidPoint Discretionary Orders with a Non-Displayed
instruction that remove liquidity. Id.
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Implementation Date
    The Exchange proposes to implement these amendments to its Fee
Schedule effective immediately.\13\
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    \13\ The Exchange initially filed the proposed fee change on May
31, 2016 (SR-BatsEDGA-2016-11). On June 8, 2016, the Exchange
withdrew SR-BatsEDGA-2016-11 and submitted this filing.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\14\ in general, and
furthers the objectives of Section 6(b)(4),\15\ in particular, as it is
designed to provide for the equitable allocation of reasonable dues,
fees and other charges among its Members and other persons using its
facilities. The Exchange also notes that it operates in a highly-
competitive market in which market participants can readily direct
order flow to competing venues if they deem fee levels at a particular
venue to be excessive. The proposed rule changes reflect a competitive
pricing structure designed to incent market participants to direct
their order flow to the Exchange. The Exchange believes that the
proposed fee codes are equitable and non-discriminatory in they would
apply uniformly to all Members. The Exchange believes the rates remains
competitive with those charged by other venues and, therefore,
reasonable and equitably allocated to Members.
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    \14\ 15 U.S.C. 78f.
    \15\ 15 U.S.C. 78f(b)(4).
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    In particular, the Exchange believes that the proposed fee codes
represent an equitable allocation of reasonable dues, fees, and other
charges. The proposed fees are similar to and based on the fees and
rebates assessed or provided to Bats Trading when routing to away
Trading Centers. For instance, like proposed fee code NA, the NYSE,
NYSE Arca, and Nasdaq charge no fee nor provide a rebate for non-
displayed orders that add liquidity.\16\ In addition, the exchanges

that would be covered by proposed fee code NB charge a fee of up to
$0.0030 per share to add liquidity.\17\ In addition, the proposed rate
for fee code NB is equal to or greater than similar routing fees
charged by other exchanges. For example, the NYSE, NYSE MKT, Nasdaq,
and BZX charge a fee of $0.0030 per share and NYSE Arca charges a fee
of $0.0035 per share regardless of which destination the order is
routed.\18\
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    \16\ See the NYSE fee schedule available at https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Price_List.pdf (dated
May 23, 2016); the NYSE Arca fee schedule available at https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf (dated May 23, 2016); and the Nasdaq
fee schedule available at http://www.nasdaqtrader.com/Trader.aspx?id=PriceListTrading2. The Exchange notes that NYSE MKT,
EDGX, and BZX provide a rebate of $0.0016, $0.0015, and $0.0017 per
share respectively for non-displayed orders that add liquidity. See
the NYSE MKT fee schedule available at https://www.nyse.com/publicdocs/nyse/markets/nyse-mkt/NYSE_MKT_Equities_Price_List.pdf
(dated May 23, 2016); the EDGX fee schedule available at http://batstrading.com/support/fee_schedule/edgx/; and the BZX fee schedule
available at http://batstrading.com/support/fee_schedule/bzx/.
    \17\ See the Bats BYX Exchange Inc. fee schedule available at
http://batstrading.com/support/fee_schedule/byx/; and the Nasdaq BX,
Inc. fee schedule available at http://www.nasdaqtrader.com/Trader.aspx?id=bx_pricing. The Exchange notes that it currently does
not provide for routing orders to post on the Chicago Stock
Exchange, Inc. or the National Stock Exchange, Inc.
    \18\ See supra note 16. Nasdaq charges a fee of $0.0035 per
share for routed orders that are directed to another market. See the
Nasdaq fee schedule at id.
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    The Exchange notes that routing through Bats Trading is voluntary.
The Exchange is providing a service to allow Members to post orders
with a Non-Displayed instruction to these destinations and that those
Members seeking to post such orders to away destinations may connect to
those destinations directly and be charged the fee or provided the
rebate from that destination. Therefore, the Exchange believes the
rates for proposed fee codes NA and NB are equitable and reasonable
because they are related to the rates provided by the away exchange and
reasonably account for the routing service provided for by the
Exchange. Lastly, the Exchange believes that the proposed amendments
are non-discriminatory because it applies uniformly to all Members and
that the proposed rates are directly related to rates provided by the
destinations to which the orders may be routed.
    In addition, volume-based rebates such as that proposed herein have
been widely adopted by equities and options exchanges and are equitable
because they are open to all Members on an equal basis and provide
additional benefits or discounts that are reasonably related to: (i)
The value to an exchange's market quality; (ii) associated higher
levels of market activity, such as higher levels of liquidity provision
and/or growth patterns; and (iii) the introduction of higher volumes of
orders into the price and volume discovery processes. The Exchange
believes that the proposed tier is a reasonable, fair and equitable,
and not an unfairly discriminatory allocation of fees and rebates,
because it will provide Members with an additional incentive to reach
certain thresholds on the Exchange.
    In particular, the Exchange believes the addition of the Volume
Tier 3 is a reasonable means to encourage Members to increase their
liquidity on the Exchange. The Exchange further believes that the
proposed tier represents an equitable allocation of reasonable dues,
fees, and other charges because the thresholds necessary to achieve the
tier encourages Members to add liquidity to the EDGA Book \19\ each
month. The Exchange also notes that the criteria and reduced rate under
Volume Tier 3 is equitable and reasonable as compared to other tiers
offered by the Exchange. For example, under the Volume Tier 1, Members
may receive a reduced fee of $0.0003 per share where they add an ADV of
at least 1% of the TCV, including orders with a Non-Displayed
instruction that add liquidity. To receive the same reduced fee under
Volume Tier 2, a Member must add an ADV of at least 0.25% of the TCV,
including orders with a Non-Displayed instruction that add liquidity;
and removes an ADV of at least 0.25% of the TCV. Under the proposed
Volume Tier 3, while the Member must satisfy a lower ADV as a
percentage of TCV threshold, the Member must have an ``added
liquidity'' as a percentage of ``added plus removed liquidity'' of at
least 85%, which the Exchange believes is a reasonable standard by
which to award the reduced rate in relation to current Volume Tiers 1
and 2. Therefore, the Exchange believes the proposed Volume Tier 3 is
consistent with Section 6(b)(4) \20\ of the Act as the more stringent
criteria correlates with the tier's reduced rate.
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    \19\ See Exchange Rule 1.5(d).
    \20\ 15 U.S.C. 78f(b)(4).
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    Lastly, the Exchange believe removing the MidPoint Discretionary
Order Add Volume Tier is also equitable, reasonable and not unfairly
discriminatory because Members that previously qualified for the
MidPoint Discretionary Order Add Volume Tier may achieve the same
reduced fee my satisfying what the Exchange believes to be
substantially similar criteria as the proposed Volume Tier 3 discussed
above, or the existing tiers under footnote 4 of the Fee Schedule.

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

    The Exchange does not believe its proposed amendment to its Fee
Schedule would impose any burden on competition that is not necessary
or appropriate in furtherance of the purposes of the Act. The Exchange
does not believe that the proposed changes represents a significant
departure from previous pricing offered by the Exchange or pricing
offered by the Exchange's competitors. Additionally, Members may opt to
disfavor the Exchange's pricing if they believe that alternatives offer
them better value. For example, routing through Bats Trading is
voluntary and Members seeking to post such orders to away destinations
may connect to those destinations directly and be charged the fee or
provide the rebate from that destination. Accordingly, the Exchange
does not believe that the proposed changes will impair the ability of
Members or competing venues to maintain their competitive standing in
the financial markets. The Exchange believes that its proposal would
not burden intramarket competition because the proposed rate would
apply uniformly to all Members.
    The Exchange does not believe that the proposed new tier would
burden competition, but instead, enhances competition, as it is
intended to increase the competitiveness of and draw additional volume
to the Exchange. As stated above, the Exchange notes that it operates
in a highly competitive market in which market participants can readily
direct order flow to competing venues if they deem fee structures to be
unreasonable or excessive. The proposed change is generally intended to
enhance the reduced fees for liquidity added to the Exchange, which is
intended to draw additional liquidity to the Exchange. The Exchange
does not believe the proposed tier would burden intramarket competition
as it would apply to all Members uniformly.
    Lastly, the Exchange does not believe removing the MidPoint
Discretionary Order Add Volume Tier would burden competition because
Members that previously qualified for the MidPoint Discretionary Order
Add Volume Tier may achieve the same reduced fee my satisfying what the
Exchange believes to be substantially similar criteria as the proposed
Volume Tier 3 discussed above, or the existing tiers under footnote 4
of the Fee Schedule.

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

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from Members or other interested
parties.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \21\ and paragraph (f) of Rule 19b-4
thereunder.\22\ 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.
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    \21\ 15 U.S.C. 78s(b)(3)(A).
    \22\ 17 CFR 240.19b-4(f).
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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-BatsEDGA-2016-12 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-BatsEDGA-2016-12. 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-BatsEDGA-2016-12, and should
be submitted on or before July 19, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
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    \23\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-15171 Filed 6-27-16; 8:45 am]
 BILLING CODE 8011-01-P


approximately $1.6 million and $10.4 million per year in 2019 dollars,
or between $0.2 million and $1.2 million per small yogurt manufacturer
per year, discounted at 3 percent. We estimate that costs are between
approximately $1.8 million and $12.1 million per year in 2019 dollars,
discounted at 7 percent. Costs per small yogurt manufacturer are
between approximately $0.2 million and $1.3 million per year. These
estimates are summarized in table 1.

                         Table 1--Annual Costs to Small Firms of the Claims Requirement
                                                [Millions 2017$]
----------------------------------------------------------------------------------------------------------------
                                                                   Discount rate
                                                                        (%)          Low  ($)        High  ($)
----------------------------------------------------------------------------------------------------------------
Annual Analytical Testing Costs.................................  ..............            $0.2            $0.3
Annual Reformulation Costs......................................               3             0.9             8.7
                                                                               7             1.0            10.2
Annual Labeling Costs...........................................               3             0.6             1.5
                                                                               7             0.6             1.7
Annual Costs....................................................               3             1.6            10.4
                                                                               7             1.8            12.1
Annual Costs Per Small Firm.....................................               3             0.2             1.2
                                                                               7             0.2             1.3
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Notes: 24-month compliance period. One-time reformulation and labeling costs are annualized over 10 years.

3. The Standards of Identity Revocation for Lowfat Yogurt and Nonfat
Yogurt
    We are revoking the standards of identity for lowfat yogurt (Sec.
131.203) and nonfat yogurt (Sec.  131.206). The revocation will result
in lowfat yogurt and nonfat yogurt being covered under the general
definition and standard of identity in Sec.  130.10. Section 130.10
sets out requirements for foods that substitute for a standardized food
but that deviate from the standard due to compliance with an expressed
nutrient content claim defined by FDA regulation.
    Under Sec.  131.203 and Sec.  131.206, lowfat yogurt must contain
not less than 0.5 percent milkfat nor more than 2 percent milkfat, and
nonfat yogurt must contain less than 0.5 percent milkfat. If the fat
content of yogurt is modified to meet the expressed nutrient content
claims, ``low fat'' and ``no fat'' in Sec.  101.62(b), lowfat yogurt
must contain less than or equal to 3 grams of fat per RACC, and nonfat
yogurt must contain less than 0.5 grams per RACC. The RACC for yogurt
is 170 grams. In other words, when yogurt is modified to comply with
the expressed nutrient content claims ``low fat'' and ``no fat,'' the
resultant products are standardized foods under Sec.  130.10, and as
such, ``lowfat yogurt'' must contain less than or equal to 1.76 percent
(= 3g/170g) milkfat and ``nonfat yogurt'' must contain less than 0.29
percent (= 0.5g/170g) milkfat. As acknowledged by comments we received,
once this final rule is in effect, some lowfat yogurt and nonfat yogurt
products that currently meet the milkfat content requirements in
Sec. Sec.  131.203 and 131.206 will have to be reformulated to meet the
fat content requirements for ``low fat'' and ``no fat'' under Sec.
101.62(b). For example, a lowfat yogurt product with 2 percent milkfat
will need to be reformulated to contain no more than 1.33 percent
milkfat to comply with Sec.  101.62(b) and be covered as a standardized
food under Sec.  130.10.
    To estimate the percentage of lowfat yogurt and nonfat yogurt
products affected by the Standards of Identity Revocation, we use data
from the USDA's National Nutrient Database for Standard Reference (Ref.
2). We estimate that approximately 21 percent of lowfat yogurts and 19
percent of nonfat yogurts are affected by the Standards of Identity
Revocation and will need to reformulate to reduce the fat content of
their yogurts to meet the 1.76 percent and 0.29

percent thresholds. We estimate that there are approximately nine small
yogurt manufacturers. Using data from the International Dairy Foods
Association, we estimate that 52 percent of yogurt sales are of lowfat
yogurt and 43 percent are of nonfat yogurt. We estimate that the number
of small lowfat yogurt manufacturers affected by the Standards of
Identity Revocation is approximately one and the number of small nonfat
yogurt manufacturers affected by the Standards of Identity Revocation
is approximately one. We estimate that there are 8,002 yogurt UPCs and
that small yogurt manufacturers comprise roughly 29 percent of all
yogurt manufacturers. We estimate that the number of small lowfat
yogurt and nonfat yogurt manufacturer UPCs affected by the Standards of
Identity Revocation are approximately 350 and approximately 200,
respectively, for a total of 550 UPCs.
    We estimate reformulation costs using the FDA Reformulation Cost
Model (Ref. 22). Using the yogurt formula-to-UPC ratio of 0.759, we
estimate that the total number of small yogurt manufacturer formulas
subject to reformulation is approximately 417. We estimate
reformulation costs by multiplying the estimated number of formulas by
estimates of per-formula costs obtained from the FDA Reformulation Cost
Model. We estimate that yogurt manufacturers that need to reduce the
fat content of their yogurt will substitute lower fat milk for higher
fat milk in the production process and that this is a critical minor
ingredient with functional effects, yielding per-formula reformulation
costs ranging from approximately $28,530 to $289,845 in 2019 dollars.
For a 24-month compliance period, we estimate one-time reformulation
costs related to the Standards of Identity Revocation to be between
approximately $11.9 million and $120.9 million in 2019 dollars.
Annualized over 10 years at 3 percent, reformulation costs range from
approximately $1.4 million to $13.8 million per year. Annualized over
10 years at 7 percent, reformulation costs range from approximately
$1.6 million to $16.1 million per year.
    Because small yogurt manufacturers must change the fat content of
their lowfat yogurt and nonfat yogurt, they also must change the amount
of fat declared on the Nutrition Facts Label. Using the FDA Labeling
Cost Model, we estimate the one-time cost of this minor label change to
be between approximately $1.4 million and $4.1 million in 2019 dollars
for small yogurt manufacturers. Annualized over 10 years, labeling
costs for small yogurt manufacturers are estimated to be between
approximately $161.3 thousand and $471.4 thousand per year, discounted
at 3 percent. Labeling costs for small yogurt manufacturers are
estimated to be between approximately $188.6 thousand and $551.1
thousand per year, discounted at 7 percent.
    In total, for a 24-month compliance period, we estimate that
revoking the standards of identity for lowfat yogurt and nonfat yogurt
would cost small yogurt manufacturers between approximately $1.4
million and $13.8 million per year in 2019 dollars, or between
approximately $1.6 million and $16.1 million per small yogurt
manufacturer per year, discounted at 3 percent. Discounted at 7
percent, we estimate that costs are between approximately $1.8 million
and $16.6 million per year. Per small yogurt manufacturer range between
approximately $1.5 million and $16.9 million per year. These estimates
are summarized in table 2.

                    Table 2--Annual Costs to Small Firms of Standards of Identity Revocation
                                                [Millions 2019$]
----------------------------------------------------------------------------------------------------------------
                                                                   Discount rate
                                                                        (%)           Low ($)        High ($)
----------------------------------------------------------------------------------------------------------------
Annual Reformulation Costs......................................               3            $1.4           $13.8
                                                                               7             1.6            16.1
Annual Labeling Costs...........................................               3             0.2             0.5
                                                                               7             0.2             0.6
Annual Costs....................................................               3             1.5            14.2
                                                                               7             1.8            16.6
Annual Costs Per Small Firm.....................................               3             1.5            14.5
                                                                               7             1.8            16.9
----------------------------------------------------------------------------------------------------------------
Notes: 24-month compliance period. One-time reformulation and labeling costs are annualized over 10 years.

4. Summary of Costs
    The total cost of the final rule to small yogurt manufacturers for
a 24-month compliance period is approximately $3.7 million to $25.1
million per year in 2019 dollars, discounted at 3 percent. Discounted
at 7 percent, estimated annual total costs are between approximately
$4.2 million and $29.2 million. On a per firm per year basis, estimated
costs are between approximately $0.4 million and $2.8 million per small
yogurt manufacturer per year in 2019 dollars, discounted at 3 percent.
Discounted at 7 percent, estimated annual total costs are between
approximately $0.5 million and $3.2 million per small yogurt
manufacturer. These estimates are summarized in table 3.

                            Table 3--Annual Costs to Small Firms of Final Yogurt Rule
                                                [Millions 2019$]
----------------------------------------------------------------------------------------------------------------
                                                                   Discount rate
                                                                        (%)           Low ($)        High ($)
----------------------------------------------------------------------------------------------------------------
Annual Cost of Claims Requirements..............................               3            $1.6           $10.4
                                                                               7             1.8            12.1
Annual Cost of Standards of Identity Revocation.................               3             1.5            14.2
                                                                               7             1.8            16.6
Annual Cost of Final Yogurt Rule................................               3             3.1            24.6
                                                                               7             3.6            28.8

Annual Cost of Final Yogurt Rule Per Small Firm.................               3             0.3             2.7
                                                                               7             0.4             3.2
----------------------------------------------------------------------------------------------------------------
Notes: 24-month compliance period.

5. Unfunded Mandates Reform Act
    The Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4)
(section 202(a)) requires us to prepare a written statement, which
includes an assessment of anticipated costs and benefits, before
proposing ``any rule that includes any Federal mandate that may result
in the expenditure by State, local, and tribal governments, in the
aggregate, or by the private sector, of $100,000,000 or more (adjusted
annually for inflation) in any one year.'' The current threshold after
adjustment for inflation is $158 million, using the most current (2020)
Implicit Price Deflator for the Gross Domestic Product. We do not
expect this rule to result in any 1-year expenditure that will meet or
exceed this amount.
    We estimate that the annual costs of the final rule to small yogurt
manufacturers will be between approximately $3.1 million to $24.6
million, discounted at 3 percent in 2019 dollars. At a 7 percent
discount rate, we estimate that the annual costs of the final rule will
be between $3.6 and $28.8 million. Based on our analysis, we do not
expect the final rule to reach the current UMRA threshold of $158
million. We also do not expect the estimated costs of the rule to be
disproportionately incurred by any State, local, or tribal government.
    The full analysis of economic impacts is available in the docket
for this final rule and at https://www.fda.gov/about-fda/reports/economic-impact-analyses-fda-regulations.

VI. Federalism

    We have analyzed the final rule in accordance with the principles
set forth in Executive Order 13132. Section 4(a) of the Executive Order
requires agencies to ``construe * * * a Federal statute to preempt
State law only where the statute contains an express preemption
provision or there is some other clear evidence that the Congress
intended preemption of State law, or where the exercise of State
authority conflicts with the exercise of Federal authority under the
Federal statute.''
    Section 403A of the FD&C Act (21 U.S.C. 343-1) is an express
preemption provision. Section 403A(a) of the FD&C Act provides that:
``* * * no State or political subdivision of a State may directly or
indirectly establish under any authority or continue in effect as to
any food in interstate commerce--(1) any requirement for a food which
is the subject of a standard of identity established under section 401
that is not identical to such standard of identity or that is not
identical to the requirement of section 403(g). * * *''
    The final rule makes changes to the standards of identity for
yogurt, lowfat yogurt, and nonfat yogurt. The final rule has preemptive
effect under section 403A(a)(1) of the FD&C Act in that it precludes
States from issuing any requirements for yogurt that are not identical
to the requirements of the final rule. Section 403A(a)(1) of the FD&C
Act displaces both State legislative requirements and State common law
duties (Riegel v. Medtronic, 128 S. Ct. 999 (2008)). In addition, as
with any Federal requirement, if a State law requirement makes
compliance with both Federal law and State law impossible, or would
frustrate Federal objectives, the State requirement would be preempted.
See Geier v. American Honda Co., 529 U.S. 861 (2000); English v.
General Electric Co., 496 U.S. 72, 79 (1990); Florida Lime & Avocado
Growers, Inc., 373 U.S. 132, 142-43 (1963); Hines v. Davidowitz, 312
U.S. 52, 67 (1941).

VII. Analysis of Environmental Impact

    We have determined under 21 CFR 25.32(a) that this action is of a
type that does not individually or cumulatively have a significant
effect on the human environment. Therefore, neither an environmental
assessment nor an environmental impact statement is required.

VIII. Paperwork Reduction Act of 1995

    The final rule contains no collection of information. Therefore,
clearance by Office of Management and Budget under the Paperwork
Reduction Act of 1995 is not required.

IX. Consultation and Coordination With Indian Tribal Governments

    We have analyzed this rule in accordance with the principles set
forth in Executive Order 13175. We have determined that the rule does
not contain policies that have substantial direct effects 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. Accordingly, we
conclude that the rule does not contain policies that have tribal
implications as defined in the Executive Order and, consequently, a
tribal summary impact statement is not required.

X. Objections

    This rule is effective as shown in the DATES section, except as to
any provisions that may be stayed by the filing of proper objections.
If you will be adversely affected by one or more provisions of this
regulation, you may file with the Dockets Management Staff (see
ADDRESSES) either electronic or written objections. You must separately
number each objection, and within each numbered objection you must
specify with particularity the provision(s) to which you object, and
the grounds for your objection. Within each numbered objection, you
must specifically state whether you are requesting a hearing on the
particular provision that you specify in that numbered objection. If
you do not request a hearing for any particular objection, you waive
the right to a hearing on that objection. If you request a hearing,
your objection must include a detailed description and analysis of the
specific factual information you intend to present in support of the
objection in the event that a hearing is held. If you do not include
such a description and analysis for any particular objection, you waive
the right to a hearing on the objection.
    Any objections received in response to the regulation may be seen
in the Dockets Management Staff between 9 a.m. and 4 p.m., Monday
through Friday, and will be posted to the docket at https://www.regulations.gov. We will

publish notice of the objections that we have received or lack thereof
in the Federal Register.

XI. References

    The following references marked with an asterisk (*) are on display
at the Dockets Management Staff (see ADDRESSES) and are available for
viewing by interested persons between 9 a.m. and 4 p.m., Monday through
Friday; they also are available electronically at https://www.regulations.gov. References without asterisks are not on public
display at https://www.regulations.gov because they have copyright
restriction, or they are available as published articles and books.
Please contact either person identified in the FOR FURTHER INFORMATION
CONTACT section to schedule a date to inspect references without
asterisks. Some may be available at the website address, if listed. FDA
has verified the website addresses, as of the date this document
publishes in the Federal Register, but websites are subject to change
over time.

1. FDA Office for Policy & Planning to the Division of Dockets
Management Memorandum, ``Extension of Comment Period on Docket No.
FDA-2000-P-0126 (Formerly Docket No. 2000P-0685) (Milk and Cream
Products and Yogurt Products; Proposal to Revoke the Standards for
Lowfat Yogurt and Nonfat Yogurt and to Amend the Standard for
Yogurt),'' March 31, 2009. Document ID: FDA-2000-P-0126-0070.
2. *United States Department of Agriculture, Agricultural Research
Service, FoodData Central, 2020, available at: https://fdc.nal.usda.gov/.
3. Routray, W. and H.N. Mishra, ``Scientific and Technical Aspects
of Yogurt Aroma and Taste: A Review,'' Comprehensive Reviews in Food
Science and Food Safety, 10(4): 208-220, 2011.
4. Cheng, H., ``Volatile Flavor Compounds in Yogurt: A Review,''
Critical Reviews in Food Science and Nutrition, 50:938-950, 2010.
5. *Codex Alimentarius Commission, ``Codex Standard for Fermented
Milks (CODEX STAN 243-2003),'' In Milk and Milk Products, Second
edition, (2011), available at: http://www.fao.org/3/i2085e/i2085e00.pdf.
6. *FDA Memorandum, ``Live and Active Culture Survey Submitted by
the National Yogurt Association Consumer Studies Comment on Survey
Report,'' 2009b.
7. Dave, R.I. and N.P. Shah, ``Viability of Yoghurt and Probiotic
Bacteria in Yoghurts Made From Commercial Starter Cultures,''
International Dairy Journal, 7:31-41, 1997.
8. Ibrahim, S.A. and J.P. Carr, ``Viability of Bifidobacteria in
Commercial Yogurt Products in North Carolina During Refrigerated
Storage,'' International Journal of Dairy Technology, 59:272-277,
2006.
9. Rosburg, V., T. Boylston, and P. White, ``Viability of
Bifidobacteria Strains in Yogurt With Added Oat Beta-Glucan and Corn
Starch During Cold Storage,'' Journal of Food Science, 75:C439-C444,
2010.
10. *United States Government Accountability Office (GAO), ``GAO-01-
326, Dairy Products: Imports, Domestic Production, and Regulation of
Ultra-Filtered Milk,'' 2001.
11. *FDA, GRAS Notice No. GRN 000504 to American Dairy Products
Institute and U.S. Dairy Export Council, November 21, 2014.
12. Boer, Ruud de. (2014). Chapter 6: Vital Membrane Processes. From
Milk By-Products to Milk Ingredients--Upgrading the Cycle. John
Wiley & Sons.
13. *FDA, ``Bacteriological Analytical Manual (BAM), Chapter 3.
Aerobic Plate Count,'' 2001; available at: https://www.fda.gov/food/laboratory-methods-food/bam-chapter-3-aerobic-plate-count.
14. International Organization for Standardization (ISO) and
International Dairy Federation (IDF), ``International Standard. ISO
7889/IDF 117:2003. Yogurt--Enumeration of Characteristic
Microorganisms--Colony-Count Technique at 37 [deg]C,'' 2003.
15. Duncan, S.E., B.R. Yaun, and S.S. Sumner, ``Microbiological
Methods for Dairy Products, Method 9.080. Yogurt and Other Fermented
Milk Products,'' In: Standard Methods for the Examination of Dairy
Products, edited by H.M. Wehr and J.F. Frank, 17th Ed., Washington,
DC, Chapter 9, pp. 261-263, American Public Health Association,
2004.
16. Lerebours, E., C. N'Djitoyap Ndam, A. Lavoine, et al., ``Yogurt
and Fermented-Then-Pasteurized Milk: Effects of Short-Term and Long-
Term Ingestion on Lactose Absorption and Mucosal Lactase Activity in
Lactase-Deficient Subjects,'' American Journal of Clinical
Nutrition, 49:823-827, 1989.
17. Marteau, P., B. Flourie, P. Pochart, C. et al., ``Effect of the
Microbial Lactase (EC <IP_ADDRESS>) Activity in Yoghurt on the
Intestinal Absorption of Lactose: An in Vivo Study in Lactase-
Deficient Humans,'' British Journal of Nutrition, 64:71-79, 1990.
18. Ouwehand, A.C. and S.J. Salminen, ``The Health Effects of
Cultured Milk Products With Viable and Non-Viable Bacteria,''
International Dairy Journal, 8:749-758, 1998.
19. Shermak, M.A., J.M. Saavedra, T.L. Jackson, et al., ``Effect of
Yogurt on Symptoms and Kinetics of Hydrogen Production in Lactose-
Malabsorbing Children,'' American Journal of Clinical Nutrition,
62:1003-1006, 1995.
20. Varela-Moreiras, G., J. M. Antoine, B. Ruiz-Roso, et al.,
``Effects of Yogurt and Fermented-Then-Pasteurized Milk on Lactose
Absorption in an Institutionalized Elderly Group,'' Journal of the
American College of Nutrition, 11:168-171, 1992.
21. *FDA Memorandum, Juan, WenYen, ``Documentation for the Analysis
of Lowfat and Nonfat Yogurts Consumption and Contribution of Vitamin
A Over Time in the U.S. Population,'' 2021.
22. White, W.J., Gledhill, E., Karns, S., et al. (2002). Cost of
Reformulating Foods and Cosmetics (FDA Labeling Cost Model).
Research Triangle Park: RTI.

List of Subjects

21 CFR Part 130

    Food additives, Food grades and standards.

21 CFR Part 131

    Cream, Food grades and standards, Incorporation by reference, Milk,
Yogurt.

    Therefore, 21 CFR parts 130 and 131 are amended as follows:

PART 130--FOOD STANDARDS: GENERAL

0
1. The authority citation for part 130 continues to read as follows:

    Authority:  21 U.S.C. 321, 336, 341, 343, 371.

0
2. In Sec.  130.10, revise paragraph (b) to read as follows:

Sec.  130.10  Requirements for foods named by use of a nutrient content
claim and a standardized term.

* * * * *
    (b) Nutrient addition. (1) Nutrients shall be added to the food to
restore nutrient levels so that the product is not nutritionally
inferior, as defined in Sec.  101.3(e)(4) of this chapter, to the
standardized food as defined in parts 131 through 169 of this chapter.
The addition of nutrients shall be reflected in the ingredient
statement.
    (2) Yogurt containing less than 3.25 percent milkfat is exempt from
compliance with paragraph (b)(1) of this section with respect to
vitamin A fortification provided the product complies with all other
requirements.
* * * * *

PART 131--MILK AND CREAM

0
3. The authority citation for part 131 continues to read as follows:

    Authority: 21 U.S.C. 321, 341, 343, 348, 371, 379e.

0
4. Revise Sec.  131.200 to read as follows:

Sec.  131.200  Yogurt.

    (a) Description. Yogurt is the food produced by culturing one or
more of the basic dairy ingredients specified in paragraph (b) of this
section and any of the optional dairy ingredients specified in
paragraph (c) of this section with a characterizing bacterial culture
that contains the lactic acid-producing bacteria, Lactobacillus
delbrueckii

subsp. bulgaricus and Streptococcus thermophilus. The ingredients
specified in paragraphs (b) and (c) of this section may be homogenized
and must be pasteurized or ultra-pasteurized before the addition of the
characterizing bacterial culture. One or more of the other optional
ingredients specified in paragraph (d) of this section may also be
added. Yogurt, before the addition of bulky flavoring ingredients,
contains not less than 3.25 percent milkfat and not less than 8.25
percent milk solids not fat and has either a titratable acidity of not
less than 0.7 percent, expressed as lactic acid, or a pH of 4.6 or
lower. To extend the shelf life of the food, yogurt may be treated
after culturing to inactivate viable microorganisms.
    (b) Basic dairy ingredients. Cream, milk, partially skimmed milk,
skim milk, or the reconstituted versions of these ingredients may be
used alone or in combination.
    (c) Optional dairy ingredients. Other safe and suitable milk-
derived ingredients may be used to increase the milk solids not fat
content of the food above the minimum of 8.25 percent required in
paragraph (a) of this section, provided that the ratio of protein to
total nonfat solids of the food, and the protein efficiency ratio of
all protein present must not be decreased as a result of adding such
ingredients.
    (d) Other optional ingredients. The following safe and suitable
ingredients may be used:
    (1) Cultures, in addition to the characterizing bacterial culture
specified in paragraph (a) of this section.
    (2) Nutritive carbohydrate sweeteners.
    (3) Flavoring ingredients.
    (4) Color additives.
    (5) Stabilizers.
    (6) Emulsifiers.
    (7) Preservatives.
    (8) Vitamin addition (optional).
    (i) If added, vitamin A must be present in such quantity that the
food contains not less than 10 percent Daily Value per Reference Amount
Commonly Consumed (RACC) thereof, within limits of current good
manufacturing practice.
    (ii) If added, vitamin D must be present in such quantity that the
food contains not less than 25 percent Daily Value per Reference Amount
Commonly Consumed (RACC) thereof, within limits of current good
manufacturing practices.
    (e) Methods of analysis--(1) Milk--(i) Milkfat content. As
determined by the method prescribed in section 33.2.26, AOAC Official
Method 989.05, Fat in Milk Modified Mojonnier Ether Extraction Method.
    (ii) Milk solids not fat. Calculated by subtracting the milkfat
content from the total solids content using the method prescribed in
section 33.2.45, AOAC Official Method 990.21, Solids-Not-Fat in Milk by
Difference between Total Solids and Fat Contents.
    (iii) Titratable acidity. As determined by the method prescribed in
section 33.2.06, AOAC Official Method 947.05, Acidity of Milk
Titrimetric Method.
    (2) pH. As determined by the potentiometric method described in
Sec.  114.90(a) of this chapter.
    (3) Live and active cultures. As determined by the method described
in ISO 7889:2003(E)/IDF 117:2003(E), Yogurt--Enumeration of
Characteristic Microorganisms--Colony-Count Technique at 37 [deg]C.
    (f) Nomenclature. The name of the food is ``yogurt.'' The name of
the food must be accompanied by a declaration indicating the presence
of any characterizing flavoring as specified in Sec.  101.22 of this
chapter.
    (1) The following term(s) must accompany the name of the food
wherever it appears on the principal display panel or panels of the
label in letters not less than one-half of the height of the letters
used in such name:
    (i) The word ``sweetened'' if a nutritive carbohydrate sweetener is
added without the addition of characterizing flavor.
    (ii) The phrase ``does not contain live and active cultures'' if
the dairy ingredients have been treated after culturing to inactivate
viable microorganisms.
    (iii) The phrase ``vitamin A'' or ``vitamin A added'', or ``vitamin
D'' or ``vitamin D added'', or ``vitamins A and D added'', as
appropriate. The word ``vitamin'' may be abbreviated ``vit''.
    (2) The name of the food may be accompanied by the phrase
``contains live and active cultures'' or another appropriate descriptor
if the food contains a minimum level of live and active cultures of
10\7\ colony forming units per gram (CFU/g) at the time of manufacture
with a reasonable expectation of 10\6\ CFU/g through the manufacturer's
assigned shelf life of the product.
    (3) The term ``homogenized'' may appear on the label if the dairy
ingredients used are homogenized.
    (g) Label declaration. Each of the ingredients used in the food
must be declared on the label as required by the applicable sections of
parts 101 and 130 of this chapter.
    (h) Incorporation by reference. The standards required in this
section are incorporated by reference into this section with the
approval of the Director of the Federal Register under 5 U.S.C. 552(a)
and 1 CFR part 51. To enforce any edition other than that specified in
this section, FDA must publish a document in the Federal Register, and
the material must be available to the public. All approved material is
available for inspection at the Food and Drug Administration's Dockets
Management Staff, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852,
240-402-7500, and is available from the sources indicated in this
paragraph (h). It is also available for inspection at the National
Archives and Records Administration (NARA). For information on the
availability of this material at NARA, email<EMAIL_ADDRESS>or
go to www.archives.gov/federal-register/cfr/ibr-locations.html.
    (1) AOAC INTERNATIONAL, 2275 Research Blvd., Suite 300, Rockville,
MD 20850-3250:
    (i) AOAC Official Method 947.05, Acidity of Milk Titrimetric
Method, Section 33.2.06, Official Methods of Analysis, 21st edition,
2019, Vol. 1.
    (ii) AOAC Official Method 989.05, Fat in Milk Modified Mojonnier
Ether Extraction Method, Section 33.2.26, Official Methods of Analysis,
21st edition, 2019, Vol. 1.
    (iii) AOAC Official Method 990.21, Solids-Not-Fat in Milk by
Difference between Total Solids and Fat Contents, Section 33.2.45,
Official Methods of Analysis, 21st edition, 2019, Vol. 1.
    (2) ISO, ISO Central Secretariat, Chemin de Blandonnet 8, CP 401,
1214 Vernier, Geneva, Switzerland.
    (i) ISO 7889:2003(E), Yogurt--Enumeration of Characteristic
Microorganisms--Colony-Count Technique at 37 [deg]C, First edition,
2003-02-01.
    (ii) [RESERVED]

    Note 1 to paragraph (h)(2)(i):  ISO 7889:2003(E) is co-published
as IDF 117:2003(E).

Sec.  131.203   [Removed]

0
5. Remove Sec.  131.203.

Sec.  131.206   [Removed]

0
6. Remove Sec.  131.206.

    Dated: June 2, 2021.
Janet Woodcock,
Acting Commissioner of Food and Drugs.
    Dated: June 7, 2021.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2021-12220 Filed 6-9-21; 8:45 am]
BILLING CODE 4164-01-P


[Federal Register Volume 77, Number 11 (Wednesday, January 18, 2012)]
[Notices]
[Pages 2595-2597]
[FR Doc No: 2012-771]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66131; File No. SR-C2-2011-043]

Self-Regulatory Organizations; C2 Options Exchange, Incorporated;
Notice of Filing of a Proposed Rule Change Relating to Changes to Rule
6.51

January 11, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 30, 2011, C2 Options Exchange, Incorporated (the
``Exchange'' or ``C2'') filed with the Securities and Exchange
Commission (the ``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 the
Substance of the Proposed Rule Change

    The filing proposes to make changes to C2's Automated Improvement
Mechanism (``AIM'') rule. The text of the proposed rule change is
available on the Exchange's Web site (http://www.c2exchange.com), at
the Exchange's Office of the Secretary, and at the Commission's Public
Reference Room.

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

    In its filing with the Commission, the self-regulatory organization
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 self-regulatory organization
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 the
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to amend C2 Rule 6.51 to
(i) allow TPHs to enter Agency Orders for fewer than 50 contracts into
AIM at the NBBO; and (ii) allow Initiating TPHs to designate a limit
price if it elects to auto-match.
    This proposed rule change would make AIM more similar to current
rules of the Boston Options Exchange Group, LLC (``BOX'') \3\ and the
International Securities Exchange, LLC (``ISE'') \4\ relating to the
Price Improvement Period (``PIP'') and Price Improvement Mechanism
(``PIM''), respectively, which are automated price improvement
mechanisms.\5\
---------------------------------------------------------------------------

    \3\ See BOX Rules Chapter V, Section 18.
    \4\ See ISE Rule 723.
    \5\ AIM, PIP and PIM have certain characteristics in common with
each other. All three mechanisms (a) provide for the opportunity for
customer price improvement, (b) have certain periods where the
initial orders are exposed for potential price improvement, (c) have
certain guidelines regarding the types of orders that may be
eligible for price improvement, and (d) have certain defined rules
related to the allocation of trades within price improvement
auctions.
---------------------------------------------------------------------------

    AIM allows a TPH to submit an Agency Order along with a contra-side
second order (a principal order or a solicited order for the same size
as the Agency Order) into an Auction where other participants could
compete with the Initiating TPH's second order to execute against the
Agency Order, which guarantees that the Agency Order will receive an
execution. Once an Auction commences, the Initiating TPH cannot cancel
it.\6\
---------------------------------------------------------------------------

    \6\ See C2 Rule 6.51(b)(1)(A).
---------------------------------------------------------------------------

    Under this proposal, Agency Orders of all sizes submitted to AIM
will be guaranteed execution at a price at least as good as the NBBO
while providing the opportunity for execution at a price better than
the NBBO. The proposal will incent more TPHs to initiate and
participate in Auctions and will allow even broader participation in
Auctions by all types of market participants. As a result, C2 expects
the proposal will increase the number of and participation in Auctions,
which would enhance competition in the Auctions. The Exchange believes
that this proposal will ultimately provide additional opportunities for
price improvement over the NBBO for its customers.
Elimination of Entry Price Restriction on Agency Orders for Fewer Than
50 Contracts
    C2 Rule 6.51(a)(2) and (3) currently provides that if an Initiating
TPH submits an Agency Order to AIM for 50 contracts or more, the
Initiating TPH must enter its contra-side second order (or stop the
Agency Order) at the better of the NBBO or the Agency Order's limit
price (if the order is a limit order); however, if an Initiating TPH
submits an Agency Order to AIM for fewer than 50 contracts, the
Initiating TPH must stop the entire Agency Order at the better of the
NBBO price improved by one minimum price improvement increment or the
Agency Order's limit price (if the order is a limit order). The
Exchange is proposing to eliminate this distinction and allow
Initiating TPHs to submit to AIM Agency Orders of any size at the NBBO.
    The Exchange believes this proposal will increase the likelihood
that TPHs will initiate Auctions for Agency Orders for fewer than 50
contracts because the TPH will only be required to guarantee an
execution at the NBBO, which will provide additional customer orders
with an opportunity for price improvement over the NBBO. The Exchange
believes the proposal will also encourage increased participation in
AIM by TPHs willing to trade with an Agency Order for fewer than 50
contracts at the NBBO but not better than the NBBO.
    In support of this proposal, the Exchange notes that both BOX \7\
and

ISE \8\ allow entry of orders into PIP and PIM, respectively, at the
NBBO without distinguishing between orders of more than or fewer than
50 contracts. Because BOX and ISE are currently able to offer their
customers price improvement for orders of fewer than 50 contracts at
the NBBO in PIP and PIM, respectively, the Exchange has determined that
it is important for competitive purposes that it be able to offer the
same opportunities to its customers for price improvement on C2 through
AIM.
---------------------------------------------------------------------------

    \7\ See supra note 3; see also Securities Exchange Act Release
No. 34-59654 (March 30, 2009), 74 FR 15551 (April 6, 2009) (SR-BX-
2009-08) (order approving proposed rule change allowing entry of
orders into PIP at the NBBO when BOX's best bid or offer is inferior
to the NBBO with no order size distinction).
    \8\ See supra note 4; see also Securities Exchange Act Release
No. 34-57847 (May 21, 2008), 73 FR 30987 (May 29, 2008) (SR-ISE-
2008-29) (order approving proposed rule change allowing entry of
orders into PIM at the NBBO when ISE's best bid or offer is inferior
to the NBBO with no order size distinction).
---------------------------------------------------------------------------

    The Exchange notes that certain allocation differences exist
between AIM and PIM as well as AIM and PIP. As proposed, our AIM change
would make the handling of AIM trades over 50 contracts consistent with
AIM trades under 50 contracts.\9\ However, unlike PIM, which requires
auctions to commence at prices better than the ISE best bid or offer
and thus precludes an auction initiator from establishing priority
ahead of any resting ISE interest, an AIM Auction can begin and
conclude at the C2 best bid or offer. This means that, like for orders
of 50 or more contracts on C2, the Initiating TPH can trade at a price
in which resting interest existed and can establish priority over
resting broker-dealer interest. Although PIP allows auctions to occur
at the BOX best bid or offer, PIP uses an order allocation structure
based on price-time priority sequence with priority for public customer
orders (like C2) and secondary priority for non-BOX Participant broker-
dealers. On C2, when an Auction concludes at the C2 best bid or offer,
first priority is for public customers, second priority is for the
Initiating TPH (for 40%), third priority is for nonpublic customer
resting orders or quotes that are unchanged from when the Auction
began, and last priority is for RFR responses. The Exchange references
these differences for informational purposes but does not believe that
the differences are material to the Exchange's goals of handling AIM
orders of all sizes the same and allowing Auctions of orders smaller
than 50 contracts at the NBBO (like PIP and PIM).
---------------------------------------------------------------------------

    \9\ PIP and PIM also do not distinguish between orders over 50
contracts and orders under 50 contracts.
---------------------------------------------------------------------------

    The Exchange further notes that certain components of AIM were
approved on a pilot basis, including that there is no minimum size
requirement for orders to be eligible for the Auction. In connection
with the pilot programs, the Exchange will submit to the Commission
reports providing detailed AIM Auction and order execution data,
including monthly data regarding executions through AIM of Agency
Orders for more or fewer than 50 contracts, as supporting evidence
that, among other things, there is meaningful competition for all size
orders.
Addition of Option To Designate Auto-Match Limit Price
    C2 Rule 6.51(b)(1)(A) currently allows an Initiating TPH to enter
its contra-side second order in one of two formats: (1) A specified
single price; or (2) a non-price specific commitment to auto-match all
Auction responses achieved during the Auction. In this case, the
Initiating TPH would have no control over the match price. The Exchange
is proposing to provide Initiating TPHs with the additional option to
auto-match competing prices from other market participants up to a
designated limit price. The Initiating TPH will still not be able to
cancel the auto-match instruction after an Auction commences and will
have no control over the prices at which it receives an allocation of
the Auction other than the outside boundary established by the
designated limit price.
    The Exchange notes that when the Initiating TPH selects the auto-
match feature prior to the start of an Auction (with or without a
designated limit price), the available liquidity at improved prices is
increased and competitive final pricing is out of the Initiating TPH's
control. The Exchange believes the proposal will encourage increased
participation in AIM because it allows TPHs willing to trade with an
Agency Order at a price better than the NBBO, but only up to a certain
price, to initiate an Auction.
    In support of this proposal, the Exchange also notes that both PIP
\10\ and PIM \11\ permit initiating participants to elect to auto-match
up to a designated limit price. The Exchange believes that AIM, and in
turn the customers that benefit from AIM, would be disadvantaged if
TPHs are not provided with the option to auto-match up to a designated
limit price because this lack of flexibility reduces the number of
Auctions and, as a result, opportunities for price improvement. Because
BOX and ISE currently allow initiating participants or members,
respectively, the option to auto-match up to the NBBO achieved during
an auction or up to a designated limit price, the Exchange believes it
is important for competitive purposes that it be able to offer the same
opportunities for price improvement on C2 through AIM.
---------------------------------------------------------------------------

    \10\ See supra note 3; see also Securities Exchange Act Release
No. 34-61805 (March 31, 2010), 75 FR 17454 (April 6, 2010) (SR-BX-
2010-22) (order approving implementation of auto-match feature with
the option to auto-match up to a designated limit price).
    \11\ See supra note 4; see also Securities Exchange Act Release
No. 34-62644 (August 4, 2010), 75 FR 48395 (August 10, 2010) (SR-
ISE-2010-61) (order approving implementation of auto-match feature
with the option to auto-match up to a designated limit price).
---------------------------------------------------------------------------

    The Exchange will provide the Commission with the following data:
(1) The percentage of trades effected through AIM in which the
Initiating TPH submitted an Agency Order with an auto-match instruction
that included a designated limit price and the percentage that did not
include a designated limit price; and (2) the average amount of price
improvement provided to AIM Agency Orders when the Initiating TPH
submitted an auto-match instruction that included a designated limit
price and the average amount that did not include a designated limit
price, versus the average amount of price improvement provided to AIM
Agency Orders when the Initiating TPH submitted a single price (no
auto-match instruction).
    After effectiveness of the proposal, and at least one week prior to
implementation, C2 will issue a notice to TPHs informing them of the
implementation of the additional auto-match feature. This will give
TPHs an opportunity to make any necessary modifications to coincide
with the implementation date.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange and, in particular, the
requirements of Section 6(b) of the Act.\12\ Specifically, the Exchange
believes the proposed rule change is consistent with the Section
6(b)(5) \13\ requirements that the rules of an exchange be designed to
promote just and equitable principles of trade, to prevent fraudulent
and manipulative acts, to remove impediments to and to perfect the
mechanism for a free and open market and a national market system, and,
in general, to protect investors and the public interest.
---------------------------------------------------------------------------

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

    In particular, the Exchange believes this proposed rule change is a
reasonable modification designed to

provide additional flexibility for TPHs to obtain executions on behalf
of their customers while continuing to provide meaningful, competitive
Auctions. The Exchange also believes that that proposed rule change
will ultimately enhance competition in the AIM Auctions and provide
customers with additional opportunities for price improvement. These
changes are consistent with changes made by other exchanges and they
serve to remove impediments to and to perfect the mechanism for a free
and open market and a national market system.

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

    C2 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.

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

    No written comments were solicited or received with respect to the
proposed rule change.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule
change should be disapproved.

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-C2-2011-043 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-C2-2011-043. 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 a.m. and 3 p.m. Copies
of such filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-C2-2011-043, and should be submitted on or before
February 8, 2012.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-771 Filed 1-17-12; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 168 (Wednesday, August 29, 2012)]
[Notices]
[Pages 52322-52323]
[FR Doc No: 2012-21267]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-SFUND-2005-0007; FRL-9522-2]

Agency Information Collection Activities; Submission to OMB for
Review and Approval; Comment Request; EPA Worker Protection Standards
for Hazardous Waste Operations and Emergency Response (Renewal)

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: In compliance with the Paperwork Reduction Act (PRA) (44
U.S.C. 3501 et seq.), this document announces that an Information
Collection Request (ICR) has been forwarded to the Office of Management
and Budget (OMB) for review and approval. This is a request to renew an
existing approved collection. The ICR, which is abstracted below,
describes the nature of the information collection and its estimated
burden and cost.

DATES: Additional comments may be submitted on or before September 28,
2012.

ADDRESSES: Submit your comments, referencing Docket ID No. EPA-HQ-
SFUND-2005-0007, to (1) EPA online using www.regulations.gov (our
preferred method), by email to<EMAIL_ADDRESS>or by mail to:
EPA Docket Center, Environmental Protection Agency, Mail Code 28221T,
1200 Pennsylvania Ave. NW., Washington, DC 20460, and (2) OMB by mail
to: Office of Information and Regulatory Affairs, Office of Management
and Budget (OMB), Attention: Desk Officer for EPA, 725 17th Street NW.,
Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Sella M. Burchette, U.S. Environmental
Response Team, MS 101, Building 205, Edison, NJ 08837, telephone
number:<PHONE_NUMBER>; fax number:<PHONE_NUMBER>; email address:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: EPA has submitted the following ICR to OMB
for review and approval according to the procedures prescribed in 5 CFR
1320.12. On May 25, 2012 (77 FR 31352), EPA sought comments on this ICR
pursuant to 5 CFR 1320.8(d). EPA received several comments that were
not related to this ICR. Any additional comments on this ICR should be
submitted to EPA and OMB within 30 days of this notice.
    EPA has established a public docket for this ICR under Docket ID
No. EPA-HQ-SFUND-2005-0007 which is

available for online viewing at www.regulations.gov, or in person
viewing at the Superfund Docket in the EPA Docket Center (EPA/DC), EPA
West, Room 3334, 1301 Constitution Ave. NW., Washington, DC. The EPA/DC
Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The telephone number for the Reading
Room is<PHONE_NUMBER>, and the telephone number for the Superfund Docket
is<PHONE_NUMBER>.
    Use EPA's electronic docket and comment system at
www.regulations.gov, to submit or view public comments, access the
index listing of the contents of the docket, and to access those
documents in the docket that are available electronically. Once in the
system, select ``docket search,'' then key in the docket ID number
identified above. Please note that EPA's policy is that public
comments, whether submitted electronically or in paper, will be made
available for public viewing at www.regulations.gov as EPA receives
them and without change, unless the comment contains copyrighted
material, confidential business information (CBI), or other information
whose public disclosure is restricted by statute. For further
information about the electronic docket, go to www.regulations.gov.
    Title: EPA Worker Protection Standards for Hazardous Waste
Operations and Emergency Response (Renewal).
    ICR Numbers: EPA ICR No. 1426.10, OMB Control No. 2050-0105.
    ICR Status: This ICR is scheduled to expire on 08/31/12. Under OMB
regulations, the Agency may continue to conduct or sponsor the
collection of information while this submission is pending at OMB.'' An
Agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information, unless it displays a currently
valid OMB control number. The OMB control numbers for EPA's regulations
in title 40 of the CFR, after appearing in the Federal Register when
approved, are listed in 40 CFR part 9, are displayed either by
publication in the Federal Register or by other appropriate means, such
as on the related collection instrument or form, if applicable. The
display of OMB control numbers in certain EPA regulations is
consolidated in 40 CFR part 9.
    Abstract: Section 126(f) of the Superfund Amendments and
Reauthorization Act of 1986 (SARA) requires EPA to set worker
protection standards for State and local employees engaged in hazardous
waste operations and emergency response in the 27 States that do not
have Occupational Safety and Health Administration approved State
plans. The EPA coverage, required to be identical to the Occupational
Safety and Health Administration (OSHA) standards, extends to three
categories of employees: Those engaged in clean-ups at uncontrolled
hazardous waste sites, including corrective actions at Treatment,
Storage and Disposal (TSD) facilities regulated under the Resource
Conservation and recovery Act (RCRA); employees working at routine
hazardous waste operations at RCRA TSD facilities, and employees
involved in emergency response operations without regard to location.
This ICR renews existing mandatory record keeping collection of ongoing
activities including monitoring of any potential employee exposure at
uncontrolled hazardous waste sites, maintaining records of employee
training, refresher training, medical exams and reviewing emergency
response plans.
    Burden Statement: The annual public reporting and recordkeeping
burden for this collection is estimated to average 10.69 hours per
response. Burden means the total time, effort, or financial resources
expended by persons to generate, maintain, retain, disclose or provide
information to or for a Federal agency. This includes the time needed
to review instructions; develop, acquire, install, and utilize
technology and systems for the purposes of collecting, validating, and
verifying information, processing and maintaining information, and
disclosing and providing information; adjust the existing ways to
comply with any previously applicable instructions and requirements
which have subsequently changed; train personnel to be able to respond
to a collection of information; search data sources; complete and
review the collection of information; and transmit or otherwise
disclose the information.
    Respondents/Affected Entities: State and local employees engaged in
hazardous waste operations and emergency response in the 27 States that
do not have OSHA approved State plans.
    Estimated Number of Respondents: 23,900.
    Frequency of Response: Annually.
    Estimated Total Average Number of Responses for Each Respondent: 1.
    Estimated Total Annual Hour Burden: 255,477 hours.
    Estimated Total Annual Cost: $3,525,588, includes $0 annualized
capital or O&M costs.
    Changes in the Estimates: There is a decrease of 56,203 hours in
the total estimated burden currently identified in the OMB Inventory of
Approved ICR Burdens. This is due to an adjustment accounting for
improved computer programs for recordkeeping.

John Moses,
Director, Collection Strategies Division.
[FR Doc. 2012-21267 Filed 8-28-12; 8:45 am]
BILLING CODE 6560-50-P