[Federal Register Volume 81, Number 197 (Wednesday, October 12, 2016)]
[Notices]
[Pages 70455-70460]
[FR Doc No: 2016-24577]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79052; File No. SR-NYSEArca-2016-82]

Self-Regulatory Organizations; NYSE Arca, Inc.; Order Instituting
Proceedings To Determine Whether To Approve or Disapprove a Proposed
Rule Change, as Modified by Amendment Nos. 1, 2, and 3 Thereto, To List
and Trade Shares of the JPMorgan Diversified Event Driven ETF Under
NYSE Arca Equities Rule 8.600

October 5, 2016.

I. Introduction

    On June 20, 2016, NYSE Arca, Inc. (``Exchange'') filed with the
Securities and Exchange Commission (``Commission''), pursuant to
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'' or
``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule
change to list and trade shares of the JPMorgan Diversified Event
Driven ETF under NYSE Arca Equities Rule 8.600. The proposed rule
change was published for comment in the Federal Register on July 7,
2016.\3\ On August 18, 2016, the Exchange filed Amendment No. 1 to the
proposed rule change,\4\ and,

pursuant to Section 19(b)(2) of the Act,\5\ the Commission designated a
longer period within which to approve the proposed rule change,
disapprove the proposed rule change, or institute proceedings to
determine whether to disapprove the proposed rule change.\6\ On
September 1, 2016, the Exchange filed Amendment No. 2 to the proposed
rule change.\7\ On September 2, 2016, the Exchange filed Amendment No.
3 to the proposed rule change.\8\ The Commission has received no
comments on the proposal. This order institutes proceedings under
Section 19(b)(2)(B) of the Act \9\ to determine whether to approve or
disapprove the proposed rule change, as modified by Amendment Nos. 1,
2, and 3 thereto.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 78218 (Jul. 1,
2016), 81 FR 44339 (``Notice'').
    \4\ In Amendment No. 1, which amended and replaced the proposed
rule change in its entirety, the Exchange clarified: (a) certain
aspects relating to the Fund's investment strategy, including
descriptions of (i) certain return factors that the Fund seeks to
utilize to achieve its investment objective, (ii) the Fund's total
net long market exposure, (iii) the Fund's use of derivative
instruments and its market exposure to such instruments, and (iv)
the Fund's investments in mutual funds; (b) that the common stock
into which convertible securities held by the Fund can be converted
will be exchange-traded; (c) that the Fund may invest no more than
5% of its assets, in the aggregate, in over-the-counter (``OTC'')
common stocks, preferred stocks, warrants, rights, and contingent
value rights (``CVRs'') of U.S. and foreign corporations (including
emerging market securities); (d) the redemption order submission
cut-off time; (e) that no more than 10% of the net assets of the
Fund will be invested in Depositary Receipts (as defined herein)
that are not exchange-listed; and (f) the use of certain defined
terms. Amendment No. 1 to the proposed rule change is available at:
https://www.sec.gov/comments/sr-nysearca-2016-82/nysearca201682-1.pdf. Because Amendment No. 1 to the proposed rule change does not
materially alter the substance of the proposed rule change or raise
unique or novel regulatory issues, Amendment No. 1 is not subject to
notice and comment.
    \5\ 15 U.S.C. 78s(b)(2).
    \6\ See Securities Exchange Act Release No. 78610, 81 FR 57960
(Aug. 24, 2016). The Commission designated October 5, 2016 as the
date by which the Commission shall either approve or disapprove, or
institute proceedings to determine whether to disapprove, the
proposed rule change.
    \7\ In Amendment No. 2, which partially amended the proposed
rule change, as modified by Amendment No. 1 thereto, the Exchange
clarified (a) the Fund's holdings in mutual fund shares as the only
non-exchange-traded investment company securities the Fund may hold,
and (b) that Depositary Receipts (as defined herein) are included as
equity securities subject to the 10% limitation on equity securities
whose principal market is not a member of the Intermarket
Surveillance Group (``ISG'') or is a market with which the Exchange
does not have a comprehensive surveillance sharing agreement.
Amendment No. 2 to the proposed rule change is available at: https://www.sec.gov/comments/sr-nysearca-2016-82/nysearca201682-2.pdf.
Because Amendment No. 2 to the proposed rule change does not
materially alter the substance of the proposed rule change or raise
unique or novel regulatory issues, Amendment No. 2 is not subject to
notice and comment.
    \8\ In Amendment No. 3, which partially amended the proposed
rule change, as modified by Amendment Nos. 1 and 2 thereto, the
Exchange (a) made conforming changes to the Statutory Basis section
of the filing to reflect the same changes made by Amendment No. 2 to
the proposed rule change, and (b) clarified a reference to the term
``advisor'' to mean ``Adviser.'' Amendment No. 3 to the proposed
rule change is available at: https://www.sec.gov/comments/sr-nysearca-2016-82/nysearca201682-3.pdf. Because Amendment No. 3 to
the proposed rule change does not materially alter the substance of
the proposed rule change or raise unique or novel regulatory issues,
Amendment No. 3 is not subject to notice and comment.
    \9\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

II. Exchange's Description of the Proposal

    The Exchange proposes to list and trade shares (``Shares'') of the
JPMorgan Diversified Event Driven ETF (``Fund'') under NYSE Arca
Equities Rule 8.600, which governs the listing and trading of Managed
Fund Shares. The Fund is a series of J.P. Morgan Exchange-Traded Fund
Trust (``Trust''), a Delaware statutory trust.\10\ J.P. Morgan
Investment Management Inc. (``Adviser'') will be the investment adviser
to the Fund. The Adviser is a wholly-owned subsidiary of JPMorgan Asset
Management Holdings Inc., which is a wholly-owned subsidiary of
JPMorgan Chase & Co., a bank holding company. The Adviser will also
provide administrative services for, and will oversee the other service
providers of, the Fund. SEI Investments Distribution Co. will be the
distributor of the Fund's Shares.
---------------------------------------------------------------------------

    \10\ The Trust is registered under the Investment Company Act of
1940 (``1940 Act''). The Exchange states that, on April 22, 2016,
the Trust filed with the Commission an amendment to its registration
statement on Form N-1A under the Securities Act of 1933
(``Securities Act'') and the 1940 Act relating to the Fund (File
Nos. 333-191837 and 811-22903) (``Registration Statement''). The
Exchange also notes that an exemptive order (``Exemptive Order'')
was issued on February 19, 2016 (IC Release No. 31990). The Exchange
represents that investments made by the Fund will comply with the
conditions set forth in the Exemptive Order.
---------------------------------------------------------------------------

    The Fund will seek to provide long-term total return and will seek
to achieve its investment objective by employing an event-driven
investment strategy, primarily investing in companies that the Adviser
believes will be impacted by pending or anticipated corporate or
special situation events. In executing this investment strategy, the
Fund will seek to capture the price difference between a security's
market price and the anticipated value post-event, based on the
assumption that an event or catalyst will affect future pricing. It
will do so based on its systematic investment process for securities
selection. The Adviser believes it has identified (and will continue to
identify) a set of sources of potential event-driven investment return
that have a low correlation to each other and traditional markets and
have distinct risk and return profiles (``return factors'').
    Under normal market conditions,\11\ the Fund will seek to achieve
its investment objective by employing its investment strategy to access
certain return factors. For example, the return factors that the
Adviser may utilize include, but are not limited to, the following:
---------------------------------------------------------------------------

    \11\ The term ``under normal market conditions'' includes, but
is not limited to, the absence of extreme volatility or trading
halts in the securities markets or the financial markets generally;
circumstances under which the Fund's investments are made for
temporary defensive purposes; operational issues (e.g., systems
failure) causing dissemination of inaccurate market information; or
force majeure type events such as cyber-attacks, natural or man-made
disaster, act of God, armed conflict, act of terrorism, riot or
labor disruption, or any similar intervening circumstance.
---------------------------------------------------------------------------

    (1) Merger arbitrage--seeks to capitalize on price discrepancies
and returns generated by a corporate transaction. The Fund may purchase
the common stock of the company being acquired and may short the common
stock of the acquirer in expectation of profiting from the price
differential between the purchase price of the securities and the value
received for the securities as a result of or in expectation of the
consummation of the merger.
    (2) Activism tracking--invests in companies that are the target of
activist investors.
    (3) Share buybacks--attempts to exploit the outperformance of a
company engaged in a share buyback program.
    (4) Parents and spinoffs--attempts to capture positive performance
of a parent company after the spinoff announcement; this typically
leads to a revaluation of the company.
    (5) Index arbitrage--attempts to profit from the price changes of
assets as they are added to or deleted from indices.
    (6) Post-reorganization equities--attempts to profit from the
mispricing of companies as they emerge from bankruptcy.
    Each return factor represents a potential source of investment
return that results from, among other things, assuming a particular
risk or taking advantage of a market opportunity. Each return factor
represents a potential source of investment return, and the Adviser
allocates assets to a subset of return factors based on current
investment opportunities. Under normal market conditions, the Fund will
seek to achieve its investment objective by employing the event-driven
strategy to access certain return factors. The Adviser believes that,
in general, the Fund's event-driven investment returns will be
attributable to the individual contributions of the various return
factors. By employing this return factor based approach, the Fund will
seek to provide positive total returns over time while maintaining a
relatively low correlation with traditional markets. The exposure to
individual return factors may vary based on the market opportunity of
the individual return factors. Additional return factors may be
identified over time.
    The Fund will invest its assets globally to gain exposure to equity
securities (across market capitalizations) in developed markets. The
Fund may use both long and short positions (achieved primarily through
the use of derivative instruments as described below). The Fund
generally will

maintain a total net long market exposure, meaning that the Fund's
aggregate exposure will be greater to instruments that the Adviser
expects to outperform. However, the Fund may have net long or net short
exposure to one or more industry sectors, individual markets, and/or
currencies based on the return factors.
    The Adviser will make use of derivatives (as described below), in
implementing its strategies. Under normal market conditions, the
Adviser currently expects that a significant portion of the Fund's
exposure will be attained through the use of derivatives in addition to
its exposure through direct investments. Derivatives will primarily be
used as an efficient means of implementing a particular strategy in
order to gain exposure to a desired return factor. For example, the
Fund may use a total return swap to establish both long and short
positions in order to gain the desired exposure rather than physically
purchasing and selling short each instrument. Derivatives may also be
used to increase gain, to effectively gain targeted exposure from its
cash positions, to hedge various investments, and/or for risk
management. As a result of the Fund's use of derivatives and to serve
as collateral, the Fund may hold significant amounts of U.S. Treasury
obligations, including Treasury bills, bonds and notes and other
obligations issued or guaranteed by the U.S. Treasury, other short-term
investments, including money market funds and foreign currencies, in
which certain derivatives are denominated.
    The amount that may be invested in any one instrument will vary and
generally depend on the return factors employed by the Adviser at that
time. However, with the exception of specified investment limitations
for certain assets described below, there are no stated percentage
limitations on the amount that can be invested in any one type of
instrument, and the Adviser may, at times, focus on a smaller number of
instruments. Moreover, the Fund will generally be unconstrained by any
particular capitalization, style or sector and may invest in any
developed region or country. The Fund may have both long and short
exposure to these instruments. The Adviser will make use of
quantitative models and information and data supplied by third parties
to, among other things, help determine the portfolio's weightings among
various investments and construct sets of transactions and investments.
    The Fund will purchase a particular instrument when the Adviser
believes that such instrument will allow the Fund to gain the desired
exposure to a return factor. Conversely, the Fund will consider selling
a particular instrument when it no longer provides the desired exposure
to a return factor. In addition, investment decisions will take into
account a return factor's contribution to the Fund's overall
volatility.
    In addition to its main return factors, the Fund may utilize return
factors that use debt securities. The Fund may invest, either directly
or through financial derivative instruments, debt securities that are
subject to a downgrade from investment grade to non-investment grade
(also known as high yield/junk bond) status. For example, the Fund may
invest in the bonds that have been downgraded while hedging credit risk
more broadly by using credit default swaps indices in order to attempt
to keep the Fund's exposure market neutral.

A. Exchange's Description of the Fund's Principal Investments

    Under normal market conditions, the Fund will invest principally
(i.e., more than 50% of the Fund's assets) in the securities and
financial instruments described below, which may be represented by
derivatives, as discussed below.
    The Fund may invest in exchange-listed and traded common stocks,
preferred stocks,\12\ warrants and rights \13\ of U.S. and foreign
corporations (including emerging market securities), and U.S. and non-
U.S. real estate investment trusts (``REITs'').\14\ Exchange-listed and
traded common stocks, preferred stocks, warrants and rights of U.S.
corporations, and U.S. REITs will be traded on U.S. national securities
exchanges.
---------------------------------------------------------------------------

    \12\ Preferred stock is a class of stock that generally pays a
dividend at a specified rate and has preference over common stock in
the payment of dividends and in liquidation (U.S. and non-U.S.,
including emerging markets).
    \13\ Rights are securities, typically issued with preferred
stock or bonds, that give the holder the right to buy a
proportionate amount of common stock at a specified price (U.S. and
non-U.S., including emerging markets).
    \14\ REITs are pooled investment vehicles which invest primarily
in income-producing real estate or real estate related loans or
interest.
---------------------------------------------------------------------------

    The Fund may invest in exchange-listed and OTC ``Depositary
Receipts'' \15\ as described below.
---------------------------------------------------------------------------

    \15\ Depositary Receipts include American Depositary Receipts
(``ADRs''), Global Depositary Receipts (``GDRs'') and European
Depositary Receipts (``EDRs''). ADRs are receipts typically issued
by an American bank or trust company that evidence ownership of
underlying securities issued by a foreign corporation. EDRs are
receipts issued by a European bank or trust company evidencing
ownership of securities issued by a foreign corporation. GDRs are
receipts issued throughout the world that evidence a similar
arrangement. ADRs, EDRs and GDRs may trade in foreign currencies
that differ from the currency the underlying security for each ADR,
EDR or GDR principally trades in. Generally, ADRs, in registered
form, are designed for use in the U.S. securities markets. EDRs, in
registered form, are used to access European markets. GDRs, in
registered form, are tradable both in the United States and in
Europe and are designed for use throughout the world. No more than
10% of the net assets of the Fund will be invested in Depositary
Receipts that are not exchange-listed.
---------------------------------------------------------------------------

    The Fund may invest in the following cash and cash equivalents:
investments in money market funds (for which the Adviser and/or its
affiliates serve as investment adviser or administrator), bank
obligations,\16\ commercial paper,\17\ repurchase agreements, and
short-term funding agreements.\18\
---------------------------------------------------------------------------

    \16\ Bank obligations include the following: bankers'
acceptances, certificates of deposit, and time deposits. Bankers'
acceptances are bills of exchange or time drafts drawn on and
accepted by a commercial bank. Maturities are generally six months
or less. Certificates of deposit are negotiable certificates issued
by a bank for a specified period of time and earning a specified
return. Time deposits are non-negotiable receipts issued by a bank
in exchange for the deposit of funds.
    \17\ Commercial paper consists of secured and unsecured short-
term promissory notes issued by corporations and other entities.
Maturities generally vary from a few days to nine months.
    \18\ Short-term funding agreements are agreements issued by
banks and highly rated U.S. insurance companies such as Guaranteed
Investment Contracts and Bank Investment Contracts.
---------------------------------------------------------------------------

    The Fund may invest in corporate debt.\19\
---------------------------------------------------------------------------

    \19\ The Adviser expects that, under normal market conditions,
the Fund will invest at least 75% of its corporate debt securities
in issuances that have at least $100,000,000 par amount outstanding
in developed countries, or at least $200,000,000 par amount
outstanding in emerging market countries.
---------------------------------------------------------------------------

    In addition to money market funds referenced above, the Fund may
invest in shares of non-exchange-traded investment company securities,
that is, mutual fund shares, including mutual fund shares for which the
Adviser and/or its affiliates may serve as investment adviser or
administrator, to the extent permitted by Section 12(d)(1) \20\ of the
1940 Act and the rules thereunder.
---------------------------------------------------------------------------

    \20\ 15 U.S.C. 80a-12(d)(1).
---------------------------------------------------------------------------

    In addition, the Fund may invest in exchange traded funds
(``ETFs''),\21\ purchase and sell futures contracts on indexes of
securities, invest in swaps (credit default swaps (``CDSs''), CDS
indices, and total return swaps on equity securities, equity indexes,
fixed income securities, and fixed income futures), invest in forward
and spot

currency transactions \22\ (such investments consist of non-deliverable
forwards (``NDFs''), foreign forward currency contracts, and spot
currency transactions), and invest in OTC and exchange-traded call and
put options on equities, fixed income securities, and currencies or
options on indexes of equities, fixed income securities, and
currencies.
---------------------------------------------------------------------------

    \21\ The ETFs in which the Fund may invest will be registered
under the 1940 Act and include Investment Company Units (as
described in NYSE Arca Equities Rule 5.2(j)(3)); Portfolio
Depositary Receipts (as described in NYSE Arca Equities Rule 8.100);
and Managed Fund Shares (as described in NYSE Arca Equities Rule
8.600). Such ETFs all will be listed and traded in the U.S. on
registered exchanges. While the Fund may invest in inverse ETFs, the
Fund will not invest in leveraged or inverse leveraged (e.g., 2X, -
2X, 3X, or -3X) ETFs.
    \22\ The Fund will limit its investments in currencies to those
currencies with a minimum average daily foreign exchange turnover of
USD $1 billion as determined by the Bank for International
Settlements (``BIS'') Triennial Central Bank Survey. As of the most
recent BIS Triennial Central Bank Survey, at least 52 separate
currencies had minimum average daily foreign exchange turnover of
USD $1 billion. For a list of eligible BIS currencies, see
www.bis.org.
---------------------------------------------------------------------------

    The Fund may invest in U.S. Government obligations, which may
include direct obligations of the U.S. Treasury, including Treasury
bills, notes and bonds, all of which are backed as to principal and
interest payments by the full faith and credit of the United States,
and separately traded principal and interest component parts of such
obligations that are transferable through the Federal book-entry system
known as Separate Trading of Registered Interest and Principal of
Securities and Coupons Under Book Entry Safekeeping.

B. Exchange's Description of the Fund's Other Investments

    While the Fund, under normal market conditions, will invest at
least fifty percent (50%) of its assets in the securities and financial
instruments described above, the Fund may invest its remaining assets
in other assets and financial instruments, as described below.
    The Fund may invest in U.S. and non-U.S. convertible securities,
which are bonds or preferred stock that can convert to common stock.
The common stock into which convertible securities can be converted
will be exchange-traded.
    The Fund may invest in reverse repurchase agreements.
    The Fund may invest in sovereign obligations, which are investments
in debt obligations issued or guaranteed by a foreign sovereign
government or its agencies, authorities, or political subdivisions.
    The Fund may invest no more than 5% of its assets in equity and
debt securities that are restricted securities (Rule 144A securities),
in addition to Rule 144A securities deemed illiquid by the Adviser, as
referenced below.
    Under normal market conditions, the Fund may invest no more than 5%
of its assets, in the aggregate, in OTC common stocks, preferred
stocks, warrants, rights, and CVRs of U.S. and foreign corporations
(including emerging market securities).

C. Exchange's Description of the Fund's Investment Restrictions

    The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets (calculated at the time of investment),
including Rule 144A securities deemed illiquid by the Adviser,
consistent with Commission guidance. The Fund will monitor its
portfolio liquidity on an ongoing basis to determine whether, in light
of current circumstances, an adequate level of liquidity is being
maintained, and will consider taking appropriate steps in order to
maintain adequate liquidity if, through a change in values, net assets,
or other circumstances, more than 15% of the Fund's net assets are held
in illiquid assets. Illiquid assets include securities subject to
contractual or other restrictions on resale and other instruments that
lack readily available markets as determined in accordance with
Commission staff guidance.
    The Fund may invest in other investment companies to the extent
permitted by Section 12(d)(1) of the 1940 Act and rules thereunder and/
or any applicable exemption or exemptive order under the 1940 Act with
respect to such investments.
    The Fund may invest in securities denominated in U.S. dollars,
major reserve currencies, and currencies of other countries in which
the Fund may invest.
    The Fund may invest in both investment grade and high yield debt
securities.
    The Fund intends to qualify for and to elect treatment as a
separate regulated investment company under Subchapter M of the
Internal Revenue Code. Furthermore, the Fund may not concentrate
investments in a particular industry or group of industries, as
concentration is defined under the 1940 Act, the rules or regulations
thereunder, or any exemption therefrom, as such statute, rules, or
regulations may be amended or interpreted from time to time.\23\
---------------------------------------------------------------------------

    \23\ The Registration Statement states that, for purposes of the
Fund's fundamental investment policy regarding industry
concentration, ``to concentrate'' generally means to invest more
than 25% of the Fund's total assets, taken at market value at the
time of investment.
---------------------------------------------------------------------------

    The Fund is a diversified series of the Trust. The Fund intends to
meet the diversification requirements of the 1940 Act.
    The Fund's investments, including derivatives, will be consistent
with the Fund's investment objective and will not be used to enhance
leverage (although certain derivatives may result in leverage). That
is, while the Fund will be permitted to borrow as permitted under the
1940 Act, the Fund's investments will not be used to seek performance
that is the multiple or inverse multiple (i.e., 2Xs and 3Xs) of the
Fund's primary broad-based securities benchmark index (as defined in
Form N-1A).\24\
---------------------------------------------------------------------------

    \24\ The Fund's broad-based securities benchmark index will be
identified in a future amendment to the Registration Statement
following the Fund's first full calendar year of performance.
---------------------------------------------------------------------------

D. Exchange's Description of the Fund's Use of Derivatives

    The Fund proposes to seek certain exposures through transactions in
the specific derivative instruments described above. The derivatives to
be used are futures, swaps, NDFs, foreign forward currency contracts,
and call and put options. Derivatives, which are instruments that have
a value based on another instrument, exchange rate, or index, may also
be used as substitutes for securities in which the Fund can invest. The
Fund may use these derivative instruments to increase gain, to
effectively gain targeted exposure from its cash positions, to hedge
various investments, and/or for risk management.
    Investments in derivative instruments will be made in accordance
with the 1940 Act and consistent with the Fund's investment objective
and policies. To limit the potential risk associated with such
transactions, the Fund will segregate or ``earmark'' assets determined
to be liquid by the Adviser in accordance with procedures established
by the Trust's Board of Trustees and in accordance with the 1940 Act
(or, as permitted by applicable regulation, enter into certain
offsetting positions) to cover its obligations under derivative
instruments. These procedures have been adopted consistent with Section
18 of the 1940 Act and related Commission guidance. In addition, the
Fund will include appropriate risk disclosure in its offering
documents, including leveraging risk. Leveraging risk is the risk that
certain transactions of the Fund, including the Fund's use of
derivatives, may give rise to leverage, causing the Fund to be more
volatile than if it had not been leveraged.\25\ Because the markets for
certain assets, or the assets themselves, may be unavailable or cost
prohibitive as

compared to derivative instruments, suitable derivative transactions
may be an efficient alternative for the Fund to obtain the desired
asset exposure.
---------------------------------------------------------------------------

    \25\ To mitigate leveraging risk, the Adviser will segregate or
``earmark'' liquid assets or otherwise cover the transactions that
may give rise to such risk.
---------------------------------------------------------------------------

III. Proceedings To Determine Whether To Approve or Disapprove SR-
NYSEArca-2016-82 and Grounds for Disapproval Under Consideration

    The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act \26\ to determine whether the proposed rule
change, as modified by Amendment Nos. 1, 2, and 3 thereto, should be
approved or disapproved. Institution of such proceedings is appropriate
at this time in view of the legal and policy issues raised by the
proposed rule change. Institution of proceedings does not indicate that
the Commission has reached any conclusions with respect to any of the
issues involved. Rather, as described below, the Commission seeks and
encourages interested persons to provide comments on the proposed rule
change, as modified by Amendment Nos. 1, 2, and 3 thereto.
---------------------------------------------------------------------------

    \26\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

    Pursuant to Section 19(b)(2)(B) of the Act,\27\ the Commission is
providing notice of the grounds for disapproval under consideration.
The Commission is instituting proceedings to allow for additional
analysis of the proposed rule change's consistency with Section 6(b)(5)
of the Act, which requires, among other things, that the rules of a
national securities exchange be ``designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade,'' and ``to protect investors and the public
interest.'' \28\
---------------------------------------------------------------------------

    \27\ Id.
    \28\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Under the proposal, the Exchange states that the Fund will invest
in assets globally. In addition to certain U.S. securities, the Fund
proposes to hold non-U.S. exchange listed and traded common stocks,
preferred stocks, warrants, and rights. Further, the Fund proposes to
hold non-U.S. REITs, Depositary Receipts, corporate bonds, sovereign
obligations, and convertible securities. The Exchange, however,
proposes no quantitative standards with respect to these non-U.S.
securities in which the Fund, at the Adviser's discretion, may invest.
The Commission has recently noted that appropriate quantitative
standards help reduce the extent to which Managed Fund Shares holding
non-U.S. components may be susceptible to manipulation.\29\ For
example, with respect to certain equity securities, the Commission
noted that standards, such as minimum market value, trading volume, and
diversification requirements, should reduce the risk that Managed Fund
Shares holding non-U.S. component stocks are susceptible to
manipulation.\30\
---------------------------------------------------------------------------

    \29\ See Securities Exchange Act Release No. 78397 (Jul. 22,
2016), 81 FR 49320, at 49325 (Jul. 27, 2016).
    \30\ Id.
---------------------------------------------------------------------------

    The Exchange also states that the Fund's investments may be
represented by derivatives. Further, derivatives may be used ``to
increase gain, to effectively gain targeted exposure from its cash
positions, to hedge various investments, and/or for risk management.''
The Exchange does not propose to limit the amount of derivatives that
the Fund may hold, and also does not provide any other information
regarding the Fund's use of derivatives, including the use of OTC or
non-centrally cleared derivatives. The Commission has previously noted
that quantitative requirements, such as concentration limits on the use
of listed derivatives and limits on OTC derivatives, help reduce the
extent to which Managed Fund Shares holding derivative instruments may
be susceptible to manipulation.\31\
---------------------------------------------------------------------------

    \31\ Id.
---------------------------------------------------------------------------

    Accordingly, the Commission solicits comment on whether the
proposal is consistent with the Act. In particular, the Commission
seeks comment on whether the Exchange's representations relating to
non-U.S. component securities and derivatives held by the Fund are
sufficient to prevent the susceptibility of the Fund's portfolio to
manipulation and are thereby consistent with the requirements of
Section 6(b)(5) of the Act, which, among other things, requires that
the rules of an exchange be designed to prevent fraudulent and
manipulative acts and practices and to protect investors and the public
interest.

IV. Procedure: Request for Written Comments

    The Commission requests that interested persons provide written
submissions of their views, data, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposal. In particular, the Commission invites the written
views of interested persons concerning whether the proposal is
consistent with Section 6(b)(5) or any other provision of the Act, or
the rules and regulations thereunder. Although there do not appear to
be any issues relevant to approval or disapproval that would be
facilitated by an oral presentation of views, data, and arguments, the
Commission will consider, pursuant to Rule 19b-4, any request for an
opportunity to make an oral presentation.\32\
---------------------------------------------------------------------------

    \32\ Section 19(b)(2) of the Act, as amended by the Securities
Acts Amendments of 1975, Pub. L. 94-29 (June 4, 1975), grants the
Commission flexibility to determine what type of proceeding--either
oral or notice and opportunity for written comments--is appropriate
for consideration of a particular proposal by a self-regulatory
organization. See Securities Acts Amendments of 1975, Senate Comm.
on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st
Sess. 30 (1975).
---------------------------------------------------------------------------

    Interested persons are invited to submit written data, views, and
arguments regarding whether the proposal should be approved or
disapproved by November 2, 2016. Any person who wishes to file a
rebuttal to any other person's submission must file that rebuttal by
November 16, 2016. The Commission asks that commenters address the
sufficiency of the Exchange's statements in support of the proposal,
which are set forth in the Notice \33\ and in Amendment Nos. 1, 2, and
3 to the proposed rule change,\34\ in addition to any other comments
they may wish to submit about the proposed rule change.
---------------------------------------------------------------------------

    \33\ See supra note 3.
    \34\ See supra notes 4, 7, and 8.
---------------------------------------------------------------------------

    Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSEArca-2016-82 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-2016-82. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be

available for Web site viewing and printing in the Commission's Public
Reference Room, 100 F Street NE., Washington, DC 20549, on official
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of
the filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NYSEArca-2016-82 and should be submitted on or before
November 2, 2016. Rebuttal comments should be submitted by November 16,
2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\35\
Brent J. Fields,
Secretary.
---------------------------------------------------------------------------

    \35\ 17 CFR 200.30-3(a)(57).
---------------------------------------------------------------------------

[FR Doc. 2016-24577 Filed 10-11-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 87, Number 90 (Tuesday, May 10, 2022)]
[Rules and Regulations]
[Pages 27947-27949]
[FR Doc No: 2022-09992]

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

DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[Docket Number USCG-2022-0184]
RIN 1625-AA00

Safety Zone; Graduate Boat Parade, Sturgeon Bay, WI

AGENCY: Coast Guard, Department of Homeland Security (DHS).

ACTION: Temporary final rule.

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

SUMMARY: The Coast Guard is establishing a temporary safety zone for
certain waters of Sturgeon Bay, WI. This action is necessary to provide
for the safety of life on these navigable waters during the boat parade
for the Graduates of Sturgeon Bay High School on May 28, 2022. This
rulemaking will restrict usage by persons and vessels within the safety
zone. At no time during the effective period may non-parade vessels
transit the waters of Sturgeon Bay between the Highway 42 Bridge and
Michigan Street Bridge. These restrictions will apply to all vessels
during the effective period unless authorized by the Captain of the
Port Lake Michigan or a designated representative.

DATES: This rule is effective from 11:00 a.m. through 2:00 p.m. on May
28, 2022.

ADDRESSES: To view documents mentioned in this preamble as being
available in the docket, go to https://www.regulations.gov, type USCG-
2022-0184 in the search box and click ``Search.'' Next, in the Document
Type column, select ``Supporting & Related Material.''

FOR FURTHER INFORMATION CONTACT: If you have questions about this
rulemaking, call or email Chief Petty Officer Jeromy Sherrill, Sector
Lake Michigan Waterways Management Division, U.S. Coast Guard;
telephone<PHONE_NUMBER>, email [email protected].

SUPPLEMENTARY INFORMATION:

I. Table of Abbreviations

CFR Code of Federal Regulations
DHS Department of Homeland Security
FR Federal Register
NPRM Notice of proposed rulemaking
Sec.  Section
U.S.C. United States Code

II. Background Information and Regulatory History

    On March 9, 2022, the principal of Sturgeon Bay High School
notified the Coast Guard that it will be conducting a boat parade for
graduates of the Class of 2022 on May 28, 2022, from 11:00 a.m. through
2:00 p.m. The boat parade will begin at Madelyn Marine, NW of Highway
42 bridge, proceed NW to the Michigan Street Bridge, cross the channel
towards the Maritime Museum, then proceed SE, crossing back across the
channel and ending at Madelyn Marine. The Captain of the Port Sector
Lake Michigan (COTP) has determined that potential hazards associated
with the boat parade would be a safety concern for anyone within the
safety zone that is not participating in the boat parade.
    In response, on March 22, 2022, the Coast Guard published a notice
of proposed rulemaking (NPRM) titled ``Safety Zone; Graduate Boat
Parade, Sturgeon Bay, WI'' (87 FR 16129). There we stated why we issued
the NPRM, and invited comments on our proposed regulatory action
related to this fireworks display. During the comment period that ended
April 6, 2022, we received 0 comments.

III. Legal Authority and Need for Rule

    The Captain of the Port Sector Lake Michigan (COTP) has determined
that potential hazards associated with the boat parade would be a
safety concern for anyone within the safety zone that is not
participating in the boat parade. The purpose of this rule is to ensure
safety of vessels and the navigable waters in the safety zone before,
during, and after the scheduled event.

IV. Discussion of Comments, Changes, and the Rule

    As noted above, we received no comments on our NPRM published March
22, 2022. There are no changes in the regulatory text of this rule from
the proposed rule in the NPRM.
    This rule establishes a safety zone from 11:00 a.m. through 2:00
p.m. on May 28, 2022. The safety zone would cover all navigable waters
of Sturgeon Bay between the Highway 42 Bridge and Michigan Street
Bridge. The duration of the zone is intended to ensure the safety of
vessels and these navigable waters before, during, and after the boat
parade event. No vessels or person would be permitted to enter the
safety zone without obtaining permission from the COTP or a designated
representative. The regulatory text appears at the end of this
document.

V. Regulatory Analyses

    We developed this rule after considering numerous statutes and
Executive orders related to rulemaking. Below we summarize our analyses
based on a number of these statutes and Executive orders, and we
discuss First Amendment rights of protestors.

A. Regulatory Planning and Review

    Executive Orders 12866 and 13563 direct agencies to assess the
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits. This rule has not been designated a ``significant
regulatory action,'' under Executive Order 12866. Accordingly, this
rule has not been reviewed by the

Office of Management and Budget (OMB).
    This regulatory action determination is based on the
characteristics of the safety zone. The safety zone created by this
rule will relatively small and is designed to minimize its impact on
navigable waters. This rule will prohibit entry into certain navigable
waters of Sturgeon Bay, WI, and it is not anticipated to exceed 3 hours
in duration. Thus, restrictions on vessel movement within that
particular area are expected to be minimal. Moreover, under certain
conditions vessels may still transit through the safety zone when
permitted by the COTP Lake Michigan.

B. Impact on Small Entities

    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as
amended, requires Federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000. The Coast Guard received 00 comments from the Small Business
Administration on this rulemaking. The Coast Guard certifies under 5
U.S.C. 605(b) that this rule will not have a significant economic
impact on a substantial number of small entities.
    While some owners or operators of vessels intending to transit the
safety zone may be small entities, for the reasons stated in section
V.A above, this rule will not have a significant economic impact on any
vessel owner or operator.
    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this rule. If the rule would affect your
small business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
call or email the person listed in the FOR FURTHER INFORMATION CONTACT
section.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

C. Collection of Information

    This rule will not call for a new collection of information under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

D. Federalism and Indian Tribal Governments

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has 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. We have analyzed this rule under that order and have
determined that it is consistent with the fundamental federalism
principles and preemption requirements described in Executive Order
13132.
    Also, this rule does not have tribal implications under Executive
Order 13175, Consultation and Coordination with Indian Tribal
Governments, because it does not have a substantial direct effect on
one or more Indian tribes, on the relationship between the Federal
Government and Indian tribes, or on the distribution of power and
responsibilities between the Federal Government and Indian tribes.

E. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this rule will not result in
such an expenditure, we do discuss the effects of this rule elsewhere
in this preamble.

F. Environment

    We have analyzed this rule under Department of Homeland Security
Directive 023-01, Rev. 1, associated implementing instructions, and
Environmental Planning COMDTINST 5090.1 (series), which guide the Coast
Guard in complying with the National Environmental Policy Act of 1969
(42 U.S.C. 4321-4370f), and have determined that this action is one of
a category of actions that do not individually or cumulatively have a
significant effect on the human environment. This rule involves a
safety zone lasting 3 hours that would prohibit entry within a
relatively small portion of Sturgeon Bay. It is categorically excluded
from further review under paragraph L60(a) of Appendix A, Table 1 of
DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental
Consideration supporting this determination is available in the docket.
For instructions on locating the docket, see the ADDRESSES section of
this preamble.

G. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters.
Protesters are asked to call or email the person listed in the FOR
FURTHER INFORMATION CONTACT section to coordinate protest activities so
that your message can be received without jeopardizing the safety or
security of people, places or vessels.

List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and
recordkeeping requirements, Security measures, Waterways.

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 165 as follows:

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS

0
1. The authority citation for part 165 continues to read as follows:

    Authority: 46 U.S.C. 70034, 70051; 33 CFR 1.05-1, 6.04-1, 6.04-
6, and 160.5; Department of Homeland Security Delegation No.
00170.1, Revision No. 01.2.

0
2. Add Sec.  165.T09-0184 to read as follows:

Sec.  165.T09-0184   Safety Zone; Graduate Boat Parade, Sturgeon Bay,
WI.

    (a) Location. All navigable waters of Sturgeon Bay between the
Highway 42 Bridge and Michigan Street Bridge.
    (b) Enforcement period. The safety zone described in paragraph (a)
of this section is effective on May 28, 2022, from 11:00 a.m. through
2:00 p.m.
    (c) Regulations. (1) In accordance with the general regulations in
Sec.  165.23, entry into, transiting, or anchoring within this safety
zone is prohibited unless authorized by the Captain of the Port Lake
Michigan (COTP) or a designated representative.
    (2) This safety zone is closed to all vessel traffic, except as may
be permitted by the COTP or a designated representative.
    (3) The ``designated representative'' of the COTP is any Coast
Guard commissioned, warrant, or petty officer

who has been designated by the COTP to act on his or her behalf.
    (4) Persons and vessel operators desiring to enter or operate
within the safety zone during the boat parade must contact the COTP or
an on-scene representative to obtain permission to do so. The COTP or
an on-scene representative may be contacted via VHF Channel 16. Vessel
operators given permission to enter or operate in the safety zone must
comply with all directions given to them by the COTP or an on-scene
representative.

    Dated: April 22, 2022.
D.P. Montoro,
Captain, U.S. Coast Guard, Captain of the Port Lake Michigan.
[FR Doc. 2022-09992 Filed 5-9-22; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 88, Number 177 (Thursday, September 14, 2023)]
[Proposed Rules]
[Pages 63034-63036]
[FR Doc No: 2023-19861]

========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.

========================================================================

Federal Register / Vol. 88, No. 177 / Thursday, September 14, 2023 /
Proposed Rules

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2023-1880; Project Identifier MCAI-2023-00587-T]
RIN 2120-AA64

Airworthiness Directives; Airbus Canada Limited Partnership (Type
Certificate Previously Held by C Series Aircraft Limited Partnership
(CSALP); Bombardier, Inc.) Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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

SUMMARY: The FAA proposes to adopt a new airworthiness directive (AD)
for certain Airbus Canada Limited Partnership Model BD-500-1A10 and BD-
500-1A11 airplanes. This proposed AD was prompted by damage found on
two power-feeder harnesses due to chafing with wheel bins. An
investigation found that the power-feeder harnesses were not adequately
supported to protect from chafing due to vibration. This proposed AD
would require modifying the variable frequency generator (VFG) power-
feeder harness routing, as specified in a Transport Canada AD, which is
proposed for incorporation by reference (IBR). 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 October 30,
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 under
Docket No. FAA-2023-1880; or in person at Docket Operations between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD
docket contains this NPRM, the mandatory continuing airworthiness
information (MCAI), any comments received, and other information. The
street address for Docket Operations is listed above.
    Material Incorporated by Reference:
     For Transport Canada material that is proposed for IBR in
this AD, contact Transport Canada, Transport Canada National Aircraft
Certification, 159 Cleopatra Drive, Nepean, Ontario K1A 0N5, Canada;
telephone<PHONE_NUMBER>; email [email protected]. You may find this material on the
Transport Canada website at tc.canada.ca/en/aviation. It is also
available at regulations.gov under Docket No. FAA-2023-1880.
     For service information identified in this NPRM, contact
Airbus Canada Limited Partnership, 13100 Henri-Fabre Boulevard,
Mirabel, Qu[eacute]bec, J7N 3C6, Canada; telephone<PHONE_NUMBER>; email
[email protected]; website a220world.airbus.com.
     You may view this material at the FAA, Airworthiness
Products Section, Operational Safety Branch, 2200 South 216th St., Des
Moines, WA. For information on the availability of this material at the
FAA, call<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: William Reisenauer, Aviation Safety
Engineer, FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590;
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-2023-1880; Project Identifier
MCAI-2023-00587-T'' 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
William Reisenauer, Aviation Safety Engineer, FAA, 1600 Stewart Avenue,
Suite 410, Westbury, NY 11590; phone:<PHONE_NUMBER>; email: [email protected]. Any commentary that the FAA receives which is not
specifically designated as CBI will be placed in the public docket for
this rulemaking.

Background

    Transport Canada, which is the aviation authority for Canada, has
issued Transport Canada AD CF-2023-24, dated April 6, 2023 (Transport
Canada AD CF-2023-24) (also referred to as the MCAI), to correct an
unsafe condition for certain Airbus Canada Limited Partnership Model
BD-500-1A10 and BD-500-1A11 airplanes. The MCAI states that two VFG
power-feeder harnesses were found damaged due to chafing with wheel
bins during

maintenance in service on three airplanes. An investigation found that
the power-feeder harnesses were not adequately supported to protect
from chafing due to vibration.
    The FAA is proposing this AD to prevent damage to VFG power-feeder
harnesses from chafing due to vibration, which could lead to a loss of
generated power from both VFGs, or to a fire in the case of flammable
fluid contact with arcing wires.
    You may examine the MCAI in the AD docket at regulations.gov under
Docket No. FAA-2023-1880.

Related Service Information Under 1 CFR Part 51

    Transport Canada AD CF-2023-24 specifies procedures for modifying
the VFG power-feeder harness routing, including a general visual
inspection for damage at the intersection of the VFG power-feeder
harnesses and the surface of the wheel bins, and corrective actions
including obtaining and following repair instructions. This material is
reasonably available because the interested parties have access to it
through their normal course of business or by the means identified in
ADDRESSES.

FAA's Determination

    This product has been approved by the aviation authority of another
country and is approved for operation in the United States. Pursuant to
the FAA's bilateral agreement with this State of Design Authority, it
has notified the FAA of the unsafe condition described in the MCAI
referenced above. The FAA is issuing this NPRM after determining that
the unsafe condition described previously is likely to exist or develop
in other products of the same type design.

Proposed AD Requirements in This NPRM

    This proposed AD would require accomplishing the actions specified
in Transport Canada AD CF-2023-24 described previously, except for any
differences identified as exceptions in the regulatory text of this
proposed AD.

Explanation of Required Compliance Information

    In the FAA's ongoing efforts to improve the efficiency of the AD
process, the FAA developed a process to use some civil aviation
authority (CAA) ADs as the primary source of information for compliance
with requirements for corresponding FAA ADs. The FAA has been
coordinating this process with manufacturers and CAAs. As a result, the
FAA proposes to incorporate Transport Canada AD CF-2023-24 by reference
in the FAA final rule. This proposed AD would, therefore, require
compliance with Transport Canada AD CF-2023-24 in its entirety through
that incorporation, except for any differences identified as exceptions
in the regulatory text of this proposed AD. Service information
required by Transport Canada AD CF-2023-24 for compliance will be
available at regulations.gov under Docket No. FAA-2023-1880 after the
FAA final rule is published.

Costs of Compliance

    The FAA estimates that this AD, if adopted as proposed, would
affect 16 airplanes of U.S. registry. The FAA estimates the following
costs to comply with this proposed AD:

                                      Estimated Costs for Required Actions
----------------------------------------------------------------------------------------------------------------
           Labor cost                    Parts cost             Cost per  product        Cost on U.S. operators
----------------------------------------------------------------------------------------------------------------
Up to 51 work-hours x $85 per    Up to $3,538.............  Up to $7,873.............  Up to $125,968.
 hour = Up to $4,335.
----------------------------------------------------------------------------------------------------------------

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:

Airbus Canada Limited Partnership (Type Certificate Previously Held
by C Series Aircraft Limited Partnership (CSALP); Bombardier, Inc.):
Docket No. FAA-2023-1880; Project Identifier MCAI-2023-00587-T.

(a) Comments Due Date

    The FAA must receive comments on this airworthiness directive
(AD) by October 30, 2023.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Airbus Canada Limited Partnership Model BD-
500-1A10 and BD-500-1A11 airplanes, certificated in any category, as
identified in Transport Canada

AD CF-2023-24, dated April 6, 2023 (Transport Canada AD CF-2023-24).

(d) Subject

    Air Transport Association (ATA) of America Code 24, Electrical
Power.

(e) Unsafe Condition

    This AD was prompted by damage found on two variable frequency
generator (VFG) power-feeder harnesses due to chafing with wheel
bins. An investigation found that the power-feeder harnesses were
not adequately supported to protect from chafing due to vibration.
The FAA is issuing this AD to prevent damage to VFG power-feeder
harnesses from chafing due to vibration. The unsafe condition, if
not addressed, could lead to a loss of generated power from both
VFGs, or to a fire in the case of flammable fluid contact with
arcing wires.

(f) Compliance

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

(g) Requirements

    Except as specified in paragraph (h) of this AD: Comply with all
required actions and compliance times specified in, and in
accordance with, Transport Canada AD CF-2023-24.

(h) Exceptions to Transport Canada AD CF-2023-24

    (1) Where Transport Canada AD CF-2023-24 refers to its effective
date, this AD requires using the effective date of this AD.
    (2) Where Transport Canada AD CF-2023-24 refers to ``hours air
time,'' this AD requires using ``flight hours.''

(i) Additional AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
International Validation 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 responsible Flight Standards Office, as
appropriate. If sending information directly to the International
Validation Branch, send it to the attention of the person identified
in paragraph (j) of this AD. Information may be emailed to: [email protected]. Before using any approved AMOC, notify your
appropriate principal inspector, or lacking a principal inspector,
the manager of the responsible Flight Standards Office.
    (2) Contacting the Manufacturer: For any requirement in this AD
to obtain instructions from a manufacturer, the instructions must be
accomplished using a method approved by the Manager, International
Validation Branch, FAA; or Transport Canada; or Airbus Canada
Limited Partnership's Transport Canada Design Approval Organization
(DAO). If approved by the DAO, the approval must include the DAO-
authorized signature.

(j) Additional Information

    For more information about this AD, contact William Reisenauer,
Aviation Safety Engineer, FAA, 1600 Stewart Avenue, Suite 410,
Westbury, NY 11590; phone:<PHONE_NUMBER>; email: [email protected].

(k) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless this AD specifies otherwise.
    (i) Transport Canada AD CF-2023-24, dated April 6, 2023.
    (ii) [Reserved]
    (3) For Transport Canada AD CF-2023-24, contact Transport Canada
National Aircraft Certification, 159 Cleopatra Drive, Nepean,
Ontario K1A 0N5, Canada; telephone<PHONE_NUMBER>; email
[email protected]. You
may find this Transport Canada AD on the Transport Canada website at
tc.canada.ca/en/aviation.
    (4) You may view this material at the FAA, Airworthiness
Products Section, Operational Safety Branch, 2200 South 216th St.,
Des Moines, WA. For information on the availability of this material
at the FAA, call<PHONE_NUMBER>.
    (5) You may view this material that is incorporated by reference
at the National Archives and Records Administration (NARA). For
information on the availability of this material at NARA, email
[email protected], or go to: www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued on September 8, 2023.
Ross Landes,
Deputy Director for Regulatory Operations, Compliance & Airworthiness
Division, Aircraft Certification Service.
[FR Doc. 2023-19861 Filed 9-13-23; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 77, Number 153 (Wednesday, August 8, 2012)]
[Rules and Regulations]
[Pages 47282-47284]
[FR Doc No: 2012-19344]

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

DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[Docket No. USCG-2012-0688]
RIN 1625-AA00

Safety Zone; Milwaukee Air and Water Show, Lake Michigan,
Milwaukee, WI

AGENCY: Coast Guard, DHS.

ACTION: Temporary final rule.

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

SUMMARY: The Coast Guard is making a temporary deviation to the
established Milwaukee Air and Water Show safety zone on Lake Michigan
near Milwaukee Wisconsin. This action is necessary to more accurately
reflect the size requirements for this safety zone during this year's
air show. This safety zone is intended to restrict vessels from a
portion of Lake Michigan during the Milwaukee Air and Water Show. This
safety zone is necessary to protect spectators and vessels from the
hazards associated with an air show over water.

DATES: This rule will be effective from 8:00 a.m. on August 10, 2012,
until 4:00 p.m. on August 12, 2012.

ADDRESSES: Documents mentioned in this preamble are part of docket
[USCG-2012-0688]. To view documents mentioned in this preamble as being
available in the docket, go to http://www.regulations.gov, type the
docket number in the ``SEARCH'' box, and click ``Search.'' You may
visit the Docket Management Facility, Department of Transportation,
West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE.,
Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays.

FOR FURTHER INFORMATION CONTACT: If you have questions on this
temporary rule, call or email CWO Jon Grob, U.S. Coast Guard Sector
Lake Michigan; telephone<PHONE_NUMBER>, email<EMAIL_ADDRESS>If
you have questions on viewing or submitting material to the docket,
call Renee V. Wright, Program Manager, Docket Operations, telephone
202-366-9826.

SUPPLEMENTARY INFORMATION:

Table of Acronyms

DHS Department of Homeland Security
FR Federal Register
NPRM Notice of Proposed Rulemaking

A. Regulatory History and Information

    The Coast Guard is issuing this temporary final rule without prior
notice and opportunity to comment pursuant to authority under section
4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This
provision authorizes an agency to issue a rule without prior notice and
opportunity to comment when the agency for good cause finds that those
procedures are ``impracticable, unnecessary, or contrary to the public
interest.'' Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good
cause exists for not publishing a notice of proposed rulemaking (NPRM)
with respect to this rule because doing so would be impracticable and
contrary to the public interest. The final details for this year's
event were not known to the Coast Guard until there was insufficient
time remaining before the event to publish an NPRM. Thus, delaying the
effective date of this rule to wait for a comment period to run would
be both impracticable and contrary to the public interest because it
would inhibit the Coast Guard's ability to protect spectators and
vessels from the hazards associated with an air show and associated
pyrotechnics, which are discussed further below.
    Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause
exists for making this rule effective less than 30 days after
publication in the Federal Register. For the same reasons

discussed in the preceding paragraph, waiting for a 30 day notice
period to run would be impracticable and contrary to the public
interest.

B. Basis and Purpose

    Between 8:00 a.m. until 4:00 p.m. each day on Friday, Saturday, and
Sunday of the second weekend of August 2012, an air show will be held
over Lake Michigan in Milwaukee, WI. The Captain of the Port, Sector
Lake Michigan, has determined that an air show with associated
acrobatic maneuvers proximate to a gathering of watercraft and
personnel pose a significant risk to public safety and property. Such
hazards include aircraft malfunctions and subsequent crash and falling
or burning debris. This temporary rule makes a temporary deviation to
the Milwaukee Air and Water Show safety zone, which is established at
33 CFR 165.929(43).

C. Discussion of Rule

    Changes have been made to the boundaries and times previously
codified for this event; these changes were necessary to provide the
public with the most up to date information as received from the
sponsoring organization. With the aforementioned hazards in mind, the
Captain of the Port, Sector Lake Michigan, has determined that this
temporary deviation of the size of this safety zone is necessary to
ensure the safety of spectators and vessels during the air show. This
zone will be enforced from 8:00 a.m. until 4:00 p.m. on Friday,
Saturday, and Sunday of the second weekend of August 2012. The safety
zone will encompass all waters and adjacent shoreline of Lake Michigan
and Bradford Beach located within a 4000-yard by 1000-yard rectangle.
The rectangle will be bounded by the points beginning at 43[deg]02'42''
N, 087[deg]52'14'' W; then northeast to 43[deg]04'25'' N,
087[deg]50'53'' W; then northwest to 43[deg]04'40'' N, 087[deg]51'29''
W; then southwest to 43[deg]02'57'' N, 087[deg]52'50'' W; then
southeast returning to the point of origin (NAD 83). Entry into,
transiting, or anchoring within the safety zone is prohibited unless
authorized by the Captain of the Port, Sector Lake Michigan, or his
designated on-scene representative. The Captain of the Port or his
designated on-scene representative may be contacted via VHF Channel 16.

D. Regulatory Analyses

    We developed this rule after considering numerous statutes and
executive orders related to rulemaking. Below we summarize our analyses
based on 13 of these statutes or executive orders.

1. Regulatory Planning and Review

    This rule is not a significant regulatory action under section 3(f)
of Executive Order 12866, Regulatory Planning and Review, as
supplemented by Executive Order 13563, Improving Regulation and
Regulatory Review, and does not require an assessment of potential
costs and benefits under section 6(a)(3) of Executive Order 12866 or
under section 1 of Executive Order 13563. The Office of Management and
Budget has not reviewed it under those Orders. It is not
``significant'' under the regulatory policies and procedures of the
Department of Homeland Security (DHS). We conclude that this rule is
not a significant regulatory action because we anticipate that it will
have minimal impact on the economy, will not interfere with other
agencies, will not adversely alter the budget of any grant or loan
recipients, and will not raise any novel legal or policy issues. The
safety zone created by this rule will be relatively small and enforced
for a relatively short time. Also, the safety zone is designed to
minimize its impact on navigable waters. Furthermore, the safety zone
has been designed to allow vessels to transit around it. Thus,
restrictions on vessel movement within that particular area are
expected to be minimal. Under certain conditions, moreover, vessels may
still transit through the safety zone when permitted by the Captain of
the Port.

2. Impact on Small Entities

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as
amended, requires federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The Coast Guard
certifies under 5 U.S.C. 605(b) that this rule will not have a
significant economic impact on a substantial number of small entities.
    This rule will affect the following entities, some of which might
be small entities: The owners or operators of vessels intending to
transit or anchor in a portion of Lake Michigan, Milwaukee, WI on
Friday, Saturday, and Sunday of the second weekend of August, 2012.
    This safety zone will not have a significant economic impact on a
substantial number of small entities for the following reasons: This
safety zone would be activated, and thus subject to enforcement, for
only eight hours on these days. Traffic may be allowed to pass through
the zone with the permission of the Captain of the Port. The Captain of
the Port can be reached via VHF channel 16. Before the activation of
the zone, we would issue local Broadcast Notice to Mariners.

3. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this rule. If the rule would affect your
small business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
contact the person listed in the FOR FURTHER INFORMATION CONTACT
section above.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

4. Collection of Information

    This rule will not call for a new collection of information under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

5. Federalism

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has 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. We have analyzed this rule under that Order and determined
that this rule does not have implications for federalism.

6. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters.
Protesters are asked to contact the person listed in the FOR FURTHER
INFORMATION CONTACT section to coordinate protest activities so that
your message can be received without jeopardizing the safety or
security of people, places or vessels.

7. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of

their discretionary regulatory actions. In particular, the Act
addresses actions that may result in the expenditure by a State, local,
or tribal government, in the aggregate, or by the private sector of
$100,000,000 (adjusted for inflation) or more in any one year. Though
this rule will not result in such an expenditure, we do discuss the
effects of this rule elsewhere in this preamble.

8. Taking of Private Property

    This rule will not cause a taking of private property or otherwise
have taking implications under Executive Order 12630, Governmental
Actions and Interference with Constitutionally Protected Property
Rights.

9. Civil Justice Reform

    This rule meets applicable standards in sections 3(a) and 3(b)(2)
of Executive Order 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce burden.

10. Protection of Children

    We have analyzed this rule under Executive Order 13045, Protection
of Children from Environmental Health Risks and Safety Risks. This rule
is not an economically significant rule and does not create an
environmental risk to health or risk to safety that may
disproportionately affect children.

11. Indian Tribal Governments

    This rule does not have tribal implications under Executive Order
13175, Consultation and Coordination with Indian Tribal Governments,
because it does not have a substantial direct effect on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.

12. Energy Effects

    This action is not a ``significant energy action'' under Executive
Order 13211, Actions Concerning Regulations That Significantly Affect
Energy Supply, Distribution, or Use.

13. Technical Standards

    This rule does not use technical standards. Therefore, we did not
consider the use of voluntary consensus standards.

14. Environment

    We have analyzed this rule under Department of Homeland Security
Management Directive 023-01 and Commandant Instruction M16475.lD, which
guide the Coast Guard in complying with the National Environmental
Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have determined
that this action is one of a category of actions that do not
individually or cumulatively have a significant effect on the human
environment. This rule involves the establishment of a safety zone and,
therefore it is categorically excluded from further review under
paragraph 34(g) of Figure 2-1 of the Commandant Instruction. An
environmental analysis checklist supporting this determination and a
Categorical Exclusion Determination are available in the docket where
indicated under ADDRESSES. We seek any comments or information that may
lead to the discovery of a significant environmental impact from this
rule.

List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and
recordkeeping requirements, Security measures, Waterways.

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 165 as follows:

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS

0
1. The authority citation for Part 165 continues to read as follows:

    Authority:  33 U.S.C. 1231; 46 U.S.C. Chapters 701, 3306, 3703;
50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Pub.
L. 107-295, 116 Stat. 2064; Department of Homeland Security
Delegation No. 0170.1.

0
2. Add Sec.  165.T09-0688 to read as follows:

Sec.  165.T09-0688  Safety Zone; Milwaukee Air and Water Show, Lake
Michigan, Milwaukee, WI.

    (a) Location. The safety zone will encompass all waters and
adjacent shoreline of Lake Michigan and Bradford Beach located within a
4000-yard by 1000-yard rectangle. The rectangle will be bounded by the
points beginning at 43[deg]02'42'' N, 087[deg]52'14'' W; then northeast
to 43[deg]04'25'' N, 087[deg]50'53'' W; then northwest to
43[deg]04'40'' N, 087[deg]51'29'' W; then southwest to 43[deg]02'57''
N, 087[deg]52'50'' W; then southeast returning to the point of origin
(NAD 83).
    (b) Enforcement Period. This regulation will be enforced on Friday,
Saturday, and Sunday of the second weekend of August, 2012 from 8:00
a.m. until 4:00 p.m. each day.
    (c) Regulations.
    (1) In accordance with the general regulations in Sec.  165.23 of
this part, entry into, transiting, or anchoring within this safety zone
is prohibited unless authorized by the Captain of the Port, Sector Lake
Michigan or his designated on-scene representative.
    (2) This safety zone is closed to all vessel traffic, except as may
be permitted by the Captain of the Port, Sector Lake Michigan or his
designated on-scene representative.
    (3) The ``on-scene representative'' of the Captain of the Port,
Sector Lake Michigan is any Coast Guard commissioned, warrant or petty
officer who has been designated by the Captain of the Port, Sector Lake
Michigan to act on his behalf.
    (4) Vessel operators desiring to enter or operate within the safety
zone shall contact the Captain of the Port, Sector Lake Michigan or his
on-scene representative to obtain permission to do so. The Captain of
the Port, Sector Lake Michigan or his on-scene representative may be
contacted via VHF Channel 16. Vessel operators given permission to
enter or operate in the safety zone must comply with all directions
given to them by the Captain of the Port, Sector Lake Michigan, or his
on-scene representative.

    Dated: July 20, 2012.
M. W. Sibley,
Captain, U.S. Coast Guard, Captain of the Port, Sector Lake Michigan.
[FR Doc. 2012-19344 Filed 8-7-12; 8:45 am]
BILLING CODE 9110-04-P