[Federal Register: May 19, 2010 (Volume 75, Number 96)]
[Notices]
[Page 28082-28083]
[DOCID:fr19my10-112]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62081; File No. SR-NASDAQ-2010-058]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Modify Fees for Members Using the NASDAQ Market Center

May 11, 2010.
    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 May 3, 2010, The NASDAQ Stock Market LLC (``NASDAQ'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change as described in Items I, II, and III below, which Items have
been prepared by NASDAQ. Pursuant to Section 19(b)(3)(A)(ii) of the Act
\3\ and Rule 19b-4(f)(2) thereunder,\4\ NASDAQ has designated this
proposal as establishing or changing a due, fee, or other charge, which
renders the proposed rule change effective upon filing. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

    NASDAQ proposes to modify pricing for NASDAQ members using the
NASDAQ Market Center. NASDAQ will implement the proposed change on May
3, 2010. The text of the proposed rule change is available at http://
nasdaqomx.cchwallstreet.com/, at NASDAQ's principal office, and at the
Commission's Public Reference Room.

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

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

1. Purpose
    In response to announced execution rate changes at the New York
Stock Exchange (``NYSE''), NASDAQ is making minor modifications to its
pricing schedule for the routing of orders through the NASDAQ Market
Center. First, NASDAQ is increasing the per share credits and fees for
members using the STGY, SCAN, SKNY, SKIP, or DOTI routing strategies to
either add liquidity or execute at the NYSE.\5\ The credit for orders
adding liquidity after routing will increase to $0.0013 from $0.0010
per share. The fee for other orders will increase to $0.0021 from
$0.0018 per share. For orders using these strategies that execute in
destinations other than the NYSE (or NASDAQ OMX BX, in the case of DOTI
orders), the fee will remain $0.0030 per share executed.\6\
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    \5\ Orders designated to use these routing strategies check the
NASDAQ book for the full size of the order prior to routing. The
terms and conditions of NASDAQ's routing strategies are described in
NASDAQ Rule 4758.
    \6\ For DOTI orders that execute in NASDAQ OMX BX, NASDAQ will
continue to pass through fees and rebates associated with order
execution on that venue.
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    Second, NASDAQ is modifying the fees for members using the TFTY or
MOPP routing strategies, and directed orders that execute in a venue
other than the NASDAQ Market Center as

follows: (1) The fees for directed orders designated as Intermarket
Sweep Orders that execute at the NYSE will increase to $0.0023 from
$0.0020 per share executed; (2) The fee for other directed orders that
execute at the NYSE will increase to $0.0022 from $0.0019 per share
executed for members with an average daily volume through the NASDAQ
Market Center in all securities during the month of more than 35
million shares of liquidity provided; (3) The fee for all for other
directed orders that execute at the NYSE from members that do not reach
the 35 million threshold will increase to $0.0023 from $0.0020 per
share; (4) The fee for MOPP orders that execute at the NYSE will
increase to $0.0023 from $0.0020 per share; and (5) The fee for TFTY
orders that execute at the NYSE will increase to $0.0017 from $0.0014
per share. All other fees and pass-through fees remain unchanged.
2. Statutory Basis
    NASDAQ believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\7\ in general, and with Section
6(b)(4) of the Act,\8\ in particular, in that it provides for the
equitable allocation of reasonable dues, fees and other charges among
members and issuers and other persons using any facility or system
which NASDAQ operates or controls. The impact of the modest price
increases upon the net fees paid by a particular market participant
will depend upon a number of variables, including the routing
strategies that it uses, the relative availability of liquidity on
NASDAQ and other venues, the prices of the market participant's quotes
and orders relative to the national best bid and offer (i.e., its
propensity to add or remove liquidity), and the types of securities
that it trades. NASDAQ notes that it operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee levels at a particular venue to be
excessive. Accordingly, if particular market participants object to the
proposed fee increases, they can avoid paying the fees by directing
orders to other venues or using routing strategies and order types that
are not subject to the increases. NASDAQ believes that its fees
continue to be reasonable and equitably allocated to members on the
basis of whether they opt to direct orders to NASDAQ.
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    NASDAQ does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended. Because the market
for order execution and routing is extremely competitive, members may
readily direct orders to NASDAQ's competitors if they object to the
proposed rule change.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act \9\ and subparagraph (f)(2) of Rule 19b-4
thereunder.\10\ At any time within 60 days of the filing of the
proposed rule change, the Commission may summarily abrogate such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2010-058 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2010-058. This
file number should be included on the subject line if e-mail is used.
    To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for Web site
viewing and printing in the Commission's Public Reference Room on
official business days between the hours of 10 a.m. and 3 p.m. Copies
of such filing also will be available for inspection and copying at the
principal offices of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NASDAQ-2010-058, and should be submitted on or before
June 9, 2010.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010-11936 Filed 5-18-10; 8:45 am]
BILLING CODE 8010-01-P


[Federal Register Volume 84, Number 226 (Friday, November 22, 2019)]
[Notices]
[Pages 64595-64600]
[FR Doc No: 2019-25308]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 33687; File No. 812-14626-01]

AMG Pantheon Master Fund, LLC, et al.

November 18, 2019.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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    Notice of application for an order under section 17(d) of the
Investment Company Act of 1940 (the ``Act'') and rule 17d-1 under the
Act to permit certain joint transactions otherwise prohibited by
section 17(d) of the Act and rule 17d-1 under the Act.

Summary of Application:  Applicants request an order to permit closed-
end management investment companies to co-invest in portfolio companies
with each other and with certain affiliated investment funds.

Applicants:  AMG Pantheon Master Fund, LLC (the ``Existing Registered
Fund'' or the ``Fund''), AMG Pantheon Subsidiary Fund, LLC (the
``Wholly-Owned Subsidiary''), Pantheon Ventures (US) LP, Pantheon
Ventures (UK) LLP (individually or collectively, ``Pantheon''),
Pantheon Asia Fund VI, L.P., Pantheon Emerging Asia Fund VI, L.P.,
Pantheon Emerging Markets Fund (Ex-Asia), L.P., Pantheon Global
Infrastructure Fund II, L.P., Pantheon Global Secondary Fund IV, L.P.,
Pantheon Global Secondary Fund V, L.P., Pantheon USA Fund VIII, L.P.,
Pantheon USA Fund IX, L.P., Pantheon USA Small Funds Program IX, L.P.,
Pantheon Global Co-Investment Opportunities Fund II, L.P., Pantheon
Global Co-Investment Opportunities Fund III, L.P., Pantheon Access
(US), L.P., Pantheon Access (ERISA), L.P., Pantheon Multi-Strategy
Program 2014 (US), L.P., Pantheon Multi-Strategy Program 2014 (ERISA),
L.P., BVK Private Equity 2011, L.P., BVK Private Equity 2014, L.P.,
Industriens Vintage Infrastructure, L.P., Industriens Vintage
Infrastructure II, L.P., Pantheon Global Secondary Fund IV OPERS, L.P.,
Pantheon Global GT Fund, L.P., Pantheon Global HO Fund, L.P., Pantheon
Global Secondary Fund IV KSA, L.P., Pantheon Global Real Assets GT
Fund, L.P., Pantheon Global Real Assets HO Fund, L.P., Global
Infrastructure 2015-K, L.P., Pantheon Global Infrastructure Fund II
NPS, L.P., Pantheon Global Infrastructure Fund III NPS, L.P., Psagot-
Pantheon 1, L.P., Sacramento County Employees' Retirement System
Secondary Infrastructure and Real Assets Fund, LLC, KFH Strategic
Private Investments, L.P., KGT Strategic Private Investments, L.P.,
Pantheon Real Assets Opportunities Fund, L.P., Pantheon/VA NRP, LP,
Pantheon Global Infrastructure EUR Investments Unit Trust, Pantheon
Global Infrastructure USD Investments Unit Trust, Pantheon Global
Infrastructure Investments Fund (Cayman) LP, PGIF III Co-mingled Fund,
L.P., VA-Pantheon Infrastructure II, LP, Pantheon G Infrastructure
Opportunities LP, Amalienborg Vintage Infrastructure K/S, Global
Infrastructure 2015-K Holdings, L.P., Pantheon Global Co-Investment
Opportunities Fund, L.P., Pantheon Global Co-Investment Opportunities
Fund II (Sidecar), L.P., Pantheon Global Secondary Holdings, L.P.,
Pantheon Global Secondary Holdings II, L.P., Pantheon GT Holdings,
L.P., Pantheon HO Holdings, L.P., SCERS SIRF (Holdings), LLC, Pantheon
Multi-Strategy Primary Program 2014, L.P., Pantheon Multi-Strategy
Secondary Program 2014, L.P., Pantheon Multi-Strategy Co-Investment
Program 2014, L.P., Pantheon Access Primary Program, L.P., Pantheon
Access Secondary Program, L.P., Pantheon Access Co-Investment Program,
L.P., Pantheon Strategic Investments A, L.P., Pantheon G Infrastructure
Holdings LP, BVK Private Equity 2018, L.P., Lincoln Brook Opportunities
Fund, L.P., Pantheon Global Infrastructure Fund II (Luxembourg) SCSP,
Pantheon Access (Luxembourg) SLP SICAV SIF, Pantheon Multi-Strategy
Program 2014 (Luxembourg) SLP SICAV SIF, PGCO IV Co-Mingled Fund SCSP,
ASGA Global Infrastructure L.P., CPEG-Pantheon Infrastructure L.P.,
Solutio Premium Private Equity VI Master SCSP, Solutio Premium Private
Equity VII Master SCSP, Solutio Premium Private Debt I SCSP and
Pantheon Global Secondary Fund VI SCSP (the ``Existing Affiliated
Funds,'' and together with the Existing Registered Fund, the Wholly-
Owned Subsidiary and Pantheon, the ``Applicants'').

Filing Dates:  The application was filed on March 15, 2016, and amended
on December 29, 2017, December 27, 2018, September 5, 2019 and October
30, 2019.

Hearing or Notification of Hearing:  An order granting the requested
relief will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicants with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on December 12, 2019, and

should be accompanied by proof of service on applicants, in the form of
an affidavit or, for lawyers, a certificate of service. Pursuant to
rule 0-5 under the Act, hearing requests should state the nature of the
writer's interest, any facts bearing upon the desirability of a hearing
on the matter, the reason for the request, and the issues contested.
Persons who wish to be notified of a hearing may request notification
by writing to the Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
St. NE, Washington, DC 20549-1090. Applicants: 600 Steamboat Road,
Suite 300, Greenwich, CT 06830.

FOR FURTHER INFORMATION CONTACT: Bruce R. MacNeil, Senior Counsel, at
(202) 551-6817, or Kaitlin C. Bottock, Branch Chief, at<PHONE_NUMBER>
(Division of Investment Management, Chief Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's website by searching for the file number, or for an
applicant using the Company name box, at http://www.sec.gov/search/search.htm or by calling<PHONE_NUMBER>.

Applicants' Representations

    1. The Existing Registered Fund \1\ is a Delaware limited liability
company that is registered as a closed-end management investment
company under the Act. The Fund's investment objective is to seek long-
term capital appreciation by investing in private equity investments.
The board of directors of the Fund (the ``Board'') \2\ is currently
comprised of four members, three of whom are not ``interested persons''
within the meaning of Section 2(a)(19) of the 1940 Act (the
``Independent Directors''),\3\ of the Fund.
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    \1\ The Existing Registered Fund and any Future Registered Fund
are referred to collectively as the ``Registered Funds.'' The term
``Future Registered Fund'' means any closed-end management
investment company (a) that is registered under the Act, (b) whose
investment adviser is an Investment Adviser (defined below), and (c)
that intends to participate in Co-Investment Transactions (defined
below). The term ``Investment Adviser'' means (a) Pantheon and (b)
any future investment adviser that controls, is controlled by or is
under common control with Pantheon and is registered as an
investment adviser or is an exempt reporting adviser under the
Investment Advisers Act of 1940, as amended (the ``Advisers Act'').
    \2\ The term ``Board'' means the board of directors of the
Existing Registered Fund as well as the board of directors or
trustees of any Future Registered Fund.
    \3\ The ``Independent Directors'' means the members of a Board
who are not ``interested persons'' of a Registered Fund within the
meaning of Section 2(a)(19) of the 1940 Act.
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    2. Each of the Existing Affiliated Funds would be an investment
company but for section 3(c)(1) or 3(c)(7) of the Act.
    3. Pantheon Ventures (US) LP is a limited partnership organized
under the laws of the State of Delaware and is registered with the
Commission as an investment adviser under the Advisers Act. Affiliated
Managers Group, Inc. (``AMG''), a publicly-traded company, indirectly
owns a majority of the interests of Pantheon Ventures (US) LP. Pantheon
Ventures (US) LP serves as the investment adviser to the Existing
Registered Fund pursuant to an investment advisory agreement and as the
investment adviser of many of the Existing Unregistered Funds.
    4. Pantheon Ventures (UK) LLP is a limited liability partnership
organized under the laws of England and Wales and is an exempt
reporting adviser under the Advisers Act. AMG indirectly owns a
majority of the interests of Pantheon Ventures (UK) LLP. Pantheon
Ventures (UK) LLP serves as the investment adviser of many of the
Existing Unregistered Funds.
    5. Applicants seek an order (``Order'') to permit a Registered Fund
and one or more other Registered Funds and/or Unregistered Funds \4\
(collectively ``Co-Investment Affiliates'') to (a) participate in the
same investment opportunities through a proposed co-investment program
in circumstances where such participation would otherwise be prohibited
under Section 17 of the Act and (B) make additional investments in
securities of such issuers, including through the exercise of warrants,
conversion privileges and other rights to purchase securities of the
issuers (``Follow-On Investments''). ``Co-Investment Transaction''
means any transaction in which a Registered Fund (or its Wholly-Owned
Investment Subsidiary, as defined below) participate with one or more
Co-Investment Affiliates in reliance on the Order. ``Potential Co-
Investment Transaction'' means any investment opportunity in which a
Regulated Fund (or its Wholly-Owned Investment Subsidiaries) could not
participate together with one or more Co-Investment Affiliates without
obtaining and relying on the Order.\5\
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    \4\ ``Unregistered Funds'' means (a) the Existing Unregistered
Funds and (b) any future entity (i) whose investment adviser is an
Investment Adviser, (ii) that would be an investment company but for
Section 3(c)(1) or 3(c)(7) of the Act, and (iii) that intends to
participate in Co-Investment Transactions.
    \5\ All existing entities that currently intend to rely on the
requested Order have been named as Applicants, and any entity that
subsequently relies on the Order will comply with the terms and
conditions of the Application.
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    6. Applicants state that a Registered Fund may, from time to time,
form one or more Wholly-Owned Investment Subsidiaries.\6\ Such a
subsidiary would be prohibited from investing in a Co-Investment
Transaction with any Co-Investment Affiliate because it would be a
company controlled by its parent Registered Fund for purposes of rule
17d-1 under the Act. Applicants request that a Wholly-Owned Investment
Subsidiary be permitted to participate in Co-Investment Transactions in
lieu of its parent Registered Fund and that the Wholly-Owned Investment
Subsidiary's participation in any such transaction be treated, for
purposes of the Order, as though the parent Registered Fund were
participating directly. Applicants represent that this treatment is
justified because a Wholly-Owned Investment Subsidiary would have no
purpose other than serving as a holding vehicle for the Registered
Fund's investments and, therefore, no conflicts of interest could arise
between the Registered Fund and the Wholly-Owned Investment Subsidiary.
The Registered Fund's Board would make all relevant determinations
under the conditions with regard to a Wholly-Owned Investment
Subsidiary's participation in a Co-Investment Transaction, and the
Registered Fund's Board would be informed of, and take into
consideration, any proposed use of a Wholly-Owned Investment Subsidiary
in the Registered Fund's place. If the Registered Fund proposes to
participate in the same Co-Investment Transaction with any of its
Wholly-Owned Investment Subsidiaries, the Board will also be informed
of, and take into consideration, the relative participation of the
Registered Fund and the Wholly-Owned Investment Subsidiary.
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    \6\ The term ``Wholly-Owned Investment Subsidiary'' means any
entity: (i) That is wholly-owned by a Registered Fund (with such
Registered Fund at all times holding, beneficially and of record,
100% of the voting and economic interests); (ii) whose sole business
purpose is to hold one or more investments on behalf of such
Registered Fund; (iii) with respect to which the Board of such
Registered Fund has the sole authority to make all determinations
with respect to the entity's participation under the conditions of
this Application; and (iv) that would be an investment company but
for Section 3(c)(1) or 3(c)(7) of the Act. The Wholly-Owned
Subsidiary is a Wholly-Owned Investment Subsidiary, and any
subsidiary of a Registered Fund that participates in a Co-Investment
Transaction will be a Wholly-Owned Investment Subsidiary.
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    7. When considering Potential Co-Investment Transactions for any
Registered Fund, an Investment Adviser will consider only the
Objectives and

Strategies,\7\ investment restrictions, regulatory and tax
requirements, capital available for investment (``Available
Capital''),\8\ and other pertinent factors applicable to the Registered
Fund. Each Investment Adviser, as applicable, undertakes to perform
these duties consistently for each Registered Fund, as applicable,
regardless of which of them serves as investment advisers to these
entities. The participation of a Registered Fund in a Potential Co-
Investment Transaction may only be approved by a Required Majority \9\
of the directors eligible to vote on that Co-Investment Transaction
(the ``Eligible Directors'').\10\ Due to the similarity in Objectives
and Strategies of certain Registered Funds with the investment
objectives, policies and strategies of certain Co-Investment
Affiliates, the Investment Adviser expects that investments for a
Registered Fund should also generally be appropriate investments for
one or more other Co-Investment Affiliates.
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    \7\ ``Objectives and Strategies'' means the investment
objectives and strategies of the Registered Funds, as described in
the Registered Funds' registration statements on Form N-2, other
filings the Registered Funds have made with the Commission under the
Securities Act of 1933 (``Securities Act'') or under the Securities
Exchange Act of 1934, as amended, and the Registered Funds' reports
to shareholders.
    \8\ ``Available Capital'' will be determined based on the amount
of cash on hand, existing commitments and reserves, if any, the
targeted leverage level, targeted asset mix and other investment
policies and restrictions set from time to time by the Board of the
applicable Registered Fund or imposed by applicable laws, rules,
regulations or interpretations.
    \9\ ``Required Majority'' has the meaning provided in Section
57(o) of the 1940 Act. The Board members of a Registered Fund that
make up the Required Majority will be determined as if the
Registered Fund was a was a business development company subject to
section 57(o) (``BDC'').
    \10\ The term ``Eligible Directors'' means the directors who are
eligible to vote under Section 57(o) of the 1940 Act as if the
Registered Fund was a BDC.
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    8. With respect to participation in a Potential Co-Investment
Transaction by a Registered Fund, the applicable Investment Adviser
will present each Potential Co-Investment Transaction and the proposed
allocation of each investment opportunity to the Eligible Directors.
The Required Majority of a Registered Fund will approve each Co-
Investment Transaction prior to any investment by the Registered Fund.
    9. With respect to the pro rata dispositions and Follow-On
Investments provided in conditions 7 and 8, a Registered Fund may
participate in a pro rata disposition or Follow-On Investment without
obtaining prior approval of the Required Majority if, among other
things: (i) The proposed participation of each Co-Investment Affiliate
and a Registered Fund and each Affiliated Account in such disposition
is proportionate to its outstanding investments in the issuer
immediately preceding the disposition or Follow-On Investment, as the
case may be; and (ii) the Board has approved the Registered Fund's
participation in pro rata dispositions and Follow-On Investments as
being in the best interests of the Registered Fund. If the Board does
not so approve, any such disposition or Follow-On Investment will be
submitted to the Eligible Directors. The Board may at any time rescind,
suspend or qualify its approval of pro rata dispositions and Follow-On
Investments with the result that all dispositions and/or Follow-On
Investments must be submitted to the Eligible Directors.
    10. No Independent Director of any Registered Fund will have a
direct or indirect financial interest in any Co-Investment Transaction
(other than indirectly through share ownership in one of the Registered
Funds), including any interest in any issuer whose securities would be
acquired in a Co-Investment Transaction.
    11. If the Investment Adviser, the principal owners of the
Investment Adviser (``Principals''), or any person controlling,
controlled by, or under common control with the Investment Adviser or
the Principals, and the Co-Investment Affiliates (collectively, the
``Holders'') own in the aggregate more than 25 percent of the
outstanding voting shares of a Registered Fund (the ``Shares''), then
the Holders will vote such Shares as required under the condition 14.
Applicants believe that this condition will ensure that the Independent
Directors will act independently in evaluating the Co-Investment
Transactions, because the ability of the Investment Adviser or the
Principals to influence the Independent Directors by a suggestion,
explicit or implied, that the Independent Directors can be removed will
be limited significantly. The Independent Directors shall evaluate and
approve the independent third party, taking into account its
qualifications, reputation for independence, cost to the investors, and
other factors that they deem relevant.

Applicants' Legal Analysis

    1. Section 17(d) of the Act and rule 17d-1 under the Act prohibit
affiliated persons of a registered investment company from
participating in joint transactions with the company unless the
Commission has granted an order permitting such transactions. In
passing upon applications under rule 17d-1, the Commission considers
whether the company's participation in the joint transaction is
consistent with the provisions, policies, and purposes of the Act and
the extent to which such participation is on a basis different from or
less advantageous than that of other participants.
    2. Applicants state that they expect that participation in
Potential Co-Investment Transactions by any of the Registered Funds and
the Co-Investment Affiliates may increase favorable investment
opportunities for the Registered Funds and the Co-Investmant
Affiliates. The conditions are designed to ensure that the Investment
Advisers would not be able to favor a Co-Investment Affiliate over a
Registered Fund through the allocation of investment opportunities
between them. Applicants state that the Regulated Fund's participation
in the Co-Investment Transactions will be consistent with the
provisions, policies, and purposes of the Act and on a basis that is
not different from, or less advantageous than, the other participants.

Applicants' Conditions

    Applicants agree that any Order granting the requested relief shall
be subject to the following conditions:
    1. Each time an Investment Adviser considers a Potential Co-
Investment Transaction for an Unregistered Fund or another Registered
Fund that falls within a Registered Fund's then-current Objectives and
Strategies, the Investment Adviser to the Registered Fund will make an
independent determination of the appropriateness of the investment for
such Registered Fund in light of the Registered Fund's then-current
circumstances.
    2.(a). If the Investment Adviser to a Registered Fund deems the
Registered Fund's participation in any Potential Co-Investment
Transaction to be appropriate for the Registered Fund, it will then
determine an appropriate level of investment for the Registered Fund.
    (b). If the aggregate amount recommended by the applicable
Investment Adviser to be invested by the applicable Registered Fund in
the Potential Co-Investment Transaction, together with the amount
proposed to be invested by the other participating Registered Funds and
Unregistered Funds, collectively, in the same transaction, exceeds the
amount of the investment opportunity, the amount of the investment
opportunity will be allocated among them pro rata based on each
participant's Available Capital for investment in the asset class being
allocated, up to the amount proposed to be invested by each. The
applicable

Investment Adviser will provide the Eligible Directors of each
participating Registered Fund with information concerning each
participating party's Available Capital to assist the Eligible
Directors with their review of the Registered Fund's investments for
compliance with these allocation procedures.
    (c). After making the determinations required in conditions 1 and
2(a), the applicable Investment Adviser will distribute written
information concerning the Potential Co-Investment Transaction,
including the amount proposed to be invested by each participating
Registered Fund and Unregistered Fund, to the Eligible Directors of
each participating Registered Fund for their consideration. A
Registered Fund will co-invest with one or more other Registered Funds
and/or one or more Unregistered Funds only if, prior to the Registered
Fund's participation in the Potential Co-Investment Transaction, a
Required Majority concludes that:
    (i). The terms of the Potential Co-Investment Transaction,
including the consideration to be paid, are reasonable and fair to the
Registered Fund and its shareholders and do not involve overreaching in
respect of the Registered Fund or its shareholders on the part of any
person concerned;
    (ii). the Potential Co-Investment Transaction is consistent with:
    (A). The interests of the shareholders of the Registered Fund; and
    (B). the Registered Fund's then-current Objectives and Strategies;
    (iii). the investment by any other Registered Funds or Unregistered
Funds would not disadvantage the Registered Fund, and participation by
the Registered Fund would not be on a basis different from or less
advantageous than that of other Registered Funds or Unregistered Funds;
provided, that if any other Registered Fund or Unregistered Fund, but
not the Registered Fund itself, gains the right to nominate a director
for election to a portfolio company's board of directors or the right
to have a board observer or any similar right to participate in the
governance or management of the portfolio company, such event shall not
be interpreted to prohibit the Required Majority from reaching the
conclusions required by this condition (2)(c)(iii), if:
    (A). The Eligible Directors will have the right to ratify the
selection of such director or board observer or participant, if any;
    (B). the applicable Investment Adviser agrees to, and does, provide
periodic reports to the Registered Fund's Board with respect to the
actions of such director or the information received by such board
observer or obtained through the exercise of any similar right to
participate in the governance or management of the portfolio company;
and
    (C). any fees or other compensation that any Unregistered Fund or
any Registered Fund or any affiliated person of any Unregistered Fund
or any Registered Fund receives in connection with the right of an
Unregistered Fund or a Registered Fund to nominate a director or
appoint a board observer or otherwise to participate in the governance
or management of the portfolio company will be shared proportionately
among the participating Unregistered Funds (who each may, in turn,
share its portion with its affiliated persons) and the participating
Registered Funds in accordance with the amount of each party's
investment; and
    (iv). the proposed investment by the Registered Fund will not
benefit the Investment Advisers, the Unregistered Funds or the other
Registered Funds or any affiliated person of any of them (other than
the parties to the Co-Investment Transaction), except
    (A). to the extent permitted by condition 13,
    (B). to the extent permitted by Section 17(e) of the Act, as
applicable,
    (C). indirectly, as a result of an interest in the securities
issued by one of the parties to the Co-Investment Transaction, or
    (D). in the case of fees or other compensation described in
condition 2(c)(iii)(C).
    3. Each Registered Fund has the right to decline to participate in
any Potential Co-Investment Transaction or to invest less than the
amount proposed.
    4. The applicable Investment Adviser will present to the Board of
each Registered Fund, on a quarterly basis, a record of all investments
in Potential Co-Investment Transactions made by any of the other
Registered Funds or Unregistered Funds during the preceding quarter
that fell within the Registered Fund's then-current Objectives and
Strategies that were not made available to the Registered Fund, and an
explanation of why the investment opportunities were not offered to the
Registered Fund. All information presented to the Board pursuant to
this condition will be kept for the life of the Registered Fund and at
least two years thereafter, and will be subject to examination by the
Commission and its staff.
    5. Except for Follow-On Investments made in accordance with
condition 8,\11\ a Registered Fund will not invest in reliance on the
Order in any issuer in which another Registered Fund, Unregistered
Fund, or any affiliated person of another Registered Fund or
Unregistered Fund is an existing investor.
---------------------------------------------------------------------------

    \11\ This exception applies only to Follow-On Investments by a
Registered Fund in issuers in which that Registered Fund already
holds investments.
---------------------------------------------------------------------------

    6. A Registered Fund will not participate in any Potential Co-
Investment Transaction unless the terms, conditions, price, class of
securities to be purchased, settlement date, and registration rights
will be the same for each participating Registered Fund and
Unregistered Fund. The grant to an Unregistered Fund or another
Registered Fund, but not the Registered Fund, of the right to nominate
a director for election to a portfolio company's board of directors,
the right to have an observer on the board of directors or similar
rights to participate in the governance or management of the portfolio
company will not be interpreted so as to violate this condition 6, if
conditions 2(c)(iii)(A), (B) and (C) are met.
    7.(a). If any Unregistered Fund or any Registered Fund elects to
sell, exchange or otherwise dispose of an interest in a security that
was acquired in a Co-Investment Transaction, the applicable Investment
Adviser will:
    (i). Notify each Registered Fund that participated in the Co-
Investment Transaction of the proposed disposition at the earliest
practical time; and
    (ii). formulate a recommendation as to participation by each
Registered Fund in the disposition.
    (b). Each Registered Fund will have the right to participate in
such disposition on a proportionate basis, at the same price and on the
same terms and conditions as those applicable to the participating
Unregistered Funds and Registered Funds.
    (c). A Registered Fund may participate in such disposition without
obtaining prior approval of the Required Majority if:
    (i). The proposed participation of each Registered Fund and each
Unregistered Fund in such disposition is proportionate to its
outstanding investments in the issuer immediately preceding the
disposition;
    (ii). the Board of the Registered Fund has approved as being in the
best interests of the Registered Fund the ability to participate in
such dispositions on a pro rata basis (as

described in greater detail in the application); and
    (iii). the Board of the Registered Fund is provided on a quarterly
basis with a list of all dispositions made in accordance with this
condition. In all other cases, the Investment Adviser will provide its
written recommendation as to the Registered Fund's participation to the
Eligible Directors, and the Registered Fund will participate in such
disposition solely to the extent that a Required Majority determines
that it is in the Registered Fund's best interests.
    (d). Each Unregistered Fund and each Registered Fund will bear its
own expenses in connection with any such disposition.
    8.(a). If any Unregistered Fund or any Registered Fund desires to
make a Follow-On Investment in a portfolio company whose securities
were acquired in a Co-Investment Transaction, the applicable Investment
Adviser will:
    (i). Notify each Registered Fund that participated in the Co-
Investment Transaction of the proposed transaction at the earliest
practical time; and
    (ii). formulate a recommendation as to the proposed participation,
including the amount of the proposed Follow-On Investment, by each
Registered Fund.
    (b). A Registered Fund may participate in such Follow-On Investment
without obtaining prior approval of the Required Majority if:
    (i). The proposed participation of each Registered Fund and each
Unregistered Fund in such investment is proportionate to its
outstanding investments in the issuer immediately preceding the Follow-
On Investment; and
    (ii). the Board of the Registered Fund has approved as being in the
best interests of the Registered Fund the ability to participate in
Follow-On Investments on a pro rata basis (as described in greater
detail in the application). In all other cases, the Investment Adviser
will provide its written recommendation as to the Registered Fund's
participation to the Eligible Directors, and the Registered Fund will
participate in such Follow-On Investment solely to the extent that a
Required Majority determines that it is in the Registered Fund's best
interests.
    (c). If, with respect to any Follow-On Investment:
    (i). The amount of the opportunity is not based on the Registered
Funds' and the Unregistered Funds' outstanding investments immediately
preceding the Follow-On Investment; and
    (ii). the aggregate amount recommended by the applicable Investment
Adviser to be invested by the applicable Registered Fund in the Follow-
On Investment, together with the amount proposed to be invested by the
other participating Registered Funds and Unregistered Funds,
collectively, in the same transaction, exceeds the amount of the
investment opportunity, then amount invested by each such party will be
allocated among them pro rata based on each participant's Available
Capital for investment in the asset class being allocated, up to the
amount proposed to be invested by each.
    (d). The acquisition of Follow-On Investments as permitted by this
condition will be considered a Co-Investment Transaction for all
purposes and subject to the other conditions set forth in the
application.
    9. The Independent Directors of each Registered Fund will be
provided quarterly for review all information concerning Potential Co-
Investment Transactions and Co-Investment Transactions, including
investments made by other Registered Funds or Unregistered Funds that
the Registered Fund considered but declined to participate in, so that
the Independent Directors may determine whether all investments made
during the preceding quarter, including those investments that the
Registered Fund considered but declined to participate in, comply with
the conditions of the Order. In addition, the Independent Directors
will consider at least annually the continued appropriateness for the
Registered Fund of participating in new and existing Co-Investment
Transactions.
    10. Each Registered Fund will maintain the records required by
Section 57(f)(3) of the Act as if each of the Registered Funds were a
business development company and each of the investments permitted
under these conditions were approved by the Required Majority under
Section 57(f) of the Act.
    11. No Independent Director of a Registered Fund will also be a
director, general partner, managing member or principal, or otherwise
an ``affiliated person'' (as defined in the Act) of an Unregistered
Fund.
    12. The expenses, if any, associated with acquiring, holding or
disposing of any securities acquired in a Co-Investment Transaction
(including, without limitation, the expenses of the distribution of any
such securities registered for sale under the Securities Act) will, to
the extent not payable by the Investment Advisers under their
respective investment advisory agreements with Unregistered Funds and
the Registered Funds, be shared by the Registered Funds and the
Unregistered Funds in proportion to the relative amounts of the
securities held or to be acquired or disposed of, as the case may be.
    13. Any transaction fee \12\ (including break-up or commitment fees
but excluding broker's fees contemplated by Section 17(e) of the Act,
as applicable), received in connection with a Co-Investment Transaction
will be distributed to the participating Registered Funds and
Unregistered Funds on a pro rata basis based on the amounts they
invested or committed, as the case may be, in such Co-Investment
Transaction. If any transaction fee is to be held by an Investment
Adviser pending consummation of the transaction, the fee will be
deposited into an account maintained by such Investment Adviser at a
bank or banks having the qualifications prescribed in Section 26(a)(1)
of the Act, and the account will earn a competitive rate of interest
that will also be divided pro rata among the participating Registered
Funds and Unregistered Funds based on the amounts they invest in such
Co-Investment Transaction. None of the Unregistered Funds, the
Investment Advisers, the other Registered Funds or any affiliated
person of the Registered Funds or Unregistered Funds will receive
additional compensation or remuneration of any kind as a result of or
in connection with a Co-Investment Transaction (other than (a) in the
case of the Registered Funds and the Unregistered Funds, the pro rata
transaction fees described above and fees or other compensation
described in condition 2(c)(iii)(C); and (b) in the case of an
Investment Adviser, investment advisory fees paid in accordance with
the agreement between the Investment Adviser and the Registered Fund or
Unregistered Fund).
---------------------------------------------------------------------------

    \12\ Applicants are not requesting and the Commission is not
providing any relief for transaction fees received in connection
with any Co-Investment Transaction.
---------------------------------------------------------------------------

    14. If the Holders own in the aggregate more than 25% of the Shares
of a Registered Fund, then the Holders will vote such Shares as
directed by an independent third party when voting on (1) the election
of directors; (2) the removal of one or more directors; or (3) any
other matter under either the Act or applicable State law affecting the
Board's composition, size or manner of election.
    15. Each Registered Fund's chief compliance officer, as defined in
Rule 38a-1(a)(4) of the Act, will prepare an annual report for its
Board that evaluates (and documents the basis of that evaluation) the
Registered Fund's

compliance with the terms and conditions of the application and the
procedures established to achieve such compliance.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-25308 Filed 11-21-19; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 83, Number 38 (Monday, February 26, 2018)]
[Rules and Regulations]
[Pages 8175-8181]
[FR Doc No: 2018-03733]

=======================================================================
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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

46 CFR Parts 136 and 142

[Docket No. USCG-2017-1060]
RIN 1625-AC43

Harmonization of Fire Protection Equipment Standards for Towing
Vessels

AGENCY: Coast Guard, DHS.

ACTION: Interim final rule; request for comments.

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

SUMMARY: The Coast Guard is issuing an interim final rule to apply
changes made by the 2016 final rule, Harmonization of Standards for
Fire Protection, Detection, and Extinguishing Equipment, to inspected
towing vessels. Applying these updated fire protection requirements to
inspected towing vessels will align regulations for inspected towing
vessels with other commercial vessel regulations.

DATES: This interim final rule is effective March 28, 2018. Comments
and related material must be submitted to the online docket via http://www.regulations.gov on or before March 28, 2018. The incorporation by
reference of certain publications listed in the rule is approved by the
Director of the Federal Register on March 28, 2018.

ADDRESSES:  You may submit comments identified by docket number USCG-
2017-1060 using the Federal eRulemaking Portal at https://www.regulations.gov. See the ``Public Participation and Request for
Comments'' portion of the SUPPLEMENTARY INFORMATION section of this
document for further instructions on submitting comments.
    Viewing material proposed for incorporation by reference. Make
arrangements to view this material by contacting the person identified
in the FOR FURTHER INFORMATION CONTACT section of this document.

FOR FURTHER INFORMATION CONTACT: For information about this document,
call or email LT Alexandra Miller, Office of Design and Engineering
Standards, Lifesaving and Fire Safety Division (CG-ENG-4), Coast Guard;
telephone<PHONE_NUMBER>, email [email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents for Preamble

I. Abbreviations
II. Basis and Purpose, and Regulatory History
III. Discussion of the Rule
IV. Regulatory Analyses
    A. Regulatory Planning and Review
    B. Small Entities
    C. Assistance for Small Entities
    D. Collection of Information
    E. Federalism
    F. Unfunded Mandates Reform Act
    G. Taking of Private Property
    H. Civil Justice Reform
    I. Protection of Children
    J. Indian Tribal Governments
    K. Energy Effects
    L. Technical Standards
    M. Environment
V. Public Participation and Request for Comments

I. Abbreviations

    CFR Code of Federal Regulations
    DHS Department of Homeland Security
    Fire Protection rule Harmonization of Standards for Fire
Protection, Detection, and Extinguishing Equipment final rule, 81 FR
48220, July 22, 2016
    FR Federal Register
    IFR Interim final rule
    NFPA 10 National Fire Protection Association Standard for
Portable Fire Extinguishers, 2010 edition
    OMB Office of Management and Budget
    RA Regulatory Analysis
    Sec.  Section symbol
    Subchapter M 46 CFR subchapter M--Towing Vessels
    U.S.C. United States Code

II. Basis and Purpose, and Regulatory History

    This interim final rule harmonizes fire protection requirements
regarding portable and semi-portable fire extinguishers on inspected
towing vessels with the requirements for other commercial vessels in
Title 46 of the Code of Federal Regulations (CFR), including
uninspected towing vessels. The Coast Guard may regulate fire
protection equipment on inspected towing vessels under statutory
authority found in 46 U.S.C. 3301 and 3306, which was delegated by the
Secretary of Homeland Security to the Coast Guard in DHS Delegation
Number 0170.1(II)(92).
    The Coast Guard issues this rule without prior notice and
opportunity for public comment. Section 553(b)(B) of the Administrative
Procedure Act provides an exception from notice and comment
requirements when an agency finds that notice and comment are
``impracticable, unnecessary, or contrary to the public interest.'' In
accordance with 5 U.S.C. 553(b)(B), the Coast Guard finds that notice
and comment are unnecessary because this rule would not require a
substantive change of fire protection equipment on towing vessels, and
would align with regulatory requirements already met by all existing
towing vessels. This rule will revise 46 CFR subchapter M to require
inspected towing vessels to meet fire protection equipment requirements
that already apply to other commercial vessels, including uninspected
towing vessels. The Coast Guard updated these standards in its 2016
Fire Protection rule. At the time the Coast Guard updated the fire
protection equipment requirements for other commercial vessels, there
were no towing vessels inspected under subchapter M: The Coast Guard
established subchapter M in a June 2016 rule that published one month
prior to the Fire Protection rule, and, as a practical matter, did not
place requirements on any towing vessel until July 2017 or later.\1\
Because of the timing of subchapter M requirements, at this time
uninspected towing vessels are subject to the more modern Fire
Protection rule provisions. This rule corrects the anomalous situation
whereby a towing vessel transitioning from uninspected to inspected
status would be required to comply with the previous standards instead
of the updated Fire Protection rule. Moreover, all existing marine fire
extinguishers already meet the requirements of this interim final rule,
and the number of extinguishers required on a vessel will not change.
Because this rule will not require any existing vessel to change its
equipment or practices, the Coast Guard finds good cause to forgo
notice and opportunity to comment.
---------------------------------------------------------------------------

    \1\ The Inspection of Towing Vessels final rule published on
June 20, 2016 (81 FR 40003). It gave existing towing vessels 2 years
or more to comply with the rule, and defined ``new towing vessel''
such that no vessel would be subject to new vessel requirements
until at least July 20, 2017. See discussion at 81 FR 40061.

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

III. Discussion of the Rule

    Under existing regulations, towing vessels must carry Coast Guard-
approved fire extinguishers.\2\ Historically, the labels on all Coast
Guard-approved fire extinguishers displayed two ratings: A performance
rating determined by testing to the industry consensus standard UL 711,
and a USCG Type/Size rating based on type of fire and the quantity of
extinguishing agent. In its Fire Protection rule, the Coast Guard
eliminated the USCG Type/Size rating requirement from 46 CFR part 162
in favor of the UL standard, but the fire protection regulations in 46
CFR subchapter M are still framed in terms of USCG Type/Size rating.
This rule will change those provisions in part 142 of subchapter M to
reflect the UL standard instead, matching the changes made by the Fire
Protection rule.
---------------------------------------------------------------------------

    \2\ See 46 CFR part 142 subpart B for inspected towing vessels,
and 46 CFR subpart 25.30 for uninspected towing vessels.
---------------------------------------------------------------------------

    This rule does not change the number of extinguishers required, and
an extinguisher that displays the USCG Type/Size rating may still be
used if it meets all other requirements. This rule adds a
grandfathering clause in section 142.231(a), identical to one that
appears in 46 CFR 25.30-80 as a result of the Fire Protection rule, in
order to avoid any new obligation on uninspected vessels that become
inspected and subject to subchapter M. For similar reasons, section
142.240 makes semi-portable fire extinguishers subject to the rules for
portable extinguishers instead of fixed fire extinguishing systems;
this change matches the treatment of semi-portable extinguishers on
similar vessels subject to 46 CFR part 25.
    In addition, this rule revises maintenance requirements for fire
extinguishers. Subchapter M had required extinguisher maintenance in
accordance with the industry consensus standard NFPA 10, which requires
certified personnel to conduct annual fire extinguishing equipment
maintenance. NFPA 10 also requires monthly visual inspections and
documentation by certified personnel. Section 142.240 provides for some
departures from NFPA 10 to: Allow for the acceptance of state and local
licenses for inspections; allow an owner, operator, or qualified
crewmember to complete monthly inspections (as opposed to certified
personnel); and reduce the requirements of the annual inspection for
non-rechargeable extinguishers. These modifications are consistent with
those put into place for other commercial vessels, including
uninspected towing vessels, by the Fire Protection rule. Section
142.240(a) also imports a provision from the Fire Protection rule
requiring that if the marine inspector or third-party organization
finds that equipment or records are not properly maintained, then a
qualified servicing facility must perform the required activities. This
provision is less stringent than the NFPA 10 provision in the original
subchapter M text.
    Finally, this rule makes non-substantive changes such as replacing
the term ``hand-portable'' with ``portable.'' It also updates the
edition of NFPA 10 from 2007 to the 2010 edition used in the Fire
Protection rule; there are no substantive changes between these two
editions.

IV. Regulatory Analyses

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

A. Regulatory Planning and Review

    Executive Orders 12866 (``Regulatory Planning and Review'') and
13563 (``Improving Regulation and Regulatory Review'') 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 (including potential economic, environmental,
public health and safety effects, distributive impacts, and equity).
Executive Order 13563 emphasizes the importance of quantifying both
costs and benefits, of reducing costs, of harmonizing rules, and of
promoting flexibility. Executive Order 13771 (``Reducing Regulation and
Controlling Regulatory Costs''), directs agencies to reduce regulation
and control regulatory costs and provides that ``for every one new
regulation issued, at least two prior regulations be identified for
elimination, and that the cost of planned regulations be prudently
managed and controlled through a budgeting process.''
    The Office of Management and Budget (OMB) has not designated this
rule a significant regulatory action under section 3(f) of E.O. 12866.
As this rule is not a significant regulatory action, this rule is
exempt from the requirements of Executive Order 13771. See OMB's
Memorandum ``Guidance Implementing Executive Order 13771, Titled
`Reducing Regulation and Controlling Regulatory Costs' '' (April 5,
2017). A regulatory analysis (RA) follows.
    This interim final rule (IFR) will update the fire safety rules in
subchapter M to incorporate changes brought about by the publication of
the Fire Protection final rule. Specifically, fire extinguisher ratings
and carriage requirements must all be brought up to date. Affected
sections of subchapter M (all located in 46 CFR part 142, Fire
Protection) are: Sec. Sec.  142.215(a), (c) and (d); 142.225(d);
142.230; new 142.231; 142.240; and 142.315(a)(3)(i) and (b)(1).
    Table 1 presents a summary of the impacts of this rule.

                 Table 1--Summary of Impacts of the Rule
------------------------------------------------------------------------
                Category                             Summary
------------------------------------------------------------------------
Applicability..........................  Towing vessels required to be
                                          inspected under subchapter M.
Affected population....................  5,509 towing vessels.
Costs..................................  No costs identified.
Benefits...............................  Harmonizes with Fire Protection
                                          to provide consistent guidance
                                          to industry.
------------------------------------------------------------------------

Affected Population
    The affected population consists of the U.S. flagged towing vessels
subject to the provisions of subchapter M. The RA performed for the
Inspection of Towing Vessels final rule identified 5,509 towing vessels
that will be affected and concluded that the long-term pattern was a
steady-state population. We have no new information to revise that
conclusion

and will use the population from that rule for this analysis.
Cost Analysis
    This interim final rule contains 29 changes to the fire protection
regulations in subchapter M. A summary of these changes follows:
     Made eighteen minor edits to the regulatory text to
harmonize subchapter M text with Fire Protection (e.g., ``hand
portable'' to ``portable''); update technical references (e.g. ``B-1''
to ``10-B:C:''); correct grammatical errors or improve clarity; and
harmonize references to other sections within subchapter M.
     Revised five paragraphs to either consolidate or edit
existing text for clarity, or delete text that is no longer needed.
     Added three new provisions to increase industry options to
comply with NFPA 10. An example is to allow for the acceptance of state
and local licenses for inspections.
     Added a new paragraph to allow equipment beyond the
regulatory minimum.
     Added a new paragraph to allow continued use of existing
dual-label equipment.
     Added a new provision that restates current recordkeeping
requirements.
    Overall, the Coast Guard has not identified any costs associated
with these changes. The changes and economic impacts are described in
Table 2.

                                 Table 2--Assessment of Cost Impacts of the Rule
----------------------------------------------------------------------------------------------------------------
       Description of change             Type of change                          Cost impact
----------------------------------------------------------------------------------------------------------------
Subpart B--List of Sections
    Change ``Hand-portable'' to      Non-substantive text   No cost.
     ``Portable''.                    edit for consistent
                                      usage.
    Add new section title ``142.231  Non-substantive text   No cost.
     Exception for portable and       edit to consolidate
     semi-portable extinguishers      requirements for new
     required for existing towing     and existing vessels.
     vessels.''
Sec.   142.215(a)
    Change ``Hand-portable'' to      Non-substantive text   No cost.
     ``Portable.''.                   edit for consistent
                                      usage.
Sec.   142.215(c)
    Edit and reorganize paragraph    Non-substantive text   No cost.
     for clarity.                     edit only.
    Moved the last sentence to new   Non-substantive text   No cost.
     paragraph Sec.   142.215(d).     edit only.
Sec.   142.215(d)
    Created new paragraph Sec.       Non-substantive text   No cost.
     142.215(d) that contains the     edit only.
     last sentence of former Sec.
     142.215(c).
Sec.   142.225(d)
    Change equipment type from ``B-  Non-substantive text   No cost.
     II'' to ``40-B'' and other       edit for consistent
     edits.                           usage.
    Edit and reorganize paragraph    Non-substantive text   No cost.
     for clarity.                     edit only.
Sec.   142.230
    Change ``Hand-portable'' to      Non-substantive text   No cost.
     ``Portable''.                    edit for consistent
                                      usage.
Sec.   142.230(a), (b), & (c)
    Delete, refers to labeling       Removal of outdated    No cost.
     system that is no longer in      labeling terms.
     use. Former paragraphs (d) and
     (e) now (a) and (b).
Sec.   142.230(d)(1) new Sec.
 142.230(a)
    Change ``B-I'' to ``10-B:C'',    Change to labeling     No cost.
     ``Hand-portable'' to             terms.
     ``Portable'', and ``B-II'' to
     ``40-B:C.''
Sec.   142.230(d)(2) new Sec.
 142.230(b)
    Change ``Hand-portable'' to      Non-substantive text   No cost.
     ``Portable''.                    edit for consistent
                                      usage.
    Change ``a'' to ``At'' and       Non-substantive text   No cost.
     correct references to table      edit only.
     and paragraph.
    In Table 142.230(d)(2), change   Change to labeling     No cost.
     ``B-II'' to ``40-B:C''.          terms.
Sec.   142.230(d)(2)(ii)
    Delete paragraph as no longer    Non-substantive text   No cost.
     needed.                          edit only.
Sec.   142.230(e) new Sec.
 142.230(c)
    Change paragraph reference and   Removal of outdated    No cost.
     change reference to sizes to     labeling terms.
     ``any.''
New Sec.   142.230(d)
    Allow for equipment beyond       New text.............  No cost, no mandated requirements.
     regulatory minimum.
Sec.   142.231(a)
    Add provision to accept current  New text.............  No cost, no mandated requirements.
     equipment and continue use of
     dual-label equipment.
Sec.   142.231(b)
    Reference requirements in part   New text.............  No cost, subchapter M applies to new vessels.
     142 for new vessels.
Sec.   142.240(a)
    Change ``Hand-portable'' to      Non-substantive text   No cost.
     ``Portable''.                    edit for consistent
                                      usage.
Sec.   142.240(a)(1)(i)
    Move requirements for semi-      Align with 46 CFR      No cost.
     portable equipment from Sec.     part 25.
     142.240(a)(2) to this sub-
     paragraph.
    Delete references to Table       Non-substantive text   No cost.
     142.240 as this is redundant     edit for clarity.
     with existing text.

    Allow for the acceptance of      New text.............  No cost, no mandated requirements.
     state and local licenses for
     inspections.
Sec.   142.240(a)(1)(ii)
    Modify requirements of NFPA 10   New text.............  No cost, no mandated requirements.
     to allow monthly inspections
     by owner, operator, person-in-
     charge, or crew member.
Sec.   142.240(a)(1)(iii)
    Modify requirements of NFPA 10   New text.............  No cost, no mandated requirements.
     to allow annual maintenance by
     owner, operator, person-in-
     charge, or crew member.
Sec.   142.240(a)(1)(iv)
    Maintain evidence of servicing   New text.............  No cost, current industry practice.
     and provide to inspector. If
     evidence is unsatisfactory,
     prescribed examinations,
     maintenance, and tests must be
     conducted.
Sec.   142.240(a)(2)
    Delete ``semi-portable.''......  Align with 46 CFR      No cost, current industry practice.
                                      part 25 and NFPA 10.
Sec.   142.240, Table 142.240
    Delete ``semi-portable''.......  Align with 46 CFR      No cost, current industry practice.
                                      part 25 and NFPA 10.
Sec.   142.240(c)(2)
    Change ``Hand-portable'' to      Non-substantive text   No cost.
     ``Portable''.                    edit for consistent
                                      usage.
Sec.   142.315(a)(3)(i) & (b)(1)
    Change ``B-V'' to ``160-B.''...  Change to labeling     No cost.
                                      terms.
----------------------------------------------------------------------------------------------------------------

Benefits
    The primary benefit of this interim final rule is to align the fire
safety rules in subchapter M with the changes brought about by the
publication of the Fire Protection rule. The changes include removal of
a labeling requirement, and flexibility in the application of NFPA 10.
This will provide a consistent set of fire protection requirements to
towing vessel owners and operators.
Alternatives
    When creating this interim final rule, the Coast Guard considered
several alternatives. The previous analysis represents the preferred
alternative, which will align fire protection requirements in
subchapter M with the Fire Protection rule.
Alternative 1: Preferred Alternative
    The preferred alternative is to update the fire safety rules in
subchapter M to match changes made by the Fire Protection rule. The
analysis for this alternative appears in the ``Regulatory Analysis''
section of the preamble of this interim final rule.
Alternative 2: No Action Alternative
    In this alternative, the Coast Guard would take no action regarding
the differences between 46 CFR part 25 and 46 CFR part 142. As this
would impose an inconvenience to industry by not removing the outdated
labeling requirement, we reject this alternative.
Alternative 3: Not Including New Options
    This option would remove the outdated labeling requirement for fire
extinguishers, but would not provide for any flexibility in applying
the requirements of NFPA 10. The benefit of this alternative is the
harmonization of text with other fire protection regulations, including
those that already apply to uninspected towing vessels. This
alternative would not add any new costs, as NFPA 10 is referenced in
subchapter M, but would not offer any new compliance options.

B. Small Entities

    Under the Regulatory Flexibility Act, 5 U.S.C. 601-612, we have
considered whether this rule would have a significant economic impact
on a substantial number of small entities. 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.
    Our economic analysis concluded that this interim final rule will
have no cost impact and will not affect the small entities that own and
operate the towing vessels that comprise the affected population,
described above. Therefore, 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.
    If you think that your business, organization, or governmental
jurisdiction qualifies as a small entity and that this rule will have a
significant economic impact on it, please submit a comment at the
address under ADDRESSES. In your comment, explain why you think it
qualifies and how and to what degree this rule will economically affect
it.

C. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996, Public Law 104-121, we offered to assist small
entities in understanding this rule so that they could better evaluate
its effects on them and participate in the rulemaking. 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.
    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).

D. Collection of Information

    This rule calls for no new collection of information or
modification of an existing collection of information under the
Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520.

E. Federalism

    A rule has implications for federalism under Executive Order 13132
(``Federalism'') if it has a substantial direct effect on 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 Executive Order 13132
and have determined that it is consistent with the fundamental
federalism principles and preemption requirements described in
Executive Order 13132. Our analysis is explained below.
    It is well settled that States may not regulate in categories
reserved for regulation by the Coast Guard. It is also well settled
that all of the categories covered in 46 U.S.C. 3306, 3703, 7101, and
8101 (design, construction, alteration, repair, maintenance, operation,
equipping, personnel qualification, and manning of vessels), as well as
the reporting of casualties and any other category in which Congress
intended the Coast Guard to be the sole source of a vessel's
obligations, are within the field foreclosed from regulation by the
States. See the Supreme Court's decision in United States v. Locke and
Intertanko v. Locke, 529 U.S. 89, 120 S.Ct. 1135 (2000). This rule
covers foreclosed categories as it establishes regulations covering
fire extinguishing equipment for towing vessels subject to inspection
under 46 U.S.C. 3301 and 3306. Therefore, because the States may not
regulate within these categories, this rule is consistent with the
fundamental federalism principles and preemption requirements described
in Executive Order 13132.

F. 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.

G. 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'').

H. 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.

I. 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 will
not create an environmental risk to health or risk to safety that might
disproportionately affect children.

J. Indian Tribal Governments

    This rule does not have tribal implications under Executive Order
13175 (``Consultation and Coordination with Indian Tribal
Governments''), because it will 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.

K. Energy Effects

    We have analyzed this rule under Executive Order 13211 (``Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use''). We have determined that it is not a
``significant energy action'' under that order because it is not a
``significant regulatory action'' under Executive Order 12866 and is
not likely to have a significant adverse effect on the supply,
distribution, or use of energy.

L. Technical Standards and Incorporation by Reference

    The National Technology Transfer and Advancement Act, codified as a
note to 15 U.S.C. 272, directs agencies to use voluntary consensus
standards in their regulatory activities unless the agency provides
Congress, through OMB, with an explanation of why using these standards
would be inconsistent with applicable law or otherwise impractical.
Voluntary consensus standards are technical standards (e.g.,
specifications of materials, performance, design, or operation; test
methods; sampling procedures; and related management systems practices)
that are developed or adopted by voluntary consensus standards bodies.
This rule uses the following updated voluntary consensus standard:
    NFPA 10, Standard for Portable Fire Extinguishers, 2010 Edition,
effective December 5, 2009. This standard applies to the selection,
installation, inspection, maintenance, recharging, and testing of
portable fire extinguishers.
    Consistent with 1 CFR part 51 incorporation by reference
provisions, this material is reasonably available. Interested persons
have access to it through their normal course of business, may purchase
it from the organization identified in 46 CFR 136.112(h), or may view a
copy by means we have identified in that section.

M. Environment

    We have analyzed this rule under Department of Homeland Security
Management Directive 023-01, Revision (Rev) 1, and Commandant
Instruction M16475.lD (COMTINST M16475.1D), which guide the Coast Guard
in complying with the National Environmental Policy Act of 1969 (42
U.S.C. 4321-4370f), and have concluded that this action is one of a
category of actions that do not individually or cumulatively have a
significant effect on the human environment. A Record of Environmental
Consideration (REC) supporting this determination is available in the
docket where indicated under the ``Public Participation and Request for
Comments'' section of this preamble.
    This interim final rule (IFR) is categorically excluded under
paragraphs (34)(a), (d), and (e) of Figure 2 in COMDTINST M16475.1D,
and also under paragraph 6(a) of the ``Appendix to National
Environmental Policy Act: Coast Guard Procedures for Categorical
Exclusions, Notice of Final Agency Policy'' (67 FR 48243, July 23,
2002). This IFR updates 46 CFR subchapter M to harmonize fire safety
standards for inspected towing vessels with those of other commercial
vessels. These matters are editorial or procedural in nature; involve
the inspection, equipping, equipment approval and carriage requirements
of vessels; and also concern vessel safety standards. This rule
supports the Coast Guard's maritime safety mission.

V. Public Participation and Request for Comments

    We view public participation as essential to effective rulemaking,
and will consider all comments and material received during the comment
period. Your comment can help shape the outcome of this rulemaking. If
you submit a comment, please include the docket number for this
rulemaking, indicate the specific section of this document to which
each comment

applies, and provide a reason for each suggestion or recommendation.
    We encourage you to submit comments through the Federal eRulemaking
Portal at https://www.regulations.gov. If your material cannot be
submitted using https://www.regulations.gov, contact the person in the
FOR FURTHER INFORMATION CONTACT section of this document for alternate
instructions. Documents mentioned in this notice, and all public
comments, are in our online docket at https://www.regulations.gov and
can be viewed by following that website's instructions. Additionally,
if you go to the online docket and sign up for email alerts, you will
be notified when comments are posted or a final rule is published.
    We accept anonymous comments. All comments received will be posted
without change to http://www.regulations.gov and will include any
personal information you have provided. For more about privacy and the
docket, you may review a Privacy Act notice regarding the Federal
Docket Management System in the March 24, 2005, issue of the Federal
Register (70 FR 15086).

List of Subjects

46 CFR Part 136

    Incorporation by reference, Reporting and recordkeeping
requirements, Towing vessels.

46 CFR Part 142

    Fire prevention, Incorporation by reference, Marine safety,
Reporting and recordkeeping requirements, Towing vessels.

    For the reasons discussed in the preamble, the Coast Guard amends
46 CFR parts 136 and 142 as follows:

PART 136--CERTIFICATION

0
1. The authority citation for part 136 continues to read as follows:

    Authority: 46 U.S.C. 3103, 3301, 3306, 3308, 3316, 8104, 8904;
33 CFR 1.05; DHS Delegation 0170.1.

0
2. Amend Sec.  136.112 by revising paragraph (h)(1) to read as follows:

Sec.  136.112   Incorporation by reference.

* * * * *
    (h) * * *
    (1) NFPA 10--Standard for Portable Fire Extinguishers, 2010
Edition, effective December 5, 2009, IBR approved for Sec.  142.240(a)
of this subchapter.
* * * * *

PART 142--FIRE PROTECTION

0
3. The authority citation for part 142 continues to read as follows:

    Authority:  46 U.S.C. 3103, 3301, 3306, 3308, 3316, 8104, 8904;
33 CFR 1.05; Department of Homeland Security Delegation 0170.1.

0
4. Amend Sec.  142.215 as follows:
0
a. In paragraph (a), remove the text ``hand-''; and
0
b. Revise paragraph (c); and
0
c. Add paragraph (d).
    The revision and addition read as follows:

Sec.  142.215   Approved equipment.

* * * * *
    (c) New installations of fire-extinguishing and fire-detection
equipment of a type not required, or in excess of that required by this
part, may be permitted--
    (1) If Coast Guard approved;
    (2) If accepted by the local OCMI or TPO, as applicable; or
    (3) If equipment and components are listed and labeled by an
independent Nationally Recognized Testing Laboratory (NRTL), as that
term is defined in 29 CFR 1910.7, and are designed, installed, tested,
and maintained in accordance with an appropriate industry standard and
the manufacturer's specific guidance.
    (d) Existing equipment and installations not meeting the applicable
requirements of this part may be continued in service so long as they
are in good condition and accepted by the local OCMI or TPO.

0
5. Amend Sec.  142.225 by revising paragraph (d) to read as follows:

Sec.  142.225   Storage of flammable or combustible products.

* * * * *
    (d) A 40-B portable fire extinguisher must be located near the
storage room or cabinet. This is in addition to the portable fire
extinguishers required by tables 142.230(a) and 142.230(b) of this
part.

0
6. Revise Sec.  142.230 to read as follows:

Sec.  142.230   Portable fire extinguishers and semi-portable fire-
extinguishing systems.

    (a) Towing vessels of 65 feet or less in length must carry at least
the minimum number of portable fire extinguishers set forth in table
142.230(a).

          Table 142.230(a)--10-B:C Portable Fire Extinguishers
------------------------------------------------------------------------
                                      Minimum number of 10-B:C portable
                                       fire extinguishers required \1\
                                   -------------------------------------
           Length, feet               No fixed fire-      Fixed fire-
                                      extinguishing      extinguishing
                                        system in          system in
                                     machinery space    machinery space
------------------------------------------------------------------------
Under 26 \2\......................                  1                  0
26 and over, but under 40.........                  2                  1
40 and over, but not over 65......                  3                  2
------------------------------------------------------------------------
\1\ One 40-B:C portable fire extinguisher may be substituted for two 10-
  B:C portable fire extinguishers.
\2\ See Sec.   136.105 of this subchapter concerning vessels under 26
  feet.

    (b) Towing vessels of more than 65 feet in length must carry--
    (1) At least the minimum number of portable fire extinguishers set
forth in table 142.230(b); and
    (2) One 40-B portable fire extinguisher fitted in the engine room
for each 1,000 brake horsepower of the main engines or fraction
thereof. A towing vessel is not required to carry more than six
additional 40-B portable fire extinguishers in the engine room for this
purpose, regardless of horsepower.

          Table 142.230(b)--40-B:C Portable Fire Extinguishers
------------------------------------------------------------------------
                    Gross tonnage--                      Minimum number
-------------------------------------------------------     of 40-B:C
                                                          portable fire
                    Over                      Not over    extinguishers
------------------------------------------------------------------------
                                                    50                 1

50.........................................        100                 2
100........................................        500                 3
500........................................      1,000                 6
1,000......................................  .........                 8
------------------------------------------------------------------------

    (c) The frame or support of any semi-portable fire extinguisher
fitted with wheels must be welded or otherwise permanently attached to
a steel bulkhead or deck to prevent it from rolling under heavy sea
conditions.
    (d) Extinguishers with larger numerical ratings or multiple letter
designations may be used if the extinguishers meet the minimum
requirements of this section.

0
7. Add Sec.  142.231 to read as follows:

Sec.  142.231   Exception for portable and semi-portable fire
extinguishers required for existing towing vessels.

    (a) Previously installed fire extinguishers with extinguishing
capacities smaller than what is required by Sec.  142.230 of this part
need not be replaced and may be continued in service so long as they
are maintained in good condition to the satisfaction of the OCMI.
    (b) All new equipment and installations must meet the applicable
requirements in this part for new vessels.

0
8. Amend Sec.  142.240 by revising paragraphs (a) introductory text,
(a)(1) and (2), the heading for Table 142.240, and paragraph (c)(2) to
read as follows:

Sec.  142.240   Inspection, testing, maintenance, and records.

    (a) Inspection and testing. All portable fire extinguishers, semi-
portable fire-extinguishing systems, fire-detection systems, and fixed
fire-extinguishing systems, including ventilation, machinery shutdowns,
and fixed fire-extinguishing system pressure-operated dampers on board
the vessel, must be inspected or tested at least once every 12 months,
as prescribed in paragraphs (a)(1) through (8) of this section, or more
frequently if otherwise required by the TSMS applicable to the vessel.
    (1) Portable and semi-portable fire extinguishers must be
inspected, maintained, and tested in accordance with the inspection,
maintenance procedures, and hydrostatic pressure tests required by
Chapters 7 and 8 of NFPA 10, Standard for Portable Fire Extinguishers
(incorporated by reference, see Sec.  136.112 of this subchapter), with
the frequency specified by NFPA 10 and as amended here:
    (i) Certification or licensing by a state or local jurisdiction as
a fire extinguisher servicing agency will be accepted by the Coast
Guard as meeting the personnel certification requirements of NFPA 10
for annual maintenance and recharging of extinguishers.
    (ii) Monthly inspections required by NFPA 10 may be conducted by
the owner, operator, person-in-charge, or a designated member of the
crew.
    (iii) Non-rechargeable or non-refillable extinguishers must be
inspected and maintained in accordance with NFPA 10; however, the
annual maintenance need not be conducted by a certified person and can
be conducted by the owner, operator, person-in-charge, or a designated
member of the crew.
    (iv) The owner or managing operator must provide satisfactory
evidence of the required servicing to the marine inspector or TPO, as
applicable. If any of the equipment or records have not been properly
maintained, a qualified servicing facility must perform the required
inspections, maintenance procedures, and hydrostatic pressure tests. A
tag issued by a qualified servicing organization, and attached to each
extinguisher, may be accepted as evidence that the necessary
maintenance procedures have been conducted.
    (2) Fixed fire-extinguishing systems must be inspected and tested,
as required by table 142.240 of this section, in addition to the tests
required by Sec. Sec.  147.60 and 147.65 of subchapter N of this
chapter.
* * * * *

Table 142.240 to paragraph (a)--Fixed fire-extinguishing systems
* * * * *
* * * * *
    (c) * * *
    (2) The records of inspections and tests of portable fire
extinguishers and semi-portable fire-extinguishing systems may be
recorded in accordance with paragraph (c)(1) of this section, or on a
tag attached to each unit by a qualified servicing organization.

Sec.  142.315   [Amended]

0
9. Amend Sec.  142.315 by removing the text ``B-V'' in paragraphs
(a)(3)(i) and (b)(1) and adding in its place the text ``160-B''.

    Dated: February 15, 2018.
J.G. Lantz,
Director of Commercial Regulations and Standards, U.S. Coast Guard.
[FR Doc. 2018-03733 Filed 2-23-18; 8:45 am]
 BILLING CODE 9110-04-P