[Federal Register Volume 80, Number 164 (Tuesday, August 25, 2015)]
[Notices]
[Pages 51632-51638]
[FR Doc No: 2015-20937]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75738 ; File No. SR-NASDAQ-2015-095]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing of Proposed Rule Change Relating to the Listing and
Trading of the Shares of the AltShares Long/Short High Yield Fund of
ETFis Series Trust I

August 19, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on August 7, 2015, The NASDAQ Stock Market LLC (``Nasdaq'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by Nasdaq. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    Nasdaq proposes to list and trade the shares of the AltShares Long/
Short High Yield Fund (the ``Fund'') of ETFis Series Trust I (the
``Trust'') under Nasdaq Rule 5735 (``Managed Fund Shares'').\3\ The
shares of the Funds are collectively referred to herein as the
``Shares.'' The text of the proposed rule change is available at http://nasdaq.cchwallstreet.com/, at Nasdaq's principal office, and at the
Commission's Public Reference Room.
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    \3\ The Commission approved Nasdaq Rule 5735 in Securities
Exchange Act Release No. 57962 (June 13, 2008), 73 FR 35175 (June
20, 2008) (SR-NASDAQ-2008-039). The Exchange believes the proposed
rule change raises no significant issues not previously addressed in
prior Commission orders.
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, Nasdaq included statements
concerning the purpose of, and basis for, the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. Nasdaq 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 the
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to list and trade the Shares of the Fund
under Nasdaq Rule 5735, which governs the listing and trading of
Managed Fund Shares \4\ on the Exchange. The Fund will be an actively-
managed exchange-traded fund (``ETF''). The Shares will be offered by
the Trust, which was established as a Delaware series trust on
September 20, 2012.\5\ The Trust is registered with the Commission as
an investment company and has filed a registration statement on Form N-
1A (``Registration Statement'') with the Commission.\6\ The Fund is a
series of the Trust.
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    \4\ A Managed Fund Share is a security that represents an
interest in an investment company registered under the Investment
Company Act of 1940, as amended (15 U.S.C. 80a-1) (the ``1940 Act'')
organized as an open-end investment company or similar entity that
invests in a portfolio of securities selected by its investment
adviser consistent with its investment objectives and policies. In
contrast, an open-end investment company that issues Index Fund
Shares, listed and traded on the Exchange under Nasdaq Rule 5705,
seeks to provide investment results that correspond generally to the
price and yield performance of a specific foreign or domestic stock
index, fixed income securities index or combination thereof.
    \5\ The Commission has issued an order, upon which the Trust may
rely (the ``Exemptive Order''), granting certain exemptive relief to
the investment adviser to the Fund under the 1940 Act. See
Investment Company Act Release No. 30607 (July 23, 2013) (File No.
812-14080).
    \6\ See Post-Effective Amendment No. 40/41 to Form N-1A
Registration Statement for the Trust, dated May 4, 2015 (File Nos.
333-187668 and 811-22819) (the ``Registration Statement''). The
description of the Fund and the Shares contained herein is based, in
part, on information in the Registration Statement.
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Description of the Shares and the Fund
    Etfis Capital LLC is the investment adviser (``Adviser'') to the
Fund. Bramshill Investments, LLC is the investment sub-adviser to the
Fund (the ``Sub-Adviser''). The Sub-Adviser is responsible for daily
portfolio management and all investment decisions for the Fund. ETF
Distributors LLC (the ``Distributor'') will be the principal
underwriter and distributor of the Fund's Shares. The Bank of New York
Mellon Corporation (``BNY'') will act as the administrator, accounting
agent, custodian and transfer agent to the Fund.
    Paragraph (g) of Rule 5735 provides that if the investment adviser
to the investment company issuing Managed Fund Shares is affiliated
with a broker-dealer, such investment adviser shall erect a ``fire
wall'' between the investment adviser and the broker-dealer with
respect to access to information concerning the composition and/or
changes to such investment company portfolio.\7\ In addition, paragraph
(g) further requires that personnel who make decisions on the open-end
fund's portfolio composition must be subject to procedures designed to
prevent the use and dissemination of material, nonpublic information
regarding the open-end fund's portfolio. Rule 5735(g) is similar to
Nasdaq Rule 5705(b)(5)(A)(i); however, paragraph (g) in connection with
the establishment of a ``fire wall'' between the investment adviser and
the broker-dealer reflects the applicable open-end fund's portfolio,
not an underlying benchmark index, as is the case with index-based
funds. The Adviser is not a broker-dealer, although it is affiliated
with the Distributor, a broker-dealer. The Adviser has implemented a
fire wall with respect to its broker-dealer affiliate regarding access
to information concerning the composition and/or changes to the
portfolio. The Sub-Adviser is not a broker-dealer and is not affiliated
with a broker-dealer. In the event (a) the Adviser or the Sub-Adviser
becomes newly affiliated with a broker-dealer \8\ or registers as a
broker-dealer, or (b) any new adviser or new sub-adviser is a
registered broker-dealer or is or becomes affiliated with a broker-
dealer, it will implement a fire wall with respect to its relevant
personnel and/or such broker-dealer affiliate, as

applicable, regarding access to information concerning the composition
and/or changes to the Fund portfolio and will be subject to procedures
designed to prevent the use and dissemination of material nonpublic
information regarding such portfolio.
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    \7\ An investment adviser to an open-end fund is required to be
registered under the Investment Advisers Act of 1940 (the ``Advisers
Act''). As a result, the Adviser, the Sub-Adviser and each such
party's related personnel are subject to the provisions of Rule
204A-1 under the Advisers Act relating to codes of ethics. This Rule
requires investment advisers to adopt a code of ethics that reflects
the fiduciary nature of the relationship to clients as well as
compliance with applicable federal securities laws as defined in
Rule 204A-1(e)(4). Accordingly, procedures designed to prevent the
communication and misuse of nonpublic information by an investment
adviser must be consistent with Rule 204A-1 under the Advisers Act.
In addition, Rule 206(4)-7 under the Advisers Act makes it unlawful
for an investment adviser to provide investment advice to clients
unless such investment adviser has (i) adopted and implemented
written policies and procedures reasonably designed to prevent
violation, by the investment adviser and its supervised persons, of
the Advisers Act and the Commission rules adopted thereunder; (ii)
implemented, at a minimum, an annual review regarding the adequacy
of the policies and procedures established pursuant to subparagraph
(i) above and the effectiveness of their implementation; and (iii)
designated an individual (who is a supervised person) responsible
for administering the policies and procedures adopted under
subparagraph (i) above.
    \8\ In the case of the Adviser, which is already affiliated with
a broker-dealer and has implemented a fire wall with respect to such
affiliated broker-dealer, this refers to a new affiliation with an
additional broker-dealer.
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Investment Objective
    The Fund's investment objective is to seek current income and
capital appreciation with reduced volatility over time.
Principal Investments
    The Fund will seek to achieve its investment objective primarily by
investing in a portfolio of ``high yield'' debt securities of U.S.
companies.
    Under normal market conditions,\9\ the Fund will hold long
positions in high yield debt securities selected because the Sub-
Adviser believes they are likely to outperform the market over time or
increase in value in the near term (the ``Long Position''), and will
hold short positions in high yield debt securities selected because the
Sub-Adviser believes they are likely to lose value in the near or
longer term (the ``Short Position'').
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    \9\ The term ``under normal market conditions'' as used herein
includes, but is not limited to, the absence of adverse market,
economic, political or other conditions, including extreme
volatility or trading halts in the fixed income or other securities
markets or the financial markets generally; operational issues
causing dissemination of inaccurate market information; or force
majeure type events such as systems failure, natural or man-made
disaster, act of God, armed conflict, act of terrorism, riot or
labor disruption or any similar intervening circumstance. In periods
of extreme market disturbance, the Fund may take temporary defensive
positions, by overweighting its portfolio in cash/cash-like
instruments; however, to the extent possible, the Adviser would
continue to seek to achieve the Fund's investment objectives.
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    The Fund will not have any portfolio maturity limitation and may
invest its assets in instruments with short-term, medium-term or long-
term maturities. Issuers of securities in which the Fund expects to
invest will include large and medium capitalization companies, and may
include small capitalization companies. The Sub-Adviser expects the
Fund's investment portfolio to include up to 200 different securities
positions with a target portfolio net exposure (the market value of the
Long Position minus the market value of the Short Position) of between
-20% and 100%.
    In selecting securities for the Fund's portfolio, the Sub-Adviser
generally will analyze debt securities included in the Bloomberg USD
Corporate High Yield Bond Index (the ``Bloomberg High Yield Index'').
While the Fund may invest directly in high yield debt securities, the
Sub-Adviser may also implement the Fund's strategy by investing in
exchange-traded pools (which will consist of exchange-traded funds,\10\
exchange-traded notes,\11\ or closed-end funds, and each of which will
be listed for trading on a U.S. exchange) (``ETPs'') that invest a
significant portion of their portfolios in high yield debt instruments
(``High Yield ETPs'').
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    \10\ See Nasdaq Rules 5705.
    \11\ See Nasdaq Rules 5710.
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    Positions in high-yield debt securities also may include foreign
debt securities traded on U.S. or foreign exchanges or in U.S. or
foreign over-the-counter markets, which may be denominated in foreign
currencies. (Any currency hedging will be accomplished by taking long
or short positions in ETPs.)
    ``High yield debt securities'' generally include debt securities
that are rated lower than ``BBB-'' by Standard & Poor's Ratings Group
or ``Baa3'' by Moody's Investors Service, Inc. or at a similar level by
another nationally recognized statistical rating organization, or are
unrated but are deemed to be of comparable quality by the Sub-Adviser.
These securities consist of senior and subordinated corporate debt
obligations (bonds, debentures, notes and commercial paper). The Fund
may invest in the foregoing corporate debt obligations, senior bank
loans (including through loan assignments and loan participations),
preferred stocks, municipal bonds, convertible bonds and convertible
preferred stocks.\12\ The Fund will not invest in other types of high-
yield debt securities, such as asset-backed securities. The Fund will
not be limited to investing in high-yield securities, so any of the
securities listed may also be investment grade. The Fund may invest in
U.S. treasuries.
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    \12\ Convertible bonds and convertible preferred stocks in which
the Fund invests, and the equity securities into which these
securities may be converted, and also preferred stocks (non-
convertible) in which the Fund invests, generally will be exchange-
traded. The Sub-Adviser's current expectation is that at least 80%
of these securities will be exchange-traded. At least 90% of these
exchange-traded securities will be traded on exchanges that are
Intermarket Surveillance Group (``ISG'') members.
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The Fund
    As a result of its trading strategy, the Fund expects to engage in
frequent portfolio transactions that will likely result in higher
portfolio turnover than other similar investment companies. Portfolio
turnover is a ratio that indicates how often the securities in an
investment company's portfolio change during a year. A higher portfolio
turnover rate indicates a greater number of changes, and a lower
portfolio turnover rate indicates a smaller number of changes. Under
normal circumstances, the anticipated annual portfolio turnover rate
for the Fund is expected to be greater than 100%.
Other Investments
    The Fund may invest in other types of investments, as set forth in
this section. In addition to investing in High Yield ETPs as discussed
under Principal Investments, the Fund could invest in other fixed-
income ETPs--but will not invest in leveraged ETPs. Due to legal
limitations, the Fund will be prevented from purchasing more than 3% of
an ETF's outstanding shares unless: (i) The ETF or the Fund has
received an order for exemptive relief from the 3% limitation from the
Commission that is applicable to the Fund; and (ii) the ETF and the
Fund take appropriate steps to comply with any conditions in such
order. The Fund may invest in warrants.\13\
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    \13\ Warrants in which the Fund invests, and the equity
securities into which these warrants may be converted, generally
will be exchange-traded. The Sub-Adviser's current expectation is
that at least 80% of these securities will be exchange-traded. At
least 90% of these exchange-traded securities will be traded on
exchanges that are ISG members.
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    In certain adverse market, economic, political, or other
conditions, the Fund may temporarily depart from its normal investment
policies and strategy, provided that the alternative is consistent with
the Fund's investment objective and is in the best interest of the
Fund. At such times, the Fund may invest in cash or cash equivalents,
such as money market instruments,\14\ and to the extent permitted by
applicable law and the Fund's investment restrictions, the Fund may
invest in shares of money market mutual funds. Under such
circumstances, the Fund may invest up to 100% of its assets in these
investments and may do so for extended periods of time. Under normal
circumstances, however, the Fund may also hold money market instruments
and/or shares of money market mutual funds for various reasons
including to provide for funds awaiting investment, to accumulate cash
for anticipated purchases of portfolio securities, to allow for
shareholder redemptions and to provide for the Fund's operating
expenses.
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    \14\ The money market instruments in which the Fund may invest
are short-term (less than one-year) notes issued by (i) the U.S.
government, (ii) an agency of the U.S. government, or (iii) a U.S.
corporation.
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    The Fund anticipates investing entirely in fully liquid assets, but
it has the flexibility to invest up to 15% of its net assets in
illiquid securities and other

illiquid assets.\15\ Under the supervision of the Board of Trustees of
the Trust (the ``Trust Board''), the Sub-Adviser will determine the
liquidity of the Fund's investments, and through reports from the Sub-
Adviser, the Trust Board monitors investments in illiquid instruments.
In determining the liquidity of the Fund's investments, the Sub-Adviser
may consider various factors including: (i) The frequency of trades and
quotations; (ii) the number of dealers and prospective purchasers in
the marketplace; (iii) dealer undertakings to make a market; (iv) the
nature of the security (including any demand or tender features); and
(v) the nature of the marketplace for trades (including the ability to
assign or offset the Fund's rights and obligations relating to the
investment). If through a change in values, net assets, or other
circumstances, the Fund were in a position where more than 15% of its
net assets were invested in illiquid securities or other illiquid
assets, it would seek to take appropriate steps to protect liquidity.
In keeping with the foregoing focus on liquidity, the Fund will
generally seek to invest in high-yield debt securities, bank loans, and
other debt issuances that the Sub-Adviser deems to be liquid, with
readily available prices. The Fund will only invest in bank loans that
have a par amount outstanding of U.S. $100 million or greater at the
time the loan is originally issued. The Fund will not enter into a long
or short position in high yield debt securities with a par amount
outstanding of less than U.S. $100 million at the time of issuance of
such high yield debt securities, if upon establishing such position,
the total value of such positions would represent fifty percent or
greater of the Fund's net assets.
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    \15\ The Commission has stated that long-standing Commission
guidelines have required open-end funds to hold no more than 15% of
their net assets in illiquid securities and other illiquid assets.
See Investment Company Act Release No. 28193 (March 11, 2008), 73 FR
14618 (March 18, 2008), FN 34. See also Investment Company Act
Release No. 5847 (October 21, 1969), 35 FR 19989 (December 31, 1970)
(Statement Regarding ``Restricted Securities''); Investment Company
Act Release No. 18612 (March 12, 1992), 57 FR 9828 (March 20, 1992)
(Revisions of Guidelines to Form N-1A). A fund's portfolio security
is illiquid if it cannot be disposed of in the ordinary course of
business within seven days at approximately the value ascribed to it
by the fund. See Investment Company Act Release No. 14983 (March 12,
1986), 51 FR 9773 (March 21, 1986) (adopting amendments to Rule 2a-7
under the 1940 Act); Investment Company Act Release No. 17452 (April
23, 1990), 55 FR 17933 (April 30, 1990) (adopting Rule 144A under
the Securities Act of 1933).
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    The Fund may not invest more than 25% of the value of its total
assets in securities of issuers in any particular industry.\16\
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    \16\ See Form N-1A, Item 9. The Commission has taken the
position that a fund is concentrated if it invests more than 25% of
the value of its total assets in any one industry. See, e.g.,
Investment Company Act Release No. 9011 (October 30, 1975), 40 FR
54241 (November 21, 1975).
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    The Fund's investments (including investments in ETPs) will not be
utilized to seek to achieve a leveraged return on the Fund's net
assets. The Fund will not invest in futures contracts, will not invest
in options, will not invest in swaps, and will not invest in other
derivative instruments.
The Shares
    The Fund will issue and redeem Shares only in Creation Units,
through the Distributor, without a sales load (but subject to
transaction fees), at the net asset value (``NAV'') next determined
after receipt of an order in proper form, on a continuous basis every
day except weekends and specified holidays, pursuant to the terms of
the agreement executed with each Authorized Participant (as defined
below). The NAV of the Fund will be determined once each business day,
normally as of the close of regular trading on the NYSE, generally,
4:00 p.m. Eastern time.\17\ Creation Unit sizes will be 25,000 Shares
per Creation Unit.
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    \17\ NAV per Share will be calculated by dividing the Fund's net
assets by the number of Fund Shares outstanding. For more
information regarding the valuation of Fund investments in
calculating the Fund's NAV, see ``Net Asset Value'' below and see
``Determination of Net Asset Value'' in the Registration Statement.
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    The consideration for purchase of a Creation Unit will consist of
either (i) an in-kind deposit of a designated portfolio of securities
(the ``Deposit Securities'') for each Creation Unit constituting a
substantial replication, or a representation, of the securities
included in the Fund's portfolio and an amount of cash (the ``Cash
Component'') computed as described below or (ii) cash totaling the NAV
of the Creation Unit (``Deposit Cash''). The ``Cash Component'' will be
an amount equal to the difference between the NAV of the shares (per
Creation Unit) and the market value of the Deposit Securities. The Fund
may also effect a portion of an otherwise in-kind creation or
redemption for cash, in accordance with the Exemptive Order.
    As applicable, (i) the Deposit Securities and the Cash Component,
together, or (ii) the Deposit Cash, will constitute the ``Fund
Deposit,'' which will represent the minimum initial and subsequent
investment amount for a Creation Unit of the Fund. If the Cash
Component is a positive number (i.e., the NAV per Creation Unit exceeds
the market value of the Deposit Securities), the Cash Component will be
such positive amount. If the Cash Component is a negative number (i.e.,
the NAV per Creation Unit is less than the market value of the Deposit
Securities), the Cash Component will be such negative amount and the
creator will be entitled to receive cash from the Fund in an amount
equal to the Cash Component. The Cash Component will serve the function
of compensating for any difference between the NAV per Creation Unit
and the market value of the Deposit Securities.
    To be eligible to place orders with respect to creations and
redemptions of Creation Units, an entity must be (i) a ``Participating
Party,'' i.e., a broker-dealer or other participant in the clearing
process through the Continuous Net Settlement System of the National
Securities Clearing Corporation (``NSCC'') or (ii) a Depository Trust
Company (``DTC'') Participant (a ``DTC Participant''). In addition,
each Participating Party or DTC Participant (each, an ``Authorized
Participant'') must execute an agreement that has been agreed to by the
Distributor and the Fund Administrator, BNY, with respect to purchases
and redemptions of Creation Units.
    BNY, through the NSCC, will make available on each business day,
immediately prior to the opening of business on the Exchange's Regular
Market Session (currently 9:30 a.m. Eastern time), the list of the
names and the required number of shares of each Deposit Security to be
included in the current Fund Deposit (based on information at the end
of the previous business day) for the Fund. Such Fund Deposit, subject
to any relevant adjustments, will be applicable in order to effect
purchases of Creation Units of the Fund until such time as the next
announced composition of the Deposit Securities is made available.
    Shares may be redeemed only in Creation Units at their NAV next
determined after receipt of a redemption request in proper form by the
Fund through BNY and only on a business day.
    With respect to the Fund, BNY, through the NSCC, will make
available immediately prior to the opening of business on the Exchange
(9:30 a.m. Eastern time) on each business day, the list of the names
and share quantities of the Fund's portfolio securities (``Fund
Securities'') that will be applicable (subject to possible amendment or
correction) to redemption requests received in proper form on that day.
Fund Securities received on redemption

may not be identical to Deposit Securities.
    Unless cash redemptions are available or specified for the Fund,
the redemption proceeds for a Creation Unit will consist of Fund
Securities as announced by BNY on the business day of the request for
redemption received in proper form plus cash in an amount equal to the
difference between the NAV of the Shares being redeemed, as next
determined after a receipt of a request in proper form, and the value
of the Fund Securities (the ``Cash Redemption Amount''), less a fixed
redemption transaction fee and any applicable additional variable
charge as set forth in the Registration Statement. In the event that
the Fund Securities have a value greater than the NAV of the Shares, a
compensating cash payment equal to the differential will be required to
be made by or through an Authorized Participant by the redeeming
shareholder. Notwithstanding the foregoing, at the Trust's discretion,
an Authorized Participant may receive the corresponding cash value of
the securities in lieu of one or more Fund Securities.
    The creation order and redemption order cut off time for the Fund
is expected to be 3:00 p.m. Eastern time. On days when the Exchange
closes earlier than normal and in the case of custom orders, the Fund
may require orders for Creation Units to be placed earlier in the day.
Net Asset Value
    The NAV per Share for the Fund will be computed by dividing the
value of the net assets of the Fund (i.e., the value of its total
assets less total liabilities) by the total number of Shares
outstanding, rounded to the nearest cent. Expenses and fees, including
the management fees, will be accrued daily and taken into account for
purposes of determining NAV. The NAV of the Fund will be calculated by
BNY and determined at the close of regular trading on the NYSE
(ordinarily 4:00 p.m. Eastern time) on each day that such exchange is
open. In calculating the Fund's NAV per Share, investments will
generally be valued by using market valuations. A market valuation
generally means a valuation (i) obtained from an exchange, a pricing
service, or a major market maker (or dealer) or (ii) based on a price
quotation or other equivalent indication of value supplied by an
exchange, a pricing service, or a major market maker (or dealer).\18\
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    \18\ Under normal market conditions, the Fund will obtain
pricing information on all of its assets from these sources.
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    ETPs, exchange-traded fixed income securities, exchange-traded
convertible securities, exchange-traded warrants and any other exchange
traded securities will be valued at the official closing price on their
principal exchange or board of trade, or lacking any current reported
sale at the time of valuation, at the mean between the most recent bid
and asked quotations on the principal exchange or board of trade.
Portfolio securities traded on more than one securities exchange will
be valued at the last sale price or official closing price, as
applicable, on the business day as of which such value is being
determined at the close of the exchange representing the principal
market for such securities. Fixed-income securities traded over-the-
counter (including high yield fixed-income securities and money market
instruments); warrants traded over-the-counter; and convertible
securities traded over-the-counter will be valued at the mean between
the most recent available bid and asked quotations provided by parties
that make a market in the instrument. If recent bid and asked
quotations are not available, these securities will be valued in
accordance with the Fund's fair valuation procedures. Money market
instruments with maturities of less than 60 days will be valued at
amortized cost. Shares of mutual funds that are not exchange-listed
will be valued at their net asset value.
    Notwithstanding the foregoing, in determining the value of any
security or asset, the Fund may use a valuation provided by a pricing
vendor employed by the Trust and approved by the Trust Board. The
pricing vendor may base such valuations upon dealer quotes, by
analyzing the listed market, by utilizing matrix pricing, by analyzing
market correlations and pricing and/or employing sensitivity analysis.
    The Adviser may use various pricing services, or discontinue the
use of any pricing service, as approved by the Trust Board from time to
time. A price obtained from a pricing service based on such pricing
service's valuation matrix may be considered a market valuation. Any
assets or liabilities denominated in currencies other than the U.S.
dollar will be converted into U.S. dollars at the current market rates
on the date of valuation as quoted by one or more sources.
    In the event that current market valuations are not readily
available or such valuations do not reflect current market value, the
Trust's procedures require the Adviser's Pricing Committee to determine
a security's fair value in accordance with the Fund's fair value
pricing procedures, which are approved by the Trust Board and
consistent with the 1940 Act.\19\ In determining such value the
Adviser's Pricing Committee may consider, among other things, (i) price
comparisons among multiple sources, (ii) a review of corporate actions
and news events, and (iii) a review of relevant financial indicators.
In these cases, the Fund's NAV may reflect certain portfolio
securities' fair values rather than their market prices. Fair value
pricing involves subjective judgments and it is possible that the fair
value determination for a security is materially different than the
value that could be realized upon the sale of the security.
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    \19\ The Valuation Committee of the Trust Board will be
responsible for the oversight of the pricing procedures of the Fund
and the valuation of the Fund's portfolio. The Valuation Committee
has delegated day-to-day pricing responsibilities to the Adviser's
Pricing Committee, which will be composed of officers of the
Adviser. The Pricing Committee will be responsible for the valuation
and revaluation of any portfolio investments for which market
quotations or prices are not readily available. The Trust and the
Adviser have implemented procedures designed to prevent the use and
dissemination of material, nonpublic information regarding valuation
and revaluation of any portfolio investments.
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Availability of Information
    The Fund's Web site, which will be publicly available prior to the
public offering of Shares, will include a form of the prospectus for
the Fund that may be downloaded. The Web site will include additional
quantitative information updated on a daily basis, including, for the
Fund: (1) The prior business day's reported NAV, mid-point of the bid/
ask spread at the time of calculation of such NAV (the ``Bid/Ask
Price''),\20\ and a calculation of the premium and discount of the Bid/
Ask Price against the NAV; (2) data in chart format displaying the
frequency distribution of discounts and premiums of the daily Bid/Ask
Price against the NAV, within appropriate ranges, for each of the four
previous calendar quarters; and (3) daily trading volume. On each
business day, before commencement of trading in Shares in the Regular
Market Session \21\ on the Exchange, the Trust will disclose on its Web
site the identities and quantities of the portfolio of securities and
other

assets (the ``Disclosed Portfolio'') held by the Fund that will form
the basis for the Fund's calculation of NAV at the end of the business
day.\22\
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    \20\ The Bid/Ask Price of the Fund will be determined using the
midpoint of the highest bid and the lowest offer on the Exchange as
of the time of calculation of such Fund's NAV. The records relating
to Bid/Ask Prices will be retained by the Fund and its service
providers.
    \21\ See Nasdaq Rule 4120(b)(4) (describing the three trading
sessions on the Exchange: (1) Pre-Market Session from 7 a.m. to 9:30
a.m. Eastern time; (2) Regular Market Session from 9:30 a.m. to 4
p.m. or 4:15 p.m. Eastern time; and (3) Post-Market Session from 4
p.m. or 4:15 p.m. to 8 p.m. Eastern time).
    \22\ Under accounting procedures to be followed by the Fund,
trades made on the prior business day (``T'') will be booked and
reflected in NAV on the current business day (``T+1'').
Notwithstanding the foregoing, portfolio trades that are executed
prior to the opening of the Exchange on any business day may be
booked and reflected in NAV on such business day. Accordingly, the
Fund will be able to disclose at the beginning of the business day
the portfolio that will form the basis for the NAV calculation at
the end of the business day.
---------------------------------------------------------------------------

    On a daily basis, the Fund will disclose for each portfolio
security and other asset of the Fund the following information on the
Fund's Web site (if applicable): Name, ticker symbol, CUSIP number or
other identifier, if any; type of holding (such as ``bond'', ``note'',
``preferred stock'', ``ETP'', ``mutual fund''); quantity held (as
measured by, for example, number of shares, contracts or units);
maturity date, if any; coupon rate, if any; effective date, if any;
market value of the holding; and the percentage weighting of the
holdings in the Fund's portfolio. The Web site information will be
publicly available at no charge.
    In addition, for the Fund, an estimated value, defined in Rule 5735
as the ``Intraday Indicative Value,'' that reflects an estimated
intraday value of the Fund's portfolio, will be disseminated. Moreover,
the Intraday Indicative Value, available on the NASDAQ OMX Information
LLC proprietary index data service,\23\ will be based upon the current
value for the components of the Disclosed Portfolio and will be updated
and widely disseminated and broadly displayed at least every 15 seconds
during the Regular Market Session. In addition, during hours when the
local markets for foreign securities in the Fund's portfolio are
closed, the Intraday Indicative Value will be updated at least every 15
seconds during the Regular Market Session to reflect currency exchange
fluctuations.
---------------------------------------------------------------------------

    \23\ Currently, the NASDAQ OMX Global Index Data Service
(``GIDS'') is the NASDAQ OMX global index data feed service,
offering real-time updates, daily summary messages, and access to
widely followed indexes and Intraday Indicative Values for ETFs.
GIDS provides investment professionals with the daily information
needed to track or trade NASDAQ OMX indexes, listed ETFs, or third-
party partner indexes and ETFs.
---------------------------------------------------------------------------

    The dissemination of the Intraday Indicative Value, together with
the Disclosed Portfolio, will allow investors to determine the value of
the underlying portfolio of the Fund on a daily basis and to provide a
close estimate of that value throughout the trading day.
    Investors will also be able to obtain the Fund's Statement of
Additional Information (``SAI''), the Fund's Shareholder Reports, and
its Form N-CSR and Form N-SAR, filed twice a year. The Fund's SAI and
Shareholder Reports will be available from the Fund free upon request,
and those documents and the Form N-CSR and Form N-SAR may be viewed on-
screen or downloaded from the Commission's Web site at www.sec.gov.
    Intra-day, executable price quotations on the high yield debt
securities, bank loans, warrants, other fixed-income and convertible
securities, including cash and cash equivalents, ETPs and other assets
held by the Fund are available from major broker-dealer firms or on the
exchange on which they are traded, if applicable. The foregoing, intra-
day price information is available through subscription services, such
as Bloomberg and Thomson Reuters, which can be accessed by Authorized
Participants and other investors. The previous day's closing price and
trading volume information for the exchange-traded securities held by
the Fund will be published daily in the financial section of
newspapers. Quotation and last sale information for the exchange-traded
securities held by the Fund will be available via UTP Level 1, as well
as Nasdaq proprietary quote and trade services.
    Information regarding market price and volume of the Shares is and
will be continually available on a real-time basis throughout the day
on brokers' computer screens and other electronic services. The
previous day's closing price and trading volume information for the
Shares will be published daily in the financial section of newspapers.
Quotation and last sale information for the Shares will be available
via UTP Level 1, as well as Nasdaq proprietary quote and trade
services.
Initial and Continued Listing
    The Shares will be subject to Rule 5735, which sets forth the
initial and continued listing criteria applicable to Managed Fund
Shares. The Exchange represents that, for initial and/or continued
listing, the Fund must be in compliance with Rule 10A-3 \24\ under the
Act. A minimum of 100,000 Shares will be outstanding at the
commencement of trading on the Exchange. The Exchange will obtain a
representation from the issuer of the Shares that the NAV per Share
will be calculated daily and that the NAV and the Disclosed Portfolio
will be made available to all market participants at the same time.
---------------------------------------------------------------------------

    \24\ See 17 CFR 240.10A-3.
---------------------------------------------------------------------------

Trading Halts and Trading Pauses
    With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares of the Fund. Nasdaq will halt or pause trading in
the Shares under the conditions specified in Nasdaq Rules 4120 and
4121, including the trading pauses under Nasdaq Rules 4120(a)(11) and
(12). Trading may be halted because of market conditions or for reasons
that, in the view of the Exchange, make trading in the Shares
inadvisable. These may include: (1) The extent to which trading is not
occurring in the securities and/or the financial instruments
constituting the Disclosed Portfolio of the Fund; or (2) whether other
unusual conditions or circumstances detrimental to the maintenance of a
fair and orderly market are present. Trading in the Shares also will be
subject to Rule 5735(d)(2)(D), which sets forth circumstances under
which Shares of the Fund may be halted.
Trading Rules
    Nasdaq deems the Shares to be equity securities, thus rendering
trading in the Shares subject to Nasdaq's existing rules governing the
trading of equity securities. Nasdaq will allow trading in the Shares
from 7:00 a.m. until 8:00 p.m. Eastern time. The Exchange has
appropriate rules to facilitate transactions in the Shares during all
trading sessions. As provided in Nasdaq Rule 5735(b)(3), the minimum
price variation for quoting and entry of orders in Managed Fund Shares
traded on the Exchange is $0.01.
Surveillance
    The Exchange represents that trading in the Shares will be subject
to the existing trading surveillances, administered by both Nasdaq and
also the Financial Industry Regulatory Authority (``FINRA'') on behalf
of the Exchange, which are designed to detect violations of Exchange
rules and applicable federal securities laws.\25\ The Exchange
represents that these procedures are adequate to properly monitor
Exchange trading of the Shares in all trading sessions and to deter and
detect violations of Exchange rules and applicable federal securities
laws.
---------------------------------------------------------------------------

    \25\ FINRA surveils trading on the Exchange pursuant to a
regulatory services agreement. The Exchange is responsible for
FINRA's performance under this regulatory services agreement.
---------------------------------------------------------------------------

    The surveillances referred to above generally focus on detecting
securities trading outside their normal patterns, which could be
indicative of manipulative or other violative activity.

When such situations are detected, surveillance analysis follows and
investigations are opened, where appropriate, to review the behavior of
all relevant parties for all relevant trading violations. In addition,
the Exchange may obtain information from the Trade Reporting and
Compliance Engine (``TRACE''), which is the FINRA-developed vehicle
that facilitates mandatory reporting of over-the-counter secondary
market transactions in eligible fixed income securities.\26\
---------------------------------------------------------------------------

    \26\ All broker/dealers who are FINRA member firms have an
obligation to report transactions in corporate bonds to TRACE.
---------------------------------------------------------------------------

    FINRA, on behalf of the Exchange, will communicate as needed
regarding trading in the Shares or other exchange-traded securities
with other markets and other entities that are ISG members, and FINRA,
on behalf of the Exchange, may obtain trading information regarding
trading in the Shares; exchange-traded fixed income securities;
exchange-traded warrants; exchange-traded convertible securities; ETPs;
or other exchange-traded securities from such markets and other
entities. In addition, the Exchange may obtain information regarding
trading in the Shares; exchange-traded warrants; exchange-traded fixed-
income securities; exchange-traded convertible securities; ETPs; or
other exchange-traded securities from markets and other entities that
are members of ISG or with which the Exchange has in place a
comprehensive surveillance sharing agreement.\27\ FINRA, on behalf of
the Exchange, is able to access, as needed, trade information for
certain fixed income securities, including corporate debt securities
and money market instruments, held by the Fund reported to FINRA's
TRACE.
---------------------------------------------------------------------------

    \27\ For a list of the current members of ISG, see
www.isgportal.org.
---------------------------------------------------------------------------

    In addition, the Exchange also has a general policy prohibiting the
distribution of material, nonpublic information by its employees.
Information Circular
    Prior to the commencement of trading, the Exchange will inform its
members in an Information Circular of the special characteristics and
risks associated with trading the Shares. Specifically, the Information
Circular will discuss the following: (1) The procedures for purchases
and redemptions of Shares in Creation Units (and that Shares are not
individually redeemable); (2) Nasdaq Rule 2111A, which imposes
suitability obligations on Nasdaq members with respect to recommending
transactions in the Shares to customers; (3) how and by whom
information regarding the Intraday Indicative Value and the Disclosed
Portfolio is disseminated; (4) the risks involved in trading the Shares
during the Pre-Market and Post-Market Sessions when an updated Intraday
Indicative Value will not be calculated or publicly disseminated; (5)
the requirement that members deliver a prospectus to investors
purchasing newly issued Shares prior to or concurrently with the
confirmation of a transaction; and (6) trading information.
    In addition, the Information Circular will advise members, prior to
the commencement of trading, of the prospectus delivery requirements
applicable to the Fund. Members purchasing Shares from the Fund for
resale to investors will deliver a prospectus to such investors. The
Information Circular will also discuss any exemptive, no-action and
interpretive relief granted by the Commission from any rules under the
Act.
    Additionally, the Information Circular will reference that the Fund
is subject to various fees and expenses described in the Registration
Statement. The Information Circular will also disclose the trading
hours of the Shares of the Fund and the applicable NAV Calculation Time
for the Shares. The Information Circular will disclose that information
about the Shares of the Fund will be publicly available on the Fund'
Web site.
2. Statutory Basis
    Nasdaq believes that the proposal is consistent with Section 6(b)
of the Act \28\ in general and Section 6(b)(5) of the Act \29\ in
particular in that it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in facilitating transactions in securities, and to
remove impediments to and perfect the mechanism of a free and open
market and a national market system.
---------------------------------------------------------------------------

    \28\ 15 U.S.C. 78f.
    \29\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices in that the
Shares will be listed and traded on the Exchange pursuant to the
initial and continued listing criteria in Nasdaq Rule 5735. The
Exchange believes that its surveillance procedures are adequate to
properly monitor the trading of the Shares on Nasdaq during all trading
sessions and to deter and detect violations of Exchange rules and the
applicable federal securities laws. The Adviser is affiliated with a
broker-dealer and has implemented a ``fire wall'' with respect to such
broker-dealer regarding access to information concerning the
composition and/or changes to the Fund's portfolio. In addition, as
noted above, investors will have ready access to information regarding
the Fund's holdings, the Intraday Indicative Value, the Disclosed
Portfolio, and quotation and last sale information for the Shares. The
Exchange may obtain information via ISG from other exchanges that are
members of ISG or with which the Exchange has entered into a
comprehensive surveillance sharing agreement.
    The proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
that the Exchange will obtain a representation from the issuer of the
Shares that the NAV per share will be calculated daily and that the NAV
and the Disclosed Portfolio will be made available to all market
participants at the same time. In addition, a large amount of
information is publicly available regarding the Fund and the Shares,
thereby promoting market transparency. The Fund's portfolio holdings
will be disclosed on its Web site daily after the close of trading on
the Exchange and prior to the opening of trading on the Exchange the
following day. Moreover, the Intraday Indicative Value, available on
the NASDAQ OMX Information LLC proprietary index data service will be
widely disseminated and broadly displayed at least every 15 seconds
during the Regular Market Session. On each business day, before
commencement of trading in Shares in the Regular Market Session on the
Exchange, the Fund will disclose on its Web site the Disclosed
Portfolio that will form the basis for the Fund's calculation of NAV at
the end of the business day. Information regarding market price and
trading volume of the Shares is and will be continually available on a
real-time basis throughout the day on brokers' computer screens and
other electronic services, and quotation and last sale information for
the Shares will be available via UTP Level 1, as well as Nasdaq
proprietary quote and trade services. Intra-day, executable price
quotations on the high yield debt securities, bank loans, other fixed-
income and convertible securities, including cash and cash equivalents,
ETPs and other assets held by the Fund are available from major broker-
dealer firms or on the exchange on which they are traded, if
applicable. The foregoing

intra-day price information is available through subscription services,
such as Bloomberg and Thomson Reuters, which can be accessed by
Authorized Participants and other investors.
    The Web site for the Fund will include a form of the prospectus for
the Fund and additional data relating to NAV and other applicable
quantitative information. Trading in Shares of the Fund will be halted
if the circuit breaker parameters in Nasdaq Rule 4120(a)(11) have been
reached or because of market conditions or for reasons that, in the
view of the Exchange, make trading in the Shares inadvisable, and
trading in the Shares will be subject to Nasdaq Rule 5735(d)(2)(D),
which sets forth circumstances under which Shares of the Fund may be
halted. In addition, as noted above, investors will have ready access
to information regarding the Fund's holdings, the Intraday Indicative
Value, the Disclosed Portfolio, and quotation and last sale information
for the Shares.
    The proposed rule change is designed to perfect the mechanism of a
free and open market and, in general, to protect investors and the
public interest in that it will facilitate the listing and trading of
an additional type of actively-managed exchange-traded product that
will enhance competition among market participants, to the benefit of
investors and the marketplace. As noted above, the Exchange has in
place surveillance procedures relating to trading in the Shares and may
obtain information via ISG from other exchanges that are members of ISG
or with which the Exchange has entered into a comprehensive
surveillance sharing agreement. In addition, as noted above, investors
will have ready access to information regarding the Fund's holdings,
the Intraday Indicative Value, the Disclosed Portfolio, and quotation
and last sale information for the Shares.
    For the above reasons, Nasdaq believes the proposed rule change is
consistent with the requirements of Section 6(b)(5) of the Act.

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 that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange believes that
the proposed rule change will facilitate the listing and trading of an
additional type of actively-managed exchange-traded fund that will
enhance competition among market participants, to the benefit of
investors and the marketplace.

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

    Written comments were neither solicited nor received.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(a) By order approve or disapprove such proposed rule change; or (b)
institute proceedings to determine whether the proposed rule change
should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2015-095 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2015-095. 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 such filing will also 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-NASDAQ-2015-095 and should
be submitted on or before September 15, 2015.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\30\
---------------------------------------------------------------------------

    \30\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-20937 Filed 8-24-15; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register: April 14, 2006 (Volume 71, Number 72)]
[Notices]
[Page 19509-19510]
[DOCID:fr14ap06-46]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OPP-2005-0545; FRL-7771-7]

Notice of Filing of a Pesticide Petition for Establishment of
Regulations for the Combined Residues of Lambda-Cyhalothrin and Its
Epimer in or on Various Food Commodities

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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

SUMMARY: This notice announces the initial filing of a pesticide
petition proposing the establishment of a regulation for residues of
lambda-cyhalothrin, (S)-alpha-cyano-3-phenoxybenzyl-(Z)-(1R,3R)-3-(2-
chloro-3,3,3-trifluoroprop-1-enyl)-2,2-dimethylcyclopropanecarboxylate
and (R)-alpha-cyano-3-phenoxybenzyl-(Z)-(1S,3S)-3-(2-chloro-3,3,3-
trifluoroprop-1-enyl)-2,2-dimethylcyclopropanecarboxylate and the
epimer of lambda-cyhalothrin, (S)-alpha-cyano-3-phenoxybenzyl-(Z)-
(1S,3S)-3-(2-chloro-3,3,3-trifluoroprop-1-enyl)-2,2-
dimethylcyclopropanecarboxylate and (R)-alpha-cyano-3-phenoxybenzyl-
(Z)-(1S,3S)-3-(2-chloro-3,3,3-trifluoroprop-1-enyl)-2,2-
dimethylcyclopropanecarboxylate in or on various food commodities.

DATES: Comments must be received on or before May 15, 2006.

ADDRESSES: Submit your comments, identified by docket identification
(ID) number EPA-HQ-OPP-2005-0545 and pesticide petition number (PP)
5F6994, by one of the following methods:
     http://www.regulations.gov/. Follow the on-line

instructions for submitting comments.
     Mail: Public Information and Records Integrity Branch
(PIRIB) (7502C), Office of Pesticide Programs (OPP), Environmental
Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-
0001.
     Hand Delivery: Public Information and Records Integrity
Branch (PIRIB) (7502C), Office of Pesticide Programs (OPP),
Environmental Protection Agency, Rm. 119, Crystal Mall 2, 1801
S. Bell St., Arlington, VA, Attention: Docket ID number EPA-HQ-OPP-
2005-0545. The docket facility is open from 8:30 a.m. to 4 p.m., Monday
through Friday, excluding legal holidays. The telephone number for the
docket facility is<PHONE_NUMBER>. Such deliveries are only accepted
during the Docket's normal hours of operation, and special arrangements
should be made for deliveries of boxed information.
    Instructions: Direct your comments to docket ID numberEPA-HQ-OPP-
2005-0545. EPA's policy is that all comments received will be included
in the public docket without change and may be made available on-line
at http://www.regulations.gov/, including any personal information

provided, unless the comment includes information claimed to be
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Do not submit information that you
consider to be CBI or otherwise protected through regulations.gov or e-
mail. The http://www.regulations.gov Web site is an ``anonymous access''

system, which means EPA will not know your identity or contact
information unless you provide it in the body of your comment. If you
send an e-mail comment directly to EPA without going through
regulations.gov, your e-mail address will be captured automatically and
included as part of the comment that is placed in the public docket and
made available on the Internet. If you submit an electronic comment,
EPA recommends that you include your name and other contact information
in the body of your comment and with any disk or CD ROM you submit. If
EPA cannot read your comment due to technical difficulties and cannot
contact you for clarification, EPA may not be able to consider your
comment. Electronic files should avoid the use of special characters,
any form of encryption, and be free of any defects or viruses. For
additional information about EPA's public docket, visit the EPA Docket
Center homepage at http://www.epa.gov/epahome/dockets.htm/.

    Docket. All documents in the docket are listed in the
regulation.gov index. Although listed in the index, some information is
not publicly available, e.g., CBI or other information whose disclosure
is restricted by statute. Certain other material, such as copyrighted
material, will be publicly available only in hard copy. Publicly
available docket materials are available either electronically at
http://www.regulations.gov or in hard copy at the Public Information

and Records Integrity Branch (PIRIB) (7502C), Office of Pesticide
Programs (OPP), Environmental Protection Agency, Rm. 119, Crystal Mall
2, 1801 S. Bell St., Arlington, VA. The Docket Facility is
open from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal
holidays. The Docket telephone number is<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Bonaventure Akinlosotu, Registration
Division (7505C), Office of Pesticide Programs, Environmental
Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-
0001; telephone number:<PHONE_NUMBER>; e-mail address:
<EMAIL_ADDRESS>

SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this Action Apply to Me?

    You may be potentially affected by this action if you are an
agricultural producer, food manufacturer, or pesticide manufacturer.
Potentially affected entities may include, but are not limited to:
     Crop production (NAICS code 111).
     Animal production (NAICS code 112).
     Food manufacturing (NAICS code 311).
     Pesticide manufacturing (NAICS code 32532).
    This listing is not intended to be exhaustive, but rather provides
a guide for readers regarding entities likely to be affected by this
action. Other types of entities not listed in this unit could also be
affected. The North American Industrial Classification System (NAICS)
codes have been provided to assist you and others in determining
whether this action might apply to certain entities. If you have any
questions regarding the applicability of this action to a particular
entity, consult the person listed under FOR FURTHER INFORMATION
CONTACT.

B. What Should I Consider as I Prepare My Comments for EPA?

    1. Submitting CBI. Do not submit this information to EPA through
regulations.gov or e-mail. Clearly mark the part or all of the
information that you claim to be CBI. For CBI information in a disk or
CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as
CBI and then identify electronically within the disk or CD ROM the
specific information that is claimed as CBI. In addition to one
complete version of the comment that includes information claimed as
CBI, a copy of the comment that does not contain the information
claimed as CBI

must be submitted for inclusion in the public docket. Information so
marked will not be disclosed except in accordance with procedures set
forth in 40 CFR part 2.
    2. Tips for preparing your comments. When submitting comments,
remember to:
    i. Identify the document by docket number and other identifying
information (subject heading, Federal Register date and page number).
    ii. Follow directions. The Agency may ask you to respond to
specific questions or organize comments by referencing a Code of
Federal Regulations (CFR) part or section number.
    iii. Explain why you agree or disagree; suggest alternatives and
substitute language for your requested changes.
    iv. Describe any assumptions and provide any technical information
and/or data that you used.
    v. If you estimate potential costs or burdens, explain how you
arrived at your estimate in sufficient detail to allow for it to be
reproduced.
    vi. Provide specific examples to illustrate your concerns, and
suggest alternatives.
    vii. Explain your views as clearly as possible, avoiding the use of
profanity or personal threats.
    viii. Make sure to submit your comments by the comment period
deadline identified.

II. What Action is the Agency Taking?

    EPA is printing a summary of a pesticide petition received under
section 408 of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21
U.S.C. 346a, proposing the establishment or amendment of regulations in
40 CFR part 180 for residues of the pesticide lambda-cyhalothrin and
its epimer in or on various food commodities. EPA has determined that
this pesticide petition contains data or information regarding the
elements set forth in FFDCA section 408(d)(2); however, EPA has not
fully evaluated the sufficiency of the submitted data at this time or
whether the data support granting of the pesticide petition. Additional
data may be needed before EPA rules on this pesticide petition.
    Pursuant to 40 CFR 180.7(f), a summary of the petition included in
this notice, prepared by the petitioner along with a description of the
analytical method available for the detection and measurement of the
pesticide chemical residues is available on EPA's Electronic Docket at
http://www.regulations.gov/. To locate this information on the home

page of EPA's Electronic Docket, select ``Quick Search'' and type
``EPA-HQ-OPP-2005-0545.'' Once the search has located the docket,
clicking on the docket ID number will bring up a list of all documents
in the docket for the pesticide including the petition summary.

New Tolerance

    PP 5F6994. Syngenta Crop Protection, Inc., 410 Swing Road,
Greensboro, NC 27409; and the Interregional Project No. 4 (IR-4), 681
U.S. Highway 1 South, North Brunswick, NJ 08902-3390, proposes
to establish tolerances, for the combined residues of the insecticide
lambda-cyhalothrin, (S)-alpha-cyano-3-phenoxybenzyl-(Z)-(1R,3R)-3-(2-
chloro-3,3,3-trifluoroprop-1-enyl)-2,2-dimethylcyclopropanecarboxylate
and (R)-alpha-cyano-3-phenoxybenzyl-(Z)-(1S, 3S)-3-(2-chloro-3,3,3-
trifluoroprop-1-enyl)-2,2-dimethylcyclopropanecarboxylate and the
epimer of lambda-cyhalothrin, (S)-alpha-cyano-3-phenoxybenzyl- (Z)-
(1S,3S)-3-(2-chloro-3,3,3-trifluoroprop-1-enyl)-2,2-
dimethylcyclopropanecarboxylate and (R)-alpha-cyano-3-phenoxybenzyl-
(Z)-(1S,3S)-3-(2-chloro-3,3,3-trifluoroprop-1-enyl)-2,2-
dimethylcyclopropanecarboxylate in or on food commodity crop groupings:
Cucurbit vegetables (Crop Group 9) at 0.05 parts per million (ppm);
grass, forage, fodder, hay (Crop Group 17) at 9.0 ppm; tuberous and
corm vegetables (Crop Subgroup 1-C) at 0.01 ppm; barley, buckwheat,
oat, rye, grain at 0.05 ppm; barley, bran at 0.2 ppm; oat, rye, forage
at 2.0 ppm; barley, oat, hay at 2.0 ppm; barley, oat, rye, straw at 2.0
ppm; and wild rice, grain at 1.0 ppm. An adequate analytical method,
gas liquid chromatography (GLC) with an electron capture detector
(ECD), is available for enforcement purposes.

List of Subjects

    Environmental protection, Agricultural commodities, Feed additives,
Food additives, Pesticides and pests, Reporting and recordkeeping
requirements.

    Dated: April 6, 2006.
Donald R. Stubbs,
Acting Director, Registration Division, Office of Pesticide Programs.
[FR Doc. E6-5506 Filed 4-13-06; 8:45 am]

BILLING CODE 6560-50-S


[Federal Register Volume 85, Number 86 (Monday, May 4, 2020)]
[Notices]
[Pages 26464-26466]
[FR Doc No: 2020-09369]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OPPT-2019-0502; FRL-10008-63]

Perchloroethylene; Draft Toxic Substances Control Act (TSCA) Risk
Evaluation and TSCA Science Advisory Committee on Chemicals (SACC)
Meetings; Notice of Availability, Public Meetings, and Request for
Comment

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: EPA is announcing the availability of and soliciting public
comment on the draft Toxic Substances Control Act (TSCA) risk
evaluation of perchloroethylene. EPA is also submitting the same
document to the TSCA Science Advisory Committee on Chemicals (SACC) for
peer review and is announcing that there will be two virtual public
meetings of the TSCA SACC, with participation by phone and webcast
only, and no in-person gathering. The first virtual public meeting will
be a preparatory meeting for the SACC to consider the scope and clarity
of the draft charge questions for the peer review. This will be
followed by the peer review public virtual meeting for the SACC to
consider and review the draft risk evaluation. The purpose of
conducting risk evaluations under TSCA is to determine whether a
chemical substance presents an unreasonable risk of injury to health or
the environment under the conditions of use, including an unreasonable
risk to a relevant potentially exposed or susceptible subpopulation.

DATES:
    Preparatory Virtual Meeting: Will be held on May 5, 2020, from 1:00
p.m. to approximately 4:00 p.m. (EDT). You must register online on or
before May 5, 2020, to receive the webcast meeting link and audio
teleconference information. Submit your comments for the preparatory
virtual meeting, or request time to present oral comments, on or before
noon, May 1, 2020.
    Peer Review Public Virtual Meeting: Will be held on May 26-29,
2020, from 10:00 a.m. to approximately 5:00 p.m. (EDT) (as needed,
updated times for each day may be provided in the meeting agenda that
will be posted in the docket at http://www.regulations.gov and the TSCA
SACC website at http://www.epa.gov/tsca-peer-review). You must register
online to receive the webcast meeting link and audio teleconference
information. To make oral comments during the peer review virtual
public meeting, please register by noon on May 20, 2020, to be included
on the meeting agenda. Any written comments submitted on the draft risk
evaluation on or before May 20, 2020, will be provided to the TSCA SACC
committee for their consideration before the meeting. Comments received
after May 20, 2020, and prior to the oral public comment period during
the meeting will be available to the SACC for their consideration
during the meeting. All comments received by the end of the comment
period will be considered by EPA.
    Comments: All comments on the draft risk evaluation must be
received on or before July 6, 2020. For additional instructions, see
Unit III. of the SUPPLEMENTARY INFORMATION.

ADDRESSES:
    Virtual Meetings: Please visit http://www.epa.gov/tsca-peer-review
to register. You must register online to receive the webcast meeting
link and audio teleconference information for participation.
    Comments: Submit your comments, identified by docket identification
(ID) number EPA-HQ-OPPT-2019-0502, using the Federal eRulemaking Portal
at http://www.regulations.gov. Follow the online instructions for
submitting comments. Do not submit electronically any information you
consider to be Confidential Business Information (CBI) or other
information whose disclosure is restricted by statute.
    Docket: Docket materials are publicly available online at https://www.regulations.gov under docket ID number EPA-HQ-OPPT-2019-0502.
Please note, that due to the public health emergency, the EPA Docket
Center and Reading Room was closed to public visitors on March 31,
2020, and there is a temporary suspension of mail delivery to EPA
(including hand deliveries). Our Docket Center staff will continue to
provide customer service via email, phone, and webform. For further
information on EPA Docket Center services, docket contact information
and the current status of the EPA Docket Center and Reading Room,
please visit https://www.epa.gov/dockets.
    Requests to present oral comments and requests for special
accommodations: Submit requests for special accommodations, or requests
to present oral comments during the virtual meetings to the Designated
Federal Official (DFO) listed under FOR FURTHER INFORMATION CONTACT by
the deadline identified in the DATES section.

FOR FURTHER INFORMATION CONTACT: TSCA SACC: Tamue Gibson, DFO, Office
of Science Coordination and Policy (7201M), Environmental Protection
Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001; telephone
number:<PHONE_NUMBER>; email address<EMAIL_ADDRESS>    Draft Risk Evaluation: Dr. Stan Barone, Office of Pollution
Prevention and Toxics (7403M), Environmental Protection Agency, 1200
Pennsylvania Ave. NW, Washington, DC 20460-0001; telephone number:
(202) 564-1169; email address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this action apply to me?

    This action is directed to the public in general. This action may
be of interest to persons who are or may be required to conduct testing
and those interested in risk evaluations of chemical substances under
TSCA, 15 U.S.C. 2601 et seq. Since other entities may also be
interested in this draft risk evaluation, the EPA has not attempted to
describe all the specific entities that may be affected by this action.

B. What is EPA's authority for taking this action?

    TSCA section 6, 15 U.S.C. 2605, requires EPA to conduct risk
evaluations to ``determine whether a chemical substance presents an
unreasonable risk of injury to health or the environment, without
consideration of costs or other nonrisk factors, including an
unreasonable risk to a potentially exposed or susceptible subpopulation
identified as relevant to the risk evaluation by the Administrator,
under the conditions of use.'' 15 U.S.C. 2605(b)(4)(A). TSCA sections
6(b)(4)(A) through (H) enumerate the deadlines and minimum requirements
applicable to this process, including provisions that provide
instruction on chemical substances that must undergo evaluation, the
minimum components of a TSCA risk evaluation, and the timelines for
public comment and completion of the risk evaluation. TSCA also
requires that EPA operate in a manner that is consistent with the best
available science, make decisions based on the weight of the scientific
evidence and consider reasonably available information. 15 U.S.C.
2625(h), (i), and (k).
    The statute identifies the minimum components for all chemical
substance risk evaluations. For each risk evaluation, EPA must publish
a document that outlines the scope of the risk evaluation to be
conducted, which includes the hazards, exposures, conditions of use,
and the potentially

exposed or susceptible subpopulations that EPA expects to consider. 15
U.S.C. 2605(b)(4)(D). The statute further provides that each risk
evaluation must also: (1) Integrate and assess available information on
hazards and exposures for the conditions of use of the chemical
substance, including information that is relevant to specific risks of
injury to health or the environment and information on relevant
potentially exposed or susceptible subpopulations; (2) describe whether
aggregate or sentinel exposures were considered and the basis for that
consideration; (3) take into account, where relevant, the likely
duration, intensity, frequency, and number of exposures under the
conditions of use; and (4) describe the weight of the scientific
evidence for the identified hazards and exposures. 15 U.S.C.
2605(b)(4)(F)(i)-(ii) and (iv)-(v). Each risk evaluation must not
consider costs or other nonrisk factors. 15 U.S.C. 2605(b)(4)(F)(iii).
    The statute requires that the risk evaluation process last no
longer than three years, with a possible additional six-month
extension. 15 U.S.C. 2605(b)(4)(G). The statute also requires that the
EPA allow for no less than a 30-day public comment period on the draft
risk evaluation, prior to publishing a final risk evaluation. 15 U.S.C.
2605(b)(4)(H).

C. What action is EPA taking?

    EPA is announcing the availability of and seeking public comment on
the draft risk evaluation of the chemical substance identified in Unit
II. EPA is seeking public comment on all aspects of the draft risk
evaluation, including any preliminary conclusions, findings, and
determinations, and the submission of any additional information that
might be relevant to the draft risk evaluation, including the science
underlying the risk evaluation and the outcome of the systematic review
associated with the chemical substance. This 60-day comment period on
the draft risk evaluation satisfies TSCA section 6(b)(4)(H), which
requires EPA to ``provide no less than 30 days public notice and an
opportunity for comment on a draft risk evaluation prior to publishing
a final risk evaluation'' and 40 CFR 702.49(a), which states that ``EPA
will publish a draft risk evaluation in the Federal Register, open a
docket to facilitate receipt of public comment, and provide no less
than a 60-day comment period, during which time the public may submit
comment on EPA's draft risk evaluation.'' In addition to any new
comments on the draft risk evaluation, the public should resubmit or
clearly identify any previously filed comments, modified as
appropriate, that are relevant to the draft risk evaluation and that
the submitter feels have not been addressed. EPA does not intend to
respond to comments submitted prior to the release of the draft risk
evaluation unless they are clearly identified in comments on the draft
risk evaluation.
    EPA is also submitting the draft risk evaluation and associated
supporting documents to the TSCA SACC for peer review and announcing
the meeting for the peer review panel. All comments submitted to the
docket on the draft risk evaluation by the deadline identified in the
DATES section will be provided for consideration to the TSCA SACC peer
review panel, which will have the opportunity to consider the comments
during its discussions.

D. What should I consider as I prepare my comments for EPA?

    1. Submitting CBI. Do not submit this information to EPA through
regulations.gov or email. Clearly mark the part or all of the
information that you claim to be CBI. For CBI information in a disk or
CD-ROM that you mail to EPA, mark the outside of the disk or CD-ROM as
CBI and then identify electronically within the disk or CD-ROM the
specific information that is claimed CBI. In addition to one complete
version of the comment that includes information claimed as CBI, a copy
of the comment that does not contain the information claimed as CBI
must be submitted for inclusion in the public docket. Information so
marked will not be disclosed except in accordance with procedures set
forth in 40 CFR part 2.
    2. Tips for preparing your comments. When preparing and submitting
your comments, see the commenting tips at http://www.epa.gov/dockets/comments.html.

II. Draft TSCA Risk Evaluation

A. What is EPA's risk evaluation process for existing chemicals under
TSCA?

    The risk evaluation process is the second step in EPA's existing
chemical process under TSCA, following prioritization and before risk
management. As this chemical is one of the first ten chemical
substances undergoing risk evaluation, the chemical substance was not
required to go through prioritization (81 FR 91927, December 19, 2016)
(FRL-9956-47). The purpose of conducting risk evaluations is to
determine whether a chemical substance presents an unreasonable risk of
injury to health or the environment, under the conditions of use,
including an unreasonable risk to a relevant potentially exposed or
susceptible subpopulation. As part of this process, EPA must evaluate
both hazard and exposure, not consider costs or other nonrisk factors,
use reasonably available information and approaches in a manner that is
consistent with the requirements in TSCA for the use of the best
available science, and ensure decisions are based on the weight of
scientific evidence.
    The specific risk evaluation process that EPA has established by
rule to implement the statutory process is set out in 40 CFR part 702
and summarized on EPA's website at http://www.epa.gov/assessing-and-managing-chemicals-under-tsca/risk-evaluations-existing-chemicals-under-tsca. As explained in the preamble to EPA's final rule on
procedures for risk evaluation (82 FR 33726, July 20, 2017) (FRL-9964-
38), the specific regulatory process set out in 40 CFR part 702,
subpart B will be followed for the first ten chemical substances
undergoing risk evaluation to the maximum extent practicable.

B. What is perchloroethylene?

    Perchloroethylene has a wide range of uses, including production of
fluorinated compounds, and as a solvent in dry cleaning and vapor
degreasing. A variety of consumer and commercial products use
perchloroethylene such as adhesives (arts and crafts, as well as light
repairs), aerosol degreasing, brake cleaners, aerosol lubricants,
sealants, stone polish, stainless steel polish and wipe cleaners.
Perchloroethylene is subject to federal and state regulations and
reporting requirements. Leading applications of perchloroethylene
include manufacturing, solvents for cleaning and degreasing,
lubricants, adhesives and sealants, cleaning and furniture care
products. EPA evaluated the conditions of use associated with the
manufacturing, processing, distribution in commerce, industrial,
commercial and consumer use and disposal of perchloroethylene. The
yearly aggregate production volume ranged from 388 to 324 million
pounds between 2012 and 2015.
    Information about the problem formulation and scope phases of the
TSCA risk evaluation for this chemical is available at https://www.epa.gov/assessing-and-managing-chemicals-under-tsca/risk-evaluation-perchloroethylene.

III. TSCA SACC

A. What is the purpose of the TSCA SACC?

    The TSCA SACC was established by EPA in 2016 and operates in
accordance with the Federal Advisory Committee Act (FACA), 5 U.S.C.
Appendix 2 et seq. The TSCA SACC provides expert independent scientific
advice and consultation to the EPA on the scientific and technical
aspects of risk assessments, methodologies, and pollution prevention
measures and approaches for chemicals regulated under TSCA.
    The TSCA SACC is comprised of experts in: Toxicology; human health
and environmental risk assessment; exposure assessment; and related
sciences (e.g., synthetic biology, pharmacology, biotechnology,
nanotechnology, biochemistry, biostatistics, physiologically based
pharmacokinetic modelling (PBPK) modeling, computational toxicology,
epidemiology, environmental fate, and environmental engineering and
sustainability). When needed, the committee will be assisted in their
reviews by ad hoc participants with specific expertise in the topics
under consideration.

B. How can I access the TSCA SACC documents?

    EPA's background documents, related supporting materials, and draft
charge questions to the TSCA SACC are available on the TSCA SACC
website and in the docket established for the specific chemical
substance. In addition, EPA will provide additional background
documents (e.g., TSCA SACC members participating in this meeting and
the meeting agenda) as the materials become available. You may obtain
electronic copies of these documents, and certain other related
documents that might be available, in the docket at http://www.regulations.gov and the TSCA SACC website at http://www.epa.gov/tsca-peer-review.
    After the public meeting, the TSCA SACC will prepare meeting
minutes summarizing its recommendations to the EPA. The meeting minutes
will be posted on the TSCA SACC website and in the relevant docket.

C. What do I need to know about the TSCA SACC public meetings?

    The focus of the public meetings is to peer review EPA's draft risk
evaluation. After the peer review process, EPA will consider peer
reviewer comments and recommendations and public comments, in
finalizing the risk evaluation. The draft risk evaluation contains:
Discussion of chemistry and physical-chemical properties;
characterization of conditions of use; environmental fate and transport
assessment; human health exposures; environmental hazard assessment;
risk characterization; risk determination; and a detailed description
of the systematic review process developed by the Office of Pollution
Prevention and Toxics to search, screen, and evaluate scientific
literature for use in the risk evaluation process.

D. How do I participate in the public meetings?

    You may participate in the public meetings by following the
instructions in this unit. To ensure proper receipt by EPA, it is
imperative that you identify the corresponding docket ID number in the
subject line on the first page of your request.
    1. Preparatory virtual meeting. The preparatory virtual meeting
will be conducted via webcast and telephone. You may participate in the
preparatory virtual meeting by registering to join the webcast. You may
also submit written or oral comments.
    i. Registration. You must register to participate in the
preparatory virtual meeting. To participate by listening or making a
comment during this meeting, please go to the EPA website to register:
http://www.epa.gov/tsca-peer-review. Registration online will be
confirmed by an email that will include the webcast meeting link and
audio teleconference information.
    ii. Written comments. Written comments for consideration during the
preparatory virtual meeting should be submitted, using the instructions
in ADDRESSES and this unit, on or before the date set in the DATES
section.
    iii. Oral comments. Requests to make brief oral comments to the
TSCA SACC during the preparatory virtual meeting should be submitted
when registering online or with the DFO listed under FOR FURTHER
INFORMATION CONTACT on or before noon on the date set in the DATES
section. Oral comments before the TSCA SACC during the preparatory
virtual meeting are limited to approximately 5 minutes due to the time
constraints of this virtual meeting.
    2. Peer review public virtual meeting. The peer review public
virtual meeting will be conducted via webcast and telephone. You may
participate in the peer review public virtual meeting by registering to
join the webcast. You may also submit written or oral comments.
    i. Registration. You must register to participate in the peer
review public virtual meeting. To participate by listening or making a
comment during this meeting, please go to the EPA website to register:
http://www.epa.gov/tsca-peer-review. Registration online will be
confirmed by an email that will include the webcast meeting link and
audio teleconference information.
    ii. Written comments. To provide the TSCA SACC the time necessary
to consider and review your comments, written comments for
consideration during the peer review public virtual meeting should be
submitted, using the instructions in ADDRESSES and this unit, on or
before the date set in the DATES section. Comments received after the
date set in the DATES section and prior to the end of the oral public
comment period during the meeting will still be provided to the TSCA
SACC for their consideration.
    iii. Oral comments. To be included on the meeting agenda, requests
to make brief oral comments to the TSCA SACC during the peer review
public virtual meeting should be submitted when registering online or
with the DFO listed under FOR FURTHER INFORMATION CONTACT on or before
noon on the date set in the DATES section. The request should identify
the name of the individual making the presentation, and the
organization (if any) the individual will represent. Oral comments
before the TSCA SACC during the peer review public virtual meeting are
limited to approximately 5 minutes. In addition, each speaker should
email their comments and presentation to the DFO listed under FOR
FURTHER INFORMATION CONTACT, preferably, at least 24 hours prior to the
oral public comment period.

    Authority: 15 U.S.C. 2601 et seq.

Andrew Wheeler,
Administrator.
[FR Doc. 2020-09369 Filed 5-1-20; 8:45 am]
BILLING CODE 6560-50-P