22362 Federal Register / Vol. 77, No. 72 / Friday, April 13, 2012 / Notices 

ADAMS accession number for each 

document referenced in this notice (if 

that document is available in ADAMS) 

is provided the first time that a 

document is referenced. Additional 

information regarding accessing 

materials related to this action is under 

the Document Availability heading in 

the SUPPLEMENTARY INFORMATION section 

of this document. 

• NRC’s PDR: You may examine and 

purchase copies of public documents at 

the NRC’s PDR, Room O1–F21, One 

White Flint North, 11555 Rockville 

Pike, Rockville, Maryland 20852. 

FOR FURTHER INFORMATION CONTACT: For 

information about the Final SEIS or the 

environmental review process, please 

contact Paula Cooper, telephone: 301– 

415–2323; email: 

Paula.Cooper@nrc.gov. Projects Branch 

2, Division of License Renewal, Office of 

Nuclear Reactor Regulation, U.S. 

Nuclear Regulatory Commission, 

Washington, DC 20555–0001. 

SUPPLEMENTARY INFORMATION: 

Discussion 

The NRC received an application, 

dated January 19, 2010, from Energy 

Northwest (EN), filed pursuant to 

Section 103 of the Atomic Energy Act of 

1954, as amended, and Title 10 of the 

Code of Federal Regulations Part 54 (10 

CFR part 54), to renew the operating 

license for CGS. Renewal of the license 

would authorize the applicant to 

operate the facility for an additional 20- 

year period beyond the period specified 

in the current operating license. The 

current operating license for CGS (NPF– 

21), expires on December 20, 2023. 

The final Supplemental 

Environmental Impact Statement (SEIS) 

is being issued as part of the NRC’s 

process to decide whether to issue a 

renewed license to CGS, pursuant to 10 

CFR part 54. The final SEIS was 

prepared in compliance with the 

National Environmental Policy Act of 

1969, as amended (NEPA), and the 

NRC’s regulations for implementing 

NEPA in 10 CFR part 51. In the final 

SEIS, the NRC staff assessed the 

potential environmental impacts from 

the operation, refurbishment, and 

decommissioning of the proposed CGS 

project. The NRC staff assessed the 

impacts of the proposed action on land 

use, historic and cultural resources, air 

quality, geology and soils, water 

resources, ecological resources, 

transportation, public and occupational 

health, waste management, 

socioeconomics, and environmental 

justice. In preparing this final SEIS, the 

NRC staff also reviewed, considered, 

evaluated, and addressed the public 

comments received during the scoping 

process and on the draft SEIS. 

In addition to the proposed action, the 

NRC staff considered a reasonable range 

of alternatives, including the no-action 

alternative. Under the no-action 

alternative, the NRC would deny EN’s 

request for a renewed operating license 

for the CGS site. The no-action 

alternative serves as a baseline for 

comparison of the potential 

environmental impacts of the proposed 

action. Other alternatives the NRC staff 

considered include: (1) Natural gas-fired 

combined cycle (NGCC); (2) new 

nuclear; (3) combination alternative 

(NGCC, hydroelectric, wind, and 

conservation and efficiency); (4) Offsite 

new nuclear and NGCC; (5) coal-fired 

power; (6) energy conservation and 

energy efficiency; (7) purchased power; 

(8) solar power; (9) wind power; (10) 

biomass waste; (11) hydroelectric 

power; (12) ocean wave and current 

energy; (13) geothermal power; (14) 

municipal solid waste; (15) biofuels; 

(16) oil-fired power; (17) fuel cells; and 

(18) delayed retirement. These 

alternatives, except for the NGCC, new 

nuclear, and combination alternative, 

were eliminated from further analysis 

because they do not meet future system 

needs and do not have costs or benefits 

that justify inclusion in the range of 

reasonable alternatives. 

As discussed in Section 9.4 of the 

final supplement, the staff determined 

that the adverse environmental impacts 

of license renewal for CGS are not great 

enough to deny the option of license 

renewal for energy planning decisionmakers. This recommendation is based 

on: (1) The analysis and findings in the 

GEIS; (2) information provided in the 

environmental report and other 

documents submitted by EN; (3) 

consultation with Federal, State, local, 

and tribal government agencies; (4) the 

staff’s own independent environmental 

review; and (5) consideration of public 

comments received during the scoping 

process and on the draft Supplemental 

Environmental Impact Statement. 

Document Availability 

Documents related to this notice are 

available on the NRC’s plant application 

for license renewal Web site at http:// 

www.nrc.gov/reactors/operating/

licensing/renewal/applications/

columbia.html. The final SEIS for the 

proposed CGS project may also be 

accessed on the Internet at http:// 

www.nrc.gov/reading-rm/doccollections/nuregs/staff/sr1437/ by 

selecting ‘‘Supplement-47.’’ 

The CGS’s license application, the 

CGS’s Environmental Report, and 

Volumes 1 and 2 of the NRC’s final SEIS 

are available in ADAMS under 

Accession Numbers ML100250668, 

ML100250666, ML12096A334, and 

ML12096A336, respectively. 

A copy of the final SEIS will be 

available at the Richland Public Library, 

955 Northgate Drive, Richland, 

Washington 99352, and at the 

Kennewick Branch of Mid-Columbia 

Libraries, 1620 South Union Street, 

Kennewick, Washington 99338. 

Dated at Rockville, Maryland, this 6th day 

of April, 2012. 

For the Nuclear Regulatory Commission. 

Dennis Morey, 

Chief, Reactor Projects Branch 1, Division 

of License Renewal, Office of Nuclear Reactor 

Regulation. 

[FR Doc. 2012–8809 Filed 4–12–12; 8:45 am] 

BILLING CODE 7590–01–P 

NUCLEAR REGULATORY 

COMMISSION 

[Docket No. 70–0398; NRC–2012–0091] 

Exemption Requests for Special 

Nuclear Material License SNM–362, 

Department of Commerce, 

Gaithersburg, MD 

AGENCY: Nuclear Regulatory 

Commission. 

ACTION: Availability of environmental 

assessment and finding of no significant 

impact. 

FOR FURTHER INFORMATION CONTACT: 

Mary T. Adams, Office of Nuclear 

Material Safety and Safeguards, U.S. 

Nuclear Regulatory Commission, 

Washington, DC 20555–0001; telephone: 

301–492–3113; email: 

Mary.Adams@nrc.gov. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

The Nuclear Regulatory Commission 

(NRC) is considering the issuance of 

exemptions from Title 10 of the Code of 

Federal Regulations (10 CFR) 36.27(b) 

and 36.31(a), to be included in the 

renewal of Special Nuclear Material 

(SNM) License SNM–362 for the U.S. 

Department of Commerce, National 

Institutes of Standards and Technology 

(NIST) in Gaithersburg, Maryland. NIST 

requested renewal of SNM–362 in an 

application dated June 29, 2007 

(ML072140750). NIST revised the 

license renewal application on March 

23, 2011 (ML110940239) to include 

three requests for exemption from NRC 

regulations in 10 CFR 36.27(b), 36.31(a), 

and 70.24. 

Pursuant to 10 CFR 51.22(c)(14)(v), 

renewal of materials licenses issued 

under 10 CFR Part 70 for research and 


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Federal Register / Vol. 77, No. 72 / Friday, April 13, 2012 / Notices 22363 

1The exemption request for 10 CFR 70.24 is 

categorically excluded from the requirement to 

perform an environmental assessment by 10 CFR 

51.22(c)(25). The categorical exclusion 

determination for the criticality accident alarm 

system exemption will be documented in the Safety 

Evaluation Report supporting the license renewal. 

development and for educational 

purposes is a category of actions which 

the NRC has determined does not 

individually or cumulatively have a 

significant effect on the human 

environment, and as such, this category 

of actions does not require 

environmental review or the preparation 

of an Environmental Assessment (EA). 

However, in addition to its application 

for renewal, NIST has also requested 

specific exemptions from three NRC 

regulations, and the exemption requests 

require environmental review unless the 

exemptions themselves are also subject 

to categorical exclusion. One of the 

exemption requests, that request related 

to 10 CFR 70.24, has also been 

determined to belong to the 

categorically excluded action, 

specifically those identified in 10 CFR 

51.22(c)(25). This determination will be 

discussed in the safety evaluation report 

that will support the license renewal. 

In accordance with 10 CFR 51.21 the 

NRC has prepared this EA to assess the 

environmental impacts of granting the 

remaining two exemption requests from 

10 CFR 36.27(b) and 36.31(a). Based on 

the EA, the NRC has concluded that a 

Finding of No Significant Impact 

(FONSI) is appropriate, and therefore an 

EIS will not be prepared. 

II. Environmental Assessment 

On March 23, 2011, NIST provided a 

revised request for renewal of SNM– 

362, which authorizes the receipt, 

possession, and use of source, 

byproduct, and SNM for research and 

development purposes. NIST uses 

licensed materials for research, 

development, calibration, and testing 

activities. NIST develops, maintains, 

and disseminates national standards for 

ionizing radiation and radioactivity to 

support health care, industry, and 

homeland security. Examples of this 

work include development of reference 

materials and measurement calibration 

services for radiopharmaceuticals; 

maintaining and disseminating 

standards used by hospitals to calibrate 

systems; and development of standards 

and protocols for radiation 

measurement instruments used in 

homeland security. Activities for which 

the licensed material is used are 

described in the license renewal 

application (LRA). 

Materials License SNM–362 was first 

issued by the Atomic Energy 

Commission in 1960 to the National 

Bureau of Standards, renamed in 1988 

to the National Institute of Standards 

and Technology. NIST is a Federal 

agency within the Department of 

Commerce. The SNM license was 

renewed in 1979, 1985, 1991, and 1997. 

The current license was scheduled to 

expire on July 31, 2007. In accordance 

with 10 CFR Part 70, NIST submitted an 

application requesting renewal of 

Materials License SNM–162 on June 29, 

2007 (Agencywide Documents Access 

and Management System [ADAMS] 

Accession No. ML072140750) and, in 

accordance with the timely renewal 

provision of 10 CFR 70.38(a), the license 

has remained in effect. In addition to 

the SNM license, NIST holds a test 

reactor operating license, TR–5 (Docket 

No. 50–184), and an NRC Exempt 

Distribution License No. 19–23454–01E 

(Docket No. 30–22202) for byproduct 

material. In response to an NRC Request 

for Additional Information (ADAMS 

Accession No. ML103210269), NIST 

provided a third revised LRA on March 

23, 2011 (ADAMS Accession No. 

ML110940239), which included the 

requests for exemption from 10 CFR 

36.27(b), 36.31(a), and 70.24.1 The 

exemption requests that are under 

consideration in this EA are related to 

10 CFR 36.27(b) and 36.31(a). The 

exemptions were first granted by the 

NRC in Amendment 2 to SNM–362 

issued on November 23, 1999 (ADAMS 

accession numbers ML993350644 and 

ML993350646). This EA addresses the 

action of continuing these previouslygranted exemptions in the renewed 

license. 

Description of the Proposed Action 

NIST has been licensed by the NRC 

for the possession and use of SNM in 

license SNM–362 since 1960. The 

exemptions from 10 CFR 36.27(b) and 

36.31(a) have been parts of SNM–362 

since 1999. The proposed actions are to 

continue to exempt the licensee from 

the requirement that the radiation room 

must be equipped with a fire 

extinguishing system capable of 

extinguishing a fire without the entry of 

personnel into the room (10 CFR 

36.27(b)); and the requirements that (1) 

the console key must be attached to a 

portable radiation survey meter by a 

chain or cable, and (2) the door to the 

radiation room must require the same 

key used for source movement (i.e., 

control console key) (10 CFR 36.31(a)) 

upon renewal of Materials License 

SNM–362. Continuing these exemptions 

in the renewed license does not require 

or authorize any change in licensee 

operations. 

The action of renewing SNM–362 is 

an action that is categorically excluded 

from environmental review under 10 

CFR 51.22(c)(14)(v), which includes 

issuance, amendment, or renewal of 

materials licenses issued pursuant to 10 

CFR Parts 30, 31, 32, 33, 34, 35, 36, 39, 

40, or 70 authorizing the use of 

radioactive materials for research and 

development and educational purposes. 

The inclusion of the two exemptions 

requested by NIST in the LRA is an 

action that requires an EA in accordance 

with 10 CFR 51.21. 

Need for the Proposed Action 

The first part of the proposed action 

is a continued exemption from 10 CFR 

36.27(b), which requires that the 

irradiation room at a panoramic 

irradiator be equipped with a fire 

extinguishing system capable of 

extinguishing a fire without the entry of 

personnel into the room. The system for 

the irradiation room must have a shutoff valve to control flooding into 

unrestricted areas. 

In the initial 1999 request for 

exemption, NIST indicated that 

equipment limitations and facility age 

(then nearly 40 years old) would 

prevent NIST from complying with 10 

CFR 36.27(b). The second part of the 

proposed action is a continued 

exemption from 10 CFR 36.31(a). 10 

CFR 36.31(a) requires that the key that 

operates the irradiator be attached to a 

portable radiation survey meter by a 

chain or cable. In addition, NIST stated 

that the age of the facility (then nearly 

40 years old) and the interconnectivity 

of the safety features would make it 

prohibitively expensive to modify the 

facility to meet the same-key 

requirement and would offer no 

enhancement of safety. 

Alternatives to the Proposed Action 

An alternative to granting the 

continued exemption to 10 CFR 36.27(b) 

is to deny the exemption request and 

require NIST to provide the irradiation 

room with a fire extinguishing system 

capable of extinguishing a fire without 

the entry of personnel into the room 

with a shut-off valve to control flooding 

into unrestricted areas. 

An alternative to granting the 

continued exemption to 10 CFR 36.31 is 

to deny the exemption request and 

require NIST to provide that the key that 

actuates the mechanism that moves the 

sources of a panoramic irradiator be 

attached to a portable radiation survey 

meter by a chain or cable. 


pmangrum on DSK3VPTVN1PROD with NOTICES
22364 Federal Register / Vol. 77, No. 72 / Friday, April 13, 2012 / Notices 

Environmental Impacts of the Proposed 

Action and Alternatives 

The NRC established 10 CFR Part 36 

to ‘‘specify radiation safety 

requirements and licensing 

requirements for the use of licensed 

radioactive materials in irradiators.’’ 58 

FR 7715; February 9, 1993. At that time, 

the NRC issued an environmental 

assessment and finding of no significant 

impact which analyzed the 

environmental impacts of the 

requirements in 10 CFR Part 36, 

including sections 36.27 and 36.31 (Ref. 

3, Enclosure 4). Specifically, the NRC 

considered the environmental impacts 

of internal and external radiation 

exposure resulting from normal 

operations, accident scenarios, and 

abnormal operations. For each of these 

scenarios, the NRC determined that the 

safety requirements of the regulation 

would not have a significant 

environmental impact. As discussed 

below, the NRC has determined that the 

alternatives proposed by the licensee 

would have the same safety impact as 

the regulations, and as such, the 

environmental impacts that were 

analyzed by the NRC when the 

regulation was initially promulgated 

would remain unchanged, and the 

impacts would not be significant. 

Section 36.27(b) requires that the 

irradiation room at a panoramic 

irradiator be equipped with a fire 

extinguishing system capable of 

extinguishing a fire without the entry of 

personnel into the room. The system for 

the irradiation room must have a shutoff valve to control flooding into 

unrestricted areas. 

The irradiation room housing NIST’s 

10 CFR Part 36 panoramic irradiators 

are entirely of concrete construction. 

The rooms are limited in size so there 

is minimal opportunity for combustible 

materials to be stored in the area. NIST 

administratively limits storage of 

flammable materials in the rooms. As 

such, the most credible fire incident 

would be an electrical fire from the 

control, instrumentation, or lighting 

systems. This would not be sufficient to 

engulf or significantly endanger the 

source. 

To compensate for NIST’s not 

complying with 10 CFR 36.27(b), NIST 

indicated that the signal from the heat 

or smoke detectors will alert the NIST 

Fire Protection Group, and that the 

irradiators are designed to retract the 

source when the electrical power fails or 

on loss of air, as may occur during a fire. 

Fire extinguishers at the site are 

available to fight small fires and 

operators are instructed to retract the 

source, if possible, prior to exiting the 

facility for a fire involving major 

portions of the facility. NRC staff 

determined that the alternative fire 

protection provisions identified by NIST 

provide an adequate level of safety for 

workers and the public. 

Based upon the compensatory 

measures provided by the licensee and 

described above, NRC staff has 

determined that potential 

environmental impacts from a fire in the 

irradiation room will not be increased 

by continuing the exemption from 10 

CFR 36.27(b) because the compensatory 

measures control the likelihood of a fire 

to a level of protection equivalent to 

what would be provided by the 

prescribed measures in 36.27(b). There 

are no environmental impacts of the 

proposed exemption to 10 CFR 36.27(b). 

Granting the exemption will not result 

in effluents to the environment or an 

increase in occupational exposure. It 

also will not increase the likelihood or 

consequences of a fire at the facility. 

Section 36.31(a) requires that the key 

that operates the irradiator be attached 

to a portable radiation survey meter by 

a chain or cable. In the 1999 exemption 

request, NIST stated that the age of the 

facility (then nearly 40 years old) and 

the interconnectivity of the safety 

features would make it prohibitively 

expensive to modify the facility to meet 

the same-key requirement and would 

offer no enhancement of safety. The key 

used to enter the irradiation room is 

captured in the lock when the door is 

opened. This means that physically the 

key cannot be moved out of its captured 

position if the door to the survey room 

is open. The distance from the lock to 

the source area is such that attaching the 

key to a survey meter would require a 

long chain that could be a trip hazard 

or get jammed in the chain of the access 

door when it is opening or closing. 

NIST’s procedure requires that a survey 

meter be used when entering the room. 

Additionally, in lieu of attaching a 

survey meter to the key, NIST installed 

a radiation detector within the 

irradiation room. This detector indicates 

if the source is open, and it is tested 

every day that the unit is in operation. 

NRC agreed that the age of the facility 

and the limitations associated with 

modifying the safety features made it 

unreasonable to modify the facility to 

meet the requirement, and that the 

added radiation monitors, entrance 

controls, and security measures would 

provide comparable safety measures. 

Based upon the alternative radiation 

safety measures provided by the 

licensee and described above, NRC staff 

has confirmed that there are no 

environmental impacts of the proposed 

exemption to 10 CFR 36.31(a). Granting 

the exemption will not result in any 

effluents to the environment or an 

increase in occupational exposure. 

List of Agencies and Persons Consulted 

and Identification of Sources Used 

NRC staff consulted with the 

Maryland Department of the 

Environment. The Department was not 

opposed to the NRC findings. 

The NRC staff determined that 

consultation with the U.S. Fish and 

Wildlife Service for compliance with 

Section 7 of the Endangered Species Act 

is not necessary because the proposed 

action does not have the potential to 

affect listed species or critical habitat. 

The NRC staff reviewed the Maryland 

Inventory of Historic Properties and 

confirmed that there are no known 

archeological sites or other historic 

properties within or immediately 

adjacent to the NIST campus. 

Continuing the proposed exemptions in 

the renewed NIST license is not a type 

of activity that has potential to cause 

effects on historic properties. Therefore, 

no further consultation is required 

under Section 106 of the National 

Historic Preservation Act. 

Finding of No Significant Impact 

Pursuant to 10 CFR Part 51, the NRC 

has considered the environmental 

consequences of taking the proposed 

action. On the basis of this assessment, 

the Commission has concluded that 

environmental impacts associated with 

the proposed action would not be 

significant and the Commission is 

making a finding of no significant 

impact. Accordingly, preparation of an 

EIS is not warranted. 

III. Further Information 

Documents related to this action, 

including the application for license 

renewal and supporting documentation, 

are available electronically at the NRC 

Library at http://www.nrc.gov/readingrm/adams.html. From this site, you may 

access ADAMS, which provides text 

and image files of NRC’s public 

documents. The ADAMS accession 

numbers for the documents related to 

this Notice are: 

1. NIST Revised License Renewal 

Application for SNM–362, Docket No. 70– 

398, March 23, 2011, (ML110940239). 

2. Exemptions from 10 CFR Part 36 (TAC 

No. L31075) and Safety Evaluation Report, 

November 23, 1999 (ML993350644 and 

ML993350646). 

3. U.S. NRC, September 18, 1992, SECY– 

92–323, Final Rule on Licenses and 

Radiation Safety Requirements for Irradiators 

(ML120940618), Enclosure 4, Environmental 

Assessment and Finding of no Significant 

Impact, August 1992. 


pmangrum on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 72 / Friday, April 13, 2012 / Notices 22365 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3An ROT is defined in Exchange Rule 1014(b) as 

a regular member of the Exchange located on the 

trading floor who has received permission from the 

Exchange to trade in options for his own account. 

See Exchange Rule 1014 (b)(i) and (ii). 

4An SQT is defined in Exchange Rule 

1014(b)(ii)(A) as an ROT who has received 

permission from the Exchange to generate and 

submit option quotations electronically in options 

to which such SQT is assigned. 

5An RSQT is defined in Exchange Rule in 

1014(b)(ii)(B) as an ROT that is a member or 

member organization with no physical trading floor 

presence who has received permission from the 

Exchange to generate and submit option quotations 

electronically in options to which such RSQT has 

been assigned. An RSQT may only submit such 

quotations electronically from off the floor of the 

Exchange. 

6See Securities Exchange Act Release No. 65644 

(October 27, 2011), 76 FR 67786 (November 2, 2011) 

(approving SR–Phlx–2011–123). 

If you do not have access to ADAMS, 

or if there are problems in accessing the 

documents located in ADAMS, please 

contact the NRC Public Document Room 

(PDR) Reference staff at 1–800–397– 

4209, 301–415–4737, or by email to 

pdr.resource@nrc.gov. These documents 

may also be viewed electronically on 

the public computers located at the 

NRC’s PDR, O1F21, One White Flint 

North, 11555 Rockville Pike Rockville, 

MD 20852. The PDR reproduction 

contractor will copy documents for a 

fee. 

Dated at Rockville, Maryland this 5th day 

of April 2012. 

For the U.S. Nuclear Regulatory 

Commission. 

Kevin Ramsey, 

Acting Chief, Fuel Manufacturing Branch, 

Division of Fuel Cycle Safety and Safeguards, 

Office of Nuclear Material Safety and 

Safeguards. 

[FR Doc. 2012–8917 Filed 4–12–12; 8:45 am] 

BILLING CODE 7590–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66767; File No. SR–Phlx– 

2012–40] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing of Proposed Rule Change 

Relating to Quarterly Trading 

Requirements Applicable to Registered 

Options Traders 

April 6, 2012. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1, and Rule 19b–4 2 thereunder, 

notice is hereby given that on March 26, 

2012, NASDAQ OMX PHLX LLC 

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I and 

II below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Exchange Rules 1014, Obligations and 

Restrictions Applicable to Specialists 

and Registered Options Traders, and 

1093, Phlx XL Risk Monitor Mechanism, 

and Options Floor Procedure Advice B– 

3, Trading Requirements, to change 

trading requirements applicable to 

certain Registered Options Traders 

trading electronically, as described 

below. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.nasdaqtrader.com/ 

micro.aspx?id=PHLXRulefilings, at the 

principal office of the Exchange, and at 

the Commission’s Public Reference 

Room, and on the Commission’s Web 

site at http://www.sec.gov. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to eliminate unnecessary and 

outdated potential burdens on certain 

Exchange market makers arising from 

their use of electronic orders to trade on 

the Exchange. The general term ‘‘market 

makers’’ on the Exchange includes 

specialists and registered options 

traders (‘‘ROTs’’).3 ROTs can be either 

Streaming Quote Traders (‘‘SQTs’’) 4, 

Remote Streaming Quote Traders 

(‘‘RSQTs’’) 5 or non-Streaming Quote 

Trader ROTs (‘‘non-SQT ROTs’’) which 

by definition are neither SQTs nor 

RSQTs. The Exchange is proposing to 

amend Rule 1014, Commentary .13 to 

permit non-SQT ROTs to meet an inperson trading requirement set forth in 

that section using electronic orders. The 

Exchange also proposes to amend Rule 

1014(b)(ii)(E) to eliminate a trading 

requirement applicable to a non-SQT 

ROT who transacts more than 20% of 

his/her contract volume in an option 

electronically versus in open outcry 

during any calendar quarter. A 

conforming change is proposed to 

Section (a) of Rule 1093, Phlx XL Risk 

Monitor Mechanism. Finally, changes 

are proposed to Options Floor 

Procedure Advice B–3 and to Rule 

1014(b)(ii)(E)(1) to conform to a recent 

amendment by the Exchange of Rule 

1014, Commentary .01, as explained 

below. 

Recent Rule 1014, Commentary .01 

Amendment 

The Exchange has recently amended 

Commentary .01 of Rule 1014. 6 Prior to 

the amendment Commentary .01 

required that in order for an ROT (other 

than an RSQT or a Remote Specialist) to 

receive specialist margin treatment for 

off-floor orders in any calendar quarter, 

the ROT was required among other 

things to execute the greater of 1,000 

contracts or 80% of his total contracts 

that quarter in person and not through 

the use of orders (the ‘‘80% in-person 

test’’). 

The only way to participate in trades 

other than through the use of orders is 

by quoting. As the Exchange explained 

in the proposed rule change, non-SQT 

ROTs do not ‘‘stream’’ quotes, meaning 

send quotes electronically to the 

Exchange. Instead, pursuant to 

Commentary .18 of Rule 1014, they 

submit limit orders electronically and 

respond to floor brokers verbally. While 

SQTs quote electronically by 

‘‘streaming’’ quotations into the 

Exchange, non-SQT ROTs quote 

verbally in response to floor brokers 

representing orders in the trading crowd 

verbally. 

The Exchange explained in the filing 

that the limitation on the use of orders 

to satisfy the 80% in-person test with 

respect to non-SQT ROTs was obsolete 

as, over time, following the movement 

toward a more electronic trading 

platform in options, it had become 

difficult for such ROTs to comply with 

the trading requirement without using 

orders. The Exchange explained that in 

order to comply with their quarterly 

trading requirements, non-SQT ROTs 

have to proactively enter orders that 

provide or take liquidity. While some 

time ago, ROTs were able to place their 

liquidity on the book by verbally 


pmangrum on DSK3VPTVN1PROD with NOTICES