[Federal Register Volume 76, Number 116 (Thursday, June 16, 2011)]
[Notices]
[Pages 35249-35256]
[FR Doc No: 2011-14895]

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SECURITIES AND EXCHANGE COMMISSION

[[Release No. IC-29693; File No. 812-13821]

Allianz Life Insurance Company of North America, et al; Notice of
Application

June 10, 2011.
AGENCY: Securities and Exchange Commission (``SEC'' or ``Commission'').

ACTION: Notice of application for an order approving the substitution
of certain securities pursuant to Section 26(c) of the Investment
Company Act of 1940, as amended (the ``1940 Act'' or ``Act'') and an
order of exemption pursuant to Section 17(b) of the Act from Section
17(a) of the Act.

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Applicants: Allianz Life Insurance Company of North America (``Allianz
Life'') and Allianz Life Insurance Company of New York (``Allianz NY'')
(together the ``Insurance Company Applicants''); their respective
separate accounts Allianz Life Variable Account A (``Allianz Account
A''), Allianz Life Variable Account B (``Allianz Account B''), and
Allianz Life of NY Variable Account C (``Allianz Account C'')
(collectively with the Insurance Company Applicants, the
``Applicants''); and PIMCO Equity Series VIT (the ``PIMCO EqS VIT'' and
collectively with the Applicants, the ``Section 17 Applicants'').
Summary of Application: The Applicants seek an order pursuant to
Section 26(c) of the 1940 Act, approving the substitution of the
securities of the PIMCO EqS Pathfinder Portfolio for the securities of
the Mutual Global Discovery Securities Fund (the ``Substitution) held
by Allianz Account A, Allianz Account B, or Allianz Account C
(collectively, the ``Separate Accounts'' or ``Separate Account
Applicants'') to support certain individual variable annuity contracts
and variable life insurance contracts (the ``Contracts'') issued by
Allianz Life and Allianz NY. The Section 17 Applicants seek an order
pursuant to Section 17(b) of the 1940 Act exempting them from Section
17(a) of the Act to the extent necessary to permit them to engage in
certain in-kind transactions in connection with the Substitution.
Filing Date: The application was filed on September 14, 2010, and
amended on October 6, 2010, October 12, 2010 and May 26, 2011.
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 Secretary of the
Commission and serving Applicants and PIMCO EqS VIT with a copy of the
request, personally or by mail. Hearing requests should be received by
the Commission by 5:30 p.m. on July 5, 2011, and should be accompanied
by proof of service on Applicants and PIMCO EqS VIT in the form of an
affidavit or, for lawyers, a certificate of service. Hearing requests
should state the nature of the requester's interest, the reason for the
request, and the issues contested. Persons who wish to be notified of a
hearing may request notification by writing to the Secretary of the
Commission.

ADDRESSES: Secretary, SEC, 100 F Street, NE., Washington, DC 20549-
1090. Applicants: Allianz Life Insurance Company of North America,
Allianz Life Variable Account A, and Allianz Life Variable Account B,
5701 Golden Hills Dr., Minneapolis, MN 55416-1297; Allianz Life
Insurance Company of New York, and Allianz Life of NY Variable Account
C, One Chase Manhattan Plaza, 37th Floor, New York, NY 10005-1423; and
PIMCO Equity Series VIT, 840 Newport Center Drive, Newport Beach, CA
92660.

FOR FURTHER INFORMATION CONTACT: Sally Samuel, Senior Counsel, or Joyce
M. Pickholz, Branch Chief, Office of Insurance Products, Division of
Investment Management, at<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or for an
applicant using the Company name box, at http://www.sec.gov/search/search.htm, or by calling<PHONE_NUMBER>.
    Applicants' and PIMCO EqS VIT's Representations:
    1. The Applicants propose to substitute certain classes of shares
of the PIMCO EqS Pathfinder Portfolio (the ``Replacement Fund'') for
the corresponding class of shares of the Mutual Global Discovery
Securities Fund (the ``Replaced Fund'') currently held by the Separate
Accounts, as shown in the table below:

                                   The Replacement Fund and the Replaced Fund
                                [Each a ``Fund'' and collectively the ``Funds'']
----------------------------------------------------------------------------------------------------------------
   Replacement Fund  (investment                             Replaced Fund  (investment
              adviser)                    Share classes               adviser)                Share classes
----------------------------------------------------------------------------------------------------------------
PIMCO EqS Pathfinder Portfolio \TM\  Institutional Class...  Mutual Global Discovery     Class 1
(Pacific Investment Management       Advisor Class *.......   Securities Fund (Franklin  Class 2*
 Company LLC or ``PIMCO'').                                   Mutual Advisers, LLC).
----------------------------------------------------------------------------------------------------------------
* A distribution (12b-1) fee is assessed against assets attributable to this class of shares at the annual rate
  of 0.25% of the average daily net assets attributable to the class.

    2. The Replacement Fund is a series of the PIMCO EqS VIT, a
Delaware statutory trust. The PIMCO EqS VIT is registered as an open-
end management investment company under the 1940 Act (File No. 811-
22376) and its shares are registered as securities under the Securities
Act of 1933, as amended (the ``1933 Act'') (File No. 333-164078).
    3. Shares of the Replacement Fund are sold to separate accounts of
Allianz Life and Allianz NY for the purpose of

funding variable annuity contracts and variable life insurance
policies. The Replacement Fund is managed by PIMCO, an affiliate of the
Insurance Company Applicants.
    4. The Replaced Fund is a series of Franklin Templeton Variable
Insurance Products Trust (``FTVIPT''), a Delaware statutory trust.
FTVIPT is registered as an open-end management investment company under
the 1940 Act (File No. 811-05583), and its shares are registered as
securities under the 1933 Act (File No. 033-23493). The Replaced Fund
is managed by Franklin Mutual Advisers, LLC, which is not an affiliate
of the Insurance Company Applicants.
    5. The following table shows the inception date and net assets at
December 31, 2010, for each class of shares of the Replaced Fund:

------------------------------------------------------------------------
                                                       Net assets at
         Replaced Fund            Inception date     December 31,  2010
------------------------------------------------------------------------
Mutual Global Discovery
 Securities Fund:
    Class 1...................  Nov. 8, 1996.....  $84.2 million*
    Class 2...................  Jan. 6, 1999.....  1.35 billion**
------------------------------------------------------------------------
* As of December 31, 2010, approximately 99.9% of the assets in Class 1
  of the Replaced Fund would have been transferred to Institutional
  Class of the Replacement Fund.
** As of December 31, 2010, approximately 36.4% of the assets in Class 2
  of the Replaced Fund would have been transferred to Advisor Class of
  the Replacement Fund.

    6. The following table shows the inception date and net assets at
December 31, 2010, for each class of shares of the Replacement Fund:

------------------------------------------------------------------------
                                                        Net assets at
        Replacement Fund           Inception date     December 31,  2010
------------------------------------------------------------------------
PIMCO EqS Pathfinder
 Portfolio\TM\
    Institutional Class........  April 14, 2010....  $3.3 million.
    Advisor Class..............  April 14, 2010....  2.5 million.
------------------------------------------------------------------------

    7. Subaccounts investing in Class 1 shares of the Replaced Fund and
Institutional Class shares of the Replacement Fund are available only
to owners of certain Contracts that are no longer offered for sale by
the Insurance Company Applicants. Pursuant to the proposed
Substitution, the Insurance Company Applicants will replace shares of
subaccounts investing in Class 1 shares of the Replaced Fund on the
date of the Substitution with Institutional Class shares of the
Replacement Fund.
    8. Subaccounts investing in Class 2 shares of the Replaced Fund and
Advisor Class shares of the Replacement Fund are available to owners of
various Contracts, including Contracts that are no longer offered for
sale and Contracts currently offered for sale by the Insurance Company
Applicants. Pursuant to the proposed Substitution, the Insurance
Company Applicants will replace shares of subaccounts investing in
Class 2 shares of the Replaced Fund on the date of the Substitution
with Advisor Class shares of the Replacement Fund.
    9. It is currently anticipated that the Substitution will occur on
or about July 22, 2011, or as soon thereafter as may be practicable
following receipt of the requested Order of the Commission (the
``Substitution Date''). Following the Substitution, the Replaced Fund
will no longer be offered under any Contract issued by Allianz Life or
Allianz NY.
    10. Allianz Life is a stock life insurance company organized under
the laws of the state of Minnesota in 1896. Allianz Life offers fixed
and variable annuities and individual life insurance. Allianz Life is
licensed to do direct business in 49 states and the District of
Columbia. Allianz Life is a subsidiary of Allianz SE, a ``Societas
Europaea'' or European stock corporation.
    11. Allianz NY is a stock life insurance company organized under
the laws of the state of New York on September 21, 1982. Allianz NY
offers fixed and variable annuities. Allianz NY is licensed to do
direct business in six states, including New York and the District of
Columbia.
    12. Allianz Account A is a segregated asset account of Allianz
Life. Allianz Account A was established by Allianz Life on May 31,
1985, under Minnesota insurance laws. Allianz Account A is used to fund
certain variable life insurance policies issued by Allianz Life.
Allianz Account A is divided into a number of subaccounts, each of
which invests in and reflects the investment performance of a specific
underlying registered investment company or portfolio thereof (each an
``Investment Option''). Allianz Account A is registered as a unit
investment trust under the 1940 Act (File No. 811-04965).
    13. Allianz Account B is a segregated asset account of Allianz
Life. Allianz Account B was established by Allianz Life on May 31,
1985, under Minnesota insurance laws. Allianz Account B is used to fund
certain variable annuity contracts issued by Allianz Life. Allianz
Account B is divided into a number of subaccounts, each of which
invests in and reflects the investment performance of a specific
Investment Option. Allianz Account B is registered as a unit investment
trust under the 1940 Act (File No. 811-05618).
    14. Allianz Account C is a segregated asset account of Allianz NY.
Allianz Account C was established by Allianz NY on February 26, 1988,
under New York insurance laws. Allianz Account C is used to fund
certain variable annuity contracts issued by Allianz NY. Allianz
Account C is divided into a number of subaccounts, each of which
invests in and reflects the investment performance of a specific
Investment Option. Allianz Account C is registered as a unit investment
trust under the 1940 Act (File No. 811-05716).
    15. The table below shows current and effective registration
statements with the Commission for Contracts funded by Allianz Account
B that offer the Replaced Fund as an Investment Option:

----------------------------------------------------------------------------------------------------------------
                                                                                Number of
                                                                                Investment
          Separate account            Registration       Contract name         Type of contract       Options
                                           No.                                                        (total/
                                                                                unaffiliated)
----------------------------------------------------------------------------------------------------------------
Allianz Account B..................       333-82329  Allianz Alterity       Variable Deferred             67/25
                                                      \(2)\.                 Annuity.
Allianz Account B..................      333-145866  Allianz Connections    Variable Deferred             52/11
                                                      \(2)\.                 Annuity.
Allianz Account B..................       333-90260  Allianz High Five      Variable Deferred             61/24
                                                      \(2)\.                 Annuity.
Allianz Account B..................      333-120181  Allianz High Five      Variable Deferred             57/20
                                                      L.\(2)\.               Annuity.
Allianz Account B..................       333-95729  Allianz Rewards \(2)\  Variable Deferred             66/25
                                                                             Annuity.
Allianz Account B..................      333-139701  Allianz Vision \(2)\.  Variable Deferred             52/11
                                                                             Annuity.
Allianz Account B..................        33-23035  Valuemark II \(1)\...  Variable Deferred             62/25
                                                                             Annuity.
Allianz Account B..................       333-06709  Valuemark IV \(1)\...  Variable Deferred             62/25
                                                                             Annuity.
----------------------------------------------------------------------------------------------------------------
\(1)\ Only Class 1 shares are available through this contract.
\(2)\ Only Class 2 shares are available through this contract.

    16. In addition, Allianz Life has the following registration
statements that are no longer updated for eleven Contracts funded by
Allianz Account A and Allianz Account B (the ``A and B Great Wested
Contracts''). Although the A and B Great Wested Contracts are no longer
offered for sale, they do offer the Replaced Fund as an Investment
Option:

----------------------------------------------------------------------------------------------------------------
                                                                                Number of
                                                                                Investment
          Separate account            Registration       Contract name         Type of contract       Options
                                           No.                                                        (Total/
                                                                                unaffiliated)
----------------------------------------------------------------------------------------------------------------
Allianz Account B..................      333-126217  Allianz Custom Income  Variable Deferred              28/8
                                                      \(2)\.                 Annuity.
Allianz Account B..................      333-134267  Allianz Elite \(2)\..  Variable Deferred             49/13
                                                                             Annuity.
Allianz Account A..................        33-11158  Allianz ValueLife      Flexible Premium              32/17
                                                      \(1)\.                 Variable Universal
                                                                             Life.
Allianz Account B..................      333-111049  Allianz High Five      Variable Deferred             57/20
                                                      Bonus \(2)\.           Annuity.
Allianz Account B..................       333-63719  USAllianz Charter      Variable Deferred             42/23
                                                      \(2)\.                 Annuity.
Allianz Account B..................      333-101812  USAllianz Charter II   Variable Deferred             46/22
                                                      \(2)\.                 Annuity.
Allianz Account B..................       333-47886  USAllianz Dimensions   Variable Deferred             38/22
                                                      \(2)\.                 Annuity.
Allianz Account A..................       333-60206  USAllianz LifeFund     Flexible Premium              44/22
                                                      \(2)\.                 Variable Universal
                                                                             Life.
Allianz Account B..................        33-72046  Valuemark III \(1)\..  Variable Deferred             62/25
                                                                             Annuity.
Allianz Account B..................        33-76190  Valuemark Income Plus  Variable Immediate            54/23
                                                      \(1)\.                 Annuity.
Allianz Account A..................        33-15464  Valuemark Life \(1)\.  Single Premium                32/17
                                                                             Variable Life.
----------------------------------------------------------------------------------------------------------------
\(1)\ Only Class 1 shares are available through this contract.
\(2)\ Only Class 2 shares are available through this contract.

    17. Currently Allianz NY has the following current and effective
registration statement with the Commission for one Contract funded by
Allianz Account C that offers the Replaced Fund as an Investment
Option:

----------------------------------------------------------------------------------------------------------------
                                                                                Number of
                                                                                Investment
          Separate account            Registration       Contract name         Type of contract       Options
                                           No.                                                        (Total/
                                                                                Unaffiliated)
----------------------------------------------------------------------------------------------------------------
Allianz Account C..................      333-143195  Allianz Vision NY-     Variable Deferred             52/11
                                                      (Only Class 2 shares   Annuity.
                                                      available).
----------------------------------------------------------------------------------------------------------------

    18. In addition, Allianz NY has the following registration
statements that are no longer updated for six Contracts funded by
Allianz Account C (the ``C Great Wested Contracts''). Although the C
Great Wested Contracts are no longer offered for sale, they do offer
the Replaced Fund as an Investment Option:

----------------------------------------------------------------------------------------------------------------
                                                                                Number of
                                                                                Investment
          Separate account            Registration       Contract name         Type of contract       Options
                                           No.                                                        (Total/
                                                                                Unaffiliated)
----------------------------------------------------------------------------------------------------------------
Allianz Account C..................       333-19699  Allianz Advantage NY   Variable Deferred             65/25
                                                      \(2)\.                 Annuity.
Allianz Account C..................      333-105274  Allianz Charter II NY  Variable Deferred             61/21
                                                      \(2)\.                 Annuity.
Allianz Account C..................      333-124767  Allianz High Five NY   Variable Deferred             57/20
                                                      \(2)\.                 Annuity.
Allianz Account C..................       333-75718  Allianz Opportunity    Variable Deferred             65/25
                                                      NY \(2)\.              Annuity.

Allianz Account C..................        33-26646  Valuemark II NY \(1)\  Variable Deferred             32/17
                                                                             Annuity.
Allianz Account C..................       333-19699  Valuemark IV NY \(1)\  Variable Deferred             47/23
                                                                             Annuity.
----------------------------------------------------------------------------------------------------------------
\(1)\ Only Class 1 shares are available through this contract.
\(2)\ Only Class 2 shares are available through this contract.

    19. Of the Contracts that offer the Replaced Fund as an Investment
Option, only Allianz Vision and Allianz Vision New York currently are
offered for sale.
    20. Under the Contracts, the Insurance Company Applicants reserve
the right, subject to regulatory approval, to substitute one of the
Investment Options with another Investment Option after appropriate
notice. Moreover, the Contracts permit the Insurance Company Applicants
to limit allocation of purchase payments to one or more subaccounts
that invest in an Investment Option. The prospectuses for the Contracts
also contain disclosure of these rights.
    21. The proposed Substitution is due primarily to the fact that the
Replacement Fund, which has the same investment objective and
substantially similar investment strategies as the Replaced Fund, is
managed by the same portfolio managers who previously managed the
Replaced Fund. The Replacement Fund's portfolio is jointly managed by
Anne Gudefin and Charles Lahr. Ms. Gudefin and Mr. Lahr were hired by
PIMCO at the end of 2009, to manage the Replacement Fund on its
inception in April, 2010; they previously served as the co-lead
portfolio managers of the Replaced Fund since 2007. As a result, the
Replacement Fund now is managed by the same portfolio managers, and
with substantially the same mandate and value-oriented style, as the
Replaced Fund prior to the transition. The Replaced Fund, on the other
hand, now is managed by a new portfolio management team.
    22. The proposed Substitution also is part of an overall business
plan of the Insurance Company Applicants to make their respective
products more efficient to monitor and administer and more competitive
(both in terms of new sales and the retention of existing business).
The Insurance Company Applicants believe that more concentrated and
streamlined operations for Investment Options will result in increased
operational and administrative efficiencies and economies of scale for
the Insurance Company Applicants. Having added the Replacement Fund as
an Investment Option to retain the ability for Contract holders to
invest in a value-oriented fund managed by Ms. Gudefin and Mr. Lahr,
the Insurance Company Applicants believe that it would enhance
operational and administrative efficiency to replace the Replaced Fund,
which, with the same mandate and value-oriented style as the
Replacement Fund, is a largely redundant Investment Option.
    23. For these reasons and the reasons discussed below, the
Applicants believe that substituting the Replacement Fund for the
Replaced Fund is appropriate and in the best interests of the contract
owners.
    24. The Insurance Company Applicants believe that the Replacement
Fund is an appropriate replacement for the Replaced Fund because its
investment objective is the same (both funds seek capital appreciation)
and its principal investment strategies are substantially the same as
those of the Replaced Fund. In addition, because the principal
investment risks of the Replaced Fund and the Replacement Fund are
substantially the same, the risk expectations of those contract owners
with interests in the Replaced Fund will continue to be met after the
Substitution. Comparisons of the investment objectives, principal
investment policies and principal investment risks of the Funds are set
forth in the application.
    25. The following chart compares the management fees and the total
annual fund operating expenses (before and after any waivers and
reimbursements) for the year ended December 31, 2010, expressed as an
annual percentage of average daily net assets, of the Replaced Fund and
the Replacement Fund.

----------------------------------------------------------------------------------------------------------------
                                                    Mutual Global Discovery           PIMCO EqS Pathfinder
                                                  Securities Fund  (Replaced    Portfolio\TM\ (Replacement Fund)
                                                       Fund)  (percent)                     (percent)
                                               -----------------------------------------------------------------
                                                                                Institutional
                                                    Class 1         Class 2          class        Advisor class
----------------------------------------------------------------------------------------------------------------
Management Fee................................            0.80            0.80       \(1)\ 0.75       \(1)\ 0.75
Distribution (12b-1) Fees.....................  ..............            0.25  ...............             0.25
Other Expenses................................            0.20            0.20             0.04             0.02
Acquired Fund Fees and Expenses...............  ..............  ..............             0.02             0.02
Supervision and Administration Fee............  ..............  ..............       \(2)\ 0.35       \(2)\ 0.35
                                               -----------------------------------------------------------------
    Total Annual Fund Operating Expenses......            1.00            1.25             1.16             1.39
Fee Waiver/Expense Reimbursement..............  ..............  ..............     \(3)\ (0.13)     \(3)\ (0.13)
                                               -----------------------------------------------------------------
    Total Annual Fund Operating Expenses After  ..............  ..............             1.03             1.26
     Fee Waiver/Expense Reimbursement.........
----------------------------------------------------------------------------------------------------------------
\(1)\ Pursuant to an Investment Advisory Contract, dated March 30, 2010, PIMCO acts as investment adviser to the
  Replacement Fund and receives, as compensation from the fund, an investment advisory fee of 0.75%.

\(2)\ Pursuant to a Supervision and Administration Agreement, dated March 30, 2010, PIMCO also acts as the
  administrator to the Replacement Fund and is responsible both for providing various supervisory and
  administrative services and for paying the expenses of various other services (such as audits, transfer agent,
  registrar, custodial services, shareholder meetings, ordinary legal fees, and fidelity bond/insurance
  premiums). As compensation for these services, PIMCO receives a supervisory and administrative fee of 0.35%.
  In its prospectus, the Replacement Fund discloses this fee together with the investment advisory fee as a
  combined management fee of 1.10%. The expenses incurred by the Replaced Fund for similar administrative
  services are included under Other Expenses.
\(3)\ PIMCO has contractually agreed, through May 1, 2012, to reduce its advisory fee by 0.13% of the average
  daily net assets of the Portfolio. This Fee Limitation Agreement renews annually unless terminated by PIMCO
  upon at least 30 days' prior notice to the end of the contract term. Under certain conditions, PIMCO may
  recoup amounts reduced in future periods, not exceeding three years.

    26. The assets and performance of the Funds for the years ending
December 31, 2009 and December 31, 2010 are set forth in the
application.
    27. Applicants hereby request the Commission's approval to effect
the substitution of shares of the Replacement Fund for shares of the
Replaced Fund as follows: Institutional Class shares of the PIMCO EqS
Pathfinder Portfolio for Class 1 shares of the Mutual Global Discovery
Securities Fund; and Advisor Class shares of the PIMCO EqS Pathfinder
Portfolio for Class 2 shares of the Mutual Global Discovery Securities
Fund.
    28. At the close of business on the Substitution Date, Allianz Life
and Allianz NY will each redeem shares of the Replaced Fund held by
their Separate Accounts in-kind or in cash, or a combination thereof,
and apply the proceeds of such redemptions to the purchase of shares of
the Replacement Fund. Thus, after the Substitution, each subaccount of
the Separate Accounts previously holding shares of the Replaced Fund
will hold shares of the Replacement Fund.
    29. Redemption requests and purchase orders will be placed
simultaneously so that redemption of Replaced Fund shares and purchase
of Replacement Fund shares will both occur at the price for such shares
computed as of the close of business on the Substitution Date in a
manner consistent with Rule 22c-1 under the 1940 Act. As a result, the
full net asset value of the Replaced Fund shares held by the Separate
Account Applicants will be reflected in the contract owners' contract
values following the Substitution, without reduction for brokerage or
other such fees or charges. All expenses incurred in connection with
the Substitution, including legal, accounting, transactional, and other
fees and expenses, including brokerage commissions, will be paid by
Allianz Life, Allianz NY or PIMCO. Accordingly, contract value
attributable to contract owners then invested in the Replaced Fund will
remain fully invested at all times, and the Substitution will take
place at relative net asset value with no change in the amount of any
contract owner's contract value, death benefit, or in the dollar value
of his or her investment in the applicable Separate Account.
    30. Affected contract owners will not incur any fees or charges in
connection with the Substitution so that the net asset value of
redeemed shares of the Replaced Fund held by the Separate Account
Applicants will be reflected in the contract owners' contract values
following the Substitution. Moreover, neither the obligations of the
respective Insurance Company Applicants under the Contracts nor the
rights of contract owners will be altered in any way by the
Substitution. The Substitution will not impose any tax liability or
have any adverse tax consequences on contract owners. The Substitution
will not cause Contract fees and charges currently being paid by
existing owners of Contracts to be greater after the Substitution than
they were before the Substitution. For a period of at least 30 days
following the Substitution, neither Allianz Life nor Allianz NY will
exercise any right they may have under the Contracts to impose
additional restrictions on transfers.\1\
---------------------------------------------------------------------------

    \1\ One exception to this would be restrictions that Allianz
Life or Allianz NY may impose to deter or prevent ``market timing''
activities by owners of Contracts or their agents.
---------------------------------------------------------------------------

    31. The Insurance Company Applicants represent that PIMCO and the
Replacement Fund will enter into a written contract agreeing that
during the 24 months following the Substitution Date, the total annual
fund operating expenses, net of any acquired fund fees and expenses, of
the Replacement Fund (taking into account applicable fee waivers and
expense reimbursements) will not exceed the total annual fund operating
expenses, net of any acquired fund fees and expenses, of the Replaced
Fund for the fiscal year ended December 31, 2010; this contractual
expense limitation will be set at 1.00% for Institutional Class shares
and 1.25% for Advisor Class shares. In addition, for the 24 months
following the Substitution Date, the Insurance Company Applicants will
not increase separate account fees and charges for the Contracts
outstanding on the Substitution Date. Thereafter, total annual fund
operating expenses for the Replacement Fund will vary from year to year
and may exceed those of the Replaced Fund.
    32. Contract owners have been notified of the application by means
of a Notice of Substitution sent on May 25, 2011, stating that the
Applicants filed the initial application and seek approval for the
Substitution. The Notice of Substitution set forth the anticipated
Substitution Date and advised affected contract owners that on the
Substitution Date contract values allocated to subaccounts investing in
shares of the Replaced Fund will be transferred to subaccounts
investing in shares of the Replacement Fund, without charge (including
sales charges or surrender charges) and without being counted toward
the number of transfers that may be permitted without charge.
    33. The Notice of Substitution also stated that, from the date of
the Notice (May 25, 2011) through the date 30 days after the
Substitution (the ``Free Transfer Period''), the respective Insurance
Company Applicants will allow the affected contract owners to make one
transfer of contract value held in each subaccount investing in the
Replaced Fund (before the Substitution) or Replacement Fund (after the
Substitution) to one or more Investment Options available pursuant to
the Contracts, subject to any Investment Option allocation restrictions
under their Contract, without charge and without assessing transfer
fees. Such a transfer will not be counted as a transfer request under
any contractual provisions of the Contracts that limit the number of
transfers that may be made without charge. Further, prior to the
Substitution, all affected contract owners will receive a copy of the
most recent prospectus for the Replacement Fund.
    34. Within five days following the Substitution, the Insurance
Company Applicants will send a Post-Substitution notice to affected
contract owners stating that the Substitution was carried out and
reiterating the information set forth in the Notice, including a
reminder that the Free Transfer Period will continue through the date
30 days after the Substitution.

Applicants' Legal Analysis and Conditions

Section 26(c) Relief

    1. Applicants submit that the Substitution does not present the
type of costly forced redemption or other harms that Section 26(c) of
the Act was intended to guard against and is consistent with the
protection of investors and the purposes fairly intended by the 1940
Act. The Substitution is consistent with contract owners' objectives
and risk expectations because the investment objective, principal
investment strategies and risks of the Replacement Fund are
substantially similar to those of the Replaced Fund. In addition, the
total annual fund operating expenses of the Replacement Fund will be no
higher than those of the Replaced Fund, after applicable fee waivers
and expense reimbursements that will be in place for the Replacement
Fund, for a period of at least 24 months following the Substitution.
    2. Applicants represent that for a period of 24 months from the
date of the Substitution, the PIMCO EqS Pathfinder Portfolio will be
subject to an expense cap (1.00% for Institutional Class shares; 1.25%
for Advisor Class shares) limiting its total annual fund operating
expenses, net of any acquired fund fees and expenses, to an amount not
to exceed the total annual fund operating expenses of the Mutual Global
Discovery Securities Fund, net of any acquired fund fees and expenses,
for the fiscal year ended December 31, 2010. In addition, for the 24
months following the Substitution Date, the Insurance Company
Applicants will not increase separate account fees and charges for the
Contracts outstanding on the Substitution Date
    3. Owners of Contracts who are beneficial shareholders of the
Replaced Fund have been provided with appropriate Notice of the
Substitution and Free Transfer Period. No 12b-1 fees are assessed to
Class 1 shares of the Replaced Fund or the Institutional Class shares
of the Replacement Fund. Identical 12b-1 fees of 0.25% of average daily
net assets are assessed to Class 2 shares of the Replaced Fund and the
Advisor Class shares of the Replacement Fund.
    4. Applicants submit that the investment objectives are the same
and the investment strategies are substantially the same for both
Funds; both primarily invest in equity securities (and securities
convertible into, or that the adviser expects to be exchanged for,
common or preferred stock) of issuers that the manager believes are
undervalued. The risks are similar for both Funds and are consistent
with the risks generally applicable to the types of securities (such as
value-oriented equity securities, arbitrage securities and distressed
companies and foreign securities) in which both funds invest.
    5. In addition to identical investment objectives and substantially
similar principal investment strategies and risks, as well as total
annual fund operating expenses that are expected to be no higher (after
waivers), the advisory services that are provided to the Replacement
Fund by its investment adviser are comparable to the types of advisory
services provided to the Replaced Fund by its investment adviser. The
investment advisory fee paid to PIMCO by the Replacement Fund (0.75%)
is slightly lower than the investment advisory fee paid to Franklin
Mutual Advisers by the Replaced Fund (0.80%).
    6. The Contracts contain features that provide adequate protection
to contract owners in the event of a substitution. Moreover, the
Substitution will be subject to the following: (1) A contract owner may
request that his or her contract value be reallocated to another
Investment Option, subject to any Investment Option allocation
restrictions under their Contract, at any time during the Free Transfer
Period without charge. The Free Transfer Period provides sufficient
time for contract owners to reconsider their Investment Options; (2)
the Substitution will be at the net asset value of the respective
shares, without the imposition of any transfer, brokerage or similar
charge; (3) neither the contract owners, the Replaced Fund, nor the
Replacement Fund will bear any costs of the Substitution, and all
legal, accounting, and transactional costs and any brokerage or other
costs incurred in the Substitution will be paid by the Insurance
Company Applicants or PIMCO, and accordingly, the Substitution will
have no impact on the contract owners' contract values; (4) the
Substitution will in no way alter the contractual obligations of the
Insurance Company Applicants or the rights and privileges of contract
owners under the Contracts; and (5) the Substitution will in no way
alter the tax benefits to contract owners.
    7. The Applicants, on the basis of the facts and circumstances
described above and in the application, have determined that it is in
the best interests of contract owners to substitute shares of the
Replaced Fund with shares of the Replacement Fund.
    8. Applicants submit that the Substitution is consistent with the
protection of investors and the purposes fairly intended by the policy
and provisions of the 1940 Act.

Section 17(b) Relief

    1. The Section 17 Applicants request that the Commission issue an
order pursuant to Section 17(b) of the 1940 Act exempting them from
Section 17(a) of the 1940 Act to the extent necessary to permit Allianz
Life and Allianz NY to carry out the Substitution by redeeming shares
of the Replaced Fund in kind and using such proceeds to purchase shares
of the Replacement Fund.
    2. Section 17(a)(1) of the 1940 Act prohibits any affiliated person
of a registered investment company, or an affiliated person of an
affiliated person, acting as principal, from selling any security or
other property to such registered investment company. Section 17(a)(2)
of the 1940 Act prohibits any of the persons described above, acting as
principal, from purchasing any security or other property from such
registered investment company.
    3. Applicants may be considered affiliates of the Replacement Fund
based upon the definition of ``affiliated person'' in Section 2(a)(3)
of the 1940 Act. Shares of the Replacement Fund are held by the
Separate Accounts. Because shares held by a separate account of an
insurance company are legally owned by the insurance company, Allianz
Life and Allianz NY and their affiliates collectively own of record
shares of the Replacement Fund. Further, PIMCO, which is an affiliated
person of the Replacement Fund by virtue of Section 2(a)(3)(E) of the
1940 Act, is, like Allianz Life and Allianz NY, a wholly owned
subsidiary of Allianz SE. For these reasons, the Replacement Fund is
arguably under the control of Allianz Life and Allianz NY
notwithstanding the fact that contract owners may be considered the
beneficial owners of those shares held in the Separate Accounts. If the
Replacement Fund is under the control of Allianz Life and Allianz NY,
then each of Allianz Life and Allianz NY, or any person controlling
Allianz Life and Allianz NY, or any person under common control with
Allianz Life and Allianz NY, is an affiliated person of the Replacement
Fund. Similarly, if the Replacement Fund is under the control of
Allianz Life and Allianz NY, then the Replacement Fund is an affiliated
person of Allianz Life and Allianz NY, and of any persons that control
Allianz Life and Allianz NY or are under

common control with Allianz Life and Allianz NY.
    4. At the close of business on the Substitution Date, the Insurance
Company Applicants will redeem shares of the Replaced Fund either in-
kind or in cash, or a combination thereof, and use the proceeds of such
redemptions to purchase shares of the Replacement Fund, with each
subaccount of the applicable Separate Account investing the proceeds of
its redemption from the Replaced Fund in the Replacement Fund. Thus,
the proposed transactions may involve a transfer of portfolio
securities by the Replaced Fund to Allianz Life and Allianz NY.
Immediately thereafter, Allianz Life and Allianz NY would purchase
shares of the Replacement Fund with the portfolio securities and/or
cash received from the Replaced Fund. This aspect of the Substitution
may be deemed to involve one or more sales by Allianz Life or Allianz
NY of securities or other property to the Replacement Fund, and could
therefore be viewed as being prohibited by Section 17(a) of the l940
Act. Accordingly, the Section 17 Applicants seek relief from Section
17(a) of the 1940 Act for the in-kind purchases and sales of the
Replacement Fund shares.\2\
---------------------------------------------------------------------------

    \2\ Any in-kind redemptions from the Replaced Fund will be
effected in accordance with the conditions set forth in the
Commission's no-action letter issued to the Signature Financial
Group (publicly available December 28, 1999).
---------------------------------------------------------------------------

    5. Any in-kind redemptions and purchases for purposes of the
Substitution will be effected in a manner consistent with the
investment objectives and strategies of the Replaced Fund and the
Replacement Fund. PIMCO will review the securities holdings of the
Replaced Fund and determine which of the Replaced Fund's portfolio
holdings would be suitable investments for the Replacement Fund in the
overall context of the Replacement Fund's investment objective and
strategies and consistent with PIMCO's management of the Replacement
Fund. PIMCO will accept only those securities as consideration for
shares that it would have acquired for the Replacement Fund in a cash
transaction. The Section 17 Applicants submit that these portfolio
securities will be of the type and quality that the Replacement Fund
would have acquired with the proceeds from share sales had the shares
been sold for cash.
    6. The Section 17 Applicants state that any securities to be paid
out as redemption proceeds and subsequently contributed to the
Replacement Fund to effect the contemplated in-kind purchases of shares
will be valued based on valuation procedures adopted by the board of
the PIMCO EqS VIT. The redeeming and purchasing values will be the
same. Consistent with Rule 17a-7(d) under the 1940 Act, no brokerage
commissions, fees, or other remuneration will be paid by the Replaced
Fund or the Replacement Fund in connection with the in-kind
transactions. If PIMCO declines to accept particular portfolio
securities of the Replaced Fund for purchase in-kind of shares of the
Replacement Fund, those positions will be liquidated by the Replaced
Fund and shares of the Replacement Fund will be purchased with cash.
    7. Section 17(b) of the 1940 Act provides that the Commission may,
upon application, grant an order exempting any transaction from the
prohibitions of Section 17(a) of the l940 Act if the evidence
establishes that: (1) The terms of the proposed transaction, including
the consideration to be paid or received, are reasonable and fair and
do not involve overreaching on the part of any person concerned; (2)
the proposed transaction is consistent with the policy of each
registered investment company concerned, as recited in its registration
statement and records found under the 1940 Act; and (3) the proposed
transaction is consistent with the general purposes of the 1940 Act.
    8. The Section 17 Applicants submit that the terms of the
Substitution, including the consideration to be paid and received, are
reasonable and fair and do not involve overreaching on the part of any
person concerned principally because the transactions will conform with
all but one of the conditions enumerated in Rule 17a-7 under the 1940
Act. The use of in-kind transactions will not cause contract owner
interests to be diluted. The proposed transactions will take place at
relative net asset value in conformity with the requirements of Section
22(c) of the 1940 Act and Rule 22c-1 thereunder with no change in the
amount of any contract owner's contract value or death benefit or in
the dollar value of his or her investment in any of the Separate
Accounts. The proposed transactions cannot be effected at a price that
is disadvantageous to either the Replaced Fund or the Replacement Fund.
Contract owners will not suffer any adverse tax consequences as a
result of the Substitution. Fees and charges under the Contracts will
not increase because of the Substitution. Even though they may not rely
on Rule 17a-7 under the 1940 Act, the Section 17 Applicants submit that
the Rule's conditions outline the type of safeguards that result in
transactions that are fair and reasonable to registered investment
company participants and preclude overreaching in connection with an
investment company by its affiliated persons.
    9. The board of the PIMCO EqS VIT has adopted procedures, as
required by paragraph (e)(1) of Rule 17a-7 under the 1940 Act, pursuant
to which the Replacement Fund may purchase and sell securities to and
from its affiliates. The Section 17 Applicants will carry out the
proposed in-kind purchases in conformity with all of the conditions of
Rule 17a-7 under the Act and the Replacement Fund's policies and
procedures relating to Rule 17a-7 under the Act, except that the
consideration paid for the securities being purchased or sold may not
be entirely cash. Nevertheless, the circumstances surrounding the
proposed Substitution will be such as to offer to the Replacement Fund
the same degree of protection from overreaching that Rule 17a-7 under
the Act provides to the Replacement Fund generally in connection with
its purchase and sale of securities under that Rule in the ordinary
course of its business. In particular, Allianz Life and Allianz NY (or
any of their affiliates) cannot effect the proposed transactions at a
price that is disadvantageous to the Replacement Fund. Although the
transactions may not be entirely for cash, each will be effected based
upon (1) The independent market price of the portfolio securities
valued as specified in paragraph (b) of Rule 17a-7 under the Act, and
(2) the net asset value per share of each Fund involved valued in
accordance with the procedures disclosed in its respective registration
statement and as required by Rule 22c-1 under the 1940 Act. No
brokerage commission, fee, or other remuneration will be paid to any
party in connection with the proposed transactions. The board of the
PIMCO EqS VIT will conduct its review of the transactions in the same
manner that it normally would follow in accordance with Rule 17a-7
under the l940 Act.
    10. The proposed transactions also are reasonable and fair in that
they will be effected in a manner consistent with the public interest
and the protection of investors. Contract owners will be fully informed
of the terms of the Substitution and they will be provided a prospectus
for the Replacement Fund. In addition, contract owners will have the
opportunity to make a free transfer from the Replacement Fund to any
other available Investment Option offered under their Contract, subject
to any Investment Option allocation

restrictions under their Contract, during the Free Transfer Period.
    11. The Section 17 Applicants also submit that the Substitution is
consistent with the policies of the Replaced Fund and the Replacement
Fund as recited in the current registration statement and reports filed
under the 1940 Act.
    12. In addition, the Section 17 Applicants submit that the proposed
Substitution is consistent with the general purposes of the 1940 Act as
stated in the Findings and Declaration of Policy in Section 1 of the
1940 Act. The proposed transactions do not present any of the
conditions or abuses that the 1940 Act was designed to prevent.
Securities to be paid out as redemption proceeds from the Replaced Fund
and subsequently contributed to the Replacement Fund to effect the
contemplated in-kind purchases of shares will be valued in accordance
with the requirements of Rule 17a-7 under the l940 Act. Therefore,
there will be no change in value to any contract owner as a result of
the Substitution.

Conclusion

    For the reasons and upon the facts set forth above and in the
application, the Applicants and the Section 17 Applicants believe that
the requested order meets the standards set forth in Section 26(c) of
the Act and Section 17(b) of the Act, respectively, and should
therefore, be granted.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-14895 Filed 6-15-11; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: August 18, 2009 (Volume 74, Number 158)]
[Notices]
[Page 41773-41774]
[DOCID:fr18au09-88]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60486; File No. SR-Phlx-2009-68]

Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX, Inc. Relating
to Settlement of FLEX Currency Options

August 12, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') ,\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on August 6, 2009, NASDAQ OMX PHLX, Inc. (``Phlx'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III, below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    The Exchange proposes to clarify Phlx Rule 1079 (FLEX Index, Equity
and Currency Options) regarding settlement of FLEX currency options \3\
in U.S. dollars. The text of the proposed rule change is available on
the Exchange's Web site at http://nasdaqomxphlx.cchwallstreet.com/
NASDAQOMXPHLX/Filings/, at the principal office of the Exchange, and at
the Commission's Public Reference Room.
---------------------------------------------------------------------------

    \3\ FLEX currency options are long-term U.S. dollar-settled
foreign currency options (``FCOs'') that are up to three years in
length. See Rule 1079(a)(6). FCOs are also known as World Currency
Options (``WCOs''). See also Rule 1012 (Exchange may list FCOs
having up to three years from the time they are listed until
expiration).
---------------------------------------------------------------------------

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

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

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

1. Purpose
    The purpose of the proposed rule change is to clarify Phlx Rule
1079 regarding settlement of FLEX currency options in U.S. dollars.
    In 2007, the Exchange listed and began trading six U.S. dollar-
settled FCOs.\4\ In July 2009, the Commission approved the Exchange's
filing to list and trade ten additional U.S. dollar-settled FCOs (the
``New Currencies'').\5\ The Exchange's 2009 filing, in addition to
providing the capability to list and trade the New Currencies, among
other things established position limits and spelled out a uniform
pricing convention (methodology) for all U.S. dollar-settled FCOs.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release Nos. 54989 (December 21,
2006), 71 FR 78506 (December 29, 2006) (SR-Phlx-2006-34) (approval
order regarding the listing and trading of U.S. dollar-settled FCOs
on the British pound and the Euro); and 56034 (July 10, 2007), 72 FR
38853 (July 16, 2007) (SR-Phlx-2007-34) (approval order regarding
the listing and trading of U.S. dollar-settled FCOs on the
Australian dollar, the Canadian dollar, the Swiss franc, and the
Japanese yen).
    \5\ See Securities Exchange Act Release No. 60196 (June 24,
2009), 74 FR 31782 (July 2, 2009) (approval order regarding the
listing and trading of the Mexican peso, the Brazilian real, the
Chinese yuan, the Danish krone, the New Zealand dollar, the
Norwegian krone, the Russian ruble, the South African rand, the
South Korean won, and the Swedish krona).
---------------------------------------------------------------------------

    Currently, sixteen FCOs are listed and traded on the Exchange. The
defining characteristic of all FCOs is that they are all U.S. dollar-
settled, that is, they do not require delivery of an underlying foreign
currency and settle only in U.S. dollars.\6\ Each of these FCOs can be
traded as long-term FLEX currency options. FLEX currency options, which
are U.S. dollar-settled FCOs that have long expiration dates up to
three years in length, also settle in U.S. dollars.\7\
---------------------------------------------------------------------------

    \6\ In contrast, physical delivery foreign currency options, so
named because settlement could involve delivery of the underlying
currency, were listed and traded on the exchange through early 2007;
all open interest in physical delivery options was traded out or
expired by the end of March 2007.
    \7\ See Rule 1079(a)(9)(B).
---------------------------------------------------------------------------

    This filing clarifies Rule 1079 indicating that FLEX currency
options settle in U.S. dollars.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act \8\ in general, and furthers the objectives of Section
6(b)(5) of the Act \9\ in particular, in that it is designed to promote
just and equitable principles of trade, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general to protect investors and the public interest,
by clarifying the settlement of FLEX currency options in U.S. dollars.
---------------------------------------------------------------------------

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

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.

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

    No written comments were either solicited or received.

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

    The Exchange believes that the foregoing proposed rule change may
take effect upon filing with the Commission pursuant to Section
19(b)(3)(A) \10\ of the Act and Rule 19b-4(f)(6)(iii) thereunder \11\
because the foregoing proposed rule change does not: (i) Significantly
affect the protection of investors or the public interest; (ii) impose
any significant burden on competition; and (iii) become operative for
30 days from the date on which it was filed, or such shorter time as
the Commission may designate.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate 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.
    The Exchange has asked the Commission to waive the 30-day operative
delay set forth in Rule 19b-4(f)(6)(iii). The Commission believes
investors will be best served by clarifying without delay that FLEX
currency options settle in U.S. dollars on the Exchange. The Commission
also notes that the proposed rule change presents no novel issues. For
these reasons, the Commission believes it is consistent with the
protection of investors and the public interest to waive the 30-day
operative delay, and hereby grants such waiver.\12\
---------------------------------------------------------------------------

    \12\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule change's impact on
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).

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

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number SR-Phlx-2009-68 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-Phlx-2009-68. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room on official business
days between the hours of 10 a.m. and 3 p.m. Copies of such filing also
will be available for inspection and copying at the principal offices
of the Exchange. All comments received will be posted without change;
the Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
Phlx-2009-68, and should be submitted on or before September 8, 2009.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-19744 Filed 8-17-09; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register: October 5, 2007 (Volume 72, Number 193)]
[Notices]
[Page 57096]
[DOCID:fr05oc07-94]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

Solicitation of Applications for FY 2008 Border Enforcement Grant
(BEG) Funding

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Notice.

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

SUMMARY: FMCSA announces that it has published an opportunity to apply
for FY2008 BEG funding on the grants.gov Web site (http://www.grants.gov
). Section 4110 of the Safe, Accountable, Flexible,

Efficient Transportation Equity Act: A Legacy For Users (Pub. L. 109-
59) established the BEG program. The program is a discretionary grant
program that provides funding for border commercial motor vehicle (CMV)
safety programs and related enforcement activities and projects. An
entity or a State that shares a land border with another country is
eligible to receive grant funding. To apply for funding, applicants
must register with the grants.gov Web site (http://www.grants.gov/applicants/get_registered.jsp
) and submit an application in accordance

with instructions provided. Applications for grant funding must be
submitted electronically to the FMCSA through the grants.gov Web site.

DATES: FMCSA will initially consider funding of applications submitted
by November 1, 2007 by qualified applicants. If additional funding
remains available, applications submitted after November 1, 2007 will
be considered on a case-by-case basis. Funds will not be available for
allocation until such time as FY2008 appropriations legislation is
passed and signed into law.

FOR FURTHER INFORMATION CONTACT: Mr. Milt Schmidt, Federal Motor
Carrier Safety Administration, Office of Safety Programs, North
American Borders Division (MC-ESB),<PHONE_NUMBER>, 1200 New Jersey Ave.,
SE., Washington, DC 20590. Office hours are from 7:30 a.m. to 4 p.m.,
e.t., Monday through Friday, except Federal holidays.

    Issued on: September 28, 2007.
William A. Quade,
Associate Administrator for Enforcement and Program Delivery.
[FR Doc. E7-19677 Filed 10-4-07; 8:45 am]

BILLING CODE 4910-EX-P


[Federal Register Volume 79, Number 149 (Monday, August 4, 2014)]
[Rules and Regulations]
[Pages 45088-45089]
[FR Doc No: 2014-17961]

=======================================================================
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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 774

[Docket No. 140711578-4578-01]
RIN 0694--AG23

Technical Amendments to the Export Administration Regulations:
Update of Export Control Classification Number 0Y521 Series
Supplement--Biosensor Systems and Related Software and Technology

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule; technical amendment.

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

SUMMARY: In this rule, the Bureau of Industry and Security (BIS) amends
the Export Administration Regulations (EAR) by removing certain entries
from the supplement that identifies those items subject to the EAR that
are not listed elsewhere in the Commerce Control List (CCL), but which
the Department of Commerce, with the concurrence of the Departments of
Defense and State, has determined should be controlled for export for
foreign policy reasons or because the items provide a significant
military or intelligence advantage to the United States. Within one
calendar year from the date that such items are listed in the
supplement, BIS must publish a rule reclassifying the items under an
entry on the CCL. Otherwise, such items automatically become designated
as EAR99 items, unless BIS publishes a rule amending the supplement to
extend the period in which the items will be listed therein. In
accordance with this requirement, this rule removes references to
biosensor systems and related ``software'' and ``technology'' from the
supplement, because these items automatically became designated as
EAR99 items on March 28, 2014, and the references to them in the
supplement are now obsolete.

DATES: This rule is effective August 4, 2014.

FOR FURTHER INFORMATION CONTACT: Scott Hubinger, Senior Chemist and
General Engineer, Chemical and Biological Controls Division, Office of
Nonproliferation and Treaty Compliance by phone<PHONE_NUMBER> or by
email at<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Background

ECCN 0Y521 Series

    BIS established the ECCN 0Y521 series in a final rule published
April 13, 2012 (72 FR 22191) (hereinafter ``April 13 rule'') to
identify items that warrant control on the Commerce Control List (CCL)
but are not yet identified in an existing ECCN. Items are added to the
ECCN 0Y521 series by the Department of Commerce, with the concurrence
of the Departments of Defense and State, upon a determination that an
item should be controlled because it provides at least a significant
military or intelligence advantage to the United States or because
foreign policy reasons justify such control. The ECCN 0Y521 series is a
temporary holding classification with a limitation that while an item
is temporarily classified under ECCN 0Y521, the U.S. Government works
to adopt a control through the relevant multilateral regime(s), to
determine an appropriate longer-term control over the item, or that the
item does not warrant control on the CCL.
    Under the procedures established in the April 13 rule and codified
at Sec.  742.6(a)(7)(iii) of the EAR, items classified under ECCN 0Y521
remain so-classified for one year from the date a final rule
identifying the item is published in the Federal Register amending the
EAR, unless the item is re-classified under a different ECCN, under an
EAR99 designation, or the 0Y521 classification is extended. During this
time, the U.S. Government determines whether it is appropriate to
submit a proposed control to the applicable export control regime
(e.g., the Wassenaar Arrangement) for potential multilateral control,
with the understanding that multilateral controls are preferable when
practical.

Technical Amendments Updating Supplement No. 5 to Part 774: Removal of
References to Biosensor Systems and Related ``Software'' and
``Technology''

    On March 28, 2013 (78 FR 18814), BIS imposed 0Y521 license
requirements on biosensor systems and related ``software'' and
``technology'' for export and reexport to all destinations, except
Canada. Under the procedures established in the April 13 rule and as
described in Supplement No. 5 to Part 774, the effective date of the
initial classification was the date of that rule's publication, March
28, 2013, and the date the items would be designated EAR99, unless
reclassified in another ECCN or the 0Y521 classification was reissued,
was one year later, March 28, 2014. In the interim, BIS, on behalf of
the U.S. Government, submitted a proposal to the Australia Group (a
multilateral regime of which the United States is a member) for control
of the items for nonproliferation reasons. The Australia Group decided
that it would not impose controls on the items, and the U.S. Government
did not seek further consideration of multilateral controls, nor did
BIS re-classify the items under a different ECCN or reissue the 0Y521
classification. In accordance with Sec.  742.6(a)(7)(iii) of the EAR,
as of March 28, 2014, the 0Y521 classification of the biosensor systems
and related ``software'' and ``technology'' expired, meaning the items
were no longer classified in the 0Y521 series and became designated
EAR99. By removing the items from the list of items classified in the
0Y521 series in Supplement No. 5 to Part, this rule removes text that

imposes no license requirement but has potential to confuse readers
about the items' EAR99 status.
    Further, BIS received two comments in response to the March 28,
2013 interim final rule. One commenter stated that designating the
Biosensor System No. 1 0A521 without license exception options other
than License Exception GOV section 740.11(b)(2)(ii) may result in
regulating the item more restrictively than it would under the ITAR and
may result in ``chilling effects toward academic research and thereby
diminish innovation.'' Another commenter raised concerns that the scope
of what is covered by the No.1 0E521 ``Technology'' might be overly
broad without a reference to the General Technology Note and that BIS
should provide guidance on how to interpret the scope. The change of
status of the biosensor systems and related ``software'' and
``technology'' to EAR99 renders the comments moot.
    Therefore, in this rule, BIS amends the EAR to update certain
entries in Supplement No. 5 to Part 774-- Items Classified Under Export
Control Classification Numbers (ECCNs) 0A521, 0B521, 0C521, 0D521 and
0E521--according to the procedure set forth in the April 13 rule that
established the 0Y521 series. Specifically, in this rule, BIS removes
references to biosensor systems and related ``software'' and
``technology'' under ECCNs 0A521 No. 1, 0D521 No. 1 and 0E521 No. 1,
respectively, from Supplement No. 5 to Part 774 of the EAR to conform
with the current legal status of those items under the EAR and rid the
Supplement of obsolete references. The items are EAR99 and the 0Y521
series license requirements do not apply. This is a technical amendment
that only updates Supplement No. 5 to Part 774 of the EAR. It does not
alter any right, obligation or prohibition under the EAR.

Export Administration Act

    Since August 21, 2001, the Export Administration Act has been in
lapse and the President, through Executive Order 13222 of August 17,
2001 (3 CFR, 2001 Comp., 783 (2002)), as amended by Executive Order
13637 of March 8, 2013, 78 FR 16129 (March 13, 2013), and extended most
recently by the Notice of August 8, 2013, 78 FR 49107 (August 12,
2013), has continued the EAR in effect under the International
Emergency Economic Powers Act. BIS continues to carry out the
provisions of the Export Administration Act, as appropriate and to the
extent permitted by law, pursuant to Executive Order 13222 as amended
by Executive Order 13637.

Rulemaking Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distribute impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This final rule has been determined to be not significant
for purposes of Executive Order 12866.
    2. Notwithstanding any other provision of law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with, a collection of information subject to the
requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et
seq.) (PRA), unless that collection of information displays a currently
valid Office of Management and Budget (OMB) Control Number. This rule
does not involve any collection of information.
    3. This rule does not contain policies with Federalism implications
as that term is defined under E.O. 13132.
    4. The Department finds that there is good cause under 5 U.S.C.
553(b)(3)(B) to waive the provisions of the Administrative Procedure
Act requiring prior notice and the opportunity for public comment
because they are unnecessary. This rule only updates Supplement No. 5
to Part 774 to the EAR by removing references to certain items to make
the Supplement conform to the current legal status of those items under
the EAR. These revisions are merely technical and reflect what already
is in effect under the EAR in accordance with established procedure,
and the procedure itself was proposed to the public and the subject of
public comment. This rule clarifies information, which serves to avoid
confusing readers about the items' EAR99 status. It does not alter any
right, obligation or prohibition that applies to any person under the
EAR. Because these revisions are not substantive changes, it is
unnecessary to provide notice and opportunity for public comment. In
addition, the 30-day delay in effectiveness required by 5 U.S.C. 553(d)
is not applicable because this rule is not a substantive rule. Because
neither the Administrative Procedure Act nor any other law requires
that notice of proposed rulemaking and an opportunity for public
comment be given for this rule, the analytical requirements of the
Regulatory Flexibility Act (5 U.S.C. 601 et seq.) are not applicable.

List of Subjects in 15 CFR Part 774

    Exports, Reporting and recordkeeping requirements.
    Accordingly, Part 774 of the Export Administration Regulations (15
CFR Parts 730-774) is amended as follows:

PART 774--[AMENDED]

0
1. The authority citation for part 774 continues to read as follows:

    Authority:  50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
10 U.S.C. 7420; 10 U.S.C. 7430(e); 22 U.S.C. 287c, 22 U.S.C. 3201 et
seq.; 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u); 42 U.S.C. 2139a; 42
U.S.C. 6212; 43 U.S.C. 1354; 15 U.S.C. 1824a; 50 U.S.C. app. 5; 22
U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 13026, 61 FR 58767, 3 CFR,
1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p.
783; Notice of August 8, 2013, 78 FR 49107 (August 12, 2013).

0
2. Supplement No. 5 to Part 774--Items Classified Under ECCNs Items
Classified Under Export Control Classification Numbers (ECCNs) 0A521,
0B521, 0C521, 0D521 and 0E521--is amended by:
0
a. Removing and reserving the entire entry for item ``No. 1 Biosensor
systems and dedicated detecting components'' under the section ``0A521.
Systems, Equipment and Components'';
0
b. Removing and reserving the entire entry for item ``No. 1 0D521
``Software'' for the function of Biosensor Systems controlled by ECCN
0A521.'' under section ``0D521. Software''; and
0
c. Removing and reserving the entire entry for item ``No. 1 0E521
``Technology for the ``development'' or ``production'' of Biosensor
Systems controlled by ECCN 0A521.'' under section ``0E521.
Technology''.

    Dated: July 25, 2014.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2014-17961 Filed 8-1-14; 8:45 am]
BILLING CODE 3510-33-P


[Federal Register: October 23, 2006 (Volume 71, Number 204)]
[Notices]
[Page 62104]
[DOCID:fr23oc06-42]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. RP07-19-000]

Northwest Pipeline Corporation; Notice of Proposed Changes in
FERC Gas Tariff

October 16, 2006.
    Take notice that on October 12, 2006, Northwest Pipeline
Corporation (Northwest) tendered for filing as part of its FERC Gas
Tariff, Third Revised Volume No. 1, the following tariff sheets, to be
effective November 12, 2006:

Third Revised Sheet No. 56
First Revised Sheet No. 57
Original Sheet No. 58
Sheet No. 59
Third Revised Sheet No. 86
Original Sheet No. 87
Sheet Nos. 88 and 89
Fifth Revised Sheet No. 110
First Revised Sheet No. 111
Third Revised Sheet No. 326
First Revised Sheet No. 344
Second Revised Sheet No. 353

    Northwest states that the purpose of this filing is to add
unilateral evergreen options under Rate Schedules TF-2, SGS-2F and LS-
2F.
    Northwest states that a copy of this filing has been served upon
Northwest's customers and interested state regulatory commissions.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211 and 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed in accordance with the provisions of
Section 154.210 of the Commission's regulations (18 CFR 154.210).
Anyone filing an intervention or protest must serve a copy of that
document on the Applicant. Anyone filing an intervention or protest on
or before the intervention or protest date need not serve motions to
intervene or protests on persons other than the Applicant.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://www.ferc.gov.
 Persons unable to file electronically should submit an

original and 14 copies of the protest or intervention to the Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, DC
20426.
    This filing is accessible on-line at http://www.ferc.gov, using the

``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive e-mail
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For

TTY, call<PHONE_NUMBER>.

Magalie R. Salas,
Secretary.
 [FR Doc. E6-17623 Filed 10-20-06; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 76, Number 100 (Tuesday, May 24, 2011)]
[Rules and Regulations]
[Pages 29997-29998]
[FR Doc No: 2011-12587]

=======================================================================
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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2010-0436; Directorate Identifier 2009-NM-230-AD;
Amendment 39-16643; AD 2011-07-06]
RIN 2120-AA64

Airworthiness Directives; Bombardier, Inc. Model CL-600-2B19
(Regional Jet Series 100 & 440) Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule; correction.

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

SUMMARY: The FAA is correcting an airworthiness directive (AD) that
published in the Federal Register. That AD applies to the products
listed above. The service information reference in paragraph (g)(7) in
the Actions section of the AD is incorrect. This document corrects that
error. In all other respects, the original document remains the same.

DATES: This final rule is effective May 24, 2011. The effective date
for AD 2011-07-06 remains May 6, 2011.

ADDRESSES: You may examine the AD docket on the Internet at http.//
www.regulations.gov; or in person at the Docket Management Facility
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains this AD, the regulatory evaluation,
any comments received, and other information. The address for the
Docket Office (phone:<PHONE_NUMBER>) is Document Management Facility,
U.S. Department of Transportation, Docket Operations, M-30, West
Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE.,
Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Wing Chan, Aerospace Engineer,
Avionics and Flight Test Branch, ANE-172, FAA, New York Aircraft
Certification Office (ACO), 1600 Stewart Avenue, Suite 410, Westbury,
New York 11590; telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>; e-mail:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Airworthiness Directive 2011-07-06,
amendment 39-16643 (76 FR 18024, April 1, 2011), currently requires
revising the Limitations and Normal Procedures sections of the airplane
flight manual; revising the maintenance program for certain airplanes
by incorporating certain inspections; replacing certain data
concentrator units (DCUs) with modified DCUs, and, if

applicable, modifying the configuration strapping units, installing the
outboard low-heat detection switches and wing A/ICE box assembly and
its associated wires; and activating the outboard low-heat detection
switches; for Bombardier, Inc. Model CL-600-2B19 (Regional Jet Series
100 & 440) airplanes.
    In the AD as published, the reference to Bombardier Service
Bulletin 601R-30-034, dated November 19, 2007, in paragraph (g)(7) of
the AD is incorrect. The reference to the Bombardier Service Bulletin
should read Bombardier Service Bulletin 601R-31-034, dated November 19,
2007.
    No other part of the preamble or regulatory information has been
changed; therefore, only the changed portion of the final rule is being
published in the Federal Register.
    The effective date of this AD remains May 6, 2011.

Correction of Regulatory Text

Sec.  39.13  [Corrected]

0
In the Federal Register of April 1, 2011, on page 18028, in the first
column, paragraph (g)(7) of AD 2011-07-06 is corrected to read as
follows:

* * * * *
    (7) Replacing DCUs P/N 622-9820-007, 622-9820-008, or 622-9820-
009 with modified DCUs having P/N 622-9820-010, and modifying CSUs,
are also acceptable for compliance with the requirements of
paragraph (g)(3) of this AD if done before the effective date of
this AD, in accordance with Accomplishment Instructions of
Bombardier Service Bulletin 601R-31-034, dated November 19, 2007.
* * * * *

    Issued in Renton, Washington, on May 13, 2011.
Ali Bahrami,
Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2011-12587 Filed 5-23-11; 8:45 am]
BILLING CODE 4910-13-P