[Federal Register Volume 81, Number 23 (Thursday, February 4, 2016)]
[Proposed Rules]
[Pages 5967-5969]
[FR Doc No: 2016-02097]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 100

[Docket Number USCG-2015-1108]
RIN 1625-AA08

Special Local Regulation, Daytona Beach Grand Prix of the Seas;
Atlantic Ocean, Daytona Beach, FL

AGENCY: Coast Guard, DHS.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Coast Guard proposes to establish a special local
regulation on the waters of the Atlantic Ocean east of Daytona Beach,
Florida during the Daytona Beach Grand Prix of the Seas, a series of
high-speed personal watercraft boat races. This action is necessary to
provide for the safety of life on the navigable waters surrounding the
event. This special local regulation will be enforced daily 8 a.m. to 5
p.m., from April 22 through April 24, 2016. This proposed rulemaking
would prohibit persons and vessels from being in the regulated area
unless authorized by the Captain of the Port (COTP) Jacksonville or a
designated representative. We invite your comments on this proposed
rulemaking.

DATES: Comments and related material must be received by the Coast
Guard on or before March 7, 2016.

ADDRESSES: You may submit comments identified by docket number USCG-
2015-1108 using the Federal eRulemaking Portal at http://www.regulations.gov. See the ``Public Participation and Request for
Comments'' portion of the SUPPLEMENTARY INFORMATION section for further
instructions on submitting comments.

FOR FURTHER INFORMATION CONTACT: If you have questions about this
proposed rulemaking, call or email Lieutenant Allan Storm, Sector
Jacksonville, Waterways Management Division, U.S. Coast Guard;
telephone<PHONE_NUMBER>, email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Table of Abbreviations

CFR Code of Federal Regulations
DHS Department of Homeland Security
E.O. Executive order
FR Federal Register
NPRM Notice of proposed rulemaking
Pub. L. Public Law
Sec.  Section
U.S.C. United States Code

II. Background, Purpose, and Legal Basis

    On December 7, 2015, Powerboat P1-USA, LLC notified the Coast Guard
that it will be conducting a series of high speed boat races in the
Atlantic Ocean, offshore from Daytona Beach, FL from April 22 through
24, 2016. The COTP Jacksonville has determined that the potential
hazards associated with the high speed boat races necessitate the
establishment of a special local regulation.
    The purpose of this rulemaking is to ensure the safety of life on
the navigable waters of the United States by prohibiting all vessels
and persons not participating in the event from entering the regulated
area. The Coast Guard proposes this rulemaking under authority in 33
U.S.C. 1233.

III. Discussion of Proposed Rule

    The COTP proposes to establish a special local regulation for the
Daytona Beach Grand Prix of the Seas, a series of high-speed personal
watercraft boat races. The regulated area includes the waters of the
Atlantic Ocean offshore from Daytona Beach, Florida and will be
enforced daily 8 a.m. to 5 p.m., from April 22 through April 24, 2016.
Approximately 90 high-speed personal watercraft are anticipated to
participate in the races. The regulated area would encompass an
approximated offshore area that is 1,350 yards wide that extends from
600 yards south of the Daytona Beach pier to 1,900 yards north of the
pier. No vessel or person would be permitted to enter the regulated
area without obtaining permission from the COTP or a designated
representative. The regulatory text we are proposing appears at the end
of this document.

IV. Regulatory Analyses

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

A. Regulatory Planning and Review

    E.O.s 12866 and 13563 direct agencies to assess the costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits.
E.O. 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This NPRM has not been designated a ``significant
regulatory action,'' under E.O. 12866. Accordingly,

the NPRM has not been reviewed by the Office of Management and Budget.
    The Coast Guard has determined that this NPRM is not a significant
regulatory action for the following reasons: (1) the special local
regulation would be enforced for a total of only 27 hours over the
course of three days; (2) although persons and vessels would not be
able to enter, transit through, anchor in, or remain within the
regulated area without authorization from the COTP Jacksonville or a
designated representative, they would be able to operate in the
surrounding area during the enforcement period; (3) persons and vessels
would still be able to enter, transit through, anchor in, or remain
within the regulated if authorized by the COTP Jacksonville or a
designated representative; and (4) the Coast Guard would provide
advance notification of the special local regulation to the local
maritime community via Broadcast Notice to Mariners or by on-scene
designated representative.

B. Impact on Small Entities

    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as
amended, requires Federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this
proposed rule would not have a significant economic impact on a
substantial number of small entities.
    While some owners or operators of vessels intending to transit
through the regulated area may be small entities, for the reasons
stated in section IV.A above, this proposed rule would not have a
significant economic impact on any vessel owner or operator.
    If you think that your business, organization, or governmental
jurisdiction qualifies as a small entity and that this rule would have
a significant economic impact on it, please submit a comment (see
ADDRESSES) explaining why you think it qualifies and how and to what
degree this rule would economically affect it.
    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this proposed rule. If the rule would affect
your small business, organization, or governmental jurisdiction and you
have questions concerning its provisions or options for compliance,
please contact the person listed in the FOR FURTHER INFORMATION CONTACT
section. The Coast Guard will not retaliate against small entities that
question or complain about this proposed rule or any policy or action
of the Coast Guard.

C. Collection of Information

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

D. Federalism and Indian Tribal Governments

    A rule has implications for federalism under E.O. 13132,
Federalism, if it has a substantial direct effect on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. We have analyzed this proposed rule under that Order and
have determined that it is consistent with the fundamental federalism
principles and preemption requirements described in E.O. 13132.
    Also, this proposed rule does not have tribal implications under
E.O. 13175, Consultation and Coordination with Indian Tribal
Governments, because it would not have a substantial direct effect on
one or more Indian tribes, on the relationship between the Federal
Government and Indian tribes, or on the distribution of power and
responsibilities between the Federal Government and Indian tribes. If
you believe this proposed rule has implications for federalism or
Indian tribes, please contact the person listed in the FOR FURTHER
INFORMATION CONTACT section above.

E. Unfunded Mandates Reform Act

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

F. Environment

    We have analyzed this proposed rule under Department of Homeland
Security Management Directive 023-01 and Commandant Instruction
M16475.lD, which guide the Coast Guard in complying with the National
Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have made
a preliminary determination that this action is one of a category of
actions that do not individually or cumulatively have a significant
effect on the human environment. This proposed rule involves a special
local regulation that would prohibit persons and vessels from
transiting through a 2,500 yard by 1,350 yard regulated area during a
three day racing event lasting nine hours daily. Normally such actions
are categorically excluded from further review under paragraph 34(h) of
Figure 2-1 of Commandant Instruction M16475.lD. A preliminary
environmental analysis checklist and Categorical Exclusion
Determination are available in the docket where indicated under
ADDRESSES. We seek any comments or information that may lead to the
discovery of a significant environmental impact from this proposed
rule.

G. Protest Activities

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

V. Public Participation and Request for Comments

    We view public participation as essential to effective rulemaking,
and will consider all comments and material received during the comment
period. Your comment can help shape the outcome of this rulemaking. If
you submit a comment, please include the docket number for this
rulemaking, indicate the specific section of this document to which
each comment applies, and provide a reason for each suggestion or
recommendation.
    We encourage you to submit comments through the Federal eRulemaking
Portal at http://www.regulations.gov. If your material cannot be
submitted using http://www.regulations.gov, contact the person in the
FOR FURTHER INFORMATION CONTACT section of this document for alternate
instructions.
    We accept anonymous comments. All comments received will be posted
without change to http://www.regulations.gov and will include any
personal information you have provided. For more about privacy and the
docket, you may review a Privacy Act notice regarding the Federal
Docket Management System in the March 24,

2005, issue of the Federal Register (70 FR 15086).
    Documents mentioned in this NPRM as being available in the docket,
and all public comments, will be in our online docket at http://www.regulations.gov and can be viewed by following that Web site's
instructions. Additionally, if you go to the online docket and sign up
for email alerts, you will be notified when comments are posted or a
final rule is published.

List of Subjects in 33 CFR Part 100

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

    For the reasons discussed in the preamble, the Coast Guard proposes
to amend 33 CFR part 100 as follows:

PART 100--SAFETY OF LIFE ON NAVIGABLE WATERS

0
1. The authority citation for part 100 continues to read as follows:

    Authority:  33 U.S.C. 1233.

0
2. Add Sec.  100.35T07-1108 to read as follows:

Sec.  100.35T07-1108  Special Local Regulation, Daytona Beach Grand
Prix of the Seas; Atlantic Ocean, Daytona Beach, FL.

    (a) Regulated Area. The following regulated area is a special local
regulation located offshore from Daytona Beach, FL. All waters of the
Atlantic Ocean encompassed within the following points: Starting at
Point 1 in position 29[deg]14.580' N., 081[deg]00.820' W., thence
northeast to Point 2 in position 29[deg]14.783' N., 081[deg]00.101' W.,
thence southeast to Point 3 in position 29[deg]13.646' N.,
081[deg]59.549' W., thence southwest to Point 4 in position
29[deg]13.434' N., 081[deg]00.224' W., thence northwest back to origin.
These coordinates are based on North American Datum 1983.
    (b) Definition. The term ``designated representative'' means Coast
Guard Patrol Commanders, including Coast Guard coxswains, petty
officers, and other officers operating Coast Guard vessels, and
Federal, state, and local officers designated by or assisting the
Captain of the Port (COTP) Jacksonville in the enforcement of the
regulated area.
    (c) Regulations. (1) All persons and vessels are prohibited from
entering, transiting through, anchoring in, or remaining within the
regulated area unless authorized by the COTP Jacksonville or a
designated representative.
    (2) Persons and vessels desiring to enter, transit through, anchor
in, or remain within the regulated area may contact the COTP
Jacksonville by telephone at<PHONE_NUMBER>, or a designated
representative via VHF-FM radio on channel 16 to request authorization.
If authorization is granted, all persons and vessels receiving such
authorization must comply with the instructions of the COTP
Jacksonville or designated representative.
    (3) The Coast Guard will provide notice of the regulated area
through Broadcast Notice to Mariners via VHF-FM channel 16 or by on-
scene designated representatives.
    (d) Enforcement Period. This section will be enforced daily 8 a.m.
to 5 p.m. from April 22 through April 24, 2016.

    Dated: January 25, 2016.
J.F. Dixon,
Captain, U.S. Coast Guard, Captain of the Port Jacksonville.
[FR Doc. 2016-02097 Filed 2-3-16; 8:45 am]
 BILLING CODE 9110-04-P


UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D. C. 20460 OFFICE OF PREVENTION, PESTICIDES AND TOXIC SUBSTANCES July 5, 2002 CERTIFIED MAIL Dear Registrant:

This is to inform you that on July 5, 2002, the Environmental Protection Agency (hereafter referred to as EPA or the Agency) completed its "Report of FQPA Tolerance Reassessment Progress and Interim Risk Management Decision (TRED) for Tebuthiuron". A Notice of Availability, soliciting public comment for a 30 day period, will be published in the Federal Register (FR) Notice shortly.

FFDCA, as amended, requires EPA to reassess all the tolerances for registered chemicals in effect on or before the date of the enactment of the Food Quality Protection Act (FQPA) in August of 1996 against the new safety standard adopted in the FQPA. In reassessing these tolerances, the Agency must consider, among other things, aggregate risks from non occupational sources of pesticide exposure, whether there is increased susceptibility to infants and children, and the cumulative effects of pesticides with a common mechanism of toxicity. The tolerances are considered reassessed once the safety finding has been made or a modification or revocation occurs. A reregistration eligibility decision (RED) for Tebuthiuron, was completed in April 1994, prior to FQPA enactment. Therefore, it needed to be updated to reassess the tolerances under the FQPA standard.

The Agency has evaluated the dietary risk associated with Tebuthiuron and has determined that there is a reasonable certainty that no harm to any population subgroup will result from exposure to Tebuthiuron when considering dietary exposure and all other non occupational sources of pesticide exposure for which there is reliable information. Therefore, no mitigation measures are needed, and the tolerances established for residues of Tebuthiuron in/ on raw agricultural commodities are now considered reassessed as safe under section 408( q) of the FFDCA.

FQPA requires that EPA consider "available information" concerning the cumulative effects of a particular pesticide's residues and "other substances that have a common mechanism of toxicity." The reason for consideration of other substances is due to the possibility that lowlevel exposures to multiple chemical substances that cause a common toxic effect by a common mechanism could lead to the same adverse health effect, as would a higher level of exposure to any of the other substances individually. EPA did not perform a cumulative risk assessment as part of this reregistration review of Tebuthiuron, because the Agency has not determined if there are any other chemical substances that have a mechanism of toxicity common with that of Tebuthiuron. If EPA identifies other substances that share a common mechanism of toxicity with Tebuthiuron, then a cumulative risk assessment will be conducted that includes Tebuthiuron once the final framework EPA will use for conducting cumulative risk assessments is available.

The Agency's human health findings for the pesticide Tebuthiuron, were discussed in a closure conference call, and are summarized in the attached chemical overview of the risk assessments. These risk assessments and other documents pertaining to the Tebuthiuron tolerance reassessment decision are listed at the end of this document and are available on the Internet at http:// www. epa. gov/ pesticides/ reregistration/ status. htm and the public docket for viewing.

Tolerances for residues of tebuthiuron are related to the consumption of secondary residues in meat and milk from livestock fed tebuthiuron treated grass forage and hay. The registered uses of tebuthiuron are classified in 40 CFR§ 180.390.

The 40 CFR tolerance expression under 40 CFR§ 180.390 must be modified as follows:

CFR§ 180.390 Tebuthiuron; tolerances for residues (a) Tolerances are established for the combined residues of the herbicide tebuthiuron (N[ 5( 1, 1 dimethylethyl) 1, 3, 4 thiadiazol 2 yl N, N' dimethylurea) and its metabolites N[ 5( 2 hydroxy 1, 1 dimethylethyl) 1, 3, 4 thiadiazol 2 yl] N, N'dimethylurea –[ 5( 1, 1 dimethylethyl) 1, 3, 4 thiadiazol 2 yl] N methylurea, and N 5( 1, 1 dimethylethyl) 1, 3, 4 thiadiazol 2 yl] N' hydroxymethyl N methylurea in or on the following agricultural commodities:

Grass, hay Grass, forage (b) Tolerances are established for the combined residues of the herbicide tebuthiuron (N[ 5( 1, 1 dimethylethyl) 1, 3, 4 thiadiazol 2 yl N, N' dimethylurea) and its metabolites N[ 5( 1, 1 dimethylethyl) 1, 3, 4 thiadiazol 2 yl] N methylurea, –[ 5 (1, 1 dimethylethyl) 1, 3, 4 thiadiazol 2 yl] urea, 2 dimethylethyl 5 amino 1, 3, 4thiadiazole and N[ 5( 1, 1 dimethylethyl) 1, 3, 4 thiadiazol 2 yl] N' hydroxymethylN methylurea in or on the following raw agricultural commodities:

Cattle, fat Cattle, mbyp Cattle, meat Goats, fat Goats, mbyp Goats, fat Horses, fat Horses, mbyp Horses, meat Sheep, fat Sheep, mbyp Sheep, meat (c) A tolerance is established for the combined residues of the herbicide tebuthiuron (N[ 5( 1, 1 dimethylethyl) 1, 3, 4 thiadiazol 2 yl N, N' dimethylurea) and its metabolites N[ 5( 1, 1 dimethylethyl) 1, 3, 4 thiadiazol 2 yl] N methylurea, N[ 5 2 hydroxy 1, 1 dimethylethyl) 1, 3, 4 thiadiazol 2 yl] N methylurea, N[ 5( 1, 1dimethylethyl 1, 3, 4 thiadiazol 2 yl] urea, N[ 5( 1, 1 dimethylethyl) 1, 3, 4thiadiazol 2 yl] N' hydroxymethyl N dimethylurea, and N[ 5( 2 hydroxy 1, 1dimethylethyl 1, 3, 4 thiadiazol 2 yl] N' hydroxymethyl N methylurea in or on the following raw agricultural commodity:

Milk The Codex Commission has established that there are no maximum residue limits (MRLs) for residues of tebuthiuron in/ on various raw agricultural and processed commodities. Therefore, issues of compatibility with respect to U. S. tolerances and Codex MRLs do not exist.

Tebuthiuron Tolerances Commodity Current Tolerance (ppm) Reassessed Tolerance (ppm) Tolerance Reassessment Cattle, Fat 2 1 Lowered Cattle, MBYP 2 5 Raised Cattle, Meat 2 1 Lowered Goats, Fat 2 1 Lowered Goats, MBYP 2 5 Raised Goats, Meat 2 1 Lowered Grasses, Forage 20 10 Lowered Grasses, Hay 20 10 Lowered Horses, Fat 2 1 Lowered Horses, MBYP 2 5 Raised Horses, Meat 2 1 Lowered Milk 0. 3 0. 8 Raised Sheep, Fat 2 1 Lowered Sheep, MBYP 2 5 Raised Sheep, Meat 2 1 Lowered A generic Data Call In (DCI) that outlines further data requirements for this chemical will be prepared and mailed to you in the near future.

If you have questions on this document, please contact the Chemical Review Manager, Wilhelmena Livingston, at (703) 308 8025.

Lois A. Rossi, Director Special Review and Reregistration Attachments:

TRED for Tebuthiuron Addendum to TRED Drinking Water Assessment for Tebuthiuron Product Chemistry Chapter for the TRED Residue Chemistry Chapter for the TRED Acute and Chronic Dietary Exposure Assessment for the TRED Toxicology Chapter for the TRED Third Report of the HIARC Committee Report of the FQPA Safety Factor Committee The Outcome of the HED MARC Meeting


[Federal Register Volume 80, Number 22 (Tuesday, February 3, 2015)]
[Notices]
[Pages 5834-5840]
[FR Doc No: 2015-02018]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 31430; 812-14402]

AlphaMark Advisors, LLC, et al.; Notice of Application

January 28, 2015.
AGENCY:  Securities and Exchange Commission (the ``Commission'').

ACTION:  Notice of an application for an order under section 6(c) of
the Investment Company Act of 1940 (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) for an exemption from sections 12(d)(1)(A) and (B) of the
Act.

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Applicants: ETF Series Solutions (the ``Trust''), AlphaMark Advisors,
LLC (``AlphaMark''), and Quasar Distributors, LLC (``Quasar'').

SUMMARY:  Applicants request an order that permits: (a) Actively-
managed series of the Trust to issue shares (``Shares'') redeemable in
large aggregations only (``Creation Units''); (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 after the tender of Creation Units 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 Units; 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 December 18, 2014.

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 Februry 23, 2015, and should be accompanied by proof of
service on applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Pursuant to rule 0-5 under the Act, hearing
requests should state the nature of the writer's interest, any facts
bearing upon the desirability of a hearing on the matter, the reason
for the request, and the issues contested. Persons who wish to be
notified of a hearing may request notification by writing to the
Commission's Secretary.

ADDRESSES:  Secretary, U.S. Securities and Exchange Commission, 100 F
Street NE., Washington, DC 20549. Applicants: AlphaMark Advisors, LLC,
250 Grandview Drive, Suite 175, Ft. Mitchell, Kentucky 41017; ETF
Series Solutions and Quasar Distributors, LLC, 615 East Michigan
Street, 4th Floor, Milwaukee, WI 53202.

FOR FURTHER INFORMATION CONTACT:  Courtney S. Thornton, Senior Counsel,
at<PHONE_NUMBER> or David P. Bartels, Branch Chief, at<PHONE_NUMBER>
(Division of Investment Management, Chief Counsel's Office).

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

Applicants' Representations

    1. The Trust is registered as an open-end management investment
company under the Act and is organized as a Delaware statutory trust.
The Trust will offer Funds (as defined below), each of which will have
distinct investment strategies and will attempt to achieve its
investment objective by utilizing an active management strategy.
    2. AlphaMark, an Ohio limited liability company, is, and any other
Adviser (as defined below) will be, registered as an investment adviser
under the Investment Advisers Act of 1940 (the ``Advisers Act''). An
Adviser will be the investment adviser to each Fund and may enter into
subadvisory agreements with one or more affiliated or unaffiliated
investment sub-advisers to a Fund (each, a ``Sub-Adviser''). Any Sub-
Adviser will be registered or not subject to registration under the
Advisers Act. Quasar, a Delaware limited liability company, is, and any
other Distributor will be, registered as a broker-dealer (``Broker'')
under the Securities Exchange Act of 1934 (the ``Exchange Act'').\1\ A
Distributor will serve as the principal underwriter and distributor for
each of the Funds.
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    \1\ For purposes of the requested order, the term
``Distributor'' shall include any other entity that acts as the
distributor and principal underwriter of the Creation Units of
Shares of the Funds in the future and complies with the terms and
conditions of the application.
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    3. Applicants request that the order apply to AlphaMark Small Cap
Growth ETF (the ``Initial Fund'') and to future series of the Trust or
of any other open-end investment company that may be created in the
future that, in each case, (a) is an actively managed exchange-traded
fund (``ETF''), (b) is advised by AlphaMark or an entity controlling,
controlled by, or under common control with AlphaMark (each such entity
or any successor entity thereto, an ``Adviser'') \2\ and (c) complies
with the terms and conditions of the application (individually a
``Fund,'' and collectively, the ``Funds'').\3\
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    \2\ 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.
    \3\ All entities that currently intend to rely on the order are
named as applicants. Any entity that relies on the order in the
future will comply with the terms and conditions of the application.

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    4. The Funds may invest in equity securities or fixed income
securities traded in the U.S. or non-U.S. markets. Funds that invest in
equity securities or fixed income securities traded in the U.S. or non-
U.S. markets are ``Global Funds.'' Funds that invest solely in foreign
equity securities or foreign fixed income securities are ``Foreign
Funds.'' The Funds may also invest in ``Depositary Receipts'' \4\ and
may engage in TBA Transactions (as defined below). Applicants further
state that, in order to implement each Fund's investment strategy, the
Adviser and/or Sub-Advisers of a Fund may review and change the
securities, or instruments, or other assets or positions held by the
Fund (``Portfolio Positions'') daily.\5\
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    \4\ Depositary Receipts are typically issued by a financial
institution (a ``Depository'') and evidence ownership in a security
or pool of securities that have been deposited with the Depository.
A Fund will not invest in any Depositary Receipts that the Adviser
or any Sub-Adviser deems to be illiquid or for which pricing
information is not readily available. No affiliated persons of
applicants or any Sub-Adviser will serve as the Depository for any
Depositary Receipts held by a Fund.
    \5\ If a Fund invests in derivatives, then (a) the Fund's board
of trustees or directors (for any entity, the ``Board'') will
periodically review and approve the Fund's use of derivatives and
how the Fund's investment adviser assesses and manages risk with
respect to the Fund's use of derivatives and (b) the Fund's
disclosure of its use of derivatives in its offering documents and
periodic reports will be consistent with relevant Commission and
staff guidance.
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    5. Applicants also request that any exemption under section
12(d)(1)(J) of the Act from sections 12(d)(1)(A) and (B) apply to: (i)
Any Fund; (ii) any Acquiring Fund (as defined below); and (iii) any
Brokers selling Shares of a Fund to an Acquiring Fund or any principal
underwriter of a Fund. A management investment company or unit
investment trust registered under the Act that is not part of the same
``group of investment companies'' as the Fund within the meaning of
section 12(d)(1)(G)(ii) of the Act and that acquires Shares of a Fund
in excess of the limits of Section 12(d)(1)(A) of the Act is referred
to as an ``Acquiring Management Company'' or an ``Acquiring Trust,''
respectively, and the Acquiring Management Companies and Acquiring
Trusts are referred to collectively as ``Acquiring Funds.'' \6\
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    \6\ An Acquiring Fund may rely on the order only to invest in a
Fund and not in any other registered investment company.
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    6. A Creation Unit will consist of at least 25,000 Shares and
applicants expect that the trading price of a Share will range from $20
to $100. All orders to purchase Creation Units must be placed with the
Distributor by or through an ``Authorized Participant,'' which is a
participant in the Depository Trust Company (``DTC,'' such participant
a ``DTC Participant'') that has executed a ``Participant Agreement''
with the Distributor. Purchase orders for Funds will be processed
either through the enhanced clearing process of the Continuous Net
Settlement System of the National Securities Clearing Corporation
(``NSCC'', and such process the ``NSCC Process'') or through the manual
clearing process of the DTC (``DTC Process'').
    7. In order to keep costs low and permit each Fund to be as fully
invested as possible, Shares will be purchased and redeemed in Creation
Units 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 Units 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'').\7\ On
any given Business Day \8\ 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, and these instruments may be referred to, in the case of
either a purchase or a redemption, as the ``Creation Basket.'' In
addition, the Creation Basket will correspond pro rata to the positions
in a Fund's portfolio (including cash positions),\9\ 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; \10\ or
(c) TBA Transactions,\11\ short positions and other positions that
cannot be transferred in kind \12\ will be excluded from the Creation
Basket.\13\ If there is a difference between the NAV attributable to a
Creation Unit and the aggregate market value of the Creation Basket
exchanged for the Creation Unit, the party conveying instruments with
the lower value will also pay to the other an amount in cash equal to
that difference (the ``Balancing Amount'').
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    \7\ 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.
    \8\ Each Fund will sell and redeem Creation Units on any day
that the Trust is open for business, including as required by
section 22(e) of the Act (each, a ``Business Day'').
    \9\ The portfolio used for this purpose will be the same
portfolio used to calculate the Fund's net asset value (``NAV'') for
that Business Day.
    \10\ A tradeable round lot for a security will be the standard
unit of trading in that particular type of security in its primary
market.
    \11\ 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.
    \12\ 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.
    \13\ Because these instruments will be excluded from the
Creation Basket, their value will be reflected in the determination
of the Balancing Amount (defined below).
---------------------------------------------------------------------------

    8. Purchases and redemptions of Creation Units 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 Balancing 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; (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
Process or DTC Process; or (ii) in the case of Global Funds and Foreign
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, 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 a Global Fund or

Foreign Fund would be subject to unfavorable income tax treatment if
the holder receives redemption proceeds in kind.\14\
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    \14\ 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).
---------------------------------------------------------------------------

    9. Each Business Day, before the open of trading on a national
securities exchange, as defined in section 2(a)(26) of the Act (a
``Listing Market''), on which Shares are listed and traded, each Fund
will cause to be published through the NSCC the names and quantities of
the instruments comprising the Creation Basket, as well as the
estimated Balancing Amount (if any), for that day. The published
Creation Basket will apply until a new Creation Basket is announced on
the following Business Day, and there will be no intra-day changes to
the Creation Basket except to correct errors in the published Creation
Basket. The Listing Market will disseminate, every 15 seconds
throughout the regular trading hours, through the facilities of the
Consolidated Tape Associate, an estimated NAV, which is an amount per
Share representing the current value of the Portfolio Positions that
were publicly disclosed prior to the commencement of trading in Shares
on the Listing Market.
    10. Each Fund will recoup the settlement costs charged by NSCC and
DTC by imposing a fee (the ``Transaction Fee'') on investors purchasing
or redeeming Creation Units. Where a Fund permits an in-kind purchaser
or redeemer to deposit or receive cash in lieu of one or more Deposit
or Redemption Instruments, the purchaser or redeemer may be assessed a
higher Transaction Fee to offset the cost of buying or selling those
particular Deposit or Redemption Instruments. In all cases, such
Transaction Fees will be limited in accordance with requirements of the
Commission applicable to management investment companies offering
redeemable securities. All orders to purchase Creation Units must be
placed with the Distributor by or through an Authorized Participant and
the Distributor will transmit such orders to the Funds. The Distributor
will maintain a record of Creation Unit purchases and will send out
confirmations of such purchases.
    11. Purchasers of Shares in Creation Units may hold such Shares or
may sell such Shares into the secondary market. Shares will be listed
and traded at negotiated prices on a Listing Market and it is expected
that the relevant Listing Market will designate one or more member
firms to maintain a market for the Shares.\15\ The price of Shares
trading on a Listing Market will be based on a current bid-offer in the
secondary market. Purchases and sales of Shares in the secondary market
will not involve a Fund and will be subject to customary brokerage
commissions and charges.
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    \15\ If Shares are listed on The NASDAQ Stock Market LLC
(``Nasdaq'') or a similar electronic Listing Market (including NYSE
Arca, Inc.), one or more member firms of that Listing Market will
act as market maker (a ``Market Maker'') and maintain a market for
Shares trading on that Listing Market. On Nasdaq, no particular
Market Maker would be contractually obligated to make a market in
Shares. However, the listing requirements on Nasdaq stipulate that
at least two Market Makers must be registered in Shares to maintain
a listing. Registered Market Makers are required to make a
continuous two-sided market or subject themselves to regulatory
sanctions. No Market Maker will be an affiliated person, or an
affiliated person of an affiliated person, of the Funds, except
within the meaning of section 2(a)(3)(A) or (C) of the Act due
solely to ownership of Shares.
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    12. Applicants expect that purchasers of Creation Units will
include institutional investors and arbitrageurs. Applicants expect
that secondary market purchasers of Shares will include both
institutional and retail investors.\16\ Applicants believe that the
structure and operation of the Funds will be designed to enable
efficient arbitrage and, thereby, minimize the probability that Shares
will trade at a material premium or discount to a Fund's NAV.
---------------------------------------------------------------------------

    \16\ Shares will be registered in book-entry form only. DTC or
its nominee will be the registered owner of all outstanding Shares.
Beneficial ownership of Shares will be shown on the records of DTC
or DTC Participants.
---------------------------------------------------------------------------

    13. Shares will not be individually redeemable and owners of Shares
may acquire those Shares from a Fund, or tender such shares for
redemption to the Fund, in Creation Units only. To redeem, an investor
must accumulate enough Shares to constitute a Creation Unit. Redemption
requests must be placed by or through an Authorized Participant. As
discussed above, redemptions of Creation Units will generally be made
on an in-kind basis, subject to certain specified exceptions under
which redemptions may be made in whole or in part on a cash basis, and
will be subject to a Transaction Fee.
    14. Neither a Trust nor any Fund will be advertised or marketed or
otherwise held out as a traditional open-end investment company or
mutual fund. Instead, each Fund will be marketed as an ``actively-
managed exchange-traded fund.'' All marketing materials that describe
the features or method of obtaining, buying, or selling Creation Units,
or Shares traded on a Listing Market, or refer to redeemability, will
prominently disclose that Shares are not individually redeemable and
that the owners of Shares may acquire those Shares from a Fund or
tender those Shares for redemption to the Fund in Creation Units only.
    15. Each Fund's Web site (``Web site''), which will be publicly
available prior to the offering of Shares, will include the Fund's
prospectus (``Prospectus''), statement of additional information
(``SAI''), and summary prospectus, if used. The Web site will contain,
on a per Share basis for each Fund, the prior Business Day's NAV and
the market closing price or mid-point of the bid/ask spread at the time
of calculation of such NAV (``Bid/Ask Price''), and a calculation of
the premium or discount of the market closing price or the Bid/Ask
Price against such NAV. On each Business Day, prior to the commencement
of trading in Shares on a Listing Market, each Fund shall post on the
Web site the identities and quantities of the Portfolio Positions held
by the Fund that will form the basis for the calculation of the NAV at
the end of that Business Day.\17\
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    \17\ Under accounting procedures followed by the Fund, trades
made on the prior Business Day (``T'') will be booked and reflected
in NAV on the current Business Day (T+1). Accordingly, the Funds
will be able to disclose at the beginning of the Business Day the
portfolio that will form the basis for the NAV calculation at the
end of the Business Day.
---------------------------------------------------------------------------

Applicants' Legal Analysis

    1. Applicants request an order under section 6(c) of the Act
granting 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 granting an exemption from sections 17(a)(1) and (2)
of the Act, and under section 12(d)(1)(J) for an exemption from
sections 12(d)(1)(A) and (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
provision 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 holder, 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 Trust to register as
an open-end management investment company and issue Shares that are
redeemable in Creation Units only. Applicants state that investors may
purchase Shares in Creation Units from each Fund and that Creation
Units will always be redeemable in accordance with the provisions of
the Act. Applicants further state that because the market price of
Shares will be disciplined by arbitrage opportunities, investors should
be able to 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

    4. 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 the 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.
    5. Applicants state 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 (a) to prevent dilution caused by
certain riskless-trading schemes by principal underwriters and contract
dealers, (b) to prevent unjust discrimination or preferential treatment
among buyers and (c) to ensure an orderly distribution system of shares
by contract dealers by eliminating price competition from non-contract
dealers who could offer investors shares at less than the published
sales price and who could pay investors a little more than the
published redemption price.
    6. Applicants assert that the protections intended to be afforded
by Section 22(d) and rule 22c-1 are adequately addressed by the
proposed methods for creating, redeeming and pricing Creation Units and
pricing and trading Shares. Applicants state that (a) secondary market
trading in Shares does not involve the Funds as parties and cannot
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 but do
not occur as a result of unjust or discriminatory manipulation.
Finally, applicants assert that competitive forces in the marketplace
should ensure that the margin between NAV and the price for the Shares
in the secondary market 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 the settlement of redemptions of Creation Units of the
Foreign and Global Funds is contingent not only on the settlement cycle
of the U.S. securities markets but also on the delivery cycles present
in foreign markets for underlying foreign Portfolio Positions in which
those Funds invest. Applicants have been advised that, under certain
circumstances, the delivery cycles for transferring Portfolio Positions
to redeeming investors, coupled with local market holiday schedules,
will require a delivery process of up to fifteen (15) calendar days.
Applicants therefore request relief from section 22(e) in order to
provide payment or satisfaction of redemptions within a longer number
of calendar days as required for such payment or satisfaction in the
principal local markets where transactions in the Portfolio Positions
of each Foreign and Global Fund customarily clear and settle, but in
all cases no later than fifteen (15) days following the tender of a
Creation Unit.\18\
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    \18\ Applicants acknowledge that no relief obtained from the
requirements of Section 22(e) of the Act will affect any obligations
that it may otherwise 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 date.
---------------------------------------------------------------------------

    8. Applicants state that section 22(e) was designed to prevent
unreasonable, undisclosed or unforeseen delays in the actual payment of
redemption proceeds. Applicants assert that the protections intended to
be afforded by Section 22(e) are adequately addressed by the proposed
method and securities delivery cycles for redeeming Creation Units.
Applicants state that allowing redemption payments for Creation Units
of a Fund to be made within a maximum of fifteen (15) calendar days
\19\ would not be inconsistent with the spirit and intent of section
22(e). Applicants represent that each Fund's Prospectus and/or SAI will
identify those instances in a given year where, due to local holidays,
more than seven calendar days, up to a maximum of fifteen (15) calendar
days, will be needed to deliver redemption proceeds and will list such
holidays. Applicants are not seeking relief from section 22(e) with
respect to Foreign and Global Funds that do not effect redemptions in-
kind.
---------------------------------------------------------------------------

    \19\ Certain countries in which a Fund may invest have
historically had settlement periods of up to 15 calendar days.
---------------------------------------------------------------------------

Section 12(d)(1) of the Act

    9. Section 12(d)(1)(A) of the Act prohibits a registered investment
company from acquiring shares of an investment company if the
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 its 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 relief to permit Acquiring Funds to acquire
Shares in excess of the limits in section

12(d)(1)(A) of the Act and to permit the Funds, their principal
underwriters and any Broker to sell Shares to Acquiring Funds in excess
of the limits in section 12(d)(l)(B) of the Act. Applicants submit that
the proposed conditions to the requested relief address the concerns
underlying the limits in section 12(d)(1), which include concerns about
undue influence, excessive layering of fees and overly complex
structures.
    11. Applicants submit that their proposed conditions address
concerns regarding the potential for undue influence. To limit the
control that an Acquiring Fund may have over a Fund, applicants propose
a condition prohibiting the adviser of an Acquiring Management Company
(``Acquiring Fund Advisor''), sponsor of an Acquiring Trust
(``Sponsor''), any person controlling, controlled by, or under common
control with the Acquiring Fund Advisor 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 Advisor, the Sponsor, or any person controlling,
controlled by, or under common control with the Acquiring Fund Advisor
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 sub-adviser
to an Acquiring Fund (``Acquiring Fund Sub-Advisor''), any person
controlling, controlled by or under common control with the Acquiring
Fund Sub-Advisor, 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 (or
portion of such investment company or issuer) advised or sponsored by
the Acquiring Fund Sub-Advisor or any person controlling, controlled by
or under common control with the Acquiring Fund Sub-Advisor
(``Acquiring Fund's Sub-Advisory Group'').
    12. Applicants propose a condition to ensure that no Acquiring Fund
or Acquiring Fund Affiliate \20\ (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 Advisor, Acquiring Fund Sub-
Advisor, employee or Sponsor of the Acquiring Fund, or a person of
which any such officer, director, member of an advisory board,
Acquiring Fund Advisor, Acquiring Fund Sub-Advisor, 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).
---------------------------------------------------------------------------

    \20\ An ``Acquiring Fund Affiliate'' is any Acquiring Fund
Advisor, Acquiring Fund Sub-Advisor, Sponsor, promoter and principal
underwriter of an Acquiring Fund, and any person controlling,
controlled by or under common control with any of these entities.
``Fund Affiliate'' is an investment adviser, promoter, or principal
underwriter of a Fund or any person controlling, controlled by or
under common control with any of these entities.
---------------------------------------------------------------------------

    13. Applicants propose several conditions to address the potential
for layering of fees. Applicants note that the Board of any Acquiring
Management Company, including a majority of the directors or trustees
who are not ``interested persons'' within the meaning of section
2(a)(19) of the Act (for any Board, the ``Independent Trustees''), will
be required to 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. Applicants
also state that 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.\21\
---------------------------------------------------------------------------

    \21\ Any reference to NASD Conduct Rule 2830 includes any
successor or replacement rule that may be adopted by the Financial
Industry Regulatory Authority.
---------------------------------------------------------------------------

    14. Applicants submit that the proposed arrangement will not create
an overly complex fund structure. Applicants note that a Fund will be
prohibited from acquiring 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.
    15. To ensure that an Acquiring Fund is aware of 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 include an acknowledgement from the
Acquiring Fund that it may rely on the order only to invest in a Fund
and not in any other investment company.

Section 17(a) 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 person (``Second Tier Affiliates''), from selling any security to
or purchasing any security from the company. Section 2(a)(3) of the Act
defines ``affiliated person'' to include 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 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 or policies'' of the fund and provides that a
control relationship will be presumed where one person owns more than
25% of another person's voting securities. The Funds may be deemed to
be controlled by the Adviser or an entity controlling, controlled by or
under common control with 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 or an entity controlling, controlled by
or under common control with the Adviser (an ``Affiliated Fund'').
    17. Applicants request an exemption under sections 6(c) and 17(b)
of the Act from sections 17(a)(1) and 17(a)(2) of the Act to permit in-
kind purchases and redemptions of Creation Units from the Funds by
persons that are affiliated persons or Second Tier Affiliates of the
Funds solely by virtue of one or more of the following: (a) Holding 5%
or more, or more than 25%, of the Shares of a Trust of one or more
Funds; (b) having an affiliation with a person with an ownership
interest described in (a); or (c) holding 5% or more, or more than 25%,
of the shares of one or more Affiliated Funds. Applicants also request
an exemption in order to permit each Fund to sell Shares to and redeem
Shares from, and engage in the in-kind transactions that would
accompany such sales and redemptions with, any Acquiring Fund of which
the Fund is an affiliated person or Second-Tier Affiliate.\22\
---------------------------------------------------------------------------

    \22\ Applicants anticipate that most Acquiring Funds will
purchase Shares in the secondary market and will not purchase or
redeem Creation Units directly from a Fund. 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 Units by a Fund to an Acquiring Fund and redemptions of
those Shares in Creation Units. The requested relief is intended to
cover transactions that would 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 an affiliated person of an
affiliated person of an Acquiring Fund because an investment adviser
to the Funds is also an investment adviser to that Acquiring Fund.

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

    18. Applicants assert that no useful purpose would be served by
prohibiting such affiliated persons or Second Tier Affiliates from
making in-kind purchases or in-kind redemptions of Shares of a Fund in
Creation Units. Both the deposit procedures for in-kind purchases of
Creation Units and the redemption procedures for in-kind redemptions
will be the same for all purchases and redemptions. Deposit Instruments
and Redemption Instruments will be valued in the same manner as those
Portfolio Positions currently held by the relevant Funds and the
valuation of the Deposit Instruments and Redemption Instruments will be
made in an identical manner regardless of the identity of the purchaser
or redeemer. Applicants do not believe that in-kind purchases and
redemptions will result in abusive self-dealing or overreaching of the
Fund.
    20. Applicants also submit that the sale of Shares to and
redemption of Shares from an Acquiring Fund satisfies the standards for
relief under sections 17(b) and 6(c) of the Act. Applicants note that
any consideration paid for the purchase or redemption of Shares
directly from a Fund will be based on the NAV of the Fund.\23\ The
Acquiring Fund Agreement will require any Acquiring Fund that purchases
Creation Units directly from a Fund to represent that the purchase will
be in compliance with its investment restrictions and consistent with
the investment policies set forth in its registration statement.
---------------------------------------------------------------------------

    \23\ Applicants acknowledge that the 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 of a Fund 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.
---------------------------------------------------------------------------

    21. Applicants believe that: (a) With respect to the relief
requested pursuant to section 17(b), the proposed transactions are fair
and reasonable, and do not involve overreaching on the part of any
person concerned, the proposed transactions are consistent with the
policy of each Fund and, where applicable, Acquiring Fund, and the
proposed transactions are consistent with the general purposes of the
Act; and (b) with respect to the relief requested pursuant to section
6(c), the requested exemption for the proposed transactions is
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' Conditions

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

A. Actively-Managed Exchange-Traded Fund Relief

    1. Neither the Trust nor any Fund will be advertised or marketed as
an open-end investment company or mutual fund. Any advertising material
that describes the purchase or sale of Creation Units or refers to
redeemability will prominently disclose that the Shares are not
individually redeemable and that owners of the Shares may acquire those
Shares from the Fund and tender those Shares for redemption to the Fund
in Creation Units only.
    2. The Web site, 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 Bid/Ask Price,
and a calculation of the premium or discount of the market closing
price or Bid/Ask Price against such NAV.
    3. As long as a Fund operates in reliance on the requested order,
its Shares will be listed on a Listing Market.
    4. On each Business Day, before commencement of trading in Shares
on a Fund's Listing Market, the Fund will disclose on the Web site the
identities and quantities of the Portfolio Positions held by the Fund
that will form the basis for the Fund's calculation of NAV per Share at
the end of the Business Day.
    5. The Adviser or any Sub-Advisers, directly or indirectly, will
not cause any Authorized Participant (or any investor on whose behalf
an Authorized Participant may transact with the Fund) to acquire any
Deposit Instrument for a Fund through a transaction in which the Fund
could not engage directly.
    6. 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 actively-managed exchange-traded
funds.

B. Section 12(d)(1) Relief

    7. 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 percent
of the outstanding voting securities of a Fund, it will vote its Shares
of the Fund in the same proportion as the vote of all other holders of
that Fund's 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-Advisor or a person controlling, controlled by, or
under common control with the Acquiring Fund Sub-Advisor acts as the
investment adviser within the meaning of section 2(a)(20)(A) of the
Act.
    8. 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.
    9. The Board of an Acquiring Management Company, including a
majority of the Independent Trustees, will adopt procedures reasonably
designed to ensure that the Acquiring Fund Advisor and any Acquiring
Fund Sub-Advisor 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.
    10. Once an investment by an Acquiring Fund in the Shares of a Fund
exceeds the limits in section 12(d)(1)(A)(i) of the Act, the Board of
the Fund, including a majority of the Independent Trustees, will
determine that any consideration paid by the Fund to an Acquiring Fund
or an Acquiring Fund Affiliate in connection with any services or
transactions: (i) Is fair and reasonable in relation to the nature and
quality of the services and benefits received by the Fund; (ii) 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

(iii) 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).
    11. 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.
    12. The Board of a Fund, including a majority of the Independent
Trustees, will adopt procedures reasonably designed to monitor any
purchases of securities by the 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 of
the Fund 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 of the Fund will consider, among other things: (i) Whether the
purchases were consistent with the investment objectives and policies
of the Fund; (ii) 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 (iii) 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 of the Fund will take any
appropriate actions based on its review, including, if appropriate, the
institution of procedures designed to ensure that purchases of
securities in Affiliated Underwritings are in the best interest of
shareholders of the Fund.
    13. 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
determinations of the Board of the Fund were made.
    14. Before investing in Shares of a Fund 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 Boards
and their investment adviser(s), or their Sponsors or trustees
(``Trustee''), as applicable, understand the terms and conditions of
the requested order, and agree to fulfill their responsibilities under
the requested 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 the names as soon as
reasonably practicable after a change occurs. The Fund and the
Acquiring Fund will maintain and preserve a copy of the requested
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.
    15. The Acquiring Fund Advisor, 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 under rule 12b-l under the Act) received
from the Fund by the Acquiring Fund Advisor, Trustee or Sponsor, or an
affiliated person of the Acquiring Fund Advisor, Trustee or Sponsor,
other than any advisory fees paid to the Acquiring Fund Advisor,
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-Advisor will waive fees otherwise payable to the Acquiring
Fund Sub-Advisor, 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-Advisor, or an affiliated person of the
Acquiring Fund Sub-Advisor, other than any advisory fees paid to the
Acquiring Fund Sub-Advisor 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-Advisor. In
the event that the Acquiring Fund Sub-Advisor waives fees, the benefit
of the waiver will be passed through to the Acquiring Management
Company.
    16. 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.
    17. No Fund will acquire securities of any other 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 the Fund acquires securities of another investment company
pursuant to exemptive relief from the Commission permitting the Fund to
acquire securities of one or more investment companies for short-term
cash management purposes.
    18. Before approving any advisory contract under section 15 of the
Act, the Board of each Acquiring Management Company, including a
majority of the Independent 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.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-02018 Filed 2-2-15; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 184 (Wednesday, September 23, 2015)]
[Notices]
[Page 57429]
[FR Doc No: 2015-24053]

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DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

[Docket Number FRA-2015-0081]

Petition for Waiver of Compliance

    In accordance with part 211 of Title 49 Code of Federal Regulations
(CFR), this document provides the public notice that by a document
dated August 12, 2015, Metro-North Railroad (MNCW) has petitioned the
Federal Railroad Administration (FRA) for a waiver of compliance from
certain provisions of the Federal railroad safety regulations contained
at 49 CFR part 213. FRA assigned the petition Docket Number FRA-2015-
0081.
    MNCW requests relief from 49 CFR 213.233(c), which specifies the
required track inspection frequency. MNCW's request concerns the twice-
weekly inspection requirement that applies to MNCW tracks. The
regulation specifies that if a track carries passenger trains, it must
be inspected twice weekly. FRA has interpreted that 1 week is defined
as a period of 7 days, Sunday through Saturday. MNCW states that it is
more cost effective for its operations to satisfy the twice-weekly
inspection requirement using a calendar week beginning on Monday, and
requests a waiver to conduct track inspections on this schedule.
    A copy of the petition, as well as any written communications
concerning the petition, is available for review online at
www.regulations.gov and in person at the U.S. Department of
Transportation's (DOT) Docket Operations Facility, 1200 New Jersey
Avenue SE., W12-140, Washington, DC 20590. The Docket Operations
Facility is open from 9 a.m. to 5 p.m., Monday through Friday, except
Federal Holidays.
    Interested parties are invited to participate in these proceedings
by submitting written views, data, or comments. FRA does not anticipate
scheduling a public hearing in connection with these proceedings since
the facts do not appear to warrant a hearing. If any interested party
desires an opportunity for oral comment, they should notify FRA, in
writing, before the end of the comment period and specify the basis for
their request.
    All communications concerning these proceedings should identify the
appropriate docket number and may be submitted by any of the following
methods:
     Web site: http://www.regulations.gov . Follow the online
instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: Docket Operations Facility, U.S. Department of
Transportation, 1200 New Jersey Avenue SE., W12-140, Washington, DC
20590.
     Hand Delivery: 1200 New Jersey Avenue SE., Room W12-140,
Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal Holidays.
    Communications received by November 9, 2015 will be considered by
FRA before final action is taken. Comments received after that date
will be considered as far as practicable.
    Anyone is able to search the electronic form of any written
communications and comments received into any of our dockets by the
name of the individual submitting the comment (or signing the document,
if submitted on behalf of an association, business, labor union, etc.).
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the
public to better inform its processes. DOT posts these comments,
without edit, including any personal information the commenter
provides, to www.regulations.gov, as described in the system of records
notice (DOT/ALL-14 FDMS), which can be reviewed at www.dot.gov/privacy.
See also http://www.regulations.gov/#!privacyNotice for the privacy
notice of regulations.gov.

    Issued in Washington, DC, on September 16, 2015.
Ron Hynes,
Director, Office of Technical Oversight.
[FR Doc. 2015-24053 Filed 9-22-15; 8:45 am]
 BILLING CODE 4910-06-P


[Federal Register: May 25, 2006 (Volume 71, Number 101)]
[Notices]
[Page 30211-30213]
[DOCID:fr25my06-118]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53826; File No. SR-NYSE-2005-90]

Self-Regulatory Organizations; New York Stock Exchange, Inc.;
Notice of Filing of Proposed Rule Change and Amendment No. 1 To Allow
Certain Institutional Customers To Elect Not To Receive Account
Statements

May 18, 2006.
    Pursuant to section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Exchange Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is
hereby given that on December 21, 2005, the New York Stock Exchange,
Inc. (``NYSE'' or the ``Exchange'') filed with the Securities and
Exchange Commission (``SEC'' or the ``Commission'') the proposed change
to NYSE Rule 409 (Statements of Accounts to Customers) as described in
Items I, II, and III below, which Items have been prepared by the
Exchange. On March 28, 2006, the NYSE filed Amendment No. 1 to the
proposed rule change.\4\ 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\ 15 U.S.C. 78a et seq.
    \3\ 17 CFR 240.19b-4.
    \4\ In Amendment No. 1, a partial amendment, the NYSE proposed
additional changes to the text of proposed amended Rule 409, which
are incorporated in the proposed rule text below.
---------------------------------------------------------------------------

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

    The Exchange is proposing to amend NYSE Rule 409 to allow
institutional customers conducting a Delivery versus Payment and
Receive versus Payment (``DVP/RVP'') business to elect not to receive
account statements.
    The text of the proposed rule change is set forth below. Italics
indicate new text that would be added to the current text of NYSE Rule
409.

Rule 409.

Statements of Accounts to Customers
    (a) Except with the permission of the Exchange, or as otherwise
provided by this paragraph, member organizations shall send to their
customers statements of account showing security and money positions
and entries at least quarterly to all accounts having an entry, money
or security position during the preceding quarter. Quarterly statements
need not be sent to a customer pursuant to Rule 409(a) if:
    (1) The customer's account is carried solely for the purpose of
execution on a Delivery versus Payment/Receive versus Payment basis
(DVP/RVP);
    (2) All transactions effected for the account are done on a DVP/RVP
basis in conformity with Rule 387;
    (3) The account does not show security or money positions at the
end of the quarter;
    (4) The customer consents to the suspension of such statements in
writing. Such consents must be maintained by the member organization in
a manner consistent with Exchange Rule 440 and Rule 17a-4 under the
Securities Exchange Act of 1934;
    (5) The member organization undertakes to provide any particular
statement or statements to the customer promptly upon request; and
    (6) The member organization undertakes to promptly reinstate the
delivery of such statements to the customer upon request.
    Nothing in this rule shall be seen to qualify or condition the
obligations of a member organization under SEC Rule 15c3-2 concerning
quarterly notices of free credit balances on statements.
    For purposes of this rule, a DVP/RVP account is an arrangement
whereby payment for securities purchased is to be made to the selling
customer's agent and/or delivery of securities sold is to be made to
the buying customer's agent in exchange for payment at time of
settlement, usually in the form of cash.
    (b) through (g)--No change.
    Supplementary Material--No change.

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

    In filing the proposed rule change and Amendment No. 1 with the
Commission, the Exchange included statements concerning the purpose of,
and basis for, the proposed rule change, as amended. 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 Purpose of, and
Statutory Basis for, the Proposed Rule Change

(1) Purpose
    Waiving of Customer Statements for Institutional DVP/RVP Accounts.
NYSE Rule 409, in pertinent part, specifies the obligations of member
organizations with respect to customer statements, including frequency
of delivery and elements of content.
    NYSE Rule 409(a) requires that, except with the permission of the
Exchange, members and member organizations shall send statements at
least quarterly to customers for accounts showing security and money
positions and entries during the preceding quarter. The Exchange
proposes amendments to the Rule that would provide relief from this
requirement for customer accounts that are carried solely for the
purpose of DVP/RVP transactions. A DVP/RVP account is an arrangement
whereby delivery of securities sold is made to the buying customer's
bank in exchange for payment, usually in cash, at settlement. Such
accounts must comply with the requirements outlined in NYSE Rule 387
(COD Orders).\5\
---------------------------------------------------------------------------

    \5\ NYSE Rule 387 sets out specific prerequisites for the
acceptance of such orders:
    (1) The member or member organization must have previously
received the name and address of the agent, together with its
customer number;
    (2) The order must note the payment on delivery or collect on
delivery nature of the trade;
    (3) The member or member organization must deliver to the
customer a confirmation in the specified form; and
    (4) The member organization must have obtained an agreement from
the customer regarding the furnishing of appropriate instructions
for the settlement of the trade.
---------------------------------------------------------------------------

    Due to the nature of DVP/RVP accounts, their statements do not
generally reflect any cash balance or security position at the end of a
quarter. Consequently, DVP/RVP customers (chiefly institutional
customers) generally rely on confirmations (issued pursuant to SEC Rule
10b-10) or trade runs for transaction-related information. Such records
provide critical transactional information (such as security name and
price, commission or markup, trade date, settlement date, etc.) in a
timely fashion (trade date +1). According to the NYSE, such records are
preferred by institutional investors, who have no desire to receive
voluminous quarterly statements.
    Accordingly, the Exchange proposes amendments to Rule 409 that
would relieve member organizations of the obligation to send quarterly
statements to customers with such accounts if: (1) The customer's
account is carried solely for the purpose of execution on a DVP/RVP
basis; (2) all transactions effected for the account are done on a DVP/
RVP basis in conformity with Rule 387; (3) the account does not show
security or money positions at the end of the quarter; (4) the customer
consents to the suspension of such statements in writing and such
consents are maintained by the member organization in a manner
consistent with Exchange Rule 440 and Rule 17a-4 under the Exchange
Act; (5) the member organization undertakes to provide any particular
statement or statements to the customer promptly upon request; and (6)
the member organization undertakes to promptly reinstate the delivery
of such statements to the customer upon request.
    Nothing in the proposed amended rule would be seen to qualify or
condition the obligations of a member organization under SEC Rule 15c3-
2 concerning quarterly notices of free credit balances on statements.
For purposes of the proposed amended rule, a DVP/RVP account is an
arrangement whereby payment for securities purchased is to be made to
the selling customer's agent and/or delivery of securities sold is to
be made to the buying customer's agent in exchange for payment at time
of settlement, usually in the form of cash.
    By requiring affirmative consent, the ability of the customer to
receive quarterly statements is preserved, and the member organization
is precluded from unilaterally terminating delivery of such statements.
The customer would also retain the right to reinstate the delivery of
statements at any time, and to resume receipt of statements promptly
upon request.
    In sum, the Exchange believes that the proposed amended rule would
provide reasonable regulatory flexibility by allowing customers to
decline delivery of statements that are of little or no use to them.
Correspondingly, the proposed amended rule would result in substantial
cost savings to member organizations in that they would no longer be
required to produce and deliver unwanted and unnecessary records.\6\
---------------------------------------------------------------------------

    \6\ In correspondence dated October 26, 2004, and May 22, 2003,
that the NYSE received from Mr. Lawrence Morillo, Chairman of the
Securities Industry Association STP Legal and Regulatory
Subcommittee, it was estimated that it would not be unreasonable to
expect a firm to realize savings of $100,000 per year in statement
production and mailing costs.
---------------------------------------------------------------------------

(2) Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the requirements of the Exchange Act and the rules and regulations
thereunder applicable to a national securities exchange, and in
particular, with the requirements of section 6(b)(5) of the Exchange
Act.\7\ Section 6(b)(5) requires, among other things, that the rules of
an exchange be designed to promote just and equitable principles of
trade, to remove impediments to and perfect the mechanism of a free and
open market and national market system, and in general, to protect
investors and the public interest. The Exchange believes the proposed
rule change is designed to promote just and equitable principles of
trade, perfect the mechanism of a free an open market, and protect
investors by permitting DVP/RVP customers to avoid receiving unwanted,
voluminous quarterly account statements.
---------------------------------------------------------------------------

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

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

    The Exchange believes that the proposed rule change would not
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Exchange Act.

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

    The Exchange neither solicited nor received written comments on the
proposed rule change.

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

    Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (a) By order approve such proposed rule change, or
    (b) Institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to<EMAIL_ADDRESS>Please include

File Number SR-NYSE-2005-90 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2005-90. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments, all

written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Section, 100 F Street,
NE., Washington, DC 20549. Copies of such filing also will be available
for inspection and copying at the principal office of the NYSE. 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-NYSE-2005-90 and should be
submitted on or before June 15, 2006.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-8053 Filed 5-24-06; 8:45 am]

BILLING CODE 8010-01-P