[Federal Register Volume 75, Number 79 (Monday, April 26, 2010)]
[Rules and Regulations]
[Pages 21499-21503]
[FR Doc No: 2010-9692]

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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 75, No. 79 / Monday, April 26, 2010 / Rules
and Regulations

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2010-0430; Directorate Identifier 2010-NM-098-AD;
Amendment 39-16270; AD 2010-09-05]
RIN 2120-AA64

Airworthiness Directives; The Boeing Company Model 737-600, -700,
-700C, -800, -900, and -900ER Series Airplanes

AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).

ACTION: Final rule; request for comments.

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SUMMARY: The FAA is superseding an existing airworthiness directive
(AD) that applies to all The Boeing Company Model 737-600, -700, -700C,
-800, -900, and -900ER series airplanes. The existing AD currently
requires doing a detailed inspection of the inboard and outboard aft
attach lugs of the left and right elevator control tab mechanisms for
gaps between the swage ring and the aft attach lug, and between the
spacer and the aft attach lug; trying to move or rotate the spacer
using hand pressure; and replacing any discrepant elevator tab control
mechanism, including performing the detailed inspection on the
replacement part before and after installation. For certain airplanes,
this new AD adds improved repetitive inspections for discrepancies of
the inboard and outboard aft attach lugs of the left and right elevator
control tab mechanisms, and replacement if necessary. For certain other
airplanes, this new AD adds a one-time inspection for discrepancies of
the inboard and outboard aft attach lugs of the left and right elevator
control tab mechanisms, and replacement if necessary. For airplanes on
which the elevator control tab mechanism is replaced with a certain
mechanism, this AD requires repetitive inspections for discrepancies of
the elevator control tab mechanism and replacement if necessary.
Replacing the elevator control tab mechanism with a new, Boeing-built
mechanism terminates the repetitive inspections. This AD results from a
report of failure of the aft attach lugs on the left elevator tab
control mechanism, which resulted in severe elevator vibration; this
event occurred on an airplane on which the existing AD had been done.
We are issuing this AD to detect and correct a loose bearing in the aft
lug of the elevator tab control mechanism, which could result in
unwanted elevator and tab vibration. Consequent structural failure of
the elevator or horizontal stabilizer could result in loss of
structural integrity and aircraft control.

DATES: This AD becomes effective April 29, 2010.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in the AD as of April 29,
2010.
    On April 7, 2010 (75 FR 16648, April 2, 2010), the Director of the
Federal Register approved the incorporation by reference of a certain
other publication listed in the AD.
    We must receive any comments on this AD by June 10, 2010.

ADDRESSES: You may send comments by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue, SE., Washington, DC 20590.
     Hand Delivery: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.
    For service information identified in this AD, contact Boeing
Commercial Airplanes, Attention: Data & Services Management, P.O. Box
3707, MC 2H-65, Seattle, Washington 98124-2207; telephone<PHONE_NUMBER>,
extension 1; fax<PHONE_NUMBER>; e-mail<EMAIL_ADDRESS>Internet
https://www.myboeingfleet.com.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov; or in person at the Docket Management Facility
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains this AD, the regulatory evaluation,
any comments received, and other information. The street address for
the Docket Office (telephone<PHONE_NUMBER>) is in the ADDRESSES section.
Comments will be available in the AD docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Kelly McGuckin, Aerospace Engineer,
Systems and Equipment Branch, ANM-130S, FAA, Seattle ACO, 1601 Lind
Avenue, SW., Renton, Washington 98057-3356; telephone<PHONE_NUMBER>;
fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Discussion

    On March 18, 2010, we issued AD 2010-06-51, amendment 39-16250 (75
FR 16648, April 2, 2010). That AD applies to all The Boeing Company
Model 737-600, -700, -700C, -800, -900, and -900ER series airplanes.
That AD requires doing a detailed inspection of the inboard and
outboard aft attach lugs of the left and right elevator control tab
mechanisms for gaps between the swage ring and the aft attach lug, and
between the spacer and the aft attach lug; trying to move or rotate the
spacer using hand pressure; and replacing any discrepant elevator tab
control mechanism, including performing the detailed inspection on the
replacement part before and after installation. That AD resulted from a
report of failure of the aft attach lugs on the left elevator tab
control mechanism, which resulted in severe elevator vibration. The
actions specified in that AD are intended to detect and correct a loose
bearing in the aft lug of the elevator tab control mechanism, which
could result in unwanted elevator and tab vibration. Consequent
structural failure of the elevator or horizontal stabilizer could
result in loss of structural integrity and aircraft control.

Actions Since AD Was Issued

    Since we issued that AD, we received an additional report of
failure of the aft attach lugs on the left elevator tab control
mechanism. This event occurred on an airplane that had been inspected

in accordance with AD 2010-06-51. We have determined that an improved
inspection is necessary to address the identified unsafe condition. We
verified the inspection procedure with an operator prior to approval of
Boeing Alert Service Bulletin 737-27A1297, dated April 16, 2010.

Relevant Service Information

    We have reviewed Boeing Alert Service Bulletin 737-27A1297, dated
April 16, 2010. The service bulletin describes procedures for Model
737-700, -700C, -800, and -900ER series airplanes, line numbers 2508
through 3250 inclusive. The service bulletin specifies a one-time
detailed inspection (for all airplanes having line numbers 2708 through
3250 inclusive that are approved for operation under ETOPS), and
repetitive detailed inspections (for all airplanes having line numbers
2508 through 2707 inclusive) for discrepancies of the inboard and
outboard aft attach lugs of the left and right elevator control tab
mechanisms, and replacing any discrepant mechanisms. The detailed
inspection includes the use of a feeler gage and finger pressure and
instructs to apply hand pressure during the inspection for gaps and
looseness. Discrepancies include the following conditions:
     The spacer moves or rotates.
     Gap exists between the swage ring and the outer face of
the aft attach lug such that a 0.005 inch feeler gage can be inserted
more than 0.025 inch.
     Gap exists between two nested lugs such that a 0.005 inch
feeler gage can be inserted more than 0.050 inch.
     Gap exists between the inner face of the aft attach lug
and the spacer such that a 0.005 inch feeler gage can be inserted more
than 0.050 inch.
    The service bulletin also specifies that for airplanes on which the
elevator control tab mechanism is replaced with an elevator control tab
mechanism that is not a Boeing-built mechanism, the repetitive detailed
inspections described above are necessary.
    The service bulletin also specifies that replacing discrepant
elevator control tab mechanisms with Boeing-built elevator control tab
mechanisms eliminates the need for the repetitive inspections.

FAA's Determination and Requirements of This AD

    The unsafe condition described previously is likely to exist or
develop on other airplanes of these same type designs. For this reason,
we are issuing this AD to supersede AD 2010-06-51. This new AD retains
the inspection requirements of AD 2010-06-51, and also requires, for
certain airplanes, accomplishing the actions specified in Boeing Alert
Service Bulletin 737-27A1297, dated April 16, 2010, described
previously, except as discussed under ``Differences Between the AD and
Boeing Alert Service Bulletin 737-27A1297.'' This new AD also requires
sending the inspection results to the manufacturer and sending
discrepant elevator control tab mechanisms to the manufacturer.

Differences Between the AD and Boeing Alert Service Bulletin 737-
27A1297

    Boeing Alert Service Bulletin 737-27A1297, dated April 16, 2010,
specifies that replacing discrepant elevator control tab mechanisms
with Boeing-built elevator control tab mechanisms eliminates the need
for the repetitive inspections. This AD specifies that installing only
a new, Boeing-built elevator control tab mechanism terminates the
repetitive inspections. We have not received sufficient data to
demonstrate that repaired elevator control tab mechanisms were repaired
using procedures that will adequately address the identified unsafe
condition. We find that only allowing new Boeing elevator control tab
mechanisms as terminating action, as specified by this AD, will
adequately address the unsafe condition. We have coordinated this issue
with Boeing.
    While Boeing Alert Service Bulletin 737-27A1297, dated April 16,
2010, does not identify Model 737-600 and -900 series airplanes, this
AD applies to those airplanes because they are subject to the Parts
Installation paragraph of this AD.

Interim Action

    This AD is considered to be interim action. The inspection reports
and the returned discrepant parts that are required by this AD will
enable the airframe manufacturer and the FAA to obtain better insight
into the nature, cause, and extent of the issue, and eventually to
develop final action to address the unsafe condition. Once final action
has been identified, we might consider further rulemaking.

FAA's Justification and Determination of the Effective Date

    A loose bearing in the aft lug of the elevator tab control
mechanism could result in unwanted elevator and tab vibration.
Consequent structural failure of the elevator or horizontal stabilizer
could result in loss of structural integrity and aircraft control.
Because of our requirement to promote safe flight of civil aircraft and
thus the critical need to ensure the structural integrity of the
airplane, and the short compliance time involved with this action, this
AD must be issued immediately.
    Because an unsafe condition exists that requires the immediate
adoption of this AD, we find that notice and opportunity for prior
public comment hereon are impracticable and that good cause exists for
making this amendment effective in less than 30 days.

Comments Invited

    This AD is a final rule that involves requirements affecting flight
safety, and we did not provide you with notice and an opportunity to
provide your comments before it becomes effective. However, we invite
you to send any written data, views, or arguments about this AD. Send
your comments to an address listed under the ADDRESSES section. Include
``Docket No. FAA-2010-0430; Directorate Identifier 2010-NM-098-AD'' at
the beginning of your comments. We specifically invite comments on the
overall regulatory, economic, environmental, and energy aspects of this
AD. We will consider all comments received by the closing date and may
amend this AD because of those comments.
    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We
will also post a report summarizing each substantive verbal contact we
receive about this AD.

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.
    We are 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

    We have determined that 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 the regulation:

    1. Is not a ``significant regulatory action'' under Executive Order
12866;
    2. Is not a ``significant rule'' under the DOT Regulatory Policies
and Procedures (44 FR 11034, February 26, 1979); 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.
    We prepared a regulatory evaluation of the estimated costs to
comply with this AD and placed it in the AD docket. See the ADDRESSES
section for a location to examine the regulatory evaluation.

List of Subjects in 14 CFR Part 39

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

Adoption of the Amendment

0
Accordingly, under the authority delegated to me by the Administrator,
the FAA amends part 39 of the Federal Aviation Regulations (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 Federal Aviation Administration (FAA) amends Sec.  39.13 by
removing amendment 39-16250 (75 FR 16648, April 2, 2010) and by adding
the following new airworthiness directive (AD):

2010-09-05 The Boeing Company: Amendment 39-16270. Docket No. FAA-
2010-0430; Directorate Identifier 2010-NM-098-AD.

Effective Date

    (a) This AD becomes effective April 29, 2010.

Affected ADs

    (b) This AD supersedes AD 2010-06-51, Amendment 39-16250.

Applicability

    (c) This AD applies to all The Boeing Company Model 737-600, -
700, -700C, -800, -900, and -900ER series airplanes; certificated in
any category.

Subject

    (d) Air Transport Association (ATA) of America Code 27: Flight
controls.

Unsafe Condition

    (e) This AD results from a report of failure of the aft attach
lugs on the left elevator tab control mechanism, which resulted in
severe elevator vibration; this event occurred on an airplane on
which the existing AD had been done. The Federal Aviation
Administration is issuing this AD to detect and correct a loose
bearing in the aft lug of the elevator tab control mechanism, which
could result in unwanted elevator and tab vibration. Consequent
structural failure of the elevator or horizontal stabilizer could
result in loss of structural integrity and aircraft control.

Compliance

    (f) You are responsible for having the actions required by this
AD performed within the compliance times specified, unless the
actions have already been done.

Restatement of Requirements of AD 2010-06-51

Inspection and Corrective Action

    (g) For Groups 1, 2, and 3; and Group 4, Configuration 2; as
identified in Boeing Alert Service Bulletin 737-27A1296, dated March
12, 2010: At the applicable time specified in paragraph 1.E.
Compliance of Boeing Alert Service Bulletin 737-27A1296, dated March
12, 2010, except as required by paragraph (i) of this AD, do a
detailed inspection of the inboard and outboard aft attach lugs of
the left and right elevator control tab mechanisms for gaps between
the swage ring and the aft attach lug, and between the spacer and
the aft attach lug; and try to move or rotate the spacer using hand
pressure; in accordance with the Accomplishment Instructions of
Boeing Alert Service Bulletin 737-27A1296, dated March 12, 2010.
Doing the inspection required by paragraph (m) or (o) of this AD, as
applicable, terminates the requirements of this paragraph.
    (h) If, during accomplishment of the actions required by
paragraph (g) of this AD, any gap is found between the swage ring
and the aft attach lug, or between the spacer and the aft attach
lug; or if the spacer moves or rotates: Before further flight, do
the actions required by paragraphs (h)(1) and (h)(2) of this AD, in
accordance with the Accomplishment Instructions of Boeing Alert
Service Bulletin 737-27A1296, dated March 12, 2010.
    (1) Inspect the replacement elevator tab control mechanism for
discrepancies, as specified in paragraph (g) of this AD; and, if no
discrepancy is found, install the replacement elevator tab control
mechanism.
    (2) Re-inspect the installed elevator tab control mechanism, as
required by paragraph (g) of this AD.

Exception to Service Bulletin Specifications

    (i) Where Boeing Alert Service Bulletin 737-27A1296, dated March
12, 2010, specifies a compliance time after the date of the original
issue of the service bulletin, this AD requires compliance within
the specified compliance time after April 7, 2010 (the effective
date of AD 2010-06-51).

Inspection Done According to Multi Operator Message (MOM)

    (j) An inspection done before April 7, 2010, according to Boeing
Multi Operator Message Number MOM-MOM-10-0159-01B, dated March 10,
2010, is considered acceptable for compliance with the corresponding
inspection specified in paragraph (g) of this AD.

Reporting

    (k) At the applicable time specified in paragraph (k)(1) or
(k)(2) of this AD: Submit a report of the findings (both positive
and negative) of the inspections required by paragraph (g) of this
AD to Boeing Commercial Airplanes Group, Attention: Manager, Airline
Support, e-mail<EMAIL_ADDRESS>The report must include the
inspection results including a description of any discrepancies
found, the airplane line number, and the number of flight cycles and
flight hours accumulated on the airplane. Under the provisions of
the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), the Office of
Management and Budget (OMB) has approved the information collection
requirements contained in this AD and has assigned OMB Control
Number 2120-0056.
    (1) If the inspection was done on or after April 7, 2010: Submit
the report within 10 days after the inspection.
    (2) If the inspection was done before April 7, 2010: Submit the
report within 10 days after April 7, 2010.

Parts Installation Specified in AD 2010-06-51

    (l) For all airplanes: As of April 7, 2010, and until the
effective date of this AD, no person may install an elevator tab
control mechanism, part number 251A2430-( ), on any airplane, unless
the mechanism has been inspected before and after installation, in
accordance with the requirements of paragraph (g) of this AD, and no
discrepancies have been found. As of the effective date of this AD,
comply with paragraph (u) of this AD.

New Requirements of This AD

Repetitive Inspections for Group 1 Airplanes, as Identified in Boeing
Alert Service Bulletin 737-27A1297, Dated April 16, 2010

    (m) For Group 1 airplanes, as identified in Boeing Alert Service
Bulletin 737-27A1297, dated April 16, 2010: Except as required by
paragraph (n) of this AD, within 12 days after the effective date of
this AD, do a detailed inspection for discrepancies of the inboard
and outboard aft attach lugs of the left and right elevator control
tab mechanisms, in accordance with the Accomplishment Instructions
of Boeing Alert Service Bulletin 737-27A1297, dated April 16, 2010.
Repeat the inspection thereafter at intervals not to exceed 300
flight hours until the replacement specified in paragraph (r) of
this AD is done. Doing the initial inspection required by this
paragraph terminates the requirements of paragraph (g) of this AD.
    (n) For Group 1 airplanes as identified in Boeing Alert Service
Bulletin 737-27A1297, dated April 16, 2010: Beginning 7 days after

the effective date of this AD, no person may operate an airplane on
an extended twin operations (ETOPS) flight unless the initial
inspection required by paragraph (m) of this AD has been
accomplished.

One-Time Inspection for Group 2, Configuration 1 Airplanes, as
Identified in Boeing Alert Service Bulletin 737-27A1297, Dated April
16, 2010

    (o) For Group 2, Configuration 1 airplanes as identified in
Boeing Alert Service Bulletin 737-27A1297, dated April 16, 2010:
Within 30 days after the effective date of this AD, do a one-time
detailed inspection for discrepancies of the inboard and outboard
aft attach lugs of the left and right elevator control tab
mechanisms, in accordance with the Accomplishment Instructions of
Boeing Alert Service Bulletin 737-27A1297, dated April 16, 2010.
Doing the inspection required by this paragraph terminates the
requirements of paragraph (g) of this AD.

Corrective Actions

    (p) If, during any inspection required by paragraph (m), (o), or
(q) of this AD, any discrepancy is found, before further flight,
replace the elevator tab control mechanism by doing the actions
specified in paragraphs (p)(1) and (p)(2) of this AD.
    (1) Do a detailed inspection for discrepancies of the
replacement elevator tab control mechanism; and, if no discrepancy
is found, install the replacement elevator tab control mechanism; in
accordance with the Accomplishment Instructions of Boeing Alert
Service Bulletin 737-27A1297, dated April 16, 2010. If any
discrepancy is found, then that elevator tab control mechanism
cannot be installed and the actions specified in this paragraph must
be done before further flight on another replacement elevator tab
control mechanism.
    (2) Re-inspect the installed elevator tab control mechanism
using the inspection procedure specified in paragraph (o) of this
AD.

Repetitive Inspections for Certain Group 2, Configuration 1 Airplanes,
as Identified in Boeing Alert Service Bulletin 737-27A1297, Dated April
16, 2010

    (q) For Group 2, Configuration 1 airplanes as identified in
Boeing Alert Service Bulletin 737-27A1297, dated April 16, 2010, on
which the elevator control tab mechanism is replaced with a
mechanism other than a new, Boeing-built mechanism: Within 300
flight hours after doing the replacement, do a detailed inspection
for discrepancies of the inboard and outboard aft attach lugs of the
left and right elevator control tab mechanisms, in accordance with
the Accomplishment Instructions of Boeing Alert Service Bulletin
737-27A1297, dated April 16, 2010. Repeat the inspection thereafter
at intervals not to exceed 300 flight hours until the replacement
specified in paragraph (r) of this AD is done.

Terminating Action

    (r) Replacing an elevator tab mechanism with a new, Boeing-built
mechanism, as specified in paragraphs (r)(1) and (r)(2) of this AD,
terminates the inspections required by paragraphs (m), (o), and (q)
of this AD.

    Note 1:  Refer to paragraphs 3.B.7.b.(1)(a)1) and
3.B.7.b.(1)(a)2) of the Accomplishment Instructions of Boeing Alert
Service Bulletin 737-27A1297, dated April 16, 2010, to establish
whether the mechanism is Boeing-built.

    (1) Do a detailed inspection for discrepancies of the new,
Boeing-built replacement elevator tab control mechanism; and, if no
discrepancy is found, install the replacement elevator tab control
mechanism; in accordance with the Accomplishment Instructions of
Boeing Alert Service Bulletin 737-27A1297, dated April 16, 2010. If
any discrepancy is found, then that elevator tab control mechanism
cannot be installed and the actions specified in this paragraph must
be done on another new, Boeing-built replacement elevator tab
control mechanism.
    (2) Re-inspect the installed elevator tab control mechanism
using the inspection procedure specified in paragraph (o) of this
AD.

Reporting

    (s) At the applicable time specified in paragraph (s)(1) or
(s)(2) of this AD: Submit a report of any findings (positive and
negative) of the first inspection required by paragraphs (m), (o),
and (q) of this AD, and any positive findings from the repetitive
inspections required by this AD, to Boeing Commercial Airplanes
Group, Attention: Manager, Airline Support, e-mail:
<EMAIL_ADDRESS>The report must include the inspection
results including a description of any discrepancies found, the
airplane line number, and the total number of flight cycles and
flight hours accumulated on the airplane. Under the provisions of
the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), the Office of
Management and Budget (OMB) has approved the information collection
requirements contained in this AD and has assigned OMB Control
Number 2120-0056.
    (1) If the inspection was done on or after the effective date of
this AD: Submit the report within 10 days after the inspection.
    (2) If the inspection was done before the effective date of this
AD: Submit the report within 10 days after the effective date of
this AD.

Return of Discrepant Parts

    (t) If, during any inspection required by paragraph (m), (o), or
(q) of this AD, any discrepancy is found, and if the inspection was
done on or after the effective date of this AD: Within 30 days after
the inspection, return the discrepant elevator tab control
mechanism, and include a copy of the inspection report sent to
Boeing, as specified in paragraph (s) of this AD, to: Spares
Distribution Center, Attention: Manager, Airline Support, Repair
Overhaul and Exchange Services, SSA 111, Boeing Commercial Airplane
Group, 2201 South 142nd Street, Door W10, Seatac, Washington, USA,
98168.

Parts Installation

    (u) For all airplanes identified in paragraph (c) of this AD: As
of the effective date of this AD, comply with the conditions
specified in paragraphs (u)(1) and (u)(2) of this AD.
    (1) No person may install an elevator tab control mechanism,
part number 251A2430-(), on any airplane, unless the mechanism has
been inspected before and after installation using the inspection
procedures specified in either paragraphs (p)(1) and (p)(2) of this
AD, or in paragraphs (r)(1) and (r)(2) of this AD; and no
discrepancies have been found.
    (2) An elevator tab control mechanism, part number 251A2430-(),
that is not a new, Boeing-built elevator tab control mechanism may
be installed, provided that the mechanism is inspected using the
inspection procedures specified in paragraph (m) of this AD within
300 flight hours after doing the installation, and that the
inspection is repeated thereafter at the interval specified in
paragraph (m) of this AD.

Alternative Methods of Compliance (AMOCs)

    (v)(1) The Manager, Seattle Aircraft Certification Office (ACO),
FAA, has the authority to approve AMOCs for this AD, if requested
using the procedures found in 14 CFR 39.19. Send information to
Attn: Kelly McGuckin, Aerospace Engineer, Systems and Equipment
Branch, ANM-130S, FAA, Seattle ACO, 1601 Lind Avenue SW., Renton,
Washington 98057-3356; telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>.
Information may be e-mailed to<EMAIL_ADDRESS>    (2) To request a different method of compliance or a different
compliance time for this AD, follow the procedures in 14 CFR 39.19.
Before using any approved AMOC on any airplane to which the AMOC
applies, notify your principal maintenance inspector (PMI) or
principal avionics inspector (PAI), as appropriate, or lacking a
principal inspector, your local Flight Standards District Office.
The AMOC approval letter must specifically refer to this AD.
    (3) An AMOC that provides an acceptable level of safety may be
used for any repair required by this AD if it is approved by the
Boeing Commercial Airplanes Organization Designation Authorization
(ODA) that has been authorized by the Manager, Seattle ACO, to make
those findings. For a repair method to be approved, the repair must
meet the certification basis of the airplane, and the approval must
specifically refer to this AD.
    (4) AMOCs approved previously in accordance with AD 2010-06-51
are approved as AMOCs for the corresponding provisions of paragraph
(g) or (l) of this AD.

Material Incorporated by Reference

    (w) You must use Boeing Alert Service Bulletin 737-27A1296,
dated March 12, 2010; or Boeing Alert Service Bulletin 737-27A1297,
dated April 16, 2010; as applicable, to do the actions required by
this AD, unless the AD specifies otherwise.
    (1) The Director of the Federal Register approved the
incorporation by reference of Boeing Alert Service Bulletin 737-
27A1297, dated April 16, 2010, under 5 U.S.C. 552(a) and 1 CFR part
51.
    (2) The Director of the Federal Register previously approved the
incorporation by reference of Boeing Alert Service Bulletin 737-
27A1296, dated March 12, 2010, on April 7, 2010 (75 FR 16648, April
2, 2010).

    (3) For service information identified in this AD, contact
Boeing Commercial Airplanes, Attention: Data & Services Management,
P. O. Box 3707, MC 2H-65, Seattle, Washington 98124-2207; telephone
206-544-5000, extension 1; fax<PHONE_NUMBER>; e-mail
<EMAIL_ADDRESS>Internet https://www.myboeingfleet.com.
    (4) You may review copies of the service information at the FAA,
Transport Airplane Directorate, 1601 Lind Avenue SW., Renton,
Washington. For information on the availability of this material at
the FAA, call<PHONE_NUMBER>.
    (5) You may also review copies of the 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, call<PHONE_NUMBER>, or go to http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.

    Issued in Renton, Washington, on April 19, 2010.
Ali Bahrami,
Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2010-9692 Filed 4-22-10; 4:15 pm]
BILLING CODE 4910-13-P


[Federal Register Volume 85, Number 195 (Wednesday, October 7, 2020)]
[Notices]
[Pages 63302-63305]
[FR Doc No: 2020-22111]

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[Investment Company Act Release No. 34039; 812-15089]

Horizon Funds and Horizon Investments, LLC

October 1, 2020.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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    Notice of an application under section 6(c) of the Investment
Company Act of 1940 (``Act'') for an exemption from section 15(a) of
the Act, as well as from certain disclosure requirements in rule 20a-1
under the Act, Item 19(a)(3) of Form N-1A, Items 22(c)(1)(ii),
22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A under the
Securities Exchange Act of 1934 (``1934 Act''), and sections 6-
07(2)(a), (b), and (c) of Regulation S-X (``Disclosure Requirements'').

Applicants: Horizon Funds (the ``Trust''), a Delaware statutory trust
registered under the Act as an open-end management investment company
with multiple series (each a ``Fund'') and Horizon Investments, LLC
(the ``Initial Adviser''), a South Carolina limited liability company
registered as an investment adviser under the Investment Advisers Act
of 1940 (``Advisers Act'') that serves an investment adviser to the
Funds (collectively with the Trust, the ``Applicants'').

Summary of Application: The requested exemption would permit Applicants
to enter into and materially amend subadvisory agreements with
subadvisers without shareholder approval and would grant relief from
the Disclosure Requirements as they relate to fees paid to the
subadvisers.

Filing Dates: The application was filed on January 10, 2020, and
amended on July 6, 2020.

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 emailing the Commission's
Secretary at<EMAIL_ADDRESS>and serving applicants with a
copy of the request by email. Hearing requests should be received by
the Commission by 5:30 p.m. on October 26, 2020, and should be
accompanied by proof of service on the applicants, in the form of an
affidavit, or, for lawyers, a certificate of service. Pursuant to rule
0-5 under the Act, hearing requests should state the nature of the
writer's interest, any facts bearing upon the desirability of a hearing
on the matter, the reason for the request, and the issues contested.
Persons who wish to be notified of a hearing may request notification
by emailing the Commission's Secretary at<EMAIL_ADDRESS>
ADDRESSES: The Commission<EMAIL_ADDRESS>The Trust and the
Initial Adviser: 6210 Ardrey Kell Road, Suite 300, Charlotte, NC 28277.

FOR FURTHER INFORMATION CONTACT: Christine Y. Greenlees, Senior
Counsel, at<PHONE_NUMBER>, or Daniele Marchesani, Assistant Chief
Counsel at<PHONE_NUMBER> (Division of Investment Management, Chief
Counsel's Office).

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

I. Requested Exemptive Relief

    1. Applicants request an order to permit the Adviser,\1\ subject to
the approval of the board of trustees of the Trust (collectively, the
``Board''),\2\ including a majority of the trustees who are not
``interested persons'' of the Trust or the Adviser, as defined in
section 2(a)(19) of the Act (the ``Independent Trustees''), without
obtaining shareholder approval, to: (i) Select investment sub-advisers
(``Sub-Advisers'') for all or a portion of the assets of one or more of
the Funds pursuant to an investment sub-advisory

agreement with each Sub-Adviser (each a ``Sub-Advisory Agreement'');
and (ii) materially amend Sub-Advisory Agreements with the Sub-
Advisers.
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    \1\ The term ``Adviser'' means (i) the Initial Adviser, (ii) its
successors, and (iii) any entity controlling, controlled by or under
common control with, the Initial Adviser or its successors that
serves as the primary adviser to a Sub-Advised Fund (as defined
below). For the purposes of the requested order, ``successor'' is
limited to an entity that results from a reorganization into another
jurisdiction or a change in the type of business organization.
    \2\ The term ``Board'' also includes the board of trustees or
directors of a future Sub-Advised Fund (as defined below), if
different from the board of trustees of the Trust.
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    2. Applicants also request an order exempting the Sub-Advised Funds
(as defined below) from the Disclosure Requirements, which require each
Fund to disclose fees paid to a Sub-Adviser. Applicants seek relief to
permit each Sub-Advised Fund to disclose (as a dollar amount and a
percentage of the Fund's net assets): (i) The aggregate fees paid to
the Adviser and any Wholly-Owned Sub-Advisers; and (ii) the aggregate
fees paid to Affiliated and Non-Affiliated Sub-Advisers (``Aggregate
Fee Disclosure'').\3\ Applicants seek an exemption to permit a Sub-
Advised Fund to include only the Aggregate Fee Disclosure.\4\
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    \3\ A ``Wholly-Owned Sub-Adviser'' is any investment adviser
that is (1) an indirect or direct ``wholly-owned subsidiary'' (as
such term is defined in section 2(a)(43) of the 1940 Act) of the
Adviser, (2) a ``sister company'' of the Adviser that is an indirect
or direct ``wholly-owned subsidiary'' of the same company that
indirectly or directly wholly owns the Adviser (the Adviser's
``parent company''), or (3) a parent company of the Adviser. A
``Non-Affiliated Sub-Adviser'' is any investment adviser that is not
an ``affiliated person'' (as defined in the 1940 Act) of a Fund or
the Adviser, except to the extent that an affiliation arises solely
because the Sub-Adviser serves as a sub-adviser to one or more
Funds. Section 2(a)(43) of the 1940 Act defines ``wholly-owned
subsidiary'' of a person as a company 95 per centum or more of the
outstanding voting securities of which are, directly or indirectly,
owned by such a person.
    \4\ Applicants note that all other items required by sections 6-
07(2)(a), (b) and (c) of Regulation S-X will be disclosed.
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    3. Applicants request that the relief apply to Applicants, as well
as to any future Fund and any other existing or future registered open-
end management investment company or series thereof that intends to
rely on the requested order in the future and that: (i) Is advised by
the Adviser; (ii) uses the multi-manager structure described in the
application; and (iii) complies with the terms and conditions of the
application (each, a ``Sub-Advised Fund'').\5\
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    \5\ All registered open-end investment companies that currently
intend to rely on the requested order are named as Applicants. Any
entity that relies on the requested order will do so only in
accordance with the terms and conditions contained in the
application.
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II. Management of the Sub-Advised Funds

    4. The Adviser serves or will serve as the investment adviser to
each Sub-Advised Fund pursuant to an investment advisory agreement with
the Fund (each an ``Investment Advisory Agreement''). Each Investment
Advisory Agreement has been or will be approved by the Board, including
a majority of the Independent Trustees, and by the shareholders of the
relevant Sub-Advised Fund in the manner required by sections 15(a) and
15(c) of the Act. The terms of these Investment Advisory Agreements
comply or will comply with section 15(a) of the Act. Applicants are not
seeking an exemption from the Act with respect to the Investment
Advisory Agreements. Pursuant to the terms of each Investment Advisory
Agreement, the Adviser, subject to the oversight of the Board, will
provide continuous investment management for each Sub-Advised Fund. For
its services to each Sub-Advised Fund, the Adviser receives or will
receive an investment advisory fee from that Fund as specified in the
applicable Investment Advisory Agreement.
    5. Consistent with the terms of each Investment Advisory Agreement,
the Adviser may, subject to the approval of the Board, including a
majority of the Independent Trustees, and the shareholders of the
applicable Sub-Advised Fund (if required by applicable law), delegate
portfolio management responsibilities of all or a portion of the assets
of a Sub-Advised Fund to a Sub-Adviser. The Adviser will retain overall
responsibility for the management and investment of the assets of each
Sub-Advised Fund. This responsibility includes recommending the removal
or replacement of Sub-Advisers, allocating the portion of that Sub-
Advised Fund's assets to any given Sub-Adviser and reallocating those
assets as necessary from time to time.\6\ The Sub-Advisers will be
``investment advisers'' to the Sub-Advised Funds within the meaning of
section 2(a)(20) of the Act and will provide investment management
services to the Funds subject to, without limitation, the requirements
of sections 15(c) and 36(b) of the Act.\7\ The Sub-Advisers, subject to
the oversight of the Adviser and the Board, will determine the
securities and other investments to be purchased, sold or entered into
by a Sub-Advised Fund's portfolio or a portion thereof, and will place
orders with brokers or dealers that they select.\8\
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    \6\ Applicants represent that if the name of any Sub-Advised
Fund contains the name of a sub-adviser, the name of the Adviser
that serves as the primary adviser to the Fund, or a trademark or
trade name that is owned by or publicly used to identify the
Adviser, will precede the name of the sub-adviser.
    \7\ The Sub-Advisers will be registered with the Commission as
an investment adviser under the Advisers Act or not subject to such
registration.
    \8\ A ``Sub-Adviser'' also includes an investment sub-adviser
that provides or will provide the Adviser with a model portfolio
reflecting a specific strategy, style or focus with respect to the
investment of all or a portion of a Sub-Advised Fund's assets. The
Adviser may use the model portfolio to determine the securities and
other instruments to be purchased, sold or entered into by a Sub-
Advised Fund's portfolio or a portion thereof, and place orders with
brokers or dealers that it selects.
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    6. The Sub-Advisory Agreements will be approved by the Board,
including a majority of the Independent Trustees, in accordance with
sections 15(a) and 15(c) of the Act. In addition, the terms of each
Sub-Advisory Agreement will comply fully with the requirements of
section 15(a) of the Act. The Adviser may compensate the Sub-Advisers
or the Sub-Advised Funds may compensate the Sub-Advisers directly.
    7. Sub-Advised Funds will inform shareholders of the hiring of a
new Sub-Adviser pursuant to the following procedures (``Modified Notice
and Access Procedures''): (a) Within 90 days after a new Sub-Adviser is
hired for any Sub-Advised Fund, that Fund will send its shareholders
either a Multi-manager Notice or a Multi-manager Notice and Multi-
manager Information Statement; \9\ and (b) the Sub-Advised Fund will
make the Multi-manager Information Statement available on the website
identified in the Multi-manager Notice no later than when the Multi-
manager Notice (or Multi-manager Notice and Multi-manager Information
Statement) is first sent to shareholders, and will maintain it on that
website for at least 90 days.\10\
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    \9\ A ``Multi-manager Notice'' will be modeled on a Notice of
internet Availability as defined in Rule 14a-16 under the 1934 Act,
and specifically will, among other things: (a) Summarize the
relevant information regarding the new Sub-Adviser (except as
modified to permit Aggregate Fee Disclosure); (b) inform
shareholders that the Multi-manager Information Statement is
available on a website; (c) provide the website address; (d) state
the time period during which the Multi-manager Information Statement
will remain available on that website; (e) provide instructions for
accessing and printing the Multi-manager Information Statement; and
(f) instruct the shareholder that a paper or email copy of the
Multi-manager Information Statement may be obtained, without charge,
by contacting the Sub-Advised Fund. A ``Multi-manager Information
Statement'' will meet the requirements of Regulation 14C, Schedule
14C and Item 22 of Schedule 14A under the 1934 Act for an
information statement, except as modified by the requested order to
permit Aggregate Fee Disclosure. Multi-manager Information
Statements will be filed with the Commission via the EDGAR system.
    \10\ In addition, Applicants represent that whenever a Sub-
Adviser is hired or terminated, or a Sub-Advisory Agreement is
materially amended, the Sub-Advised Fund's prospectus and statement
of additional information will be supplemented promptly pursuant to
rule 497(e) under the Securities Act of 1933.
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III. Applicable Law

    8. Section 15(a) of the Act states, in part, that it is unlawful
for any person to act as an investment adviser to a registered
investment company ``except pursuant to a written contract, which
contract, whether with such registered

company or with an investment adviser of such registered company, has
been approved by the vote of a majority of the outstanding voting
securities of such registered company.''
    9. Form N-1A is the registration statement used by open-end
investment companies. Item 19(a)(3) of Form N-1A requires a registered
investment company to disclose in its statement of additional
information the method of computing the ``advisory fee payable'' by the
investment company with respect to each investment adviser, including
the total dollar amounts that the investment company ``paid to the
adviser (aggregated with amounts paid to affiliated advisers, if any),
and any advisers who are not affiliated persons of the adviser, under
the investment advisory contract for the last three fiscal years.''
    10. Rule 20a-1 under the Act requires proxies solicited with
respect to a registered investment company to comply with Schedule 14A
under the 1934 Act. Items 22(c)(1)(ii), 22(c)(1)(iii), 22(c)(8) and
22(c)(9) of Schedule 14A, taken together, require a proxy statement for
a shareholder meeting at which the advisory contract will be voted upon
to include the ``rate of compensation of the investment adviser,'' the
``aggregate amount of the investment adviser's fee,'' a description of
the ``terms of the contract to be acted upon,'' and, if a change in the
advisory fee is proposed, the existing and proposed fees and the
difference between the two fees.
    11. Regulation S-X sets forth the requirements for financial
statements required to be included as part of a registered investment
company's registration statement and shareholder reports filed with the
Commission. Sections 6-07(2)(a), (b), and (c) of Regulation S-X require
a registered investment company to include in its financial statements
information about investment advisory fees.
    12. Section 6(c) 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 the Act, or
any rule thereunder, if 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.
Applicants state that the requested relief meets this standard for the
reasons discussed below.

IV. Arguments in Support of the Requested Relief

    13. Applicants assert that, from the perspective of the
shareholder, the role of the Sub-Advisers is substantially equivalent
to the limited role of the individual portfolio managers employed by an
investment adviser to a traditional investment company. Applicants also
assert that the shareholders expect the Adviser, subject to review and
approval of the Board, to select a Sub-Adviser who is in the best
position to achieve the Sub-Advised Fund's investment objective.
Applicants believe that permitting the Adviser to perform the duties
for which the shareholders of the Sub-Advised Fund are paying the
Adviser--the selection, oversight and evaluation of the Sub-Adviser--
without incurring unnecessary delays or expenses of convening special
meetings of shareholders is appropriate and in the interest of the
Fund's shareholders, and will allow such Fund to operate more
efficiently. Applicants state that each Investment Advisory Agreement
will continue to be fully subject to section 15(a) of the Act and
approved by the relevant Board, including a majority of the Independent
Trustees, in the manner required by section 15(a) and 15(c) of the Act.
    14. Applicants submit that the requested relief meets the standards
for relief under section 6(c) of the Act. Applicants state that the
operation of the Sub-Advised Fund in the manner described in the
Application must be approved by shareholders of that Fund before it may
rely on the requested relief. Applicants also state that the proposed
conditions to the requested relief are designed to address any
potential conflicts of interest or economic incentives, and provide
that shareholders are informed when new Sub-Advisers are hired.
    15. Applicants contend that, in the circumstances described in the
application, a proxy solicitation to approve the appointment of new
Sub-Advisers provides no more meaningful information to shareholders
than the proposed Multi-manager Information Statement. Applicants state
that, accordingly, they believe the requested relief 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.
    16. With respect to the relief permitting Aggregate Fee Disclosure,
Applicants assert that disclosure of the individual fees paid to the
Sub-Advisers does not serve any meaningful purpose. Applicants contend
that the primary reasons for requiring disclosure of individual fees
paid to Sub-Advisers are to inform shareholders of expenses to be
charged by a particular Sub-Advised Fund and to enable shareholders to
compare the fees to those of other comparable investment companies.
Applicants believe that the requested relief satisfies these objectives
because the Sub-Advised Fund's overall advisory fee will be fully
disclosed and, therefore, shareholders will know what the Sub-Advised
Fund's fees and expenses are and will be able to compare the advisory
fees a Sub-Advised Fund is charged to those of other investment
companies. In addition, Applicants assert that the requested relief
would benefit shareholders of the Sub-Advised Fund because it would
improve the Adviser's ability to negotiate the fees paid to Sub-
Advisers. In particular, Applicants state that if the Adviser is not
required to disclose the Sub-Advisers' fees to the public, the Adviser
may be able to negotiate rates that are below a Sub-Adviser's
``posted'' amounts. Applicants assert that the relief will also
encourage Sub-Advisers to negotiate lower sub-advisory fees with the
Adviser if the lower fees are not required to be made public.

V. Relief for Affiliated Sub-Advisers

    17. The Commission has granted the requested relief with respect to
Wholly-Owned and Non-Affiliated Sub-Advisers through numerous exemptive
orders. The Commission also has extended the requested relief to
Affiliated Sub-Advisers.\11\ Applicants state that although the
Adviser's judgment in recommending a Sub-Adviser can be affected by
certain conflicts, they do not warrant denying the extension of the
requested relief to Affiliated Sub-Advisers. Specifically, the Adviser
faces those conflicts in allocating fund assets between itself and a
Sub-Adviser, and across Sub-Advisers, as it has an interest in
considering the benefit it will receive, directly or indirectly, from
the fee the Sub-Advised Fund pays for the management of those assets.
Applicants also state that to the extent the Adviser has a conflict of
interest with respect to the selection of an Affiliated Sub-Adviser,
the proposed conditions are protective of shareholder interests by
ensuring the Board's independence and providing the Board with the
appropriate resources and

information to monitor and address conflicts.
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    \11\ See Carillon Series Trust and Carillon Tower Advisers,
Inc., Investment Company Act Rel. Nos. 33464 (May 2, 2019) (notice)
and 33494 (May 29, 2019) (order).
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    18. With respect to the relief permitting Aggregate Fee Disclosure,
Applicants assert that it is appropriate to disclose only aggregate
fees paid to Affiliated Sub-Advisers for the same reasons that similar
relief has been granted previously with respect to Wholly-Owned and
Non-Affiliated Sub-Advisers.

VI. Applicants' Conditions

    Applicants agree that any order granting the requested relief will
be subject to the following conditions:
    1. Before a Sub-Advised Fund may rely on the order requested in the
Application, the operation of the Sub-Advised Fund in the manner
described in the Application will be, or has been, approved by a
majority of the Sub-Advised Fund's outstanding voting securities as
defined in the Act, or, in the case of a Sub-Advised Fund whose public
shareholders purchase shares on the basis of a prospectus containing
the disclosure contemplated by condition 2 below, by the initial
shareholder before such Sub-Advised Fund's shares are offered to the
public.
    2. The prospectus for each Sub-Advised Fund will disclose the
existence, substance and effect of any order granted pursuant to the
Application. In addition, each Sub-Advised Fund will hold itself out to
the public as employing the multi-manager structure described in the
Application. The prospectus will prominently disclose that the Adviser
has the ultimate responsibility, subject to oversight by the Board, to
oversee the Sub-Advisers and recommend their hiring, termination, and
replacement.
    3. The Adviser will provide general management services to each
Sub-Advised Fund, including overall supervisory responsibility for the
general management and investment of the Sub-Advised Fund's assets, and
subject to review and oversight of the Board, will (i) set the Sub-
Advised Fund's overall investment strategies, (ii) evaluate, select,
and recommend Sub-Advisers for all or a portion of the Sub-Advised
Fund's assets, (iii) allocate and, when appropriate, reallocate the
Sub-Advised Fund's assets among Sub-Advisers, (iv) monitor and evaluate
the Sub-Advisers' performance, and (v) implement procedures reasonably
designed to ensure that Sub-Advisers comply with the Sub-Advised Fund's
investment objective, policies and restrictions.
    4. Sub-Advised Funds will inform shareholders of the hiring of a
new Sub-Adviser within 90 days after the hiring of the new Sub-Adviser
pursuant to the Modified Notice and Access Procedures.
    5. At all times, at least a majority of the Board will be
Independent Trustees, and the selection and nomination of new or
additional Independent Trustees will be placed within the discretion of
the then-existing Independent Trustees.
    6. Independent Legal Counsel, as defined in Rule 0-1(a)(6) under
the Act, will be engaged to represent the Independent Trustees. The
selection of such counsel will be within the discretion of the then-
existing Independent Trustees.
    7. Whenever a Sub-Adviser is hired or terminated, the Adviser will
provide the Board with information showing the expected impact on the
profitability of the Adviser.
    8. The Board must evaluate any material conflicts that may be
present in a sub-advisory arrangement. Specifically, whenever a sub-
adviser change is proposed for a Sub-Advised Fund (``Sub-Adviser
Change'') or the Board considers an existing Sub-Advisory Agreement as
part of its annual review process (``Sub-Adviser Review''):
    (a) The Adviser will provide the Board, to the extent not already
being provided pursuant to section 15(c) of the Act, with all relevant
information concerning:
    (i) Any material interest in the proposed new Sub-Adviser, in the
case of a Sub-Adviser Change, or the Sub-Adviser in the case of a Sub-
Adviser Review, held directly or indirectly by the Adviser or a parent
or sister company of the Adviser, and any material impact the proposed
Sub-Advisory Agreement may have on that interest;
    (ii) any arrangement or understanding in which the Adviser or any
parent or sister company of the Adviser is a participant that (A) may
have had a material effect on the proposed Sub-Adviser Change or Sub-
Adviser Review, or (B) may be materially affected by the proposed Sub-
Adviser Change or Sub-Adviser Review;
    (iii) any material interest in a Sub-Adviser held directly or
indirectly by an officer or Trustee of the Sub-Advised Fund, or an
officer or board member of the Adviser (other than through a pooled
investment vehicle not controlled by such person); and
    (iv) any other information that may be relevant to the Board in
evaluating any potential material conflicts of interest in the proposed
Sub-Adviser Change or Sub-Adviser Review.
    (b) the Board, including a majority of the Independent Trustees,
will make a separate finding, reflected in the Board minutes, that the
Sub-Adviser Change or continuation after Sub-Adviser Review is in the
best interests of the Sub-Advised Fund and its shareholders and, based
on the information provided to the Board, does not involve a conflict
of interest from which the Adviser, a Sub-Adviser, any officer or
Trustee of the Sub-Advised Fund, or any officer or board member of the
Adviser derives an inappropriate advantage.
    9. Each Sub-Advised Fund will disclose in its registration
statement the Aggregate Fee Disclosure.
    10. In the event that the Commission adopts a rule under the Act
providing substantially similar relief to that in the order requested
in the Application, the requested order will expire on the effective
date of that rule.
    11. Any new Sub-Advisory Agreement or any amendment to an existing
Investment Advisory Agreement or Sub-Advisory Agreement that directly
or indirectly results in an increase in the aggregate advisory fee rate
payable by the Sub-Advised Fund will be submitted to the Sub-Advised
Fund's shareholders for approval.

    For the Commission, by the Division of Investment Management,
under delegated authority.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-22111 Filed 10-6-20; 8:45 am]
BILLING CODE 8011-01-P


TABLE 2 ANNUAL BURDEN OF REPORTING AND RECORDKEEPING REQUIREMENTS NATIONAL EMISSION STANDARDS FOR HAZARADOUS AIR POLLUTANTS ( NESHAP) SUBPART F  VINYL CHLORIDE REPORTING/ RECORDKEEPING REQUIREMENT Hours/ Occurence ( A) Occurences/

Year ( B) Hrs/ Year ( C= A* B)

( C) Respondents/

Year ( D) Hours/ Yr ( E)

C x D Costs/ Year ( F)

1. APPLICATIONS N/ A N/ A N/ A N/ A N/ A N/ A 2. SURVEY AND STUDIES N/ A N/ A N/ A N/ A N/ A N/ A 3. REPORTING REQUIREMENTS a. Read Instructions 1 1 1 0 0 $ 0.00 b. Required Activities Initial Performance Tests 60 1 60 0 0 $ 0.00 Repeat of Performance Tests 60 0.2 12 0 0 $ 0.00 c. Create Information  Included in 3b

d. Gather Existing Information  Included in 3b

e. Write Report Notification of Construction/ Reconstruction 2 1 2 0 0 $ 0.00 Notification of Anticipated Startup 2 1 2 0 0 $ 0.00 Notification of Actual Startup 2 1 2 0 0 $ 0.00 Notification of Emissions Testing 2 1 2 0 0 $ 0.00 Emissions Test Report 2 1 2 0 0 $ 0.00 Notification of Physical or Operational Change 2 1 2 0 0 $ 0.00 Application for Waiver of Testing 8 1 8 0 0 $ 0.00 Application of Equivalency 40 1 40 0 0 $ 0.00 Initial Report 24 1 24 0 0 $ 0.00 Quarterly Report 50 4 200 44 8800 $ 486,992.00 MVV/ RVD Report 8 3 24 44 1056 $ 58,439.04 SUBTOTAL 9856 $ 545,431.04 4. RECORDKEEPING REQUIREMENTS a. Read Instructions  Included in 3a

b. Plan Activities  Included in 3b

c. Implement Activities  Included in 3b

d. Develop Record System N/ A N/ A N/ A N/ A N/ A N/ A e. Time to Enter Information*

Records of Reactor Parameters and Emissions 0.25 365 91.25 44 4015 $ 222,190.10 Records of Leaks Detected 1 52 52 44 2288 $ 126,617.92 f. Train Personnel N/ A N/ A N/ A N/ A N/ A N/ A g. Audits N/ A N/ A N/ A N/ A N/ A N/ A TOTAL ANNUAL BURDEN 16159 $ 894,239.06 Assumptions Number of affected facilities 44 Time required to read instructions ( hours) 1 Time required to complete performance test ( hours) 60 Rate of failed performance tests 20%

Time required to record operating parameters ( hours) 0.25 Time required to report leaks 1 Number of days operating per year 365 Number of new facilities ( per year) 0 Time required to record startups, shutdowns,

malfunctions etc. ( hours) 0.25 Number of startups, shutdowns, malfuctions,

etc. ( per year) 1 Time Required for notification preparation ( hours) 2 Time required to prepare application to waive testing ( hours) 8 Time required to prepare application for equivalent equipment and procedures ( hours) 40 Time required to prepare application for equipment equivalency ( hours) 8 Time required to prepare application to waive testing ( hours) 8 Time required to prepare initial report ( hours) 24 Time required to prepare quarterly report ( hours) 50 Time required to prepare MVV/ RVD report ( hours) 8 Technical labor rate $ 55.34 * Assume an hourly wage of 26.35 plus 110% overhead costs which equals $ 55.34.

* Assume 20 percent of initial performance tests must be repeated due to failure.

* Assume facility will operate 365 days per year as specified in the NESHAP review document.

* MVV/ RVD = Manual Vent Valve/ Relief Valve Discharge. We estimate three ( 3) MVV/ RVD discharges per year.

* Assume that no facilities will submit an application for equivalent equipment over the next three years ( Section 61.66).

* Assume that there will be no notifications of physical or operational change over the next three years.


Recommended 8 Hour Ozone Designations ( 2000/ 2001/ 2002)

Nonattainment  Wayne, Oakland, Macomb, St. Clair, Livingston, Washtenaw, Monroe, Lenawee, Cass, Berrien, Allegan, Ottawa, Muskegon, Mason, Benzie Attainment  Kent, Genesee, Lapeer Attainment  All other counties Detroit Ann Arbor Flint CMSA Wayne, Oakland, Macomb, St. Clair, Livingston, Washtenaw, Monroe, Lenawee, Lapeer, Genesee Triangle = monitoring site NOTE: A Michigan map with all county names listed is provided on Page 40. Figure 1 Recommended 8 hour Ozone Designations


[Federal Register Volume 77, Number 38 (Monday, February 27, 2012)]
[Notices]
[Pages 11608-11611]
[FR Doc No: 2012-4401]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66427; File No. SR-BATS-2012-011]

 Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Adopting
Rebates for the Competitive Liquidity Provider Program

February 21, 2012.
    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 February

8, 2012, BATS Exchange, Inc. (``BATS'' or ``Exchange'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change as described in Items I, II, and III below, which Items have
been prepared by the Exchange. The Commission is publishing this notice
to solicit comments on the proposed rule change from interested
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to institute a fee change in connection with
an incentive program for Exchange-registered market makers (``Market
Makers'') in securities listed on the Exchange. Changes to the
Exchange's fees pursuant to this proposal will be effective upon
filing.
    The text of the proposed rule change is available at the Exchange's
Web site at http://www.batstrading.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 parts of such
statements.

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

1. Purpose
    On August 30, 2011, the Exchange received approval of rules
applicable to the qualification, listing and delisting of securities of
issuers on the Exchange.\3\ More recently, the Exchange received
approval to operate a program that is designed to incentivize certain
market makers registered with the Exchange as Competitive Liquidity
Providers (``CLPs'') to enhance liquidity on the Exchange in securities
listed on the Exchange (the ``Competitive Liquidity Provider Program''
or ``CLP Program'').\4\ The Exchange proposes to adopt financial
incentives for the Competitive Liquidity Provider Program, as described
below. These incentives include competition amongst CLPs for daily
rebates awarded based on quoting activity and the ability to earn free
executions in Exchange auctions of Exchange-listed securities.
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    \3\ See Securities Exchange Act Release No. 65225 (August 30,
2011), 76 FR 55148 (September 6, 2011) (SR-BATS-2011-018).
    \4\ See Securities Exchange Act Release No. 66307 (February 2,
2012), 77 FR 6608 (February 8, 2012) (SR-BATS-2011-051).
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Daily Rebates
    Pursuant to the CLP Program, the Exchange will measure the
performance of CLPs in assigned securities by calculating Size Event
Tests (``SETs'') in each second of trading during every day on which
the Exchange is open for business. At a randomly selected point in time
during Regular Trading Hours, at least once per second, the Exchange
will measure each CLP's quoted size at the NBB and NBO. The CLP with
the greatest aggregate size at the NBB and NBO at each SET (i.e., the
combined size at the NBB and NBO) will be considered to have a
``winning SET.'' A CLP must have at least 10% of the winning SETs on
any trading day in order meet its daily quoting requirement and to be
eligible for the daily rebates proposed below. As proposed, any Market
Maker registered in a security as a CLP that has satisfied the daily
quoting requirement will be eligible to receive a single daily
financial rebate for each day's quoting activity as follows:

------------------------------------------------------------------------
                                 Amount of total    Allocation of daily
       Class of security           daily rebate            rebate
------------------------------------------------------------------------
Tier I Securities Listed on     $500 per day.....  80% ($400) to CLP
 the Exchange Pursuant to Rule                      with highest number
 14.8 for Six Months                                of winning SETs; 20%
 Commencing from the Date of                        ($100) to CLP with
 Initial Listing on the                             second highest
 Exchange.                                          number of winning
                                                    SETs.
Tier I Securities Listed on     250 per day......  80% ($200) to CLP
 the Exchange Pursuant to Rule                      with highest number
 14.8 for Remaining Time                            of winning SETs; 20%
 Subject to CLP Program.                            ($50) to CLP with
                                                    second highest
                                                    number of winning
                                                    SETs.
Tier II Securities Listed on    100 per day......  100% to CLP with
 the Exchange Pursuant to Rule                      highest number of
 14.9.                                              winning SETs.
ETPs Listed Pursuant to Rule    250 per day......  80% ($200) to CLP
 14.11.                                             with highest number
                                                    of winning SETs; 20%
                                                    ($50) to CLP with
                                                    second highest
                                                    number of winning
                                                    SETs.
------------------------------------------------------------------------

    As set forth in the chart above, for all Tier I securities and
exchange traded products (``ETPs'') listed on the Exchange, the
Exchange proposes to offer quoting incentives to the two CLPs with the
highest number of winning SETs during Regular Trading Hours on the
Exchange. For each award, the Exchange will provide 80% of the
incentive to the first-place CLP and 20% of the incentive to the
second-place CLP. In the event only one CLP is eligible for the daily
rebate, 100% of such rebate will be provided to such CLP. In the event
that multiple CLPs have an equal number of winning SETs, the CLP with
the highest executed volume in the security will be awarded the
applicable daily rebate. For Tier II securities listed on the Exchange,
the Exchange will provide 100% of the quoting incentive to the first-
place CLP.
    The Exchange proposes to offer a daily quoting incentive of $500
for CLPs ($400 for the first-place CLP and $100 for the second-place
CLP) CLPs for the first six months that a Tier I corporate security is
listed on the Exchange pursuant to Rule 14.8. Such listing could either
be the result of an issuers initial public offering (``IPO'') on the
Exchange or due to the transfer of an issuer from another exchange to
the Exchange. For the remainder of the time a Tier I corporate security
is listed on the Exchange, and for all ETPs, the Exchange proposes to
offer a $250 daily quoting incentive ($200 for the first-place CLP and
$50 for the second-place CLP). Finally, the Exchange proposes to offer
a daily quoting incentive of $100 for Tier II securities listed on the
Exchange pursuant to Rule 14.9.

Waiver of Fees for Auction Executions
    In order to further incentivize Members to register as CLPs and
participate in the CLP Program, the Exchange proposes to waive
applicable execution fees in Exchange auctions for any CLP that
receives a daily rebate for a specific Exchange-listed security on at
least two (2) trading days during a calendar month. The auction fee
waiver will be provided on a security-by-security basis in the
subsequent calendar month for CLPs that qualify. Further, because a CLP
cannot qualify for this incentive until at least the second calendar
month of a security's listing, in the initial calendar month of a
security's listing on the Exchange, a CLP that is assigned the security
will not be charged for any executions in the security that occur in
any auction of the security that is conducted by the Exchange pursuant
to Rule 11.23.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder that are applicable to a national securities exchange, and,
in particular, with the requirements of Section 6 of the Act.\5\
Specifically, the Exchange believes that the proposed rule change is
consistent with Sections 6(b)(4) and (b)(5) of the Act,\6\ in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among issuers, and it does not unfairly discriminate
between customers, issuers, brokers or dealers.
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    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(4) and (b)(5).
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    At the outset, the Exchange believes that the proposal is not
unfairly discriminatory due to the fact that registration as an
Exchange Market Maker, and, in turn, as a CLP, is equally available to
all Members that satisfy the requirements of Rule 11.8. The Exchange
believes that by allocating pricing benefits to CLPs that make tangible
commitments to enhancing market quality for securities listed on the
Exchange, the proposal will encourage the development of new financial
products, provide a better trading environment for investors in
Exchange-listed securities, and generally encourage greater competition
between listing venues.
    As proposed, the CLP Program is designed to enhance the Exchange's
competitiveness as a listing venue and to strengthen its market quality
for Exchange-listed securities. The Exchange is launching its listings
business at a time in which there are two dominant primary listing
venues, the New York Stock Exchange and Nasdaq. The Exchange believes
that the proposed change would increase competition by incenting
Exchange Market Makers to register as CLPs, which will enhance the
quality of quoting in Exchange-listed securities and will further
assist the Exchange to develop an alternative to Nasdaq and the New
York Stock Exchange for an issuer seeking to list its securities.
Accordingly, the Exchange believes that the proposal will compliment
the Exchange's program for listing securities on the Exchange, which
will, in turn, provide issuers with another option for raising capital
in the public markets, thereby promoting the principles discussed in
Section 6(b)(5) of the Act.\7\
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    \7\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed quoting incentives are fair
and equitable in that registered CLPs will be competing for rewards
that are calculated based solely on the Exchange's measurement of SETs,
and the quoting incentive provided varies only depending on the type of
security for which such CLP is registered. The Exchange further
believes that differentiation between various types of Exchange-listed
securities is fair and equitable and not unreasonably discriminatory
because the risks and necessary incentives for a market maker to make a
market in different securities vary, as described in further detail
below.
    The Exchange proposes a lower quoting incentive for Tier II
corporate issues than other Exchange listed securities. Specifically,
the Exchange proposes to provide an incentive of $100 per day for the
CLP with the highest number of winning SETs during the applicable
trading day with respect to a Tier II corporate issue subject to the
CLP Program. The Exchange has also chosen not to offer a quoting
incentive to the CLP with the second highest number of winning SETs
during the applicable trading day for Tier II corporate issues. The
Exchange believes that this quoting incentive structure for Tier II
corporate issues is reasonable because the Exchange does not expect to
have as many registered CLPs for Tier II corporate issues as compared
to Tier I corporate issues and ETPs. This is because if there is indeed
less competition in Tier II issues, then the registered CLPs in Tier II
issues will have a better opportunity to receive the daily quoting
incentive. Also, because the quoting incentive is lower, the Exchange
believes it is reasonable to simply provide a single quoting incentive
to the CLP with the highest number of winning SETs during the
applicable trading day for Tier II corporate issues.
    The Exchange proposes a daily quoting incentive of $250 per day for
ETPs listed pursuant to Exchange Rule 14.11, with $200 for the first-
place CLP and $50 for the second-place CLP. The Exchange believes that
this quoting incentive is reasonable because the Exchange expects to
have several competing CLPs for each ETP, and thus, the daily quoting
incentive must be slightly larger (to incent competition even by CLPs
that may receive the incentive less frequently). Due to the additional
competition, the Exchange also believes it is reasonable to provide a
quoting incentive to both the first and second-place CLP for ETPs.
    The Exchange also expects to have several competing CLPs for Tier I
corporate issues. While the value of an ETP can be readily monitored
and updated based on analysis conducted of the underlying securities or
products, market making for a corporate issue requires additional
analysis and imposes different risks. Due to the additional risks, the
Exchange believes that additional incentives are necessary and
appropriate in order to encourage CLPs to register as CLPs for Tier I
corporate issues listed on the Exchange pursuant to Rule 14.8 for a
six-month period commencing from the date of initial listing on the
Exchange. Based on the additional risks and the additional competition,
the Exchange believes that the proposed quoting incentive for Tier I
corporate issues of $500 is reasonable for the first six months that a
security is listed on the Exchange. After six months, because CLPs
should become more familiar with the market for the applicable issue,
the Exchange believes it is reasonable to provide the same quoting
incentive as it provides for ETPs.
    Finally, as described above, in order to further incentivize
Members to register as CLPs and participate in the CLP Program, the
Exchange proposes to waive applicable execution fees in Exchange
auctions for any CLP that receives a daily rebate for a specific
Exchange-listed security on at least two (2) trading days during a
calendar month. The Exchange believes that the waiver of auction fees
is equitable and not unreasonably discriminatory because it will be
available to all CLPs registered for the applicable issue and will be
awarded based on objective criteria. Also, as noted above, registration
as an Exchange Market Maker, and, in turn, as a CLP, is equally
available to all Members that satisfy the requirements of Rule 11.8.
The

Exchange believes that the waiver of auction fees is reasonable because
it is based on a relatively low threshold, and thus, will help to
incentivize Members to register as CLPs and participate in the CLP
Program and to stay registered in the CLP Program even if such Members
rarely receive the applicable daily quoting incentive.

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

    The Exchange does not believe that the proposed rule change imposes
any burden on competition.

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

    No written comments were solicited or received.

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

    Pursuant to Section 19(b)(3)(A)(ii) of the Act \8\ and Rule 19b-
4(f)(2) thereunder,\9\ the Exchange has designated this proposal as
establishing or changing a due, fee, or other charge applicable to the
Exchange's Members and non-members, which renders the proposed rule
change effective upon filing.
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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 17 CFR 240.19b-4(f)(2).
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    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 necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.

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-BATS-2012-011 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BATS-2012-011. 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
a.m. and 3 p.m. Copies of such 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 publicly available. All
submissions should refer to File Number SR-BATS-2012-011 and should be
submitted on or before March 19, 2012.
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    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-4401 Filed 2-24-12; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 209 (Tuesday, October 29, 2019)]
[Notices]
[Pages 57926-57928]
[FR Doc No: 2019-23554]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 33675; File No. 812-15052]

MassMutual Select Funds, et al.

October 23, 2019.
AGENCY: Securities and Exchange Commission (the ``Commission'').

ACTION: Notice.

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    Notice of an application for an order under section 12(d)(1)(J) of
the Investment Company Act of 1940 (the ``Act'') for an exemption from
sections 12(d)(1)(A), (B), and (C) of the Act, and under sections 6(c)
and 17(b) of the Act for an exemption from section 17(a) of the Act.
The requested order would permit certain registered open-end investment
companies to acquire shares of certain registered open-end investment
companies, registered closed-end investment companies, and business
development companies (``BDCs''), as defined in section 2(a)(48) of the
Act, and registered unit

investment trusts (``UITs'') (collectively, the ``Underlying Funds'')
that are within and outside the same group of investment companies as
the acquiring investment companies, in excess of the limits in section
12(d)(1) of the Act.

Applicants: MassMutual Select Funds, MassMutual Premier Funds, MML
Series Investment Fund, and MML Series Investment Fund II (each a
``Trust,'' and collectively, the ``Trusts''), is each organized as a
Massachusetts business trust and registered with the Commission under
the Act as an open-end management investment company with multiple
series, each of which has its own investment objectives and principal
investment strategies. MML Investment Advisers, LLC, the adviser to the
Trusts, is organized as a limited liability company established under
the laws of the state of Delaware and is registered as an investment
adviser under section 203 of the Investment Advisers Act of 1940.

Filing Dates: The application was filed on July 26, 2019, and amended
on October 17, 2019.

Hearing or Notification of Hearing: An order granting the requested
relief will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicants with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on November 18, 2019, and should be accompanied by proof of
service on the applicants, in the form of an affidavit, or, for
lawyers, a certificate of service. Pursuant to rule 0-5 under the Act,
hearing requests should state the nature of the writer's interest, any
facts bearing upon the desirability of a hearing on the matter, the
reason for the request, and the issues contested. Persons who wish to
be notified of a hearing may request notification by writing to the
Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street NE, Washington, DC 20549-1090. Applicants: Andrew M. Goldberg,
Esq., MML Investment Advisers, LLC, 100 Bright Meadow Blvd., Enfield,
CT 06082, with copies to Timothy W. Diggins, Esq. and Yana D. Guss,
Esq., Ropes & Gray LLP, Prudential Tower, 800 Boylston Street, Boston,
MA 02199-3600.

FOR FURTHER INFORMATION CONTACT: Edward J. Rubenstein, Senior Special
Counsel, at<PHONE_NUMBER>, or Nadya B. Roytblat, Assistant Chief
Counsel, at<PHONE_NUMBER> (Division of Investment Management, Chief
Counsel's Office).

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

Summary of the Application

    1. Applicants request an order to permit (a) each Fund \1\ (and
each a ``Fund of Funds'') to acquire shares of Underlying Funds \2\ in
excess of the limits in sections 12(d)(1)(A) and (C) of the Act, and
(b) each Underlying Fund that is a registered open-end management
investment company or series thereof, their principal underwriters, and
any broker or dealer registered under the 1934 Act to sell shares of
the Underlying Funds to the Fund of Funds in excess of the limits in
section 12(d)(1)(B) of the Act.\3\ Applicants also request that the
Commission issue an order under sections 6(c) and 17(b) of the Act from
the prohibition on certain affiliated transactions in section 17(a) of
the Act to the extent necessary to permit the Underlying Funds to sell
their shares to, and redeem their shares from, the Funds of Funds.\4\
Applicants state that such transactions will be consistent with the
policies of each Fund of Funds and each Underlying Fund and with the
general purposes of the Act and will be based on the net asset values
of the Underlying Funds.
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    \1\ Applicants request that the order apply not only to the
existing series of the Trusts (the ``Existing Funds''), but that the
order also extend to any future series of each Trust and any other
existing or future registered open-end management investment
companies and any series thereof that are part of the same ``group
of investment companies,'' as defined in section 12(d)(1)(G)(ii) of
the Act, as the Trusts are, or may in the future be, advised by the
Adviser or any other investment adviser controlling, controlled by,
or under common control with the Adviser (together with the Existing
Funds, each series a ``Fund,'' and collectively, the ``Funds''). For
purposes of the request for relief, the term ``group of investment
companies'' means any two or more registered investment companies,
including closed-end investment companies and BDCs, that hold
themselves out to investors as related companies for purposes of
investment and investor services.
    \2\ Certain of the Underlying Funds registered under the Act as
either UITs or open-end management investment companies may have
requested and obtained exemptions from the Commission necessary to
permit their shares to be listed and traded on a national securities
exchange at negotiated prices and, accordingly, to operate as
exchange-traded funds (collectively, ``ETFs'' and each an ``ETF'').
    \3\ Applicants are not requesting relief for a Fund of Funds to
invest in BDCs and registered closed-end investment companies that
are not listed and traded on a national securities exchange.
    \4\ A Fund of Funds generally would purchase and sell shares of
an Underlying Fund that operates as an ETF or closed-end fund
through secondary market transactions rather than through principal
transactions with the Underlying Fund. Applicants nevertheless
request relief from sections 17(a)(1) and (2) to permit each ETF or
closed-end fund that is an affiliated person, or an affiliated
person of an affiliated person, as defined in section 2(a)(3) of the
Act, of a Fund of Funds, to sell shares to or redeem shares from the
Fund of Funds. This includes, in the case of sales and redemptions
of shares of ETFs, the in-kind transactions that 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 an ETF, BDC, or closed-end fund could be deemed
an affiliated person, or an affiliated person of an affiliated
person, of a Fund of Funds because an investment adviser to the ETF,
BDC, or closed-end fund, or an entity controlling, controlled by, or
under common control with the investment adviser to the ETF, BDC, or
closed-end fund, is also an investment adviser to the Fund of Funds.
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    2. Applicants agree that any order granting the requested relief
will be subject to the terms and conditions stated in the application.
Such terms and conditions are designed to, among other things, help
prevent any potential (i) undue influence over an Underlying Fund that
is not in the same ``group of investment companies'' as the Fund of
Funds through control or voting power, or in connection with certain
services, transactions, and underwritings, (ii) excessive layering of
fees, and (iii) overly complex fund structures, which are the concerns
underlying the limits in sections 12(d)(1)(A), (B), and (C) of the Act.
    3. 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 provision of section
12(d)(1) if the exemption is consistent with the public interest and
the protection of investors. Section 17(b) of the Act authorizes the
Commission to grant an order permitting a transaction otherwise
prohibited by section 17(a) if it finds that (a) the terms of the
proposed transaction are fair and reasonable and do not involve
overreaching on the part of any person concerned; (b) the proposed
transaction is consistent with the policies of each registered
investment company involved; and (c) the proposed transaction is
consistent with the general purposes of the Act. Section 6(c) of the
Act permits the Commission to exempt any persons, securities, or
transactions from any provision of the Act if 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.

    For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-23554 Filed 10-28-19; 8:45 am]
BILLING CODE 8011-01-P