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  |"Higgins, Cortney"<EMAIL_ADDRESS>"Kymn, Christine J."
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  |"Maresca, Charles A."<EMAIL_ADDRESS>RobertJ
Wayland/RTP/USEPA/US@EPA, Peter Tsirigotis/RTP/USEPA/US@EPA, "Mancini, Dominic
J." |
<EMAIL_ADDRESS>Melanie King/RTP/USEPA/US@EPA
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  |08/09/2010 02:23 PM
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  |RE: NSCR Catalyst Will not deliver the 97% NOx reductions as estimated by
EPA for 4SRB Engines                                              |
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“(For example, Waukesha brochures indicate an excess air ratio of 1.06 for
”best economy” on rich burn engines and 0.99 for “Catalytic Converter Input
(3-way)”.

I forgot that I already had this addressed below.  Here are two manufacturers
talking about outside the .96-.99 range in two random selections I came
across.

From: Bromberg, Kevin L.
Sent: Monday, August 09, 2010 2:10 PM
To: 'Higgins, Cortney'; 'Kymn, Christine J.'
Cc: Maresca, Charles A<EMAIL_ADDRESS><EMAIL_ADDRESS>'Mancini, Dominic J.';
<EMAIL_ADDRESS>Subject: RE: NSCR Catalyst Will not deliver the 97% NOx reductions as
estimated by EPA for 4SRB Engines

After talking to Cortney, apparently, EPA is of the understanding that
catalyst manufacturers SPECIFY the “appropriate” operating range of  .96 and
.99 AFR , but that concept appears nowhere in the emails that I can find.  Why
can’t someone operate in the 1.0 to 1.1 range to limit HCHO if you’re trying
to meet an aggressive HCHO standard?  That was our point.  I’m interested in
any printed materials from catalyst manufacturers that so specifies.  Please
provide after the 2:30 call.

Further, in the general duty clause of the proposal, it appears that
facilities are only required to set the parameters to achieve reduction
of the regulated pollutants, not other pollutants.    If you’re trying
to meet NOX and HCHO, then EPA would have a different situation to address.

From: Bromberg, Kevin L.
Sent: Monday, August 09, 2010 9:16 AM
To: 'Higgins, Cortney'; 'Kymn, Christine J.'
Cc: Maresca, Charles A<EMAIL_ADDRESS><EMAIL_ADDRESS>'Mancini, Dominic J.';
<EMAIL_ADDRESS>Subject: NSCR Catalyst Will not deliver the 97% NOx reductions as estimated by
EPA for 4SRB Engines

Thanks EPA for the reply on Saturday that we’ve reviewed over the weekend, but
the reply only reinforces our previous conclusion that NOx reductions will be
seriously eroded in the field by more than a factor of two.  This supports our
key request that 4SRB catalysts not be required for engines between 500 and
705 HP.
First, I present a few key summary points.
The perception that large NOx co-benefits will result from the addition of
NSCR on 4SRB engines is flawed based on the following:

·          NOx performance is very sensitive to the air to fuel ratio
(AFR) and needs to be “more fuel rich” or “air deficient” to achieve NOx
reductions. This is documented in the graph questioned by Miratech and in the
Johnson Matthey information.  In addition, the Miratech brochure (page 8/pdf
page 12 of 65) also shows a VERY NARROW operating band for system performance
(i.e., from about 0.986 to 0.996).  At leaner operation up to the rich burn
definition of a stoichiometry of 1.1 (which is ~2% oxygen), NOx reductions in
the Miratech “cartoon” are diminished (note that the Miratech picture does not
show actual data, but presents common trends and generally agrees with the
other two graphs).  Similarly, the MECA brochure supports that conclusion that
NSCR performance for NOx is very susceptible to the AFR and that CO and
hydrocarbon performance are better under leaner operation (see page 5, of page
6 of 17);
·          An AFR set point for engine efficiency (e.g., about 1.05 to
higher) is in contrast with the richer set point requirements for NOx
emissions reduction (i.e. higher fuel use).  (For example, Waukesha brochures
indicate an excess air ratio of 1.06 for ”best economy” on rich burn engines
and 0.99 for “Catalytic Converter Input (3-way)”.
Claim of NOx co-benefits at the leaner AFR set points (still within the common
operating range for RB engines) is not accurate or supported by the “cartoon
graphs” of two catalyst vendors (Miratech and Johnson
Matthey) or MECA;
·          Richer AFR set points results in higher operating
temperatures and increased maintenance.  Emissions of CO, hydrocarbon, and
greenhouse gases (CO2 and methane), as well as ammonia (a particulate
precursor) are also higher at richer set points).
Formaldehyde compliance (if a catalyst is required) is also assured at the AFR
of 1.05 and higher.  Thus, there are multiple reasons for an operator to run
leaner – and multiple benefits (for energy efficiency, engine operability, and
emissions).
 Claims contrary to these points should be supported with data rather than
“statements” (without supporting data and emissions warranties) from a vendor
with obvious financial stakes in the outcome of the regulation. In addition,
the vendor discusses damage from “over-oxygenation” in its email response to
EPA.  However, the vendor brochure indicates that this is only in regard to
NOx reduction (i.e., not formaldehyde performance) per page 11, and occur at
higher than 2%
O2 (i.e., higher than a stoichiometry of 1.1). So, that discussion appears to
be over-emphasized in the vendor email communication, but does indicate
another mechanism for NOx performance to fail (while formaldehyde emissions
would apparently not be compromised per the vendor brochure).

http://ect.jmcatalysts.com/emission-control-technologies-three-way-catalysts
We gave EPA two sources.  The EPA note describes only one source.  The second
one from Johnson Matthey Catalysts is above.  I assume that Matthey is showing
the latest technology on its website.  It also shows that the NOx reductions
drop sharply for leaner AFR's above 99.8% AFR.
The source below shows that NOx reductions drops above 99% AFR.  The text
below says that "This chart should be zoomed into a realistic area somewhere
between 0.96 lambda (1.040 phi) and 0.99 lambda (1.010 phi).
This is an area where the AFR will be operating."  So there is absolute
agreement between those two sources and the Miratech source that to achieve
the significant NOx reductions, you need to have the engine operate between
0.96 and 0.99.  This apparently was true of all the old and new catalysts.
That is NOT the issue. We agree you can achieve NOX reductions IF you set in
this region, and we said so.  However, it should also be acknowledged that the
AFR “operating window” is very narrow, which speaks to our point in the
difficulty in retaining this performance IF you are targeting NOx reductions.
 However, EPA provided us with a key diagram we didn’t have before showing
graphically what we had said already – that the HCHO emissions reductions
increase as you go leaner – and to maximize HCHO emissions you will go beyond
the 0.96-0.99 area.  This graph (page 8 of the Miratch manual), shows that the
best removals occur for AFR above .99 thru above 1.10.  Miratech also points
out that you shouldn’t go above 2% oxygen (1.1 AFR) in order to avoid hurting
the NOx reductions, but that note doesn't say that it hurts the HCHO
reductions (the EPA note incorrectly says it hurts the ability to reduce “any
pollutants” while the manual at page 11 references ONLY NOx).  And the graph
shows that HC reductions continue to grow as the engine leans out.  It is also
noteworthy that this is yet another mechanism that can result in performance
failures for NOx.
 The EPA response appears to focus solely on the ability to meet the NOx
standard and not the ability to meet the HCHO standard.   The issue is
where will the engines be set IF in practice to meet an HCHO standard and will
NOx reductions occur?  The Miratech and EPA notes do not say where the desired
AFR window for HCHO is.  We believe that HCHO reductions will occur for AFRs
that are greater than 100%, where NOx reductions do not occur, which is
confirmed in the Miratch manual (which is CURRENT TECHNOLOGY).  What stops
facilities from doing so in order to
reduce CO, ammonia, fuel efficiency, GHGs, and maintenance costs?   This
is the question posed by our earlier comments.  EPA didn’t really get a
response on the key issue.
 Looking at curve in Figure 2 of the MECA 1997 Report, it appears that the
NMHC control improves as you move from 99% to above 100%.  To the extent that
EPA sets an aggressive HCHO standard, the engine is even less likely to
achieve NOx reductions, because it will stay off the rich side of the rich
burn engines. This is consistent with the Miratech graph.
 However, EPA does point out this part:  “ shows in Figure 2 that the NMHC
reductions will decrease as you lean out the engine.”  This implies that you
can’t go too lean, or you would lose the HCHO emissions also – so is this true
of other current NSCRs?  And how wide is the lean window where NOX reductions
won’t occur?  The reduction in HC emission reductions, however, is not shown
in the Miratech manual. Since the MECA cartoon has little detail, appears to
present both rich burn and lean burn operating ranges, and is not consistent
with others, we expect that cartoon is not representing a negative impact on
HC performance within the “leaner” range for rich burn engines.
 Judging from the graph on page 8 of the Miratech manual, in the desired AFRC
window for control, which is narrowly centered around 99%, the NOx reductions
appears around 90%, not 97%, which is only a small reduction from 97%.  But I
would say the concern is that to get additional HC reductions, you actually go
past 1.0.  But the mfger says that you can damage the ability to reduce NOx
permanently if you go beyond 2% oxygen for extended periods of time (A/F ratio
of 1.1 at 2% oxygen)  But that wouldn’t stop a facility from doing so, because
he’s setting for HCHO reductions, not NOx.  And if EPA sets an aggressive HCHO
standard, more facilities will need to go leaner than 99% to get to
compliance, and will forego some or most of the NOx reductions.  In the
Miratech graph, the NOx reductions do not go to zero, unlike the Colorado
State University results.
 In sum, the NOx reductions may not go to zero, but the Actual Data, and MECA
and Johnson Matthey cartoon graphs all show a steeper decline in NOx
performance than the Miratech cartoon. In the leaner area more favored by HCHO
compliance, the NOx reductions go from 97% to somewhat under 10% (according to
Miratech’s cartoon graph).  So the NOx reductions can easily be cut by half or
more by going into the lean area according to Miratech’s own brochure.
Therefore, the EPA response did not rebut our concern - and now we have
quantified the effect as somewhere between a 95% reduction under optimal NOx
reductions conditions and maintaining a narrow AFR set point and a no NOx
reduction for individual engines when operating lean.
   ----- Original Message -----
From<EMAIL_ADDRESS><EMAIL_ADDRESS>To: Higgins, Cortney
Cc<EMAIL_ADDRESS><EMAIL_ADDRESS>
<EMAIL_ADDRESS><EMAIL_ADDRESS><EMAIL_ADDRESS><EMAIL_ADDRESS>

Sent: Fri Aug 06 22:59:07 2010
Subject: Fw: Catalyst windows

Hi Cortney,
I am forwarding the email below in response to SBA's claim that NOx reductions
would not be achieved through the use of NSCR on 4SRB engines.  This is
information from Miratech who is a large supplier of catalyst technology.

See also their catalyst manual which is attached, which discusses the
potential to over-oxygenate the catalyst if you run it at too high of an

O2.  See at the top of p. 11.  According to Miratech, saturating it with

too much O2 would result in the catalyst losing the ability to reduce any
pollutants.

I would also reference the information on p. 5-6 in the attached report from
MECA.  It says "NOx conversion efficiency drops dramatically when the engine
is run in the lean regime, while NMHC and CO conversion efficiency also
declines somewhat." and shows in Figure 2 that the NMHC reductions will
decrease as you lean out the engine.
(See attached file: icengine.pdf)(See attached file: Catalyst Operating Manual
- 012909B.PDF)

Melanie King
Energy Strategies Group
Sector Policies and Programs Division
Office of Air Quality Planning and Standards U.S. Environmental Protection
Agency

Mail Code D243-01
RTP, NC  27711

Phone:<PHONE_NUMBER>
Fax:<PHONE_NUMBER>
<EMAIL_ADDRESS>----- Forwarded by Melanie King/RTP/USEPA/US on 08/06/2010 10:38 PM
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  |"Kevin O'Sullivan (MIRATECH)"<EMAIL_ADDRESS>|

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  |"David Zenthoefer"<EMAIL_ADDRESS>|

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  |08/06/2010 06:04 PM
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  |FW: Catalyst windows
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Melanie –

We haven’t met – and David was tied up so I reached out to one of our experts
and his abridged response is below.  As you can see, we believe the original
investigator is dealing with dated and limited material.
I’m not much on sugar coating – so my simple synopsis is if you’re designing
rules on the information provided us to respond to, there is a

lot more work to be done and more technology to understand than what we were
presented.

I’d be pleased to discuss this in more detail with you or the investigator.

My best -

Kevin

Kevin R. O'Sullivan, President and Chief Operating Officer,   MIRATECH
Corporation
Primary:<PHONE_NUMBER> (Office Direct), Alternate:<PHONE_NUMBER> (Cell)

Emission Solutions for Industrial Engines<EMAIL_ADDRESS>or
www.miratechcorp.com
Fax:<PHONE_NUMBER>, 420 South 145th East Avenue, Mail Drop A  Tulsa, OK
74108 - 1305

From our consultant:

I've looked over this BS and it looks to me like whoever submitted this to the
EPA is banking everything off of data that they have collected years back or
with catalyst that were manufactured years ago. Looking at

what he is saying, he has a catalyst that is using the older loadings and
designs that only give 90% reduction. The current 0.5 gram catalyst is
achieving 96 to 97% reduction.

The next thing that he is basing his information on is a very narrow operating
window (lambda window). Most catalyst manufactures today have opened the size
of the operating window allowing a greater deviation in the AFR control and
still be within the desired emissions levels.

He is defining a Rich Burn engine as an engine with a Lambda setting of 1.10.
I believe the EPA defines any engine running with 2 percent of oxygen or less
to be a rich burn. A few years back they defined it as 4%

or less. Everyone in the free world that has ever seen a catalytic converter
knows that it must operate at 0.5% or less.

The chart that the guy provided, in my opinion, is not accurate. Of course you
can get these readings with as large of a swing that they are

inducing on the AFR and catalyst. This chart should be zoomed into a realistic
area somewhere between 0.96 lambda (1.040 phi) and 0.99 lambda

(1.010 phi). This is an area where the AFR will be operating. The ammonia
levels that he is showing is higher than anyone would expect.
Typically you start smelling ammonia at about 30 ppm. They are saying that
this level is showing up at about 0.985 lambda.

Lastly, the AFR issue. If they are testing with a low end system, yes they
will have problems maintaining the operational window. The better the
controller, the tighter the hold on the operational window.

The bottom line is, these guys are throwing both the AFR and catalyst under
the bus with data from only one source. Modern AFR technology and modern
catalyst technologies are far more superior that the older stuff.

-----Original Message-----
From: David Zenthoefer
Sent: Friday, August 06, 2010 9:19 AM
To: John Sartain; Kevin O'Sullivan (MIRATECH)
Subject: FW: Catalyst windows

Kevin,

Can you take a pass at this for the EPA, this is helping to finalize the

NESHAP rule due out next Tuesday.

David

David Zenthoefer, Vice President - Sales and Service MIRATECH Corporation
Primary:<PHONE_NUMBER> (Cell)

Emissions Solutions for industrial engines<EMAIL_ADDRESS>
or www.miratechcorp.com
Fax:<PHONE_NUMBER>, 420 South 145th East Ave, Tulsa, OK 74145-4712

-----Original Message-----
From<EMAIL_ADDRESS><EMAIL_ADDRESS>
Sent: Friday, August 06, 2010 9:01 AM
To: David Zenthoefer
Subject: Re: Catalyst windows

Hi David,
Thanks so much to you and John for speaking with me this morning.  The issue I
am trying to resolve is whether you will get NOx reductions from

a 3-way catalyst that is installed on a rich burn engine to meet CO or VOC
emission standards.  The argument that is being made is that they will set the
engine up specifically to get the CO/VOC reductions and not

achieve any NOx reductions since they aren't trying to meet a NO limit as
well.  Below I have copied the information that was sent to us by one

of the interagency stakeholders who is suggesting that little to no NOx
reductions will be achieved.  From speaking with you this morning, my
understanding is that running the engine too lean will saturate/poison the
catalyst and the reductions of all 3 pollutants will be decreased.

Below is the information that was sent to me by the interagency reviewer

to support the claim that little to no NOx reductions will occur:

If you get NOx reduction with NSCR it is usually relatively high – e.g.,

90% or more.  The problem is that the NOx performance is very sensitive to the
air to fuel ratio (AFR) and the stream needs to be “more rich” (i.e., more
fuel rich or air deficient).  A lesser NOx reduction (e.g., 20 – 60% NOx
reduction) with NSCR is typically not seen, because the performance curve
(versus AFR) is very steep – meaning that you go from no NOx reduction to
relatively high NOx reduction (e.g., 80% or
more) with very small changes to AFR.  Similarly, if set for “richer”
operation with NOx reduction, relatively small changes in AFR can move the AFR
more lean and significantly impact NOx performance.  Thus, if an

operator installs NSCR to meet a NOx limit, the set to provide a better
assurance of emission performance is often accomplished by establishing a
“richer” set point (which can result in significant ammonia emissions).  In
this scenario, there is more of an operating window before minor AFR changes
can move “too lean” and significantly compromise NOx performance.  Those
richer set point also result in lower

efficiency / higher fuel use, more hydrocarbon (HC) emissions, and hotter
operation – and these conditions affect maintenance requirements because the
HC and higher temps impact performance and increase maintenance frequency (and
related costs).

An example of NOx (post NSCR catalyst) versus AFR for a RB with NSCR is
provided here. Note the “stoichiometric ratio” (SR) is the theoretical amount
of air relative to the amount required to burn all of the fuel – i.e., at 1.00
there is just enough air to burn all the fuel.  From the scale on the x-axis,
a change in the amount of air by 1 or 2% dramatically changes the NOx
emissions (and ammonia and CO emissions).
This level of AFR control is difficult to maintain on a continuous basis. It’s
also not reasonable to operate in a region of the “NOx curve” that provides
intermediate levels of NOx reduction so in general NOx reduction with NSCR
close to an all or nothing proposition. Also – as a reminder, the definition
of “rich burn” is an engine with a stoichiometric ratio up to 1.10 (beyond the
scale of this graph).  As you can see from the graph, the NOx emissions on the
right side of the graph (from SR of about 0.99 or higher) have high NOx
indicative of very

little or no NOx reduction.  This relates to our discussion that NOx
reductions cannot be presumed with NSCR – and operators can achieve better
efficiency, lower fuel use, and lower greenhouse gas emissions by

running leaner where NSCR will not reduce NOx.

Also for the NOx data – the marginal relative change in the 3 data points to
the right (from about 2100 to about 2650 ppmv) is due to changes in the inlet
NOx and not from NSCR reduction – i.e., the inlet NOx versus AFR is also
dependent on AFR at this operating threshold where you cross from “rich” to
“lean”, and the NOx reduction across the catalyst is insignificant.  Note that
the one NOx point at about 850 ppmv is 58% reduction and the three low NOx
points on the left are about

98% reduction for these tests.

(Embedded image moved to file: pic10264.gif) Since facilities will be
attempting to meet an air toxics standard, the preferred operation will use a
stoichiometric ratio of 0.99 or more, which would be on the “fuel lean” side
(right hand side) of the graph.
However, the NOx reductions will only occur on the rich side (left hand
side) of the graph – in this case approximately 0.98 or less.  In addition to
good HCHO emissions performance, there are additional reasons for being on the
lean side of the curve – reduced fuel consumption, associated reductions in
greenhouse gas emissions (i.e., lower CO2 and methane), reduced maintenance,
and avoidance of ammonia and CO emissions.  The NOx reductions go very quickly
from roughly 98% to 0% once you move from richer settings to leaner operation
above about

0.98.   Also, the air to fuel ratio differences are very small and given

some instability of the settings of these engines, maintaining a precise

setpoint is difficult and you will need to set an even leaner setting optimize
engine operability and effieciency – or, conversely, set a
richer setting to ensure NOx reductions.   The above graph is from a
rich burn engine tested by Colorado State University. Unless EPA is also

setting a NOx limit with the HCHO limit, these desired NOx reductions are
unlikely to occur.

EPA may wish to review additional data to see how under what AFR ratios,

both the HCHO number and the desired NOx reductions can occur (by how much and
whether these overlap), although I don’t know how this result can be achieved
under the current standard.

Melanie King
Energy Strategies Group
Sector Policies and Programs Division
Office of Air Quality Planning and Standards U.S. Environmental Protection
Agency

Mail Code D243-01
RTP, NC  27711

Phone:<PHONE_NUMBER>
Fax:<PHONE_NUMBER>
<EMAIL_ADDRESS>

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  |"David Zenthoefer"
<EMAIL_ADDRESS>|

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  |Melanie
King/RTP/USEPA/US@EPA
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  |08/06/2010 09:39
AM
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  |Catalyst
windows
 |

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David

David Zenthoefer, Vice President - Sales and Service MIRATECH Corporation
Primary:<PHONE_NUMBER> (Cell)

Emissions Solutions for industrial engines<EMAIL_ADDRESS>
or www.miratechcorp.com
Fax:<PHONE_NUMBER>, 420 South 145th East Ave, Tulsa, OK 74145-4712 [attachment
"Catalyst Operating Manual - 012909B.PDF" deleted by Melanie

King/RTP/USEPA/US]

“This message and any attachments may contain FW Murphy information that is
highly confidential, privileged, and exempt from disclosure.  Any recipient
other than the intended recipient is advised that dissemination, distribution,
copying, or other use of this message is strictly prohibited.  If you have
received this message in error, please notify the sender immediately, plus
delete the message and any backups.”


[Federal Register Volume 84, Number 50 (Thursday, March 14, 2019)]
[Rules and Regulations]
[Pages 9228-9230]
[FR Doc No: 2019-04709]

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

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 882

[Docket No. FDA-2019-N-0396]

Medical Devices; Neurological Devices; Classification of the
Transcranial Magnetic Stimulation System for Neurological and
Psychiatric Disorders and Conditions

AGENCY: Food and Drug Administration, HHS.

ACTION: Final order.

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

SUMMARY: The Food and Drug Administration (FDA or we) is classifying
the transcranial magnetic stimulation system for neurological and
psychiatric disorders and conditions into class II (special controls).
The

special controls that apply to the device type are identified in this
order and will be part of the codified language for the transcranial
magnetic stimulation system for neurological and psychiatric disorders
and conditions' classification. We are taking this action because we
have determined that classifying the device into class II (special
controls) will provide a reasonable assurance of safety and
effectiveness of the device. We believe this action will also enhance
patients' access to beneficial innovative devices, in part by reducing
regulatory burdens.

DATES: This order is effective March 14, 2019. The classification was
applicable on August 16, 2018.

FOR FURTHER INFORMATION CONTACT: John Doucet, Center for Devices and
Radiological Health, Food and Drug Administration, 10903 New Hampshire
Ave., Bldg. 66, Rm. 1535, Silver Spring, MD 20993-0002,<PHONE_NUMBER>,
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Background

    Upon request, FDA has classified the transcranial magnetic
stimulation system for neurological and psychiatric disorders and
conditions as class II (special controls), which we have determined
will provide a reasonable assurance of safety and effectiveness. In
addition, we believe this action will enhance patients' access to
beneficial innovation, in part by reducing regulatory burdens by
placing the device into a lower device class than the automatic class
III assignment.
    The automatic assignment of class III occurs by operation of law
and without any action by FDA, regardless of the level of risk posed by
the new device. Any device that was not in commercial distribution
before May 28, 1976, is automatically classified as, and remains
within, class III and requires premarket approval unless and until FDA
takes an action to classify or reclassify the device (see 21 U.S.C.
360c(f)(1)). We refer to these devices as ``postamendments devices''
because they were not in commercial distribution prior to the date of
enactment of the Medical Device Amendments of 1976, which amended the
Federal Food, Drug, and Cosmetic Act (FD&C Act).
    FDA may take a variety of actions in appropriate circumstances to
classify or reclassify a device into class I or II. We may issue an
order finding a new device to be substantially equivalent under section
513(i) of the FD&C Act to a predicate device that does not require
premarket approval (see 21 U.S.C. 360c(i)). We determine whether a new
device is substantially equivalent to a predicate by means of the
procedures for premarket notification under section 510(k) (21 U.S.C.
360(k)) of the FD&C Act and part 807 (21 CFR part 807) respectively.
    FDA may also classify a device through ``De Novo'' classification,
a common name for the process authorized under section 513(f)(2) of the
FD&C Act. Section 207 of the Food and Drug Administration Modernization
Act of 1997 established the first procedure for De Novo classification
(Pub. L. 105-115). Section 607 of the Food and Drug Administration
Safety and Innovation Act modified the De Novo application process by
adding a second procedure (Pub. L. 112-144). A device sponsor may
utilize either procedure for De Novo classification.
    Under the first procedure, the person submits a 510(k) for a device
that has not previously been classified. After receiving an order from
FDA classifying the device into class III under section 513(f)(1) of
the FD&C Act, the person then requests a classification under section
513(f)(2).
    Under the second procedure, rather than first submitting a 510(k)
and then a request for classification, if the person determines that
there is no legally marketed device upon which to base a determination
of substantial equivalence, that person requests a classification under
section 513(f)(2) of the FD&C Act.
    Under either procedure for De Novo classification, FDA is required
to classify the device by written order within 120 days. The
classification will be according to the criteria under section
513(a)(1) of the FD&C Act. Although the device was automatically within
class III, the De Novo classification is considered to be the initial
classification of the device.
    We believe this De Novo classification will enhance patients'
access to beneficial innovation, in part by reducing regulatory
burdens. When FDA classifies a device into class I or II via the De
Novo process, the device can serve as a predicate for future devices of
that type, including for 510(k)s (see 21 U.S.C. 360c(f)(2)(B)(i)). As a
result, other device sponsors do not have to submit a De Novo request
or premarket approval application in order to market a substantially
equivalent device (see 21 U.S.C. 360c(i), defining ``substantial
equivalence''). Instead, sponsors can use the 510(k) process, when
necessary, to market their device.

II. De Novo Classification

    On September 29, 2017, Brainsway Ltd. submitted a request for De
Novo classification of the Brainsway Deep Transcranial Magnetic
Stimulation System. FDA reviewed the request in order to classify the
device under the criteria for classification set forth in section
513(a)(1) of the FD&C Act.
    We classify devices into class II if general controls by themselves
are insufficient to provide reasonable assurance of safety and
effectiveness, but there is sufficient information to establish special
controls that, in combination with the general controls, provide
reasonable assurance of the safety and effectiveness of the device for
its intended use (see 21 U.S.C. 360c(a)(1)(B)). After review of the
information submitted in the request, we determined that the device can
be classified into class II with the establishment of special controls.
FDA has determined that these special controls, in addition to the
general controls, will provide reasonable assurance of the safety and
effectiveness of the device.
    Therefore, on August 16, 2018, FDA issued an order to the requester
classifying the device into class II. FDA is codifying the
classification of the device by adding 21 CFR 882.5802. We have named
the generic type of device transcranial magnetic stimulation system for
neurological and psychiatric disorders and conditions, and it is
identified as a prescription, non-implantable device that uses brief
duration, rapidly alternating, or pulsed, magnetic fields to induce
neural activity in the cerebral cortex. It is not intended for applying
or focusing magnetic fields towards brain areas outside cerebral cortex
(e.g., cerebellum). A repetitive transcranial magnetic stimulation
system that is intended to treat major depressive disorder is
classified in Sec.  882.5805. A transcranial magnetic stimulation
system for headache is classified in Sec.  882.5808.
    FDA has identified the following risks to health associated
specifically with this type of device and the measures required to
mitigate these risks in table 1.

 Table 1--Transcranial Magnetic Stimulation System for Neurological and
   Psychiatric Disorders and Conditions Risks and Mitigation Measures
------------------------------------------------------------------------
            Identified risks                   Mitigation measures
------------------------------------------------------------------------
Seizure................................  Non-clinical performance
                                          testing, and Labeling.
Thermal injury.........................  Non-clinical performance
                                          testing; Thermal safety
                                          testing; Electrical safety
                                          testing; Software
                                          verification, validation, and
                                          hazard analysis; and Labeling.
Hearing loss...........................  Non-clinical performance
                                          testing, and Labeling.
Scalp discomfort, dizziness, nausea,     Labeling.
 pain in neck or jaw, headache, or
 other adverse effects due to treatment.
Adverse tissue reaction................  Biocompatibility evaluation,
                                          and Labeling.
Electrical shock.......................  Electrical safety testing, and
                                          Labeling.
Device failure due to interference with  Electromagnetic compatibility
 other devices.                           testing, Electrical safety
                                          testing, and Labeling.
------------------------------------------------------------------------

    FDA has determined that special controls, in combination with the
general controls, address these risks to health and provide reasonable
assurance of safety and effectiveness. In order for a device to fall
within this classification, and thus avoid automatic classification in
class III, it would have to comply with the special controls named in
this final order. The necessary special controls appear in the
regulation codified by this order. This device is subject to premarket
notification requirements under section 510(k) of the FD&C Act.
    At the time of classification, transcranial magnetic stimulation
systems for neurological and psychiatric disorders and conditions are
for prescription use only. Prescription devices are exempt from the
requirement for adequate directions for use for the layperson under
section 502(f)(1) of the FD&C Act and 21 CFR 801.5, as long as the
conditions of 21 CFR 801.109 are met (referring to 21 U.S.C.
352(f)(1)).

III. Analysis of Environmental Impact

    The Agency has determined under 21 CFR 25.34(b) that this action is
of a type that does not individually or cumulatively have a significant
effect on the human environment. Therefore, neither an environmental
assessment nor an environmental impact statement is required.

IV. Paperwork Reduction Act of 1995

    This final order establishes special controls that refer to
previously approved collections of information found in other FDA
regulations and guidance. These collections of information are subject
to review by the Office of Management and Budget (OMB) under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections
of information in the guidance document ``De Novo Classification
Process (Evaluation of Automatic Class III Designation)'' have been
approved under OMB control number 0910-0844; the collections of
information in part 820, regarding quality system regulation, have been
approved under OMB control number 0910-0073; the collections of
information in part 814, subparts A through E, regarding premarket
approval, have been approved under OMB control number 0910-0231; the
collections of information in part 807, subpart E, regarding premarket
notification submissions, have been approved under OMB control number
0910-0120; and the collections of information in part 801, regarding
labeling, have been approved under OMB control number 0910-0485.

List of Subjects in 21 CFR Part 882

    Medical devices.

    Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs, 21 CFR part
882 is amended as follows:

PART 882--NEUROLOGICAL DEVICES

0
1. The authority citation for part 882 continues to read as follows:

    Authority: 21 U.S.C. 351, 360, 360c, 360e, 360j, 360l, 371.

0
2. Add Sec.  882.5802 to subpart F to read as follows:

Sec.  882.5802  Transcranial magnetic stimulation system for
neurological and psychiatric disorders and conditions.

    (a) Identification. A transcranial magnetic stimulation system for
neurological and psychiatric disorders and conditions is a
prescription, non-implantable device that uses brief duration, rapidly
alternating, or pulsed, magnetic fields to induce neural activity in
the cerebral cortex. It is not intended for applying or focusing
magnetic fields towards brain areas outside cerebral cortex (e.g.,
cerebellum). A repetitive transcranial magnetic stimulation system that
is intended to treat major depressive disorder is classified in Sec.
882.5805. A transcranial magnetic stimulation system for headache is
classified in Sec.  882.5808.
    (b) Classification. Class II (special controls). The special
controls for this device are:
    (1) Performance testing must demonstrate electromagnetic
compatibility, electrical safety, and thermal safety.
    (2) Software verification, validation, and hazard analysis must be
performed.
    (3) The patient-contacting components of the device must be
demonstrated to be biocompatible.
    (4) Non-clinical performance testing must demonstrate that the
device performs as intended under anticipated conditions of use. The
following performance characteristics must be tested:
    (i) Magnetic pulse output testing;
    (ii) Magnetic and electrical field testing;
    (iii) Testing of the safety features built into the device; and
    (iv) Testing of the sound levels patients are exposed to during
device use.
    (5) The physician and patient labeling must include the following:
    (i) The risks and benefits associated with use of the device;
    (ii) Detailed instructions to prevent seizures, to monitor the
patient for seizure activity during treatment, and to provide seizure
management care if one were to occur during treatment; and
    (iii) A description of the ear protection to be worn by the patient
during use of the device, including the type of protection and its
noise reduction rating.

    Dated: March 8, 2019.
Lowell J. Schiller,
Acting Associate Commissioner for Policy.
[FR Doc. 2019-04709 Filed 3-13-19; 8:45 am]
BILLING CODE 4164-01-P


Lydia Wegman/RTP/USEPA/US

06/04/2008 03:24 PM

To

<EMAIL_ADDRESS><EMAIL_ADDRESS>
cc

<EMAIL_ADDRESS><EMAIL_ADDRESS><EMAIL_ADDRESS><EMAIL_ADDRESS>Tricia Crabtree/RTP/USEPA/US@EPA

Subject

A suggestion for moving forward on the lead NAAQS RIA and timing for
issuance of the final RIA

Hi Heidi and Art,

I've just returned from being away for nearly two weeks and as far as I
can tell, Bob Meyers and Art have not yet discussed the question of
whether we include additional analyses based on different C-R functions
in the proposed lead NAAQS RIA.  In light of the continuing delay in
resolving this question and thereby moving forward on the proposed RIA,
I would like to suggest that we simply decide not to issue a proposed
RIA for lead.   We have already begun work on the final RIA and hope to
brief you within about two weeks on the changes we plan to make in the
final, compared to the draft proposed RIA that you've reviewed.   At
this point, given the incredibly tight schedule for completing the lead
rule, I see little virtue in our spending time drafting and your
spending time reviewing, and all of us spending time discussing, the
characterization of the results of the additional C-R analyses.

In addition, I understand from Ron that Heidi has noted that Art has
some other changes he wanted us to making concerning the
characterizations of costs and benefits in the proposed RIA, though we
have not yet heard what those are.  Again, rather than spinning our
wheels further on the proposed RIA, I think we would do best to move on
to the final RIA and determine how to address Art's concerns in the
context of the document.  As you know, we have already committed to
including the additional C-R functions and air-to-blood ratio analyses
in the final RIA, so we can include a discussion of how to characterize
those results in our discussions in a couple of weeks about the final
RIA.

Please let me know if you think this approach will work.  I have not yet
discussed it with my management or OPEI as I wanted to get your reaction
before proceeding further.

I also want to note again what I explained to Heidi concerning the
timing for completion of the RIA.  The court order requires us to
complete the lead rule and all tasks necessary for implementation by
September 15.   Our lawyers at both DOJ and OGC have told us that they
interpret this aspect of the court order to include the RIA.   Thus,
they have told us that the RIA, as well as the rule and  the
implementation and monitoring provisions, must all be completed by
September 15.   I wanted to ensure that you were aware of that so that
we can avoid any last minute discussions of that issue.  Please let me
know that you concur with this plan, or, if not, the basis for your
difference of opinion.

Thanks very much.

Lydia


[Federal Register Volume 86, Number 76 (Thursday, April 22, 2021)]
[Notices]
[Pages 21401-21405]
[FR Doc No: 2021-08311]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91585; File No. SR-BOX-2021-03]

Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee
Schedule on the BOX Options Market LLC Facility

April 16, 2021.
    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 April 1, 2021, BOX Exchange LLC (``Exchange'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change as described in Items I, II, and III below, which Items have
been prepared by the Exchange. The Exchange filed the proposed rule
change pursuant to Section 19(b)(3)(A)(ii) of the Act,\3\ and Rule 19b-
4(f)(2) thereunder,\4\ which renders the proposal effective upon filing
with the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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

    The Exchange is filing with the Securities and Exchange Commission
(``Commission'') a proposed rule change to amend the Fee Schedule on
the BOX Options Market LLC (``BOX'') facility. The text of the proposed
rule change is available from the principal office of the Exchange, at
the Commission's Public Reference Room and also on the Exchange's
internet website at http://boxexchange.com.

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 expects to move to a new, larger, Trading Floor in Q2
2021. The move has been driven, in part, by an increase in demand for
participation on the BOX Trading Floor, particularly for Floor Market
Makers. The larger Trading Floor will allow a greater number of Floor
Participants--specifically Floor Market Makers--and their associated
personnel to be present on the Trading Floor while also continuing to
follow the social distancing requirements imposed by the COVID-19
pandemic.\5\ In conjunction with the move to a larger floor, the
Exchange now proposes to modify the Fee Schedule for trading on BOX to
amend certain fees in Section VIII.C. (Trading Floor Participant Fees)
to allow the Exchange to more accurately assess fees for space utilized
by Floor Participants and their associated personnel.
---------------------------------------------------------------------------

    \5\ See Standards of Conduct for the Safety and Welfare of
Persons on the BOX Trading Floor related to COVID-19, available at:
https://boxoptions.com/assets/BOX-Floor_-Standards-of-Conduct_V1.1-1.pdf. The Exchange notes that due to the social distancing
requirements imposed by the COVID-19 pandemic the Exchange
restricted ``Other Registered On-Floor Persons'' (defined below)
access to the Trading Floor, as well as removed some Market Maker
podia. Moving to the larger Trading Floor will enable the Exchange
to allow those personnel to return to the Floor.
---------------------------------------------------------------------------

    First, the Exchange proposes to amend the Trading Floor Participant
Fees for Floor Market Makers. Currently, each Floor Market Maker pays a
monthly Trading Floor Participant Fee which entitles the firm to one
podium \6\ on the BOX Trading Floor \7\ and an unlimited amount of
registered trading permits for the Floor Market Maker's employees to
transact on the BOX Trading Floor.\8\ BOX also offers Floor Market
Makers the option to pay $1,500 per month for additional podiums on the
Trading Floor.
---------------------------------------------------------------------------

    \6\ A podium is the term used within the industry for the Floor
Market Maker workspace located in the middle of the Crowd Area
(defined below).
    \7\ The ``Trading Floor'' is the physical trading floor located
in Chicago. The Trading Floor shall consist of one ``Crowd Area'' or
``Pit'' where all option classes will be located. The Crowd Area or
Pit shall be marked with specific visible boundaries on the Trading
Floor, as determined by the Exchange. See BOX Rule 100(a)(67).
    \8\ The Exchange notes each podium is limited to one registered
trading permit holder actively trading at any given time.
---------------------------------------------------------------------------

    The Exchange now proposes to remove the $1,500 per month fee for an
additional podium for Floor Market Makers. This proposed change would,
in effect, require Floor Market Makers who would like to have two or
more podiums on the BOX Trading Floor to purchase each additional
podium at $5,500 per month.\9\
---------------------------------------------------------------------------

    \9\ Floor Market Makers will continue to be allowed only one
registered trading permit holder at a podium at any one time.
---------------------------------------------------------------------------

    BOX also charges a $100 Badge Fee per month for persons who are not
trading permit holders but are employed by or associated with a Floor
Participant and have access to the BOX Trading Floor (e.g., Clerks,
interns, stock execution clerks etc.).\10\ The Exchange is proposing to
remove the current Section VIII(C)(c)(Badge Fee) and replace it with

the proposed Section VIII(C)(c)(Other Registered On-Floor
Persons'').\11\ The proposed change will retitle the subsection while
continuing to assess the current Badge Fee of $100 to all Other
Registered On-Floor Persons associated with Floor Market Makers or
Floor Brokers.\12\ The Exchange also proposes to introduce a Desk Fee
of $350 per month for these Other Registered On-Floor Persons. Like the
Desk Fee currently assessed for Floor Brokers, the proposed Desk Fee
will entitle Other Registered On-Floor Persons associated with Floor
Market Makers or Floor Brokers one desk adjacent to the Crowd Area on
the Trading Floor.\13\ The Exchange notes, although no Floor
Participant is required to have a Clerk, if a Floor Participant chooses
to employ a Clerk(s) whom, by the nature of their roles, are
consistently present on the Trading Floor, that Floor Participant will
need to purchase a desk for such Clerk. In contrast, if a Floor
Participant employ's an IT professional to service their technology
needs, and who only enters the Trading Floor on an infrequent basis,
the Floor Participant will not need to purchase a desk for such
personnel. For example, under the proposed fee structure, a Floor
Broker that occupies one desk on the Trading Floor who wishes to have a
Clerk \14\ would be assessed a $5,000 per month Floor Broker
Participant Fee \15\ and a $350 Floor Broker Desk Fee. Their Clerk
would be assessed a $100 Badge Fee and a $350 Desk Fee per month.\16\
The Exchange notes, although Floor Market Makers operate at the point
of sale in the Crowd Area/Pit, Floor Market Makers can employ support
staff (Other Registered On-Floor Persons, for example Clerks) who may
work at desks adjacent to the Crowd Area on the Trading Floor.\17\
---------------------------------------------------------------------------

    \10\ See BOX Rule 7630. The Exchange notes only registered
trading permit holders are permitted to effect transactions on the
Trading Floor. The Exchange also notes, registered trading permit
holders (Floor Market Makers and Floor Brokers) are not assessed a
Badge Fee as their access to the Trading Floor is granted through
their registered trading permits.
    \11\ ``Other Registered On-Floor Persons'' include all persons
registered to be on the Trading Floor except Floor Market Makers and
Floor Brokers.
    \12\ The Exchange notes this part of the proposal does not
change any fees assessed to Floor Participants.
    \13\ Only one ``Other Registered On-Floor Person'' will be
allowed at a desk at any one time, however, the Floor Participant
may still have more than one ``Other Registered On-Floor Persons''.
For example, a Floor Market Maker may have one desk for Other
Registered On-Floor Persons and employ two Clerks part-time; each
Clerk will be assessed a $100 Badge Fee per month, and only one
Clerk at a time may be at the desk on the BOX Trading Floor. The
Exchange believes this assessment of Desk Fees is reasonable and
appropriate as it aligns with the Exchange's effort to charge based
on the space utilized by each firm.
    \14\ A Clerk is a registered on-floor person employed by or
associated with a Floor Broker or Floor Market Maker and who is not
eligible to effect transactions on the Trading Floor as a Floor
Market Maker or Floor Broker. See BOX Rule 7630 (Clerks).
    \15\ Subject to the Trading Floor Credit Floor Brokers may
receive.
    \16\ Although no Floor Participant is required to employ Other
Registered On-Floor Persons (e.g., Clerks), if a Floor Participant
does employ such person(s), and that employee will be consistently
on the Trading Floor, they are required to have a desk. The Exchange
notes there will be variability on the required number of desks for
each Floor Participant depending on the Floor Participants staffing
needs. For example, a Floor Participant may employ multiple Clerks
and only have one shared desk where each of those Clerks would work
at any given time. The Exchange notes, in the aforementioned
example, if the Participant was a Floor Market Maker, the Floor
Market Maker Clerk would be charged the same Badge Fee and Desk Fee.
    \17\ The Exchange notes desks for Floor Market Maker personnel
is not considered ``booth space.'' Booth space is a term solely for
Floor Brokers on the Trading Floor. Specifically, Floor Broker booth
space is akin to private office space where employees of the same
firm communicate with customers, receive orders, and coordinate
covering the Trading Floor to announce such orders into the Crowd
Area.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act, in general, and Section
6(b)(4) and 6(b)(5) of the Act,\18\ in particular, in that it provides
for the equitable allocation of reasonable dues, fees, and other
charges among BOX Participants and other persons using its facilities
and does not unfairly discriminate between customers, issuers, brokers
or dealers.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    First, the Exchange believes the proposed change to remove the
$1,500 monthly additional podium fee is reasonable, equitable, and not
unfairly discriminatory. Market Maker podia must be located in the
middle of the trading crowd, and as such, represent valuable space
currently in high demand on the Exchange's Trading Floor. The location
of Market Maker podia is unique and different from that of Floor Broker
booth space, and as such, represents valuable space currently in high
demand on the Exchange's Trading Floor. Market Maker podia must be
located in the Crowd Area so that they may hear the open outcry of an
order and respond accordingly. Unlike podia, Floor Broker booth space
is outside of the Crowd Area along the walls of the Trading Floor. The
Exchange notes Floor Market Maker podia space has reached maximum
capacity on the current Trading Floor and the Exchange anticipates, due
to increased demand, to have limited availability for such podia on its
new floor as well. The Exchange does not currently have the same level
of demand for Floor Broker booth space and will continue to have ample
space on its new Trading Floor to accommodate Floor Brokers. Due to the
increased demand for Floor Market Maker podia on the Exchange's Trading
Floor and the limited supply of such space--even in the larger Trading
Floor footprint--the Exchange believes it is reasonable and appropriate
to charge $5,500 per month, per podium for the following reasons.\19\
Despite moving to a larger floor space, the Exchange's proposed fee for
each podium reflects the fact that the space available for podia is not
unlimited and the Exchange is anticipating space to be further limited
based on current Market Makers adding additional podia/desks and new
market makers interested in joining BOX and utilizing more space on the
new Trading Floor. Because Floor Market Maker podia are integrated in
the Trading Floor, the more physical space occupied by a single Market
Making firm (e.g., multiple podia) means less physical space for other
Market Makers to participate in the trading crowd. Thus, the Exchange
proposes to revise the podium fee to charge Floor Market Makers in a
manner that reflects this reality and to encourage the efficient use of
space by these Participants. Furthermore, the Exchange believes this
part of the proposal is reasonable because the new, larger floor space
(which includes more podia) will provide each Floor Market Making firm
the opportunity to participate in additional options transactions. In
addition, the Exchange believes the proposed fee is reasonable as the
current amount assessed for one podium is $5,500 per month. When the
Exchange initially established the BOX Trading Floor (and in turn, the
Additional Podium Fee), a lower rate was assessed because the Exchange
was trying to incentivize participation on the BOX Trading Floor and
was uncertain about the level of demand for such podia. Based on the
increased interest in trading on the BOX Trading Floor, the Exchange
now believes it is reasonable and appropriate to assess a higher fee
for each podium.\20\
---------------------------------------------------------------------------

    \19\ The Exchange notes, currently there is a waiting list for
Market Maker podia due to the space constraints caused by the COVID-
19 social distancing requirements. Once the Exchange transitions to
its new floor, there will be more space available, however, it will
still be limited due to the COVID-19 safety measures in place.
    \20\ The Exchange again notes the demand from current Floor
Market Makers and prospective firms necessitated the Exchange's move
to a new trading floor in order to accommodate these space
requirements.
---------------------------------------------------------------------------

    The Exchange notes it operates in a highly competitive market in
which market participants can readily move their options business to
competing venues if they deem fee levels at a particular venue to be
excessive or

incentives to be insufficient.\21\ Further, transacting on the BOX
Trading Floor is entirely voluntary and operating on the BOX Trading
Floor is merely an additional option for Participants to transact on
BOX. In addition, the Exchange believes offering one podium to Floor
Market Makers for $5,500 per month (and if necessary, additional podia
for $5,500 per month) will better incentivize market making firms to
only purchase podia they will make productive use of on the Trading
Floor. Removing the additional podium fee of $1,500 per month reduces
the potential for a single Market Making firm to use more podia space
than needed on the Trading Floor. If a Market Making firm is required
to pay the higher $5,500 per month fee for each podium, the Exchange
believes this will encourage the efficient use and allocation of such
valuable space. Furthermore, the Exchange believes the proposed change
is reasonable as it aligns the Exchange's fees with fees that are
assessed at other exchanges with physical trading floors.\22\ The
Exchange believes that the proposed change is equitable and not
unfairly discriminatory as it will apply equally to all Floor Market
Makers on the BOX Trading Floor.
---------------------------------------------------------------------------

    \21\ The Exchange is aware of multiple competitors with trading
floors offering competing products and services to BOX. See Cboe
Rule 5.80 (Admission to and Conduct on the Trading Floor); NYSEArca
Rule 6.2-O (Admission to and Conduct on the Options Trading Floor);
NYSEAmer Rule 902NY (Admission and Conduct on the Options Trading
Floor); Nasdaq Phlx Options 8 Floor Trading: Section 8 (Trading
Floor Registration).
    \22\ See Nasdaq Phlx Options 7 Pricing Schedule Section 8.A
(Permit and Registration Fees). Phlx charges $6,000 per month per
permit for each Floor Market Maker with a physical presence on
Phlx's trading floor. NYSE American charges $5,000 per month for
NYSE American Options Floor Market Makers. See NYSE American Options
Fee Schedule III.A. NYSE American Options Market Makers are ATP
Holders registered with the Exchange for the purpose of making
transactions as a dealer-specialist on the Floor of the Exchange.
See NYSE American Rule 920NY. See also Cboe Fee Schedule, Floor
Trading Permit Sliding Scales ($6,000 for 1 permit, $4,500 for
permits 2 to 5). Floor permit entitles the holder to act as a
Market-Maker on the floor of the exchange.
---------------------------------------------------------------------------

    Furthermore, the Exchange believes that it is equitable and not
unfairly discriminatory to continue to charge Floor Market Makers more
per month than Floor Brokers.\23\ Unlike Floor Market Makers, Floor
Brokers play a critical role in bringing liquidity to the BOX Trading
Floor. Orders are brought to the Trading Floor by Floor Brokers only,
and benefit all Floor Participants by providing more trading
opportunities, which may attract Market Makers, Customers and other
market participants.\24\ An increase in activity, in turn, may
facilitate tighter spreads, contribute to overall deeper, more liquid
market, and increase price discovery, which can benefit all market
participants. The Exchange also notes that Floor Market Makers are not
obligated to provide continuous quotes like Market Makers on BOX's
electronic market.\25\ Further, Floor Market Makers are not obligated
to respond to all Floor Brokers Orders on the BOX Trading Floor. As
such, the Exchange believes Floor Market Makers benefit from the access
they have to interact with (at their discretion) orders which are made
available in open outcry on the Trading Floor by Floor Brokers. The
Exchange also notes that Floor Market Makers may choose to conduct
their business on the Trading Floor, unlike Floor Brokers, who have a
business model that is naturally tied to the physical trading space.
The Exchange offers Market Makers a choice on how to conduct business,
only electronic or floor and electronic. The Exchange believes that it
is equitable and not unfairly discriminatory to assess Floor Market
Makers a higher monthly fee because they have the benefit of trading on
both if they so choose. The Exchange believes assessing Floor Brokers a
lower fee accounts for the value Floor Brokers provide to the
Exchange's market and other participants. As described above, Floor
Market Makers benefit from the access they have on the BOX Trading
Floor to interact with orders from Floor Brokers which are made
available in open outcry on the Trading Floor.
---------------------------------------------------------------------------

    \23\ The Exchange notes that a Floor Market Maker is an Options
Participant of the Exchange located on the Trading Floor who has
received permission from the Exchange to trade in options for his
own account. A Floor Broker is an individual who is registered with
the Exchange for the purpose, while on the Trading Floor, of
accepting and handling options orders.
    \24\ The Exchange emphasizes that no market making firm would be
interested in trading on the BOX Trading Floor unless Floor Brokers
brought liquidity to the floor. Floor Brokers are essential to the
operation of the Exchange's trading floor.
    \25\ Among other requirements and obligations, electronic Market
Makers on BOX are required to post valid quotes at least sixty
percent (60%) of the time that the classes are open for trading. See
BOX Rule 8050(e). Floor Market Makers are instead obligated to, in
response to any request for quote by a Floor Broker or Options
Exchange Official, provide a two-sided market. See BOX Rule 8510(c).
Therefore, because Floor Market Makers are deriving a substantial
benefit from participating in transactions on the floor without
carrying more significant obligations to quote on the Trading Floor,
the Exchange believes it is fair and equitable to assess higher fees
to Floor Market Makers.
---------------------------------------------------------------------------

    In addition, the Exchange believes the fee differential between
Floor Brokers and Floor Market Makers is reasonable and not unfairly
discriminatory because pricing differences between these participant
types currently exist at other exchanges within the industry.\26\ As an
example, on Phlx, Floor Market Makers are charged $6,000 per month per
permit while Floor Brokers are charged $4,000 per month per permit.\27\
Further, other exchanges also seek to incentivize Floor Broker order
flow by reducing their fees. The Exchange notes Cboe also has a fee
structure in place to incentivize Floor Brokers to bring orders to the
floor in order to avail themselves of reduced Permit Fees in comparison
to Floor Market Makers.\28\ In a previous filing, Cboe has stated that
their Floor Broker ADV Discount (which allows Floor Brokers to pay
lower fees than Floor Market Makers) ``is designed to encourage the
execution of orders in all classes via open outcry, which may increase
volume, which would benefit all market participants . . . trading via
open outcry.'' \29\
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    \26\ The Exchange notes, pursuant to this proposal Floor Market
Makers will continue to be charged $500 more for a podium compared
to Floor Broker firm's booth space (if the Floor Broker does not
achieve their Trading Floor Credit).
    \27\ See Nasdaq Phlx Options 7 Pricing Schedule Section 8.A
(Permit and Registration Fees).
    \28\ Cboe Options Fee Schedule, Floor Trading Permit Sliding
Scales and Floor Broker ADV Discount. Cboe's monthly Permit Fees
work on a sliding scale basis in conjunction with Floor Brokers
being able to achieve discounts based on the Average Daily Volume
(``ADV'') Floor Brokers achieve each month.
    \29\ See Securities Exchange Act Release No. 34-89826 (September
10, 2020), 85 FR 57900 (September 16, 2020) (SR-CBOE-2020-086)
(Noticed by Commission for Immediate Effectiveness).
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    In addition, the Exchange believes the proposal is equitable and
not unfairly discriminatory because it aligns the Exchange's fees with
at least one other competitor when considering the degree of price
differentiation.\30\ For example, assume that Market Making Firm A on
NYSE American has two (2) registered ATPs \31\ and are therefore
charged $10,000 in monthly ATP Fees for operating on the trading
floor.\32\ In addition, NYSE American Market Makers are charged $90 per
month per podium. As such, Market Making Firm A would be charged in
total $10,180 monthly for its permit fees and podia fees.\33\ By
comparison, Floor Brokers on

NYSE American are assessed a $500 per month ATP Fee and $40 per linear
foot per month for all booth space utilized by such Floor Broker.\34\
Assume Floor Broker Firm B has two Floor Brokers and 10 linear feet of
booth space for two, five-foot desks. Floor Broker Firm B would pay
$1,000 in ATP Fees and $400 in booth space, for a total of $1,400 per
month. The fee differential between Market Making Firm A and Floor
Broker Firm B on NYSE would be $8,780 per month.
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    \30\ See NYSE American Options Fee Schedule Section III. Monthly
Trading Permit, Rights, Floor Access and Premium Product Fees.
    \31\ NYSE American ``ATPs'' are registered Broker-Dealers who
are permit holders on the exchange, this includes NYSE American
Floor Brokers and Market Makers. See id.; See also NYSEAmer Rule
920NY. (Market Makers). These two participant types are analogous to
BOX's Floor Brokers and Floor Market Makers.
    \32\ See id.
    \33\ The Exchange notes, NYSE American limits the number of
Floor Market Makers allowed on the floor to two ATPs per month, the
Exchange is proposing no such restrictions at this time.
    \34\ The Exchange notes NYSE American also has an incentive and
rebate structure in place to incent Floor Brokers to bring liquidity
and execute orders on its floor. See NYSE American Options Fee
Schedule, Section III.E. Floor Broker Incentive and Rebate Programs.
The FB Prepay Program affords Floor Brokers the opportunity to
prepay Monthly ATP Fees (in addition to other fixed costs) and
thereby qualify for a percentage reduction of pre-paid annual
eligible fixed costs (e.g., ATP Fees) or an Alternative Rebate. If a
Floor Broker firm achieves the highest Tier 4, it is eligible for
100% refund of eligible fixed costs, or $16,000 per month rebate of
eligible fixed costs.
---------------------------------------------------------------------------

    Now consider the same Market Making Firm A with two Market Makers
on the BOX Trading Floor. Under this proposal, Market Making Firm A
would be charged $11,000 for their two Market Maker Trading Floor
Participant fees. Next, assume Floor Broker Firm B is assessed their
$5,000 Trading Floor Participant Fee and do not execute a trade on more
than 50% of the trading days in the given month.\35\ Floor Broker B
would be charged $5,000 and $350 for each desk for both Floor Brokers,
for a total monthly fee of $5,700. The fee differential between Market
Making Firm A and Floor Broker Firm B would be $5,300.
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    \35\ The Exchange notes, if a Floor Broker firm executes a trade
on 50% or more of trading days in a given month, the firm receives a
$5,000 Trading Floor Credit which equals its Trading Floor
Participant Fee of $5,000 per month.
---------------------------------------------------------------------------

    The Exchange notes, if Floor Broker Firm B achieved its Trading
Floor Credit it would only pay for two desks, one for each of its Floor
Brokers. Therefore, Floor Broker Firm B would only pay a total of $700
per month in Floor Broker Desk Fees. The fee differential between
Market Making Firm A and Floor Broker Firm B on BOX would be $10,300.
As discussed herein, when Floor Broker Firm B achieves their Trading
Floor Credit, the fee differentials between Participant types are in
line with the fee differential on NYSE American. The Exchange
recognizes the value that Floor Brokers bring to trading floors and
have in place reduced fees (like those discussed above when compared to
Floor Market Makers) and other fee caps and rebates to the benefit of
Floor Brokers in order to incentivize Floor Brokers to continue
bringing their customer order flow to the physical trading floor to the
benefit of all market participants.
    Second, the Exchange believes that replacing the Badge Fee
subsection with the proposed Other Registered On-Floor Persons
subsection is reasonable, equitable, and not unfairly discriminatory.
The proposed change is reasonable as it seeks to consolidate the fees
that are assessed to all Other Registered On-Floor Persons that are not
Floor Brokers or Floor Market Makers. In addition, the Exchange
believes it is reasonable to now assess a Desk Fee to Other Registered
On-Floor Persons because of the space that these individuals will
utilize on the new BOX Trading Floor.\36\ The Exchange believes
charging per desk will offer flexibility to Floor Participants to
customize the precise amount of floor space needed for their business,
while ensuring that each Floor Participant is charged equitably based
on the amount of floor space all their Other Registered On-Floor
Persons utilize. The Exchange believes the proposed Desk Fee for Other
Registered On-Floor Persons is reasonable and appropriate as a similar
fee is assessed on at least one other exchange with a physical trading
floor \37\ as well as identical to the current Desk fee assessed to BOX
Floor Brokers. Finally, the Exchange believes the proposed Other
Registered On-Floor Persons Desk Fee is equitable and not unfairly
discriminatory as such fee will be applied to all Other Registered On-
Floor Persons who are not a Floor Brokers or Floor Market Makers.
---------------------------------------------------------------------------

    \36\ The Exchange notes that Other Registered On-Floor Persons
are not currently allowed on the BOX Trading Floor due to the space
constraints caused by the COVID-19 social distancing requirements.
Once the Exchange transitions to its new floor, there will be more
space available and these individuals will be allowed to return to
the BOX Trading Floor, however, space will still be limited due to
the COVID-19 safety measures in place.
    \37\ In 2011, Phlx charged a flat $300 per month fee for
Trading/Administrative Booth paid by floor brokers and clearing
firms. See Securities Exchange Act Release No. 34-66086 (January 3,
2012), 77 FR 1111 (January 9, 2012) (SR-Phlx-2011-181). In 2013,
Phlx eliminated the Trading/Administrative Booth Fees but increased
the Floor Facility Fee to $330 per month and assessed this fee to
Clerks among other persons. Clerks on Phlx are defined as ``any
registered on-floor person employed by or associated with a member
or member organization who is not a member and is not eligible to
effect transactions on the Options Floor as a Lead Market Maker,
Floor Market Maker, or Floor Broker.'' See Phlx Options 8 Section 12
(defining ``Clerks''). As such, the Exchange believes that the
proposed Desk Fee for ``all Other Registered On-Floor Persons'' is
reasonable and appropriate as a similar fee (the Floor Facility Fee)
currently exists to cover similar costs on Phlx. See Securities
Exchange Act Release No. 69672 (May 30, 2013), 78 FR 33873 (June 5,
2013) (SR-Phlx-2013-58). See also Phlx Fee Schedule Options 7,
Section 9A.
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange does not believe
that the proposed rule changes will impose any burden on intramarket
competition because the proposed changes would be applied to all
similarly situated participants (i.e., Floor Market Makers, Clerks),
and as such, would not impose a disparate burden on competition among
the same classes of market participants. As described in further detail
above, the proposed removal of additional podium fees for Floor Market
Makers does not impose an undue burden on intermarket competition
because the resulting fee per podium is similar to other fees at
competing exchanges with trading floors.\38\ Further, the Exchange
believes assessing a Desk Fee to Other Registered On-Floor Persons does
not create an undue burden on competition because the Exchange is
allocating fees to market participants depending on the space they
utilize on the Trading Floor. Further, at least one other exchange with
a physical trading floor assesses a similar fee for Other Registered
On-Floor Persons.\39\ Lastly, purchasing Desk Space for Other
Registered On-Floor Persons employed by a Floor Participant is entirely
voluntary.
---------------------------------------------------------------------------

    \38\ See supra note 22.
    \39\ See supra note 37.
---------------------------------------------------------------------------

    Furthermore, as noted above, the Exchange operates in a highly
competitive market in which market participants can readily favor
competing venues if they deem fee levels at a particular venue to be
excessive. In such an environment, the Exchange must continually adjust
its fees to remain competitive with other exchanges. Because
competitors are free to modify their own fees in response, the Exchange
believes that the degree to which fee changes in this market may impose
any burden on competition is limited. For the reasons discussed above,
the Exchange believes that the proposed changes do not impose an undue
burden on competition.
    Lastly, as described above, the Trading Floor Participant Fees for
Floor Market Makers are in line with fees assessed at other exchanges
with physical trading floors.\40\ The Exchange, along with at least one
other competitor, recognize the value that Floor Brokers bring to
trading floors and, as such, offer reduced Trading Participant Fees to

Floor Brokers (in comparison to Floor Market Makers) in order to
incentivize Floor Brokers to continue to bring customer order flow to
physical trading floors for the benefit of all market participants.\41\
---------------------------------------------------------------------------

    \40\ See supra note 22.
    \41\ See supra note 30.
---------------------------------------------------------------------------

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Exchange Act \42\ and Rule 19b-4(f)(2)
thereunder,\43\ because it establishes or changes a due, or fee.
---------------------------------------------------------------------------

    \42\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \43\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend the rule
change if it appears to the Commission that the action is necessary or
appropriate in the public interest, for the protection of investors, or
would otherwise further the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.

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-BOX-2021-03 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-BOX-2021-03. 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 such filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. 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-BOX-2021-03, and should be submitted on
or before May 13, 2021.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\44\
---------------------------------------------------------------------------

    \44\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 2021-08311 Filed 4-21-21; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: November 29, 2010 (Volume 75, Number 228)]
[Notices]
[Page 73075-73076]
[DOCID:fr29no10-78]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. EL10-77-000]

Notice of Motion To Add Exhibit to Petition for Declaratory Order
and Complaint

November 18, 2010.

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

------------------------------------------------------------------------
City of Pella, Iowa                       Docket No. EL10-77-000.
v.
Midwest Independent Transmission System
 Operator, Inc.,
MidAmerican Energy Company, Inc.
------------------------------------------------------------------------

    Take notice that on November 15, 2010, the City of Pella, Iowa
(Complainant) filed a motion to add a document as Exhibit P-28 to its
July 2, 2010 petition for declaratory order and formal complaint
against Midwest Independent System Operator, Inc. and MidAmerican
Energy Company, Inc. (Respondents).
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211, 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. The Respondent's
answer and all interventions, or protests must be filed on or before
the comment date. The Respondent's answer, motions to intervene, and
protests must be served on the Complainants.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the

``eFiling'' link at http://www.ferc.gov. Persons unable to file
electronically should submit an original and 14 copies of the protest
or intervention to the Federal Energy Regulatory Commission, 888 First
Street, NE., Washington, DC 20426.
    This filing is accessible on-line at http://www.ferc.gov, using the
``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive e-mail
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For
TTY, call<PHONE_NUMBER>.
    Comment Date: 5 p.m. Eastern Time on December 15, 2010.

Kimberly D. Bose,
Secretary.
[FR Doc. 2010-29848 Filed 11-26-10; 8:45 am]
BILLING CODE 6717-01-P