[Federal Register Volume 81, Number 12 (Wednesday, January 20, 2016)]
[Notices]
[Pages 3195-3203]
[FR Doc No: 2016-00896]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76884; File No. SR-BATS-2015-124]

Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing of a Proposed Rule Change to Rule 14.11(i), Managed Fund Shares,
To List and Trade Shares of the REX VolMAX Long VIX Weekly Futures
Strategy ETF and the REX VolMAXX Inverse VIX Weekly Futures Strategy
ETF of the Exchange Traded Concepts Trust

January 13, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 30, 2015, BATS Exchange, Inc. (the ``Exchange'' or
``BATS'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

    The Exchange filed a proposal to list and trade shares of the REX
VolMAXXTM Long VIX Weekly Futures Strategy ETF and the REX
VolMAXXTM Inverse VIX Weekly Futures Strategy ETF (each a
``Fund'' and collectively, the ``Funds'') of the Exchange Traded
Concepts Trust (the ``Trust'') under BATS Rule 14.11(i) (``Managed Fund
Shares''). The shares of the Funds are referred to herein as the
``Shares.''
    The text of the proposed rule change is available at the Exchange's
Web site at www.batstrading.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant parts of such
statements.

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

1. Purpose
    The Exchange proposes to list and trade the Shares under BATS Rule
14.11(i), which governs the listing and trading of Managed Fund Shares
on the Exchange.\3\ The Funds will be actively managed funds. The
Shares will be offered by the Trust, which was established as a
Delaware statutory trust on July 17, 2009. The Trust is registered with
the Commission as an open-end investment company and has filed a
registration statement on behalf of the Fund on Form N-1A
(``Registration Statement'') with the Commission.\4\ The Adviser is
also registered as a Commodity Pool Operator. The REX
VolMAXXTM Long VIX Weekly Futures Strategy ETF and the REX
VolMAXXTM Inverse VIX Weekly Futures Strategy ETF and their
subsidiaries, REX VolMAXXTM Long VIX Weekly Futures Strategy
Subsidiary I and REX VolMAXXTM Inverse VIX Weekly Futures
Strategy Subsidiary I, respectively, each a wholly-owned subsidiary of
its associated Fund are organized under the laws of the Cayman Islands
(each a ``Subsidiary'' and, collectively, the ``Subsidiaries''), will
be subject to regulation by the CFTC and additional disclosure,
reporting and recordkeeping rules imposed upon commodity pools.
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    \3\ The Commission approved BATS Rule 14.11(i) in Securities
Exchange Act Release No. 65225 (August 30, 2011), 76 FR 55148
(September 6, 2011) (SR-BATS-2011-018).
    \4\ See Registration Statement on Form N-1A for the Trust, dated
December 29, 2015 (File Nos. 333-156529 and 811-22263). The
descriptions of the Fund and the Shares contained herein are based,
in part, on information in the Registration Statement. The
Commission has issued an order granting certain exemptive relief to
the Company under the Investment Company Act of 1940 (15 U.S.C. 80a-
1) (``1940 Act'') (the ``Exemptive Order''). See Investment Company
Act Release No. 30445, April 2, 2013 (File No. 812-13969).
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    Exchange Traded Concepts, LLC is the investment adviser (the
``Adviser'') to the Funds. Vident Investment Advisory, LLC is the sub-
adviser (the ``Sub-Adviser'') to the Funds. SEI Investments Global
Funds Services serves as administrator for the Trust (the
``Administrator''). Brown Brothers Harriman & Co. serves as custodian,
transfer agent, and dividend disbursing agent for the Trust. SEI
Investments Distribution Co. (``Distributor'') serves as the
distributor for the Trust.
    BATS Rule 14.11(i)(7) provides that, if the investment adviser to
the investment company issuing Managed Fund Shares is affiliated with a
broker-dealer, such investment adviser shall erect a ``fire wall''
between the investment adviser and the broker-dealer with respect to
access to information concerning the composition and/or changes to such
investment company portfolio.\5\ In addition, Rule 14.11(i)(7) further
requires that personnel who make decisions on the investment company's
portfolio composition must be subject to procedures designed to prevent
the use and dissemination of material nonpublic information regarding
the applicable investment company portfolio. Rule 14.11(i)(7) is
similar to BATS Rule 14.11(b)(5)(A)(i), however, Rule 14.11(i)(7) in
connection with the establishment of a ``fire wall'' between the
investment adviser and the broker-dealer reflects the applicable open-
end fund's portfolio, not an underlying benchmark index, as is the case
with index-based funds. Neither the Adviser nor the Sub-Adviser is or
is affiliated

with a broker-dealer. In the event that (a) the Adviser becomes a
broker-dealer or newly affiliated with a broker-dealer, or (b) any new
adviser or sub-adviser is a broker-dealer or becomes affiliated with a
broker-dealer, it will implement a fire wall with respect to its
relevant personnel or such broker-dealer affiliate, as applicable,
regarding access to information concerning the composition and/or
changes to the portfolio, and will be subject to procedures designed to
prevent the use and dissemination of material non-public information
regarding such portfolio.
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    \5\ An investment adviser to an open-end fund is required to be
registered under the Investment Advisers Act of 1940 (the ``Advisers
Act''). As a result, the Adviser, the Sub-Adviser, and their related
personnel are subject to the provisions of Rule 204A-1 under the
Advisers Act relating to codes of ethics. This Rule requires
investment advisers to adopt a code of ethics that reflects the
fiduciary nature of the relationship to clients as well as
compliance with other applicable securities laws. Accordingly,
procedures designed to prevent the communication and misuse of non-
public information by an investment adviser must be consistent with
Rule 204A-1 under the Advisers Act. In addition, Rule 206(4)-7 under
the Advisers Act makes it unlawful for an investment adviser to
provide investment advice to clients unless such investment adviser
has (i) adopted and implemented written policies and procedures
reasonably designed to prevent violation, by the investment adviser
and its supervised persons, of the Advisers Act and the Commission
rules adopted thereunder; (ii) implemented, at a minimum, an annual
review regarding the adequacy of the policies and procedures
established pursuant to subparagraph (i) above and the effectiveness
of their implementation; and (iii) designated an individual (who is
a supervised person) responsible for administering the policies and
procedures adopted under subparagraph (i) above.
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REX VolMAXX Long VIX Weekly Futures Strategy ETF
    According to the Registration Statement, the Fund seeks to provide
investors with long exposure to the implied volatility of the broad-
based, large-cap U.S. equity market by obtaining investment exposure to
an actively managed portfolio of exchange-traded futures contracts
based on the Chicago Board Options Exchange, Incorporated (``CBOE'')
Volatility Index (the ``VIX Index'') (``VIX Futures Contracts'') with
weekly and monthly expirations. The price at which a VIX Futures
Contract trades represents the implied reading of the VIX Index upon
the expiration of the VIX Futures Contract. The VIX Index is an index
designed to measure the market price of volatility in large cap U.S.
stocks over 30 days in the future and is calculated based on the prices
of certain put and call options on the S&P 500. The VIX Index is
calculated based on the premium paid by investors for certain options
linked to the level of the S&P 500. During periods of market
instability, the implied level of volatility of the S&P 500 typically
increases and, consequently, the prices of options linked to the S&P
500 typically increase (assuming all other relevant factors remain
constant or have negligible changes). This, in turn, causes the reading
of the VIX Index to increase.
    Unlike many indexes, the VIX Index is not an investable index.
Rather, the VIX Index serves as a market volatility forecast. While the
Fund generally will seek exposure to the VIX Index, the Fund is not an
index tracking fund and will generally seek to enhance its performance
by actively selecting VIX Futures Contracts of varying maturities for
the Fund and, in fact, can be expected to perform very differently from
the VIX Index over all periods of time.
Principal Holdings
    The Fund will seek to achieve its investment objective by obtaining
investment exposure to an actively managed portfolio of futures
contracts based on VIX Futures Contracts with weekly and monthly
expirations.\6\ According to the Registration Statement, the Fund will
obtain such exposure by investing, through both long and short
positions, only in the following instruments: VIX Futures Contracts;
\7\ swap agreements that provide exposure to VIX Futures Contracts; \8\
the securities of other investment companies,\9\ other pooled
investment vehicles,\10\ and exchange-traded notes \11\ that provide
exposure to VIX Futures Contracts; options on securities, securities
indices, and currencies; \12\ repurchase agreements \13\ and reverse
repurchase agreements; \14\ commercial paper; \15\ U.S. government
obligations; \16\ and cash or cash equivalents \17\ to collateralize
its exposure to the VIX Futures Contracts and for investment purposes.
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    \6\ The Fund expects the notional value of its exposure to VIX
Futures Contracts to be equal to approximately 100% of Fund assets
at all times and the weighted average of time to expiry of the VIX
Futures Contracts to be less than one month at all times.
    \7\ Consistent with the definition above, all VIX Futures
Contracts held by the Fund will be exchange-traded.
    \8\ To the extent practicable, the Fund will invest in swaps
cleared through the facilities of a centralized clearing house. To
the extent that the Fund invests in swaps that are not centrally
cleared, the Adviser will also attempt to mitigate the Fund's credit
risk by transacting only with large, well-capitalized institutions
using measures designed to determine the creditworthiness of a
counterparty. The Adviser will take various steps to limit
counterparty credit risk, as described in the Registration
Statement. The Fund's investment in over-the-counter (``OTC'')
derivatives, including OTC swaps, will not exceed 20% of its assets.
    \9\ The Fund may invest in the securities of other investment
companies, including affiliated funds and money market funds,
subject to applicable limitations under Section 12(d)(1) of the 1940
Act.
    \10\ Pooled investment vehicles include only the following
instruments: Trust Issued Receipts (as defined in BATS Rule
14.11(f)); Commodity-Based Trust Shares (as defined in Rule
14.11(e)(4)); Currency Trust Shares (as defined in Rule
14.11(e)(5)); Commodity Index Trust Shares (as defined in Rule
14.11(e)(6)); Trust Units (as defined in Rule 14.11(e)(9)); and
Paired Class Shares (as defined in NASDAQ Stock Market LLC Rule
5713). While the Funds may invest in inverse pooled investment
vehicles, the Funds will not invest in leveraged (e.g., 2X, -2X, 3X
or -3X) pooled investment vehicles.
    \11\ An ETN is a senior unsecured debt obligation designed to
track the total return of an underlying index, benchmark, or
strategy, minus investor fees. ETNs are registered under the
Securities Act of 1933 and are redeemable to the issuer. While the
Funds may invest in inverse ETNs, the Funds will not invest in
leveraged (e.g., 2X, -2X, 3X or -3X) ETNs.
    \12\ All options written on indices or securities will be
covered. For all OTC options, the Fund will seek, where possible, to
use counterparties whose financial status is such that the risk of
default is reduced; however, the risk of losses from default is
still possible. The Sub-Adviser will monitor the financial standing
of counterparties on an ongoing basis. As stated above, the Fund's
investment in OTC derivatives, which includes OTC options, will not
exceed 20% of its assets.
    \13\ The Fund follows certain procedures designed to minimize
the risks inherent in repurchase agreements. Such procedures include
effecting repurchase transactions only with large, well-capitalized,
and well-established financial institutions whose condition will be
continually monitored by the Sub-Adviser. It is the current policy
of the Fund not to invest in repurchase agreements that do not
mature within seven days if any such investment, together with any
other illiquid assets held by the Fund, amount to more than 15% of
the Fund's net assets. The investments of the Fund in repurchase
agreements, at times, may be substantial when, in the view of the
Sub-Adviser, liquidity or other considerations so warrant.
    \14\ Reverse repurchase agreements involve the sale of assets
with an agreement to repurchase the assets at an agreed-upon price,
date and interest payment and have the characteristics of borrowing.
The Fund will establish a segregated account with the Trust's
custodian bank in which the Fund will maintain cash, cash
equivalents or other portfolio securities equal in value to the
Fund's obligations in respect of reverse repurchase agreements. The
Fund does not expect to engage, under normal circumstances, in
reverse repurchase agreements with respect to more than 33\1/3\% of
its assets.
    \15\ Commercial paper is a short-term obligation with a maturity
ranging from one to 270 days issued by banks, corporations and other
borrowers. Such investments are unsecured and usually discounted.
The Funds may invest in commercial paper rated A-1 or A-2 by
Standard and Poor's Ratings Services (``S&P'') or Prime-1 or Prime-2
by Moody's Investors Service, Inc. (``Moody's'').
    \16\ U.S. government obligations include securities issued or
guaranteed as to principal and interest by the U.S. government, its
agencies, or instrumentalities, such as U.S. Treasury obligations,
receipts, STRIPS, and U.S. Treasury zero-coupon bonds.
    \17\ Cash or cash equivalents includes assets such as U.S.
Treasury securities or overnight repurchase agreements.
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    The Fund expects to gain exposure to certain of these investments
by investing a portion of its assets in the Subsidiary. The Subsidiary
will be advised by the Adviser.\18\ The Fund's investment in the
Subsidiary is intended to provide the Fund with exposure to markets (in
general, the commodity markets) within the limits of current federal
income tax laws applicable to investment companies such as the Fund,
which limit the ability of investment companies to

invest directly in certain futures contracts. The Subsidiary will have
the same investment objective as the Fund. Except as otherwise noted,
references to the Fund's investments may also be deemed to include the
Fund's indirect investments through the Subsidiary. The Fund will
invest up to 25% of its total assets in the Subsidiary.
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    \18\ The Subsidiary is not registered under the 1940 Act and is
not directly subject to its investor protections, except as noted in
the Registration Statement. However, the Subsidiary is wholly-owned
and controlled by the Fund and is advised by the Adviser. Therefore,
because of the Fund's ownership and control of the Subsidiary, the
Subsidiary would not take action contrary to the interests of the
Fund or its shareholders. The Fund's Board of Trustees (``Board'')
has oversight responsibility for the investment activities of the
Fund, including its expected investment in the Subsidiary, and the
Fund's role as the sole shareholder of the Subsidiary. The Adviser
receives no additional compensation for managing the assets of the
Subsidiary. The Subsidiary will also enter into separate contracts
for the provision of custody, transfer agency, and accounting agent
services with the same or with affiliates of the same service
providers that provide those services to the Fund.
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    The Fund may lend its portfolio securities in an amount not to
exceed 33\1/3\% of the value of its total assets via a securities
lending program through a lending agent approved by the Board, to
certain creditworthy borrowers desiring to borrow securities to
complete transactions and for other purposes. A securities lending
program allows the Fund to receive a portion of the income generated by
lending its securities and investing the respective collateral. The
Fund will receive collateral for each loaned security which is at least
equal to the current market value of that security, marked to market
each trading day.
    The Fund intends to qualify each year as a regulated investment
company (a ``RIC'') under Subchapter M of the Internal Revenue Code of
1986, as amended.\19\ The Fund will invest its assets (including via
the Subsidiary), and otherwise conduct its operations, in a manner that
is intended to satisfy the qualifying income, diversification and
distribution requirements necessary to establish and maintain RIC
qualification under Subchapter M. Aside from its investments in the
Subsidiary, the Fund will not invest in non-U.S. equity securities or
options.
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    \19\ 26 U.S.C. 851.
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Investment Restrictions
    The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets (calculated at the time of investment) deemed
illiquid by the Adviser \20\ under the 1940 Act.\21\ The Fund will
monitor its portfolio liquidity on an ongoing basis to determine
whether, in light of current circumstances, an adequate level of
liquidity is being maintained, and will consider taking appropriate
steps in order to maintain adequate liquidity if, through a change in
values, net assets, or other circumstances, more than 15% of the Fund's
net assets are held in illiquid assets. Illiquid assets include assets
subject to contractual or other restrictions on resale and other
instruments that lack readily available markets as determined in
accordance with Commission staff guidance.
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    \20\ In reaching liquidity decisions, the Adviser may consider
the following factors: The frequency of trades and quotes for the
security; the number of dealers wishing to purchase or sell the
security and the number of other potential purchasers; dealer
undertakings to make a market in the security; and the nature of the
security and the nature of the marketplace trades (e.g., the time
needed to dispose of the security, the method of soliciting offers,
and the mechanics of transfer).
    \21\ The Commission has stated that long-standing Commission
guidelines have required open-end funds to hold no more than 15% of
their net assets in illiquid securities and other illiquid assets.
See Investment Company Act Release No. 28193 (March 11, 2008), 73 FR
14618 (March 18, 2008), footnote 34. See also, Investment Company
Act Release No. 5847 (October 21, 1969), 35 FR 19989 (December 31,
1970) (Statement Regarding ``Restricted Securities''); Investment
Company Act Release No. 18612 (March 12, 1992), 57 FR 9828 (March
20, 1992) (Revisions of Guidelines to Form N-1A). A fund's portfolio
security is illiquid if it cannot be disposed of in the ordinary
course of business within seven days at approximately the value
ascribed to it by the fund. See Investment Company Act Release No.
14983 (March 12, 1986), 51 FR 9773 (March 21, 1986) (adopting
amendments to Rule 2a-7 under the 1940 Act); Investment Company Act
Release No. 17452 (April 23, 1990), 55 FR 17933 (April 30, 1990)
(adopting Rule 144A under the Securities Act of 1933).
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    The Fund's investments will be consistent with the Fund's
investment objective and will not be used to achieve leveraged or
inverse leveraged returns (i.e. two times or three times the Fund's
benchmark).
REX VolMAXXTM Inverse VIX Weekly Futures Strategy ETF
    According to the Registration Statement, the Fund seeks to provide
investors with inverse exposure to the implied volatility of the broad-
based, large-cap U.S. equity market by obtaining investment exposure to
an actively managed portfolio of exchange-traded VIX Futures Contracts
with weekly and monthly expirations. The price at which a VIX Futures
Contract trades represents the implied reading of the VIX Index upon
the expiration of the VIX Futures Contract. The VIX Index is an index
designed to measure the market price of volatility in large cap U.S.
stocks over 30 days in the future and is calculated based on the prices
of certain put and call options on the S&P 500. The VIX Index is
calculated based on the premium paid by investors for certain options
linked to the level of the S&P 500. During periods of market
instability, the implied level of volatility of the S&P 500 typically
increases and, consequently, the prices of options linked to the S&P
500 typically increase (assuming all other relevant factors remain
constant or have negligible changes). This, in turn, causes the reading
of the VIX Index to increase.
    Unlike many indexes, the VIX Index is not an investable index.
Rather, the VIX Index serves as a market volatility forecast. While the
Fund generally will seek exposure to the VIX Index, the Fund is not an
index tracking fund and will generally seek to enhance its performance
by actively selecting VIX Futures Contracts of varying maturities for
the Fund and, in fact, can be expected to perform very differently from
the VIX Index over all periods of time.
Principal Holdings
    The Fund will seek to achieve its investment objective by obtaining
investment exposure to an actively managed portfolio of futures
contracts based on VIX Futures Contracts with weekly and monthly
expirations.\22\ According to the Registration Statement, the Fund will
obtain such exposure by investing, through both long and short
positions, only in the following instruments: VIX Futures Contracts;
\23\ swap agreements that provide exposure to VIX Futures Contracts;
\24\ the securities of other investment companies,\25\ other pooled
investment vehicles,\26\ and exchange-traded notes \27\ that provide
exposure to VIX Futures Contracts; options on securities, securities
indices, and currencies; \28\

repurchase agreements \29\ and reverse repurchase agreements; \30\
commercial paper; \31\ U.S. government obligations; \32\ and cash or
cash equivalents \33\ to collateralize its exposure to the VIX Futures
Contracts and for investment purposes.
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    \22\ The Fund expects the notional value of its exposure to VIX
Futures Contracts to be equal to approximately 100% of Fund assets
at the close of each trading day and the weighted average of time to
expiry of the VIX Futures Contracts to be less than one month at all
times.
    \23\ Consistent with the definition above, all VIX Futures
Contracts held by the Fund will be exchange-traded.
    \24\ To the extent practicable, the Fund will invest in swaps
cleared through the facilities of a centralized clearing house. To
the extent that the Fund invests in swaps that are not centrally
cleared, the Adviser will also attempt to mitigate the Fund's credit
risk by transacting only with large, well-capitalized institutions
using measures designed to determine the creditworthiness of a
counterparty. The Adviser will take various steps to limit
counterparty credit risk, as described in the Registration
Statement. The Fund's investment in over-the-counter (``OTC'')
derivatives, including OTC swaps, will not exceed 20% of its assets.
    \25\ The Fund may invest in the securities of other investment
companies, including affiliated funds and money market funds,
subject to applicable limitations under Section 12(d)(1) of the 1940
Act.
    \26\ Pooled investment vehicles include only the following
instruments: Trust Issued Receipts (as defined in BATS Rule
14.11(f)); Commodity-Based Trust Shares (as defined in Rule
14.11(e)(4)); Currency Trust Shares (as defined in Rule
14.11(e)(5)); Commodity Index Trust Shares (as defined in Rule
14.11(e)(6)); Trust Units (as defined in Rule 14.11(e)(9)); and
Paired Class Shares (as defined in NASDAQ Stock Market LLC Rule
5713).
    \27\ An ETN is a senior unsecured debt obligation designed to
track the total return of an underlying index, benchmark, or
strategy, minus investor fees. ETNs are registered under the
Securities Act of 1933 and are redeemable to the issuer.
    \28\ All options written on indices or securities will be
covered. For all OTC options, the Fund will seek, where possible, to
use counterparties whose financial status is such that the risk of
default is reduced; however, the risk of losses from default is
still possible. The Sub-Adviser will monitor the financial standing
of counterparties on an ongoing basis. As stated above, the Fund's
investment in OTC derivatives, which includes OTC options, will not
exceed 20% of its assets.
    \29\ The Fund follows certain procedures designed to minimize
the risks inherent in repurchase agreements. Such procedures include
effecting repurchase transactions only with large, well-capitalized,
and well-established financial institutions whose condition will be
continually monitored by the Sub-Adviser. It is the current policy
of the Fund not to invest in repurchase agreements that do not
mature within seven days if any such investment, together with any
other illiquid assets held by the Fund, amount to more than 15% of
the Fund's net assets. The investments of the Fund in repurchase
agreements, at times, may be substantial when, in the view of the
Sub-Adviser, liquidity or other considerations so warrant.
    \30\ Reverse repurchase agreements involve the sale of assets
with an agreement to repurchase the assets at an agreed-upon price,
date and interest payment and have the characteristics of borrowing.
The Fund will establish a segregated account with the Trust's
custodian bank in which the Fund will maintain cash, cash
equivalents or other portfolio securities equal in value to the
Fund's obligations in respect of reverse repurchase agreements. The
Fund does not expect to engage, under normal circumstances, in
reverse repurchase agreements with respect to more than 33\1/3\% of
its assets.
    \31\ Commercial paper is a short-term obligation with a maturity
ranging from one to 270 days issued by banks, corporations and other
borrowers. Such investments are unsecured and usually discounted.
The Funds may invest in commercial paper rated A-1 or A-2 by
Standard and Poor's Ratings Services (``S&P'') or Prime-1 or Prime-2
by Moody's Investors Service, Inc. (``Moody's'').
    \32\ U.S. government obligations include securities issued or
guaranteed as to principal and interest by the U.S. government, its
agencies, or instrumentalities, such as U.S. Treasury obligations,
receipts, STRIPS, and U.S. Treasury zero-coupon bonds.
    \33\ Cash or cash equivalents includes assets such as U.S.
Treasury securities or overnight repurchase agreements.
---------------------------------------------------------------------------

    The Fund expects to gain exposure to certain of these investments
by investing a portion of its assets in the Subsidiary. The Subsidiary
will be advised by the Adviser.\34\ The Fund's investment in the
Subsidiary is intended to provide the Fund with exposure to markets (in
general, the commodity markets) within the limits of current federal
income tax laws applicable to investment companies such as the Fund,
which limit the ability of investment companies to invest directly in
certain futures contracts. The Subsidiary will have the same investment
objective as the Fund. Except as otherwise noted, references to the
Fund's investments may also be deemed to include the Fund's indirect
investments through the Subsidiary. The Fund will invest up to 25% of
its total assets in the Subsidiary.
---------------------------------------------------------------------------

    \34\ The Subsidiary is not registered under the 1940 Act and is
not directly subject to its investor protections, except as noted in
the Registration Statement. However, the Subsidiary is wholly-owned
and controlled by the Fund and is advised by the Adviser. Therefore,
because of the Fund's ownership and control of the Subsidiary, the
Subsidiary would not take action contrary to the interests of the
Fund or its shareholders. The Fund's Board of Trustees (``Board'')
has oversight responsibility for the investment activities of the
Fund, including its expected investment in the Subsidiary, and the
Fund's role as the sole shareholder of the Subsidiary. The Adviser
receives no additional compensation for managing the assets of the
Subsidiary. The Subsidiary will also enter into separate contracts
for the provision of custody, transfer agency, and accounting agent
services with the same or with affiliates of the same service
providers that provide those services to the Fund.
---------------------------------------------------------------------------

    The Fund may lend its portfolio securities in an amount not to
exceed 33\1/3\% of the value of its total assets via a securities
lending program through a lending agent approved by the Board, to
certain creditworthy borrowers desiring to borrow securities to
complete transactions and for other purposes. A securities lending
program allows the Fund to receive a portion of the income generated by
lending its securities and investing the respective collateral. The
Fund will receive collateral for each loaned security which is at least
equal to the current market value of that security, marked to market
each trading day.
    The Fund intends to qualify each year as a regulated investment
company (a ``RIC'') under Subchapter M of the Internal Revenue Code of
1986, as amended.\35\ The Fund will invest its assets (including via
the Subsidiary), and otherwise conduct its operations, in a manner that
is intended to satisfy the qualifying income, diversification and
distribution requirements necessary to establish and maintain RIC
qualification under Subchapter M. Aside from its investments in the
Subsidiary, the Fund will not invest in non-U.S. equity securities or
options.
---------------------------------------------------------------------------

    \35\ 26 U.S.C. 851.
---------------------------------------------------------------------------

Investment Restrictions
    The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets (calculated at the time of investment) deemed
illiquid by the Adviser \36\ under the 1940 Act.\37\ The Fund will
monitor its portfolio liquidity on an ongoing basis to determine
whether, in light of current circumstances, an adequate level of
liquidity is being maintained, and will consider taking appropriate
steps in order to maintain adequate liquidity if, through a change in
values, net assets, or other circumstances, more than 15% of the Fund's
net assets are held in illiquid assets. Illiquid assets include assets
subject to contractual or other restrictions on resale and other
instruments that lack readily available markets as determined in
accordance with Commission staff guidance.
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    \36\ In reaching liquidity decisions, the Adviser may consider
the following factors: The frequency of trades and quotes for the
security; the number of dealers wishing to purchase or sell the
security and the number of other potential purchasers; dealer
undertakings to make a market in the security; and the nature of the
security and the nature of the marketplace trades (e.g., the time
needed to dispose of the security, the method of soliciting offers,
and the mechanics of transfer).
    \37\ The Commission has stated that long-standing Commission
guidelines have required open-end funds to hold no more than 15% of
their net assets in illiquid securities and other illiquid assets.
See Investment Company Act Release No. 28193 (March 11, 2008), 73 FR
14618 (March 18, 2008), footnote 34. See also, Investment Company
Act Release No. 5847 (October 21, 1969), 35 FR 19989 (December 31,
1970) (Statement Regarding ``Restricted Securities''); Investment
Company Act Release No. 18612 (March 12, 1992), 57 FR 9828 (March
20, 1992) (Revisions of Guidelines to Form N-1A). A fund's portfolio
security is illiquid if it cannot be disposed of in the ordinary
course of business within seven days at approximately the value
ascribed to it by the fund. See Investment Company Act Release No.
14983 (March 12, 1986), 51 FR 9773 (March 21, 1986) (adopting
amendments to Rule 2a-7 under the 1940 Act); Investment Company Act
Release No. 17452 (April 23, 1990), 55 FR 17933 (April 30, 1990)
(adopting Rule 144A under the Securities Act of 1933).
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    The Fund's investments will be consistent with the Fund's
investment objective and will not be used to achieve leveraged or
inverse leveraged returns (i.e. two times or three times the Fund's
benchmark).
Net Asset Value
    According to the Registration Statement, the net asset value
(``NAV'') of the Shares of each Fund will be calculated by dividing the
value of the net assets of such Fund (i.e., the value of its total
assets less total liabilities) by the total number of Shares of the
Fund outstanding. Expenses and fees, including the management and
administration fees, are accrued daily and taken into account for
purposes of determining NAV. The NAV of the Fund is generally
determined at 4:15 p.m. Eastern Time each business day when the
Exchange is open for trading. If the Exchange or market on which the
Fund's investments are primarily traded closes early, the NAV may be
calculated prior to its normal calculation time. Creation/redemption
transaction order time cutoffs (as further described below) would also
be accelerated.
    Securities and other assets are generally valued at their market
price using information provided by a pricing service or market
quotations. VIX Futures Contracts are generally valued at their
settlement price as determined

by CBOE. Listed options will generally be valued at the last sale price
on the applicable exchange. Non-exchange traded derivatives, including
OTC-traded options and swaps, will normally be valued on the basis of
quotations or equivalent indication of value supplied by a third-party
pricing service or broker-dealer who makes markets in such instruments.
Repurchase agreements and reverse repurchase agreements will generally
be valued at bid prices received from independent pricing services as
of the announced closing time for trading in such instruments. U.S
government obligations are generally priced at a quoted market price
from an active market, generally the midpoint between the bid/ask
quotes. U.S. government obligations that mature within sixty days may
be valued using amortized cost. Money market funds would generally be
valued at their current Net Asset Value per share. Certain short-term
debt securities will be valued on the basis of amortized cost.
    Exchange-traded securities, including those exchange-traded
securities of other investment companies, other pooled investment
vehicles, and exchange-traded notes, generally will be valued at the
official closing price on the listing exchange. Non-exchange traded
securities will be valued at their net asset value.
    For more information regarding the valuation of Fund investments in
calculating the Fund's NAV, see the Registration Statement.
The Shares
    The Funds will issue and redeem Shares on a continuous basis at the
NAV per Share only in large blocks of a specified number of Shares or
multiples thereof (``Creation Units'') in transactions with authorized
participants who have entered into agreements with the Distributor. The
Adviser currently anticipates that a Creation Unit will consist of at
least 25,000 Shares, though this number may change from time to time,
including prior to listing of the Shares. The exact number of Shares
that will constitute a Creation Unit will be disclosed in the
Registration Statement. Once created, Shares of each Fund may trade on
the secondary market in amounts less than a Creation Unit.
    Although the Adviser anticipates that purchases and redemptions for
Creation Units will generally be executed on an all-cash basis, the
consideration for purchase of Creation Units of the Fund may consist of
an in-kind deposit of a designated portfolio of securities (including
any portion of such assets for which cash may be substituted) (i.e.,
the ``Deposit Assets''), and the ``Cash Component'' computed as
described below. Together, the Deposit Assets and the Cash Component
constitute the ``Fund Deposit,'' which represents the minimum initial
and subsequent investment amount for a Creation Unit of the Fund. The
specific terms surrounding the creation and redemption of shares are at
the discretion of the Adviser.
    The Deposit Assets and Fund Securities (as defined below), as the
case may be, in connection with a purchase or redemption of a Creation
Unit, generally will correspond pro rata, to the extent practicable, to
the assets held by the Fund.
    The Cash Component will be an amount equal to the difference
between the NAV of the Shares (per Creation Unit) and the ``Deposit
Amount,'' which will be an amount equal to the market value of the
Deposit Assets, and serve to compensate for any differences between the
NAV per Creation Unit and the Deposit Amount. Each Fund generally
offers Creation Units partially or entirely for cash. The Administrator
will make available through the National Securities Clearing
Corporation (``NSCC'') on each business day, prior to the opening of
business on the Exchange, the list of names and the required number or
par value of each Deposit Security and the amount of the Cash Component
to be included in the current Fund Deposit (based on information as of
the end of the previous business day) for the Fund.
    The identity and number or par value of the Deposit Assets may
change pursuant to changes in the composition of each Fund's portfolio
as rebalancing adjustments and corporate action events occur from time
to time. The composition of the Deposit Assets may also change in
response to adjustments to the weighting or composition of the holdings
of the Fund.
    Each Fund reserves the right to permit or require the substitution
of a ``cash in lieu'' amount to be added to the Cash Component to
replace any Deposit Security that may not be available in sufficient
quantity for delivery or that may not be eligible for transfer through
the Depository Trust Company (``DTC'') or the clearing process through
the NSCC.\38\
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    \38\ The Adviser represents that, to the extent the Trust
permits or requires a ``cash in lieu'' amount, such transactions
will be effected in the same or equitable manner for all authorized
participants.
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    Except as noted below, all creation orders must be placed for one
or more Creation Units and must be received by the Distributor at a
time specified by the Adviser. Currently, such orders must be received
in proper form no later than 3:00 p.m. Eastern Time on the date such
order is placed in order for creation of Creation Units to be effected
based on the NAV of Shares of the Fund as next determined on such date
after receipt of the order in proper form. The ``Settlement Date'' is
generally the third business day after the transmittal date. On days
when the Exchange or the bond markets close earlier than normal, the
Fund may require orders to create or to redeem Creation Units to be
placed earlier in the day.
    To be eligible to place orders with the Distributor to create a
Creation Unit of a Fund, an entity must be (i) a ``Participating
Party,'' i.e., a broker-dealer or other participant in the clearing
process through the Continuous Net Settlement System of the NSCC, a
clearing agency that is registered with the Commission; or (ii) a DTC
Participant, and, in each case, must have executed an agreement with
the Trust, the Distributor and the Administrator with respect to
creations and redemptions of Creation Units (``Participant
Agreement'').
    A standard creation transaction fee may be imposed to offset the
transfer and other transaction costs associated with the issuance of
Creation Units.
    Shares of the Funds may be redeemed only in Creation Units at their
NAV next determined after receipt of a redemption request in proper
form by the Distributor and only on a business day. The Administrator
will make available through the NSCC, prior to the opening of business
on the Exchange on each business day, the designated portfolio of
securities (including any portion of such securities for which cash may
be substituted) that will be applicable (subject to possible amendment
or correction) to redemption requests received in proper form on that
day (``Fund Securities''). The redemption proceeds for a Creation Unit
generally will consist of a specified amount of cash less a redemption
transaction fee. The Fund generally will redeem Creation Units entirely
for cash.
    A standard redemption transaction fee may be imposed to offset
transfer and other transaction costs that may be incurred by the Fund.
    Redemption requests for Creation Units of the Funds must be
submitted to the Distributor by or through an authorized participant by
a time specified by the Adviser. Currently, such requests must be
received no later than 3:00 p.m. Eastern Time on any business day, in
order to receive that day's NAV. The authorized participant

must transmit the request for redemption in the form required by the
Fund to the Distributor in accordance with procedures set forth in the
authorized Participant Agreement.
    Additional information regarding the Shares and the Funds,
including investment strategies, risks, creation and redemption
procedures, fees and expenses, portfolio holdings disclosure policies,
distributions, taxes and reports to be distributed to beneficial owners
of the Shares can be found in the Registration Statement or on the Web
site for the Fund, as applicable.
Availability of Information
    Each Fund's Web site, which will be publicly available prior to the
public offering of Shares, will include a form of the prospectus for
the Fund that may be downloaded. The Web sites will include additional
quantitative information updated on a daily basis, including, for the
respective Fund: (1) The prior business day's reported NAV, the closing
market price or the midpoint of the bid/ask spread at the time of
calculation of such NAV (the ``Bid/Ask Price''),\39\ daily trading
volume, and a calculation of the premium and discount of the closing
market price or Bid/Ask Price against the NAV; and (2) data in chart
format displaying the frequency distribution of discounts and premiums
of the daily closing price against the NAV, within appropriate ranges,
for each of the four previous calendar quarters. Daily trading volume
information will be available in the financial section of newspapers,
through subscription services such as Bloomberg, Thomson Reuters, and
International Data Corporation, which can be accessed by authorized
participants and other investors, as well as through other electronic
services, including major public Web sites. On each business day,
before commencement of trading in Shares during Regular Trading Hours
\40\ on the Exchange, each Fund will disclose on its Web site the
identities and quantities of the portfolio instruments (the ``Disclosed
Portfolio'') held by the Fund that will form the basis for the Fund's
calculation of NAV at the end of the business day.\41\ The Disclosed
Portfolio will include, as applicable: ticker symbol or other
identifier, a description of the holding, identity of the asset upon
which the derivative is based, the strike price for any options, the
quantity of each security or other asset held as measured by select
metrics, maturity date, coupon rate, effective date, market value and
percentage weight of the holding in the portfolio. The Web site and
information will be publicly available at no charge.
---------------------------------------------------------------------------

    \39\ The Bid/Ask Price of the Fund will be determined using the
midpoint of the highest bid and the lowest offer on the Exchange as
of the time of calculation of the Fund's NAV. The records relating
to Bid/Ask Prices will be retained by the Fund and its service
providers.
    \40\ Regular Trading Hours are 9:30 a.m. to 4:00 p.m. Eastern
Time.
    \41\ Under accounting procedures to be followed by the Fund,
trades made on the prior business day (``T'') will be booked and
reflected in NAV on the current business day (``T+1''). Accordingly,
the Fund will be able to disclose at the beginning of the business
day the portfolio that will form the basis for the NAV calculation
at the end of the business day.
---------------------------------------------------------------------------

    In addition, for each Fund, an estimated value, defined in BATS
Rule 14.11(i)(3)(C) as the ``Intraday Indicative Value,'' that reflects
an estimated intraday value of the Fund's portfolio, will be
disseminated. Moreover, the Intraday Indicative Value will be based
upon the current value for the components of the Disclosed Portfolio
and will be updated and widely disseminated by one or more major market
data vendors at least every 15 seconds during the Exchange's Regular
Trading Hours.\42\ In addition, the quotations of certain of the Fund's
holdings may not be updated for purposes of calculating Intraday
Indicative Value during U.S. trading hours where the market on which
the underlying asset is traded settles prior to the end of the
Exchange's Regular Trading Hours.
---------------------------------------------------------------------------

    \42\ Currently, it is the Exchange's understanding that several
major market data vendors display and/or make widely available
Intraday Indicative Values published via the Consolidated Tape
Association (``CTA'') or other data feeds.
---------------------------------------------------------------------------

    The dissemination of the Intraday Indicative Value, together with
the Disclosed Portfolio, will allow investors to determine the value of
the underlying portfolio of each Fund on a daily basis and provide an
estimate of that value throughout the trading day.
    Intraday price quotations on U.S. government securities, repurchase
agreements, and reverse repurchase agreements of the type held by the
Funds are available from major broker-dealer firms and from third-
parties, which may provide prices free with a time delay, or ``live''
with a paid fee. Major broker-dealer firms will also provide intraday
quotes on swaps of the type held by the Funds. Pricing information
related to exchange-listed instruments, including exchange-listed
options, securities of other investment companies, pooled investment
vehicles, and exchange-traded notes, will be available directly from
the listing exchange. Pricing information related to money market fund
shares will be available through issuer Web sites and publicly
available quotation services such as Bloomberg, Markit and Thomson
Reuters. For VIX Futures Contracts, such intraday information is
available directly from CBOE. Intraday price information is also
available through subscription services, such as Bloomberg and Thomson
Reuters, which can be accessed by authorized participants and other
investors.
    Information regarding market price and volume of the Shares will be
continually available on a real-time basis throughout the day on
brokers' computer screens and other electronic services. The previous
day's closing price and trading volume information for the Shares will
be generally available daily in the print and online financial press.
Quotation and last sale information for the Shares will be available on
the facilities of the CTA.
Initial and Continued Listing
    The Shares will be subject to BATS Rule 14.11(i), which sets forth
the initial and continued listing criteria applicable to Managed Fund
Shares. The Exchange represents that, for initial and/or continued
listing, each Fund must be in compliance with Rule 10A-3 under the Act.
\43\ A minimum of 100,000 Shares of each Fund will be outstanding at
the commencement of trading on the Exchange. The Exchange will obtain a
representation from the issuer of the Shares that the NAV will be
calculated daily and that the NAV and the Disclosed Portfolio will be
made available to all market participants at the same time.
---------------------------------------------------------------------------

    \43\ See 17 CFR 240.10A-3.
---------------------------------------------------------------------------

Trading Halts
    With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares of the Funds. The Exchange will halt trading in
the Shares under the conditions specified in BATS Rule 11.18. Trading
may be halted because of market conditions or for reasons that, in the
view of the Exchange, make trading in the Shares inadvisable. These may
include: (1) The extent to which trading is not occurring in the
instruments composing the Disclosed Portfolio of a Fund; or (2) whether
other unusual conditions or circumstances detrimental to the
maintenance of a fair and orderly market are present. Trading in the
Shares also will be subject to Rule 14.11(i)(4)(B)(iv), which sets
forth circumstances under which Shares of a Fund may be halted.

Trading Rules
    The Exchange deems the Shares to be equity securities, thus
rendering trading in the Shares subject to the Exchange's existing
rules governing the trading of equity securities. BATS will allow
trading in the Shares from 8:00 a.m. until 5:00 p.m. Eastern Time. The
Exchange has appropriate rules to facilitate transactions in the Shares
during all trading sessions. As provided in BATS Rule 11.11(a), the
minimum price variation for quoting and entry of orders in Managed Fund
Shares traded on the Exchange is $0.01, with the exception of
securities that are priced less than $1.00, for which the minimum price
variation for order entry is $0.0001.
Surveillance
    The Exchange believes that its surveillance procedures are adequate
to properly monitor the trading of the Shares on the Exchange during
all trading sessions and to deter and detect violations of Exchange
rules and the applicable federal securities laws. Trading of the Shares
through the Exchange will be subject to the Exchange's surveillance
procedures for derivative products, including Managed Fund Shares. The
Exchange may obtain information regarding trading in the Shares,
exchange-listed options, exchange listed equity securities, and the
underlying futures via the Intermarket Surveillance Group (``ISG'')
from other exchanges who are members or affiliates of the ISG or with
which the Exchange has entered into a comprehensive surveillance
sharing agreement.\44\ In addition, the Exchange is able to access, as
needed, trade information for certain fixed income instruments reported
to FINRA's Trade Reporting and Compliance Engine (``TRACE''). The
Exchange prohibits the distribution of material non-public information
by its employees.
---------------------------------------------------------------------------

    \44\ For a list of the current members and affiliate members of
ISG, see www.isgportal.com. The Exchange notes that not all
components of the Disclosed Portfolio for the Fund may trade on
markets that are members of ISG or with which the Exchange has in
place a comprehensive surveillance sharing agreement. The Exchange
also notes that all of the futures contracts in the Disclosed
Portfolio for the Fund will trade on markets that are a member of
ISG or with which the Exchange has in place a comprehensive
surveillance sharing agreement.
---------------------------------------------------------------------------

Information Circular
    Prior to the commencement of trading, the Exchange will inform its
members in an Information Circular of the special characteristics and
risks associated with trading the Shares. Specifically, the Information
Circular will discuss the following: (1) The procedures for purchases
and redemptions of Shares in Creation Units (and that Shares are not
individually redeemable); (2) BATS Rule 3.7, which imposes suitability
obligations on Exchange members with respect to recommending
transactions in the Shares to customers; (3) how information regarding
the Intraday Indicative Value is disseminated; (4) the risks involved
in trading the Shares during the Pre-Opening \45\ and After Hours
Trading Sessions \46\ when an updated Intraday Indicative Value will
not be calculated or publicly disseminated; (5) the requirement that
members deliver a prospectus to investors purchasing newly issued
Shares prior to or concurrently with the confirmation of a transaction;
and (6) trading information.
---------------------------------------------------------------------------

    \45\ The Pre-Opening Session is from 8:00 a.m. to 9:30 a.m.
Eastern Time.
    \46\ The After Hours Trading Session is from 4:00 p.m. to 5:00
p.m. Eastern Time.
---------------------------------------------------------------------------

    In addition, the Information Circular will advise members, prior to
the commencement of trading, of the prospectus delivery requirements
applicable to each Fund. Members purchasing Shares from the Fund for
resale to investors will deliver a prospectus to such investors. The
Information Circular will also discuss any exemptive, no-action, and
interpretive relief granted by the Commission from any rules under the
Act.
    In addition, the Information Circular will reference that each Fund
is subject to various fees and expenses described in the Registration
Statement. The Information Circular will also disclose the trading
hours of the Shares of the Funds and the applicable NAV calculation
time for the Shares. The Information Circular will disclose that
information about the Shares of the Funds will be publicly available on
the Funds' respective Web site. In addition, the Information Circular
will reference that the Trust is subject to various fees and expenses
described in the Registration Statement.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section
6(b) of the Act \47\ in general and Section 6(b)(5) of the Act \48\ in
particular in that it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in facilitating transactions in securities, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system and, in general, to protect investors and the
public interest.
---------------------------------------------------------------------------

    \47\ 15 U.S.C. 78f.
    \48\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices in that the
Shares will be listed and traded on the Exchange pursuant to the
initial and continued listing criteria in BATS Rule 14.11(i). The
Exchange believes that its surveillance procedures are adequate to
properly monitor the trading of the Shares on the Exchange during all
trading sessions and to deter and detect violations of Exchange rules
and the applicable federal securities laws. If the investment adviser
to the investment company issuing Managed Fund Shares is affiliated
with a broker-dealer, such investment adviser to the investment company
shall erect a ``fire wall'' between the investment adviser and the
broker-dealer with respect to access to information concerning the
composition and/or changes to such investment company portfolio.
Neither the Adviser nor the Sub-Adviser is or is affiliated with a
broker-dealer. In the event that (a) the Adviser becomes a broker-
dealer or newly affiliated with a broker-dealer, or (b) any new adviser
or sub-adviser is a broker-dealer or becomes affiliated with a broker-
dealer, it will implement a fire wall with respect to its relevant
personnel or such broker-dealer affiliate, as applicable, regarding
access to information concerning the composition and/or changes to the
portfolio, and will be subject to procedures designed to prevent the
use and dissemination of material non-public information regarding such
portfolio. The Exchange may obtain information regarding trading in the
Shares and the underlying futures via the ISG from other exchanges who
are members or affiliates of the ISG or with which the Exchange has
entered into a comprehensive surveillance sharing agreement.\49\ In
addition, the Exchange is able to access, as needed, trade information
for certain fixed income instruments reported to FINRA's TRACE.
---------------------------------------------------------------------------

    \49\ See note 44, supra.
---------------------------------------------------------------------------

    According to the Registration Statement, the REX VolMAXX Long VIX
Weekly Futures Strategy ETF expects the notional value of its exposure
to VIX Futures Contracts to be equal to approximately 100% of Fund
assets at all times and the weighted average of time to expiry of the
VIX Futures Contracts to be less than one month at all times. According
to the Registration Statement, the REX VolMAXXTM

Inverse VIX Weekly Futures Strategy ETF expects the notional value of
its exposure to VIX Futures Contracts to be equal to approximately 100%
of Fund assets at the close of each trading day and the weighted
average of time to expiry of the VIX Futures Contracts to be less than
one month at all times.
    Additionally, each Fund may hold up to an aggregate amount of 15%
of its net assets in illiquid assets (calculated at the time of
investment). The Fund will monitor its portfolio liquidity on an
ongoing basis to determine whether, in light of current circumstances,
an adequate level of liquidity is being maintained, and will consider
taking appropriate steps in order to maintain adequate liquidity if,
through a change in values, net assets, or other circumstances, more
than 15% of the Fund's net assets are held in illiquid assets. Illiquid
assets include assets subject to contractual or other restrictions on
resale and other instruments that lack readily available markets as
determined in accordance with Commission staff guidance.
    The proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
that the Exchange will obtain a representation from the issuer of the
Shares that the NAV will be calculated daily and that the NAV and the
Disclosed Portfolio will be made available to all market participants
at the same time. In addition, a large amount of information is
publicly available regarding each Fund and the Shares, thereby
promoting market transparency. Moreover, the Intraday Indicative Value
will be disseminated by one or more major market data vendors at least
every 15 seconds during Regular Trading Hours. On each business day,
before commencement of trading in Shares during Regular Trading Hours,
each Fund will disclose on its Web site the Disclosed Portfolio that
will form the basis for the Fund's calculation of NAV at the end of the
business day. Pricing information will be available on the Fund's Web
site including: (1) The prior business day's reported NAV, the closing
market price or the Bid/Ask Price, daily trading volume, and a
calculation of the premium and discount of the closing market price or
Bid/Ask Price against the NAV; and (2) data in chart format displaying
the frequency distribution of discounts and premiums of the daily
closing price against the NAV, within appropriate ranges, for each of
the four previous calendar quarters. Additionally, information
regarding market price and trading of the Shares will be continually
available on a real-time basis throughout the day on brokers' computer
screens and other electronic services, and quotation and last sale
information for the Shares will be available on the facilities of the
CTA. The Web sites for the Funds will include a form of the prospectus
for the Fund and additional data relating to NAV and other applicable
quantitative information. Trading in Shares of the Fund will be halted
under the conditions specified in BATS Rule 11.18. Trading may also be
halted because of market conditions or for reasons that, in the view of
the Exchange, make trading in the Shares inadvisable. Finally, trading
in the Shares will be subject to BATS Rule 14.11(i)(4)(B)(iv), which
sets forth circumstances under which Shares of the Fund may be halted.
In addition, as noted above, investors will have ready access to
information regarding each Fund's holdings, the Intraday Indicative
Value, the Disclosed Portfolio, and quotation and last sale information
for the Shares.
    Intraday price quotations on securities, repurchase agreements, and
reverse repurchase agreements of the type held by the Fund are
available from major broker-dealer firms and from third-parties, which
may provide prices free with a time delay, or ``live'' with a paid fee.
Major broker-dealer firms will also provide intraday quotes on swaps of
the type held by the Fund. Pricing information related to exchange-
listed instruments, including exchange-listed options, securities of
other investment companies, pooled investment vehicles, and exchange-
traded notes, will be available directly from the listing exchange.
Pricing information related to money market fund shares will be
available through issuer Web sites and publicly available quotation
services such as Bloomberg, Markit and Thomson Reuters. For VIX Futures
Contracts, such intraday information is available directly from CBOE.
Intraday price information is also available through subscription
services, such as Bloomberg and Thomson Reuters, which can be accessed
by authorized participants and other investors.
    The proposed rule change is designed to perfect the mechanism of a
free and open market and, in general, to protect investors and the
public interest in that it will facilitate the listing and trading of
additional types of actively-managed exchange-traded product that will
enhance competition among market participants, to the benefit of
investors and the marketplace. As noted above, the Exchange has in
place surveillance procedures relating to trading in the Shares and may
obtain information via ISG from other exchanges that are members of ISG
or with which the Exchange has entered into a comprehensive
surveillance sharing agreement as well as trade information for certain
fixed income instruments as reported to FINRA's TRACE. In addition, as
noted above, investors will have ready access to information regarding
the Fund's holdings, the Intraday Indicative Value, the Disclosed
Portfolio, and quotation and last sale information for the Shares.
    For the above reasons, the Exchange believes that the proposed rule
change is consistent with the requirements of Section 6(b)(5) of the
Act.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purpose of the Act. The Exchange notes that the
proposed rule change, rather will facilitate the listing and trading of
additional actively-managed exchange-traded products that will enhance
competition among both market participants and listing venues, to the
benefit of investors and the marketplace.

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

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

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-BATS-2015-124 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BATS-2015-124. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-BATS-2015-124, and should be
submitted on or before February 10, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\50\
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    \50\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-00896 Filed 1-19-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 82, Number 249 (Friday, December 29, 2017)]
[Notices]
[Pages 61812-61813]
[FR Doc No: 2017-28127]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No. FMCSA-2017-0326]

Qualification of Drivers; Exemption Applications; Implantable
Cardioverter Defibrillators

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Notice of applications for exemption; request for comments.

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SUMMARY: FMCSA announces receipt of applications from six individuals
for an exemption from the prohibition in the Federal Motor Carrier
Safety Regulations (FMCSRs) against operation of a commercial motor
vehicle (CMV) by persons with a current clinical diagnosis of
myocardial infarction, angina pectoris, coronary insufficiency,
thrombosis, or any other cardiovascular disease of a variety known to
be accompanied by syncope, dyspnea, collapse, or congestive heart
failure. If granted, the exemptions would enable these individuals with
implantable cardioverter defibrillators (ICDs) to operate CMVs in
interstate commerce.

DATES: Comments must be received on or before January 29, 2018.

ADDRESSES: You may submit comments bearing the Federal Docket
Management System (FDMS) Docket ID FMCSA-2017-0326 using any of the
following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting
comments.
     Mail: Docket Management Facility; U.S. Department of
Transportation, 1200 New Jersey Avenue SE, West Building Ground Floor,
Room W12-140, Washington, DC 20590-0001.
     Hand Delivery: West Building Ground Floor, Room W12-140,
1200 New Jersey Avenue SE, Washington, DC, between 9 a.m. and 5 p.m.,
e.t., Monday through Friday, except Federal Holidays.
     Fax: 1-202-493-2251.
    Instructions: Each submission must include the Agency name and the
docket number for this notice. Note that all comments received will be
posted without change to http://www.regulations.gov, including any
personal information provided. Please see the Privacy Act heading below
for further information.
    Docket: For access to the docket to read background documents or
comments, go to http://www.regulations.gov, at any time or Room W12-140
on the ground level of the West Building, 1200 New Jersey Avenue SE,
Washington, DC, between 9 a.m. and 5 p.m., e.t., Monday through Friday,
except Federal holidays. The FDMS is available 24 hours each day, 365
days each year. If you want acknowledgment that we received your
comments, please include a self-addressed, stamped envelope or postcard
or print the acknowledgement page that appears after submitting
comments online.
    Privacy Act: In accordance with 5 U.S.C. 553(c), DOT solicits
comments from the public to better inform its rulemaking process. DOT
posts these comments, without edit, including any personal information
the commenter provides, to http://www.regulations.gov, as described in
the system records notice (DOT/ALL-14 FDMS), which can be reviewed at
http://www.dot.gov/privacy.

FOR FURTHER INFORMATION CONTACT: Ms. Christine A. Hydock, Chief,
Medical Programs Division<PHONE_NUMBER>, [email protected], FMCSA,
Department of Transportation, 1200 New Jersey Avenue SE, Room W64-
224,Washington, DC 20590-0001. Office hours are from 8:30 a.m. to 5
p.m., e.t., Monday through Friday, except Federal holidays. If you have
questions regarding viewing or submitting material to the docket,
contact Docket Services, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

I. Background

    Under 49 U.S.C. 31136(e) and 31315, FMCSA may grant an exemption
from the FMCSRs for a five-year period if it finds ``such exemption
would likely achieve a level of safety that is equivalent to or greater
than the level that would be achieved absent such exemption.'' The
statute also allows the Agency to renew exemptions at the end of the
five-year period. FMCSA grants exemptions from the FMCSRs for a two-
year period to align with the maximum duration of a driver's medical
certification.
    The six individuals listed in this notice have requested an
exemption from 49 CFR 391.41(b)(4). Accordingly, the Agency will
evaluate the qualifications of each applicant to determine whether
granting the exemption will achieve the required level of safety
mandated by statute.
    The physical qualification standard found in 49 CFR 391.41(b)(4)
states that a person is physically qualified to drive a CMV if that
person has no current clinical diagnosis of myocardial infarction,
angina pectoris, coronary insufficiency, thrombosis, or any other
cardiovascular disease of a variety known to be accompanied by syncope,
dyspnea, collapse, or congestive cardiac failure.
    In addition to the regulations, FMCSA has published advisory
criteria \1\ to assist Medical Examiners in determining whether drivers
with certain medical conditions are qualified to operate a CMV in
interstate

commerce. [49 CFR part 391, APPENDIX A TO PART 391--MEDICAL ADVISORY
CRITERIA, section D. Cardiovascular: Sec.  391.41(b)(4), paragraph 4.]
The advisory criteria states that ICDs are disqualifying due to risk of
syncope.
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    \1\ See http://www.ecfr.gov/cgi-bin/text-idx?SID=e47b48a9ea42dd67d999246e23d97970&mc=true&node=pt49.5.391&rgn=div5#ap49.5.391_171.a and https://www.gpo.gov/fdsys/pkg/CFR-2015-title49-vol5/pdf/CFR-2015-title49-vol5-part391-appA.pdf.
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II. Qualifications of Applicants

Frank D'Ercole

    Mr. D'Ercole is a 77 year old CDL holder in New Jersey. An October
30, 2017 letter from his cardiologist states that his ICD was implanted
in June 2017 and that since that time he has had no event on his AICD
implant. His exercise test in May 2017 showed good exercise capacity.

Myles Goodwin

    Mr. Goodwin is a 54 year old driver in New Hampshire. A May 2017
letter from his cardiologist states that his ICD was implanted in
February 2015 and at the time of the letter had not deployed. As of
February 2017, his cardiac issues were well controlled.

Cody Hairr

    Mr. Hairr is a 23 year old driver in North Carolina. Medical
documentation from his cardiologist dated September 2017 and a
cardiologist letter without a date indicates that his ICD was implanted
in 2013 and has not discharged since it was implanted. The letter
states that he has no dizziness, lightheadedness, palpitations, chest
pain, undue shortness of breath, exercise intolerance or syncope since
ICD placement. His cardiologist states that from a cardiac standpoint,
we have not limited [him] from any activities or concerns related to
syncope.

Dennis R. Pickett

    Mr. Pickett is a 78 year old Class A CDL holder in Indiana. An
April 2017 letter from his cardiologist indicates that his permanent
pacemaker was upgraded to a biventricular automatic implantable
cardioverter defibrillator in February 2017 and has not deployed since
that time. His cardiologist states that Mr. Pickett has not reported
any syncopal episodes and that he plans to follow up visits for him
every three months.

Terry Stephens

    Mr. Stephens is a 54 year old Class A CDL holder in Virginia. An
August 2017 letter from his cardiologist states that his biventricular
ICD was implanted in April 2015. The cardiologist's letter also states
that Mr. Stephens does not have symptoms related to his underlying
condition, has not had any episodes of loss of consciousness, has an
ejection fraction of 45 per cent on echocardiogram, and is NYHA class I
symptomatically.

Jeffrey A. Weiner

    Mr. Weiner is a 56 year old driver in Minnesota. A May 2017 letter
from his cardiologist states that his ICD was implanted in July 2014,
has not deployed since it was implanted, and is now asymptomatic. The
letter states that his current underlying heart condition is well
compensated.

III. Request for Comments

    In accordance with 49 U.S.C. 31136(e) and 31315, FMCSA requests
public comment from all interested persons on the exemption petitions
described in this notice. We will consider all comments received before
the close of business on the closing date indicated in the dates
section of the notice.

IV. Submitting Comments

    You may submit your comments and material online or by fax, mail,
or hand delivery, but please use only one of these means. FMCSA
recommends that you include your name and a mailing address, an email
address, or a phone number in the body of your document so that FMCSA
can contact you if there are questions regarding your submission.
    To submit your comment online, go to http://www.regulations.gov and
in the search box insert the docket number FMCSA-2017-0326 and click
the search button. When the new screen appears, click on the blue
``Comment Now!'' button on the right hand side of the page. On the new
page, enter information required including the specific section of this
document to which each comment applies, and provide a reason for each
suggestion or recommendation. If you submit your comments by mail or
hand delivery, submit them in an unbound format, no larger than 8\1/2\
by 11 inches, suitable for copying and electronic filing. If you submit
comments by mail and would like to know that they reached the facility,
please enclose a stamped, self-addressed postcard or envelope.
    We will consider all comments and materials received during the
comment period. FMCSA may issue a final determination any time after
the close of the comment period.

V. Viewing Comments and Documents

    To view comments, as well as any documents mentioned in this
preamble, go to http://www.regulations.gov and in the search box insert
the docket number FMCSA-2017-0326 and click ``Search.'' Next, click
``Open Docket Folder'' and you will find all documents and comments
related to this notice.

    Issued on: December 22, 2017.
Larry W. Minor,
Associate Administrator for Policy.
[FR Doc. 2017-28127 Filed 12-28-17; 8:45 am]
 BILLING CODE 4910-EX-P


[Federal Register: September 1, 2009 (Volume 74, Number 168)]
[Notices]
[Page 45231]
[DOCID:fr01se09-90]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

[Docket No. USCG-2009-0760]

Merchant Marine Personnel Advisory Committee; Meeting

AGENCY: Coast Guard, DHS.

ACTION: Notice of meeting.

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SUMMARY: The Merchant Marine Personnel Advisory Committee (MERPAC) will
meet in Martinsburg, WV, to discuss various issues relating to the
training and fitness of merchant marine personnel. This meeting is open
to the public.

DATES: MERPAC will meet on Tuesday, September 22, 2009, from 8 a.m.
until 4 p.m., and Wednesday, September 23, 2009, from 8 a.m. until 3
p.m. This meeting may close early if all business is finished. Written
material and requests to make oral presentations should reach the Coast
Guard on or before September 9, 2009. Requests to have a copy of your
material distributed to each member of the committee should reach the
Coast Guard on or before September 9, 2009.

ADDRESSES: The Committee will meet in Room 335, the Dales-
Larsen Training Room at the U. S. Coast Guard National Maritime Center,
100 Forbes Drive, Martinsburg, WV. Send written material and requests
to make oral presentations to Mr. Mark Gould, Assistant to the
Designated Federal Officer (ADFO) of MERPAC, at COMMANDANT (CG-5221),
ATTN MERPAC, U.S. COAST GUARD, 2100 2nd ST., SW., STOP 7126,
WASHINGTON, DC 20593-7126. This notice may be viewed in our online
docket, USCG-2009-0760, at http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Mr. Mark Gould, Assistant to the DFO
of MERPAC, at<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: Notice of this meeting is given under the
Federal Advisory Committee Act, 5 U.S.C. App. (Pub. L. 92-463). Please
be advised that in order to gain admittance to the National Maritime
Center building, you must provide identification in the form of a
government-issued picture identification card.

Agenda of Meeting

    The agenda for the September 22, 2009, Committee meeting is as
follows:
    (1) The full committee will meet to discuss the objectives for the
meeting.
    (2) Working groups addressing the following task statements may
meet to deliberate--
    (a) Task Statement 30, concerning Utilizing Military Sea Service
for Standards of Training, Certification and Watchkeeping (STCW)
Certifications;
    (b) Task Statement 58, concerning Stakeholder Communications During
the Mariner Licensing and Documentation (MLD) Program Restructuring and
Centralization;
    (c) Task Statement 64, concerning Recommendations on Areas in the
STCW Convention and the STCW Code Identified for Comprehensive Review;
and
    (d) Task Statement 71, concerning Review of Coast Guard/
International Maritime Organization (IMO) Operational Level Examination
Questions for Both Deck and Engine Licenses.
    (3) New working groups may be formed to address issues proposed by
the Coast Guard, MERPAC members, or the public.
    (4) At the end of the day, the working groups will make a report to
the full committee on what has been accomplished in their meetings. No
action will be taken on these reports on this date.
    The agenda for the September 23, 2009, Committee meeting is as
follows:
    (1) Introduction;
    (2) Reports from working groups working on the following;
    (a) Task Statement 30, concerning Utilizing Military Sea Service
for STCW Certification;
    (b) Task Statement 58, concerning Stakeholder Communications During
MLD Program Restructuring and Centralization;
    (c) Addendum to Task Statement 64, concerning Recommendations on
Areas in the STCW Convention and the STCW Code Identified for
Comprehensive Review; and
    (d) Task Statement 71, concerning Review of Coast Guard/IMO
Operational Level Examination Questions for Both Deck and Engine
Licenses.
    (3) Other items which may be discussed:
    (a) Standing Committee-Prevention through People.
    (b) Briefings concerning on-going projects or topics of interest to
MERPAC.
    (c) Other items brought up for discussion by the Committee or the
public.
    (4) At the end of the day, the working groups will make a report
and, if applicable, recommendations for the full committee to consider
for presentation to the Coast Guard. Official action on these
recommendations may be taken on this date.

Procedural

    This meeting will be open to the public. However, please be advised
that in order to gain admittance to the National Maritime Center
building, you must provide identification in the form of a government-
issued picture identification card. Please note that the meeting may
close early if all business is finished. At the Chair's discretion,
members of the public may make oral presentations during the meeting.
If you would like to make an oral presentation at a meeting, please
notify the Assistant to the DFO no later than September 9, 2009.
Written material for distribution at a meeting should reach the Coast
Guard no later than September 9, 2009. If you would like a copy of your
material distributed to each member of the committee in advance of a
meeting, please submit 25 copies to the Assistant to the DFO no later
than September 9, 2009.

Information on Services for Individuals With Disabilities

    For information on facilities or services for individuals with
disabilities or to request special assistance at the meeting, contact
the Assistant to the DFO as soon as possible.

    Dated: August 24, 2009.
J.G. Lantz,
Director of Commercial Regulations and Standards.
[FR Doc. E9-21021 Filed 8-31-09; 8:45 am]

BILLING CODE 4910-15-P


Appendix A LABOR RATES *

Contractor Rates 2005 Hourly 2002 2002 2005 ECI 2005 $ 76.00 $ 69.00 1.10 $ 76.23 Respondent Rates 2005 Hourly 2002 2002 2005 ECI 2005 $ 57.00 $ 52.00 1.10 $ 57.45 State/ Local Agency Rates 2005 Hourly 2002 2002 2004 ECI 2005 $ 54.00 $ 49.00 1.11 $ 54.18 EPA Rates 2005 Hourly 2002 2002 2004 ECI 2005 $ 48.00 $ 43.00 1.12 $ 47.99 * The contractor, respondent, and state/ local agency labor rates used in the 1998 ICR were updated based upon the Bureau of Labor Statistics' Employment Cost Index ( ECI). The ECI is an economic indicator which measures changes in compensation costs.

The EPA labor rates were updated based upon the US Office of Personnel Management's Federal Pay Scale.

Page A 3 shows the value of the indexes that were used in this analysis.

Page A 2 Appendix A ( Continued)

Indexes for Updating Labor Rates SOURCE: Bureau of Labor Statistics1 Employment Cost Index  Civilian Workers Excluding Sales June 1989 = 100 Jan. 2002 158.4 Dec. 2004 175 16.6 10.48% Incr 2002 2004 1.10 Employment Cost Index  Civilian Workers State and Local Government June 1989 = 100 Jan. 2002 156.1 Dec. 2004 172.6 16.5 10.57% Incr 2002 2004 1.11 SOURCE: US Office of Personnel Management 2 Federal Pay Scale  GS 11 Step 5 2002 $ 51,322.00 2004 $ 57,280.00 5958 11.61% Incr 2002 2004 1.12 1. http:// www. bls. gov/ ncs/ ect/

3. http:// www. opm. gov/ oca/ 02tables/ RUS. htm Page A 3 Appendix A Universe of Respondents Universe Estimates Sources under EPA authority # New exploration sources 0 # New development/ production sources 1 # Existing sources 0 Sources under State/ local authority # New exploration sources 0 # New development/ production sources 2 # Existing sources 31 # Construction mod to existing sources 3 Total Number of Sources 37 Page A 4 EXHIBIT 1. NEW EXPLORATION SOURCES UNDER EPA AUTHORITY RESPONDENTS' ANNUAL BURDENS Collection Activities Number of Respondents Number of Occurrences for 3 years Occurrences per year Hours per Occurrence1 Cost per Occurrence Contractors Hours per Occurrence Contractors Dollars per Occurrence Total Hours per Year Total Cost per Year O& M Costs per Occurrence2 Capital Costs per Occurrence Total O& M Costs per Year Total Capital Costs per Year Labor Rates $ 57.00 $ 76.00 Read regulations 0 1 0.00 5 285.00 0 $ 0.00 0 $ 0.00 $ 3.88 $ 0.00 $ 0.00 $ 0.00 Consult with EPA,

or State and local agency 0 1 0.00 5 285.00 0 $ 0.00 0 $ 0.00 $ 15.87 $ 0.00 $ 0.00 $ 0.00 Prepare a NOI to construct 0 1 0.00 30 1,710.00 0 $ 0.00 0 $ 0.00 $ 116.96 $ 0.00 $ 0.00 $ 0.00 Conduct record keeping and report data to EPA 0 1 0.00 32 1,824.00 0 $ 0.00 0 $ 0.00 $ 105.38 $ 0.00 $ 0.00 $ 0.00 Responses per Year 0 Burden 0 $ 0.00 $ 0.00 $ 0.00 Collection activities in the shaded boxes require one response per occurrence 1. Assumes hours per occurrence is the same as that in the 1998 ICR.

2. Rates from the 1998 ICR were adjusted to 2002 dollars using the Employment Cost Index for Civilian Workers Excluding Sales ( Appendix A3)

Ex 1 EXHIBIT 2. NEW DEVELOPMENT/ PRODUCTION SOURCES UNDER EPA AUTHORITY RESPONDENTS' ANNUAL BURDENS Collection Activities Number of Respondents Number of Occurrences for 3 years Occurrences per year Hours per Occurrence1 Cost per Occurrence Contractors Hours per Occurrence Contractors Dollars per Occurrence Total Hours per Year Total Cost per Year O& M Costs per Occurrence2 Capital Costs per Occurrence Total O& M Costs per Year Total Capital Costs per Year Rates $ 57.00 $ 76.00 Read regulations 1 1 0.33 5 285.00 0 $ 0.00 2 $ 95.00 $ 3.88 $ 0.00 $ 1.29 $ 0.00 Consult with EPA,

or State and local agency 1 1 0.33 5 285.00 0 $ 0.00 2 $ 95.00 $ 35.55 $ 0.00 $ 11.85 $ 0.00 Prepare a NOI to construct 1 1 0.33 30 1,710.00 0 $ 0.00 10 $ 570.00 $ 116.96 $ 0.00 $ 38.99 $ 0.00 Prepare preconstruction permit application 1 1 0.33 100 5,700.00 585 $ 44,460.00 228 $ 16,720.00 $ 236.82 $ 0.00 $ 78.94 $ 0.00 Perform initial compliance test 1 1 0.33 100 5,700.00 764 $ 58,064.00 288 $ 21,254.67 $ 387.95 $ 0.00 $ 129.32 $ 0.00 Prepare permit to operate application 1 1 0.33 42 2,394.00 0 $ 0.00 14 $ 798.00 $ 236.82 $ 0.00 $ 78.94 $ 0.00 Conduct record keeping and report data to EPA 1 1 0.33 64 741.00 0 $ 0.00 21 $ 247.00 $ 250.14 $ 25,000.00 $ 83.38 $ 8,333.33 Responses per Year 1.67 Burden 565 $ 39,779.67 $ 422.71 $ 8,333.33 Collection activities in the shaded boxes require one response per occurrence 1. Assumes hours per occurrence is the same as that in the 1998 ICR.

2. Rates from the 1998 ICR were adjusted to 2002 dollars using the Employment Cost Index for Civilian Workers Excluding Sales ( Appendix A3)

Ex 2 EXHIBIT 3. NEW EXPLORATION SOURCES UNDER STATE/ LOCAL AUTHORITY RESPONDENTS' ANNUAL BURDENS Collection Activitie Number of Respondents Number of Occurrences for 3 years Occurrences per year Hours per Occurrence1 Cost per Occurrence Contractors Hours per Occurrence Contractors Dollars per Occurrence Total Hours per Year Total Cost per Year O& M Costs per Occurrence2 Capital Costs per Occurrence Total O& M Costs per Year Total Capital Costs per Year Rates $ 57.00 $ 76.00 Read regulations 0 1 0.00 5 285.00 0 $ 0.00 0 $ 0.00 $ 3.88 $ 0.00 $ 0.00 $ 0.00 Consult with EPA, or State and local agency 0 1 0.00 5 285.00 0 $ 0.00 0 $ 0.00 $ 15.87 $ 0.00 $ 0.00 $ 0.00 Prepare a NOI to construct and permit application 0 1 0.00 70 3,990.00 0 $ 0.00 0 $ 0.00 $ 116.96 $ 0.00 $ 0.00 $ 0.00 Perform initial compliance test 0 1 0.00 100 5,700.00 748 $ 56,848.00 0 $ 0.00 $ 387.95 $ 0.00 $ 0.00 $ 0.00 Conduct record keeping and report data to local agency 0 1 0.00 64 3,648.00 0 $ 0.00 0 $ 0.00 $ 105.38 $ 0.00 $ 0.00 $ 0.00 Responses per Year 0 Burden 0 $ 0.00 $ 0.00 $ 0.00 Collection activities in the shaded boxes require one response per occurrence 1. Assumes hours per occurrence is the same as that in the 1998 ICR.

2. Rates from the 1998 ICR were adjusted to 2002 dollars using the Employment Cost Index for Civilian Workers Excluding Sales ( Appendix A3)

Ex 3 EXHIBIT 4. EXISTING SOURCES UNDERSTATE/ LOCAL AUTHORITY RESPONDENTS' ANNUAL BURDENS Collection Activities Number of Respondents Number of Occurrences for 3 years Occurrences per year Hours per Occurrence1 Cost per Occurrence Contractors Hours per Occurrence Contractors Dollars per Occurrence Total Hours per Year Total Cost per Year O& M Costs per Occurrence2 Capital Costs per Occurrence Total O& M Costs per Year Total Capital Costs per Year Rates $ 57.00 $ 76.00 Prepare permit to operate application 31 1 10 42 2,394.00 0 $ 0.00 434 $ 24,738.00 $ 236.24 $ 0.00 $ 2,441.17 $ 0.00 Perform annual compliance test 31 3 31 100 5,700.00 764 $ 58,064.00 26,784 $ 1,976,684.00 $ 387.95 $ 0.00 $ 12,026.35 $ 0.00 Conduct record keeping and report data to EPA 31 3 31 64 741.00 0 $ 0.00 1,984 $ 22,971.00 $ 250.14 $ 0.00 $ 7,754.30 $ 0.00 Prepare a NOI to construct 2 1 0.67 30 1,710.00 0 $ 0.00 20 $ 1,140.00 $ 116.96 $ 0.00 $ 77.98 $ 0.00 Prepare preconstruction permit application 2 1 0.67 100 5,700.00 585 $ 44,460.00 457 $ 33,440.00 $ 236.82 $ 0.00 $ 157.88 $ 0.00 Responses per Year 74 Burden 29,679 $ 2,058,973.00 $ 22,457.68 $ 0.00 Collection activities in the shaded boxes require one response per occurrence 1. Assumes hours per occurrence is the same as that in the 1998 ICR.

2. Rates from the 1998 ICR were adjusted to 2002 dollars using the Employment Cost Index for Civilian Workers Excluding Sales ( Appendix A3)

Ex 4 EXHIBIT 5. NEW EXPLORATION SOURCES UNDER STATE/ LOCAL AUTHORITY STATE AND LOCAL AGENCIES' ANNUAL BURDENS Collection Activities Number of Respondents Number of Occurrences for 3 years Occurrences per year Hours per Occurrence* Cost per Occurrence Total Hours per Year Total Cost per Year Rates $ 54.00 Consult with sources 0 1 0.00 5 $ 270.00 0 $ 0.00 Review NOI to construct 0 1 0.00 55 $ 2,970.00 0 $ 0.00 Review permit to operate application 0 1 0.00 40 $ 2,160.00 0 $ 0.00 Oversee initial compliance test 0 1 0.00 67 $ 3,618.00 0 $ 0.00 Conduct inspections 0 2 0.00 16 $ 864.00 0 $ 0.00 Review data reports 0 1 0.00 8 $ 432.00 0 $ 0.00 Burden 0 $ 0.00 * Assumes hours per occurrence is the same as that in the 1998 ICR. Ex 5 EXHIBIT 6. EXISTING SOURCES UNDERSTATE/ LOCAL AUTHORITY STATE AND LOCAL AGENCIES' ANNUAL BURDENS Collection Activities Number of Respondents Number of Occurrences for 3 years Occurrences per year Hours per Occurrence* Cost per Occurrence Total Hours per Year Total Cost per Year Rates $ 54.00 Oversee annual compliance test 31 3 31 67 $ 3,618.00 2,077 $ 112,158.00 Conduct inspections 31 12 124 16 $ 864.00 1,984 $ 107,136.00 Review permit to operate application 31 1 10.33333333 40 $ 2,160.00 413 $ 22,320.00 Review data reports 31 3 31 8 $ 432.00 248 $ 13,392.00 Review NOI to construct and permit application 2 1 0.67 35 $ 1,890.00 23 $ 1,260.00 Burden 4,722 $ 255,006.00 * Assumes hours per occurrence is the same as that in the 1998 ICR. Ex 6 EXHIBIT 7. NEW EXPLORATION SOURCES UNDER EPA AUTHORITY EPA'S ANNUAL BURDEN Collection Activities Number of Respondents Number of Occurrences for 3 years Occurrences per year Hours per Occurrence* Cost per Occurrence Total Hours per Year Total Cost per Year Rates $ 48.00 Consult with sources 0 1 0.00 5 $ 240.00 0 $ 0.00 Review NOI to construct and permit application 0 1 0.00 35 $ 1,680.00 0 $ 0.00 Review data reports 0 1 0.00 8 $ 384.00 0 $ 0.00 Burden 0 $ 0.00 * Assumes hours per occurrence is the same as that in the 1998 ICR. Ex 7 EXHIBIT 8. NEW DEVELOPMENT/ PRODUCTION SOURCES UNDER EPA AUTHORITY EPA'S ANNUAL BURDEN Collection Activities Number of Respondents Number of Occurrences for 3 years Occurrences per year Hours per Occurrence* Costs per Occurrence Total Hours per Year Total Cost per Year Rates $ 48.00 Consult with sources 1 1 0.33 5 $ 240.00 2 $ 80.00 Review NOI to construct and permit application 1 1 0.33 263 $ 12,624.00 88 $ 4,208.00 Review preconstruction permit application 1 1 0.33 100 $ 4,800.00 33 $ 1,600.00 Oversee initial compliance test 1 1 0.33 67 $ 3,216.00 22 $ 1,072.00 Review operating permit application 11 1 3.67 40 $ 9,600.00 147 $ 35,200.00 Review data reports 1 1 0.33 8 $ 624.00 3 $ 208.00 Burden 294 $ 42,368.00 * Assumes hours per occurrence is the same as that in the 1998 ICR. Ex 8 EXHIBIT 9. CONSISTENCY UPDATES AND OVERSEEING STATE/ LOCAL ACTIVITIES EPA'S ANNUAL BURDEN Collection Activities Number of Respondents Number of Occurrences for 3 years Occurrences per year Hours per Occurrence* Cost per Occurrence Total Hours per Year Total Cost per Year Rates $ 48.00 Perform consistency updates 7 3 7 150 7,200.00 1,050 $ 50,400.00 Oversee State/ local agnecies' activities 4 12 4 40 1,920.00 160 $ 7,680.00 Burden 1,210 $ 58,080.00 * Assumes hours per occurrence is the same as that in the 1998 ICR. Ex 9 EXHIBIT 10. OCS AIR REGULATIONS INFORMATION COLLECTION BURDEN SUMMARY OF ANNUAL BURDENS AND COSTS Responses Respondent Hours Respondent Costs O& M Costs Capital Costs Agency Hours Agency Costs New Exploration Sources Under EPA Authority ( Exhibit 1) 0 0 $ 0 $ 0 $ 0 New Development / Production Sources Under EPA Authority Exhibit 2) 2 565 $ 39,780 $ 423 $ 8,333 New Exploration Sources Under Local Authority ( Exhibit 3) 0 0 $ 0 $ 0 $ 0 Existing Development / Production Sources Under Local Authority ( Exhibit 4) 74 29,679 $ 2,058,973 $ 22,458 $ 0 Subtotal of Industry Burden 75 30,244 $ 2,098,753 $ 22,880 $ 8,333 New Exploration Sources ( Exhibit 5) 0 $ 0 Existing Development/ Production Sources ( Exhibit 6) 4,722 $ 255,006 Subtotal of State/ Local Burden 4,722 $ 255,006 New Exploration Sources ( Exhibit 7) 0 $ 0 Existing Development/ Production Sources ( Exhibit 8) 294 $ 42,368 Consistency Updates ( Exhibit 9) 1,210 $ 58,080 Subtotal of EPA Burden 1,504 $ 100,448 Total Annual Cost / Burden for the Outer Continental Shelf Air Regulations 75 34,966 $ 2,353,759 $ 22,880 $ 8,333 1,504 $ 100,448 Ex 10