[Federal Register Volume 82, Number 49 (Wednesday, March 15, 2017)]
[Notices]
[Pages 13889-13893]
[FR Doc No: 2017-05090]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80189; File No. SR-NYSEArca-2017-01]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Amendment No. 2 and Order Granting Accelerated Approval of a
Proposed Rule Change, as Modified by Amendment No. 2, Amending the NYSE
Arca Equities Rule 5 and Rule 8 Series

March 9, 2017.

I. Introduction

    On January 6, 2017, NYSE Arca, Inc. (``Exchange'' or ``Arca'')
filed with the Securities and Exchange Commission (``Commission''),
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to
amend the NYSE Arca Equities Rule (``Rule'') 5 and Rule 8 Series to add
specific continued listing standards for exchange-traded products
(``ETPs'') and to specify the delisting procedures for these products.
The proposed rule change was published for comment in the Federal
Register on January 25, 2017.\3\ On February 10, 2017, the Exchange
filed Amendment No. 1 to the proposed rule change, which amended and
replaced the original proposal. On March 6, 2017, the Exchange filed
Amendment No. 2 to the proposed rule change, which amended and replaced
the original proposal, as modified by Amendment No. 1.\4\ The
Commission received nine comment letters on the proposed rule
change.\5\ The Commission is publishing this notice to solicit comments
on Amendment No. 2 from interested persons, and is approving the
proposed rule change, as modified by Amendment No. 2, on an accelerated
basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 79834 (January 18,
2017), 82 FR 8444.
    \4\ In Amendment No. 2, the Exchange: (i) Further amended rules
within the Rule 5 and Rule 8 Series to reflect that certain listing
requirements (including certain statements or representations in
rule filings for the listing and trading of specific products) apply
on an initial and ongoing basis; (ii) further amended rules within
the Rule 5 and Rule 8 Series to consistently state that the Exchange
will maintain surveillance procedures for listed products and will
initiate delisting proceedings if continued listing requirements are
not maintained; (iii) further amended rules within the Rule 5 and
Rule 8 Series to provide that, in a rule filing to list and trade a
product, all statements or representations regarding the
applicability of Exchange listing rules (including, for example,
statements and representations related to the dissemination of the
intraday indicative value and index value, as applicable) specified
in such rule filing constitute continued listing requirements; (iv)
specified an implementation date for the proposed changes; and (v)
made other technical, clarifying, and conforming changes throughout
the Rule 5 and Rule 8 Series. Amendment No. 2 is available at
https://www.sec.gov/comments/sr-nysearca-2017-01/nysearca201701-1618319-137048.pdf.
    \5\ See Letters to Brent J. Fields, Secretary, Commission, from
David W. Blass, General Counsel, Investment Company Institute, dated
January 12, 2017 (``ICI Letter''); Anna Paglia, Head of Legal,
Invesco PowerShares Capital Management LLC, dated February 10, 2017
(``PowerShares Letter''); Steven Price, SVP, Director of
Distribution Services and Chief Compliance Officer, ALPS
Distributors, Inc., ALPS Portfolio Solutions Distributor, Inc.,
dated February 10, 2017 (``ALPS Letter''); James E. Ross, Executive
Vice President and Chairman, Global SPDR Business, State Street
Global Advisors, dated February 13, 2017 (``SSGA Letter''); Samara
Cohen, Managing Director, U.S. Head of iShares Capital Markets,
Joanne Medero, Managing Director, Government Relations & Public
Policy, and Deepa Damre, Managing Director, Legal & Compliance,
BlackRock, Inc., dated February 14, 2017 (``BlackRock Letter'');
Peter K. Ewing, Senior Vice President, Northern Trust Investments,
Inc., dated February 14, 2017 (``NTI Letter''); Ryan Louvar, General
Counsel, WisdomTree Asset Management, Inc., dated February 15, 2017
(``WisdomTree Letter''); Kevin McCarthy, Senior Managing Director,
Nuveen Fund Advisors, LLC, dated February 15, 2017 (``Nuveen
Letter''); and Matthew B. Farber, Assistant General Counsel, First
Trust Advisors L.P., dated February 23, 2017 (``First Trust
Letter'').

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II. Description of the Proposed Rule Change, as Modified by Amendment
No. 2

    The Exchange proposes to amend the Rule 5 and Rule 8 Series to
specify continued listing requirements for ETPs listed under those
rules, which include products listed pursuant to Rule 19b-4(e) under
the Act (``generically-listed products'') and products listed pursuant
to proposed rule changes filed with the Commission (``non-generically-
listed products'').\6\
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    \6\ See infra notes 29-31 and accompanying text. The Exchange
also proposes to amend the requirement to delist a product if,
following the initial 12-month period following commencement of
trading on the Exchange, there are fewer than 50 record and/or
beneficial holders of the listed product for 30 or more consecutive
trading days, by deleting the threshold of ``30 or more consecutive
trading days.'' See, e.g., proposed changes to Rule 5.5(g)(2)(a)(1).
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    The Exchange also proposes to amend the Rule 5 and Rule 8 Series to
specify issuer notification requirements related to failures to comply
with continued listing requirements. Specifically, the Exchange
proposes to amend Rule 5.2(b) to require an issuer with securities
listed under Rule 5.2 or Rule 8 to promptly notify the Exchange after
the issuer becomes aware of any non-compliance by the issuer with the
applicable continued listing requirements of Rule 5.2, Rule 5.5, or
Rule 8.\7\ As proposed, the Exchange would initiate delisting
proceedings for a product listed under the Rule 5 or Rule 8 Series if
any of its continued listing requirements (including those set forth in
an Exchange Rule and those set forth in an applicable proposed rule
change) is not continuously maintained.
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    \7\ The Exchange also proposes to specify issuer notification
requirements in the product listing rules within the Rule 5 and Rule
8 Series. See, e.g., proposed Rules 5.2(j)(2)(G) and 8.100(e).
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    The Exchange also proposes to amend Rule 5.5(m) to specify the
delisting procedures for products listed under the Rule 5 and Rule 8
Series. According to the Exchange, listed ETPs are currently subject to
the delisting procedures in Rule 5.5(m). The Exchange notes that, under
Rule 5.5(m), it has the discretion to offer non-compliant issuers the
opportunity to submit a plan to regain compliance.\8\ If such a plan is
accepted, non-compliant issuers are afforded a cure period to regain
compliance.
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    \8\ Similarly, other exchanges' delisting procedures for ETPs
provide that, under certain circumstances, the exchange may accept
and review an issuer's plan to regain compliance. See, e.g.,
Securities Exchange Act Release No. 79784 (January 12, 2017), 82 FR
6664, 6665 (January 19, 2017) (SR-NASDAQ-2016-135).
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    Finally, the Exchange proposes to make conforming and technical
changes throughout the Rule 5 and Rule 8 Series to maintain consistency
in its rules. For example, the Exchange proposes to consistently use
the language ``initiate delisting proceedings under Rule 5.5(m)'' when
describing the delisting procedures for a product that fails to meet
continued listing requirements; \9\ and consistently reflect that
delisting ``following the initial twelve month period following . . .
commencement of trading on the Corporation'' only applies to the
record/beneficial holder, number of shares issued and outstanding, and
the market value of shares issued and outstanding requirements.\10\
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    \9\ See, e.g., proposed changes to Rules 5.5(g)(2)(a) and
8.100(f)(2)(i).
    \10\ See, e.g., proposed changes to Rule 8.200(d)(2); see also,
e.g., Rule 8.200, Commentary .02(d)(2) (currently applying the
twelve month threshold only to the record/beneficial holder, number
of shares issued and outstanding, and market value of shares issued
and outstanding requirements for certain Trust Issued Receipts).
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    The Exchange proposes to implement the rule changes by October 1,
2017.

III. Discussion and Commission Findings

    The Commission finds that the proposed rule change, as modified by
Amendment No. 2, is consistent with the requirements of the Act and the
rules and regulations thereunder applicable to a national securities
exchange.\11\ In particular, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act,\12\ which
requires, among other things, that the rules of a national securities
exchange be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system and, in general, to protect investors and the
public interest.
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    \11\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \12\ 15 U.S.C. 78f(b)(5).
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    The Commission received nine comment letters that express concerns
regarding the proposal.\13\ First, commenters question how an ETF,
especially one that uses indexes established and maintained by
unaffiliated third parties, would comply with the proposed rules, and
how the Exchange would enforce them.\14\ Commenters assert that it
would be unrealistic to anticipate that an ETF could ensure that an
unaffiliated index complies with the initial listing standards on an
ongoing basis, and express concern that an equity-index ETF, through no
action of its own, could see certain of the constituent securities of
the unaffiliated index fall below the listing requirements.\15\ One
commenter believes that even if a third party index provider was
amenable to changes to an underlying index that would allow an ETF to
regain compliance with the continued listing standards, it is unlikely
that the ETF would be able to formulate a compliance plan within 45
calendar days of the Exchange staff's notification.\16\ Second,
commenters argue that the proposal would provide for unfair
discrimination because the proposed rules would result in differential
treatment of ETFs as compared to other securities (e.g., common
stock).\17\ Commenters believe that the continued listing standards for
equity securities generally differ from the initial listing standards,
whereas the proposed ETF continued listing standards would be the same
as the initial listing standards.\18\ Third, commenters assert that the
proposal provides no explanation or evidence regarding the potential
manipulation of ETFs under the current rules, or how the proposal would
reduce the potential for manipulation.\19\ One commenter also believes
that significant compliance enhancements could be required to ensure
proper and continuous testing of securities held in an index, and
questions how this type of testing would enhance investor
protection.\20\
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    \13\ See supra note 5.
    \14\ See ICI Letter at 1-2; see also PowerShares Letter at 1;
SSGA Letter at 1; BlackRock Letter at 1-2; and Nuveen Letter at 1.
The Commission notes that the ALPS Letter, NTI Letter, WisdomTree
Letter, and First Trust Letter also express general support for all
the views expressed in the ICI Letter.
    \15\ See ICI Letter at 1-3; see also PowerShares Letter at 2;
SSGA Letter at 1; BlackRock Letter at 2; and Nuveen Letter at 2.
    \16\ See BlackRock Letter at 2.
    \17\ See ICI Letter at 2; see also PowerShares Letter at 1; SSGA
Letter at 1; and Nuveen Letter at 1-2.
    \18\ See ICI Letter at 2; see also Nuveen Letter at 1-2.
    \19\ See ICI Letter at 2; see also PowerShares Letter at 1-2;
SSGA Letter at 1; and Nuveen Letter at 2.
    \20\ See BlackRock Letter at 2.
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    The Commission believes that the proposal is consistent with the
Act. As the Commission previously stated, the development,
implementation, and enforcement of standards governing the initial and
continued listing of securities on an exchange are activities of
critical importance to financial markets and the investing public.\21\
Once a security has been approved for initial listing, continued
listing criteria allow an exchange to monitor the status and trading
characteristics of that issue

to ensure that it continues to meet the exchange's standards for market
depth and liquidity so that fair and orderly markets can be maintained.
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    \21\ See, e.g., Securities Exchange Act Release No. 65225
(August 30, 2011), 76 FR 55148, 55152 (September 6, 2011) (SR-BATS-
2011-018).
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    With respect to commenters' concerns regarding the inability of
certain ETFs to assure compliance with the proposal, the Commission
believes that a variety of means are available to ETP (including ETF)
issuers to monitor for a product's compliance with the continued
listing standards. For example, information regarding the composition
of a third party index may be publicly available, or may be obtained
from the index provider pursuant to provisions in the index licensing
agreement, so that the ETP issuer can monitor its compliance on an
ongoing basis. If an index approaches the thresholds set forth in the
continued listing standards, the issuer may decide to engage in
discussions with the index provider regarding potential modifications
to the index so that the ETP can continue to be listed on the Exchange.
If an index provider is unwilling to modify the index in order to
comply with the Exchange's listing requirements, the Exchange may
submit a rule proposal to continue to list the product based on the
index.\22\ Moreover, as noted below, the listing standards that address
the index composition with respect to certain index-based ETPs already
apply equally on an initial and ongoing basis,\23\ so some ETP issuers
should have experience complying with these requirements. With respect
to commenters' questions regarding the Exchange's enforcement of the
proposed continued listing requirements, the Commission notes that the
Exchange is proposing to apply its existing delisting procedures to
products listed under the Rule 5 and Rule 8 Series, rather than
adopting new delisting procedures for these products.
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    \22\ The Commission also notes that the Exchange may
preemptively submit a rule proposal to provide for the continued
listing of a specific product where the underlying index is
approaching thresholds in the continued listing requirements, but
has not yet fallen below those thresholds (i.e., submit a rule
proposal before the delisting procedures are triggered).
     For an example of an exchange rule proposal to continue the
listing of a product that no longer meets generic listing standards,
see Securities Exchange Act Release No. 57320 (February 13, 2008),
73 FR 9395 (February 20, 2008) (SR-NYSEArca-2008-15).
    \23\ See infra note 26 and accompanying text.
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    With respect to commenters' concerns that the proposed listing
standards would treat ETPs fundamentally differently than other types
of listed equity securities, the Commission notes that ETPs and other
types of equity securities each have certain listing standards that are
higher on an initial basis and lower on a continuing basis.\24\
Similarly, ETPs and other types of equity securities each have certain
listing standards that are the same on an initial and continuing
basis.\25\ In fact, the listing standards that address the index
composition with respect to certain index-based ETPs already apply
equally on an initial and ongoing basis.\26\
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    \24\ See, e.g., Rule 8.202, Commentary .04(a) (requiring a
minimum of 100,000 shares of a series of Currency Trust Shares to be
outstanding at commencement of trading); and Rule 8.202(e)(2)(ii)
(requiring 50,000 Currency Trust Shares issued and outstanding for
continued listing).
    \25\ See, e.g., Rule 5.2(c) (requiring at least 400 public
beneficial holders for the initial listing of common stock on the
Exchange under the Alternate Listing Requirements); and Rule 5.5(b)
(requiring at least 400 public beneficial holders as one option for
the continued listing of common stock on the Exchange).
    \26\ See Rule 5.2(j)(6)(B)(IV) (setting forth the initial and
continued listing requirements for Fixed Income Index-Linked
Securities and stating that ``[t]he Corporation will commence
delisting or removal proceedings if any of the initial listing
criteria described above are not continuously maintained''). The
Commission also notes that ETPs are structurally different from
other types of equity securities. See Securities Exchange Act
Release No. 53142 (January 19, 2006), 71 FR 4180, 4182 and 4187
(January 25, 2006) (SR-NASD-2006-001) (approving generic listing
standards for Index-Linked Securities, stating that ``[a]n Index
Security, just like an ETF, derives its value by reference to the
underlying index. For this reason, the Commission has required that
markets that list index based securities monitor the qualifications
of not just the actual security (e.g., the ETF, index option, or
Index Securities), but also of the underlying indexes (and of the
index providers),'' and where the NASD stated that ``[i]n contrast
to a typical corporate security (e.g., a share of common stock of a
corporation), whose value is determined by the interplay of supply
and demand in the marketplace, the fair value of an index-based
security can be determined only by reference to the underlying index
itself, which is a proprietary creation of the particular index
provider. For this reason, the Commission has always required that
markets that list or trade index-based securities continuously
monitor the qualifications of not just the actual securities being
traded (e.g., exchange-traded funds (`ETF'), index options, or Index
Securities), but also of the underlying indexes and of the index
providers.'').
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    Finally, with respect to commenters' questions regarding the
purpose of the proposal and its impact on the potential for
manipulation and investor protection, the Commission notes that, in
approving a wide variety of ETP listing standards, including standards
that apply to underlying indexes or portfolios, the Commission has
consistently explained that these standards, among other things,\27\
are intended to reduce the potential for manipulation by assuring that
the ETP is sufficiently broad-based, and that the components of an
index or portfolio underlying an ETP are adequately capitalized,
sufficiently liquid, and that no one stock dominates the index.\28\
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    \27\ See, e.g., Securities Exchange Act Release Nos. 54739
(November 9, 2006), 71 FR 66993, 66997 (November 17, 2006) (SR-AMEX-
2006-78) (approving generic listing standards for Portfolio
Depositary Receipts and Index Fund Shares based on international or
global indexes, and stating that ``the proposed listing standards
are designed to preclude ETFs from becoming surrogates for trading
in unregistered securities'' and that ``the requirement that each
component security underlying an ETF be listed on an exchange and
subject to last-sale reporting should contribute to the transparency
of the market for ETFs'' and that ``by requiring pricing information
for both the relevant underlying index and the ETF to be readily
available and disseminated, the proposal is designed to ensure a
fair and orderly market for ETFs''); 53142 (January 19, 2006), 71 FR
4180, 4186 (January 25, 2006) (SR-NASD-2006-001) (approving generic
listing standards for Index-Linked Securities and stating that
``[t]he Commission believes that by requiring pricing information
for both the relevant underlying index or indexes and the Index
Security to be readily available and disseminated, the proposed
listing standards should help ensure a fair and orderly market for
Index Securities''); 34758 (September 30, 1994), 59 FR 50943, 50945-
46 (October 6, 1994) (SR-NASD-94-49) (approving listing standards
for Selected Equity-Linked Debt Securities (``SEEDS'') and stating
that ``the listing standards and issuance restrictions should help
to reduce the likelihood of any adverse market impact on the
securities underlying SEEDS,'' and where the NASD stated that ``the
proposed numerical, quantitative listing standards should ensure
that only substantial companies capable of meeting their contingent
obligations created by SEEDS are able to list such products on
Nasdaq'').
    \28\ See, e.g., Securities Exchange Act Release Nos. 54739
(November 9, 2006), 71 FR 66993, 66996-97 (November 17, 2006) (SR-
AMEX-2006-78) (approving generic listing standards for Portfolio
Depositary Receipts and Index Fund Shares based on international or
global indexes, and stating that standards related to the
composition of an index or portfolio underlying an ETF ``are
designed, among other things, to require that components of an index
or portfolio underlying an ETF are adequately capitalized and
sufficiently liquid, and that no one stock dominates the index'' and
that ``[t]aken together, the Commission finds that these standards
are reasonably designed to ensure that stocks with substantial
market capitalization and trading volume account for a substantial
portion of any underlying index or portfolio, and that when applied
in conjunction with the other applicable listing requirements, will
permit the listing only of ETFs that are sufficiently broad-based in
scope to minimize potential manipulation''); 53142 (January 19,
2006), 71 FR 4180, 4186 (January 25, 2006) (SR-NASD-2006-001)
(approving generic listing standards for Index-Linked Securities and
stating that the listing standards for Index-Linked Securities,
including minimum market capitalization, monthly trading volume, and
relative weight requirements ``are designed to ensure that the
trading markets for index components underlying Index Securities are
adequately capitalized and sufficiently liquid, and that no one
stock dominates the index. The Commission believes that these
requirements should significantly minimize the potential for
[[hairsp]] manipulation.''); 78397 (July 22, 2016), 81 FR 49320,
49324-25 (July 27, 2016) (SR-NYSEArca-2015-110) (approving generic
listing standards for Managed Fund Shares, noting the Exchange's
statement that the proposed requirements for Managed Fund Shares are
based in large part on the generic listing criteria currently
applicable to Investment Company Units and stating that ``the
Commission believes that this is an appropriate approach with
respect to underlying asset classes covered by the existing generic
standards, because the mere addition of active management to an ETF
portfolio that would qualify for generic listing as an index-based
ETF should not affect the portfolio's susceptibility to
manipulation'').

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    For exchange listing standards to effectively achieve their goals,
including to effectively address the potential for manipulation of a
listed ETP, their application cannot be linked to only a single point
in time (i.e., the time of initial listing). Instead, they must be
applied on an ongoing basis. The Commission notes that, currently,
certain provisions within the Rule 5 and Rule 8 Series impose specific
listing requirements on an initial basis, without imposing ongoing
listing requirements that are intended to achieve the same goals as
these initial listing requirements.\29\ To fill this gap, the proposal
would specify that certain listing requirements in the Rule 5 and Rule
8 Series apply both on an initial and ongoing basis, rather than only
at the time of initial listing.\30\ Also, with respect to non-
generically listed products, the Exchange proposes to amend the Rule 5
and Rule 8 Series to state that all statements or representations in
the proposed rule change regarding: (i) The description of the index,
portfolio, or reference asset (as applicable to a specific product);
(ii) limitations on index, portfolio holdings, or reference assets (as
applicable to a specific product); or (iii) the applicability of
Exchange listing rules (including, for example, statements and
representations related to the dissemination of the intraday indicative
value and index value, as applicable) specified in the proposed rule
change constitute continued listing requirements.\31\
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    \29\ Moreover, certain of the listing requirements do not
explicitly state that they apply on an ongoing, as well as initial,
basis. In these cases, the proposal would make explicit that the
requirements apply both on an initial and ongoing basis. See, e.g.,
proposed changes to Rule 8.100, Commentary .01(b) and (c) (making
explicit that, for Portfolio Depository Receipts overlying an equity
index or portfolio, requirements related to index methodology and
index value dissemination, as well as intraday indicative value
dissemination, apply on an initial and ongoing basis); proposed
changes to Rule 5.2(j)(6)(A)(e) (making explicit that, for Index-
Linked Securities, the requirement related to tangible net worth
applies on an initial and ongoing basis); proposed changes to Rule
5.2(j)(7), Commentary .03 (making explicit that, for Trust
Certificates, requirements related to the qualifications of a
trustee and changes to a trustee apply on an initial and ongoing
basis).
    \30\ For example, current Rule 8.100, Commentary .01(a) sets
forth requirements for component stocks of an index or portfolio
underlying a series of generically-listed Portfolio Depository
Receipts, which apply upon initial listing. These requirements
include, for example, minimum market value, minimum monthly trading
volume, and concentration limits for the component stocks. The
proposal would specify that these requirements apply both on an
initial and continued basis.
    \31\ The Commission notes that it has approved proposed rule
changes for the listing and trading of ETPs that included similar
representations. See, e.g., Securities Exchange Act Release No.
77548 (April 6, 2016), 81 FR 21626, 21630 (April 12, 2016) (SR-
NASDAQ-2015-161). The Commission also notes that similar types of
requirements exist in the Exchange's rules. See, e.g., Rule 8.100,
Commentary .01(b) and (c) (setting forth, among other things, index
value dissemination and intraday indicative value dissemination
requirements for certain generically-listed Portfolio Depository
Receipts).
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    Because the proposal specifies continued listing requirements for
products listed pursuant to the Rule 5 and Rule 8 Series, the
Commission believes the proposal is designed to achieve on a continuing
basis the goals of the listing requirements, including ensuring that
the Exchange lists products that are not susceptible to manipulation
and maintaining fair and orderly markets for the listed products. In
particular,\32\ the Commission believes that the proposal is designed
to ensure that stocks with substantial market capitalization and
trading volume account for a substantial portion of the weight of an
index or portfolio underlying a listed product; \33\ provide
transparency regarding the components of an index or portfolio
underlying a listed product; \34\ ensure that there is adequate
liquidity in the listed product itself; \35\ and provide timely and
fair disclosure of useful information that may be necessary to price
the listed product.\36\ Moreover, the Commission believes that the
proposal to require an issuer to notify the Exchange of its failures to
comply with continued listing requirements would supplement the
Exchange's own surveillance of the listed products.\37\
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    \32\ See also supra notes 27-28 (noting additional goals of the
ETP listing standards).
    \33\ For example, as proposed, the requirements under Rule
8.100, Commentary .01(a)(A), including minimum market value and
minimum monthly trading volume requirements for components of the
index or portfolio underlying Portfolio Depository Receipts, would
apply both on an initial and ongoing basis. Also, for non-
generically listed products, the proposal would provide that
statements or representations made in the proposed rule changes
relating to the description of the index or portfolio, among other
things, constitute continued listing requirements. See, e.g.,
proposed Rule 8.100(e).
    \34\ For example, as proposed, the requirements under Rule
8.100, Commentary .01(a)(A), including the requirement that
components of the index or portfolio underlying Portfolio Depository
Receipts be exchange-listed and NMS stocks, would apply both on an
initial and ongoing basis.
    \35\ For example, the Exchange proposes to amend Rule 5.2(j)(2)
to explicitly provide that listing requirements for Equity-Linked
Notes (``ELNs'') apply both on an initial and ongoing basis,
including, for example, the minimum public distribution of an issue
of ELNs.
    The Commission also believes that the proposal to delete the
threshold of ``30 or more consecutive trading days'' in the
requirements for the number of beneficial and/or record holders is
consistent with the goal of ensuring that there is adequate
liquidity in the listed product on an ongoing basis. As proposed,
the Exchange would initiate delisting proceedings for a product if
it fails to comply with the minimum number of beneficial and/or
record holder requirement, even if the non-compliance does not
continue for 30 consecutive trading days. See supra note 6.
    \36\ For example, the proposed changes to Rule 8.100, Commentary
.01(b) and (c) would make explicit that the requirements related to
the dissemination of the value of the index underlying Portfolio
Depository Receipts and the intraday indicative value for Portfolio
Depository Receipts apply on an initial and ongoing basis.
    \37\ The Commission notes that the concept of issuer
notification is not novel. For example, in connection with its
proposal to adopt generic listing standards for Managed Fund Shares,
the Exchange stated that, prior to listing pursuant to the generic
listing standards, an issuer would be required to represent to the
Exchange that it will advise the Exchange of any failure by a series
of Managed Fund Shares to comply with the continued listing
requirements, and, pursuant to its obligations under Section
19(g)(1) of the Act, the Exchange will monitor for compliance with
the continued listing requirements. See Securities Exchange Act
Release No. 78397 (July 22, 2016), 81 FR 49320, 49324 (July 27,
2016) (SR-NYSEArca-2015-110).
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    As noted above, the proposal specifies the delisting procedures for
products listed pursuant to the Rule 5 and Rule 8 Series. The
Commission believes that the proposed amendments to Rule 5.5(m) would
provide transparency regarding the process that the Exchange will
follow if a listed product fails to meet its continued listing
requirements. Also, as noted above, the proposed delisting procedures
already exist and are not novel.
    Finally, the Commission believes that the conforming and technical
proposed changes do not raise novel issues, are designed to further the
goals of the listing standards, and provide clarity and consistency in
the Exchange's rules.
    For the reasons discussed above, the Commission finds that the
proposed rule change, as modified by Amendment No. 2, is consistent
with the Act.

IV. Accelerated Approval of Amendment No. 2

    As noted above, in Amendment No. 2, the Exchange: (i) Further
amended rules within the Rule 5 and Rule 8 Series to reflect that
certain listing requirements (including certain statements or
representations in rule filings for the listing and trading of specific
products) apply on an initial and ongoing basis; (ii) further amended
rules within the Rule 5 and Rule 8 Series to consistently state that
the Exchange will maintain surveillance procedures for listed products
and will initiate delisting proceedings if continued listing
requirements are not maintained; (iii) further amended rules within the
Rule 5 and Rule 8 Series to provide that, in

a rule filing to list and trade a product, all statements or
representations regarding the applicability of Exchange listing rules
(including, for example, statements and representations related to the
dissemination of the intraday indicative value and index value, as
applicable) specified in such rule filing constitute continued listing
requirements; (iv) specified an implementation date for the proposed
changes; and (v) made other technical, clarifying, and conforming
changes throughout the Rule 5 and Rule 8 Series. The Commission
believes that Amendment No. 2 furthers the goals of the proposed rule
change as discussed above, enhances consistency between the Exchange's
proposal and recently approved proposals from other exchanges,\38\ and
provides clarity and consistency within the Exchange's rules.
Accordingly, the Commission finds good cause, pursuant to Section
19(b)(2) of the Act,\39\ to approve the proposed rule change, as
modified by Amendment No. 2, on an accelerated basis.
---------------------------------------------------------------------------

    \38\ See Securities Exchange Act Release Nos. 79784 (January 12,
2017), 82 FR 6664 (January 19, 2017) (SR-NASDAQ-2016-135) and 80169
(March 7, 2017) (SR-BatsBZX-2016-80).
    \39\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

V. Solicitation of Comments on Amendment No. 2

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether Amendment No. 2
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-NYSEArca-2017-01 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2017-01. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEArca-2017-01 and should
be submitted on or before April 5, 2017.

VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\40\ that the proposed rule change (SR-NYSEArca-2017-01), as
modified by Amendment No. 2, be, and hereby is, approved on an
accelerated basis.
---------------------------------------------------------------------------

    \40\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\41\
Eduardo A. Aleman,
Assistant Secretary.
---------------------------------------------------------------------------

    \41\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

[FR Doc. 2017-05090 Filed 3-14-17; 8:45 am]
BILLING CODE 8011-01-P


From: Paul Edmiston Sent: Wednesday, March 06, 2013 10:26:29 AM To: Matthews, Lisa Subject: RE: Additional Info for Analytical Chemical Methods Technical Workshop? Lisa,

Please add the following to the record.  Thank you and good luck with the rest of your study.

-Paul

Above ground management of flow back water and produced water resulting hydraulic fracturing should be of great concern to the EPA.  Contamination of surface or groundwater by fluids mismanagement has been documented in all states where hydraulic fracturing has occurred. The large volume of water that must managed at the surface means there is the possibility that fluids associated with fracturing operations can enter the environment via spills or intentional discharge of fluids. For an example, intentional dumping into surface water has been documented by the EPA in Ohio as recently as February 2013. Therefore, it is encouraged that the EPA monitor surface waters for fracturing chemicals especially near pads and operational centers. Grab sampling and passive sampling would be useful and should include baseline measurements to establish proof of impact.

Identifying chemicals that are unique to fracturing operations is key to establishing impact by exploration and production activities. Based on my analysis of flow back water organic chemicals such as 2-butoxyethanol and related alcohols in addition to quaternary amines would be useful as these chemicals are used as solvents as additives. BTEX compounds are less abundant and are typical of either produced water unless hydrocarbons (ex. diesel) is added to the fracturing fluid. Polymers are used widely, but it can be harder to develop methods to identify such macromolecules. The best approach, due to changing compositions, is to have a set of indicators such as those mentioned above combine with a broad analysis of organics and salts. I would suggest sampling and detection methods that can capture and identify a range of semi-volatiles and cations. Development of an analysis group with expertise in fracturing fluids and possess flexibility to conduct a suite of analyses would be useful.

Although operators are doing excellent work recycling both flow back and produced water, care must taken to ensure proper transportation and disposal. Monitoring these activities would be important for environmental protection and should be accomplished with at least equal vigor than exploring whether there is connectivity between formation shale and groundwater aquifers.  [Submitted by Paul L. Edmiston, College of Wootser]

>>> "Matthews, Lisa"<EMAIL_ADDRESS>03/05/13 8:38 AM >>> You can send it to me, and we'll add it to the docket for request for information for the study. Thank you.

Lisa Matthews US EPA Office of Research and Development 202-564-6669 (ph) 202-577-4035 (BBerry) <EMAIL_ADDRESS>

-----Original Message----- From: Paul L. Edmiston<EMAIL_ADDRESS>Sent: Monday, March 04, 2013 9:14 PM To: Matthews, Lisa Subject: Additional Info for Analytical Chemical Methods Technical Workshop?

Lisa,

Thank you for the invitation to attend the workshop. How would it be possible to provide additional comments and information to the workshop record?

I have been provided flow back water samples by the operators and have received "coke bottle samples" from citizens in the midwest as well as official samples from the DOE. I have a unique perspective into what it is in flow back water. I was reluctant to state what to "look for" due to NDAs with the operators.

After careful consideration, I have determined what I can officially state that will be useful to the EPA.

Thank you for any guidance you can provide.

Best, Paul Edmiston


[Federal Register: March 6, 2008 (Volume 73, Number 45)]
[Notices]
[Page 12180-12181]
[DOCID:fr06mr08-74]

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

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2008-N-0119]

Canned Pacific Salmon Deviating From Identity Standard; Temporary
Permit for Market Testing

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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

SUMMARY: The Food and Drug Administration (FDA) is announcing that a
temporary permit has been issued to Yardarm Knot Fisheries, LLC, to
market test canned Pacific salmon that deviates from the U.S. standard
of identity for canned Pacific salmon. The purpose of the temporary
permit is to

allow the applicant to measure consumer acceptance of the product and
assess commercial feasibility.

DATES: This permit is effective for 15 months, beginning on the date
the permit holder introduces or causes the introduction of the test
product into interstate commerce, but not later than June 6, 2008.

FOR FURTHER INFORMATION CONTACT: Ritu Nalubola, Center for Food Safety
and Applied Nutrition (HFS-820), Food and Drug Administration, 5100
Paint Branch Pkwy., College Park, MD 20740,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: In accordance with 21 CFR 130.17 concerning
temporary permits to facilitate market testing of foods deviating from
the requirements of the standards of identity issued under section 401
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 341), FDA is
giving notice that a temporary permit has been issued to Yardarm Knot
Fisheries, LLC, 3600 15th Ave. West, suite 300, Seattle, WA 98119.
    The permit covers limited interstate marketing tests of a product
identified as Yardarm Knot ``Skinless and Boneless Sockeye Salmon.''
This canned salmon product may deviate from the U.S. standard of
identity for canned Pacific salmon (Sec.  161.170 (21 CFR 161.170)) in
that the product is prepared by removing the skin and bones of the
salmon used. Therefore, in addition to the optional forms of pack
provided in Sec.  161.170(a)(3), this temporary marketing permit
provides for an alternative ``skinless and boneless'' form of pack. The
test product meets all the requirements of the standard with the
exception of the ``skinless and boneless'' form of pack. The purpose of
the temporary permit is to allow the applicant to measure consumer
acceptance of the product, identify mass production problems, and
assess commercial feasibility.
    This permit provides for the temporary marketing of not more than
1.35 million pounds (or 612 thousand kilograms) of the test product.
The test product will be manufactured by Yardarm Knot Fisheries, LLC,
at Mile 1.5 Alaska Peninsula Highway, Naknek, Alaska 99633. The test
product will be distributed by Yardarm Knot Fisheries, LLC, throughout
the United States. The information panel of the label will bear
nutrition labeling in accordance with 21 CFR 101.9. Each of the
ingredients used in the food will be declared on the label as required
by the applicable sections of 21 CFR part 101. This permit is effective
for 15 months, beginning on the date the permit holder introduces or
causes the introduction of the product into interstate commerce, but
not later than (see DATES).

    Dated: February 28, 2008.
Barbara Schneeman,
Director, Office of Nutritional Products, Labeling and Dietary
Supplements, Center for Food Safety and Applied Nutrition.
[FR Doc. E8-4316 Filed 3-5-08; 8:45 am]

BILLING CODE 4160-01-S


[Federal Register Volume 80, Number 83 (Thursday, April 30, 2015)]
[Notices]
[Pages 24305-24307]
[FR Doc No: 2015-10094]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-31578]

Notice of Applications for Deregistration Under Section 8(f) of
the Investment Company Act of 1940

April 24, 2015.
    The following is a notice of applications for deregistration under
section 8(f) of the Investment Company Act of 1940 for the month of
April 2015. A copy of each application may be obtained via the
Commission's Web site by searching for the file number, or for an
applicant using the Company name box, at http://www.sec.gov/search/search.htm or by calling<PHONE_NUMBER>. An order granting each
application will be issued unless the SEC orders a hearing. Interested
persons may request a hearing on any application by writing to the
SEC's Secretary at the address below and serving the relevant applicant
with a copy of the request, personally or by mail. Hearing requests
should be received by the SEC by 5:30 p.m. on May 19, 2015, and should
be accompanied by proof of service on applicants, in the form of an
affidavit or, for lawyers, a certificate of service. Pursuant to Rule
0-5 under the Act, hearing requests should state the nature of the
writer's interest, any facts bearing upon the desirability of a hearing
on the matter, the reason for the request, and the issues contested.
Persons who wish to be notified of a hearing may request notification
by writing to the Commission's Secretary.

ADDRESSES: The Commission: Brent J. Fields, Secretary, U.S. Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

FOR FURTHER INFORMATION CONTACT: Diane L. Titus at<PHONE_NUMBER>, SEC,
Division of Investment Management, Chief Counsel's Office, 100 F Street
NE., Washington, DC 20549-8010.

UBS Cashfund Inc. [File No. 811-2802]

    Summary: Applicant seeks an order declaring that it has ceased to
be an investment company. On June 19, 2014, applicant made a
liquidating distribution to its shareholders, based on net asset value.
Applicant has retained $4,093 in cash to pay outstanding liabilities.
Expenses of $66,724 incurred in connection with the liquidation were
paid by UBS Global Asset Management (Americas) Inc., applicant's
investment adviser.
    Filing Date: The application was filed on March 12, 2015.
    Applicant's Address: c/o UBS Global Asset Management (Americas)
Inc., Attn: Keith A. Weller, 1285 Avenue of the Americas, 12th Floor,
New York, NY 10019-6028.

Ambassador Funds [File No. 811-9941]

    Summary: Applicant seeks an order declaring that it has ceased to
be an investment company. On October 15, 2012, applicant made a
liquidating distribution to its shareholders, based on net asset value.
Expenses incurred in

connection with the liquidation were paid by applicant's investment
adviser.
    Filing Date: The application was filed on May 7, 2013.
    Applicant's Address: 500 Griswold St., Suite 2800, Detroit, MI
48226.

ISI Strategy Fund, Inc. [File No. 811-8291]

Total Return U.S. Treasury Fund, Inc. [File No. 811-5040]

North American Government Bond Fund, Inc. [File No. 811-7292]

Managed Municipal Fund, Inc. [File No. 811-6023]

    Summary: Each applicant seeks an order declaring that it has ceased
to be an investment company. Applicants transferred their assets to
corresponding series of Centre Funds, and on March 17, 2015, made a
distribution to their shareholders based on net asset value. Expenses
of $64,178 incurred in connection with the reorganizations were paid by
International Strategy & Investment Inc., the investment adviser of the
acquiring trust.
    Filing Date: The applications were filed on April 7, 2015.
    Applicants' Address: ALPS Fund Services, Inc., 1290 Broadway, Ste.
1100, Denver, CO 80203.

Exchange Listed Funds Trust [File No. 811-23026]

    Summary: Applicant seeks an order declaring that it has ceased to
be an investment company. Applicant has never made a public offering of
its securities and does not propose to make a public offering or engage
in business of any kind.
    Filing Date: The application was filed on March 13, 2015.
    Applicant's Address: 2545 S. Kelly Ave. Ste. C, Edmond, OK 73013.

Sound Point Floating Rate Income Fund [File No. 811-22768]

    Summary: Applicant, a closed-end investment company, seeks an order
declaring that it has ceased to be an investment company. Applicant
transferred its assets to Trust for Advised Portfolios, and on May 30,
2014, made distributions to its shareholders based on net asset value.
Expenses of approximately $85,103 incurred in connection with the
reorganization were paid by Sound Point Capital Management, L.P.,
applicant's investment adviser.
    Filing Dates: The application was filed on February 18, 2015, and
amended on April 7, 2015.
    Applicant's Address: 375 Park Ave., 25th Floor, New York, NY 10152.

Wexford Trust [File No. 811-5469]

    Summary: Applicant seeks an order declaring that it has ceased to
be an investment company. Applicant transferred its assets to Managed
Portfolio Series, and on September 5, 2014, made a distribution to its
shareholders based on net asset value. Expenses of $147,793 incurred in
connection with the reorganization were paid by Muhlenkamp & Company,
Inc., applicant's investment adviser.
    Filing Date: The application was filed on April 7, 2015.
    Applicant's Address: 5000 Stonewood Dr., Ste. 300, Wexford, PA
15090-8388.

Global Equity Long/Short Master Fund [File No. 811-22459]

    Summary: Applicant, a closed-end investment company, seeks an order
declaring that it has ceased to be an investment company. Applicant
transferred its asset to Morgan Creek Global Equity Long/Short
Institutional Fund in a despoking transaction, and on July 1, 2014,
made distributions to its shareholders based on net asset value.
Expenses of $31,920 incurred in connection with the liquidation were
ultimately paid by applicant's shareholders.
    Filing Dates: The application was filed on December 10, 2014, and
amended on April 2, 2015.
    Applicant's Address: 301 West Barbee Chapel Rd., Suite 200, Chapel
Hill, NC 27517.

American Strategic Income Portfolio Inc. [File No. 811-6404]

American Strategic Income Portfolio Inc. II [File No. 811-6640]

    Summary: Each applicant, a closed-end investment company, seeks an
order declaring that it has ceased to be an investment company.
Applicants transferred their assets to Diversified Real Asset Income
Fund, and on September 8, 2014 made distributions to their shareholders
based on net asset value. Expenses of $233,545 and $752,809,
respectively, incurred in connection with the reorganizations were paid
by applicants and the investment advisers of the applicants and the
acquiring fund, or their affiliates.
    Filing Dates: The applications were filed on December 22, 2014, and
amended on March 20, 2015.
    Applicants' Address: 800 Nicollet Mall, BC-MN-H04N, Minneapolis, MN
55402.

Hatteras GPEP Fund II, LLC [File No. 811-22594]

    Summary: Applicant, a closed-end investment company, seeks an order
declaring that it has ceased to be an investment company. Applicant has
never made a public offering of its securities and does not propose to
make a public offering. Applicant currently has fewer than 100 holders
of its securities and intends to continue operation as a private fund
in reliance on section 3(c)(1) of the Act. Applicant has notified its
beneficial owners that certain legal protections afforded to
shareholders of an investment company registered under the Act will no
longer apply.
    Filing Dates: The application was filed on January 9, 2015, and
amended on April 9, 2015.
    Applicant's Address: 6601 Six Forks Rd., Suite 340, Raleigh, NC
27615.

Eaton Vance Structured Emerging Markets Premium Income

Trust [File No. 811-22536]

Eaton Vance Inflation-Linked Income Credit Trust [File No. 811-22567]

    Summary: Each applicant, a closed-end investment company, seeks an
order declaring that it has ceased to be an investment company.
Applicants have never made a public offering of their securities and do
not propose to make a public offering or engage in business of any
kind.
    Filing Date: The applications were filed on March 26, 2015.
    Applicants' Address: Two International Place, Boston, MA 02110.

Helios High Income Fund, Inc. [File No. 811-21332]

Helios Strategic Income Fund, Inc. [File No. 811-21487]

Helios Advantage Income Fund, Inc. [File No. 811-21631]

Helios Multi-Sector High Income Fund, Inc. [File No. 811-21833]

    Summary: Each applicant, each a closed-end investment company,
seeks an order declaring that it has ceased to be an investment
company. Each applicant transferred its assets to Brookfield High
Income Fund Inc., and on August 13, 2014, made distributions to their
shareholders based on net asset value. Expenses of $64,949, $62,360,
$92.044 and $73,813, respectively, incurred in connection with the
reorganizations were paid by each applicant and the acquiring fund.
    Filing Dates: The applications were filed on December 24, 2014, and
amended on March 17, 2015.
    Applicants' Address: Brookfield Place, 250 Vesey St., New York, NY
10281-1023.

Putnam Capital Appreciation Fund [File No. 811-7061]

    Summary: Applicant seeks an order declaring that it has ceased to
be an investment company. Applicant transferred its assets to Putnam
Investors Fund, and on December 29, 2008, made a distribution to its
shareholders based on net asset value. Expenses of approximately
$66,568 incurred in connection with the reorganization were paid by
applicant.
    Filing Date: The application was filed on April 15, 2015.
    Applicant's Address: One Post Office Sq., Boston, MA 02109.

Putnam Classic Equity Fund [File No. 811-7223]

    Summary: Applicant seeks an order declaring that it has ceased to
be an investment company. Applicant transferred its assets to The
Putnam Fund for Growth and Income, and on December 29, 2008, made
distributions to its shareholders based on net asset value. Expenses of
approximately $66,568 incurred in connection with the reorganization
were paid by applicant.
    Filing Date: The application was filed on April 15, 2015.
    Applicant's Address: One Post Office Sq., Boston, MA 02109.

Putnam Discovery Growth Fund [File No. 811-6203]

    Summary: Applicant seeks an order declaring that it has ceased to
be an investment company. Applicant transferred its assets to Putnam
New Opportunities Fund (now known as Putnam Multi-Cap Growth Fund), and
on December 29, 2008, made a distribution to its shareholders based on
net asset value. Expenses of approximately $66,568 incurred in
connection with the reorganization were paid by applicant.
    Filing Date: The application was filed on April 15, 2015.
    Applicant's Address: One Post Office Sq., Boston, MA 02109.

Putnam OTC & Emerging Growth Fund [File No. 811-3512]

    Summary: Applicant seeks an order declaring that it has ceased to
be an investment company. Applicant transferred its assets to Putnam
Vista Fund, and on December 29, 2008, made distributions to its
shareholders based on net asset value. Expenses of approximately
$66,568 incurred in connection with the reorganization were paid by
applicant.
    Filing Date: The application was filed on April 15, 2015.
    Applicant's Address: One Post Office Sq., Boston, MA 02109.

Putnam Tax-Free Health Care Fund [File No. 811-6659]

    Summary: Applicant, a closed-end investment company, seeks an order
declaring that it has ceased to be an investment company. Applicant
transferred its assets to Putnam Tax Exempt Income Fund, and on
September 17, 2007, made a distribution to its shareholders based on
net asset value. Expenses of approximately $335,299 incurred in
connection with the reorganization were paid by applicant.
    Filing Date: The application was filed on April 13, 2015.
    Applicant's Address: One Post Office Sq., Boston, MA 02109.

Martin Currie Business Trust [File No. 811-8612]

    Summary: Applicant seeks an order declaring that it has ceased to
be an investment company. On January 30, 2015, applicant made a
liquidating distribution to its shareholders, based on net asset value.
Expenses of $87,460 incurred in connection with the liquidation were
paid by Martin Currie, Inc., applicant's investment adviser.
    Filing Dates: The application was filed on March 24, 2015, and
amended on April 23, 2015.
    Applicant's Address: Saltire Court, 20 Castle Terrace, Edinburgh,
Scotland EH1 2ES.

Security Equity Fund [File No. 811-22932]

    Summary: Applicant seeks an order declaring that i0t has ceased to
be an investment company. Applicant transferred its assets to a
corresponding shell series of Guggenheim Funds Trust, and on January
27, 2014 and September 23, 2014, made distributions to its shareholders
based on net asset value. Expenses of $523,662 incurred in connection
with the reorganization were paid by applicant and Security Investors,
LLC, applicant's investment adviser.
    Filing Dates: The application was filed on February 19, 2015, and
amended on April 23, 2015.
    Applicant's Address: 805 King Farm Blvd., Ste. 600, Rockville, MD
20850.

    For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Brent J. Fields,
Secretary.
[FR Doc. 2015-10094 Filed 4-29-15; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 86, Number 126 (Tuesday, July 6, 2021)]
[Proposed Rules]
[Pages 35416-35418]
[FR Doc No: 2021-14271]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2021-0546; Project Identifier MCAI-2021-00387-P]
RIN 2120-AA64

Airworthiness Directives; Hoffmann GmbH & Co. KG Propellers

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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

SUMMARY: The FAA proposes to supersede Airworthiness Directive (AD)
2020-25-05, which applies to all Hoffmann GmbH & Co. KG (Hoffmann)
model HO-V 72 propellers. AD 2020-25-05 requires amending the existing
aircraft flight manual (AFM) with abnormal propeller vibration
instructions. AD 2020-25-05 also requires visual inspection and non-
destructive test (NDT) inspection of the propeller hub and, depending
on the results of the inspections, replacement of the propeller hub
with a part eligible for installation. AD 2020-25-05 also requires
replacement of the propeller hub before exceeding 30 years since the
date of manufacture. Since the FAA issued AD 2020-25-05, analyses of
the inspection results showed that the 30-year life limit of the
propeller hub is no longer needed. This proposed AD would retain
certain requirements of AD 2020-25-05 and remove the 30-year life limit
of the propeller hub. The FAA is proposing this AD to address the
unsafe condition on these products.

DATES: The FAA must receive comments on this proposed AD by August 20,
2021.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.
     Hand Delivery: Deliver to Mail address above between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    For service information identified in this NPRM, contact Hoffmann
GmbH & Co. KG, K[uuml]pferlingstrasse 9, 83022, Rosenheim, Germany;
exception occurred on : 2021-14271.htm
exception occurred on : 2021-14271.htm
phone: +49 0 8031 1878 0; email: prop.com">[email protected]prop.com; website:
prop.com">https://hoffmann-prop.com. You may view this service information at the
FAA, Airworthiness Products Section, Operational Safety Branch, 1200
District Avenue, Burlington, MA 01803. For information on the
availability of this material at the FAA, call<PHONE_NUMBER>.

Examining the AD Docket

    You may examine the AD docket at https://www.regulations.gov by
searching for and locating Docket No. FAA-2021-0546; or in person at
Docket Operations between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays. The AD docket contains this NPRM, the
mandatory continuing airworthiness information (MCAI), any comments
received, and other information. The street address for Docket
Operations is listed above.

FOR FURTHER INFORMATION CONTACT: Michael Schwetz, Aviation Safety
Engineer, Boston ACO Branch, FAA, 1200 District Avenue, Burlington, MA
01803; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Comments Invited

    The FAA invites you to send any written relevant data, views, or
arguments about this proposal. Send your comments to an address listed
under ADDRESSES. Include ``Docket No. FAA-2021-0546; Project Identifier
MCAI-2021-00387-P'' at the beginning of your comments. The most helpful
comments reference a specific portion of the proposal, explain the
reason for any recommended change, and include supporting data. The FAA
will consider all comments received by the closing date and may amend
the proposal because of those comments.
    Except for Confidential Business Information (CBI) as described in
the following paragraph, and other information as described in 14 CFR
11.35, the FAA will post all comments received, without change, to
https://www.regulations.gov, including any personal information you
provide. The agency will also post a report summarizing each
substantive verbal contact we receive about this proposed AD.

Confidential Business Information

    CBI is commercial or financial information that is both customarily
and actually treated as private by its owner. Under the Freedom of
Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public
disclosure. If your comments responsive to this NPRM contain commercial
or financial information that is customarily treated as private, that
you actually treat as private, and that is relevant or responsive to
this NPRM, it is important that you clearly designate the submitted
comments as CBI. Please mark each page of your submission containing
CBI as ``PROPIN.'' The FAA will treat such marked submissions as
confidential under the FOIA, and they will not be placed in the public
docket of this NPRM. Submissions containing CBI should be sent to
Michael Schwetz, Aviation Safety Engineer, Boston ACO Branch, FAA, 1200
District Avenue, Burlington, MA 01803. Any commentary that the FAA
receives which is not specifically designated as CBI will be placed in
the public docket for this rulemaking.

Background

    The FAA issued AD 2020-25-05, Amendment 39-21347 (85 FR 78702,
December 7, 2020), (AD 2020-25-05), for all Hoffmann model HO-V 72
propellers. AD 2020-25-05 was prompted by reports of cracks at
different positions on two affected propeller hubs. AD 2020-25-05
requires amending the existing AFM with abnormal propeller vibration
instructions. AD 2020-25-05 also requires visual inspection and NDT
inspection of the propeller hub and, depending on the results of the
inspections, replacement of the propeller hub with a part eligible for
installation. AD 2020-25-05 also requires replacement of the propeller
hub before exceeding 30 years since the date of manufacture or within
30 days after the effective date of AD 2020-25-05, whichever occurs
later. The agency issued AD 2020-25-05 to prevent failure of the
propeller hub.

Actions Since AD 2020-25-05 Was Issued

    Since the FAA issued AD 2020-25-05, the European Union Aviation
Safety Agency (EASA), which is the Technical Agent for the Member
States of the European Community, has issued EASA AD 2020-0226R1, dated
March 31, 2021 (referred to after this as ``the MCAI''), to address the
unsafe condition on these products. The MCAI states:

    Cracks have been reported at different positions on two affected
parts, both installed on Slingsby T67 ``Firefly'' aeroplanes. One
crack was found during scheduled inspection, the other crack during
an unscheduled inspection after abnormal vibrations occurred. Both
cases are under investigation by Hoffmann Propeller.
    This condition, if not detected and corrected, could lead to in-
flight propeller detachment, possibly resulting in damage to the
airplane and/or injury to persons on the ground.
    To address this potential unsafe condition, Hoffmann issued the
SB, providing applicable instructions.
    For the reasons described above, EASA issued Emergency AD 2020-
0226-E to require inspections of affected parts and, depending on
findings, replacement, and introduces a life limit for affected
parts. That [EASA] AD also required, for certain aeroplanes,
amendment of the applicable Aircraft Flight Manual (AFM).
    Since that [EASA] AD was issued, recent analyses of inspection
results showed that the life limit of 30 years is no longer
necessary and Hoffmann Propeller issued Revision D of the SB
accordingly.
    This [EASA] AD is revised to delete the life limit and to
introduce a clarification for corrective action(s) during overhaul
in paragraph (6) [of EASA AD].
    You may obtain further information by examining the MCAI in the AD
docket at https://www.regulations.gov by searching for and locating
Docket No. FAA-2021-0546.
    In addition, Hoffmann issued Service Bulletin SB E53, Rev. D, dated
February 18, 2021, to no longer specify that the propeller hub be
replaced before exceeding 30 years since the date of manufacture.

FAA's Determination

    This product has been approved by EASA and is approved for
operation in the United States. Pursuant to the FAA's bilateral
agreement with the European Community, EASA has notified the FAA of the
unsafe condition described in the MCAI and service information. The FAA
is issuing this NPRM because the agency evaluated all the relevant
information provided by EASA and determined the unsafe condition
described previously is likely to exist or develop in other products of
the same type design.

Related Service Information Under 1 CFR Part 51

    The FAA reviewed Hoffmann Propeller GmbH & Co. KG Service Bulletin
SB E53, Rev. D, dated February 18, 2021. This service information
specifies procedures for visual and NDT inspections of the propeller
hub for cracks. This service information is reasonably available
because the interested parties have access to it through their normal
course of business or by the means identified in ADDRESSES.

Proposed AD Requirements in This NPRM

    This proposed AD would retain certain requirements of AD 2020-25-
05. This proposed AD would no longer require that the propeller hub be
replaced before exceeding 30 years since the date of manufacture or
within 30 days after the effective date of AD 2020-25-05.

Differences Between the Proposed AD and MCAI or Service Information

    EASA AD 2020-0226R1, dated March 31, 2021, applies to Hoffmann HO-V
72 propellers with propeller hub HO-V 72 ( ) ( )-( )-( ) that have been
used or are expected to be used for aerobatic maneuvers. This proposed
AD applies to all Hoffmann model HO-V 72 propellers regardless of their
use.
    Hoffmann Propeller GmbH & Co. KG Service Bulletin SB E53, Rev. D,
dated February 18, 2021, specifies that operators must send any
propeller found with a crack to Hoffmann for investigation. The service
bulletin also specifies that operators must report any propeller with
cracked hubs to Hoffmann. This proposed AD does not mandate sending the
propeller or information to Hoffmann.

Costs of Compliance

    The FAA estimates that this AD, if adopted as proposed, would
affect 35 propellers installed on airplanes of U.S. registry.
    The FAA estimates the following costs to comply with this proposed
AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per      Cost on U.S.
                Action                         Labor cost           Parts cost        product        operators
----------------------------------------------------------------------------------------------------------------
Amend AFM.............................  1 work-hour x $85 per                 $0             $85          $2,975
                                         hour = $85.
Visually inspect propeller hub........  1 work-hour x $85 per                  0              85           2,975
                                         hour = $85.
NDT inspect propeller hub.............  8 work-hours x $85 per                 0             680          23,800
                                         hour = $680.
----------------------------------------------------------------------------------------------------------------

    The FAA estimates the following costs to do any necessary
replacement that would be required based on the results of the proposed
inspection. The agency has no way of determining the number of aircraft
that might need this replacement:

                                               On-Condition Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per
                    Action                                 Labor cost               Parts cost        product
----------------------------------------------------------------------------------------------------------------
Replace propeller hub.........................  5 work-hours x $85 per hour =             $1,600          $2,025
                                                 $425.
----------------------------------------------------------------------------------------------------------------

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, Section 106, describes the
authority of the FAA Administrator. Subtitle VII, Aviation Programs,
describes in more detail the scope of the Agency's authority.
    The FAA is issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701, General requirements.
Under that section, Congress charges the FAA

with promoting safe flight of civil aircraft in air commerce by
prescribing regulations for practices, methods, and procedures the
Administrator finds necessary for safety in air commerce. This
regulation is within the scope of that authority because it addresses
an unsafe condition that is likely to exist or develop on products
identified in this rulemaking action.

Regulatory Findings

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

List of Subjects in 14 CFR Part 39

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

The Proposed Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13   [Amended]

0
2. The FAA amends Sec.  39.13 by:
0
a. Removing Airworthiness Directive AD 2020-25-05, Amendment 39-21347
(85 FR 78702, December 7, 2020); and
0
b. Adding the following new airworthiness directive:

Hoffmann GmbH & Co. KG: Docket No. FAA-2021-0546; Project Identifier
MCAI-2021-00387-P.

(a) Comments Due Date

    The FAA must receive comments on this airworthiness directive
(AD) by August 20, 2021.

(b) Affected ADs

    This AD replaces AD 2020-25-05, Amendment 39-21347 (85 FR 78702,
December 7, 2020).

(c) Applicability

    This AD applies to all Hoffmann GmbH & Co. KG HO-V 72
propellers.

(d) Subject

    Joint Aircraft System Component (JASC) Code 6114, Propeller Hub
Section.

(e) Unsafe Condition

    This AD was prompted by reports of cracks at different positions
on two affected propeller hubs. The FAA is issuing this AD to
prevent failure of the propeller hub. The unsafe condition, if not
addressed, could result in release of the propeller, damage to the
airplane, and injury to persons on the ground.

(f) Compliance

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

(g) Required Actions

    (1) Before the next flight after December 22, 2020 (the
effective date of AD 2020-25-05), amend the existing aircraft flight
manual by inserting the procedure: ``Abnormal propeller vibrations:
As applicable, reduce engine RPM.''
    (2) Before the next flight after the effective date of this AD,
and thereafter, before the next flight after any flight where
abnormal propeller vibrations have been experienced, visually
inspect propeller hub HO-V 72 ( ) ( )-( )-( ) for cracks using
paragraph 2.1 of Hoffmann Propeller GmbH & Co. KG Service Bulletin
SB E53, Rev. D, dated February 18, 2021 (the SB).
    (3) Within 20 flight hours after the effective date of this AD,
perform a non-destructive test (NDT) inspection of propeller hub HO-
V 72 ( ) ( )-()-( ) using paragraph 2.3 of the SB.
    (4) If, during any inspection required by paragraph (g)(2) or
(3) of this AD, any crack is detected, replace propeller hub HO-V 72
( ) ( )-( )-( ) with a part eligible for installation.
    (5) During each overhaul of propeller hub HO-V 72 ( ) ( )-( )-(
) after the effective date of this AD, perform an NDT inspection
using paragraph 2.3 of the SB.

(h) Definition

    For the purpose of this AD, a ``part eligible for installation''
is a propeller hub HO-V 72 ( ) ( )-( )-( ) with zero hours time
since new or a propeller hub HO-V 72 ( ) ( )-( )-( ) that has passed
an NDT inspection using paragraph 2.3 of the SB.

(i) Non-Required Actions

    (1) Sending the propeller to Hoffmann for investigation, as
contained in paragraph 2.1 of the SB, is not required by this AD.
    (2) Reporting propeller hubs with cracks to Hoffmann, as
contained in paragraph 2.3 of the SB, is not required by this AD.

(j) Credit for Previous Actions

    You may take credit for the initial visual inspection and NDT
inspection of the propeller hub required by paragraphs (g)(2), (3),
and (5) of this AD if you performed any of these actions before the
effective date of this AD using Hoffmann Propeller GmbH & Co. KG SB
E53 Rev. A, dated October 9, 2020; Rev. B, dated October 14, 2020;
or Rev. C, dated December 9, 2020.

(k) Special Flight Permit

    A special flight permit may be issued in accordance with 14 CFR
21.197 and 21.199 to operate the airplane to a service facility to
perform the NDT inspection. Special flight permits are prohibited to
perform the visual inspection of the propeller hub.

(l) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Boston ACO Branch, FAA, has the authority to
approve AMOCs for this AD, if requested using the procedures found
in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request
to your principal inspector or local Flight Standards District
Office, as appropriate. If sending information directly to the
manager of the certification office, send it to the attention of the
person identified in Related Information.
    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.

(m) Related Information

    (1) For more information about this AD, contact Michael Schwetz,
Aviation Safety Engineer, Boston ACO Branch, FAA, 1200 District
Avenue, Burlington, MA 01803; phone:<PHONE_NUMBER>; fax: (781) 238-
7199; email<EMAIL_ADDRESS>    (2) Refer to European Union Aviation Safety Agency (EASA) AD
2020-0226R1, dated March 31, 2021, for more information. You may
examine the EASA AD in the AD docket at https://www.regulations.gov
by searching for and locating it in Docket No. FAA-2021-0546.
    (3) For service information identified in this AD, contact
Hoffmann GmbH & Co. KG, K[uuml]pferlingstrasse 9, 83022, Rosenheim,
exception occurred on : 2021-14271.htm
exception occurred on : 2021-14271.htm
Germany; phone: +49 0 8031 1878 0; email: prop.com">[email protected]prop.com;
website: prop.com">https://hoffmann-prop.com. You may view this referenced
service information at the FAA, Airworthiness Products Section,
Operational Safety Branch, 1200 District Avenue, Burlington, MA
01803. For information on the availability of this material at the
FAA, call<PHONE_NUMBER>.

    Issued on June 29, 2021.
Lance T. Gant,
Director, Compliance & Airworthiness Division, Aircraft Certification
Service.
[FR Doc. 2021-14271 Filed 7-2-21; 8:45 am]
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