[Federal Register Volume 88, Number 191 (Wednesday, October 4, 2023)]
[Notices]
[Pages 68890-68894]
[FR Doc No: 2023-21942]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98599; File No. SR-MRX-2023-18]

Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Its
Complex Order Rules

September 28, 2023.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on September 27, 2023, Nasdaq MRX, LLC (``MRX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II 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 240.19-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend Options 3, Section 11, Auction
Mechanisms, and Options 3, Section 13, Price Improvement Mechanisms for
Crossing Transactions.
    The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/mrx/rules, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.

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

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

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

1. Purpose
    In connection with a technology migration to an enhanced Nasdaq,
Inc. (``Nasdaq'') functionality, the Exchange proposes to amend certain
auction rules \3\ which describe the short sale price test in Rule 201
of Regulation SHO. Specifically, the Exchange proposes to adopt a new
sentence within Options 3, Section 11, Auction Mechanisms, and Options
3, Section 13, Price Improvement Mechanisms for Crossing Transactions,
to add further detail to the recently adopted stock-tied rule text.
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    \3\ See Securities Exchange Act Release No. 95854 (September 21,
2022), 87 FR 58571 (September 27, 2022) (SR-MRX-2023-10) (Notice of
Filing of Amendment No. 1 and Order Granting Accelerated Approval of
a Proposed Rule Change, as Modified by Amendment No. 1, To Amend Its
Rules Relating to Single-Leg and Complex Orders in Connection With a
Technology Migration) (``SR-MRX-2023-10'').
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Background
    Before the migration of MRX to an enhanced technology platform, MRX
Members were able to trade certain Stock-Option Orders as described in
MRX Options 3, Section 14(a)(2) \4\ and Stock-Complex Orders as
described in MRX Options 3, Section 14(a)(3),\5\ among other things.
MRX recently filed a rule change to: (1) re-introduce stock-tied
functionality; and (2) amend the stock-tied functionality that was
available before the technology migration.\6\ Among other things, the
proposal added Supplementary Material .08(c) to Options 3, Section 11
and Supplementary Material .09(c) to Options 3, Section 13 \7\ to
address the short sale price test in Rule 201 of Regulation SHO with
respect to Complex PIM Orders,\8\ Complex Facilitation Orders \9\ and
Complex SOM Orders.\10\ The rules states [sic] that when the short sale
price test in Rule 201 of Regulation SHO is triggered for a covered
security, Nasdaq Execution Services, LLC (``NES''),\11\ will not
execute a short sale order in the underlying covered security component
of a Complex Facilitation Order, Complex SOM Order and/or Response, or
in the underlying security component of a Complex PIM Order and/or
Improvement Order, if the price is equal to or below the current
national best bid.\12\ However, NES will execute a short sale order in
the underlying covered security component of a Complex Facilitation
Order, Complex SOM Order and/or Response, or in the underlying security
component of a Complex PIM Order and/or Improvement Order, if such
order is marked ``short exempt,'' regardless of whether it is at a
price that is equal to or below the current national best bid.\13\
Further, if NES cannot execute the underlying covered security
component of a Complex Facilitation Order, Complex SOM Order and/or
Response, or Complex PIM Order and/or Improvement Order, in accordance
with Rule 201 of Regulation SHO, the Exchange will cancel back the
Complex Facilitation Order, Complex SOM Order and/or Response or
Complex PIM Order and/or Improvement Order to the entering Member.
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    \4\ The term ``Stock-Option Order'' refers to an order for a
Stock-Option Strategy as defined in Options 3, Section 14(a)(2). A
Stock-Option Strategy is the purchase or sale of a stated number of
units of an underlying stock or a security convertible into the
underlying stock (``convertible security'') coupled with the
purchase or sale of options contract(s) on the opposite side of the
market representing either (A) the same number of units of the
underlying stock or convertible security, or (B) the number of units
of the underlying stock necessary to create a delta neutral
position, but in no case in a ratio greater than eight-to-one
(8.00), where the ratio represents the total number of units of the
underlying stock or convertible security in the option leg to the
total number of units of the underlying stock or convertible
security in the stock leg. See MRX Options 3, Section 14(a)(2).
    \5\ The term ``Stock-Complex Order'' refers to an order for a
Stock-Complex Strategy as defined in Options 3, Section 14(a)(3). A
Stock-Complex Strategy is the purchase or sale of a stated number of
units of an underlying stock or a security convertible into the
underlying stock (``convertible security'') coupled with the
purchase or sale of a Complex Options Strategy on the opposite side
of the market representing either (A) the same number of units of
the underlying stock or convertible security, or (B) the number of
units of the underlying stock necessary to create a delta neutral
position, but in no case in a ratio greater than eight-to-one
(8.00), where the ratio represents the total number of units of the
underlying stock or convertible security in the option legs to the
total number of units of the underlying stock or convertible
security in the stock leg. Only those Stock-Complex Strategies with
no more than the applicable number of legs, as determined by the
Exchange on a class-by-class basis, are eligible for processing. See
MRX Options 3, Section 14(a)(3).
    \6\ See SR-MRX-2023-10.
    \7\ Id.
    \8\ A Complex PIM Order is an order entered into the Complex
Price Improvement Mechanism as described in Options 3, Section
13(e). See MRX Options 3, Section 14(b)(18).
    \9\ A Complex Facilitation Order is an order entered into the
Complex Facilitation Mechanism as described in Options 3, Section
11(c). See MRX Options 3, Section 14(b)(16).
    \10\ A Complex SOM Order is an order entered into the Complex
Solicited Order Mechanism as described in Options 3, Section 11(e).
See MRX Options 3, Section 14(b)(17).
    \11\ NES is a broker-dealer owned and operated by Nasdaq, Inc.
NES, an affiliate of the Exchange, has been approved by the
Commission to become a Member of the Exchange and perform inbound
routing on behalf of the Exchange.
    \12\ See MRX Supplementary Material .08(c) to Options 3, Section
11 and MRX Supplementary Material .09(c) to Options 3, Section 13.
The term ``covered security'' has the same meaning as in Rule
201(a)(1) of Regulation SHO.
    \13\ See MRX Supplementary Material .08(c) to Options 3, Section
11 and MRX Supplementary Material .09(c) to Options 3, Section 13.

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Proposal
    At this time, the Exchange proposes to amend its Complex SOM,
Complex Facilitation, and Complex PIM rules to add a new sentence
within Supplementary Material .08(c) to Options 3, Section 11 and
Supplementary Material .09(c) to Options 3, Section 13 that describes
the manner in which NES would execute a short sale order in the
underlying covered security component of Response, Improvement Complex
Order, or unrelated Limit Complex Order on the Complex Order Book (1)
when the facilitating Electronic Access Member's contra-order, the
solicited contra-side Complex Order, or the Counter-Side Order does not
include a short sale order in the underlying covered security
component; or (2) when the facilitating Electronic Access Member's
contra-order, the solicited contra-side Complex Order, or the Counter-
Side Order includes a short sale order in the underlying security
component. As described more fully below, in the first case NES would
execute the underlying covered security component of the Response,
Improvement Complex Order, or unrelated Limit Complex Order on the
Complex Order Book at its stated limit price. In the second case, NES
would execute the underlying security component of the Response,
Improvement Complex Order, or unrelated Limit Complex Order on the
Complex Order Book at its stated limit price or better.
    The proposed rules will make clear to Members who submit auction
responses or Improvement Orders that include a short sale order, or
Members that place orders on the Complex Order Book that include a
short sale order, the manner in which NES will execute the short sale
component of their order when their Response, Improvement Complex
Order, or unrelated Limit Complex Order on the Complex Order Book
executes in the Complex SOM, Complex Facilitation, and Complex PIM
auction, (i.e. their short sale order will execute at its stated limit
price, but not at a better price) if the facilitating Electronic Access
Member's contra-order, the solicited contra-side Complex Order, or the
Counter-Side Order does not include a short sale order. However their
short sale order will execute at its stated limit price or better if
the facilitating Electronic Access Member's contra-order, the solicited
contra-side Complex Order, or the Counter-Side Order includes a short
sale order. Thus, whether a short sale order included in an auction
receives its stated limit price, or potentially receives a better price
than its limit price, depends on whether the contra-side order
submitted to the auction with an agency order also included a short
sale order. Although the availability of the potential for price
improvement for the responder's short sale order will vary, depending
on whether the contra-order also included a short sale order, MRX notes
that for the reasons described below the alternative would be to
exclude auction orders that include a short sale order from the Complex
SOM, Complex Facilitation, and Complex PIM altogether, which would
decrease competition in the auction and potentially reduce
opportunities for the agency order to receive price improvement in the
auctions. Below are some examples of Complex PIM Auction responses
(``Improvement Orders'') executing within a Complex PIM Auction.\14\
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    \14\ While the examples utilize the Complex PIM auction, the
same examples apply to a Complex SOM or Complex Facilitation
auction.

Example No. 1--Complex PIM Auction utilizing stated limit price
MRX BBO for option leg is 0.05 x 0.10
Underlying equity NBBO is 1.05 x 1.10
Reg SHO short sale price test is triggered in the underlying
Stock-Option Strategy is created to buy 1 put, buy 100 shares (cBBO for
this strategy is 1.10 x 1.20)
Complex PIM to buy strategy, 100 @1.13 (buy stock @1.08 and options
@0.05); \15\ Counter-Side Order does not include a short sale order
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    \15\ The Exchange notes that different combinations of stock and
options prices could determine the strategy prices in this Example 1
as well as Examples 2 and 3. The Exchange is assuming the noted
prices for the examples, however the Exchange notes that multiple
price points could achieve the net prices in these examples. In this
particular case in Example 1, the agency order could buy stock @1.07
and buy options @0.06 in lieu of the prices noted.
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Improvement Complex Order1 is a Priority Customer Order to sell, sell
short stock leg, 100 @1.11 (sell stock @1.06 and options @0.05)
Improvement Complex Order2 to sell, sell short stock leg, 100 @1.12
(sell stock @1.07 and options @0.05)
Complex PIM auction timer concludes

    Improvement Complex Order1 trades with Complex PIM Agency Order,
option @0.05 and stock @1.06 for net price of 1.11. The Improvement
Complex Order may not trade the underlying equity at 1.05 because it
cannot execute a short sale order at a price that is equal to the NBB
of the underlying equity.

Example No. 2--Complex PIM Auction utilizing stated limit price
MRX BBO for option leg is 0.05 x 0.10
Underlying equity NBBO is 1.05 x 1.10
Reg SHO short sale price test is triggered in the underlying
Stock-Option Strategy is created to buy 1 put, buy 100 shares (cBBO for
this strategy is 1.10 x 1.20)
Complex PIM to buy strategy, 100 @1.13 (buy stock @1.08 and options
@0.05); Counter-Side
Order does not include a short sale order
Improvement Complex Order1 is a Priority Customer Order to sell, sell
short stock leg, 100 @1.10 (sell stock @1.05 and options @0.05)
Improvement Complex Order2 to sell, sell short stock leg, 100 @1.12
(sell stock @1.06 and options @0.06)
Complex PIM auction timer concludes

    Improvement Complex Order2 trades with Complex PIM Agency Order,
option @0.06 and stock @1.06 for net price of 1.12. Since the Counter-
Side Order does not include a short sale order, Improvement Complex
Order1 is considered for execution at its stated limit price of 1.10;
since it cannot trade at 1.10 due to Reg SHO, it does not trade with
the Complex PIM Agency Order.

Example No. 3--Complex PIM Auction where Counter-Side is also short
selling
MRX BBO for option leg is 0.05 x 0.10
Underlying equity NBBO is 1.05 x 1.20
Counter-Side Order includes a short sale order
Reg SHO short sale price test is triggered in the underlying
Stock-Option Strategy is created to buy 1 put, buy 100 shares (cBBO for
this strategy is 1.10 x 1.30)

    Complex PIM to Buy strategy, 100 @1.13, Counter-Side Order is a
Market Order that is willing to auto-match at any price point within
Reg SHO price restriction bound and has `sell short' stock leg
instructions and therefore cannot trade the stock component at any
price less than or equal to the underlying best bid of $1.05. In this
example, if the Counter-Side Order did not have a ``sell short''
instruction it would not be required to trade at a price that is better
than the NBB for security ($1.05) and could execute at a price equal to
or less than the underlying best bid of $1.05. The price of 1.10 is the
cBB (net of option and underlying NBB).

Improvement Complex Order1 is to sell, sell short stock leg, 100 @1.10
(selling stock at 1.05 and options at 0.05; note it cannot trade at
1.10 due to Reg SHO)
Improvement Complex Order2 to sell, sell short stock leg, 100 @1.12
(selling stock at 1.06 and options at 0.06)
Complex PIM auction timer concludes

    The Complex PIM Agency Order first executes 40 contracts with the
Counter-

Side Market Order, the option leg at 0.05 and stock leg at 1.06 for a
net price of 1.11. The remaining 60 contracts from the Complex Agency
Order then execute with Improvement Complex Order1 at the same price.
In this example, both the Complex Counter-Side Order and the
Improvement Complex Order are marked short sale, which permits the
Improvement Complex Order to trade at a price that is better than its
stated limit price.
    In this example, the Improvement Complex Order traded at its next
available price in lieu of its stated limit price because both the
Counter-Side Order and the Improvement Complex Order included a short
sale order in the underlying component security. In contrast, if the
Counter-Side Order did not include a short sale order than the Counter-
Side Order and Improvement Complex Order2 trade with the Complex PIM
Agency Order for net price of 1.12 (option @0.06 and stock @1.06).
    The Exchange proposes to amend the rule text in Supplementary
Material .08 to Options 3, Section 11 with respect to a SOM and
Facilitation auction to provide:

    When a response or an unrelated limit complex order on the
complex order book includes a short sale order in the underlying
covered security, NES will execute such order at (1) its stated
limit price if the facilitating Electronic Access Member's contra
order or contra-side solicited Complex Order does not include a
short sale order in the underlying security; or (2) its stated limit
price or better if the facilitating Electronic Access Member' contra
order or the solicited contra-side Complex Order includes a short
sale order in the underlying covered security.

    With respect to a Complex PIM auction, the Exchange proposes to
amend the rule text within Supplementary Material .09 to Options 3,
Section 13 to provide:

    When an improvement order or an unrelated limit complex order on
the complex order book includes a short sale order in the underlying
covered security, NES will execute such order at (1) its stated
limit price if the Counter-Side Order does not include a short sale
order in the underlying security; or (2) its stated limit price or
better if the counter-side order includes a short sale order in the
underlying covered security.

    In such case where a response or an unrelated limit complex order
on the complex order book includes a short sale order in the underlying
covered security, NES will execute the order at its stated limit price
if the facilitating Electronic Access Member's contra order, contra-
side solicited Complex Order, or Counter-Side Order does not include a
short sale order in the underlying covered security because the
Exchange desires to foster competition by including responses that have
a short sale order in the underlying covered security. In this
scenario, the Exchange would consider all prices submitted by
responders at which the auction may execute because the Electronic
Access Member's contra order, contra-side solicited Complex Order, or
Counter-Side Order does not need to comply with the short sale price
test in Rule 201 of Regulation SHO because the order is not short. By
using the order's stated limit price in this case, the Exchange would
allow the responder with a short sale order to participate in the
auction and allocate the best price possible to the agency order while
complying with the short sale price test.\16\ The Exchange believes
that including responses with a short sale order in the underlying
covered security may create additional competition in the Complex SOM,
Complex Facilitation and Complex PIM auction while also providing
additional opportunity for potential price improvement for the agency
order.
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    \16\ For example, utilizing a Complex PIM auction with a BBO of
0.05 x 0.10 and an NBBO for the underlying security component of
1.05 x 1.10, if the Initiating Order submitted an agency order to
buy @1.13 and a contra-order to sell @1.13, with auto-match at any
price point, and Responder1 was long @1.10, and Responder2 was short
@1.10 (in this scenario 1.10 would not comply with the short sale
price test), pursuant to the proposed amendment, the agency order
would receive a price improvement allocation @1.10. In this scenario
the improved price of 1.11 would not be allocated to the responder
with a short sale rather the price improvement would be applied to
the agency order. The Exchange believes it is important to offer
price improvement to the agency order over the responder to the
auction. Of note, the responder that was short @1.10 would be
cancelled.
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    When a response, Improvement Order, or an unrelated limit complex
order on the complex order book includes a short sale order in the
underlying covered security, NES will execute the order at its stated
limit price or better if the facilitating Electronic Access Member
contra order, solicited contra-side Complex Order, or Counter-Side
Order includes a short sale order in the underlying security component.
In this case, each short sale compliant price would be considered in
determining the price at which the auction may execute, which would be
at its stated limit price or better. In this scenario, because the
Electronic Access Member contra order, solicited contra-side Complex
Order, or Counter-Side Order are short, the Exchange will only consider
prices that comply with the short sale price test in Rule 201 of
Regulation SHO. In this case, all prices that are compliant with the
short sale price test are considered when allocating the auction, and
both the agency order and responders may receive a better price. The
auction would allocate at the agency order's stated limited price or
better depending on the prices of the responses. The auction responses
may execute at their stated limited price or better depending on the
final auction price.
    This is in contrast to the prior scenario where the Electronic
Access Member's contra order, contra-side solicited Complex Order, or
Counter-Side Order does not need to comply with the short sale price
test. Utilizing the proposed stated limit price or better where a
Member's contra order, contra-side solicited Complex Order, or Counter-
Side Order includes a short sale order allows the Exchange to
potentially provide price improvement opportunity to the agency order.
Implementation
    This Exchange intends to begin implementation of the proposed rule
change prior to November 1, 2023. The Exchange will issue an Options
Trader Alert to Members with the operative date.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\17\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\18\ in particular, in that it is designed to
promote just and equitable principles of trade and to protect investors
and the public interest for the reasons discussed below.
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    \17\ 15 U.S.C. 78f(b).
    \18\ 15 U.S.C. 78f(b)(5).
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    With respect to short sale regulation, the proposed handling of the
stock/ETF component of a Complex Order under this proposal does not
raise any issues of compliance with the currently operative provisions
of Regulation SHO \19\ and, therefore, the proposal promotes just and
equitable principles of trade. When a Complex Order has a stock/ETF
component, Members must indicate, pursuant to Regulation SHO, whether
that order involves a long or short sale. NES, as a trading center
under Rule 201, will be compliant with the requirements of Regulation
SHO. Of course, broker-dealers, including both NES and the Members
submitting orders to MRX with a stock/ETF component, must comply with
Regulation SHO. NES' compliance team updates, reviews and monitors NES'
policies and procedures including those pertaining to Regulation SHO on
an annual basis.
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    \19\ 17 CFR 242.200 et seq.

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    In the case where a response, Improvement Order, or an unrelated
limit complex order includes a short sale order in the underlying
covered security, executing such order at its stated limit price when
the facilitating Electronic Access Member's contra order, contra-side
Complex Order, or Counter-Side Order does not include a short sale
order in the underlying security would protect investors and the public
interest by considering all prices at which the auction could execute.
Under these circumstance, the Response, Improvement Complex Order, or
unrelated Limit Complex Order would be considered for execution at its
stated limit price (provided the limit price is compliant with the
short sale price test in Rule 201 of Regulation SHO) while the
Electronic Access Member's contra order, contra-side solicited Complex
Order, or Counter-Side Order does not need to comply with the short
sale price test in Rule 201 of Regulation SHO because the order is not
short. Utilizing the order's stated limit price in this case allows the
responder with a short sale order to participate in the auction while
the agency order is allocated the best price possible while complying
with the short sale price test. The Exchange believes that this
behavior is consistent with the protection of investors and the public
interest because it attempts to afford price improvement to the agency
order over the responder to the auction. Finally, the Exchange believes
that including responses with a short sale order in the underlying
covered security may create additional competition in the Complex SOM,
Complex Facilitation and Complex PIM auction and provides the agency
order with additional opportunities for potential price improvement.
    In contrast, when the facilitating Electronic Access Member's
contra order, contra-side Complex Order, or Counter-Side Order includes
a short sale order in the underlying covered security, the auction must
be allocated at a price that is short sell compliant. In this case,
each short sale compliant price would be considered in determining the
price at which the Complex SOM, Complex Facilitation and Complex PIM
auction may execute and, because the Electronic Access Member contra
order, solicited contra-side Complex Order, or Counter-Side Order are
short, the Exchange will only consider prices that comply with the
short sale price test in Rule 201 of Regulation SHO. As a result, the
auction may allocate at the agency order's stated limited price or
better depending on the prices of the responses. Also, the auction
responses may execute at their stated limited price or better depending
on the final auction price. The Exchange believes its proposal is
consistent with the Act and the protection of investors because both
the agency order and responders may receive a better price in this
case. This is in contrast to the prior scenario where the Electronic
Access Member's contra order, contra-side solicited Complex Order, or
Counter-Side Order does not need to comply with the short sale price
test. Utilizing the proposed stated limit price or better where a
Member's contra order, contra-side solicited Complex Order, or Counter-
Side Order includes a short sale order allows the Exchange to
potentially provide a price improvement opportunity to the agency order
and to the auction response. With the proposed amendments, Complex SOM,
Complex Facilitation, and Complex PIM auction responders who submit a
response would be aware of the auction price that would comply with the
short sale price test in Rule 201 of Regulation SHO. The proposed
amendment allows Members to participate in auctions with a short sale
response and such participation facilitates competition in these
auctions. This proposed approach is in lieu of prohibiting Members
[sic] to respond to these auctions, which would limit competition. By
allowing additional responses to participate in the auction, the
Exchange believes that the proposal would benefit investors and the
public interest because the additional interest may increase
competition in these auctions, which may lead to better prices.

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.
    Where a response, Improvement Order, or an unrelated limit complex
order includes a short sale order in the underlying covered security,
executing such order at its stated limit price when the facilitating
Electronic Access Member's contra order, contra-side Complex Order, or
Counter-Side Order does not include a short sale order in the
underlying covered security does not impose an undue burden on intra-
market competition because the Exchange would uniformly consider all
prices submitted by responders in determining the allocation price
because the Electronic Access Member's contra order, contra-side
solicited Complex Order, or Counter-Side Order does not need to comply
with the short sale price test in Rule 201 of Regulation SHO because
the order is not short. Where a response, Improvement Order, or an
unrelated limit complex order includes a short sale order in the
underlying covered security, executing such order at its stated limit
price or better when the facilitating Electronic Access Member's contra
order, contra-side Complex Order, or Counter-Side Order is also a short
sale order in the underlying covered security component does not impose
an undue burden on intra-market competition because the Exchange would
uniformly consider all prices that are compliant with the short sale
price test when allocating the auction.
    Where a response, Improvement Order, or an unrelated limit complex
order includes a short sale order in the underlying covered security,
executing such order at its stated limit price when the facilitating
Electronic Access Member's contra order, contra-side Complex Order, or
Counter-Side Order does not include a short sale order in the
underlying covered security and executing such order its stated limit
price or better when the facilitating Electronic Access Member contra-
order, solicited contra-side Complex Order, or Counter-Side Order is
also a short sale order in the underlying covered security component
does not impose an undue burden on inter-market competition because
other options exchanges today may offer a similar process for handling
stock-tied transactions that have a short sale order.

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

    No written comments were either solicited or received.

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

    Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \20\ and Rule
19b-4(f)(6) thereunder.\21\
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    \20\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \21\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires the Exchange to give the Commission written notice of its
intent to file the proposed rule change, along with a brief
description and text of the proposed rule change, at least five
business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.

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    A proposed rule change filed under Rule 19b-4(f)(6) \22\ normally
does not become operative prior to 30 days after the date of the
filing. However, Rule 19b-4(f)(6)(iii) \23\ permits the Commission to
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. The Exchange states that
waiver of the 30-day operative delay will allow the Exchange to include
the proposed functionality when it re-introduces the stock-tied
functionality on the Exchange. As discussed above, the proposed
functionality will allow auction responses, unrelated Limit Complex
Orders on the Complex Order Book, and Improvement Orders that include a
short sale order to participate in the Complex Facilitation Mechanism,
Complex SOM, and Complex PIM auctions, as applicable. Although the
potential execution price of the auction response or Limit Complex
Order will vary depending on whether the contra order submitted to the
auction with the agency order also includes a short sale order, the
Exchange states that the alternative would be to exclude responses and
unrelated Limit Complex Orders that include a short sale order from the
Complex Facilitation Mechanism, Complex SOM, and Complex PIM auctions
altogether. The Commission finds that it is consistent with the
protection of investors and the public interest to waive the 30-day
operative delay. The Commission believes that the proposal will benefit
investors by allowing auction responses, Improvement Orders, and
unrelated Limit Complex Orders that include a short sale order to
participate in the Complex Facilitation Mechanism, Complex SOM, and
Complex PIM auctions, which could increase competition in the auctions
and potentially result in better prices for agency orders executed in
the auctions. In addition, the proposal will make clear to market
participants that submit auction responses that include a short sale
order, or that enter Limit Complex Orders that include a short sale
order, of the prices that their orders may receive when they execute in
a Complex Facilitation Mechanism, Complex SOM, or Complex PIM auction.
Therefore, the Commission waives the 30-day operative delay and
designates the proposal operative upon filing.\24\
---------------------------------------------------------------------------

    \22\ Id.
    \23\ 17 CFR 240.19b-4(f)(6)(iii).
    \24\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    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.

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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
file number SR-MRX-2023-18 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-MRX-2023-18. 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 (https://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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-MRX-2023-18 and should be
submitted on or before October 25, 2023.
---------------------------------------------------------------------------

    \25\ 17 CFR 200.30-3(a)(12), (59).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\25\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-21942 Filed 10-3-23; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 62 (Wednesday, April 1, 2015)]
[Notices]
[Pages 17537-17538]
[FR Doc No: 2015-07362]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74588; File No. SR-ICEEU-2015-004]

Self-Regulatory Organizations; ICE Clear Europe Limited; Order
Approving Proposed Rule Change Relating to Additional European
Sovereign CDS Contracts

March 26, 2015.

I. Introduction

    On January 27, 2015, ICE Clear Europe Limited (``ICE Clear
Europe'') 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 provide for the clearance of additional
European sovereign credit default swap (``CDS'') contracts. The
proposed rule change was published for comment in the Federal Register
on February 11, 2015.\3\ The Commission did not receive comments on the
proposed rule change. This order approves the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 34-74213 (February 5,
2015), 80 FR 7661 (February 11, 2015) (SR-ICEEU-2015-004).
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

    The purpose of the proposed rule change is to provide for the
clearing of Western European sovereign CDS contracts referencing four
additional reference entities: The Kingdom of the Netherlands, the
Republic of Finland, the Kingdom of Sweden and the Kingdom of Denmark
(the ``Additional WE Sovereign Contracts''). ICE Clear Europe currently
clears CDS contracts referencing six other Western European sovereigns:
Ireland, the Republic of Italy, the Portuguese Republic, the Kingdom of
Spain, the Kingdom of Belgium and the Republic of Austria.\4\ ICE Clear
Europe believes clearance of the Additional WE Sovereign Contracts will
benefit the markets for credit default swaps on Western European
sovereigns by offering to market participants the benefits of clearing,
including reduction in counterparty risk and safeguarding of margin
assets pursuant to clearing house rules.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 34-71920 (April 9,
2014), 79 FR 21331 (April 15, 2015) (SR-ICEEU-2014-04) (order
approving proposed rule change to clear Western European sovereign
CDS contracts referencing Ireland, the Republic of Italy, the
Portuguese Republic and the Kingdom of Spain) and Securities
Exchange Act Release No. 34-73737 (December 4, 2014), 79 FR 73372
(December 10, 2014) (SR-ICEEU-2014-18) (order approving proposed
rule change to clear additional Western European sovereign CDS
contracts referencing Kingdom of Belgium and the Republic of
Austria) (collectively, the ``Prior WE Sovereigns Orders'').
---------------------------------------------------------------------------

    ICE Clear Europe has stated that the Additional WE Sovereign
Contracts will constitute ``Non-STEC Single Name Contracts'' for
purposes of the CDS Procedures and, accordingly, will be governed by
Paragraph 10 of the CDS Procedures consistent with the treatment of the
other Western European sovereign CDS contracts currently cleared by ICE
Clear Europe. ICE Clear Europe has represented that clearing of the
Additional WE Sovereign Contracts will not require any changes to ICE
Clear Europe's existing Clearing Rules and Procedures, risk management
framework (including relevant policies), or margin model.\5\
---------------------------------------------------------------------------

    \5\ For a description of previously approved changes to ICE
Clear Europe's risk management framework to accommodate clearing of
Western European sovereign CDS contracts, see the Prior WE
Sovereigns Orders. Id. ICE Clear Europe represents that it has
performed a variety of empirical analyses related to clearing of the
Additional WE Sovereign Contracts under its margin methodology,
including back tests and stress tests.
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    Section 19(b)(2)(C) of the Act \6\ directs the Commission to
approve a proposed rule change of a self-regulatory organization if it
finds that such proposed rule change is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to such organization. Section 17A(b)(3)(F) of the Act \7\
requires, among other things, that the rules of a clearing agency are
designed to promote the prompt and accurate clearance and settlement of
securities transactions and, to the extent applicable, derivative
agreements, contracts, and transactions, to assure the safeguarding of
securities and funds which are in the custody or control of the
clearing agency or for which it is responsible, and, in general, to
protect investors and the public interest.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(2)(C).
    \7\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    After careful review, the Commission finds that the proposed rule
change is consistent with Section 17A of the Act \8\ and the rules
thereunder applicable to ICE Clear Europe. The proposed rule change
will provide for clearing of the Additional WE Sovereign Contracts,
which are similar to the other Western European sovereign CDS contracts
currently cleared by ICE Clear Europe, in accordance with the existing
rules and procedures applicable to Western European sovereign CDS
contracts. Specifically, the Commission believes that ICE Clear
Europe's proposal to clear the Additional WE Sovereign Contracts
pursuant to its current risk management framework (including margin and
guaranty fund methodology), operational procedures, settlement
procedures and default management policies is designed to promote the
prompt and accurate clearance and settlement of securities
transactions, to assure the safeguarding of securities and funds which
are in the custody or control of ICE Clear Europe or for which it is
responsible, and in general, to protect investors and the public
interest, consistent with Section 17A(b)(3)(F) of the Act.\9\
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78q-1.
    \9\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

IV. Conclusion

    On the basis of the foregoing, the Commission finds that the
proposal is consistent with the requirements of the Act and in
particular with the requirements of Section 17A of the Act \10\ and the
rules and regulations thereunder.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\11\ that the

proposed rule change (SR-ICEEU-2015-004) be, and hereby is,
approved.\12\
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(2).
    \12\ In approving the proposed rule change, the Commission
considered the proposal's impact on efficiency, competition and
capital formation. 15 U.S.C. 78c(f).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2015-07362 Filed 3-31-15; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register: July 21, 2009 (Volume 74, Number 138)]
[Rules and Regulations]
[Page 35782-35785]
[DOCID:fr21jy09-7]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2008-1311; Directorate Identifier 2007-NE-48-AD;
Amendment 39-15976; AD 2009-15-13]
RIN 2120-AA64

Airworthiness Directives; Honeywell International Inc., T5313 and
T5317 Series Turboshaft Engines

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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

SUMMARY: The FAA is adopting a new airworthiness directive (AD) for
Honeywell International Inc., T5313 and T5317 series turboshaft
engines. This AD requires initial and repetitive visual inspections and
initial and repetitive ultrasonic inspections of combustion chamber
housings (CCHs) for cracks. This AD results from eight instances of
cracks in CCHs. Two of the instances resulted in an engine shutdown
during flight. We are issuing this AD to detect cracks in the CCH,
which could result in rupture of the CCH, leading to loss of engine
power and damage to the helicopter.

DATES: This AD becomes effective August 25, 2009. The Director of the
Federal Register approved the incorporation by reference of certain
publications listed in the regulations as of August 25, 2009.

ADDRESSES: You can get the service information identified in this AD
from Honeywell International Inc., P.O. Box 52181, Phoenix, AZ 85072-
2181, U.S.A.; telephone<PHONE_NUMBER> (U.S.A.) or<PHONE_NUMBER>
(International), Web site: http://portal.honeywell.com/wps/portal/aero.
    The Docket Operations office is located at Docket Management
Facility, U.S. Department of Transportation, 1200 New Jersey Avenue,
SE., West Building Ground Floor, Room W12-140, Washington, DC 20590-
0001.

FOR FURTHER INFORMATION CONTACT: Robert Baitoo, Aerospace Engineer, Los
Angeles Aircraft Certification Office, FAA, Transport Airplane
Directorate, 3960 Paramount Blvd., Lakewood, CA 90712-4137; e-mail:
<EMAIL_ADDRESS>telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: The FAA proposed to amend 14 CFR part 39
with a proposed AD. The proposed AD applies to Honeywell International
Inc., T5313 and T5317 series turboshaft engines. We published the
proposed AD in the Federal Register on December 16, 2008 (73 FR 76291).
That action proposed to require initial and repetitive visual
inspections and initial and repetitive ultrasonic inspections of CCHs
for cracks.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://
www.regulations.gov; or in person at the Docket Operations office
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains this AD, the regulatory evaluation,
any comments received, and other information. The street address for
the Docket Operations office (telephone<PHONE_NUMBER>) is provided in
the ADDRESSES section. Comments will be available in the AD docket
shortly after receipt.

Comments

    We provided the public the opportunity to participate in the
development of this AD. We received no comments on the proposal or on
the determination of the cost to the public.

Change to Optional Terminating Action Paragraph

    We changed optional terminating action paragraph (k) to state that
installation of a CCH P/N 1-130-610-19 or 1-130-610R16 terminates the
inspection requirements of this AD. These CCHs eliminate the failure
mode that cause cracking.

Incorporation by Reference of Service Bulletin Appendix

    Since we issued the proposed AD, we realized that we need to add
the incorporation by reference of the Appendix of Honeywell
International Inc. Service Bulletin No. T53-0144, Revision 4, dated
March 31, 2008 for operators to perform the ultrasonic inspections. We
added that reference to inspection paragraphs (i) and (j) of this AD.

Conclusion

    We have carefully reviewed the available data and determined that
air safety and the public interest require adopting the AD with the
changes described previously.

Costs of Compliance

    We estimate that this AD will affect 100 engines installed on
helicopters of U.S. registry. We also estimate that it will take about
3 work-hours per engine to perform the actions, and that the average
labor rate is $80 per work-hour. No parts are required. Based on these
figures, we estimate the total cost of the AD to U.S. operators to be
$24,000.

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.
    We are 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

    We have determined that 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) Is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979); 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.
    We prepared a summary of the costs to comply with this AD and
placed it in the AD Docket. You may get a copy of this summary at the
address listed under ADDRESSES.

List of Subjects in 14 CFR Part 39

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

Adoption of the Amendment

0
Accordingly, under the authority delegated to me by the Administrator,
the Federal Aviation Administration 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:

2009-15-13 Honeywell International Inc. (Formerly AlliedSignal and
Textron-Lycoming): Amendment 39-15976. Docket No. FAA-2008-1311;
Directorate Identifier 2007-NE-48-AD.

Effective Date

    (a) This airworthiness directive (AD) becomes effective August
25, 2009.

Affected ADs

    (b) None.

Applicability

    (c) This AD applies to Honeywell International Inc. T5313B,
T5317A, T5317A-1, T5317B, and T5317BCV turboshaft engines with
combustion chamber housing (CCH), part numbers (P/Ns) 1-130-610-05,
1-130-610-12, and 1-130-610-17, installed. These engines are
installed on, but not limited to, Bell 205 and 210 Series and Kaman
K-1200 helicopters.

Unsafe Condition

    (d) This AD results from eight instances of cracks in CCHs. Two
of the instances resulted in an engine shutdown during flight. We
are issuing this AD to detect cracks in the CCH, which could result
in rupture of the CCH, leading to loss of engine power and damage to
the helicopter.

Compliance

    (e) You are responsible for having the actions required by this
AD performed within the compliance times specified unless the
actions have already been done.

Initial Visual Inspection

    (f) For CCH, P/N 1-130-610-05 and 1-130-610-12, within 50 hours
time-in-service (TIS) after the effective date of this AD, inspect
the area between points A and B around the entire housing
circumference in Figure 1 of this AD for weld repairs and cracks.
    (1) If you find any cracks, replace the CCH before further
flight. Honeywell International Inc. Alert Service Bulletin (ASB)
T53-A0142, Revision 1, dated September 14, 2006, contains additional
guidance on replacing the CCH.
    (2) If you find any weld repairs, replace the CCH within 100
hours TIS after the visual inspection. Honeywell International Inc.
ASB T53-A0142, Revision 1, dated September 14, 2006, contains
additional guidance on replacing the CCH.

Repetitive Visual Inspections

    (g) For CCH, P/N 1-130-610-05 and 1-130-610-12, inspect the area
between points A and B around the entire housing circumference in
Figure 1 of this AD for cracks within every 50 hours time-since-last
inspection. Honeywell International Inc. Standard Practices Manual
70-20-02, SP 1302, contains additional guidance on visual
inspection.
    (h) If you find any cracks, replace the CCH before further
flight. Honeywell International Inc. ASB T53-A0142, Revision 1,
dated September 14, 2006, contains additional guidance on replacing
the CCH.

[GRAPHIC] [TIFF OMITTED] TR21JY09.000

Initial Ultrasonic Inspection

    (i) Perform an ultrasonic inspection on the CCH. Use Honeywell
International Inc. Service Bulletin (SB) No. T53-0144, Revision 4,
dated March 31, 2008, section 3. Accomplishment Instructions and the
SB Appendix to perform the ultrasonic inspection at the following
compliance times.
    (1) For CCH, P/N 1-130-610-05 and 1-130-610-12, within 500 hours
TIS or next hot section inspection, whichever occurs first after the
effective date of this AD, but not to exceed 6 months after the
effective date of this AD.
    (2) For CCH, P/N 1-130-610-17, perform at the first overhaul,
but do not exceed 5,000 hours or 11,000 cycles, after the effective
date of this AD, whichever occurs first.

Repetitive Ultrasonic Inspections

    (j) Repeat the ultrasonic inspection on the CCH using Honeywell
International Inc. SB No. T53-0144, Revision 4, dated March 31,
2008, section 3. Accomplishment Instructions and the SB Appendix at
the following compliance times:
    (1) Within every 1,200 flights, defined as the cumulative number
of landings, since the last inspection; or
    (2) Within every 200 flights, if the last inspection had
ultrasonic findings as defined in paragraph 3.A.(2) or paragraph
3.A.(3) of Honeywell International Inc. SB No. T53-0144, Revision 4,
dated March 31, 2008.

Optional Terminating Action

    (k) Installation of a CCH P/N 1-130-610-19 or 1-130-610R16, or
an FAA approved equivalent part, terminates the inspection
requirements of this AD.

Alternative Methods of Compliance

    (l) The Manager, Los Angeles Aircraft Certification Office, has
the authority to approve alternative methods of compliance for this
AD if requested using the procedures found in 14 CFR 39.19.

Related Information

    (m) Honeywell International Inc. ASB T53-A0142, Revision 1,
dated September 14, 2006, and Standard Practices Manual 70-20-02, SP
1302, pertain to the subject of this AD. Contact Honeywell
International Inc., P.O. Box 52181, Phoenix, AZ 85072-2181;
telephone<PHONE_NUMBER>, Web site: http://portal.honeywell.com/wps/
portal/aero, for a copy of this service information.
    (n) Contact Robert Baitoo, Aerospace Engineer, Los Angeles
Aircraft Certification Office, FAA, Transport Airplane Directorate,
3960 Paramount Blvd., Lakewood, CA 90712-4137; e-mail:
<EMAIL_ADDRESS>telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>,
for more information about this AD.

Material Incorporated by Reference

    (o) You must use the service information specified in the
following Table 1 to perform the ultrasonic inspections required by
this AD. The Director of the Federal Register approved the
incorporation by reference of the documents listed in the following
Table 1 in accordance with 5 U.S.C. 552(a) and 1 CFR part 51.
Contact Honeywell International Inc., P.O. Box 52181, Phoenix, AZ
85072-2181; telephone<PHONE_NUMBER>, Web site: http://
portal.honeywell.com/wps/portal/aero, for a copy of this service
information. You may review copies at the FAA, New England Region,
12 New England Executive Park, Burlington, MA; or at the National
Archives and Records Administration (NARA). For information on the
availability of this material at NARA, call<PHONE_NUMBER>, or go to:
http://www.archives.gov/federal-register/cfr/ibr-locations.html.

                                       Table 1--Incorporation by Reference
----------------------------------------------------------------------------------------------------------------
  Honeywell International Inc. Service
              Bulletin No.                           Page             Revision                Date
----------------------------------------------------------------------------------------------------------------
T53-0144, Total Pages: 10...............  ALL......................          4  March 31, 2008.
T53-0144, Appendix, Total Pages: 13.....  ALL......................          C  January 25, 2008.
----------------------------------------------------------------------------------------------------------------

    Issued in Burlington, Massachusetts, on July 14, 2009.
Peter A. White,
Assistant Manager, Engine and Propeller Directorate, Aircraft
Certification Service.
[FR Doc. E9-17146 Filed 7-20-09; 8:45 am]

BILLING CODE 4910-13-P


[Federal Register Volume 78, Number 1 (Wednesday, January 2, 2013)]
[Rules and Regulations]
[Pages 25-27]
[FR Doc No: 2012-30986]

=======================================================================
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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[USCG-2012-1074]
RIN 1625-AA11

Regulated Navigation Area; Reporting Requirements for Barges
Loaded With Certain Dangerous Cargoes, Inland Rivers, Eighth Coast
Guard District; Extension of Stay (Suspension)

AGENCY: Coast Guard, DHS.

ACTION: Temporary final rule.

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

SUMMARY: The Commander, Eighth Coast Guard District is extending the
previously published stay (suspension) of reporting requirements under
the Regulated Navigation Area (RNA) established by 33 CFR 165.830 for
barges loaded with certain dangerous cargoes (CDC barges) in the inland
rivers of the Eighth Coast Guard District. A two year stay was
previously published at 76 Federal Register (FR) 1360 (January 10,
2011), which expires January 15, 2013. This extension is necessary
because the Coast Guard continues to analyze future reporting needs and
evaluate possible changes in CDC reporting requirements. This extension
of the suspension of the CDC reporting requirements in no way relieves
towing vessel operators and fleeting area managers responsible for CDC
barges in the RNA from their dangerous cargo or vessel arrival and
movement reporting obligations currently in effect under other
regulations or placed into effect under appropriate Coast Guard
authority.

DATES: Effective midnight January 15, 2013, 33 CFR 165.830(d), (e),
(f), (g), and (h) are stayed until midnight September 30, 2013.

ADDRESSES: Documents indicated in this preamble as being available in
the docket are part of docket USCG-2012-1074. To view documents
mentioned in this preamble as being available in the docket, go to
http://www.regulations.gov, type the docket number in the ``SEARCH''
box and click ``SEARCH''. Click on Open Docket Folder on the line
associated with this rulemaking. You may also visit the Docket
Management Facility in Room W12-140 on the ground floor of the
Department of Transportation West Building, 1200 New Jersey Avenue SE.,
Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays.

FOR FURTHER INFORMATION CONTACT: If you have questions about this
temporary rule, call or email LT Jason Doherty, Coast Guard; telephone
504-671-2266, email<EMAIL_ADDRESS>If you have questions on
viewing the docket, call Renee V. Wright, Program Manager, Docket
Operations, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Table of Acronyms

CDC Certain Dangerous Cargo
DHS Department of Homeland Security
FR Federal Register
NPRM Notice of Proposed Rulemaking

A. Regulatory History and Information

    The Coast Guard is issuing this temporary final rule without prior
notice and opportunity to comment pursuant to authority under section
4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This
provision authorizes an agency to issue a rule without prior notice and
opportunity to comment when the agency for good cause finds that those
procedures are ``impracticable, unnecessary, or contrary to the public
interest.'' Under 5 U.S.C. 553(b)(3)(B), the Coast Guard finds that
good cause exists for not publishing a notice of proposed rulemaking
(NPRM) with respect to this rule because it would be impracticable,
unnecessary, and contrary to the public interest.
    The contract for the CDC barge reporting system at the Inland River
Vessel Movement Center (IRVMC) expired in January 2011. Due to the
expiration of this contract, the Coast Guard would not be able to
receive and process reports, therefore, in late December 2010, the
Coast Guard decided to suspend the IRVMC reporting requirements for a
two-year period. This suspension was published in the Federal Register
at 76 FR 1360 (January 10, 2011), and expires on January 15, 2013.
    At this time, the contract for the CDC barge reporting system has
not been renewed, and the Coast Guard is still considering whether to
enter into a new contract and lift the suspension, modify the reporting
requirements in the RNA, or repeal the RNA completely. An extension of
the stay is necessary while the Coast Guard continues to consider these
options.
    We believe prior notice and comment is unnecessary because we
expect the affected public will have no objection to

the extension of the temporary suspension of regulatory requirements.
This suspension has been in place since January 2011, and the Coast
Guard has received no public comment or objection regarding the
suspension. Prior notice and comment is also contrary to the public
interest because there is no public purpose served by continuing to
require reports when there is no mechanism for receiving or processing
those reports.
    Under 5 U.S.C. 553(d)(1), a substantive rule that relieves a
restriction may be made effective less than 30 days after publication.
This temporary final rule, suspending the reporting requirements and
thereby relieving the regulatory restriction on towing vessel operators
and fleeting area managers provided by 33 CFR 165.830, takes effect at
midnight on January 15, 2013, less than 30 days after publication.

B. Basis and Purpose

    The legal basis for this rulemaking is the Coast Guard's authority
to establish regulated navigation areas, under 33 U.S.C. 1226, 1231; 46
U.S.C. Chapter 701, 3306, 3703; 50 U.S.C. 191, 195; 33 CFR 1.05-1,
6.04-1, 6.04-6, 160.5; Public Law 107-295, 116 Stat. 2064; and
Department of Homeland Security Delegation No. 0170.1. An RNA is a
water area within a defined boundary for which regulations for vessels
navigating within the area have been established, to control vessel
traffic in a place determined to have hazardous conditions. 33 CFR
165.10; Commandant Instruction Manual M16704.3A, 1-6.
    The purpose of this temporary final rule is to extend the
previously published suspension of the reporting requirements for CDC
barges imposed by the RNA created in 33 CFR 165.830. This temporary
rule relieves the towing vessel operators and fleeting area managers
responsible for CDC barges from the reporting requirements for a nine
month period.

C. Discussion of the Final Rule

    During the extended period for the suspension of reporting
requirements, towing vessel operators and fleeting area managers
responsible for CDC barges will be relieved of their obligation to
report their CDCs under 33 CFR 165.830(d), (e), (f), (g), and (h). This
suspension in no way relieves towing vessel operators and fleeting area
managers responsible for CDC barges from their dangerous cargo or
vessel arrival and movement reporting obligations currently in effect
under other regulations or placed into effect under appropriate Coast
Guard authority.

D. Regulatory Analyses

    We developed this temporary final rule after considering numerous
statutes and executive orders related to rulemaking. Below we summarize
our analyses based on 13 of these statutes or executive orders.

1. Regulatory Planning and Review

    This rule is not a significant regulatory action under section 3(f)
of Executive Order 12866, Regulatory Planning and Review, as
supplemented by Executive Order 13563, Improving Regulation and
Regulatory Review, and does not require an assessment of potential
costs and benefits under section 6(a)(3) of Executive Order 12866 or
under section 1 of Executive Order 13563. The Office of Management and
Budget has not reviewed it under that Order. This rule is temporary and
limited in nature by extending the previously published suspension of
CDC barge reporting requirements for an additional nine-month period,
creating no undue delay to vessel traffic in the regulated area.

2. Small Entities

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as
amended, requires federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000.
    The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will
not have a significant economic impact on a substantial number of small
entities. This rule will affect the following entities, some which may
be small entities: owners or operators of CDC barges intending to
transit the Inland Rivers in the Eighth Coast Guard District during
this two-year period. This rule will not have a significant economic
impact on those entities or a substantial number of any small entities
because this rule suspends reporting requirements for two years.

3. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this rule. If the rule would affect your
small business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
contact the person listed in the FOR FURTHER INFORMATION CONTACT,
above.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

4. Collection of Information

    This rule calls for no new collection of information under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

5. Federalism

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on State or local
governments and would either preempt State law or impose a substantial
direct cost of compliance on them. We have analyzed this rule under
that Order and have determined that it does not have implications for
federalism.

6. Protest Activities

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

7. Unfunded Mandates Reform Act

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

8. Taking of Private Property

    This rule will not cause a taking of private property or otherwise
have taking implications under Executive Order 12630, Governmental
Actions and Interference with Constitutionally Protected Property
Rights.

9. Civil Justice Reform

    This rule meets applicable standards in sections 3(a) and 3(b)(2)
of Executive Order 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce burden.

10. Protection of Children

    We have analyzed this rule under Executive Order 13045, Protection
of Children from Environmental Health Risks and Safety Risks. This rule
is not an economically significant rule and does not create an
environmental risk to health or risk to safety that may
disproportionately affect children.

11. Indian Tribal Governments

    This rule does not have tribal implications under Executive Order
13175, Consultation and Coordination with Indian Tribal Governments,
because it does not have a substantial direct effect on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.

12. Energy Effects

    This action is not a ``significant energy action'' under Executive
Order 13211, Actions Concerning Regulations That Significantly Affect
Energy Supply, Distribution, or Use.

13. Technical Standards

    This rule does not use technical standards. Therefore, we did not
consider the use of voluntary consensus standards.

14. Environment

    We have analyzed this rule under Department of Homeland Security
Management Directive 023-01 and Commandant Instruction M16475.lD, which
guide the Coast Guard in complying with the National Environmental
Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have determined
that this action is one of a category of actions which do not
individually or cumulatively have a significant effect on the human
environment. This rule involves the nine-month extension of a
previously published suspension of reporting requirements established
for CDC barges transiting the inland rivers of the Eighth Coast Guard
District. This rule is categorically excluded, under figure 2-1,
paragraph (34)(g), of the Instruction. Under figure 2-1, paragraph
(34)(g), of the Instruction, an environmental analysis checklist and a
categorical exclusion determination are not required for this rule.

List of Subjects in 33 CFR Part 165

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

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

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS

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

    Authority:  33 U.S.C. 1226, 1231; 46 U.S.C. Chapter 701; 50
U.S.C. 191, 195; 33 CFR 1.05-1(g), 6.04-1, 6.04-6, and 160.5; Pub.
L. 107-295, 116 Stat. 2064; Department of Homeland Security
Delegation No. 0170.1.

0
2. Amend 33 CFR 165.830 by staying paragraphs (d), (e), (f), (g), and
(h) from midnight January 15, 2013 to midnight September 30, 2013.

    Dated: December 14, 2012.
Roy A. Nash,
Rear Admiral, U.S. Coast Guard, Commander, Eighth Coast Guard District.
[FR Doc. 2012-30986 Filed 12-31-12; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 82, Number 151 (Tuesday, August 8, 2017)]
[Notices]
[Pages 37138-37141]
[FR Doc No: 2017-16639]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81293; File No. SR-Phlx-2017-04]

Self-Regulatory Organizations; NASDAQ PHLX LLC; Order Granting
Approval of a Proposed Rule Change, as Modified by Amendment Nos. 1 and
2, To Permit the Listing and Trading of P.M.-Settled NASDAQ-100
Index[supreg] Options on a Pilot Basis

August 2, 2017.

I. Introduction

    On January 18, 2017, NASDAQ PHLX LLC (``Phlx'' 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
permit the listing and trading of P.M.-settled NASDAQ-100 Index[supreg]
(``NASDAQ-100'') options on a pilot basis. The proposed rule change was
published for comment in the Federal Register on February 3, 2017.\3\
On March 14, 2017, the Commission extended the time period within which
to approve the proposed rule change, disapprove the proposed rule
change, or institute proceedings to determine whether to disapprove the
proposed rule change.\4\ On May 2, 2017, the Exchange filed Amendment
No. 1 to the proposed rule change.\5\ On May 3, 2017, the Commission
instituted proceedings under Section 19(b)(2)(B) of the Act \6\ to
determine whether to approve or disapprove the proposed rule change, as
modified by Amendment No. 1.\7\ On July 25, 2017, the Exchange filed
Amendment No. 2 to the proposed rule change.\8\ The Commission received
three comment letters on the proposed rule change, including two from
the Exchange.\9\ The Commission is approving the proposed rule change,
as modified by Amendment Nos. 1 and 2, subject to a pilot period set to
end on the earlier of: (1) Twelve months following the date of the
first listing of the options; or (2) December 29, 2018.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 79894 (January 30,
2017), 82 FR 9259 (``Notice'').
    \4\ See Securities Exchange Act Release No. 80241, 82 FR 14393
(March 20, 2017).
    \5\ In Amendment No. 1, the Exchange revised its proposal to add
that raw percentage price change data as well as percentage price
change data normalized for prevailing market volatility, as measured
by an appropriate index as agreed by the Commission and the
Exchange, would be provided as part of the pilot data. When the
Exchange filed Amendment No. 1 with the Commission, it also
submitted Amendment No. 1 to the public comment file for SR-Phlx-
2017-04 (available at: www.sec.gov/comments/sr-phlx-2017-04/phlx201704.htm).
    \6\ 15 U.S.C. 78s(b)(2)(B).
    \7\ See Securities Exchange Act Release No. 80581, 82 FR 21587
(May 9, 2017) (``Order Instituting Proceedings'').
    \8\ In Amendment No. 2, the Exchange revised the proposed
duration of the pilot program such that the pilot would terminate on
the earlier of: (i) Twelve months following the date of the first
listing of the options; or (ii) December 29, 2018. When the Exchange
filed Amendment No. 2 with the Commission, it also submitted
Amendment No. 2 to the public comment file for SR-Phlx-2017-04
(available at: www.sec.gov/comments/sr-phlx-2017-04/phlx201704.htm).
Because Amendment No. 2 does not materially alter the substance of
the proposed rule change or raise unique or novel regulatory issues,
it is not subject to notice and comment.
    \9\ See Letters to Brent J. Fields, Secretary, Commission, from
Laura G. Dickman, Lead Counsel, Chicago Board Options Exchange,
Incorporated (``CBOE''), dated May 30, 2017 (``CBOE Letter'');
Jeffrey S. Davis, Vice President and Deputy General Counsel, NASDAQ
PHLX LLC, dated June 12, 2017 (``Phlx Letter I''); and Jeffrey S.
Davis, Vice President and Deputy General Counsel, NASDAQ PHLX LLC,
dated June 29, 2017 (``Phlx Letter II'').
---------------------------------------------------------------------------

II. Description of the Proposal, as Modified by Amendment Nos. 1 and 2

    The Exchange is proposing to amend its rules to permit the listing
and trading, on a pilot basis, of NASDAQ-100 options with third-Friday-
of-the-month expiration dates, whose exercise settlement value will be
based on the closing index value, symbol XQC, of the NASDAQ-100 on the
expiration day (``P.M.-settled'').
    The Exchange represents that the conditions for listing the
proposed contract (``NDXPM'') on Phlx will be similar to those for Full
Value Nasdaq 100 Options (``NDX''), which are already listed and
trading on Phlx, except that NDXPM will be P.M.-settled.\10\ In
particular, NDXPM will use a $100 multiplier, and the minimum trading

increment will be $0.05 for options trading below $3.00 and $0.10 for
all other series. Strike price intervals will be set at no less than
$5.00. Consistent with existing rules for index options, the Exchange
will allow up to nine near-term expiration months, as well as LEAPS.
The product will have European-style exercise and will not be subject
to position limits, though there would be enhanced reporting
requirements.\11\
---------------------------------------------------------------------------

    \10\ See Notice, supra note 3, at 9260.
    \11\ For a more detailed description of the proposed NDXPM
contract, see Notice, supra note 3.
---------------------------------------------------------------------------

    As proposed, NDXPM would become subject to a pilot for a period
that would end on the earlier of: (i) Twelve months following the date
of the first listing of NDXPM; or (ii) December 29, 2018 (``Pilot
Program''). If the Exchange were to propose an extension of the Pilot
Program or should the Exchange propose to make the Pilot Program
permanent, then the Exchange would submit a filing proposing such
amendments to the Pilot Program. The Exchange notes that any positions
established under the pilot would not be impacted by the expiration of
the pilot. For example, a position in a P.M.-settled series that
expires beyond the conclusion of the pilot period could be established
during the pilot. If the Pilot Program were not extended, then the
position could continue to exist. However, the Exchange notes that any
further trading in the series would be restricted to transactions where
at least one side of the trade is a closing transaction.
    The Exchange proposes to submit a Pilot Program report to
Commission at least two months prior to the expiration date of the
Pilot Program (the ``annual report''). The annual report would contain
an analysis of volume, open interest, and trading patterns. The
analysis would examine trading in the proposed option product as well
as trading in the securities that comprise the NASDAQ-100. In addition,
for series that exceed certain minimum open interest parameters, the
annual report would provide analysis of index price volatility and
share trading activity. In addition to the annual report, the Exchange
would provide the Commission with periodic interim reports while the
Pilot Program is in effect that would contain some, but not all, of the
information contained in the annual report. The annual report would be
provided to the Commission on a confidential basis. The annual report
would contain the following volume and open interest data:
    (1) Monthly volume aggregated for all trades;
    (2) monthly volume aggregated by expiration date;
    (3) monthly volume for each individual series;
    (4) month-end open interest aggregated for all series;
    (5) month-end open interest for all series aggregated by expiration
date; and
    (6) month-end open interest for each individual series.
    In addition to the annual report, the Exchange would provide the
Commission with interim reports of the information listed in Items (1)
through (6) above periodically as required by the Commission while the
Pilot Program is in effect. These interim reports would also be
provided on a confidential basis. The annual report would also contain
the information noted in Items (1) through (6) above for Expiration
Friday, A.M.-settled NASDAQ-100 options traded on Phlx.
    In addition, the annual report would contain the following analysis
of trading patterns in Expiration Friday, P.M.-settled NASDAQ-100
option series in the Pilot Program: (1) A time series analysis of open
interest; and (2) an analysis of the distribution of trade sizes. Also,
for series that exceed certain minimum parameters, the annual report
would contain the following analysis related to index price changes and
underlying share trading volume at the close on Expiration Fridays: A
comparison of index price changes at the close of trading on a given
Expiration Friday with comparable price changes from a control sample.
The data would include a calculation of percentage price changes for
various time intervals and compare that information to the respective
control sample. Raw percentage price change data as well as percentage
price change data normalized for prevailing market volatility, as
measured by an appropriate index as agreed by the Commission and the
Exchange, would be provided. The Exchange would provide a calculation
of share volume for a sample set of the component securities
representing an upper limit on share trading that could be attributable
to expiring in-the-money series. The data would include a comparison of
the calculated share volume for securities in the sample set to the
average daily trading volumes of those securities over a sample period.
The minimum open interest parameters, control sample, time intervals,
method for randomly selecting the component securities, and sample
periods would be determined by the Exchange and the Commission.\12\
---------------------------------------------------------------------------

    \12\ See Notice, supra note 3, at 9261 and Amendment No. 1. The
proposed Pilot Program for NDXPM options is similar to the pilot
program approved for the listing and trading of P.M.-settled S&P 500
Index options (``SPXPM options''). See Securities Exchange Act
Release No. 64011 (March 2, 2011), 76 FR 12775, 12776-77 (March 8,
2011).
---------------------------------------------------------------------------

III. Summary of Comments

    As noted above, the Commission received three comment letters on
the proposed rule change, including two letters from the Exchange.\13\
In its letter, CBOE expresses support for Phlx's proposal, stating that
NDXPM would not present any novel issues not considered in connection
with SPXPM options.\14\ CBOE further states that many of the concerns
regarding P.M. settlement have been mitigated over time, and believes
the availability of additional P.M.-settled options would enhance
transparency, price discovery, and liquidity by moving these products
from the over-the-counter market to an exchange environment.\15\ In
support of its position, CBOE states that it has not observed any
adverse effects or impact on market volatility and the operation of
fair and orderly markets on the underlying cash market at or near the
close of trading in its SPXPM options.\16\
---------------------------------------------------------------------------

    \13\ See supra note 9.
    \14\ See CBOE Letter at 2.
    \15\ See id.
    \16\ See id. In its letter, CBOE further proposes that the
Commission approve pilot programs for a set period of time, such as
three years, after which the respective pilot may become permanent
or, if the Commission finds that the pilot resulted in adverse
effects to the market, conclude. See id. at 3. The Commission notes
that this comment is beyond the scope of the specific proposed rule
change under consideration.
---------------------------------------------------------------------------

    In its first comment letter, the Exchange notes that its proposal
is largely based on CBOE's pilot program for SPXPM options.\17\ In
response to a request from Commission staff that any pilot data be made
public, the Exchange states that, although it is willing to participate
in further discussion with the Commission, CBOE, and other exchanges
about the possibility of making public the data under its Pilot Program
and other similar pilots, the Exchange does not believe it should be
required to make its Pilot Program reports public absent the
development of a uniform and transparent approach regarding pilot
reports and other associated materials to similar proposed rule
changes, such as the SPXPM options pilot.\18\ Therefore, the Exchange
maintains that any reports in connection with its Pilot Program will be
submitted

to the Commission on a confidential basis.\19\
---------------------------------------------------------------------------

    \17\ See Phlx Letter I at 1.
    \18\ See id. at 2.
    \19\ See id.
---------------------------------------------------------------------------

    In its second comment letter, the Exchange responds to the Order
Instituting Proceedings and states that it does not expect any
significant impact on trading in the underlying securities of NDXPM
given the similarity to SPXPM options that are currently trading.\20\
The Exchange believes that the changes in the operation and structure
of the options markets over time, in conjunction with the proposed
NDXPM Pilot Program's similarity to the SPXPM options pilot and its
lack of novel issues, further support permitting trading in NDXPM on a
pilot basis.\21\ The Exchange further states that it expects the data
to be provided under the NDXPM Pilot Program should be similar to data
submitted in connection with the SPXPM options pilot, with the
exception of the index to be used to normalize the pilot data for
prevailing market volatility, for which the Exchange proposes to work
with the Commission to identify an index it believes would be more
suitable to the NDXPM Pilot Program.\22\ The Exchange also reiterated
its belief that the proposal could benefit investors to the extent it
attracts trading from opaque over-the-counter markets to an exchange-
listed market and could offer investors additional flexibility.\23\
---------------------------------------------------------------------------

    \20\ See Phlx Letter II at 2-4.
    \21\ See id. at 4-5.
    \22\ See id. at 5-6.
    \23\ See id. at 7.
---------------------------------------------------------------------------

IV. Discussion and Commission Findings

    After careful consideration of the proposal, the Commission finds
that the proposed rule change is consistent with the requirements of
the Act and the rules and regulations thereunder applicable to a
national securities exchange,\24\ and, in particular, the requirements
of Section 6 of the Act.\25\ Specifically, the Commission finds that
the proposed rule change is consistent with Section 6(b)(5) of the
Act,\26\ which requires that an exchange have rules designed to remove
impediments to and perfect the mechanism of a free and open market and
to protect investors and the public interest, to allow Phlx to conduct
a limited, and carefully monitored, pilot as proposed.
---------------------------------------------------------------------------

    \24\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \25\ 15 U.S.C. 78f.
    \26\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    As noted in the Order Instituting Proceedings, the Commission has
had concerns about the potential adverse effects and impact of P.M.
settlement upon market volatility and the operation of fair and orderly
markets on the underlying cash market at or near the close of trading,
including for cash-settled derivatives contracts based on a broad-based
index.\27\ In particular, the Commission sought input from commenters
to inform its evaluation of whether P.M.-settled, cash-settled index
options such as NDXPM could impact volume and volatility on the
underlying cash equities markets at the close of the trading day, and
the potential consequences this might have for investors and the
overall stability of the markets.\28\ The potential impact today
remains unclear, given the significant changes in the closing
procedures of the primary markets in recent decades. The Commission is
mindful of the historical experience with the impact of P.M. settlement
of cash-settled index derivatives on the underlying cash markets, but
recognizes that these risks may be mitigated today by the enhanced
closing procedures that are now in use at the primary equity markets.
---------------------------------------------------------------------------

    \27\ See Order Instituting Proceedings, supra note 7, at 21589.
See also Securities Exchange Act Release Nos. 64599 (June 3, 2011),
76 FR 33798, 33801-02 (June 9, 2011) (order instituting proceedings
to determine whether to approve or disapprove a proposed rule change
to allow the listing and trading of SPXPM options); 65256 (September
2, 2011), 76 FR 55969, 55970-76 (September 9, 2011) (order approving
proposed rule change to establish a pilot program to list and trade
SPXPM options); and 68888 (February 8, 2013), 78 FR 10668, 10669
(February 14, 2013) (order approving the listing and trading of
SPXPM on CBOE).
    \28\ See Order Instituting Proceedings, supra note 7, at 21589.
---------------------------------------------------------------------------

    For the reasons described below, the Commission believes that
Phlx's proposed NDXPM Pilot Program is designed to mitigate concerns
regarding P.M. settlement and will provide additional trading
opportunities for investors while providing the Commission with data to
monitor the effects of NDXPM and the impact of P.M. settlement on the
markets. To assist the Commission in assessing any potential impact of
a P.M.-settled NASDAQ-100 index option on the options markets as well
as the underlying cash equities markets, Phlx will be required to
submit data to the Commission in connection with the Pilot Program. The
Commission believes that Phlx's proposed Pilot Program, together with
the data and analysis that Phlx will provide to the Commission, will
allow Phlx and the Commission to monitor for and assess any potential
for adverse market effects of allowing P.M. settlement for Nasdaq-100
index options, including on the underlying component stocks. In
particular, the data collected from Phlx's NDXPM Pilot Program will
help inform the Commission's consideration of whether the Pilot Program
should be modified, discontinued, extended, or permanently approved.
Furthermore, the Exchange's ongoing analysis of the Pilot Program
should help it monitor any potential risks from large P.M.-settled
positions and take appropriate action on a timely basis if warranted.
    The Exchange represents that it has adequate surveillance
procedures to monitor trading in these options thereby helping to
ensure the maintenance of a fair and orderly market, and has
represented that it has sufficient capacity to handle additional
traffic associated with this new listing.\29\
---------------------------------------------------------------------------

    \29\ See Notice, supra note 3, at 9261. In addition, the
Commission notes that Phlx would have access to information through
its membership in the Intermarket Surveillance Group with respect to
the trading of the securities underlying the Nasdaq-100 index, as
well as tools such as large options positions reports to assist its
surveillance of NDXPM options. In approving the proposed rule
change, the Commission also has relied upon the Exchange's
representation that it has the necessary systems capacity to support
new options series that will result from this proposal. See id.
---------------------------------------------------------------------------

    For the reasons discussed above, the Commission finds that Phlx's
proposal is consistent with the Act, including Section 6(b)(5) thereof,
in that it is designed to remove impediments to and perfect the
mechanism of a free and open market, and, in general, to protect
investors and the public interest. In light of the enhanced closing
procedures at the underlying markets and the potential benefits to
investors discussed by the Exchange in the Notice,\30\ the Commission
finds that it is appropriate and consistent with the Act to approve
Phlx's proposal on a pilot basis. The collection of data during the
Pilot Program and Phlx's active monitoring of any effects of NDXPM on
the markets will help Phlx and the Commission assess any impact of P.M.
settlement in today's market.
---------------------------------------------------------------------------

    \30\ See id. at 9262.
---------------------------------------------------------------------------

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\31\ that the proposed rule change (SR-Phlx-2017-04), as modified
by Amendment Nos. 1 and 2, be, and hereby is, approved, subject to a
pilot period set to expire on the earlier of: (1) Twelve months
following the date of the first listing of NDXPM; or (2) December 29,
2018.
---------------------------------------------------------------------------

    \31\ 15 U.S.C. 78s(b)(2).

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

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\32\
---------------------------------------------------------------------------

    \32\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-16639 Filed 8-7-17; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 82, Number 180 (Tuesday, September 19, 2017)]
[Notices]
[Pages 43755-43756]
[FR Doc No: 2017-19873]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. ER17-2453-000]

Imperial Valley Solar 3, LLC; Supplemental Notice That Initial
Market-Based Rate Filing Includes Request for Blanket Section 204
Authorization

    This is a supplemental notice in the above-referenced proceeding of
Imperial Valley Solar 3, LLC's application for market-based rate
authority, with an accompanying rate tariff, noting that such
application includes a request for blanket authorization, under 18 CFR
part 34, of future issuances of securities and assumptions of
liability.
    Any person desiring to intervene or to protest should file with the
Federal Energy Regulatory Commission, 888 First Street NE., Washington,
DC 20426, in accordance with Rules 211 and 214 of the Commission's
Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone
filing a motion to intervene or protest must serve a copy of that
document on the Applicant.
    Notice is hereby given that the deadline for filing protests with
regard to the applicant's request for blanket authorization, under 18
CFR part 34, of future issuances of securities and assumptions of
liability, is October 3, 2017.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper, using the FERC Online links at http://www.ferc.gov. To facilitate electronic service, persons with Internet
access who will eFile a document and/or be listed as a contact for an
intervenor must create and validate an eRegistration account using the
eRegistration link. Select the eFiling link to log on and submit the
intervention or protests.
    Persons unable to file electronically should submit an original and
5 copies of the intervention or protest to the Federal Energy
Regulatory Commission, 888 First Street NE., Washington, DC 20426.
    The filings in the above-referenced proceeding are accessible in
the Commission's eLibrary system by clicking on the appropriate link in
the above list. They are also available for electronic review in the
Commission's Public Reference Room in Washington, DC. There is an
eSubscription link on the Web site that enables subscribers to receive
email notification when a document is added to a subscribed docket(s).
For assistance with any FERC

Online service, please email<EMAIL_ADDRESS>or call (866)
208-3676 (toll free). For TTY, call<PHONE_NUMBER>.

    Dated: September 13, 2017.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2017-19873 Filed 9-18-17; 8:45 am]
 BILLING CODE 6717-01-P