[Federal Register Volume 88, Number 21 (Wednesday, February 1, 2023)]
[Rules and Regulations]
[Pages 6618-6620]
[FR Doc No: 2023-01965]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2022-0987; Project Identifier MCAI-2021-01416-R;
Amendment 39-22298; AD 2023-01-04]
RIN 2120-AA64

Airworthiness Directives; Airbus Helicopters

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: The FAA is adopting a new airworthiness directive (AD) for all
Airbus Helicopters Model AS350B, AS350BA, AS350B1, AS350B2, AS350B3,
AS350D, AS355E, AS355F, AS355F1, AS355F2, AS355N, and AS355NP
helicopters. This AD was prompted by an occurrence reported where
during an inspection of a tail rotor head (TRH) pitch change spider,
excessive play and excessive wear were detected, due to an unwanted
rotating motion. This AD requires for helicopters with certain part-
numbered TRH spider pitch change units installed, inspecting for
correct installation of the spider pitch change nut (nut); marking a 2
to 5 mm wide black paint index mark and repetitively inspecting the
alignment of the marking; and additional inspections and corrective
actions if necessary. This AD also allows an affected part to be
installed on a helicopter if certain requirements of this AD are met.
The FAA is issuing this AD to address the unsafe condition on these
products.

DATES: This AD is effective March 8, 2023.
    The Director of the Federal Register approved the incorporation by
reference of certain publications listed in this AD as of March 8,
2023.

ADDRESSES:
    AD Docket: You may examine the AD docket at regulations.gov under
Docket No. FAA-2022-0987; or in person at Docket Operations between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD
docket contains this final rule, the European Union Aviation Safety
Agency (EASA) AD, any comments received, and other information. The
address for Docket Operations is U.S. Department of Transportation,
Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200
New Jersey Avenue SE, Washington, DC 20590.
    Material Incorporated by Reference:
     For Airbus Helicopters service information identified in
this final rule, contact Airbus Helicopters, 2701 North Forum Drive,
Grand Prairie, TX 75052; telephone<PHONE_NUMBER> or<PHONE_NUMBER>;
fax<PHONE_NUMBER>; or at airbus.com/helicopters/services/technical-support.html.
     You may view this service information at the FAA, Office
of the Regional Counsel, Southwest Region, 10101 Hillwood Pkwy., Room
6N-321, Fort Worth, TX 76177. For information on the availability of
this material at the FAA, call<PHONE_NUMBER>. It is also available at
regulations.gov under Docket No. FAA-2022-0987.
    Other Related Service Information: Other related Airbus Helicopters
service information identified in this final rule is available at the
Airbus Helicopters and FAA contact information under Material
Incorporated by Reference above.

FOR FURTHER INFORMATION CONTACT: Stephanie Sunderbruch, Aerospace
Engineer, Safety Risk Management Section, Systems Policy Branch, Policy
& Innovation Division, FAA, 10101 Hillwood Pkwy., Fort Worth, TX 76177;
telephone<PHONE_NUMBER>; email [email protected].

SUPPLEMENTARY INFORMATION:

Background

    The FAA issued a notice of proposed rulemaking (NPRM) to amend 14
CFR part 39 by adding an AD that would apply to all Airbus Helicopters
Model AS350B, AS350BA, AS350B1, AS350B2, AS350B3, AS350D, AS355E,
AS355F, AS355F1, AS355F2, AS355N, and AS355NP helicopters. The NPRM
published in the Federal Register on August 2, 2022 (87 FR 47141). The
NPRM was prompted by EASA AD 2021-0282, dated December 17, 2021 (EASA
AD 2021-0282), issued by EASA, which is the Technical Agent for the
Member States of the European Union, to correct an unsafe condition for
Airbus Helicopters, formerly Eurocopter and Aerospatiale, Model AS 350
B, AS 350 BA, AS 350 BB, AS 350 B1, AS 350 B2, AS 350 B3, AS 350 D, AS
355 E, AS 355 F, AS 355 F1, AS 355 F2, AS 355 N, and AS 355 NP
helicopters, all serial numbers. EASA advises that an occurrence was
reported where, during an inspection of a TRH pitch change spider,
excessive play in the assembly and excessive wear on its parts were
detected, which was due to an unwanted rotating motion. EASA advises
that this condition, if not addressed, could result in loss of the TRH
pitch change control and loss of control of the helicopter.
    Accordingly, EASA AD 2021-0282 requires a one-time check
(inspection) of the nut for correct installation, accomplishing a black
paint index marking, 2 to 5 mm wide, on the rotating spider and on the
bearing spacer of the TRH spider pitch change unit, repetitive checks
(inspections) of the marking alignment, and depending on the findings,
accomplishment of additional inspections and corrective actions. The
additional inspections include inspecting the TRH spider pitch change
unit for corrosion; inspecting for rotation and wear on the faces of
the bushes; visually inspecting the rotating plate and the rotating
plate threads for damage; and inspecting the TRH spider pitch change
unit if the mark is misaligned. The corrective actions include removing
parts with corrosion from service; replacing bushes that rotate or have
wear; and replacing damaged rotating plates. EASA AD 2021-0282 also
specifies certain procedures for installation of the affected TRH
spider pitch change unit.
    In the NPRM, the FAA proposed to require, for helicopters with
certain part-numbered TRH spider pitch change units installed,
inspecting for correct installation of the nut and depending on the
results, inspecting the TRH spider pitch change unit for corrosion,
inspecting for rotation and wear on the faces of the bushes, inspecting
the rotating plate and the rotating plate threads for damage, and
removing specified parts from service and replacing them with airworthy
parts. In the NPRM, the FAA also proposed to require for helicopters
with certain part-numbered TRH spider pitch change units installed,
marking a 2 to 5 mm wide black paint index mark to identify the
position of certain parts and after the initial marking, and thereafter
at intervals not to exceed 10 hours time in service (TIS), visually
inspecting the alignment of the marking; and additional inspections and
corrective actions if necessary. Additionally, the NPRM proposed to
allow an affected part to be installed on a helicopter if certain
requirements of the NPRM are met.

    You may examine EASA AD 2021-0282 in the AD docket at
regulations.gov under Docket No. FAA-2022-0987.

Discussion of Final Airworthiness Directive

Comments

    The FAA received comments from three commenters. The following
presents the comments received on the NPRM and the FAA's response to
each comment.

Comments Regarding the Repetitive Marking Alignment Inspections

    All three individuals requested that the FAA revise the proposed AD
to allow an owner/operator (pilot) to perform the 10 hour TIS
repetitive inspection of the black index mark after the initial
inspection and marking. Two of the individuals stated allowing a pilot
with the correct training and accreditation to perform the repetitive
10 hour TIS visual inspection of the black index mark would be in line
with the service information required by this AD.
    The FAA disagrees. The inspection requires training, and the
exception to the FAA's standard maintenance regulations for AD actions
does not allow a pilot to accomplish actions, including inspections,
that require training. Accordingly, those inspections must be
accomplished by a mechanic that meets the requirements of 14 CFR part
65 subpart D.

Conclusion

    These helicopters have been approved by EASA and are approved for
operation in the United States. Pursuant to the FAA's bilateral
agreement with the European Union, EASA has notified the FAA of the
unsafe condition described in its AD. The FAA reviewed the relevant
data, considered the comments received, and determined that air safety
requires adopting this AD as proposed. Accordingly, the FAA is issuing
this AD to address the unsafe condition on these products. Except for
minor editorial changes, this AD is adopted as proposed in the NPRM.
None of the changes will increase the economic burden on any operator.

Related Service Information Under 1 CFR Part 51

    The FAA reviewed Airbus Helicopters Alert Service Bulletin (ASB)
No. AS350-05.01.03, for Model AS350B, AS350BA, AS350B1, AS350B2,
AS350B3, and AS350D helicopters and Airbus Helicopters ASB No. AS355-
05.00.86, for Model AS355E, AS355F, AS355F1, AS355F2, AS355N, and
AS355NP helicopters, both Revision 0 and dated December 16, 2021, which
include Figure 1 that identifies the position of the TRH pitch change
unit and of the bearing spacer to be marked with a 2 to 5 mm wide black
paint index mark. The service information also specifies procedures for
inspecting the condition and installation of the nut; and inspecting
the application and alignment of the black index mark on the TRH pitch
change unit and the bearing spacer.
    This service information is reasonably available because the
interested parties have access to it through their normal course of
business or by the means identified in ADDRESSES.

Other Related Service Information

    The FAA also reviewed Airbus Helicopters Mechanical Repair Manual
AS350 65-20-00-713, dated March 29, 2017, and Airbus Aircraft
Maintenance Manual AS350 65-21-00, 4-9b, dated May 16, 2019, which
specify disassembly and reassembly information for the TRH pitch change
unit.

Differences Between This AD and the EASA AD

    EASA AD 2021-0282 applies to Model AS350BB helicopters, whereas
this AD does not because that model is not FAA-type certificated. EASA
AD 2021-0282 requires accomplishing a certain inspection using a
magnifying lens, whereas this AD requires using a 5X or higher power
magnifying glass to inspect instead.

Costs of Compliance

    The FAA estimates that this AD affects 976 helicopters of U.S.
Registry. Labor rates are estimated at $85 per work-hour. Based on
these numbers, the FAA estimates the following costs to comply with
this AD.
    Inspecting the nut for correct installation takes about 0.25 work-
hour for an estimated cost of $21 per helicopter and up to $20,307 for
the U.S. fleet.
    Inspecting the alignment of the marking takes about 0.10 work-hour
for an estimated cost of $8.50 per helicopter per inspection and up to
$8,219.50 for the U.S. fleet per inspection.
    Marking the position of the TRH pitch change unit with black paint
takes about 0.25 work-hour for an estimated cost of $21 per helicopter
and $20,307 for the U.S. fleet.
    If required, inspecting the TRH spider pitch change unit for
corrosion, inspecting the faces of the bushes for rotation and wear,
and inspecting the rotating plate and rotating plate threads for damage
takes about 13 work-hours for an estimated cost of $1,105 per
helicopter.
    If required, replacing the bushes takes about 1 work-hour and parts
cost about $5,918, for an estimated cost of $6,003 per replacement.
    If required, replacing the rotating plate takes about 1 work-hour
and parts cost about $27,375 for an estimated cost of $27,460 per
replacement.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.
    The FAA is issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: General requirements.
Under that section, Congress charges the FAA with promoting safe flight
of civil aircraft in air commerce by prescribing regulations for
practices, methods, and procedures the Administrator finds necessary
for safety in air commerce. This regulation is within the scope of that
authority because it addresses an unsafe condition that is likely to
exist or develop on products identified in this rulemaking action.

Regulatory Findings

    This AD will not have federalism implications under Executive Order
13132. This AD will not have a substantial direct effect on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government.
    For the reasons discussed above, I certify that this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Will not affect intrastate aviation in Alaska, and
    (3) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

The Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA amends 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority:  49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive:

2023-01-04 Airbus Helicopters: Amendment 39-22298; Docket No. FAA-
2022-0987; Project Identifier MCAI-2021-01416-R.

(a) Effective Date

    This airworthiness directive (AD) is effective March 8, 2023.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to all Airbus Helicopters Model AS350B, AS350BA,
AS350B1, AS350B2, AS350B3, AS350D, AS355E, AS355F, AS355F1, AS355F2,
AS355N, and AS355NP helicopters, certificated in any category.

(d) Subject

    Joint Aircraft Service Component (JASC) Code: 6420, Tail Rotor
Head.

(e) Unsafe Condition

    This AD was prompted by an occurrence reported where, during an
inspection of a tail rotor head (TRH) pitch change spider, excessive
play and excessive wear were detected, due to an unwanted rotating
motion. The FAA is issuing this AD to detect improper installation
of the pitch change spider nut (nut) and improper alignment of a
black index marking. The unsafe condition, if not addressed, could
result in loss of the TRH pitch change control and loss of control
of the helicopter.

(f) Compliance

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

(g) Required Actions

    (1) For helicopters with TRH spider pitch change unit, part
number (P/N) 350A33-2030-00, 350A33-2167-00, or 350A33-2167-01
installed, within 50 hours time-in-service (TIS) after the effective
date of this AD:
    (i) Inspect the nut for correct installation. If the nut is
missing or loose, before further flight, remove the bearing from the
TRH spider pitch change unit and do the following:
    (A) Inspect the TRH spider pitch change unit for corrosion. If
there is any corrosion, before further flight, remove the affected
part from service and replace with an airworthy part.
    (B) Inspect for rotation and wear on the faces of the bushes.
For the purposes of this AD, indications of rotation and wear
include tearing, peening, metal pick-up, and hammering. If there is
any rotation or any wear on the faces of the bushes, before further
flight, remove the bushes from service and replace with airworthy
bushes.
    (C) Using a 5X or higher power magnifying glass visually inspect
the rotating plate and the rotating plate threads for damage. For
the purposes of this AD, indications of damage include wear,
deformation, stripping, galling, and corrosion. If there is any
damage on the rotating plate or the rotating plate threads, before
further flight, remove the rotating plate from service and replace
with an airworthy rotating plate.

    Note 1 to paragraph (g)(1)(i): Airbus Helicopters Mechanical
Repair Manual (MRM) AS350 65-20-00-713, dated March 29, 2017, also
known as Work Card 65-20-00-713 MRM, and Airbus Aircraft Maintenance
Manual (AMM) AS350 65-21-00, 4-9b, dated May 16, 2019, also known as
Task 65-21-00, 4-9 AMM, specify disassembly and reassembly
information for the TRH pitch change unit.

    (ii) Identify the position of the TRH pitch change unit (item a)
and of bearing spacer (item b) by marking a 2 to 5 mm wide black
paint index mark (item C) with black paint as depicted in Figure 1
of Airbus Helicopters Alert Service Bulletin (ASB) No. AS350-
05.01.03, Revision 0, dated December 16, 2021 (ASB AS350-05.01.03),
or Airbus Helicopters ASB No. AS355-05.00.86, Revision 0, dated
December 16, 2021 (ASB AS355-05.00.86), as applicable to your model
helicopter.
    (iii) Within 10 hours TIS after the initial marking required by
paragraph (g)(1)(ii) of this AD, and thereafter at intervals not to
exceed 10 hours TIS, visually inspect the alignment of the marking.
An example of a properly aligned marking is depicted in Figure 1 of
ASB AS350-05.01.03 and ASB AS355-05.00.86, as applicable to your
model helicopter. If the black paint index mark (item C) is
misaligned, before further flight, inspect the TRH spider pitch
change unit by accomplishing the actions required by paragraphs
(g)(1)(i) and (ii) of this AD.
    (2) As of the effective date of this AD, do not install TRH
spider pitch change unit P/N 350A33-2030-00, 350A33-2167-00, or
350A33-2167-01 on any helicopter, unless you do the actions required
by paragraphs (g)(1)(i) and (ii) of this AD before further flight
after installation, and thereafter do the actions required by
paragraph (g)(1)(iii) of this AD at the times specified in paragraph
(g)(1)(iii) of this AD.

(h) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, International Validation Branch, FAA, has the
authority to approve AMOCs for this AD, if requested using the
procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19,
send your request to your principal inspector or local Flight
Standards District Office, as appropriate. If sending information
directly to the manager of the International Validation Branch, send
it to the attention of the person identified in paragraph (i)(1) of
this AD. Information may be emailed to: [email protected].
    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.

(i) Additional Information

    (1) For more information about this AD, contact Stephanie
Sunderbruch, Aerospace Engineer, Safety Risk Management Section,
Systems Policy Branch, Policy & Innovation Division, FAA, 10101
Hillwood Pkwy., Fort Worth, TX 76177; telephone<PHONE_NUMBER>;
email [email protected].
    (2) Airbus Helicopters Mechanical Repair Manual AS350 65-20-00-
713, dated March 29, 2017, and Airbus Aircraft Maintenance Manual
AS350 65-21-00, 4-9b, dated May 16, 2019, which are not incorporated
by reference, contain additional information about the subject of
this AD. This service information is available at the contact
information specified in paragraphs (j)(3) and (4) of this AD.
    (3) The subject of this AD is addressed in European Union
Aviation Safety Agency (EASA) AD 2021-0282, dated December 17, 2021.
You may view the EASA AD on the internet at regulations.gov in
Docket No. FAA-2022-0987.

(j) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference of the service information listed in this
paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless the AD specifies otherwise.
    (i) Airbus Helicopters Alert Service Bulletin (ASB) No. AS350-
05.01.03, Revision 0, dated December 16, 2021.
    (ii) Airbus Helicopters ASB No. AS355-05.00.86, Revision 0,
dated December 16, 2021.
    (3) For Airbus Helicopters service information identified in
this AD, contact Airbus Helicopters, 2701 North Forum Drive, Grand
Prairie, TX 75052; telephone<PHONE_NUMBER> or<PHONE_NUMBER>; fax
(972) 641-3775; or at airbus.com/helicopters/services/technical-support.html.
    (4) You may view this service information at FAA, Office of the
Regional Counsel, Southwest Region, 10101 Hillwood Pkwy., Room 6N-
321, Fort Worth, TX 76177. For information on the availability of
this material at the FAA, call<PHONE_NUMBER>.
    (5) You may view this service information that is incorporated
by reference at the National Archives and Records Administration
(NARA). For information on the availability of this material at
NARA, email: [email protected], or go to: www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued on January 5, 2023.
Christina Underwood,
Acting Director, Compliance & Airworthiness Division, Aircraft
Certification Service.
[FR Doc. 2023-01965 Filed 1-31-23; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 78, Number 64 (Wednesday, April 3, 2013)]
[Notices]
[Pages 20149-20155]
[FR Doc No: 2013-07729]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 30439; 812-14035]

Sage Quant Management LLC, et al.; Notice of Application

March 28, 2013.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application for an order under section 6(c) of the
Investment Company Act of 1940 (``Act'') for an exemption from sections
2(a)(32), 5(a)(1), 22(d) and 22(e) of the Act and rule 22c-1 under the
Act, under sections 6(c) and 17(b) of the Act for an exemption from
sections 17(a)(1) and (a)(2) of the Act, and under section 12(d)(1)(J)
for an exemption from sections 12(d)(1)(A) and 12(d)(1)(B) of the Act.

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Applicants: Sage Quant Management LLC (``Adviser''), and Sage Quant ETF
Trust (``Trust'') and ETF Distributors LLC.
SUMMARY:  Summary of Application: Applicants request an order that
permits: (a) Certain open-end management investment companies or series
thereof to issue shares (``Shares'') redeemable in large aggregations
only (``Creation Unit Aggregations''); (b) secondary market
transactions in Shares to occur at negotiated market prices; (c)
certain series to pay redemption proceeds, under certain circumstances,
more than seven days from the tender of Shares for redemption; (d)
certain affiliated persons of the series to deposit securities into,
and receive securities from, the series in connection with the purchase
and redemption of Creation Unit Aggregations; and (e) certain
registered management investment companies and unit investment trusts
outside of the same group of investment companies as the series to
acquire Shares.

DATES:  Filing Dates: The application was filed on May 29, 2012, and
amended on October 9, 2012, March 12, 2013 and March 27, 2013.
    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 April 22, 2013, and should be accompanied by proof of
service on applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.

ADDRESSES: Elizabeth M. Murphy, Secretary, U.S. Securities and Exchange
Commission, 100 F Street NE., Washington, DC 20549-1090. Applicants,
500 West Putnam Ave., Suite 400, Greenwich, CT 06830.

FOR FURTHER INFORMATION CONTACT: Emerson S. Davis, Senior Counsel, at
(202) 551-6868 or Daniele Marchesani, Branch Chief, at<PHONE_NUMBER>
(Division of Investment Management, Exemptive Applications Office).

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

Applicants' Representations

    1. The Trust is registered as an open-end management investment
company under the Act and organized as a Delaware statutory trust. The
Trust will initially offer one series, the Sage Quant Low Volatility
and Dividend Fund (``Initial Fund''), whose performance will correspond
to the price and yield performance, before fees and expenses, of a
specified securities index (``Underlying Index'').\1\
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    \1\ The Underlying Index for the Initial Fund is SQ Low
Volatility and Dividend Index.
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    2. Applicants request that the order apply to the Initial Fund and
any future series of the Trust or other registered open-end management
investment company or series thereof that seeks to track an Underlying
Index (``Future Funds,'' and together with the Initial Fund, the
``Funds'').\2\ Any Fund (a) will be advised by the Adviser or an entity
controlling, controlled by, or under common control with the Adviser
(each, an ``Adviser'') and (b) will comply with the terms and
conditions of the application.
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    \2\ All entities that currently intend to rely on the order have
been named as applicants. Any other existing or future entity that
subsequently relies on the order will comply with the terms and
conditions of the application. An Acquiring Fund (as defined below)
may rely on the order only to invest in Funds and not in any other
registered investment company.
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    3. Funds may be based on Underlying Indices that contain: (i) Only
domestic equity securities (``Domestic Equity''), (ii) only domestic
fixed income securities (``Domestic Fixed Income''), (iii) a blend of
domestic equity and fixed income securities (``Blended Domestic,''
collectively Blended Domestic, Domestic Equity and Domestic Fixed
Income Funds, are referred to as ``Domestic Funds''); (iv) only
international equity securities (``International Equity''); (v) only
international fixed income securities (``International Fixed Income'');
or (vi) a blend of International Equity and International Fixed Income
securities (``Blended International,'' collectively Blended
International, International Equity and International Fixed Income
Funds, are referred to as ``International Funds''). Collectively, the
Blended Domestic Funds, Blended International Funds and a combination
of Blended Domestic and Blended International Funds (``Blended Global
Funds'') are the ``Blended Funds.'' Future Funds also may be based on
Underlying Indices that only contain global equity securities (``Global
Equities'') and Underlying Indices that only contain global fixed
income securities (``Global Fixed Income'') (collectively, any Future
Fund based on a Global Fixed Income Index or Global Equity Index are
``Global Funds'').
    4. An Adviser will be the investment adviser to the Funds. Sage
Quant Management LLC is a Delaware limited liability company. Any
Adviser is or will be registered as an investment adviser under Section
203 of the Investment Advisers Act of 1940 (``Advisers Act''). The
Adviser may enter into sub-advisory agreements with one or more
investment advisers each of which will serve as a sub-adviser to a Fund
(each, a ``Sub-adviser''). Each Sub-adviser will be registered or not
subject to registration under the Advisers Act. ETF Distributors LLC is
a broker-dealer registered under the Securities Exchange Act of 1934
(``Exchange Act''). ETF Distributors LLC will serve as the distributor
and principal underwriter of the Shares of Funds (``Distributor''). In
the future another broker-dealer registered under the Exchange Act may
act as Distributor. No Distributor may be an affiliated person with any
Exchange or any Index Provider (as defined below).
    5. Each Fund will consist of a portfolio of securities and other
assets and positions (``Portfolio Instruments'') selected to correspond
generally to the price and yield performance of an Underlying Index.\3\
No entity that

creates, compiles, sponsors or maintains an Underlying Index (``Index
Provider'') is or will be an affiliated person, as defined in section
2(a)(3) of the Act, or an affiliated person of an affiliated person of
the Trust, a Fund, the Adviser, any Sub-adviser, or promoter of a Fund,
or of a Distributor.
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    \3\ Applicants represent that at least 80% of each Fund's total
assets (exclusive of collateral held from securities lending) will
be invested in securities that comprise its respective Underlying
Index (``Component Securities''), or in the case of Domestic Fixed
Income Funds and Blended Domestic Funds, in Component Securities of
its respective Underlying Index and TBA Transactions (as defined
below) representing Component Securities, and in the case of Global
Funds and International Funds, in Component Securities and
depositary receipts. Each Fund may also invest the remaining 20% of
its total assets in securities not included in its Underlying Index
and other financial instruments which the Adviser or Sub-adviser
believes will help the Fund in tracking the performance of the
Underlying Index.
---------------------------------------------------------------------------

    6. A Fund will utilize either a replication or representative
sampling strategy to track its Underlying Index. A Fund using a
replication strategy will invest in substantially all of the Component
Securities in its Underlying Index in the same approximate proportions
as in the Underlying Index. A Fund using a representative sampling
strategy will hold some, but may not hold all, of the Component
Securities of its Underlying Index. Applicants state that use of the
representative sampling strategy may prevent a Fund from tracking the
performance of its Underlying Index with the same degree of accuracy as
would a Fund that invests in every Component Security of the Underlying
Index. Applicants expect that each Fund will have a tracking error
relative to the performance of its Underlying Index of no more than 5
percent.
    7. The Trust will sell and redeem Creation Units Aggregations on a
``Business Day,'' which is defined to include any day that the Trust is
required to be open under section 22(e) of the Act. Fund Shares will
range from $25 to $250 per Share and the price of Creation Unit
Aggregations will range from $1 million to $10 million. All orders to
purchase Creation Unit Aggregations must be placed with the Distributor
by or through a party that has entered into an agreement with the
Distributor (``Authorized Participant''). Distributor will deliver
Fund's prospectus and a confirmation to those persons acquiring
Creation Unit Aggregations and will maintain a record of the
instructions given to the applicable Fund to implement the delivery of
its Shares. An Authorized Participant must be either (1) a
``Participating Party,'' (i.e., a broker-dealer or other participant in
the Continuous Net Settlement System of the National Securities
Clearing Corporation (``NSCC''), a clearing house registered with the
Commission, or (2) a participant in the Depository Trust Company
(``DTC,'' and such participant, ``DTC Participant''), which, in either
case, has signed a ``Participant Agreement'' with the Distributor.
    8. Shares will be purchased and redeemed in Creation Unit
Aggregations and generally on an in-kind basis. Except where the
purchase or redemption will include cash under the limited
circumstances specified below, purchasers will be required to purchase
Creation Unit Aggregations by making an in-kind deposit of specified
instruments (``Deposit Instruments''), and shareholders redeeming their
Shares will receive an in-kind transfer of specified instruments
(``Redemption Instruments'').\4\ On any given Business Day the names
and quantities of the instruments that constitute the Deposit
Instruments and the names and quantities of the instruments that
constitute the Redemption Instruments will be identical, unless the
Fund is Rebalancing (as defined below). In addition, the Deposit
Instruments and the Redemption Instruments will each correspond pro
rata to the positions in a Fund's portfolio (including cash
positions),\5\ except: (a) In the case of bonds, for minor differences
when it is impossible to break up bonds beyond certain minimum sizes
needed for transfer and settlement; (b) for minor differences when
rounding is necessary to eliminate fractional shares or lots that are
not tradeable round lots; \6\ (c) ``to be announced'' transactions
(``TBA Transactions''),\7\ short positions, derivatives and other
positions that cannot be transferred in kind \8\ will be excluded from
the Deposit Instruments and the Redemption Instruments; \9\ (d) to the
extent the Fund determines, on a given Business Day, to use a
representative sampling of the Fund's portfolio; \10\ or (e) for
temporary periods, to effect changes in the Fund's portfolio as a
result of the rebalancing of its Underlying Index (any such change, a
``Rebalancing''). If there is a difference between the net asset value
(``NAV'') attributable to a Creation Unit Aggregation and the aggregate
market value of the Deposit Instruments or Redemption Instruments
exchanged for the Creation Unit Aggregation, the party conveying
instruments with the lower value will also pay to the other an amount
in cash equal to that difference (the ``Cash Amount'').
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    \4\ The Funds must comply with the federal securities laws in
accepting Deposit Instruments and satisfying redemptions with
Redemption Instruments, including that the Deposit Instruments and
Redemption Instruments are sold in transactions that would be exempt
from registration under the Securities Act of 1933 (``Securities
Act''). In accepting Deposit Instruments and satisfying redemptions
with Redemption Instruments that are restricted securities eligible
for resale pursuant to Rule 144A under the Securities Act, the Funds
will comply with the conditions of Rule 144A.
    \5\ The portfolio used for this purpose will be the same
portfolio used to calculate the Fund's NAV for the Business Day.
    \6\ A tradeable round lot for a security will be the standard
unit of trading in that particular type of security in its primary
market.
    \7\ A TBA Transaction is a method of trading mortgage-backed
securities. In a TBA Transaction, the buyer and seller agree on
general trade parameters such as agency, settlement date, par amount
and price. The actual pools delivered generally are determined two
days prior to the settlement date.
    \8\ This includes instruments that can be transferred in kind
only with the consent of the original counterparty to the extent the
Fund does not intend to seek such consents.
    \9\ Because these instruments will be excluded from the Deposit
Instruments and the Redemption Instruments, their value will be
reflected in the determination of the Cash Amount (defined below).
    \10\ A Fund may only use sampling for this purpose if the
sample: (i) Is designed to generate performance that is highly
correlated to the performance of the Fund's portfolio; (ii) consists
entirely of instruments that are already included in the Fund's
portfolio; and (iii) is the same for all Authorized Participants on
a given Business Day.
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    9. Purchases and redemptions of Creation Unit Aggregations may be
made in whole or in part on a cash basis, rather than in kind, solely
under the following circumstances: (a) To the extent there is a Cash
Amount, as described above; (b) if, on a given Business Day, a Fund
announces before the open of trading that all purchases, all
redemptions or all purchases and redemptions on that day will be made
entirely in cash; (c) if, upon receiving a purchase or redemption order
from an Authorized Participant, a Fund determines to require the
purchase or redemption, as applicable, to be made entirely in cash;\11\
(d) if, on a given Business Day, a Fund requires all Authorized
Participants purchasing or redeeming Shares on that day to deposit or
receive (as applicable) cash in lieu of some or all of the Deposit
Instruments

or Redemption Instruments, respectively, solely because: (i) Such
instruments are not eligible for transfer through either the NSCC or
DTC; or (ii) in the case of International Funds, Blended Global Funds
and Global Funds, such instruments are not eligible for trading due to
local trading restrictions, local restrictions on securities transfers
or other similar circumstances; or (e) if a Fund permits an Authorized
Participant to deposit or receive (as applicable) cash in lieu of some
or all of the Deposit Instruments or Redemption Instruments,
respectively, solely because: (i) Such instruments are, in the case of
the purchase of a Creation Unit Aggregation, not available in
sufficient quantity; (ii) such instruments are not eligible for trading
by an Authorized Participant or the investor on whose behalf the
Authorized Participant is acting; or (iii) a holder of Shares of an
International Fund, Blended Global Fund or Global Fund would be subject
to unfavorable income tax treatment if the holder receives redemption
proceeds in kind.\12\
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    \11\ In determining whether a particular Fund will sell or
redeem Creation Unit Aggregations entirely on a cash or in kind
basis (whether for a given day or a given order), the key
consideration will be the benefit that would accrue to the Fund and
its investors. For instance, in bond transactions, the Adviser may
be able to obtain better execution than Share purchasers because of
the Adviser's or Sub-adviser's size, experience and potentially
stronger relationships in the fixed income markets. Purchases of
Creation Unit Aggregations either on an all cash basis or in kind
are expected to be neutral to the Funds from a tax perspective. In
contrast, cash redemptions typically require selling portfolio
holdings, which may result in adverse tax consequences for the
remaining Fund shareholders that would not occur with an in kind
redemption. As a result, tax considerations may warrant in kind
redemptions.
    \12\ A ``custom order'' is any purchase or redemption of Shares
made in whole or in part on a cash basis in reliance on clause
(e)(i) or (e)(ii).
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    10. Each Business Day, before the open of trading on a the national
securities exchange (as defined in section 2(a)(26) of the Act)
(``Exchange'') on which Shares are listed, each Fund will cause to be
published through the NSCC the names and quantities of the instruments
comprising the Deposit Instruments and the Redemption Instruments, as
well as the estimated Cash Amount (if any), for that day. The list of
Deposit Instruments and the list of Redemption Instruments will apply
until new lists are announced on the following Business Day, and there
will be no intra-day changes to the lists except to correct errors in
the published lists. The Exchange will disseminate every 15 seconds
throughout the regular trading hours through the facilities of the
Consolidated Tape Association the estimated intra-day NAV calculated
and disseminated in accordance with the relevant listing standards of
the relevant Exchange.
    11. Shares will be listed and traded on an Exchange. It is expected
that one or more member firms of an Exchange will be designated to act
as a market maker and maintain a market for Shares trading on the
Exchange. Prices of Shares trading on an Exchange will be based on the
current bid/ask market. Shares sold in the secondary market will be
subject to customary brokerage commissions and charges.
    12. Applicants expect that purchasers of Creation Unit Aggregations
will include institutional investors, arbitrageurs, traders and other
market participants. Exchange specialists or market makers also may
purchase Creation Unit Aggregations for use in market-making
activities. Applicants expect that secondary market purchasers of
Shares will include both institutional investors and retail
investors.\13\ Applicants expect that the price at which Shares trade
will be disciplined by arbitrage opportunities created by the option to
continually purchase or redeem Creation Unit Aggregations at their NAV,
which should ensure that Shares will not trade at a material discount
or premium in relation to their NAV.
---------------------------------------------------------------------------

    \13\ Shares will be registered in book-entry form only. DTC or
its nominee will be the registered owner of all outstanding Shares.
DTC or DTC Participants will maintain records reflecting beneficial
owners of Shares.
---------------------------------------------------------------------------

    13. Shares will not be individually redeemable. To redeem, an
investor must accumulate enough Shares to constitute Creation Unit
Aggregations. Redemption orders must be placed by or through an
Authorized Participant.
    14. Neither the Trust nor any Fund will be advertised, marketed or
otherwise held out as a traditional open-end investment company or a
mutual fund. Instead, each Fund will be marketed as an ``exchange-
traded fund'', an ``investment company,'' a ``fund,'' or a ``trust.''
All marketing materials that describe the features or method of
obtaining, buying or selling Creation Unit Aggregations, or Shares
listed and traded on an Exchange or refer to redeemability, will
prominently disclose that (1) Shares are not individually redeemable
and that the owners of Shares may purchase or redeem Shares from the
Fund in Creation Unit Aggregations only, and (2) the purchase and sale
price of individual Shares trading on an Exchange may be below, at, or
above the most recently calculated NAV for such Shares. The same
approach will be followed in the shareholder reports and other investor
educational materials issued or circulated in connection with the
Shares. The Funds will provide copies of their annual and semi-annual
shareholder reports to DTC Participants for distribution to
shareholders.

 Applicants' Legal Analysis

    1. Applicants request an order under section 6(c) of the Act for an
exemption from sections 2(a)(32), 5(a)(1), 22(d) and 22(e) of the Act
and rule 22c-1 under the Act, and under sections 6(c) and 17(b) of the
Act for an exemption from sections 17(a)(1) and (2) of the Act, and
under section 12(d)(1)(J) of the Act for an exemption from sections
12(d)(1)(A) and 12(d)(1)(B) of the Act.
    2. Section 6(c) of the Act provides that the Commission may exempt
any person, security or transaction, or any class of persons,
securities or transactions, from any provision of the Act, if and to
the extent that such exemption is necessary or appropriate in the
public interest and consistent with the protection of investors and the
purposes fairly intended by the policy and provisions of the Act.
Section 17(b) of the Act authorizes the Commission to exempt a proposed
transaction from section 17(a) of the Act if evidence establishes that
the terms of the transaction, including the consideration to be paid or
received, are reasonable and fair and do not involve overreaching on
the part of any person concerned, and the proposed transaction is
consistent with the policies of the registered investment company and
the general provisions of the Act. Section 12(d)(1)(J) of the Act
provides that the Commission may exempt any person, security, or
transaction, or any class or classes of persons, securities or
transactions, from any provisions of section 12(d)(1) if the exemption
is consistent with the public interest and the protection of investors.

Sections 5(a)(1) and 2(a)(32) of the Act

    3. Section 5(a)(1) of the Act defines an ``open-end company'' as a
management investment company that is offering for sale or has
outstanding any redeemable security of which it is the issuer. Section
2(a)(32) of the Act defines a redeemable security as any security,
other than short-term paper, under the terms of which the owner, upon
its presentation to the issuer, is entitled to receive approximately a
proportionate share of the issuer's current net assets, or the cash
equivalent. Because Shares will not be individually redeemable,
applicants request an order that would permit the Funds to register as
open-end management investment companies and issue Shares that are
redeemable in Creation Unit Aggregations only. Applicants state that
investors may purchase Shares in Creation Unit Aggregations and redeem
Creation Unit Aggregations from each Fund. Applicants further state
that because the market price of Shares will be disciplined by
arbitrage opportunities, investors should be able to buy and sell
Shares in the secondary market at prices that do not vary materially
from their NAV.

Section 22(d) of the Act and Rule 22c-1 Under the Act

    Section 22(d) of the Act, among other things, prohibits a dealer
from selling a redeemable security that is currently being offered to
the public by or through a principal underwriter, except at a current
public offering price described in the prospectus. Rule 22c-1 under the
Act generally requires that a dealer selling, redeeming, or
repurchasing a redeemable security do so only at a price based on its
NAV. Applicants state that secondary market trading in Shares will take
place at negotiated prices, not at a current offering price described
in a Fund's prospectus and not at a price based on NAV. Thus, purchases
and sales of Shares in the secondary market will not comply with
section 22(d) of the Act and rule 22c-1 under the Act. Applicants
request an exemption under section 6(c) from these provisions.
    4. Applicants assert that the concerns sought to be addressed by
section 22(d) of the Act and rule 22c-1 under the Act with respect to
pricing are equally satisfied by the proposed method of pricing Shares.
Applicants maintain that, while there is little legislative history
regarding section 22(d), its provisions, as well as those of rule 22c-
1, appear to have been designed to (a) prevent dilution caused by
certain riskless-trading schemes by principal underwriters and contract
dealers, (b) prevent unjust discrimination or preferential treatment
among buyers, and (c) ensure an orderly distribution system of
investment company shares by eliminating price competition from non-
contract dealers offering shares at less than the published sales price
and repurchasing shares at more than the published redemption price.
    5. Applicants believe that none of these purposes will be thwarted
by permitting Shares to trade in the secondary market at negotiated
prices. Applicants state that (a) secondary market trading in Shares
does not involve Fund assets and will not result in dilution of an
investment in Shares, and (b) to the extent different prices exist
during a given trading day, or from day to day, such variances occur as
a result of third-party market forces, such as supply and demand.
Therefore, applicants assert that secondary market transactions in
Shares will not lead to discrimination or preferential treatment among
purchasers. Finally, applicants contend that the proposed distribution
system will be orderly because competitive forces will ensure that the
difference between the market price of Shares and their NAV remains
narrow.

Section 22(e) of the Act

    7. Section 22(e) of the Act generally prohibits a registered
investment company from suspending the right of redemption or
postponing the date of payment of redemption proceeds for more than
seven days after the tender of a security for redemption. Applicants
observe that settlement of redemptions of Creation Unit Aggregations
for International Funds, Blended Global Funds, and Global Funds will be
contingent not only on the settlement cycle of the U.S. securities
markets but also on the delivery cycles in foreign markets in which
those Funds invests. Applicants state that under certain circumstances,
the delivery cycles for transferring Portfolio Instruments to redeeming
investors, coupled with local market holiday schedules, will require a
delivery process of up to twelve (12) calendar days. Applicants
therefore request relief from section 22(e) in order to provide for
payment or satisfaction of redemptions within the maximum number of
calendar days required for such payment or satisfaction in the
principal local markets where transactions in the Portfolio Instruments
of each International Fund, Blended Global Fund and Global Fund
customarily clear and settle, but in all cases no later than 12
calendar days following the tender of a Creation Unit Aggregation.\14\
With respect to Future Funds that are International Funds, Blended
Global Funds or Global Funds, applicants seek the same relief from
section 22(e) only to the extent that circumstances exist similar to
those described in the application.
---------------------------------------------------------------------------

    \14\ Applicants acknowledge that no relief obtained from the
requirements of section 22(e) will affect any obligations applicants
may have under rule 15c6-1 under the Exchange Act. Rule 15c6-1
requires that most securities transactions be settled within three
business days of the trade.
---------------------------------------------------------------------------

    8. Applicants submit that Congress adopted section 22(e) to prevent
unreasonable, undisclosed and unforeseen delays in the actual payment
of redemption proceeds. Applicants state that allowing redemption
payments for Creation Unit Aggregations of a Fund to be made within
twelve (12) calendar days would not be inconsistent with the spirit and
intent of section 22(e). Applicants state that the SAI will disclose
those local holidays (over the period of at least one year following
the date of the SAI), if any, that are expected to prevent the delivery
of redemption proceeds in seven calendar days, and the maximum number
of days needed to deliver the proceeds for each affected International
Fund, Blended Global Fund and Global Fund. Applicants are not seeking
relief from section 22(e) with respect to International Funds, Blended
Global Funds or Global Funds that do not effect redemptions of Creation
Unit Aggregations in-kind.

Section 12(d)(1) of the Act

    9. Section 12(d)(1)(A) of the Act, in relevant part, prohibits a
registered investment company from acquiring securities of an
investment company if such securities represent more than 3% of the
total outstanding voting stock of the acquired company, more than 5% of
the total assets of the acquiring company, or, together with the
securities of any other investment companies, more than 10% of the
total assets of the acquiring company. Section 12(d)(1)(B) of the Act
prohibits a registered open-end investment company, its principal
underwriter, or any other broker or dealer from selling the investment
company's shares to another investment company if the sale will cause
the acquiring company to own more than 3% of the acquired company's
voting stock, or if the sale will cause more than 10% of the acquired
company's voting stock to be owned by investment companies generally.
    10. Applicants request an exemption to permit management investment
companies (``Acquiring Management Companies'') and unit investment
trusts (``Acquiring Trusts'') registered under the Act that are not
sponsored or advised by the Adviser and are not part of the same
``group of investment companies,'' as defined in section
12(d)(1)(G)(ii) of the Act, as the Funds (collectively, ``Acquiring
Funds'') to acquire Shares beyond the limits of section 12(d)(1)(A). In
addition, applicants seek relief to permit each Fund and any broker-
dealer that is registered under the Exchange Act to sell Shares to
Acquiring Funds in excess of the limits of section 12(d)(1)(B).
    11. Each Acquiring Management Company will be advised by an
investment adviser within the meaning of section 2(a)(20)(A) of the Act
(the ``Acquiring Fund Adviser'') and may be sub-advised by one or more
investment advisers within the meaning of section 2(a)(20)(B) of the
Act (each an ``Acquiring Fund Sub-adviser''). Any Acquiring Fund
Adviser or Acquiring Fund Sub-adviser will be registered or not subject
to registration under the Advisers Act. Each Acquiring Trust will be
sponsored by a sponsor (``Sponsor'').
    12. Applicants submit that the proposed conditions to the requested
relief adequately address the concerns underlying the limits in section

12(d)(1)(A) and (B), which include concerns about undue influence by a
fund of funds over underlying funds, excessive layering of fees and
overly complex fund structures. Applicants believe that the requested
exemption is consistent with the public interest and the protection of
investors.
    13. Applicants believe that neither an Acquiring Fund nor an
Acquiring Fund Affiliate would be able to exert undue influence over a
Fund.\15\ To limit the control that an Acquiring Fund may have over a
Fund, applicants propose a condition prohibiting an Acquiring Fund
Adviser, Sponsor, any person controlling, controlled by, or under
common control with the Acquiring Fund Adviser or Sponsor, and any
investment company or issuer that would be an investment company but
for sections 3(c)(1) or 3(c)(7) of the Act that is advised or sponsored
by the Acquiring Fund Adviser, the Sponsor, or any person controlling,
controlled by, or under common control with the Acquiring Fund Adviser
or Sponsor (``Acquiring Fund's Advisory Group'') from controlling
(individually or in the aggregate) a Fund within the meaning of section
2(a)(9) of the Act. The same prohibition would apply to any Acquiring
Fund Sub-adviser, any person controlling, controlled by or under common
control with the Acquiring Fund Sub-adviser, and any investment company
or issuer that would be an investment company but for section 3(c)(1)
or 3(c)(7) of the Act (or portion of such investment company or issuer)
advised or sponsored by the Acquiring Fund Sub-adviser or any person
controlling, controlled by or under common control with the Acquiring
Fund Sub-adviser (``Acquiring Fund's Sub-Advisory Group''). Applicants
propose other conditions to limit the potential for undue influence
over the Funds, including that no Acquiring Fund or Acquiring Fund
Affiliate (except to the extent it is acting in its capacity as an
investment adviser to a Fund) will cause a Fund to purchase a security
in an offering of securities during the existence of an underwriting or
selling syndicate of which a principal underwriter is an Underwriting
Affiliate (``Affiliated Underwriting''). An ``Underwriting Affiliate''
is a principal underwriter in any underwriting or selling syndicate
that is an officer, director, member of an advisory board, Acquiring
Fund Adviser, Acquiring Fund Sub-adviser, Sponsor or employee of the
Acquiring Fund, or a person of which any such officer, director, member
of an advisory board, Acquiring Fund Adviser, Acquiring Fund Sub-
adviser, employee or Sponsor is an affiliated person (except any person
whose relationship to the Fund is covered by section 10(f) of the Act
is not an Underwriting Affiliate).
---------------------------------------------------------------------------

    \15\ An ``Acquiring Fund Affiliate'' is the Acquiring Fund
Adviser, Acquiring Fund Sub-adviser(s), Sponsor, promoter or
principal underwriter of an Acquiring Fund, and any person
controlling, controlled by or under common control with any of these
entities. A ``Fund Affiliate'' is the Adviser, Sub-adviser,
promoter, or principal underwriter of a Fund or any person
controlling, controlled by or under common control with any of these
entities.
---------------------------------------------------------------------------

    14. Applicants do not believe that the proposed arrangement will
involve excessive layering of fees. The board of directors or trustees
of any Acquiring Management Company, including a majority of the
directors or trustees who are not interested directors or trustees
within the meaning of section 2(a)(19) of the Act (``disinterested
directors or trustees''), will find that the advisory fees charged
under the contract are based on services provided that will be in
addition to, rather than duplicative of, services provided under the
advisory contract of any Fund in which the Acquiring Management Company
may invest. In addition, under condition 13, an Acquiring Fund Adviser,
or an Acquiring Trust's trustee (``Trustee'') or Sponsor, will waive
fees otherwise payable to it by the Acquiring Fund in an amount at
least equal to any compensation (including fees received pursuant to
any plan adopted by a Fund under rule 12b-1 under the Act) received
from a Fund by the Acquiring Fund Adviser, Trustee or Sponsor or an
affiliated person of the Acquiring Fund Adviser, Trustee or Sponsor, in
connection with the investment by the Acquiring Fund in the Fund.
Applicants state that any sales loads or service fees charged with
respect to shares of an Acquiring Fund will not exceed the limits
applicable to a fund of funds set forth in NASD Conduct Rule 2830.\16\
---------------------------------------------------------------------------

    \16\ All references to NASD Conduct Rule 2830 include any
successor or replacement rule to NASD Conduct Rule 2830 that may be
adopted by the Financial Industry Regulatory Authority.
---------------------------------------------------------------------------

    15. Applicants submit condition 15 addresses concerns over
meaninglessly complex fund structures. Under condition 15, no Fund may
acquire securities of any investment company or company relying on
section 3(c)(1) or 3(c)(7) of the Act in excess of the limits contained
in section 12(d)(1)(A) of the Act, except to the extent permitted by
exemptive relief from the Commission permitting the Fund to purchase
shares of other investment companies for short-term cash management
purposes. To ensure that Acquiring Funds comply with the terms and
conditions of the requested order, the Acquiring Funds must enter into
an agreement with the respective Funds (``Acquiring Fund Agreement'').
The Acquiring Fund Agreement will require the Acquiring Fund to adhere
to the terms and conditions of the requested order and participate in
the proposed transactions in a manner that addresses concerns regarding
the requested relief from section 12(d)(1). The Acquiring Fund
Agreement also will include an acknowledgement from the Acquiring Fund
that it may rely on the requested order only to invest in Funds and not
in any other investment company. Applicants also note that a Fund may
choose to reject a direct purchase of Shares in Creation Unit
Aggregations by an Acquiring Fund. To the extent that an Acquiring Fund
purchases Shares in the secondary market, a Fund would still retain its
ability to reject initial purchases of Shares made in reliance on the
requested order by declining to enter into the Acquiring Fund Agreement
prior to any investment by an Acquiring Fund in excess of the limits of
section 12(d)(1)(A).

Section 17 of the Act

    16. Section 17(a) of the Act generally prohibits an affiliated
person of a registered investment company, or an affiliated person of
such a person (``second-tier affiliate''), from selling any security or
other property to or acquiring any security or other property from the
company. Section 2(a)(3) of the Act defines ``affiliated person'' of
another person to include (a) any person directly or indirectly owning,
controlling, or holding with power to vote 5% or more of the
outstanding voting securities of the other person, and (c) any person
directly or indirectly controlling, controlled by, or under common
control with, the other person. Section 2(a)(9) of the Act defines
control as the power to exercise a controlling influence over the
management of policies of a company. It also provides that a control
relationship will be presumed where one person owns more than 25% of a
company's voting securities. The Funds may be deemed to be controlled
by the Adviser and hence affiliated persons of each other. In addition,
the Funds may be deemed to be under common control with any other
registered investment company (or series thereof) advised by the
Adviser (an ``Affiliated Fund'').
    17. Applicants request an exemption from section 17(a) of the Act
pursuant to sections 17(b) and 6(c) of the Act to permit persons to
effectuate in-kind purchases and redemptions with a Fund when they are
affiliated persons or

second-tier affiliates of the Fund solely by virtue of one or more of
the following: (1) Holding 5% or more, or more than 25%, of the
outstanding Shares of one or more Funds; (2) having an affiliation with
a person with an ownership interest described in (1); or (3) holding 5%
or more, or more than 25%, of the shares of one or more Affiliated
Funds.
    18. Applicants assert that no useful purpose would be served by
prohibiting these types of affiliated persons from acquiring or
redeeming Creation Unit Aggregations through in-kind transactions.
Except for permitted cash-in-lieu amounts, the Deposit Instruments and
Redemption Instruments will be the same for all purchasers and
redeemers regardless of the their identity. The deposit procedures for
both in-kind purchases and in-kind redemptions of Creation Unit
Aggregations will be the same for all purchases and redemptions,
regardless of size or number. Deposit Instruments and Redemption
Instruments will be valued in the same manner as Portfolio Instruments
are valued for purposes of calculating NAV. Applicants submit that, by
using the same standards for valuing Portfolio Instruments as are used
for calculating the value of Deposit Instruments and Redemption
Instruments, the Fund will ensure that its NAV will not be adversely
affected by such transactions. Applicants also believe that in-kind
purchases and redemptions will not result in self-dealing or
overreaching of the Fund.
    19. Applicants also seek relief from section 17(a) to permit a Fund
that is an affiliated person or second-tier affiliate of an Acquiring
Fund to sell its Shares to and redeem its Shares from an Acquiring
Fund, and to engage in the accompanying in-kind transactions with the
Acquiring Fund.\17\ Applicants state that the terms of the proposed
transactions will be fair and reasonable and will not involve
overreaching. Applicants note that any consideration paid by an
Acquiring Fund for the purchase or redemption of Shares directly from a
Fund will be based on the NAV of the Fund in accordance with policies
and procedures set forth in the Fund's registration statement.\18\ The
Acquiring Fund Agreement will require any Acquiring Fund that purchases
Creation Unit Aggregations directly from a Fund to represent that the
purchase will be in compliance with the investment restrictions of the
Acquiring Fund and will be consistent with the investment policies set
forth in the Acquiring Fund's registration statement. Further, absent
the unusual circumstances discussed in the application, the Deposit
Instruments and Redemption Instruments available for a Fund will be the
same for all purchasers and redeemers, respectively and will correspond
pro rata to the Fund's Portfolio Instruments, except as described
above. Applicants also state that the proposed transactions are
consistent with the general purposes of the Act and appropriate in the
public interest.
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    \17\ To the extent that purchases and sales of Shares occur in
the secondary market and not through principal transactions directly
between an Acquiring Fund and a Fund, relief from section 17(a)
would not be necessary. However, the requested relief would apply to
direct sales of Shares in Creation Unit Aggregations by a Fund to an
Acquiring Fund and redemptions of those Shares. The requested relief
also is intended to cover the in-kind transactions that may
accompany such sales and redemptions. Applicants are not seeking
relief from section 17(a) for, and the requested relief will not
apply to, transactions where a Fund could be deemed an affiliated
person or second-tier affiliate of an Acquiring Fund because the
Adviser provides investment advisory services to the Acquiring Fund.
    \18\ Applicants acknowledge that receipt of compensation by (a)
an affiliated person of an Acquiring Fund, or an affiliated person
of such person, for the purchase by the Acquiring Fund of Shares or
(b) an affiliated person of a Fund, or an affiliated person of such
person, for the sale by the Fund of its Shares to an Acquiring Fund
may be prohibited by section 17(e)(1) of the Act. The Acquiring Fund
Agreement also will include this acknowledgment.
---------------------------------------------------------------------------

Applicants' Conditions

    Applicants agree that any order of the Commission granting the
requested relief will be subject to the following conditions:

ETF Relief

    1. As long as a Fund operates in reliance on the requested order,
its Shares will be listed on an Exchange.
    2. Neither the Trust nor any Fund will be advertised or marketed as
an open-end investment company or a mutual fund. Any advertising
material that describes the purchase or sale of Creation Unit
Aggregations or refers to redeemability will prominently disclose that
Shares are not individually redeemable and that owners of Shares may
acquire those Shares from a Fund and tender those Shares for redemption
to a Fund in Creation Unit Aggregations only.
    3. The Web site for the Funds, which is and will be publicly
accessible at no charge, will contain, on a per Share basis for each
Fund, the prior Business Day's NAV and the market closing price or the
midpoint of the bid/ask spread at the time of the calculation of such
NAV (``Bid/Ask Price''), and a calculation of the premium or discount
of the market closing price or Bid/Ask Price against such NAV.
    4. The requested relief to permit ETF operations will expire on the
effective date of any Commission rule under the Act that provides
relief permitting the operation of index-based exchange-traded funds.

Section 12(d)(1) Relief

    Applicants agree that any order granting the requested 12(d)(1)
relief will be subject to the following conditions:
    5. The members of an Acquiring Fund's Advisory Group will not
control (individually or in the aggregate) a Fund within the meaning of
section 2(a)(9) of the Act. The members of an Acquiring Fund's Sub-
Advisory Group will not control (individually or in the aggregate) a
Fund within the meaning of section 2(a)(9) of the Act. If, as a result
of a decrease in the outstanding voting securities of a Fund, the
Acquiring Fund's Advisory Group or the Acquiring Fund's Sub-Advisory
Group, each in the aggregate, becomes a holder of more than 25% of the
outstanding voting securities of a Fund, it will vote its Shares in the
same proportion as the vote of all other holders of the Fund Shares.
This condition does not apply to the Acquiring Fund's Sub-Advisory
Group with respect to a Fund for which the Acquiring Fund Sub-adviser
or a person controlling, controlled by, or under common control with
the Acquiring Fund Sub-adviser acts as the investment adviser within
the meaning of section 2(a)(20)(A) of the Act.
    6. No Acquiring Fund or Acquiring Fund Affiliate will cause any
existing or potential investment by the Acquiring Fund in a Fund to
influence the terms of any services or transactions between the
Acquiring Fund or an Acquiring Fund Affiliate and the Fund or a Fund
Affiliate.
    7. The board of directors or trustees of an Acquiring Management
Company, including a majority of the disinterested directors or
trustees, will adopt procedures reasonably designed to ensure that the
Acquiring Fund Adviser and any Acquiring Fund Sub-adviser are
conducting the investment program of the Acquiring Management Company
without taking into account any consideration received by the Acquiring
Management Company or an Acquiring Fund Affiliate from a Fund or a Fund
Affiliate in connection with any services or transactions.
    8. Once an investment by an Acquiring Fund in Shares exceeds the
limit in section 12(d)(1)(A)(i) of the Act, the board of directors/
trustees of the Trust (``Board''), including a majority of

the disinterested directors/trustees, will determine that any
consideration paid by the Fund to the Acquiring Fund or an Acquiring
Funds Affiliate in connection with any services or transactions: (a) Is
fair and reasonable in relation to the nature and quality of the
services and benefits received by the Fund; (b) is within the range of
consideration that the Fund would be required to pay to another
unaffiliated entity in connection with the same services or
transactions; and (c) does not involve overreaching on the part of any
person concerned. This condition does not apply with respect to any
services or transactions between a Fund and its investment adviser(s),
or any person controlling, controlled by, or under common control with
such investment adviser(s).
    9. No Acquiring Fund or Acquiring Fund Affiliate (except to the
extent it is acting in its capacity as an investment adviser to a Fund)
will cause the Fund to purchase a security in any Affiliated
Underwriting.
    10. The Board, including a majority of the disinterested directors/
trustees, will adopt procedures reasonably designed to monitor any
purchases of securities by a Fund in an Affiliated Underwriting, once
an investment by an Acquiring Fund in the securities of the Fund
exceeds the limit of section 12(d)(1)(A)(i) of the Act, including any
purchases made directly from an Underwriting Affiliate. The Board will
review these purchases periodically, but no less frequently than
annually, to determine whether the purchases were influenced by the
investment by the Acquiring Fund in the Fund. The Board will consider,
among other things: (a) Whether the purchases were consistent with the
investment objectives and policies of the Fund; (b) how the performance
of securities purchased in an Affiliated Underwriting compares to the
performance of comparable securities purchased during a comparable
period of time in underwritings other than Affiliated Underwritings or
to a benchmark such as a comparable market index; and (c) whether the
amount of securities purchased by the Fund in Affiliated Underwritings
and the amount purchased directly from an Underwriting Affiliate have
changed significantly from prior years. The Board will take any
appropriate actions based on its review, including, if appropriate, the
institution of procedures designed to assure that purchases of
securities in Affiliated Underwritings are in the best interest of
shareholders of the Fund.
    11. Each Fund will maintain and preserve permanently in an easily
accessible place a written copy of the procedures described in the
preceding condition, and any modifications to such procedures, and will
maintain and preserve for a period of not less than six years from the
end of the fiscal year in which any purchase in an Affiliated
Underwriting occurred, the first two years in an easily accessible
place, a written record of each purchase of securities in Affiliated
Underwritings, once an investment by an Acquiring Fund in the
securities of the Fund exceeds the limit of section 12(d)(1)(A)(i) of
the Act, setting forth from whom the securities were acquired, the
identity of the underwriting syndicate's members, the terms of the
purchase, and the information or materials upon which the Board's
determinations were made.
    12. Before investing in Shares in excess of the limits in section
12(d)(1)(A), each Acquiring Fund and the Fund will execute an Acquiring
Fund Agreement stating, without limitation, that their respective
boards of directors or trustees and their investment adviser(s) or
their Sponsors or Trustees, as applicable, understand the terms and
conditions of the order, and agree to fulfill their responsibilities
under the order. At the time of its investment in Shares of a Fund in
excess of the limit in section 12(d)(1)(A)(i), an Acquiring Fund will
notify the Fund of the investment. At such time, the Acquiring Fund
will also transmit to the Fund a list of the names of each Acquiring
Fund Affiliate and Underwriting Affiliate. The Acquiring Fund will
notify the Fund of any changes to the list of names as soon as
reasonably practicable after a change occurs. The Fund and the
Acquiring Fund will maintain and preserve a copy of the order, the
Acquiring Fund Agreement, and the list with any updated information for
the duration of the investment and for a period of not less than six
years thereafter, the first two years in an easily accessible place.
    13. The Acquiring Fund Adviser, Trustee or Sponsor, as applicable,
will waive fees otherwise payable to it by the Acquiring Fund in an
amount at least equal to any compensation (including fees received
pursuant to any plan adopted by a Fund under rule 12b-1 under the Act)
received from the Fund by the Acquiring Fund Adviser, Trustee or
Sponsor, or an affiliated person of the Acquiring Fund Adviser, Trustee
or Sponsor, other than any advisory fees paid to the Acquiring Fund
Adviser, Trustee, or Sponsor, or its affiliated person by the Fund, in
connection with the investment by the Acquiring Fund in the Fund. Any
Acquiring Fund Sub-adviser will waive fees otherwise payable to the
Acquiring Fund Sub-adviser, directly or indirectly, by the Acquiring
Management Company in an amount at least equal to any compensation
received from a Fund by the Acquiring Fund Sub-adviser, or an
affiliated person of the Acquiring Fund Sub-adviser, other than any
advisory fees paid to the Acquiring Fund Sub-adviser or its affiliated
person by the Fund, in connection with any investment by the Acquiring
Management Company in the Fund made at the direction of the Acquiring
Fund Sub-adviser. In the event that the Acquiring Fund Sub-adviser
waives fees, the benefit of the waiver will be passed through to the
Acquiring Management Company.
    14. Any sales charges and/or service fees charged with respect to
shares of an Acquiring Fund will not exceed the limits applicable to a
fund of funds as set forth in NASD Conduct Rule 2830.
    15. No Fund will acquire securities of an investment company or
company relying on section 3(c)(1) or 3(c)(7) of the Act in excess of
the limits contained in section 12(d)(1)(A) of the Act, except to the
extent permitted by exemptive relief from the Commission permitting the
Fund to purchase shares of other investment companies for short-term
cash management purposes.
    16. Before approving any advisory contract under section 15 of the
Act, the board of directors or trustees of each Acquiring Management
Company, including a majority of the disinterested directors or
trustees, will find that the advisory fees charged under such advisory
contract are based on services provided that will be in addition to,
rather than duplicative of, the services provided under the advisory
contract(s) of any Fund in which the Acquiring Management Company may
invest. These findings and their basis will be recorded fully in the
minute books of the appropriate Acquiring Management Company.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-07729 Filed 4-2-13; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: January 31, 2007 (Volume 72, Number 20)]
[Notices]
[Page 4499]
[DOCID:fr31ja07-44]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. EL07-32-000]

Massachusetts Municipal Wholesale Electric Company, Complainant
v. ISO New England, Inc., Respondent; Notice of Complaint

January 24, 2007.
    Take notice that on January 23, 2007, the Massachusetts Municipal
Wholesale Electric Company (MMWEC) on behalf of the Town of Ashbumham,
Boylston, Groton, Holden, the City of Holyoke, the Towns of Littleton,
Paxton, Shrewsbury, Sterling, Templeton, West Boylston, the City of
Westfield, and the Towns of Hingham, Hull Mansfield, and North
Attleborough (collectively, the Towns) tendered for filing a complaint
against ISO New England, Inc.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211, 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. The Respondent's
answer and all interventions, or protests must be filed on or before
the comment date. The Respondent's answer, motions to intervene, and
protests must be served on the Complainants.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://www.ferc.gov.
 Persons unable to file electronically should submit an

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

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

TTY, call<PHONE_NUMBER>.
    Comment Date: 5 p.m. Eastern Time on February 12, 2007.

Magalie R. Salas,
Secretary.
[FR Doc. E7-1483 Filed 1-30-07; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 82, Number 86 (Friday, May 5, 2017)]
[Notices]
[Pages 21278-21280]
[FR Doc No: 2017-09061]

=======================================================================
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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80569; File No. SR-ISE-2017-34]

Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Regarding Quote
Mitigation

May 1, 2017.
    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 April 26, 2017, Nasdaq ISE, LLC (``ISE'' or ``Exchange'') filed with
the Securities and Exchange Commission (``SEC'' or ``Commission'') the
proposed rule change as described in Items I, II, and III, below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------

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

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

    The Exchange proposes to amend ISE Rule 804(h) regarding quote
mitigation.
    The text of the proposed rule change is available on the Exchange's
Web site at www.ise.com, at the principal office of the Exchange, and
at the Commission's Public Reference Room.

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

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

Exchange has prepared summaries, set forth in sections A, B, and C
below, of the most significant aspects of such statements.

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

1. Purpose
    The Exchange proposes to amend ISE Rule 804, entitled ``Market
Maker Quotations,'' to specifically amend Rule 804(h) which addresses
the Exchange's quote traffic mitigation plan to adopt a similar quote
mitigation plan to that of NASDAQ PHLX LLC (``Phlx'').
    ISE implemented its quote mitigation plan in conjunction with
joining other options exchanges in entering into the Penny Pilot
Program to Quote Certain Options in Pennies. In 2007, ISE proposed to
amend its rules to permit certain options classes to be quoted in
pennies during a six-month pilot.\3\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Release Act. No. 55161 (February 1,
2007), 72 FR 4754 (January 24, 2007) (SR-ISE-2006-62) (Order
Granting Approval to Proposed Rule Change as Modified by Amendment
Nos. 1 and 2 Thereto, To Implement a Penny Pilot Program To Quote
Certain Options in Pennies).
---------------------------------------------------------------------------

    ISE Rule 804(h) provides that ISE shall utilize a mechanism so that
newly-received quotations and other changes to the Exchange's best bid
and offer are not disseminated for a period of up to, but not more than
one second. With the upcoming planned migration to INET,\4\ the
Exchange proposes to utilize a plan similar to that of Phlx for quote
mitigation. The Exchange proposes to amend Rule 804(h) to adopt
language similar to Phlx. Since 2007, Phlx has operated on INET, the
same system that ISE will be migrating to utilize.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 80432 (April 11,
2017), 82 FR 18191 (April 17, 2017) (SR-ISE-2017-03) (Order
Approving Proposed Rule Change, as Modified by Amendment No. 1, to
Amend Various Rules in Connection with a System Migration to Nasdaq
INET Technology).
---------------------------------------------------------------------------

    Phlx Rule 1082(a)(ii)(C) sets forth the conditions under which Phlx
disseminates updated quotations based on changes in the Exchange's
disseminated price and/or size. Phlx disseminates an updated bid and
offer price, together with the size associated with such bid and offer,
when: (1) Phlx's disseminated bid or offer price increases or
decreases; (2) the size associated with Phlx's disseminated bid or
offer decreases; or (3) the size associated with Phlx's bid (offer)
increases by an amount greater than or equal to a percentage (never to
exceed 20%) \5\ of the size associated with the previously disseminated
bid (offer). Such percentage, which would never exceed 20%, would be
determined on an issue-by-issue basis by the Exchange and announced to
membership via an Exchange circular. The percentage size increase
necessary to give rise to a refreshed quote may vary from issue to
issue, depending, without limitation, on the liquidity, average volume,
and average number of quotations submitted in the issue. The mitigation
would apply to all options traded on ISE.
---------------------------------------------------------------------------

    \5\ Phlx has set its percentage to 10%. See http://www.nasdaqtrader.com/content/phlxmemos/2007/jan/0197-07.pdf.
---------------------------------------------------------------------------

    The Exchange will not be adopting Phlx Rule 1082(a)(ii)(C)(4). This
functionality is not necessary on INET. Phlx adopted 1082(a)(ii)(C)(4)
when it was not operating on INET, with its subsequent replatform to
INET functionality, 1082(a)(ii)(C)(4) was no longer necessary because
of the real-time features which exist on INET. The INET functionality
rendered the rule text in 1082(a)(ii)(C)(4) as unnecessary.
    The Exchange will begin a system migration to Nasdaq INET in Q2 of
2017.\6\ The migration will be on a symbol by symbol basis as specified
by the Exchange in a notice to Members. The Exchange is proposing to
implement this rule change once all symbols have migrated to INET.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 80432 (April 11,
2017), 82 FR 18191 (April 17, 2017) (SR-ISE-2017-03) (Order
Approving Proposed Rule Change, as Modified by Amendment No. 1, to
Amend Various Rules in Connection with a System Migration to Nasdaq
INET Technology).
---------------------------------------------------------------------------

    Upon completion of the migration to INET, ISE will set an initial
percentage of 3% to be applied to all issues, which will be announced
in an Options Trader Alert. ISE will continue to monitor the quote
activity on the market and would not notify participants of any
incremental increase in the size of the Exchange's quote to be
disseminated to OPRA.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\7\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\8\ in particular, in that it is designed to promote
just and equitable principles of trade, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general to protect investors and the public interest,
by reducing the number of options quotations required to be submitted
to OPRA and, therefore, mitigating the Exchange's quote message traffic
and capacity. By adopting a quote mitigation plan similar to Phlx, the
Exchange will continue to mitigate quotes and monitor its quote
capacity, as is the case today. While the Phlx method differs from that
of ISE's rule, the Exchange believes that Phlx's method today
successfully mitigates quotes on that market. In addition, ISE desires
to adopt a similar mitigation as currently utilized by its affiliated
market, as it will operate on the same architecture.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Phlx quote mitigation process has been in place since 2007.
Phlx is operating on the INET system today, the same system that ISE
will migrate to for its operating system. The Exchange believes that
Phlx's quote mitigation process has successfully controlled Phlx's
quote capacity. The Exchange believes that it is reasonable to utilize
a similar process as Phlx to mitigate quotes for ISE given the system
architecture which will be utilized on ISE with the upcoming migration.
Additionally, Nasdaq, Inc., a common parent to Phlx and ISE, has
experience with this quote mitigation strategy on INET. The Exchange
has selected to mitigate ISE at 3% to start and determine if the
percentage will need to be adjusted thereafter. While ISE, similar to
Phlx, is a mature market with various auction offerings and higher
volumes, ISE will be newly migrated to INET. The Exchange plans on
monitoring the volume on this market to determine if the percentage
needs to be adjusted. Utilizing 3% as the initial percentage will
provide the Exchange with data for the newly migrated market.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange proposes to
mitigate all options trading on ISE. All options exchanges have a quote
mitigation process in place in connection with their participation in
the Penny Pilot Program.

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

    No written comments were either solicited or received.

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

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant

burden on competition; and (iii) become operative for 30 days from the
date on which it was filed, or such shorter time as the Commission may
designate, it has become effective pursuant to Section 19(b)(3)(A)(iii)
of the Act \9\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\10\
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or 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-ISE-2017-34 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ISE-2017-34. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-ISE-2017-34 and should be
submitted on or before May 26, 2017.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-09061 Filed 5-4-17; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 94 (Wednesday, May 15, 2019)]
[Notices]
[Page 21764]
[FR Doc No: 2019-10039]

=======================================================================
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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. NJ19-11-000]

Oncor Electric Delivery Company LLC; Notice of Filing

    Take notice that on April 30, 2019, the Oncor Electric Delivery
Company LLC submitted its tariff filing: Oncor TFO Tariff Rate Changes
to be effective July 1, 2018.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211, 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed on or before the comment date. On or
before the comment date, it is not necessary to serve motions to
intervene or protests on persons other than the Applicant.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the eFiling link at http://www.ferc.gov. Persons unable to file electronically should submit an
original and 5 copies of the protest or intervention to the Federal
Energy Regulatory Commission, 888 First Street NE, Washington, DC
20426.
    This filing is accessible on-line at http://www.ferc.gov, using the
eLibrary link and is available for review in the Commission's Public
Reference Room in Washington, DC. There is an eSubscription link on the
website that enables subscribers to receive email notification when a
document is added to a subscribed docket(s). For assistance with any
FERC Online service, please email<EMAIL_ADDRESS>or call
(866) 208-3676 (toll free). For TTY, call<PHONE_NUMBER>.
    Comment Date: 5:00 p.m. Eastern Time on May 21, 2019.

    Dated: May 9, 2019.
Kimberly D. Bose,
Secretary.
[FR Doc. 2019-10039 Filed 5-14-19; 8:45 am]
 BILLING CODE 6717-01-P


Jim Ketcham Colwill/ DC/ USEPA/ US 07/ 19/ 2005 07: 00 PM To Arthur_ G._ Fraas@ omb. eop. gov, Amy_ E._ Flynn@ omb. eop. gov cc Lydia Wegman/ RTP/ USEPA/ US@ EPA, Ron Evans@ EPA, Allen Basala/ RTP/ USEPA/ US@ EPA, John Silvasi/ RTP/ USEPA/ US@ EPA, Tom Helms/ RTP/ USEPA/ US@ EPA, Jan Tierney/ DC/ USEPA/ US@ EPA, Kevin McLean/ DC/ USEPA/ US@ EPA, Peter Nagelhout/ DC/ USEPA/ US@ EPA, gillis. thomas@ epamail. epa. gov@ EPA, Rob Brenner/ DC/ USEPA/ US@ EPA Subject O3 analysis report  for your review Wednesday Art,

Here is the 10 page draft writeup of the ozone local controls analysis that you requested. We understand that you plan review it before leaving on vacation, and would appreciate your thoughts. Please reply to Lydia Wegman at 919 541 5505 or myself at 202 564 1676 ( Allen is on travel). Note that this document has not been reviewed by OPEI due to th need to get this to you today.