[Federal Register Volume 85, Number 189 (Tuesday, September 29, 2020)]
[Notices]
[Pages 61071-61077]
[FR Doc No: 2020-21410]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89974; File No. SR-CboeBZX-2020-071]

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
the Fee Schedule

September 23, 2020.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on September 11, 2020, Cboe BZX Exchange, Inc. (the ``Exchange''
or ``BZX'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') is filing
with the Securities and Exchange Commission (``Commission'') a proposed
rule change to amend the fee schedule. The text of the proposed rule
change is provided in Exhibit 5.
    The text of the proposed rule change is also available on the
Exchange's website (http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary, and at
the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend its fee schedule applicable to its
equities trading platform (``BZX Equities'') to: (1) Amend certain
standard rates; (2) update the Add Volume Tiers; (3) update the
Supplemental Incentive Program Tiers; (4) include a Remove Volume Tier;
and (5) include additional Lead Market Maker (``LMM'') Add Volume
Tiers.\3\
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    \3\ The Exchange initially filed the proposed fee changes on
September 1, 2020 (SR-CboeBZX-2020-069). On September 11, 2020, the
Exchange withdrew that filing and submitted this filing.
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    The Exchange first notes that it operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee levels at a particular venue to be
excessive or incentives to be insufficient. More specifically, the
Exchange is only one of 13 registered equities exchanges, as well as a
number of alternative trading systems and other off-exchange venues
that do not have similar self-regulatory responsibilities under the
Exchange Act, to which market participants may direct their order flow.
Based on publicly available information,\4\ no single registered
equities exchange has more than 18% of the market share. Thus, in such
a low-concentrated and highly competitive market, no single equities
exchange possesses significant pricing power in the execution of order
flow. The Exchange in particular operates a

``Maker-Taker'' model whereby it pays credits to members that provide
liquidity and assesses fees to those that remove liquidity. The
Exchange's fee schedule sets forth the standard rebates and rates
applied per share for orders that provide and remove liquidity,
respectively. Currently, for orders priced at or above $1.00, the
Exchange provides a standard rebate of $0.0025 per share for orders
that add liquidity and assesses a fee of $0.0030 per share for orders
that remove liquidity. For orders priced below $1.00, the Exchange does
not assess a fee for orders that add liquidity and assesses a fee of
0.30% of total dollar value for orders that remove liquidity.
Additionally, in response to the competitive environment, the Exchange
also offers tiered pricing which provides Members opportunities to
qualify for higher rebates or reduced fees where certain volume
criteria and thresholds are met. Tiered pricing provides an incremental
incentive for Members to strive for higher tier levels, which provides
increasingly higher benefits or discounts for satisfying increasingly
more stringent criteria.
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    \4\ See Cboe Global Markets, U.S. Equities Market Volume
Summary, Month-to-Date (August 24, 2020), available at https://markets.cboe.com/us/equities/market_statistics/.
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Proposed Amendment to Standard Rates
    As stated above, the Exchange currently assesses a standard rebate
of $0.0025 per share for orders that add liquidity in securities priced
at $1.00 or more. Also, for orders in securities below $1.00, it does
not assess a standard fee for orders that add liquidity and assesses a
fee of .30% of total dollar value per share for orders that remove
liquidity. The Exchange proposes to amend the standard rate for orders
that add liquidity in securities priced at $1.00 or more from a
standard rebate of $0.0025 per share to $0.0020 per share and reflects
this change in the Fee Codes and Associated Fee where applicable (i.e.,
corresponding to fee codes B, V, and Y). The Exchange also proposes to
amend the standard rates for orders in securities priced under $1.00
that add liquidity by providing for a standard rebate of $0.00009 per
share, and reflects this change in footnote 7 which is appended to
corresponding fee codes that add liquidity (i.e., B, V and Y). The
Exchange notes that these standard rates are in line with, yet also
competitive with, rates assessed by other equities exchanges on orders
in securities priced at $1.00 or more \5\ and in securities priced
below $1.00.\6\ The Exchange notes, too, that its affiliated exchange,
Cboe EDGX Exchange, Inc. (``EDGX Equities''), is simultaneously
submitting a fee change to amend its same current standard rates for
orders in securities under $1.00 that add liquidity in the same manner.
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    \5\ See NYSE Price List 2020, ``Transactions in stocks with a
per share stock price of $1.00 or more'', which assesses a fee of
ranging from no charge to $0.0018 for various orders in securities
priced at $1.00 or more; and Nasdaq Pricing 7, Section 118(a)(1),
which assesses a charge ranging from no charge to $0.0035 or a
credit ranging from $0.00005 to $0.00325 for various orders in
securities priced at $1.00 or more.
    \6\ See NYSE Price List 2020, ``Transactions in stocks with a
per share stock price less than $1.00'', which either does not
assess a charge or assesses a charge of 0.3% for various orders in
securities priced below $1.00; and Nasdaq Price List, ``Rebates and
Fees, Shares Executed Below $1.00'', available at http://www.nasdaqtrader.com/Trader.aspx?id=PriceListTrading2, which
assesses no charge for orders to add liquidity in securities priced
below $1.00 and assesses a charge of 0.30% of total dollar volume
for orders to remove liquidity in securities priced below $1.00. See
also Securities Exchange Release No. 89607 (August 18, 2020), 85 FR
52179 (August 24, 2020) (SR-NYSEArca-2020-75), which recently
amended in its fee schedule the base rate for adding and removing
liquidity in Round Lots and Odd Lots in Tapes A, B and C securities
with a per share price below $1.00.
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Proposed Updates to the Add Volume Tiers
    The Exchange currently offers five Add Volume Tiers under footnote
1 of the Fee Schedule. The Add Volume Tiers provide Members with
opportunities to receive incrementally increasing enhanced rebates for
their liquidity adding orders that yield fee codes ``B'' \7\, ``V''
\8\, and ``Y'' \9\, upon reaching incrementally more difficult criteria
under each tier. Specifically, the Add Volume Tiers currently offer the
following:
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    \7\ Appended to displayed orders that adds liquidity to BZX
(Tape B) and is assessed a standard rebate of $0.0025.
    \8\ Appended to displayed orders that adds liquidity to BZX
(Tape A) and is assessed a standard rebate of $0.0025.
    \9\ Appended to displayed orders that adds liquidity to BZX
(Tape C) and is assessed a standard rebate of $0.0025.
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     Tier 1 offers an enhanced rebate of $0.0028 for qualifying
orders (i.e., yielding fee codes B, V or Y) where a Member has an ADAV
\10\ as a percentage of TCV \11\ greater than or equal to 0.20%;
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    \10\ ``ADAV'' means average daily added volume calculated as the
number of shares added per day. ADAV is calculated on a monthly
basis.
    \11\ ``TCV'' means total consolidated volume calculated as the
volume reported by all exchanges and trade reporting facilities to a
consolidated transaction reporting plan for the month for which the
fees apply.
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     Tier 2 offers an enhanced rebate of $0.0029 for qualifying
orders where a Member has an ADAV as a percentage of TCV greater than
or equal to 0.30%;
     Tier 3 offers an enhanced rebate of $0.0030 for qualifying
orders where a Member has an ADAV as a percentage of TCV greater than
or equal to 0.50%;
     Tier 4 offers an enhanced rebate of $0.0031 for qualifying
orders where a Member has an ADAV as a percentage of TCV greater than
or equal to 1.00%; and
     Tier 5 offers an enhanced rebate of $0.0032 for qualifying
orders where a Member has an ADAV as a percentage of TCV greater than
or equal to 1.25%.
    The Exchange proposes to amend the rebates offered and the criteria
under each Add Volume Tier, as well as proposes an additional Tier 6,
as follows:
     Proposed Tier 1 offers an enhanced rebate of $0.0025 for
qualifying orders where a Member has an ADAV greater than or equal to
1,000,000;
     Proposed Tier 2 offers an enhanced rebate of $0.0027 for
qualifying orders where a Member has an ADAV as a percentage of TCV
greater than or equal to 0.10%;
     Proposed Tier 3 offers an enhanced rebate of $0.0028 for
qualifying orders where a Member has an ADAV as a percentage of TCV
greater than or equal to 0.20%;
     Proposed Tier 4 offers an enhanced rebate of $0.0029 for
qualifying orders where a Member has an ADAV as a percentage of TCV
greater than or equal to 0.25%;
     Proposed Tier 5 offers an enhanced rebate of $0.0030 for
qualifying orders where a Member has an ADAV as a percentage of TCV
greater than or equal to 0.40%; and
     Proposed new Tier 6 offers an enhanced rebate of $0.0031
for qualifying orders where a Member has an ADAV as a percentage of TCV
greater than or equal to 0.85%.
    The proposed rule change to Tiers 1 through 5 eases the difficulty
in reaching the tiers' criteria while amending the enhanced rebates to
correspond with the ease in criteria and proposed Tier 6 offers Members
an additional opportunity to receive a rebate on their qualifying
orders. The proposed restructuring of the current Add Volume Tiers and
the new criteria and reduced fee offered in proposed Tier 6 are
designed to provide Members with increased incentives to receive
enhanced rebates on their liquidity adding displayed orders by
increasing their add volume order flow in order to achieve the proposed
eased and/or additional criteria.
Proposed Updates to the Supplemental Incentive Program Tiers
    The Exchange currently offers three different Supplemental
Incentive Program Tiers under footnote 1 of the Fee Schedule, wherein a
Member may receive an additional rebate for qualifying orders where a
Member adds

a certain Tape ADV \12\ as a percentage of that Tape's TCV.
Specifically, the Supplemental Incentive Program Tiers offered are as
follows:
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    \12\ ``ADV'' means average daily volume calculated as the number
of shares added or removed, combined, per day. ADV is calculated on
a monthly basis.
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     Supplemental Incentive Program--Tape A Tier offers an
additional rebate of $0.0001 for orders yielding fee code V \13\ where
a Member adds a Tape A ADV greater than or equal to 0.50% of the Tape A
TCV;
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    \13\ See supra note 8.
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     Supplemental Incentive Program--Tape B Tier offers an
additional rebate of $0.0001 for orders yielding fee code B \14\ where
a Member adds a Tape B ADV greater than or equal to 0.50% of the Tape B
TCV; and
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    \14\ See supra note 7.
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     Supplemental Incentive Program--Tape C Tier offers an
additional rebate of $0.0001 for orders yielding fee code Y \15\ where
a Member adds a Tape C ADV greater than or equal to 0.50% of the Tape C
TCV;
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    \15\ See supra note 9.
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    The proposed rule change amends each of the tiers' criteria by
reducing the percentage of Tape ADV over Tape TCV from 0.50% to 0.30%.
The proposed rule change also updates the language in each Tier to
state ``where a Member has a Tape A/B/C ADAV'', which essentially
states the same requirement as ``adds an ADV,'' but is more
appropriately aligned with the defined terms in the Fee Schedule.\16\
The proposed rule change to the Supplemental Incentive Program Tiers
does not alter any of the additional rebate amounts currently offered.
As such, the reduction in percentage of Tape ADAV over TCV, thus easing
the tiers' criteria, is designed to further incentivize Members to
submit displayed order flow to Tapes A, B and C to receive the current
additional rebates provided under the Supplemental Incentive Program
Tiers.
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    \16\ See supra notes 10 and 12.
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Proposed Remove Volume Tier
    The Exchange proposes to add a new Remove Volume Tier under
footnote 1 of the Fee Schedule.\17\ The proposed Remove Volume Tier
offers a reduced fee of $0.0029 for orders in securities at or above
$1.00 and 0.28% of total dollar value for orders in securities below
$1.00 \18\ yielding fee code ``N'',\19\ ``W'' \20\ and ``BB'' \21\
where a Member has an ADAV greater than or equal to 0.20% TCV with
displayed orders that yield fee codes B, V or Y. The proposed Remove
Volume Tier is designed to incentivize Members to increase their orders
that add displayed volume on the Exchange in order to receive a reduced
fee on their qualifying, liquidity removing orders.
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    \17\ As a result of the new Remove Volume Tier, it also updates
the title of footnote 1 to ``Add/Remove Volume Tiers''.
    \18\ As a result, the Exchange proposes to update the statement
under General Notes in the Fee Schedule to state that ``unless
otherwise indicated, variable rates provided by tiers apply only to
executions in securities priced at or above $1.00.
    \19\ Appended to orders that remove liquidity from BZX (Tape C)
and is assessed a standard fee of $0.00300.
    \20\ Appended to orders that remove liquidity from BZX (Tape A)
and is assessed a standard fee of $0.00300.
    \21\ Appended to orders that remove liquidity from BZX (Tape B)
and is assessed a standard fee of $0.00300.
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Proposed Updates to the LMM Add Volume Tiers
    Under the Exchange's LMM Program, the Exchange offers daily
incentives for LMMs in securities listed on the Exchange for which the
LMM meets certain Minimum Performance Standards.\22\ Such daily
incentives are determined based on the number of Cboe-listed securities
for which the LMM meets such Minimum Performance Standards and the
average auction volume across such securities. Generally, the more LMM
Securities \23\ for which the LMM meets the Minimum Performance
Standards and the higher the auction volume across those securities,
the greater the total daily payment to the LMM. Currently, the Exchange
offers an LMM Add Volume Tier under footnote 14 of the Fee Schedule,
which provides an additional rebate of $0.0001 for LMM orders yielding
B, V and Y \24\ where an LMM 1) adds an ADV \25\ greater than or equal
to 0.20% of the TCV, 2) has an Average Aggregate Daily Auction Volume
in LMM Securities greater than or equal to 500,000, and 3) is enrolled
in at least 75 LMM Securities.
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    \22\ As defined in Rule 11.8(e)(1)(E), the term ``Minimum
Performance Standards'' means a set of standards applicable to an
LMM that may be determined from time to time by the Exchange. Such
standards will vary between LMM Securities depending on the price,
liquidity, and volatility of the LMM Security in which the LMM is
registered. The performance measurements will include: (A) Percent
of time at the NBBO; (B) percent of executions better than the NBBO;
(C) average displayed size; and (D) average quoted spread. For
additional detail, see Original LMM Filing.
    \23\ As defined in Rule 11.8(e)(1)(D), the term ``LMM Security''
means a Listed Security that has an LMM. As defined in Rule
11.8(e)(1)(B), the term ``Listed Security'' means any ETP or any
Primary Equity Security or Closed-End Fund listed on the Exchange
pursuant to Rule 14.8 or 14.9.
    \24\ See supra notes 7, 8 and 9.
    \25\ Like the proposed clarification in the Supplement Incentive
Tiers, the proposed rule change also updates the language in LMM Add
Volume Tier 1 to state ``where a Member has a Tape A/B/C ADAV'',
which essentially states the same requirement as ``adds an ADV'',
but is more appropriately aligned with the defined terms in the Fee
Schedule. See supra note 15.
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    The Exchange proposes to include three additional LMM Add Volume
Tiers as follows:\26\
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    \26\ As a result of the proposed additional LMM Add Volume
Tiers, the Exchange updates the current LMM Add Volume Tier to be
LMM Add Volume Tier 1.
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     Proposed LMM Add Volume Tier 2 provides an additional
rebate of $0.0006 for orders yielding fee codes V \27\ and ``HV'' \28\
where an LMM 1) is enrolled is enrolled in at least 50 LMM Securities,
and 2) has a Tape A ADAV greater than or equal to 0.10% of the Tape A
TCV;
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    \27\ See supra note 8.
    \28\ Appended to non-displayed orders that add liquidity (Tape
A) and are assessed a standard rebate of $0.0015.
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     Proposed LMM Add Volume Tier 3 provides an additional
rebate of $0.0003 for orders yielding fee codes B \29\ and ``HB'' \30\
where an LMM 1) is enrolled is enrolled in at least 50 LMM Securities,
and 2) has a Tape B ADAV greater than or equal to 0.20% of the Tape B
TCV;
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    \29\ See supra note 7.
    \30\ Appended to non-displayed orders that add liquidity (Tape
B) and are assessed a standard rebate of $0.0015.
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     LMM Add Volume Tier 4 provides an additional rebate of
$0.0006 for orders yielding fee codes Y \31\ and ``HY'' \32\ where an
LMM (1) is enrolled in at least 50 LMM Securities, and (2) has a Tape C
ADAV greater than or equal to 0.10% of the Tape C TCV.
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    \31\ See supra note 9.
    \32\ Appended to non-displayed orders that add liquidity (Tape
C) and are assessed a standard rebate of $0.0015.
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    The proposed additional tiers also explicitly include that the
proposed additional rebates apply to orders in securities priced below
$1.00 and makes clear in the general heading language that both
displayed and non-displayed orders will count toward meeting the tiers'
criteria. The proposed additional LMM Add Volume tiers are designed to
provide LMM Members with opportunities to receive additional rebates
for both their displayed and non-displayed orders, thus further
incentivizing Members to enroll and participate in the LMM Program, as
well LMM Members to continue to add volume to Tape A, B and C.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\33\

in general, and furthers the objectives of Section 6(b)(4),\34\ in
particular, as it is designed to provide for the equitable allocation
of reasonable dues, fees and other charges among its Members, issuers
and other persons using its facilities. The Exchange operates in a
highly competitive market in which market participants can readily
direct order flow to competing venues if they deem fee levels at a
particular venue to be excessive or incentives to be insufficient. The
proposed rule changes reflect a competitive pricing structure designed
to incentivize market participants to direct their order flow to the
Exchange, which the Exchange believes would enhance market quality to
the benefit of all Members. The Exchange notes that relative volume-
based incentives and discounts have been widely adopted by exchanges,
including the Exchange, and are reasonable, equitable and non-
discriminatory because they are open to all members on an equal basis
and provide additional benefits or discounts that are reasonably
related to (i) the value to an exchange's market quality and (ii)
associated higher levels of market activity, such as higher levels of
liquidity provision and/or growth patterns. Additionally, as noted
above, the Exchange operates in highly competitive market. The Exchange
is only one of several equity venues to which market participants may
direct their order flow, and it represents a small percentage of the
overall market. It is also only one of several maker-taker exchanges.
Competing equity exchanges offer similar tiered pricing structures,
including schedules of rebates and fees that apply based upon members
achieving certain volume and/or growth thresholds, as well as assess
similar fees or rebates for similar types of orders, to that of the
Exchange. These competing pricing schedules, moreover, are presently
comparable to those that the Exchange provides, including the pricing
of comparable criteria and/or fees and rebates.
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    \33\ 15 U.S.C. 78f.
    \34\ 15 U.S.C. 78f(b)(4).
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    Regarding the proposed change to the standard rates, the Exchange
believes that amending the standard rates for orders that add volume in
securities prices at $1.00 or more and in securities priced below $1.00
is reasonable because, as stated above, in order to operate in the
highly competitive equities markets, the Exchange and its competing
exchanges seek to offer similar pricing structures, including assessing
comparable standard rates for orders in securities priced at or above,
as well as priced below, $1.00.\35\ Thus, the Exchange believes the
proposed standard rate changes are reasonable as they are generally
aligned with and competitive with the amounts assessed for the orders
in securities above/below $1.00 on other equities exchanges. The
Exchange also believes that amending the standard rate amounts
represents an equitable allocation of fees and is not unfairly
discriminatory because they will continue to automatically and
uniformly apply to all Members' orders that add liquidity in securities
at $1.00 or more and in securities less than $1.00.
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    \35\ See supra notes 5 and 6.
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    Regarding the proposed updates and additions to the Add Volume,
Supplemental Incentive and LMM Add Volume Tiers, as well as the new
Remove Volume Tier, the Exchange believes that the proposed tiers are
reasonable because they each provide an additional opportunity (either
by amending existing tiers or adding new tiers) for Members to receive
a discounted rate or enhanced rebates by means of liquidity adding
orders. The Exchange notes the proposed tiers are available to all
Members and are competitively achievable for all Members that submit
the requisite order flow, in that, all firms are eligible for the
proposed tiers and those that submit the requisite order flow could
compete to meet the proposed tiers. Each Member will uniformly receive
the respective proposed enhanced rebates, additional rebates or reduced
fee if the corresponding tier criteria is met. The Exchange also
believes that the proposed tiers are reasonable, equitable and not
unfairly discriminatory because, as noted above, competing equity
exchanges offer similar tiered pricing structures to that of the
proposed Add Volume,\36\ Supplemental Incentive,\37\ Remove Volume,\38\
and LMM Add Volume Tiers,\39\ including as amended, which are presently
comparable in pricing and criteria to the proposed tiers.
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    \36\ See EDGA Equities Fee Schedule, footnote 7, ``Add/Remove
Volume Tiers''; BYX Equities Fee Schedule, footnote 1, ``Add/Remove
Volume Tiers''; and EDGX Equities Fee Schedule, footnote 1, ``Add
Volume Tiers'', each of which provide for similar add volume
criteria for which members may receive comparable reduced fees on
their orders (EDGA/BYX) or enhanced rebates ranging from $0.0023 to
$0.0028 (EDGX) for meeting such thresholds.
    \37\ See NYSE Price List, ``Credit Applicable to Supplemental
Liquidity Providers (``SLPs'')'', which provides additional credits
up to $0.0005 for various types of Tape liquidity; and Nasdaq Equity
7, Section 118(a)(1), which provides supplemental credit of $0.00005
for various types of Tape liquidity.
    \38\ See EDGA Equities Fee Schedule, footnote 7, ``Add/Remove
Volume Tiers'', of which the Remove Volume Tiers offers an enhanced
rebate of $0.0022 or $0.0028 for reaching a certain threshold of ADV
over TCV; and BYX Equities Fee Schedule, footnote 1, ``Add/Remove
Volume Tiers'', of which the Remove Volume Tiers offer enhanced
rebates between $0.0015 and $0.0018 for various criteria (Step-Up
volume, ADAV of a set number of shares, ADV as a percentage of TCV,
etc.).
    \39\ See Nasdaq Phlx Equity 7 Pricing Schedule, Section 3(c),
which provides up to an additional credit of $0.0003 for various
order and quoting volume thresholds for the exchange's qualified
market makers (``QMMs''); and NYSE Price List, ``Fees and Credits
applicable to Designated Market Makers (``DMMs'')'', which provides,
among various credits for orders in securities at or above $1.00,
additional credit of $0.0004 for DMMs adding liquidity in securities
under $1.00. See also Securities Exchange Release No. 89607 (August
18, 2020), 85 FR 52179 (August 24, 2020) (SR-NYSEArca-2020-75),
which recently adopted in its fee schedule a step up tier for ETP
Holders adding liquidity in Round Lots and Odd Lots in Tapes A, B
and C securities with a per share price below $1.00 and amended the
base rate for adding and removing liquidity in Round Lots and Odd
Lots in Tapes A, B and C securities with a per share price below
$1.00.
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    In particular, the Exchange believes the proposed Add Volume Tiers
are reasonable because they amend existing opportunities by easing the
level of difficulty in each of the existing five tiers, thus
maintaining the current structure of step-up in difficulty in achieving
each ascending tier, and provide an additional, also incrementally more
challenging, opportunity in proposed Tier 6. The proposed ease in
criteria and additional tier will incentivize Members to increase add
volume order flow in order to receive the corresponding enhanced
rebates for Members' qualifying orders. The Exchange further believes
that the proposed rule changes to the Add Volume Tiers are reasonable
as they represent proportional decreases in difficulty per adjacent
tiers. In line with easing the relative level of difficulty in each of
the Add Volume Tiers, the Exchange believes that providing a reduced
enhanced rebate per tier is reasonable as it is commensurate with the
proposed criteria. That is, the reduction in enhanced rebates
reasonably reflects the scaled difficulty in achieving the add volume
criteria over a baseline of 1,000,000 in proposed Tier 1, up through
the incrementally increasing ADAV threshold as a percentage of TCV in
Tiers 2 through 6. Also, the proposed reduced enhanced rebates (and
proposed additional enhanced rebate in Tier 6) corresponding to the
proposed criteria in the Add Volume Tiers do not represent a
significant departure from the enhanced rebates currently offered under
the tiers, and merely incrementally shifts the range of enhanced
rebates offered to most appropriately align with the

corresponding shift in criteria difficulty per each tier.
    Similarly, the Exchange believes the proposed amendments to the
Supplemental Incentive Tiers are reasonable because they, too, amend
existing opportunities by uniformly easing the level of difficulty in
each of the three existing Supplemental Incentive Tiers, which
currently provide for the same criteria thresholds per Tape. Therefore,
by uniformly easing the criteria per each tier, while maintaining the
existing additional rebate amounts, the proposed rule change to the
Supplemental Tiers is reasonably designed to incentivize Members to
increase their add volume order flow per each Tape.
    The Exchange believes the Remove Volume Tier is a reasonable means
to incentivize Members to continue to provide liquidity adding,
displayed volume to the Exchange by offering them a different,
additional opportunity than that of the Add Volume Tiers--to receive a
reduced fee on their liquidity removing orders by meeting the proposed
criteria in submitting additional add volume order flow. In addition to
this, the Exchange has recently observed that trading in subdollar
names has grown significantly; nearly tripling since the beginning of
2020, and that competing equities exchanges have begun offering pricing
incentives for subdollar orders.\40\ Therefore, the Exchange believes
that it is reasonable and equitable to provide the proposed reduced fee
under the new Remove Volume Tier for qualifying subdollar orders. Also,
as indicated above, the Exchange's affiliated equities exchanges
already have similar Remove Volume in place, which offer similar
rebates for achieving comparable criteria, in addition to their Add
Volume Tiers.\41\
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    \40\ See NYSE Price List, ``Fees and Credits applicable to
Designated Market Makers (``DMMs'')'', which provides, among various
credits for orders in securities at or above $1.00, additional
credit of $0.0004 for DMMs adding liquidity in securities under
$1.00; see also Securities Exchange Release No. 89607 (August 18,
2020), 85 FR 52179 (August 24, 2020) (SR-NYSEArca-2020-75), which
recently adopted in its fee schedule a step up tier for ETP Holders
adding liquidity in Round Lots and Odd Lots in Tapes A, B and C
securities with a per share price below $1.00 and amended the base
rate for adding and removing liquidity in Round Lots and Odd Lots in
Tapes A, B and C securities with a per share price below $1.00.
    \41\ See supra note 38.
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    The Exchange believes the proposed additional LMM Add Volume Tiers
are reasonable in that they offer LMM Members on the Exchange an
additional opportunity to receive an added rebate for their provision
of liquidity, both displayed and non-displayed, per Tape. As with the
proposed Remove Volume Tier, the Exchange believes that it is
reasonable and equitable to provide the proposed additional rebates
under the new LMM Add Volume Tiers for qualifying subdollar orders as a
result of the recent expansive growth in the subdollar market segment,
as well as competitive pricing offered by other equities exchanges for
subdollar orders.\42\ The Exchange believes the proposed additional
rebates for both liquidity adding displayed and non-displayed orders to
the Tapes will incentivize increased overall order flow to the Book and
price-improvement opportunities. The Exchange also notes that the
proposed LMM Add Volume Tiers reflect a competitive pricing structure
designed to incentivize market participants to enroll in LMP
Securities, which the Exchange believes will enhance market quality in
all securities listed on the Exchange and encourage issuers to list new
products and transfer existing products to the Exchange. The Exchange
further believes that the proposed criteria and corresponding
additional rebates per tier are reasonable and equitable. Generally,
Tape B experiences less variability in terms of broader market share,
whereas Tape A and C tend to experience more volatility. As a result,
the Exchange has observed that LMM Members generally submit less Tape
volume in connection with Tape A and Tape C. For example, the average
Tape ADAV as a percentage of Tape TCV in Tape A and Tape C from LMM
Members in the last month was approximately ten basis points lower than
their average Tape ADAV over Tape TCV in Tape B. As a result, the
Exchange believes Members are more easily able to meet a volume
requirement for Tape B, and therefore, it is equitable to provide for a
slightly higher ADAV Tape B threshold of Tape B TCV than that for Tape
A and C, that corresponds to a slightly lower additional rebate than
that which corresponds to Tape A and C.
---------------------------------------------------------------------------

    \42\ See supra note 40.
---------------------------------------------------------------------------

    Overall, the Exchange believes that easing the current tiers'
criteria and adding new tier criteria, each based on a Member's
liquidity adding orders, will benefit all market participants by
incentivizing continuous liquidity and thus, deeper more liquid markets
as well as increased execution opportunities. Particularly, the
majority of the proposed tiers are designed to incentivize continuous
displayed liquidity, which signals other market participants to take
the additional execution opportunities provided by such liquidity,
while the proposed incentives to provide non-displayed liquidity will
further contribute to a deeper, more liquid market and provide even
more execution opportunities for active market participants at improved
prices. This overall increase in activity deepens the Exchange's
liquidity pool, offers additional cost savings, supports the quality of
price discovery, promotes market transparency and improves market
quality, for all investors.
    In addition to this, the Exchange believes that the proposal
represents an equitable allocation of rebates and is not unfairly
discriminatory because all Members will continue to be eligible for the
Add Volume and Supplemental Incentive Tiers, as amended, and in the
same way will be eligible for the proposed Remove Volume Tier and
additional Add Volume and LMM Add Volume Tiers. Without having a view
of activity on other markets and off-exchange venues, the Exchange has
no way of knowing whether this proposed rule change would definitely
result in any Members qualifying for the proposed tiers. While the
Exchange has no way of predicting with certainty how the proposed tiers
will impact Member activity, the Exchange anticipates that for the
proposed Add Volume Tiers approximately between seven and thirteen
Members will be able to compete for and achieve the proposed criteria
across proposed Add Volume Tiers 1 and 2; at least three Members will
be able to compete for and achieve the amended criteria in each Add
Volume Tier 3 and 4; and at least six Members will be able to compete
for and achieve the amended/new criteria across Add Volume Tiers 5 and
6. The Exchange anticipates that for the proposed Supplemental
Incentive Tiers at least three Members will be able to compete for and
achieve the proposed criteria in each of the three additional tiers.
The Exchange anticipates that for the proposed Remove Volume Tier at
least ten Members will be able to compete for and achieve the proposed
criteria. Finally, the Exchange anticipates that for the proposed Add
Volume LMM Tiers at least two LMM Members will be able to compete for
and achieve the proposed criteria in each of the three additional
tiers. The Exchange anticipates that the tiers will include various
liquidity providing Member types, such as traditional Market Makers,
and wholesale or consolidator firms that mainly make markets for retail
orders, each providing distinct types of order flow to the Exchange to
the benefit of all market participants. The Exchange also notes that
the proposed tiers will not

adversely impact any Member's pricing or their ability to qualify for
other rebate tiers. Rather, should a Member not meet the proposed
criteria for a tier, the Member will merely not receive the
corresponding additional rebate.

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 that is not necessary or appropriate
in furtherance of the purposes of the Act. Rather, as discussed above,
the Exchange believes that the proposed change would encourage the
submission of additional order flow to a public exchange, thereby
promoting market depth, execution incentives and enhanced execution
opportunities, as well as price discovery and transparency for all
Members. As a result, the Exchange believes that the proposed change
furthers the Commission's goal in adopting Regulation NMS of fostering
competition among orders, which promotes ``more efficient pricing of
individual stocks for all types of orders, large and small.'' \43\
---------------------------------------------------------------------------

    \43\ Securities Exchange Act Release No. 51808, 70 FR 37495,
37498-99 (June 29, 2005) (S7-10-04) (Final Rule).
---------------------------------------------------------------------------

    The Exchange believes the proposed rule change does not impose any
burden on intramarket competition that is not necessary or appropriate
in furtherance of the purposes of the Act. Particularly, the proposed
changes apply to all Members equally in that all Members are eligible
for the proposed Add Volume Tiers, Supplemental Incentive Tiers, Remove
Volume Tier and LMM Add Volume Tiers (and have the same opportunity to
become an LMM Member), have a reasonable opportunity to meet the tiers'
criteria and will all receive the corresponding proposed enhanced
rebates, additional rebates and reduced fee if such criteria are met.
Additionally, the proposed tier changes are designed to attract
additional order flow to the Exchange. The Exchange believes that the
updated tier criteria and the additional tier criteria would
incentivize market participants to direct liquidity adding order flow
to the Exchange, bringing with it additional execution opportunities
for market participants and improved price transparency. Greater
overall order flow, trading opportunities, and pricing transparency
benefits all market participants on the Exchange by enhancing market
quality and continuing to encourage Members to send orders, thereby
contributing towards a robust and well-balanced market ecosystem. In
addition to this, the Exchange notes that the proposed amendments to
the standard rebates for orders in securities above/below $1.00 will
continue to apply automatically to all such Members' orders uniformly.
    Next, the Exchange believes the proposed rule change does not
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. As previously
discussed, the Exchange operates in a highly competitive market.
Members have numerous alternative venues that they may participate on
and direct their order flow, including 12 other equities exchanges and
off-exchange venues and alternative trading systems. Additionally, the
Exchange represents a small percentage of the overall market. Based on
publicly available information, no single equities exchange has more
than 18% of the market share.\44\ Therefore, no exchange possesses
significant pricing power in the execution of order flow. Indeed,
participants can readily choose to send their orders to other exchange
and off-exchange venues if they deem fee levels at those other venues
to be more favorable. Moreover, the Commission has repeatedly expressed
its preference for competition over regulatory intervention in
determining prices, products, and services in the securities markets.
Specifically, in Regulation NMS, the Commission highlighted the
importance of market forces in determining prices and SRO revenues and,
also, recognized that current regulation of the market system ``has
been remarkably successful in promoting market competition in its
broader forms that are most important to investors and listed
companies.'' \45\ The fact that this market is competitive has also
long been recognized by the courts. In NetCoalition v. Securities and
Exchange Commission, the D.C. Circuit stated as follows: ``[n]o one
disputes that competition for order flow is `fierce.' . . . As the SEC
explained, `[i]n the U.S. national market system, buyers and sellers of
securities, and the broker-dealers that act as their order-routing
agents, have a wide range of choices of where to route orders for
execution'; [and] `no exchange can afford to take its market share
percentages for granted' because `no exchange possesses a monopoly,
regulatory or otherwise, in the execution of order flow from broker
dealers'. . . .''.\46\ Accordingly, the Exchange does not believe its
proposed fee change imposes any burden on competition that is not
necessary or appropriate in furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \44\ See supra note 4.
    \45\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
    \46\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010)
(quoting Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
---------------------------------------------------------------------------

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

    The Exchange neither solicited nor received comments on the
proposed rule change.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \47\ and paragraph (f) of Rule 19b-4 \48\
thereunder. At any time within 60 days of the filing of the proposed
rule change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
---------------------------------------------------------------------------

    \47\ 15 U.S.C. 78s(b)(3)(A).
    \48\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-CboeBZX-2020-071 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-CboeBZX-2020-071. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will

post all comments on the Commission's internet website (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent
amendments, all written statements with respect to the proposed rule
change that are filed with the Commission, and all written
communications relating to the proposed rule change between the
Commission and any person, other than those that may be withheld from
the public in accordance with the provisions of 5 U.S.C. 552, will be
available for website viewing and printing in the Commission's Public
Reference Room, 100 F Street NE, Washington, DC 20549, on official
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of
the filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change. Persons submitting comments are cautioned that we do
not redact or edit personal identifying information from comment
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
CboeBZX-2020-071 and should be submitted on or before October 20, 2020.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\49\
---------------------------------------------------------------------------

    \49\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-21410 Filed 9-28-20; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 109 (Monday, June 8, 2015)]
[Notices]
[Pages 32391-32392]
[FR Doc No: 2015-13969]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Docket ID: FEMA-2015-0015; OMB No. 1660-0073]

Agency Information Collection Activities: Proposed Collection;
Comment Request; National Urban Search and Rescue Response System

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

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

SUMMARY: The Federal Emergency Management Agency, as part of its
continuing effort to reduce paperwork and respondent burden, invites
the general public and other Federal agencies to take this opportunity
to comment on a revision of a currently approved information
collection. In accordance with the Paperwork Reduction Act of 1995,
this notice seeks comments concerning the Urban Search and Rescue
Response System information collection.

DATES: Comments must be submitted on or before August 7, 2015.

ADDRESSES: To avoid duplicate submissions to the docket, please use
only one of the following means to submit comments:
    (1) Online. Submit comments at www.regulations.gov under Docket ID
FEMA-2015-0015. Follow the instructions for submitting comments.
    (2) Mail. Submit written comments to Docket Manager, Office of
Chief Counsel, DHS/FEMA, 500 C Street SW., Room 8NE, Washington, DC
20472-3100.
    (3) Facsimile. Submit comments to<PHONE_NUMBER>.
    All submissions received must include the agency name and Docket
ID. Regardless of the method used for submitting comments or material,
all submissions will be posted, without change, to the Federal
eRulemaking Portal at http://www.regulations.gov, and will include any
personal information you provide. Therefore, submitting this
information makes it public. You may wish to read the Privacy Act
notice that is available via the link in the footer of
www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Catherine Deel, Program Specialist,
FEMA, Response Directorate, Operations Division, at<PHONE_NUMBER>. You
may contact the Records Management Division for copies of the proposed
collection of information at facsimile number<PHONE_NUMBER> or email
address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Section 303 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (Stafford Act), 42 U.S.C.
5144, authorizes the President of the United States to form emergency
support teams of Federal personnel to be deployed to an area affected
by major disaster or emergency. Section 403(a)(3)(B) of the Stafford
Act provides that the President may authorize Federal Agencies to
perform work on public or private lands essential to save lives and
protect property, including search and rescue and emergency medical
care, and other essential needs. The Post Katrina Emergency Management
Reform Act (PKEMRA) codified the Urban Search and Rescue in the
Homeland Security Act of 2002 (as amended), stating:

    There is in the Agency [FEMA] a system known as the National
Urban Search and Rescue Response System (US&R).

    The information collection activity authorized under the
Omnicircular, 2 CFR part 200, is the collection of program and
administrative information from US&R Sponsoring Agencies relating to
readiness and response cooperative agreement awards.

Collection of Information

    Title: National Urban Search and Rescue Response System.
    Type of Information Collection: Revision of a currently approved
information collection.
    OMB Number: 1660-0073.
    FEMA Forms: FEMA Form 089-0-10, Urban Search Rescue Response System
Narrative Statement Workbook; FEMA Form 089-0-11, Urban Search Rescue
Response System Semi-Annual Performance Report; FEMA Form 089-0-12,
Urban Search Rescue Response System Amendment Form; FEMA Form 089-0-14,
Urban Search Rescue Response System Task Force Self-Evaluation
Scoresheet; FEMA Form 089-0-15, Urban Search Rescue Response System
Task Force Deployment Data; FEMA Form 089-0-26, Vehicle Support Unit
Purchase/Replacement/Disposal Justification.
    Abstract: The information collection activity is the collection of
financial, program and administrative information for US&R Sponsoring
Agencies relating to readiness and response Cooperative Agreement
awards.
    Affected Public: State, Local or Tribal Government.
    Number of Respondents: 28.
    Number of Responses: 210.
    Estimated Total Annual Burden Hours: 392 hours.

                                                       Estimated Annualized Burden Hours and Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Number of                  Average       Total                     Total
                                                                Number of    responses      Total      burden per     annual      Average       annual
         Type of respondent              Form name/form No.    respondents      per       number of     response   burden  (in  hourly wage   respondent
                                                                             respondent   responses    (in hours)     hours)        rate         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
State, Local or Tribal Government     FEMA Form 089-0-10, A             28            1           28            4          112       $42.94    $4,809.28
 (US&R Task Forces).                   thru I: Narrative
                                       Statement Workbook.
State, Local or Tribal Government     Semi-Annual Performance           28            2           56            2          112        42.94     4,809.28
 (US&R Task Forces).                   Report/FEMA Form 089-0-
                                       11.
State, Local or Tribal Government     Amendment Form/FEMA               28            2           56            1           56        42.94     2,404.64
 (US&R Task Forces).                   Form 089-0-12.
State, Local or Tribal Government     Self-Evaluations/FEMA             28            1           28            2           56        42.94     2,404.64
 (US&R Task Forces).                   Form 089-0-14.
State, Local or Tribal Government     Task Force Deployment             28            1           28            1           28        42.94     1,202.32
 (US&R Task Forces).                   Data/FEMA Form 089-0-
                                       15.
State, Local or Tribal Government     Vehicle Support Unit              14            1           14            2           28        42.94     1,202.32
 (US&R Task Forces).                   Purchase/Replacement/
                                       Disposal Justification
                                       Form/FEMA Form 089-0-
                                       26.
                                                              ------------------------------------------------------------------------------------------

    Total...........................  .......................           28  ...........          210  ...........          392  ...........    16,832.48
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The ``Avg. Hourly Wage Rate'' for each respondent includes a 1.4 multiplier to reflect a fully-loaded wage rate.

    Estimated Cost: The estimated annual cost to respondents for the
hour burden is $16,832.48. There are no annual costs to respondents'
operations and maintenance costs for technical services. There are no
annual start-up or capital costs. The cost to the Federal Government is
$79,665.90.

Comments

    Comments may be submitted as indicated in the ADDRESSES caption
above. Comments are solicited to (a) evaluate whether the proposed data
collection is necessary for the proper performance of the agency,
including whether the information shall have practical utility; (b)
evaluate the accuracy of the agency's estimate of the burden of the
proposed collection of information, including the validity of the
methodology and assumptions used; (c) enhance the quality, utility, and
clarity of the information to be collected; and (d) minimize the burden
of the collection of information on those who are to respond, including
through the use of appropriate automated, electronic, mechanical, or
other technological collection techniques or other forms of information
technology, e.g., permitting electronic submission of responses.

    Dated: May 29, 2015.
Janice Waller,
Director, Records Management Division, Mission Support, Federal
Emergency Management Agency, Department of Homeland Security.
[FR Doc. 2015-13969 Filed 6-5-15; 8:45 am]
 BILLING CODE 9111-54-P


[Federal Register Volume 86, Number 119 (Thursday, June 24, 2021)]
[Rules and Regulations]
[Pages 33116-33119]
[FR Doc No: 2021-13124]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2020-1028; Project Identifier AD-2020-00978-T;
Amendment 39-21599; AD 2021-12-12]
RIN 2120-AA64

Airworthiness Directives; The Boeing Company Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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

SUMMARY: The FAA is adopting a new airworthiness directive (AD) for all
The Boeing Company Model 717-200 airplanes. This AD was prompted by a
report of discrepant spoiler assemblies, which have the wrong splice
bar installed and lack reinforcing doublers, and by reports that some
splice bars were shipped for installation on Model 717-200 airplanes,
although they were not eligible for installation on Model 717-200
airplanes and were identified incorrectly with the Model 717-200 splice
bar part number. This AD requires a one-time inspection of the left-
and right-wing inboard and outboard spoiler assemblies, for the correct
configuration of the splice bar and doublers, and repair or replacement
if necessary. The FAA is issuing this AD to address the unsafe
condition on these products.

DATES: This AD is effective July 29, 2021.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in this AD as of July 29,
2021.

ADDRESSES: For service information identified in this final rule,
contact Boeing Commercial Airplanes, Attention: Contractual & Data
Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA
90740-5600; telephone<PHONE_NUMBER>; internet https://www.myboeingfleet.com. You may view this service information at the
FAA, Airworthiness Products Section, Operational Safety Branch, 2200
South 216th St., Des Moines, WA. For information on the availability of
this material at the FAA, call<PHONE_NUMBER>. It is also available at
https://www.regulations.gov by searching for and locating Docket No.
FAA-2020-1028.

Examining the AD Docket

    You may examine the AD docket at https://www.regulations.gov by
searching for and locating Docket No. FAA-2020-1028; or in person at
Docket Operations between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays. The AD docket contains this final rule, any
comments received, and other information. The address for Docket
Operations is U.S. Department of Transportation, Docket Operations, M-
30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue
SE, Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Mohit Garg, Aerospace Engineer,
Airframe Section, FAA, Los Angeles ACO Branch, 3960 Paramount
Boulevard, Lakewood, CA 90712-4137; phone:<PHONE_NUMBER>; fax: 562-627-
5210; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Background

    The FAA issued a notice of proposed rulemaking (NPRM) to amend 14
CFR part 39 by adding an AD that would apply to all The Boeing Company
Model 717-200 airplanes. The NPRM published in the Federal Register on
December 29, 2020 (85 FR 85559). The NPRM was prompted by a report of
discrepant spoiler assemblies, which have the wrong splice bar
installed and lack reinforcing doublers, and by reports that some
splice bars were shipped for installation on Model 717-200 airplanes,
although they were not eligible for installation on Model 717-200
airplanes and were identified incorrectly with the Model 717-200 splice
bar part number. In the NPRM, the FAA proposed to require a one-time
inspection of the left- and right-wing inboard and outboard spoiler
assemblies for the correct splice bar and doublers

configuration, and repair if necessary. The FAA is issuing this AD to
address splice bars which are not structurally adequate, which can lead
to failure of the splice bar to keep the spoiler drive link engaged,
and could result in spoiler float and consequent reduced
controllability of the airplane.

Discussion of Final Airworthiness Directive

Comments

    The FAA received comments from The Air Line Pilots Association,
International (ALPA) and Boeing, who supported the NPRM without change.
    The FAA received comments from two additional commenters, Delta Air
Lines (Delta) and Hawaiian Airlines. The following presents the
comments received on the NPRM and the FAA's response to each comment.

Request To Revise Compliance Time

    Delta asked that the compliance time of the proposed AD be changed
to 27 months of ``flying days'' instead of calendar days. Delta stated
that paragraph (g) of the proposed AD states, in part, ``At the
applicable times specified in the ``Compliance'' paragraph of Boeing
Alert Requirements Bulletin 717-57A0027 RB, dated June 26, 2020.''
Delta noted that Paragraph 1.E., Compliance, of the referenced service
information requires a general visual inspection for the correct splice
bar and doubler configuration within 6,400 flight hours or 27 months.
Delta added that because of the Covid-19 pandemic airlines have a large
quantity of aircraft in storage, so changing to flight time would not
affect the unsafe condition.
    The FAA does not agree with the commenter's request. In developing
an appropriate compliance time for this action, the FAA considered the
degree of urgency associated with addressing the subject unsafe
condition, the manufacturer's recommendation for an appropriate
compliance time, and the practical aspect of accomplishing the required
inspection within a period of time that corresponds to the normal
scheduled maintenance for most affected operators. In addition, the FAA
notes that some Model 717-200 airplanes may have been in service during
the pandemic and must comply within the required compliance time.
Operators do have the option to inspect the airplane before the first
flight following storage if the airplane is in storage for more than 27
months. However, under the provisions of paragraph (k) of this AD, the
FAA will consider requests for approval of an extension of the
compliance time if sufficient data are submitted to substantiate that
the new compliance time would provide an acceptable level of safety.

Requests To Allow Alternative Methods for Corrective Action

    Hawaiian Airlines asked that paragraph (h)(2) of the proposed AD,
which requires obtaining approval of an alternative method of
compliance (AMOC) for repair of any discrepant spoiler, be changed to
add another method: Removal and replacement of the discrepant spoiler
with a serviceable spoiler that has the correct splice bar and doublers
using the procedure specified in the Model 717 airplane maintenance
manual (AMM), Chapter 27-60-01. Hawaiian Airlines stated that this
would alleviate further out-of-service time of the aircraft, and the
discrepant spoiler can be repaired off-wing.
    The FAA agrees with the commenter's request. The FAA has added
paragraphs (h)(2)(i) and (ii) of this AD to specify that either repair
using a method approved in accordance with the procedures specified in
paragraph (k) of this AD or replacement of any spoiler assembly having
an incorrect configuration with a replacement spoiler assembly is
acceptable for compliance with this AD. The FAA notes that a
replacement spoiler assembly must have a correct configuration as
specified in Boeing Alert Requirements Bulletin 717-57A0027 RB, dated
June 26, 2020. The FAA has also added Note 2 to paragraph (h)(2)(ii) to
specify that guidance for replacement can be found in Model 717 AMM,
Chapter 27-60-01.
    Delta requested the FAA provide an approved method to correct the
unsafe condition by removing and discarding any non-blueprint parts and
re-assembling per original equipment manufacturer (OEM) spoiler drawing
5940974-1/-2/-501/-502. Delta stated that the OEM spoiler drawing was
acceptable for the type certification basis for the Model 717-200
airplane during assembly of the aircraft. Delta added that restoring
the spoiler to the OEM blueprint would restore the part to an approved
configuration with the unsafe condition removed.
    The FAA disagrees with the commenter's request. An operator cannot
bring a discrepant spoiler assembly back to the OEM correct
configuration without modifying the underlying spoiler structure.
Modifying the spoiler assembly requires repair instructions from the
OEM. An operator may request an AMOC under the provisions of paragraph
(k) of this AD.

Conclusion

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

Related Service Information Under 1 CFR Part 51

    The FAA reviewed Boeing Alert Requirements Bulletin 717-57A0027 RB,
dated June 26, 2020. This service information describes procedures for
a one-time general visual inspection of the left- and right-wing
inboard and outboard spoiler assemblies for the correct splice bar and
doublers configuration, and repair. This service information is
reasonably available because the interested parties have access to it
through their normal course of business or by the means identified in
ADDRESSES.

Costs of Compliance

    The FAA estimates that this AD affects 114 airplanes of U.S.
registry. The FAA estimates the following costs to comply with this AD:

                                      Estimated Costs for Required Actions
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per      Cost on U.S.
              Action                         Labor cost             Parts cost        product        operators
----------------------------------------------------------------------------------------------------------------
Inspection........................  4 work-hours x $85 per hour               $0            $340         $38,760
                                     = $340.
----------------------------------------------------------------------------------------------------------------

    The FAA estimates the following costs to do any necessary on-
condition actions that would be required. The FAA has no way of
determining the number of aircraft that might need these on-condition
actions:

                 Estimated Costs of On-Condition Actions
------------------------------------------------------------------------
           Labor cost                 Parts cost       Cost per product
------------------------------------------------------------------------
Up to 2 work-hour x $85 per hour  $5,432 per spoiler  Up to $5,602 per
 = Up to $170 per spoiler          assembly.           spoiler assembly.
 assembly.
------------------------------------------------------------------------

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.
    The FAA is issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: General requirements.
Under that section, Congress charges the FAA with promoting safe flight
of civil aircraft in air commerce by prescribing regulations for
practices, methods, and procedures the Administrator finds necessary
for safety in air commerce. This regulation is within the scope of that
authority because it addresses an unsafe condition that is likely to
exist or develop on products identified in this rulemaking action.

Regulatory Findings

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

List of Subjects in 14 CFR Part 39

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

The Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

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

2021-12-12 The Boeing Company: Amendment 39-21599; Docket No. FAA-
2020-1028; Project Identifier AD-2020-00978-T.

(a) Effective Date

    This airworthiness directive (AD) is effective July 29, 2021.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to all The Boeing Company Model 717-200
airplanes, certificated in any category.

(d) Subject

    Air Transport Association (ATA) of America Code 57, Wings.

(e) Unsafe Condition

    This AD was prompted by a report of discrepant spoiler
assemblies, which have the wrong splice bar installed and lack
reinforcing doublers. The FAA is issuing this AD to address splice
bars which are not structurally adequate, which can lead to failure
of the splice bar to keep the spoiler drive link engaged, and could
result in spoiler float and consequent reduced controllability of
the airplane.

(f) Compliance

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

(g) Required Actions

    Except as specified by paragraph (h) of this AD: At the
applicable times specified in the ``Compliance'' paragraph of Boeing
Alert Requirements Bulletin 717-57A0027 RB, dated June 26, 2020, do
all applicable actions identified in, and in accordance with, the
Accomplishment Instructions of Boeing Alert Requirements Bulletin
717-57A0027 RB, dated June 26, 2020.
    Note 1 to paragraph (g): Guidance for accomplishing the actions
required by this AD can be found in Boeing Alert Service Bulletin
717-57A0027, dated June 26, 2020, which is referred to in Boeing
Alert Requirements Bulletin 717-57A0027 RB, dated June 26, 2020.

(h) Exceptions to Service Information Specifications

    (1) Where Boeing Alert Requirements Bulletin 717-57A0027 RB,
dated June 26, 2020, uses the phrase ``the original issue date of
Requirements Bulletin 717-57A0027 RB,'' this AD requires using ``the
effective date of this AD.''
    (2) Where Boeing Alert Requirements Bulletin 717-57A0027 RB,
dated June 26, 2020, specifies contacting Boeing for repair
instructions: This AD requires doing the actions specified in
paragraph (h)(2)(i) or (ii) of this AD before further flight.
    (i) Repair using a method approved in accordance with the
procedures specified in paragraph (k) of this AD.
    (ii) Replace any spoiler assembly having incorrect configuration
with a replacement spoiler assembly. A replacement spoiler assembly
must have a correct configuration as specified in Boeing Alert
Requirements Bulletin 717-57A0027 RB, dated June 26, 2020.
    Note 2 to paragraph (h)(2)(ii): Guidance for replacing the
spoiler assembly with the correct configuration spoiler assembly can
be found in Model 717 Airplane Maintenance Manual (AMM), Chapter 27-
60-01.

(i) Credit for Previous Actions

    This paragraph provides credit for the actions specified in
paragraph (g) of this AD, if those actions were performed before the
effective date of this AD using Boeing Multi Operator Message MOM-
MOM-19-0572-01B, dated October 16, 2019.

(j) Parts Installation Limitation

    As of the effective date of this AD, no person may install, on
any airplane, any affected spoiler assembly (a spoiler assembly that
does not have a splice bar having part number 3914588-501 and two
doublers having part number 5940974-31), unless it has been
inspected and all applicable corrective actions have been done as
specified in paragraph (g) of this AD.

(k) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Los Angeles ACO Branch, FAA, has the authority
to approve AMOCs for this AD, if requested using the procedures
found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your
request to your principal inspector or responsible Flight Standards
Office, as appropriate. If sending information directly to the
manager of the certification office, send it to the attention of the
person identified in paragraph (l)(1) of this AD. Information may be
emailed to<EMAIL_ADDRESS>    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the responsible Flight Standards Office.

    (3) An AMOC that provides an acceptable level of safety may be
used for any repair, modification, or alteration required by this AD
if it is approved by The Boeing Company Organization Designation
Authorization (ODA) that has been authorized by the Manager, Los
Angeles ACO Branch, FAA, to make those findings. To be approved, the
repair method, modification deviation, or alteration deviation must
meet the certification basis of the airplane, and the approval must
specifically refer to this AD.

(l) Related Information

    (1) For more information about this AD, contact Mohit Garg,
Aerospace Engineer, Airframe Section, FAA, Los Angeles ACO Branch,
3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-
5264; fax:<PHONE_NUMBER>; email<EMAIL_ADDRESS>    (2) Service information identified in this AD that is not
incorporated by reference is available at the addresses specified in
paragraphs (m)(3) and (4) of this AD.

(m) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless the AD specifies otherwise.
    (i) Boeing Alert Requirements Bulletin 717-57A0027 RB, dated
June 26, 2020.
    (ii) [Reserved]
    (3) For service information identified in this AD, contact
Boeing Commercial Airplanes, Attention: Contractual & Data Services
(C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-
5600; telephone<PHONE_NUMBER>; internet https://www.myboeingfleet.com.
    (4) You may view this service information at the FAA,
Airworthiness Products Section, Operational Safety Branch, 2200
South 216th St., Des Moines, WA. For information on the availability
of this material at the FAA, call<PHONE_NUMBER>.
    (5) You may view this service information that is incorporated
by reference at the National Archives and Records Administration
(NARA). For information on the availability of this material at
NARA, email<EMAIL_ADDRESS>or go to: https://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued on June 3, 2021.
Gaetano A. Sciortino,
Deputy Director for Strategic Initiatives, Compliance & Airworthiness
Division, Aircraft Certification Service.
[FR Doc. 2021-13124 Filed 6-23-21; 8:45 am]
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