[Federal Register: April 22, 2008 (Volume 73, Number 78)]
[Notices]
[Page 21670-21673]
[DOCID:fr22ap08-82]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 28238; 812-13246]

U.S. Bank National Association, et al.; Notice of Application

April 16, 2008.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application under sections 6(c), 12(d)(1)(J), 17(b)
and 17(d) of the Investment Company Act of 1940 (the ``Act'') and rule
17d-1 thereunder for an exemption from sections 12(d)(1)(A) and (B) of
the Act, sections 17(a)(1) and (2) of the Act, and section 17(e) of the
Act, and for an order permitting certain joint transactions pursuant to
rule 17d-1 under the Act.

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    Applicants: U.S. Bank National Association (``Bank''), FAF
Advisors, Inc. (``FAF Advisors''), Mount Vernon Securities Lending
Trust (``Fund''), and First American Investment Funds, Inc. (``FAIF'').
    Summary of Application: Applicants request an order to permit (i)
Certain registered management investment companies and their series
(``Other Lending Funds'') that participate as lenders in a securities
lending program (``Program'') administered by FAF Advisors or an entity
controlling, controlled by, or under common control with FAF Advisors
(``Lending Agent'') to pay, and Lending Agent to accept, fees based on
a share of revenue generated from securities lending transactions under
the Program; (ii) the Bank and any entity controlled or under common
control with the Bank (``U.S. Bank Entity'') to engage in principal
transactions with, and receive fees or commissions for acting as broker
or agent in connection with the purchase or sale of securities for, the
Other Lending Funds, irrespective of any affiliation that may arise
solely because of an investment by an Other Lending Fund of cash
collateral derived from loaned securities under the Program (``Cash
Collateral'') in shares of any series of the Fund (``Investment
Funds''); and (iii) the Other Lending Funds, FAIF and any other
registered

management investment company or series thereof advised by FAIF
Advisors or any other entity controlling, controlled by, or under
common control with the Bank that may participate as a lender in the
Program\1\ (``Affiliated Lending Funds,'' and together with the Other
Lending Funds, ``Registered Lending Funds''), and any entity relying on
section 3(c)(1) or 3(c)(7) that may participate as a lender in the
Program (``Private Lending Funds,'' and together with the Registered
Lending Funds, ``Lending Funds''), to invest Cash Collateral in
existing and future Investment Funds that are short-term bond funds
(``Non Money Market Investment Funds'').
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    \1\ The Affiliated Lending Funds participate in the Program
pursuant to a prior Commission order. First American Investment
Funds, Inc., Investment Company Act Release Nos. 22181 (Aug. 28,
1996) (notice) and 22245 (Sep. 24, 1996) (order).

Filing Dates:  The application was filed on November 14, 2005, and
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amended on November 6, 2006, November 16, 2007, and March 13, 2008.

Hearing or Notification of Hearing:  An order granting the application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Commission's Secretary
and serving applicants with a copy of the request, personally or by
mail. Hearing requests should be received by the Commission by 5:30
p.m. on May 12, 2008, and should be accompanied by proof of service on
the applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons may request notification of a hearing by writing to
the Commission's Secretary.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street,
NE., Washington, DC 20549-1090. Applicants: FAF Advisors, 800 Nicollet
Mall, Minneapolis, MN 55402.

FOR FURTHER INFORMATION CONTACT: Nadya Roytblat, Assistant Director, at
(202) 551-6823 (Office of Investment Company Regulation, Division of
Investment Management).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained for a fee from
the Commission's Public Reference Branch, 100 F Street, NE.,
Washington, DC 20549-1520 (tel.<PHONE_NUMBER>).

Applicants' Representations

    1. The Bank is a national banking association and the largest
subsidiary of U.S. Bancorp, a multi-state financial holding company
headquartered in Minneapolis, Minnesota. The Bank serves as custodian
for several of the Lending Funds. FAF Advisors is a wholly owned
subsidiary of the Bank and is registered as an investment adviser under
the Investment Advisers Act of 1940. FAF Advisors currently serves as
Lending Agent administering the Program. FAIF is a Maryland corporation
and is registered under the Act as an open-end management investment
company. Certain of the series of FAIF are Affiliated Lending Funds.\2\
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    \2\ All existing Affiliated Lending Funds that currently intend
to rely on the requested order are named as applicants. Any other
existing or future entity may rely on the order only in accordance
with the terms and conditions of the application.
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    2. The Fund is a Delaware statutory trust organized in 2005 and is
registered as an open-end management investment company under the Act.
The Fund currently offers two Investment Funds, one of which is a money
market fund and the other a Non Money Market Investment Fund, a short-
term bond fund that seeks current income consistent with the
preservation of capital by investing in fixed-income securities and
maintaining a dollar-weighted average portfolio maturity of three years
or less. Any future Non Money Market Investment Fund will be a short
term bond fund. The Investment Funds are offered exclusively to the
Lending Funds as low expense investment vehicles for Cash Collateral.
Shares of the Investment Funds are not subject to any sales charge or
service fee. FAF Advisors serves as the investment adviser, transfer
agent and administrator of the Fund. The Bank serves as custodian of
the Fund.
    3. Under the Program, the Lending Agent enters into an agreement
with a Lending Fund (``Lending Agreement'') whereby the Lending Fund
appoints the Lending Agent to serve as its agent to lend its portfolio
securities and authorizes the Lending Agent to enter into a master
borrowing agreement (``Borrowing Agreement'') with each person
designated by the Lending Fund as eligible to borrow some or all of
such securities (``Borrower''). All securities lent under a Borrowing
Agreement are exchanged for cash or other types of collateral from the
Borrower. When the collateral delivered is cash, the Lending Agreement
authorizes and instructs the Lending Agent, as agent for the Lending
Fund, to invest the cash in accordance with specific guidelines
provided by the Lending Fund. With respect to loans involving cash
collateral, the Lending Agent is compensated for its services under the
Program indirectly through the income earned on the collateral.
Pursuant to the Borrowing Agreement, the Lending Fund commits to pay
the Borrower a negotiated return on the collateral for the term of the
loan (``Borrower's Rebate''). The return on the Lending Fund's
investment of the Cash Collateral during the term of the loan is
intended to satisfy that commitment. The difference between the
Borrower's Rebate and the actual return on the investment of the
collateral (``Securities Lending Revenue'') is divided between the
Lending Fund and the Lending Agent in accordance with the terms of the
Lending Agreement. In the case of collateral other than cash, the
Borrower will pay a loan fee to the Lending Fund. The amount of the
loan fee (also ``Securities Lending Revenue'') is divided between the
Lending Fund and the Lending Agent in accordance with the terms of the
Lending Agreement.

Applicants' Legal Analysis

    Applicants request an order (i) Pursuant to section 17(d) of the
Act and rule 17d-1 thereunder to permit the Other Lending Funds to pay,
and a Lending Agent to accept, fees based on a share of the Securities
Lending Revenue; (ii) pursuant to sections 6(c) and 17(b) of the Act
granting an exemption from sections 17(a)(1) and (2) and 17(e) of the
Act to permit any U.S. Bank Entity to engage in principal transactions
in securities and other property with the Other Lending Funds and
receive fees or commissions from the Other Lending Funds for acting as
a broker or agent in connection with the purchase or sale of securities
for the Other Lending Funds; (iii) pursuant to section 12(d)(1)(J) of
the Act to permit the Lending Funds to invest Cash Collateral in shares
of the Non Money Market Funds in excess of the limits in sections
12(d)(1)(A) and (B) of the Act; and (iv) pursuant to sections 6(c) and
17(b) of the Act granting an exemption from sections 17(a)(1) and (2)
of the Act, and pursuant to section 17(d) of the Act and rule 17d-1
thereunder, to permit the Non Money Market Funds to sell their shares
to and redeem their shares from the Registered Lending Funds in
connection with the investment of Cash Collateral, and the Non Money
Market Funds, the Lending Funds and the Lending Agent to effect certain
transactions incident to such investment in the Non Money Market
Funds.\3\
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    \3\ The duties to be performed by a Lending Agent with respect
to any Registered Lending Fund will not exceed the parameters set
forth in Norwest Bank, Minnesota, N.A., SEC No-Action Letter (pub.
avail. May 25, 1995) (``Norwest Bank''). The applicants are not
requesting, and the Commission is not passing on, any relief from
sections 15, 17(d) or 17(e) of the Act with respect to any duties of
the lending agent that are not enumerated in Norwest Bank.

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Lending Agent Fee

    1. Section 17(d) of the Act and rule 17d-1 under the Act, in
relevant part, prohibit any affiliated person or any affiliated person
of an affiliated person (``Second Tier Affiliate'') of a registered
investment company, acting as principal, from effecting any transaction
in connection with any joint enterprise or other joint arrangement or
profit sharing plan in which the investment company participates,
without an order of the Commission.
    2. Section 2(a)(3) of the Act defines an affiliated person to
include, in relevant part, (i) any person directly or indirectly
owning, controlling, or holding with power to vote, 5% or more of the
outstanding voting securities of the other person; (ii) any person 5%
or more of whose outstanding voting securities is owned, controlled or
held with power to vote by the other person, (iii) any person directly
or indirectly controlling, controlled by, or under common control with
the other person, and (vi) an investment adviser to an investment
company.
    3. As investment adviser to an Investment Fund, FAF Advisors is an
affiliated person of the Investment Fund. Applicants state that, if an
Other Lending Fund acquires 5% or more of an Investment Fund's
outstanding voting securities, the Other Lending Fund will become an
affiliated person of the Investment Fund and a Second Tier Affiliate of
the Lending Agent. Applicants also state that the Lending Agent may be
a Second Tier Affiliate of an Other Lending Fund if the Other Lending
Fund is a series of a registered investment company and FAF Advisors or
another entity controlling, controlled by, or under common control with
the Bank serves as investment adviser to another series of the same
registered investment company.
    4. Due to these possible affiliations, applicants state that
section 17(d) and rule 17d-1 may prohibit a Lending Agent from
receiving a fee from the Other Lending Funds based on a share of the
Securities Lending Revenue, and request an order pursuant to rule 17d-1
to permit the arrangement. Under rule 17d-1, in passing on applications
for orders under section 17(d), the Commission considers whether the
investment company's participation in the joint enterprise is
consistent with the provisions, policies, and purposes of the Act, and
the extent to which such participation is on a basis different from or
less advantageous than that of other participants. Applicants state
that each Other Lending Fund has its own investment adviser that is not
an affiliated person or Second Tier Affiliate of the Lending Agent, and
that any fee arrangement between a Lending Agent and an Other Lending
Fund with respect to the Program will be the product of arms length
bargaining. Therefore, applicants submit that the proposed arrangement
satisfies the standards for an order under rule 17d-1.

Transactions Between the Other Lending Funds and U.S. Bank Entities

    1. Sections 17(a)(1) and (2) of the Act generally prohibit, in
relevant part, an affiliated person or Second Tier Affiliate of a
registered investment company, acting as principal, from selling to or
purchasing from the registered company, or any company controlled by
the registered company, any security or other property. Section
17(e)(1) of the Act makes it unlawful, in relevant part, for any
affiliated person of a registered investment company or Second Tier
Affiliate, when acting as agent, to accept from any source compensation
for the purchase or sale of any property to or for such registered
investment company, except in the course of such person's business as
an underwriter or broker. Section 17(e)(2) of the Act makes it
unlawful, in relevant part, for any affiliated person of a registered
investment company or Second Tier Affiliate, when acting as broker, in
connection with the sale of securities to or by such registered
investment company, to receive from any source a commission, fee or
other remuneration for effecting such transaction which exceeds the
limits set forth in section 17(e)(2).
    2. Applicants state that FAF Advisors, controlled by U.S. Bancorp,
may be deemed to control the Investment Funds, and that each U.S. Bank
Entity may be deemed to be under common control with, and thus an
affiliated person of, the Investment Funds. If an Other Lending Fund
acquires 5% or more of an Investment Fund's outstanding voting
securities, the Other Lending Fund will become an affiliated person of
the Investment Fund and a Second Tier Affiliate of the U.S. Bank
Entities. Therefore, applicants seek an exemption under sections 6(c)
and 17(b) of the Act from the prohibitions in sections 17(a)(1) and (2)
of the Act and section 17(e) of the Act.
    3. Section 17(b) of the Act provides that the Commission, upon
application, may exempt a transaction from the provisions of section
17(a) if evidence establishes that the terms of the proposed
transaction, including the consideration to be paid, are reasonable and
fair, and do not involve overreaching on the part of any person
concerned, and that the proposed transaction is consistent with the
policy of the registered investment company concerned and with the
general purposes of the Act. Section 6(c) of the Act provides that the
Commission may conditionally or unconditionally exempt any person,
security, or transaction, or any class or classes of persons,
securities, or transactions, from any provision or provisions of the
Act or of any rule or regulation thereunder, if and to the extent that
such exemption is necessary or appropriate in the public interest and
consistent with the protection of investors and the purposes fairly
intended by the policy and provisions of the Act.
    4. Applicants submit that no element of self-dealing would be
involved in the principal transactions between a U.S. Bank Entity and
an Other Lending Fund because, in each instance, no U.S. Bank Entity
has any influence over the decisions made by any Other Lending Fund.
Applicants state that each Other Lending Fund has its own investment
adviser that is not an affiliated person or Second Tier Affiliate of
any U.S. Bank Entity and that, in economic reality, may be a competitor
of the Bank. The applicants submit that each transaction between an
Other Lending Fund and a U.S. Bank Entity would therefore be a product
of arms length bargaining, and that the standards of sections 6(c) and
17(b) are met.
    5. With respect to section 17(e), applicants state that certain
U.S. Bank Entities may rely on rule 17e-1 under the Act in effecting
transactions for the Other Lending Funds, whereas other U.S. Bank
Entities that do not meet the definition of ``broker'' in section
2(a)(5) of the Act, may not rely on rule 17e-1. Applicants request
relief under section 6(c) from section 17(e)(1) solely to the extent
that a U.S. Bank Entity may not meet the definition of ``broker'' under
the Act, and from section 17(e)(2), provided that the U.S. Bank Entity
complies with rule 17e-1 under the Act except for the requirements in
rule 17e-1(b)(3) and 17e-1(d)(2) concerning quarterly board review and
the related recordkeeping requirements. Applicants submit that the
requested relief is consistent with a similar exemption provided in
rule 12d1-1 under the Act for affiliations analogous to those between
an Other Lending Fund and a U.S. Bank Entity.

Investment by the Lending Funds of Cash Collateral in the Non Money
Market Investment Funds

    1. Section 12(d)(1)(A) of the Act provides, in relevant part, that
no registered investment company may acquire securities of another
investment company representing more than 3% of the acquired company's
outstanding voting stock, more than 5% of the acquiring company's total
assets, or, together with the securities of other investment companies,
more than 10% of the acquiring company's total assets. Section
12(d)(1)(B) of the Act provides that no registered open-end investment
company, any principal underwriter thereof, or any broker or dealer may
sell securities of the investment company to another investment company
if the sale will cause the acquiring company to own more than 3% of the
acquired company's voting stock, or if the sale will cause more than
10% of the acquired company's voting stock to be owned by investment
companies. Section 12(d)(1)(J) of the Act provides that the Commission
may exempt any person or transaction from any provision of section
12(d)(1) if and to the extent that the exemption is consistent with the
public interest and the protection of investors.
    2. Applicants request an exemption under section 12(d)(1)(J) to
permit the Lending Funds to invest Cash Collateral in shares of the Non
Money Market Investment Funds in excess of the limits imposed by
section 12(d)(1)(A), and each Non Money Market Investment Fund to sell
its shares to the Lending Funds in excess of the limits in section
12(d)(1)(B).
    3. Applicants state that none of the abuses meant to be addressed
by sections 12(d)(1)(A) and (B) of the Act will be created by the
proposed investment of Cash Collateral in the Non Money Market
Investment Funds. Applicants represent that the proposed arrangement
will not result in an inappropriate layering of fees because shares of
the Non Money Market Investment Funds will not be subject to a sales
charge or service fee. Applicants further represent that there will not
be any duplicative advisory fees. Applicants also represent that no Non
Money Market Investment Fund will acquire shares of any other
investment company or company relying on section 3(c)(1) or 3(c)(7) of
the Act other than as permitted by rule 12d1-1 under the Act, so that
there will not be any complex fund structure.
    4. Applicants also request an exemption under sections 6(c) and
17(b) of the Act, and an order pursuant to rule 17d-1 under the Act, to
permit the Non Money Market Investment Funds to sell their shares to
the Registered Lending Funds, the Registered Lending Funds to redeem
shares from the Non Money Market Funds, and the Lending Agent to
effectuate the investment of Cash Collateral in the Non Money Market
Funds.
    5. Applicants state that the Affiliated Lending Funds and the Non
Money Market Investment Funds may be deemed to be under common control
and therefore affiliated persons of each other. Applicants also state
that if any Other Lending Fund acquires 5% or more of a Non Money
Market Investment Fund's shares, the Other Lending Fund and the Non
Money Market Investment Fund may be deemed affiliated persons of each
other. Therefore, the sale of shares of the Non Money Market Investment
Fund to the Registered Lending Funds, and the redemption of such shares
in connection with the investment of Cash Collateral may be prohibited
under sections 17(a)(1) and (2) of the Act. Applicants also state that
the Lending Funds (by purchasing and redeeming shares of the Non Money
Market Investment Funds), FAF Advisors (by managing the portfolio
securities of the Affiliated Lending Funds and the Non Money Market
Investment Funds at the same time that the Affiliated Lending Funds'
Cash Collateral is invested in the Non Money Market Investment Funds,
and serving as lending agent and receiving a portion of the Securities
Lending Revenue), and the Non Money Market Investment Funds (by selling
their shares to and redeeming shares from the Lending Funds) could be
deemed to be participants in a joint enterprise or other joint
arrangement within the meaning of section 17(d) of the Act and rule
17d-1 under the Act.
    6. Applicants state that the requested relief satisfies the
standards of sections 6(c) and 17(b) of the Act and rule 17d-1 under
the Act. Applicants state that shares of the Non Money Market Funds
will be purchased and redeemed by the Lending Funds at net asset value,
on the same basis as the shares are purchased and redeemed by all other
shareholders of the Non Money Market Funds.

Applicants' Conditions

    The applicants agree that any order granting the requested relief
will be subject to the following conditions:
    1. The securities lending program of each Registered Lending Fund,
including the investment of Cash Collateral, will comply with all
present and future guidelines of the Commission and its staff regarding
securities lending arrangements.
    2. No Registered Lending Fund will purchase shares of any
Investment Fund unless participation in the Program has been approved
by a majority of the directors or trustees of the Registered Lending
Fund that are not interested persons of the Registered Lending Fund
within the meaning of section 2(a)(19) of the Act. Such directors or
trustees of each Registered Lending Fund also will evaluate the Program
no less frequently than annually and determine that investing Cash
Collateral in the Investment Fund is in the best interests of the
shareholders of the Registered Lending Fund.
    3. Investment in shares of an Investment Fund by a particular
Registered Lending Fund will be consistent with the Registered Lending
Fund's investment objectives and policies. A Registered Lending Fund's
Cash Collateral will be invested in a particular Investment Fund only
if the Registered Lending Fund has approved that Investment Fund for
investment and if that Investment Fund invests in the types of
instruments that the Registered Lending Fund has authorized for the
investment of its Cash Collateral.
    4. Shares of any Investment Fund will not be subject to a sales
charge or service fee, as defined in rules 2830(b)(8) and (9),
respectively, of the Conduct Rules of the National Association of
Securities Dealers, Inc.
    5. No Investment Fund may invest in shares of any investment
company or company relying on section 3(c)(1) or 3(c)(7) of the Act,
other than as permitted by rule 12d1-1 under the Act.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-8652 Filed 4-21-08; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 83, Number 31 (Wednesday, February 14, 2018)]
[Notices]
[Pages 6627-6629]
[FR Doc No: 2018-02976]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82661; File No. SR-NYSEArca-2018-10]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE
Arca Equities Fees and Charges

February 8, 2018.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on February 1, 2018, NYSE Arca, Inc. (``Exchange'' or ``NYSE
Arca'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend the NYSE Arca Equities Fees and
Charges (``Fee Schedule'') to (i) modify the credits the Exchange
provides for routing certain orders to the New York Stock Exchange LLC
(``NYSE''); (ii) delete a pricing tier; and (iii) delete certain
obsolete dates from the Fee Schedule. The Exchange proposes to
implement the fee changes effective February 1, 2018. The proposed rule
change is available on the Exchange's website at www.nyse.com, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.

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

    In its filing with the Commission, the self-regulatory organization
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 those 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 the
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Fee Schedule, as described
below, to (i) modify the credits the Exchange provides for routing
certain orders to the NYSE; (ii) delete a pricing tier, the Large Order
Tier; and (iii) delete certain obsolete dates from the Fee Schedule.
The Exchange proposes to implement the fee changes on February 1, 2018.
Primary Only (``PO'') Orders
    A PO Order is designed to route to the primary listing market of
the security underlying the order (i.e., NYSE, Nasdaq Stock Market,
etc.) immediately upon arrival and the order therefore does not rest on
the Exchange's order book. Because PO Orders do not rest on the
Exchange's book, the Exchange charges fees or provides credits for
those orders based on the fees and credits of the destination primary
listing market, which are the non-tier fees and credits that the
Exchange is charged by the primary listing market that receives the
orders. For Tier 1 and Tier 2 PO Orders that are routed to the NYSE,
the Exchange currently provides a credit of $0.0014 per share for such
orders.
    In a recent rule filing, the NYSE modified its fee structure for
equities transactions by decreasing the level of rebate that it
provides to its members that provide liquidity from $0.0014 per share
to $0.0012 per share.\4\ In order to maintain the same relationship
between the rate that the Exchange charges for a PO Order and the
rebate provided by the destination venue, the Exchange is also amending
the per share credit for PO Orders routed to the NYSE that provide
liquidity to the NYSE to $0.0012 per share. The Exchange proposes
corresponding changes to the Basic Rates pricing section of the Fee
Schedule.
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    \4\ See Securities Exchange Act Release No. 82563 (January 22,
2018), 83 FR 3799 (January 26, 2018) (SR-NYSE-2018-03).
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Large Order Tier
    In April 2017, the Exchange filed a proposed rule change to adopt a
new pricing tier to incentivize large order flow (``Large Order
Tier'').\5\ The Large Order Tier adopted a lower fee of $0.0010 per
share to ETP Holders, including Market Makers, that execute an average
daily volume (``ADV'') of 1,250,000 shares or greater of Market

Orders, Market-On-Close Orders, Limit-On-Close Orders and Auction-Only
Orders executed in the Closing Auction from orders of 650,000 shares
and greater (``Large Closing Orders'') and that have a ratio of Large
Closing Order shares to total shares executed during the month of at
least 35%. The Large Order Tier has not encouraged ETP Holders and
Market Makers to increase their activity to qualify for this pricing
tier as significantly as the Exchange had anticipated they would. As a
result, the Exchange proposes to remove this pricing tier from the Fee
Schedule.
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    \5\ See Securities Exchange Act Release No. 80516 (April 24,
2017), 82 FR 19775 (April 28, 2017) (SR-NYSEArca-2017-43).
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Elimination of Obsolete Dates--Step-Up Tier
    In September 2017, the Exchange filed a proposed rule change to
adopt a second way by which an ETP Holder or Market Maker could qualify
for the Step-Up Tier.\6\ As an incentive for ETP Holders and Market
Makers to direct their order flow to the Exchange, for the months of
September 2017 and October 2017 only, the Exchange adopted lower
requirements for ETP Holders and Market Makers to qualify for the
pricing tier. Given that the months during which the incentive was
applicable have passed, the Exchange proposes to delete from the Fee
Schedule reference to the Step-Up Tier credits applicable to ETP
Holders and Market Makers for the months of September 2017 and October
2017 as that language is now obsolete. This proposed change would have
no impact on pricing.
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    \6\ See Securities Exchange Act Release No. 81601 (September 13,
2017), 82 FR 43633 (September 18, 2017) (SR-NYSEArca-2017-104).
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Elimination of Obsolete Dates--ELP Program
    In March 2017, the Exchange filed a proposed rule change to adopt
the Exchange Traded Fund Liquidity Provider Program to incentivize ETP
Holders and Market Makers (collectively, the ``ELPs'') to provide
displayed liquidity to the NYSE Arca Book in NYSE Arca-listed Tape B
Securities (``ELP Program'').\7\ The ELP Program requires participating
ELPs to quote at the NBBO for at least 15% of the time for the billing
month (``Quoting Standard''), and display at least 2,500 shares that
are priced no more than 2% away from the NBBO at least 90% of the time
for the billing month (``Depth Standard''), in at least 50 ELP
Securities, to qualify for the pricing incentive. For the months of
March 2017, April 2017 and May 2017, ELPs were only required to meet to
meet the Quoting Standard to qualify for the incremental credit
provided under the ELP Program. Beginning June 2017, ELPs must meet
both the Quoting Standard and the Depth Standard to qualify for the
pricing incentive. Given that the months during which the Quoting
Standard only was required have passed, the Exchange proposes to delete
from the Fee Schedule reference to such months as that language is now
obsolete. This proposed change would have no impact on pricing.
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    \7\ See Securities Exchange Act Release Nos. 80258 (March 16,
2017), 82 FR 14775 (March 22, 2017) (SR-NYSEArca-2017-28); and 80632
(May 9, 2017), 82 FR 22360 (May 15, 2017) (SR-NYSEArca-2017-50).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\8\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\9\ in particular,
because it provides for the equitable allocation of reasonable dues,
fees, and other charges among its members, issuers and other persons
using its facilities and does not unfairly discriminate between
customers, issuers, brokers or dealers.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed changes to routing credits
for PO Orders that provide liquidity to the NYSE are reasonable because
the Exchange's credits for routing an order that does not rest on the
Exchange's order book, but rather is designed to route to the primary
listing market on arrival, are closely related to the NYSE's non-tier
rebate for its members for providing liquidity, and the proposed change
is consistent with the recent change to the NYSE Price List to lower
its non-tier rebate for providing liquidity. While the proposed change
would result in a decrease in the per share credit for PO Orders routed
to the NYSE that provide liquidity to the NYSE, the rebate that the
Exchange would provide to ETP Holders is competitive with the rate that
NYSE provides to its members for providing liquidity and would maintain
the same relationship between the rebate provided by the venue to which
the PO Order is routed and the fees charged by the Exchange for such
orders. Further, the proposed change is equitable and not unfairly
discriminatory because the rebate would apply uniformly across pricing
tiers and all similarly situated ETP Holders would be subject to the
same credit.
    The Exchange believes that it is reasonable to delete obsolete
pricing tiers from the Fee Schedule because ETP Holders and Market
Makers have not increased their activity to qualify for the Large Order
Tier as significantly as the Exchange anticipated they would. The
Exchange believes that it is equitable and not unfairly discriminatory
to eliminate the Large Order Tier because, as proposed, the pricing
tier would be eliminated entirely--ETP Holders and Market Makers would
no longer be able to qualify for this pricing tier. This aspect of the
proposed rule change would result in the removal of obsolete text from
the Fee Schedule and therefore add greater clarity to the Fee Schedule.
    The Exchange believes that it is reasonable, equitable and not
unfairly discriminatory to delete reference to obsolete dates from the
Fee Schedule. The Step Up Tier and the ELP Program adopted specific
requirements that were applicable for certain months in 2017. Given the
months during which the lower requirements were applicable have passed,
the Exchange believes deletion of the outdated language will bring
clarity to the Fee Schedule.
    For the foregoing reasons, the Exchange believes that the proposal
is consistent with the Act.

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

    In accordance with Section 6(b)(8) of the Act,\10\ the Exchange
believes that the proposed rule change would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. In particular, the routing credits would not place
a burden on competition because the Exchange is maintaining the
existing relationship between the rebate provided by the Exchange for
PO Orders that are routed to the NYSE that provide liquidity on the
NYSE and the non-tier rebate the NYSE provides to its members that
provide liquidity. In addition, the removal of obsolete text from the
Fee Schedule would not have any impact on inter- or intra-market
competition because the proposed change would result in a streamlined
Fee Schedule without any impact on pricing.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    The Exchange notes that it operates in a highly competitive market
in which market participants can readily favor competing venues if they
deem fee levels at a particular venue to be excessive or rebate
opportunities available at other venues to be more favorable. In such
an environment, the Exchange must continually adjust its fees and
rebates to remain competitive with other exchanges and to attract order
flow to the Exchange. Because

competitors are free to modify their own fees and credits in response,
and because market participants may readily adjust their order routing
practices, the Exchange believes that the degree to which fee changes
in this market may impose any burden on competition is extremely
limited. As a result of all of these considerations, the Exchange does
not believe that the proposed changes will impair the ability of ETP
Holders or competing order execution venues to maintain their
competitive standing in the financial markets.

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

    No written comments were solicited or received with respect to the
proposed rule change.

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

    The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \11\ of the Act and subparagraph (f)(2) of Rule
19b-4 \12\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \13\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-NYSEArca-2018-10 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2018-10. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSEArca-2018-10 and should be submitted
on or before March 7, 2018.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-02976 Filed 2-13-18; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 88, Number 99 (Tuesday, May 23, 2023)]
[Proposed Rules]
[Pages 32980-32983]
[FR Doc No: 2023-10817]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2023-1050; Project Identifier AD-2022-00602-E]
RIN 2120-AA64

Airworthiness Directives; Honeywell International Inc. Engines

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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

SUMMARY: The FAA proposes to adopt a new airworthiness directive (AD)
for all Honeywell International Inc. Model AS907-1-1A and AS907-2-1G
engines. This proposed AD was prompted by reports of compressor surge,
including a dual engine compressor surge, during takeoff climb out
through a steep temperature inversion, causing a loss of engine thrust
control. This proposed AD would require either the replacement of a
certain electronic control unit (ECU) software version installed on
AS907-1-1A engines with updated software or the replacement of certain
ECUs installed on AS907-1-1A engines with ECUs eligible for
installation. This proposed AD would also require the replacement of
certain ECUs installed on AS907-2-1G engines with ECUs eligible for
installation. 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 July 7,
2023.

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 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.
    AD Docket: You may examine the AD docket at regulations.gov by
searching for and locating Docket No. FAA-2023-1050; 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, any comments
received, and other information. The street address for Docket
Operations is listed above.

FOR FURTHER INFORMATION CONTACT: Joseph Costa, Aviation Safety
Engineer, West Certification Branch, FAA, 3960 Paramount Boulevard,
Lakewood, CA 90712; phone:<PHONE_NUMBER>; email: [email protected].

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-2023-1050; Project Identifier
AD-2022-00602-E'' 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
this 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
regulations.gov, including any personal information you provide. The
agency will also post a report summarizing each substantive verbal
contact received about this NPRM.

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
Joseph Costa, Aviation Safety Engineer, West Certification Branch, FAA,
3960 Paramount Boulevard, Lakewood, CA 90712. 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 was notified of several reports that Honeywell
International Inc. (Honeywell) Model AS907-1-1A and AS907-2-1G engines
experienced compressor surge, including an AS907-1-1A dual engine
compressor surge, during takeoff climb out through a steep temperature
inversion, which resulted in loss of engine thrust control. The FAA
determined that the installed ECU software version logic locked the
engine inlet total temperature (Tt2) at 60 knots on a takeoff roll and
that reference Tt2 remained locked until the aircraft reached 400 feet
above ground level (AGL) or the pilot moved the throttle before
reaching 400 AGL. The locked Tt2 is mathematically adjusted by the ECU
software for altitude and Mach number changes as the takeoff
progresses. During the climb to 400 feet AGL with a thermal inversion,
the actual engine Tt2 can increase above the Tt2 that is being
calculated by the ECU, which causes the compressor guide vanes' (CGVs)
position to be off-schedule for the actual ambient conditions.
Significant off-scheduling of the CGVs can lead to a compressor surge
event. The compressor surge margin is decreased when scheduling is
based on a colder Tt2 temperature than what the engine is actually
running. Engine deterioration impacts compressor surge margin and can
increase the likelihood of a dual engine compressor surge as the AS907-
1-1A and AS907-2-1G engine fleets age. Dual engine power loss due to a
temperature inversion occurring within 75 feet AGL during takeoff climb
out may cause the loss of thrust control of an airplane. This
condition, if not addressed, could result in reduced controllability of
the airplane, loss of control of the airplane, reduced ability of the
flight crew to maintain the safe flight and landing of the airplane,
and loss of the airplane.

FAA's Determination

    The FAA is issuing this NPRM after determining that the unsafe
condition described previously is likely to exist or develop on other
products of the same type design.

Proposed AD Requirements in this NPRM

    This proposed AD would require either the replacement of a certain
ECU software version installed on AS907-1-1A engines with a software
version eligible for installation or the replacement of certain ECUs
installed on AS907-1-1A engines with ECUs eligible for installation.
This proposed AD would also require the replacement of certain ECUs
installed on AS907-2-1G engines with ECUs eligible for installation.
ECUs with P/N 2119576-3001 or P/N 2119576-3002 installed in AS907-2-1G
engines would be eligible for reinstallation on the AS907-2-1G engines
until exceeding the compliance time specified in Table 2 to paragraph
(g)(2) of this AD.

Costs of Compliance

    The FAA estimates that this AD, if adopted as proposed, would
affect 853 engines installed on airplanes of U.S. registry. The FAA
estimates that 175 engines installed on AS907-2-1G engines will require
replacing two ECUs.
    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
----------------------------------------------------------------------------------------------------------------
Replace AS907-2-1G ECUs (2 per engine)  5 work-hours x $85 per          $109,044        $109,469     $19,157,075
                                         hour = $425.
----------------------------------------------------------------------------------------------------------------

    For either replacement of the AS907-1-1A ECU software or
replacement of the AS907-1-1A ECUs, depending on the option selected by
the operator to comply with this AD, the FAA estimates the following
costs:

----------------------------------------------------------------------------------------------------------------
                                                                                Cost per
                    Action                                 Labor cost               Parts cost        product
----------------------------------------------------------------------------------------------------------------
Replace AS907-1-1A ECU software (2 per engine)  5 work-hours x $85 per hour =                 $0            $425
                                                 $425.
Replace AS907-1-1A ECU (per ECU, per engine)..  2 work-hours x $85 per hour =             61,162          61,332
                                                 $170.
----------------------------------------------------------------------------------------------------------------

    The FAA has included all known costs in its cost estimate.
According to the manufacturer, however, some of the costs of this
proposed AD may be covered under warranty, thereby reducing the cost
impact on affected operators.

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 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 this 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 adding the following new airworthiness
directive:

Honeywell International Inc.: Docket No. FAA-2023-1050; Project
Identifier AD-2022-00602-E.

(a) Comments Due Date

    The FAA must receive comments on this airworthiness directive
(AD) by July 7, 2023.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Honeywell International Inc. (Honeywell)
Model AS907-1-1A and AS907-2-1G engines.

(d) Subject

    Joint Aircraft System Component (JASC) Code 7300, Engine Fuel
and Control.

(e) Unsafe Condition

    This AD was prompted by reports of compressor surge, including a
dual engine compressor surge, during takeoff climb out through a
steep temperature inversion, which caused a loss of engine thrust
control. The FAA is issuing this AD to prevent loss of engine thrust
control. The unsafe condition, if not addressed, could result in
reduced controllability of the airplane, loss of control of the
airplane, reduced ability of the flight crew to maintain the safe
flight and landing of the airplane, and loss of the airplane.

(f) Compliance

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

(g) Required Actions

    (1) For AS907-1-1A engines with an ECU having part number (P/N)
2119576-1011 and software version AS907_1011 installed, before
exceeding the applicable compliance time in Table 1 to paragraph
(g)(1) of this AD, either replace software version AS907_1001 with a
software version eligible for installation; or replace the ECU with
an ECU eligible for installation. Either the software or ECU must be
replaced for all four ECUs installed in both airplane engines at the
same time.
    Note 1 to paragraph (g)(1): Guidance for removing and replacing
the ECU software or removing and replacing the ECU may be found in
Honeywell Service Bulletin (SB) AS907-76-9031, Revision 2, dated May
15, 2022.

          Table 1 to Paragraph (g)(1)--Model AS907-1-1A Engines
------------------------------------------------------------------------
  Engine operating time since new
               (TSN)                           Compliance time
------------------------------------------------------------------------
Greater than 5,000 hours TSN......  Within 12 months or before exceeding
                                     400 hours time-in-service (TIS),
                                     whichever occurs first after the
                                     effective date of this AD.
3,000 to 5,000 hours TSN..........  Within 18 months or before exceeding
                                     600 hours TIS, whichever occurs
                                     first after the effective date of
                                     this AD.
Fewer than 3,000 hours TSN........  Within 24 months or before exceeding
                                     800 hours TIS, whichever occurs
                                     first after the effective date of
                                     this AD.
------------------------------------------------------------------------

    (2) For AS907-2-1G engines with serial numbers (S/N) P130101
through P130240 that have not incorporated Honeywell SB AS907-72-
9063, and for AS907-2-1G engines with S/Ns P130241 through P130336,
and S/Ns P130101 through P130240 that

have incorporated Honeywell SB AS907-72-9063, before exceeding the
applicable compliance time in Table 2 to paragraph (g)(2) of this
AD, replace any installed ECU having P/N 2119576-3001 or P/N
2119576-3002 with an ECU eligible for installation. All four ECUs
installed in both airplane engines must be replaced at the same
time.
    Note 2 to paragraph (g)(2): Guidance for removing and replacing
the ECU may be found in Honeywell SB AS907-76-9014, Revision 6,
dated October 10, 2022.
    Note 3 to paragraph (g)(2): Guidance for converting a standard
flow compressor to a high flow compressor for improving surge margin
may be found in Honeywell SB AS907-72-9063, Revision 1, dated July
31, 2019.

          Table 2 to Paragraph (g)(2)--Model AS907-2-1G Engines
------------------------------------------------------------------------
              Engine type                        Compliance time
------------------------------------------------------------------------
Standard Flow Compressor AS907-2-1G      Within 2 years or before
 engines (engine S/Ns P130101 through     exceeding 800 hours TIS,
 P130240 that have not incorporated       whichever occurs first after
 Honeywell SB AS907-72-9063).             the effective date of this AD.
High Flow Compressor                     Within 7 years or before
 AS907[dash]2[dash]1G engines (engine S/  exceeding 2,800 hours TIS,
 Ns P130241 through P130336 and engines   whichever occurs first after
 that have incorporated Honeywell SB      the effective date of this AD.
 AS907-72-9063).
------------------------------------------------------------------------

(h) Installation Prohibition

    (1) After the effective date of this AD, do not install an ECU
having P/N 2119576-1011 and software version AS907_1001 in any
AS907-1-1A engine.
    (2) Do not install an ECU having P/N 2119576-3001 or P/N
2119576-3002 in any AS907-2-1G engine if the ECU has exceeded the
compliance time specified in Table 2 to paragraph (g)(2) of this AD.

(i) Definitions

    (1) For the purpose of this AD, for the AS907-1-1A engine, a
``software version eligible for installation'' is a software version
that is not software version AS907_1001.
    (2) For the purpose of this AD, for the AS907-1-1A engine, an
``ECU eligible for installation'' is an ECU that does not have P/N
2119576-1011.
    (3) For the purpose of this AD, for the AS907-2-1G engine, an
``ECU eligible for installation'' is an ECU that does not have P/N
2119576-3001 or P/N 2119576-3002.

(j) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, West Certification 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 branch, send it to the
attention of the person identified in paragraph (k)(1) of this AD
and email to: [email protected].
    (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.

(k) Related Information

    (1) For more information about this AD, contact Joseph Costa,
Aviation Safety Engineer, West Certification Branch, FAA, 3960
Paramount Boulevard, Lakewood, CA 90712; phone:<PHONE_NUMBER>;
email: [email protected].
    (2) For service information identified in this AD that is not
incorporated by reference, contact Honeywell International Inc., 111
South 34th Street, Phoenix, AZ 85034; phone:<PHONE_NUMBER>;
website: myaerospace.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>.

(l) Material Incorporated by Reference

    None.

    Issued on May 16, 2023.
Michael Linegang,
Acting Director, Compliance & Airworthiness Division, Aircraft
Certification Service.
[FR Doc. 2023-10817 Filed 5-22-23; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 79, Number 135 (Tuesday, July 15, 2014)]
[Notices]
[Page 41275]
[FR Doc No: 2014-16573]

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

ENVIRONMENTAL PROTECTION AGENCY

[FRL -9913-87-OW]

Information Session; Stakeholder Input on Implementation of the
Water Infrastructure Finance and Innovation Act of 2014

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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

SUMMARY: The Environmental Protection Agency is announcing plans to
hold an information and stakeholder input session on July 22, 2014 in
Chicago, Illinois to discuss implementation of the ``Water
Infrastructure Finance and Innovation Act of 2014'' (WIFIA). Additional
information and stakeholder input sessions will be held in locations
around the country through November 2014. Locations and dates for the
additional sessions will be announced when they become available.
    WIFIA is an innovative financing mechanism for water-related
infrastructure of national or regional significance. It was signed into
law on June 11, 2014 as Public Law 113-121. EPA will be providing an
overview of the statute, assistance options and terms, and ideas for
implementing the program. EPA would like participants to discuss
project ideas and potential selection criteria; opportunities,
challenges, and questions about implementation; and future stakeholder
engagement. The intended audience is municipal, state, and regional
utility decision makers; private finance sector representatives; and
other interested organizations and parties.

DATES: The session will be held on July 22, 2014.

ADDRESSES: The session will be held at: EPA Region 5, Ralph Metcalf
Federal Building, Lake Michigan Room, 77 W. Jackson Street, Chicago, IL
60604.

FOR FURTHER INFORMATION CONTACT: For further information about this
notice, including registration information, contact Jordan Dorfman, EPA
Headquarters, Office of Water, Office of Wastewater Management at tel.:
202-564-0614 or email<EMAIL_ADDRESS>Members of the public are invited
to participate in the session as capacity allows.

    Authority: Water Infrastructure Finance and Innovation Act,
Public Law 113-121.

    Dated: July 8, 2014.
Andrew D. Sawyers,
Director, Office of Wastewater Management.
[FR Doc. 2014-16573 Filed 7-14-14; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 76, Number 60 (Tuesday, March 29, 2011)]
[Notices]
[Page 17474]
[FR Doc No: 2011-7311]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

Commercial Space Transportation Advisory Committee--Open Meeting

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of Commercial Space Transportation Advisory Committee
Open Meeting.

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

SUMMARY: Pursuant to Section 10(a)(2) of the Federal Advisory Committee
Act (Pub. L. 92-463, 5 U.S.C. App. 2), notice is hereby given of a
meeting of the Commercial Space Transportation Advisory Committee
(COMSTAC). The meeting will take place on Tuesday, May 10, 2011,
starting at 8 a.m., and Wednesday, May 11, 2011, starting at 8 a.m., at
the National Housing Center, 1201 15th Street, NW., Washington, DC
20005. This will be the 53rd meeting of the COMSTAC.
    The proposed agenda for May 10 features meetings of the working
groups as follows:

--Reusable Launch Vehicles (8 a.m.-10 a.m.)
--Space Transportation Operations (10 a.m.-12 p.m.)
--Export Controls (1 p.m.-3 p.m.)
--Risk Management (3 p.m.-5 p.m.)

    The proposed agenda for May 11 features:

--Speakers relevant to the commercial space transportation industry,
including Ed Mango from the Commercial Crew Office at National
Aeronautics and Space Administration, Kennedy Space Center;
--A presentation on the committee's 2011 Commercial Geosynchronous
Orbit Launch Model;
--A presentation on the committee's 2011 Commercial Space
Transportation Forecast; and
--Reports and recommendations from the working groups.

    Interested members of the public may submit relevant written
statements for the COMSTAC members to consider under the advisory
process. Statements may be concerning the issues and agenda items
mentioned above and/or additional issues that may be relevant for the
U.S. commercial space transportation industry. Interested parties
wishing to submit written statements should contact Susan Lender, DFO,
(the Contact Person listed below) in writing (mail or e-mail) by May 2,
2011, so that the information can be made available to COMSTAC members
for their review and consideration before the May 10th opening meeting.
Written statements should be supplied in the following formats: One
hard copy with original signature and/or one electronic copy via e-
mail.
    An agenda will be posted on the FAA Web site at http://ast.faa.gov.
For specific information concerning the times and locations of the
COMSTAC working group meetings, contact the Contact Person listed
below.
    Individuals who plan to attend and need special assistance, such as
sign language interpretation or other reasonable accommodations, should
inform the Contact Person listed below in advance of the meeting.

FOR FURTHER INFORMATION CONTACT: Susan Lender (AST-5), Office of
Commercial Space Transportation (AST), 800 Independence Avenue, SW.,
Room 331, Washington, DC 20591, telephone<PHONE_NUMBER>; E-mail
<EMAIL_ADDRESS>Complete information regarding COMSTAC is
available on the FAA Web site at: http://www.faa.gov/about/office_org/headquarters_offices/ast/advisory_committee/.

    Issued in Washington, DC, March 23, 2011.
George C. Nield,
Associate Administrator for Commercial Space Transportation.
[FR Doc. 2011-7311 Filed 3-28-11; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 87, Number 99 (Monday, May 23, 2022)]
[Notices]
[Pages 31287-31290]
[FR Doc No: 2022-10967]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94928; File No. SR-CBOE-2022-009]

Self-Regulatory Organizations; Cboe Exchange, Inc.; Order
Approving a Proposed Rule Change To Amend Rule 4.3.06 To Allow the
Exchange To List and Trade Options on the Goldman Sachs Physical Gold
ETF

May 17, 2022.

I. Introduction

    On March 25, 2022, Cboe Exchange, Inc. (``Exchange'' or ``Cboe'')
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 list and trade options on the
Goldman Sachs Physical Gold ETF (``AAAU'' or ``Trust''). The proposed
rule change was published for comment in the Federal Register on April
8, 2022.\3\ The Commission received one comment on the proposed rule
change.\4\ This order approves the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 94594 (Apr. 4,
2022), 87 FR 20901 (Apr. 8, 2022) (``Notice'').
    \4\ See Letter from Andrew Robison, dated April 28, 2022,
available at https://www.sec.gov/comments/sr-cboe-2022-009/srcboe2022009.htm. The comments expressed by the commenter are not
relevant to the proposed rule change.
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

    Under Cboe Rule 4.3.06(a), securities deemed appropriate for
options trading include Units \5\ that represent certain types of
interests.\6\ Cboe Rule 4.3.06(a)(4) specifies Units that represent
interests in the SPDR Gold Trust, the iShares COMEX Gold Trust, the
iShares Silver Trust, the ETFS Silver Trust, the ETFS Gold Trust, the
ETFS Palladium Trust, the ETFS Platinum Trust, or the Sprott Physical
Gold Trust. The proposed rule change would add AAAU to the list of ETFs
under Rule 4.3.06(a)(4) that may be approved for options trading on the
Exchange.
---------------------------------------------------------------------------

    \5\ The terms ``Unit'' and Exchange-Traded Fund (``ETF'') mean a
share or other security traded on a national securities exchange and
defined as an NMS stock as set forth in Cboe Rule 4.3. See Cboe
Rule. 1.1. Capitalized terms not otherwise defined herein have the
meanings set forth in CBOE's rules or the Notice.
    \6\ See Cboe Rules 4.3.06(a)(1)-(5).
---------------------------------------------------------------------------

    The Exchange states that AAAU is a gold-backed commodity ETF
structured as a trust, much like other Units currently deemed
appropriate for options trading pursuant to Cboe Rule 4.3.06(a)(4),
such as the SPDR Gold Trust (``GLD''), iShares COMEX Gold Trust
(``IAU''), Aberdeen Standard Physical Gold Trust (``SGOL''), and Sprott
Physical Gold Trust (``PHYS'').\7\ According to the Exchange, the
Trust's investment objective is for its shares to reflect the
performance of the price of gold (less the expenses of the Trust's
operations), which offers investors an opportunity to gain exposure to
gold without the complexities of gold delivery.\8\ The Trust issues
Goldman Sachs Physical Gold ETF Shares, which represent units of
fractional undivided beneficial interest in the Trust, the assets of
which consist principally of gold.\9\ The Exchange states that AAAU is
a competitively-priced commodity ETF whose cost is comparatively lower
than the industry average for commodity ETFs.\10\ The Exchange asserts
that AAAU provides investors with a cost-efficient alternative that
allows a level of participation in the gold market through the
securities market.\11\ The GLD, IAU, SGOL and PHYS trusts also issue
shares that represent fractional undivided beneficial interest in the
respective trust, each of which holds physical gold and is designed to
track gold or the performance of the price of gold and offer access to
the gold market.\12\
---------------------------------------------------------------------------

    \7\ See Notice, supra note 3, 87 FR at 20902.
    \8\ See id.
    \9\ See id. The Trust may include minimal cash. See id. at n. 5.
    \10\ See Notice, supra note 3, 87 FR at 20902.
    \11\ See id.
    \12\ See id. The trusts may include minimal cash. See id. at
n.6.
---------------------------------------------------------------------------

    AAAU options will trade in the same manner as any other ETF options
on the Exchange.\13\ The Exchange states that Cboe rules that currently
apply to the listing and trading of the aforementioned options on gold-
backed commodity ETFs also will apply to the listing and trading of
AAAU options on the Exchange.\14\ The Exchange notes that these include
rules governing, among other things, listing criteria, expiration and
exercise prices, minimum increments, position and exercise limits,
margin requirements, customer accounts and trading halt procedures.\15\
---------------------------------------------------------------------------

    \13\ See Notice, supra note 3, 87 FR at 20902.
    \14\ See id.
    \15\ See id.
---------------------------------------------------------------------------

    The Exchange's initial listing standards for ETFs on which options
may be listed and traded on the Exchange will apply to AAAU.\16\ The
Exchange represents that AAAU satisfies the Exchange's initial listing
standards as set forth in Cboe Rule 4.3(a) and Cboe Rule 4.3.06(b).\17\
Pursuant to Cboe Rule 4.3(a), an underlying security on which options
may be listed and traded on the Exchange must be duly registered and be
an NMS stock,\18\ and be characterized by a substantial number of
outstanding shares which are widely held and actively traded.\19\ In
addition, Cboe Rule 4.3.06(b) requires that Units must either (1) meet
the criteria and guidelines under Cboe Rule 4.3.01,\20\ or (2) be
available for creation or redemption each business day from or through
the issuing trust, investment company, commodity pools or other issuer
in cash or in kind at a price related to net asset value, and the
issuing trust, investment company, commodity pools or other issuer is
obligated to issue Units in a specified aggregate number even if some
or all of the investment assets and/or cash required to be deposited
have not been received by the issuing trust, investment company,
commodity pools or other issuer, subject to the condition that the
person obligated to deposit the investments has undertaken to deliver
the investment assets and/or cash as soon as possible and such
undertaking is secured by the delivery and maintenance of collateral
consisting of cash or cash equivalents satisfactory to the issuer of
the Units which underlie the option as described in the Units'
prospectus.\21\ The Exchange represents that, at minimum, AAAU
satisfies Cboe Rule 4.3.06(b)(2).\22\
---------------------------------------------------------------------------

    \16\ See id.
    \17\ See id.
    \18\ See id. The term ``NMS stock'' has the meaning set forth in
Rule 600 of Regulation NMS. See Cboe Rule 1.1.
    \19\ See Notice, supra note 3, 87 FR at 20902. The Exchange
notes that the year-to-date (March 23, 2022) average daily volume
(``ADV'') of AAAU shares is approximately 845,200 shares, the market
capitalization of AAAU as of March 23, 2022 is approximately $727.3
million and the NAV of its shares is $19.19. See id. at n. 7.
    \20\ See Cboe Rule 4.3.01 (providing guidelines established by
the Board of Directors to be considered by the Exchange in
evaluating potential underlying securities for Exchange option
transactions).
    \21\ See Notice, supra note 3, 87 FR at 20902-03.
    \22\ See id. See also Goldman Sachs Physical Gold ETF,
Prospectus (January 8, 2021) available at https://www.gsam.com/content/gsam/us/en/individual/products/etf-fund-finder/goldman-sachs-physical-gold-etf.html#activeTab=overview.
---------------------------------------------------------------------------

    The Exchange states that AAAU also will be subject to the
Exchange's continued listing requirements, set forth in Cboe Rule
4.4.06, for ETFs deemed appropriate for options trading pursuant to
Cboe Rule 4.3.06.\23\ Cboe Rule 4.4.06 provides that Units that were
initially approved for options trading pursuant to Cboe Rule 4.3.06
shall be deemed not to meet the requirements for continued approval,
and the Exchange shall not open for trading any additional series of
option contracts of the class covering such Units, if the Units cease
to be an NMS stock or the Units are halted from trading in their
primary market.\24\ Additionally, options on Units may be subject to
the suspension of opening transactions in any of the following
circumstances: (1) In the case of options covering Units approved for
trading under Cboe Rule 4.3.06(b)(1), in accordance with the terms of
paragraphs (a), (b), and (c) of Cboe Rule 4.4.01; (2) in the case of
options covering Units approved for trading under Cboe Rule

4.3.06(b)(2), following the initial twelve-month period beginning upon
the commencement of trading in the Units on a national securities
exchange and are defined [sic] as an NMS stock, there are fewer than 50
record and/or beneficial holders of such Units for 30 or more
consecutive trading days; (3) the value of the index or portfolio of
securities, non-U.S. currency, or portfolio of commodities including
commodity futures contracts, options on commodity futures contracts,
swaps, forward contracts and/or options on physical commodities and/or
Financial Instruments and Money Market Instruments on which the Units
are based is no longer calculated or available; or (4) such other event
occurs or condition exists that in the opinion of the Exchange makes
further dealing in such options on the Exchange inadvisable.\25\
---------------------------------------------------------------------------

    \23\ See Notice, supra note 3, 87 FR at 20903.
    \24\ See id.
    \25\ See id.
---------------------------------------------------------------------------

    AAAU options will be physically-settled contracts with American-
style exercise.\26\ The Exchange states that, consistent with Cboe Rule
4.5, which governs the opening of options series on a specific
underlying security (including ETFs), the Exchange will open at least
one expiration month for options on AAAU \27\ and may also list series
of options on AAAU for trading on a weekly \28\ or quarterly \29\
basis.\30\ The Exchange states that it may also list long-term equity
option series (``LEAPS'') that expire from 12 to 180 months from the
time they are listed.\31\
---------------------------------------------------------------------------

    \26\ See id. See also Cboe Rule 4.2 (providing that the rights
and obligations of holders and writers shall be as set forth in the
Rules of The Options Clearing Corporation (``OCC'')); Cboe Equity
Options Product Specifications (March 23, 2022) available at https://www.cboe.com/exchange_traded_stock/equity_options_spec/?msclkid=8079efbbaaf111ec83b46e77a2984348; OCC Rules, Chapter VIII
(governing exercise and assignment) and Chapter IX (governing the
discharge of delivery and payment obligations arising out of the
exercise of physically-settled stock option contracts).
    \27\ See Notice, supra note 3, 87 FR at 20903 n. 11; see also
Cboe Rule 4.5(b).
    \28\ See Notice, supra note 3, 87 FR at 20903. The weekly
listing program is known as the Short Term Option Series Program and
is described within Cboe Rule 4.5(d). See id. at n.12.
    \29\ See Notice, supra note 3, 87 FR at 20903; see also Cboe
Rule 4.5(e).
    \30\ See Notice, supra note 3, 87 FR at 20903.
    \31\ See id.; see also Cboe Rule 4.5(f).
---------------------------------------------------------------------------

    The Exchange states that, pursuant to Rule 4.5.07, which governs
strike prices of series of options on Units, the interval between
strike prices for series of options on AAAU will be $1 or greater where
the strike price is $200 or less and $5.00 or greater where the strike
price is greater than $200.\32\ The Exchange states that, pursuant to
Cboe Rule 5.4, where the price of a series of AAAU options is less than
$3.00 the minimum increment will be $0.05, and where the price is $3.00
or higher, the minimum increment will be $0.10.\33\ The Exchange states
that any and all new series of AAAU options that the Exchange lists
will be consistent and comply with the expirations, strike prices and
minimum increments set forth in Cboe Rules 4.5 and 5.4, as
applicable.\34\
---------------------------------------------------------------------------

    \32\ See Notice, supra note 3, 87 FR at 20903. The Exchange
notes that for options listed pursuant to the Short Term Option
Series Program, Rule 4.5(d)(5) specifically sets forth intervals
between strike prices on Short Term Option Series. See id. at n. 15.
    \33\ See Notice, supra note 3, 87 FR at 20903; see also Cboe
Rule 5.4. The Exchange states that, if options on AAAU are eligible
to participate in the Penny Interval Program, the minimum increment
will be $0.01 below $3.00 and $0.50 above $3.00. See Notice, supra
note 3, 87 FR at 20903 n. 20.
    \34\ See Notice, supra note 3, 87 FR at 20903.
---------------------------------------------------------------------------

    The Exchange states that position and exercise limits for options
on ETFs, including options on AAAU, are determined pursuant to Cboe
Rules 8.30 and 8.32, respectively.\35\ The Exchange states that
position and exercise limits for ETF options vary according to the
number of outstanding shares and the trading volumes of the underlying
ETF over the past six months, where the largest in capitalization and
the most frequently traded ETFs have an option position and exercise
limit of 250,000 contracts (with adjustments for splits, re-
capitalizations, etc.) on the same side of the market, and smaller
capitalization ETFs have position and exercise limits of 200,000,
75,000, 50,000 or 25,000 contracts (with adjustments for splits, re-
capitalizations, etc.) on the same side of the market.\36\ The Exchange
states that, given AAAU volume over the previous six months, the
Exchange anticipates that upon initial listing, AAAU options will fall
into the position limit bucket of 75,000 contracts.\37\ The Exchange
further notes that Cboe Rule 10.3, which governs margin requirements
applicable to the trading of all options on the Exchange, including
options on ETFs, will also apply to the trading of AAAU options.\38\
---------------------------------------------------------------------------

    \35\ See id.
    \36\ See id.
    \37\ See Notice, supra note 3, 87 FR at 20903 n. 21.
    \38\ See Notice, supra note 3, 87 FR at 20903.
---------------------------------------------------------------------------

    The Exchange represents that the same surveillance procedures
applicable to all other options on other Units currently listed and
traded on the Exchange will apply to options on AAAU, and that it has
the necessary systems capacity to support the new option series.\39\
The Exchange states it believes that its existing surveillance and
reporting safeguards are designed to deter and detect possible
manipulative behavior which might potentially arise from listing and
trading ETF options, including AAAU options, as proposed.\40\ Also, the
Exchange states it may obtain information from the CME Group New York
Mercantile Exchange, Inc. (``NYMEX'') (a member of the Intermarket
Surveillance Group (``ISG'')) \41\ related to any financial instrument
that is based, in whole or in part, upon an interest in or performance
of gold.\42\
---------------------------------------------------------------------------

    \39\ See id.
    \40\ See Notice, supra note 3, 87 FR at 20903-04.
    \41\ The purpose of the ISG is to provide a framework for the
sharing of information and the coordination of regulatory efforts
among exchanges trading securities and related products to address
potential intermarket manipulations and trading abuses. See https://isgportal.org/.
    \42\ See Notice, supra note 3, 87 FR at 20904.
---------------------------------------------------------------------------

    The Exchange represents that it has also analyzed its capacity and
believes the Exchange and OPRA have the necessary systems capacity to
handle the additional traffic associated with the listing of new series
that may result from the introduction of options on AAAU, up to the
number of expirations currently permissible under its rules.\43\ The
Exchange believes that because the proposal is limited to one class,
any additional traffic that may be generated from the introduction of
AAAU options will be manageable.\44\ The Exchange also proposes to
amend Cboe Rule 4.3.06(a)(4) to update the names of the ``ETFS Silver
Trust,'' the ``ETFS Gold Trust,'' the ``ETFS Palladium Trust'' and the
``ETFS Platinum Trust'' to the ``Aberdeen Standard Physical Silver
Trust,'' the ``Aberdeen Standard Physical Gold Trust,'' the ``Aberdeen
Standard Physical Palladium Trust,'' and the ``Aberdeen Standard
Physical Platinum Trust,'' respectively,\45\ and make a non-substantive
change to the rule to replace superfluous commas with conjunctions.\46\
---------------------------------------------------------------------------

    \43\ See id.
    \44\ See id.
    \45\ See Notice, supra note 3, 87 FR at 20902. The Exchange
states that these ETFs were renamed in 2018. See id.
    \46\ See id.
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    After careful consideration, the Commission finds that the proposed
rule change is consistent with the requirements of the Act and the
rules and regulations thereunder applicable to a national securities
exchange \47\ and, in particular, the requirements of Section 6

of the Act.\48\ Specifically, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act,\49\ which
requires, among other things, that the rules of a national securities
exchange be designed to promote just and equitable principles of trade,
to foster cooperation and coordination with persons engaged in
facilitating transactions in securities, 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.
---------------------------------------------------------------------------

    \47\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
    \48\ 15 U.S.C. 78f.
    \49\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission believes that the proposal to list and trade options
on AAAU on the Exchange will provide investors with the ability to
transact in AAAU options in a listed market environment, which could
provide investors with heightened contra-party creditworthiness due to
the role of OCC as issuer and guarantor of all listed options, as well
as increased transparency and enhanced price discovery. Moreover, the
Exchange already lists options on other gold-based ETFs, which, as
described above, are trusts structured in substantially the same manner
as AAAU,\50\ and the Exchange represents that it has not identified any
issues with the continued listing and trading of the gold-backed ETF
options that it currently lists for trading.\51\
---------------------------------------------------------------------------

    \50\ See e.g., Securities Exchange Act Release No. 59055 (Dec.
4, 2008), 73 FR 75148 (Dec. 10, 2008) (approving proposals to list
and trade options on IAU and the iShares Silver Trust); Securities
Exchange Act Release No. 57894 (May 30, 2008), 73 FR 32061 (Jun. 5,
2008) (approving proposals to list and trade options on GLD); and
Securities Exchange Act Release No. 61483 (Feb. 3, 2010), 75 FR 6753
(Feb. 10, 2010) (approving proposals to list and trade options on
the ETFS Gold Trust and ETFS Silver Trust).
    \51\ See Notice, supra note 3, at 20904.
---------------------------------------------------------------------------

    As a national securities exchange, Cboe is required under Section
6(b)(1) of the Act \52\ to enforce compliance by its members, and
persons associated with its members, with the provisions of the Act,
Commission rules and regulations thereunder, and its own rules. In
addition, brokers that trade AAAU options also will be subject to best
execution obligations and FINRA rules.\53\ Applicable exchange rules
also require that customers receive appropriate disclosure before
trading AAAU Options.\54\ Further, brokers opening accounts and
recommending options transactions must comply with relevant customer
suitability standards.\55\
---------------------------------------------------------------------------

    \52\ 15 U.S.C. 78f(b)(1).
    \53\ See FINRA Rule 5310.
    \54\ See Cboe Rule 9.9 and Rule 9.15.
    \55\ See Cboe Rule 9.3.
---------------------------------------------------------------------------

    Options on AAAU will trade as options under the trading rules of
the Exchange.\56\ AAAU options must also satisfy Exchange initial
listing and continued listing standards applicable to options on all
Units, including the gold-backed commodity ETFs already approved for
options trading on the Exchange. A security on which options may be
listed and traded on the Exchange must be duly registered and be an
``NMS stock'' as defined under Rule 600 of Regulation NMS \57\ and be
characterized by a substantial number of outstanding shares which are
widely held and actively traded.\58\ Additionally, Units must meet
either (1) the criteria and guidelines under Cboe Rule 4.3.01,\59\ or
(2) they must be available for creation or redemption each business day
from or through the issuer in cash or in kind at a price related to net
asset value, and the issuer must be obligated to issue Units in a
specified aggregate number even if some or all of the investment assets
required to be deposited have not been received by the issuer, subject
to the condition that the person obligated to deposit the investments
has undertaken to deliver the investment assets as soon as possible and
such undertaking is secured by the delivery and maintenance of
collateral consisting of cash or cash equivalents satisfactory to the
issuer, as provided in the respective prospectus.\60\
---------------------------------------------------------------------------

    \56\ See Chapter 5 of Cboe's Rules.
    \57\ 17 CFR 242.600.
    \58\ See Cboe Rule 4.3(a); see also supra note 19.
    \59\ See Cboe Rule 4.3.06(b)(1). See also Cboe Rule 4.3.01
(providing guidelines established by the Board of Directors to be
considered by the Exchange in evaluating potential underlying
securities for Exchange option transactions).
    \60\ See Cboe Rule 4.3.06(b)(2). The Exchange represents that,
at minimum, the AAAU satisfies this initial listing criteria. See
Notice, supra note 3, 87 FR at 20903.
---------------------------------------------------------------------------

    Series of AAAU options also will be subject to the Exchange's
continued listing requirements, including standards applicable to the
underlying Trust. If the Units cease to be an NMS stock or the Units
are halted from trading in their primary market, the Exchange will deem
Units that were initially approved for options trading pursuant to Cboe
Rule 4.3.06 not to meet the requirements for continued approval, and
the Exchange shall not open for trading any additional series of option
contracts of the class covering such Units.\61\
---------------------------------------------------------------------------

    \61\ See Cboe Rule 4.4.06.
---------------------------------------------------------------------------

    The Exchange represents that its existing surveillance and
reporting safeguards are designed to deter and detect possible
manipulative behavior which might arise from listing and trading ETF
options, including AAAU options.\62\ The Exchange also represents that
it has the necessary systems capacity to support the new ETF option
series.\63\ Additionally, the Commission notes that AAAU options will
trade in the same manner as any other options on ETFs, and the same
Exchange rules that currently govern the listing and trading of ETF
options, including permissible expirations, strike prices and minimum
increments, and applicable position and exercise limits and margin
requirements, will govern the listing and trading of options on AAAU.
---------------------------------------------------------------------------

    \62\ See Notice, supra note 3, 87 FR at 20903.
    \63\ See id.
---------------------------------------------------------------------------

    Finally, the Commission believes that the Exchange's proposals to
make grammatical edits to the rule text and update the names of certain
ETFs in Cboe Rule 4.3.06(a)(4) are helpful technical changes that add
clarity and accuracy to the rule text.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\64\ that the proposed rule change (SR-CBOE-2022-009) be, and
hereby is, approved.
---------------------------------------------------------------------------

    \64\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\65\
---------------------------------------------------------------------------

    \65\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-10967 Filed 5-20-22; 8:45 am]
BILLING CODE 8011-01-P


			  UNITED STATES OF AMERICA

		        DEPARTMENT OF TRANSPORTATION

			  OFFICE OF THE SECRETARY

			          WASHINGTON, D.C.

Issued by the Department of Transportation on October 7, 2003

NOTICE OF ACTION TAKEN -- DOCKET OST 2003-16034

________________________________________________________________________
________________________________________________________

This serves as notice to the public of the action described below, taken
by the Department official indicated (no additional confirming order
will be issued in this matter).

Applicant:  LINEAS AEREAS AZTECA, S.A. de C.V.
                      Date Filed:  August 26, 2003

Relief requested:  Exemption from 49 USC section 41301 to permit the
applicant to conduct scheduled, combination service between Guadalajara,
Mexico, and Ontario, California.

If renewal, date and citation of last action:  New authority.

Applicant representative:  Pierre Murphy,<PHONE_NUMBER>           DOT
analyst:  Allen F. Brown,<PHONE_NUMBER>

Responsive pleadings:  None.

	DISPOSITION

Action:  Approved.			       			                       Action date:
October 7, 2003

Effective dates of authority granted:  October 7, 2003, through October
7, 2004.

Basis for approval:  United States-Mexico Air Transport Services
Agreement

Except to the extent exempted/waived, this authority is subject to the
terms, conditions, and limitations indicated: Standard exemption
conditions.

Special conditions/Remarks:

Action taken by:   Paul L. Gretch, Director

		      Office of International Aviation

________________________________________________________________________
_______________________________________________________

Under authority assigned by the Department in its regulations, 14 CFR
Part 385, we found that (1) our action was consistent with Department
policy; (2) the applicant was qualified to perform its proposed
operations; (3) grant of the authority was consistent with the public
interest; and (4) grant of the authority would not constitute a major
regulatory action under the Energy Policy and Conservation Act of 1975.
To the extent not granted/deferred/dismissed, we denied all requests in
the referenced Docket.  We may amend, modify, or revoke the authority
granted in this Notice at any time without hearing at our discretion.

Persons entitled to petition the Department for review of the action set
forth in this Notice under the Department’s regulations, 14 CFR
§385.30, may file their petitions within seven (7) days after the date
of issuance of this Notice.  This action was effective when taken, and
the filing of a petition for review will not alter such effectiveness.

An electronic version of this document is available on the World Wide
Web at:

http://dms.dot.gov//reports/reports_aviation.asp