[Federal Register Volume 83, Number 108 (Tuesday, June 5, 2018)]
[Notices]
[Pages 26140-26141]
[FR Doc No: 2018-12037]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No. FMCSA-2018-0180]

Hours of Service of Drivers: Application for Exemption; Small
Business in Transportation Coalition

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

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

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SUMMARY: FMCSA announces that the Small Business in Transportation
Coalition (SBTC) has requested an exemption from the electronic logging
device (ELD) requirements for all motor carriers with fewer than 50
employees, including, but not limited to, one-person private and for-
hire owner-operators of commercial motor vehicles used in interstate
commerce. SBTC believes that the exemption would not have any adverse
impacts on operational safety as motor carriers and drivers would
remain subject to the hours-of-service (HOS) regulations as well as the
requirements to maintain paper RODS. FMCSA requests public comment on
SBTC's application for exemption.

DATES: Comments must be received on or before July 5, 2018.

ADDRESSES: You may submit comments identified by Federal Docket
Management System (FDMS) Number FMCSA-2018-0180 by any of the following
methods:
     Federal eRulemaking Portal: www.regulations.gov. See the
Public Participation and Request for Comments section below for further
information.
     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 or Courier: West Building, Ground Floor,
Room W12-140, 1200 New Jersey Avenue SE, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.
     Fax: 1-202-493-2251.
     Each submission must include the Agency name and the
docket number for this notice. Note that DOT posts all comments
received without change to www.regulations.gov, including any personal
information included in a comment. Please see the Privacy Act heading
below.
    Docket: For access to the docket to read background documents or
comments, go to www.regulations.gov at any time or visit 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., ET, Monday through Friday,
except Federal holidays. The on-line FDMS is available 24 hours each
day, 365 days each year.
    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 www.regulations.gov, as described in the
system of records notice (DOT/ALL-14 FDMS), which can be reviewed at
www.dot.gov/privacy.

FOR FURTHER INFORMATION CONTACT: For information concerning this
notice, contact Mr. Tom Yager, Chief, FMCSA Driver and Carrier
Operations Division; Office of Carrier, Driver and Vehicle Safety
Standards; Telephone:<PHONE_NUMBER>. Email: [email protected]. If you have
questions on viewing or submitting material to the docket, contact
Docket Services, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

I. Public Participation and Request for Comments

    FMCSA encourages you to participate by submitting comments and
related materials.

Submitting Comments

    If you submit a comment, please include the docket number for this
notice (FMCSA-2018-0180), indicate the specific section of this
document to which the comment applies, and provide a reason for
suggestions or recommendations. 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 the
Agency can contact you if it has questions regarding your submission.
    To submit your comments online, go to www.regulations.gov and put
the docket number, ``FMCSA-2018-0180'' in the ``Keyword'' box, and
click ``Search.'' When the new screen appears, click on ``Comment
Now!'' button and type your comment into the text box in the following
screen. Choose whether you are submitting your comment as an individual
or on behalf of a third party and then submit. 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. FMCSA will consider all comments and material received
during the comment period and may grant or not grant this application
based on your comments.

II. Legal Basis

    FMCSA has authority under 49 U.S.C. 31136(e) and 31315 to grant
exemptions from certain parts of the Federal Motor Carrier Safety
Regulations (FMCSRs). FMCSA must publish a notice of each exemption
request in the Federal Register (49 CFR 381.315(a)). The Agency must
provide the public an opportunity to inspect the information relevant
to the application, including any safety analyses that have been
conducted. The Agency must also provide an opportunity for public
comment on the request.
    The Agency reviews safety analyses and public comments submitted,
and determines whether granting the exemption would likely achieve a
level of safety equivalent to, or greater than, the level that would be
achieved by the current regulation (49 CFR 381.305). The decision of
the Agency must be published in the Federal Register (49 CFR
381.315(b)) with the reasons for denying or granting the application
and, if granted, the name of the person or class of persons receiving
the exemption, and the regulatory provision from which the exemption is
granted. The notice must also specify the effective period and explain
the terms and conditions of the exemption. The exemption may be renewed
(49 CFR 381.300(b)).

III. Request for Exemption

    SBTC reports that it is a non-profit trade organization with more
than 8,000 members. SBTC states that it ``represents, promotes, and
protects the interest of small businesses in the transportation
industry. Through the exemption application, SBTC seeks relief from the
ELD requirements for small private, common and contract motor carriers
with fewer than 50 employees. SBTC argues:

    ``[T]he ELD rule is not a ``safety regulation'' per se as the
FMCSA has concluded. Rather it is a mechanism intended to enforce a
safety regulation by regulating the manner in which a driver records
and communicates his compliance. That is, it is merely a tool to
determine compliance with an existing rule that regulates over-the-
road drivers' driving and on duty time, namely the actual safety
regulation: the [hours-of-service] regulations codified at 49 CFR
395.3 and 395.5. However, the ELD rule is not a safety regulation
itself. Therefore, it is our position that this rule does not itself
impact safety, and that the level of safety will not change based on
whether or not our exemption application is approved. That would
require a change to the [hours-of-service rules].''

    SBTC asserts that the exemption would not have any adverse impacts
on operational safety, as motor carriers and drivers would remain
subject to the HOS regulations in 49 CFR 395.3, as well as the
requirements to maintain a paper RODS under 49 CFR 395.8. The exemption
would allow motor carriers with fewer than 50 employees to maintain
their current practices that have resulted in a proven safety record.
The term of the requested exemption, if granted, would be for five
years, subject to renewal upon application.
    A copy of SBTC's application for exemption is available for review
in the docket for this notice.

    Issued on: May 30, 2018.
 Larry W. Minor,
 Associate Administrator for Policy.
[FR Doc. 2018-12037 Filed 6-4-18; 8:45 am]
 BILLING CODE 4910-EX-P


[Federal Register Volume 82, Number 175 (Tuesday, September 12, 2017)]
[Notices]
[Pages 42861-42865]
[FR Doc No: 2017-19241]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81539; File No. SR-NYSEArca-2017-93]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Adopt Commentary
.06 to NYSE Arca Rule 6.91-O To Enhance the Price Protections for
Complex Orders Executed on the Exchange

September 6, 2017.
    Pursuant to the provisions of Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on August 25, 2017, NYSE Arca, Inc. (``NYSE Arca''
or the ``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') a 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 Substance
of the Proposed Rule Change

    The Exchange proposes to adopt Commentary .06 to Rule 6.91-O
(Electronic Complex Order Trading) to enhance the price protections for
Complex Orders executed on the Exchange. The proposed rule change is
available on the Exchange's Web site at www.nyse.com, at the principal
office of the Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange is proposing to adopt Commentary .06 to Rule 6.91-O to
enhance the price protections applicable to Electronic Complex Orders
(or ``ECOs'').\3\
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    \3\ Rule 6.62-O(e) defines a Complex Order as any order
involving the simultaneous purchase and/or sale of two or more
different option series in the same underlying security, for the
same account, in a ratio that is equal to or greater than one-to-
three (.333) and less than or equal to three-to-one (3.00) and for
the purpose of executing particular investment strategy. Per Rule
6.91-O, an ECO is a Complex Order that has been entered into the
NYSE Arca System (``System'') for possible execution. See Rule 6.91-
O(a).
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    The Exchange currently provides price protection to ECOs, which is
designed to prevent the execution of orders at prices that are priced a
certain percentage away from the current market and, therefore, are
potentially erroneous.\4\ The Exchange proposes an additional price
protection that would be another check on whether an ECO's limit price
is correctly aligned to the complex strategy and would reject
erroneously priced incoming ECOs (the ``Reasonability Checks'').\5\ As
discussed herein, the proposed price protections are materially
identical to price protections available on other options exchanges,
including Nasdaq ISE, LLC (``ISE'').\6\
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    \4\ See Commentary .05 to Rule 6.91-O (providing for the
rejection of ECOs that are priced away from the current market by a
``Specified Amount,'' which Specified Amount varies depending on the
smallest MPV of any leg in the ECO) (the ``Price Protection Filter''
or ``Filter'') .
    \5\ See proposed Commentary .06 to Rule 6.91-O, which would
provide that the Exchange would reject any incoming ECO that has a
strategy described in paragraphs (a)(1)-(3) of proposed Commentary
.06 to Rule 6.91-O. Because Reasonability Checks would be performed
before the Price Protection Filter, the proposed rule text would
provide that ``[a]ny incoming Electronic Complex Order that passes
this Reasonability Check would still be subject to the Price
Protection Filter, per Commentary .05(b) of this Rule.'' See id.
    \6\ See e.g., ISE Rule 722, Supplementary Material .07(Price
limits for complex orders and quotes). The Exchange notes that, as
discussed herein, the proposed Reasonability Checks are similar to
those initially adopted by ISE and do not include a later adopted
pre-set value ``buffer.'' See infra nn. 12 and 15 [sic]. Moreover,
because the Exchange does not support ECOs entered as market orders,
the Exchange has not adopted price checks related to such orders
(which orders ISE supports). See e.g., ISE Rule 722, Supplementary
Material .07(c)(1), (3). The Exchange also notes that the Chicago
Board Options Exchange, Inc. (``CBOE'') likewise includes complex
strategy price checks, which cover more strategies than proposed
herein, but are nonetheless designed to accomplish the same goal of
avoiding execution of erroneously priced complex orders. See CBOE
Rule 6.53C, Interpretations and Policies .08 (Price Check
Parameters).
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    First, the Exchange proposes Commentary .06(a)(1) to Rule 6.91-O,
pursuant to which, upon entry into the System, the Exchange would
reject any incoming order for a complex strategy where all legs are to
sell (buy) if it is entered at a price that is less (more) than the
minimum (maximum) price, which is calculated as the sum of the ratio on
each leg of the Complex Order multiplied by $0.01 (-$0.01) per leg
(e.g., an order to sell (buy) 2 calls and sell (buy) 1 put would have a
minimum (maximum) price of $0.03 (-$0.03)).\7\
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    \7\ See proposed Commentary .06(a)(1) to Rule 6.91-O.
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    For example, an order to sell 2 calls and sell 1 put would have a
minimum net credit price of $0.03. If such an order were entered at a
price of $0.02, it would not be executable, as a price of zero would
have to be assigned to one of the legs of the order. As proposed, this
order would be rejected.
    As another example, if a market participant is entering the
following ``all sell'' complex strategy for a debit:

 Leg A: 100 x 0.01 - 0.02 x 100
 Leg B: 100 x 0.01 - 0.02 x 100
 Order 1: Sell1 Leg A, Sell 2 Leg B; Net price: - $0.03

    Result: As proposed, Order 1 would be rejected because it is priced
less than the minimum order price of $0.03. Based on each individual
leg trading for at least $0.01, this complex strategy would never trade
at a net credit price of less than $0.03. Thus, any sell order for this
strategy with a limit price less than $0.03 would be rejected.
    If, for example, a market participant is entering the following
``all buy'' complex strategy:

 Leg A: 100 x 0.01 - 0.02 x 100
 Leg B: 100 x 0.01 - 0.02 x 100
 Order 1: Buy Leg A, Buy 2 Leg B; Net price: - $0.02

    Result: As proposed, Order 1 would be rejected because it is priced
greater than the maximum net debit price of -$0.03 (and only orders
priced at -$0.03 or less would be accepted). Because debit orders are
entered into the Exchange System as a negative value, the ``maximum''
price check for buy orders is effectively a check for the minimum order
price. Here, Order 1 @-$0.02 would represent an order to buy for a net
debit price of $0.02, and therefore would be rejected.
    The Exchange notes that the price check in proposed Commentary
.06(a)(1) to Rule 6.91-O is materially identical to price protections
available on at least one other options exchange, ISE.\8\
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    \8\ See Securities Exchange Act Release No. 71406 (January 27,
2014), 79 FR 5495, 5496 (January 31, 2014) (SR-ISE-2014-05) (``ISE
Price Reasonability Filing'') (adopting ``minimum net price''
protection feature, providing that the ISE system would ``reject any
complex order strategy where all legs are to buy if it is entered at
a price that is less than the minimum price, which is calculated as
the sum of the ratio on each leg of the complex order multiplied by
$0.01 per leg (e.g., an order to buy 2 calls and buy 1 put would
have a minimum price of $0.03)'').
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    Second, the Exchange proposes Commentary .06(a)(2) to Rule 6.91-O,
pursuant to which, upon entry into the System, the Exchange would
reject any incoming order for a vertical spread strategy (i.e., an
order to sell a call (put) option and to buy another call (put) option
in the same security with the same expiration but at a higher (lower)
strike price) when entered with a net debit price of -$0.01 or less.\9\
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    \9\ See proposed Commentary .06(a)(2) to Rule 6.91-O.
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    For example, if a market participant is entering the following
vertical call credit spread for a debit:

 Leg A: April SPY 240 Call: 100 x 1.72 - 1.73 x 100
 Leg B: April SPY 241 Call: 100 x 1.36 - 1.37 x 100
 Order 1: Sell 1 Leg A, Buy 1 Leg B; Quantity 50; Net price: $
- 0.35

    Result: As proposed, Order 1 would be rejected because it priced
less than or equal to -$0.01 (i.e., it has a negative limit price). The
Exchange notes that the lower strike call will always be more

expensive than the higher strike call within the same expiration.\10\
Thus, entering this sell order with a negative limit price would result
in it being rejected.
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    \10\ The principle behind this check is based on the standard
trading principle of ``buy low, sell high.'' The ability to buy
stock at a lower price is more valuable than the ability to buy
stock at a higher price, and thus a call with a lower strike price
has more value, and thus is more expensive, than a call with a
higher strike price. Similarly, the ability to sell stock at a
higher price is more valuable than the ability to sell stock at a
lower price, and thus a put with a higher strike price has more
value, and thus is more expensive, than a put with a lower strike
price.
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    The Exchange notes that the price check in proposed Commentary
.06(a)(2) to Rule 6.91-O is materially identical to price protections
available on at least one other options exchange, ISE.\11\
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    \11\ See supra note 9 [sic], ISE Price Reasonability Filing
(providing that, subject to certain limitations, the ISE system
would ``reject a vertical spread order (i.e., an order to buy a call
(put) option and to sell another call (put) option in the same
security with the same expiration but at a higher (lower) strike
price) when entered with a net price of less than zero''). The
Exchange notes that ISE amended Supplementary Material .07(c)(1) to
ISE Rule 722 to add a ``pre-set value'' less than zero to allow a
buffer within which certain orders would not be rejected. See, e.g.,
See Securities Exchange Act Release No. 72254 (May 27, 2014), 79 FR
31372, 31373 (June 2, 2014) (SR-ISE-2014-26) (``ISE Price
Reasonability Modification Filing''). The Exchange has opted to hard
code the reject value as $-0.01, which aligns with the ISE Price
Reasonability Filing and, would nonetheless operate in a manner
similar to ISE's current rule, notwithstanding the ``buffer.''
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    Finally, upon entry into the System, the Exchange proposes to
reject any incoming order for a credit calendar spread strategy (i.e.,
an order to sell a call (put) option with a longer expiration and to
buy another call (put) option with a shorter expiration in the same
security at the same strike price) when entered with a net price of -
$0.01 or less.\12\
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    \12\ See proposed Commentary .06(a)(3) to Rule 6.91-O.
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    For example, if a market participant is entering the following
calendar credit spread for a debit:

 Leg A: May SPY 240 Call: 100 x 3.41 - 3.43 x 100
 Leg B: April SPY 240 Call: 100 x 1.72 - 1.73 x 100
 Order 1: Sell 1 Leg A, Buy 1 Leg B; Quantity: 50; Net price: -
$1.68

    Result: As proposed, Order 1 would be rejected because it is priced
less than or equal to -$0.01. The Exchange notes that the further out
expiring call being sold will always be more expensive than a nearer
expiring call being bought at the same strike price, and should always
generate a credit.\13\ Thus, any order to sell the far expiration and
buy the near expiration entered with a price of -0.01 or less would
result in this order being rejected.
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    \13\ The principle behind this check is based on the general
concept that locking in a price further into the future involves
more risk for the buyer and seller and thus is more valuable, making
an option (call or put) with a farther expiration more expensive
than an option with a nearer expiration. This is similar, for
example, to interest rates for mortgages: In general, an interest
rate on a 30-year mortgage is higher than the interest rate on a 15-
year mortgage due to the risk of potential interest rate changes
over the longer period of time to both the mortgagor and mortgagee.
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    The Exchange notes that the price check in proposed Commentary
.06(a)(3) to Rule 6.91-O is materially identical to price protections
available on at least one other options exchange, ISE.\14\
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    \14\ See, e.g., ISE Rule 722, Supplementary Material .07(c)(3)
(providing, in part, that the ISE system will ``reject a calendar
spread order (i.e., an order to buy a call (put) option with a
longer expiration and to sell another call (put) option with a
shorter expiration in the same security at the same strike price)
when entered with a net price of less than zero (minus a pre-set
value).'' See also supra note 12 [sic], ISE Price Reasonability
Modification Filing (adopting ISE Rule 722, Supplementary Material
.07(c)(2)). Rather than utilize a ``pre-set value'' (or buffer), the
Exchange has opted to hard code the reject value as $-0.01. See id.
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    Regarding calendar spread orders, the Exchange also proposes to
retain discretion to deactivate this price check in the interest of
fair and orderly markets.\15\ For example, the Exchange may deactivate
this price check if there is a corporate action in a complex symbol
that would result in an otherwise valid strategy being rejected by the
proposed check.\16\ The Exchange believes this discretion to deactivate
the Reasonability Check would be consistent with its obligation to
assure a fair and orderly market, and that the need for such
flexibility is recognized in other Exchange rules, such as those
related to position limits, quote-width differentials and price
protection filters.\17\ As proposed, the Exchange would announce by
electronic message to ATP Holders that request to receive such messages
if the Exchange deactivates (and later reactivates) the Reasonability
Check for calendar spread orders.
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    \15\ See proposed Commentary .06(a)(3)(i) to Rule 6.91-O.
    \16\ The Exchange has not similarly retained discretion to
deactivate the Reasonability Checks for minimum price and vertical
spreads because corporate actions will not create a scenario where a
lower strike call would be cheaper than a higher strike call, or a
higher strike put will be cheaper than a lower strike put.
    \17\ See, e.g., Rules 6.8-O (regarding position limits); 6.37A-O
(regarding maximum quotation spreads); 6.60-O (regarding price
protection for orders); 6.61-O (regarding price protection for
Market Maker quotes) and Commentary .05 to Rule 6.91-O (regarding
the Price Protection Filter for ECOs).
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    Further, the Exchange does not propose to apply the Reasonability
Check on calendar orders entered on the Trading Floor, as such orders
are subject to manual handling by individuals who will have evaluated
the price of an order based on then-market conditions.\18\ The Exchange
notes that other exchanges that offer price protections similar to
those proposed for calendar spreads have similarly retained discretion
to limit the application of this check.\19\
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    \18\ See proposed Commentary .06(a)(3)(i) to Rule 6.91-O.
    \19\ See, e.g., CBOE Rule 6.53C, Interpretations and Policies
.08(c)(6) (excluding from debit/credit reasonability checks ``orders
routed from a PAR workstation or order management terminal'' because
such orders would be subject to manual handling). The Exchange notes
that CBOE's exclusion of complex orders entered on the floor from
its debit/credit reasonability checks is not limited to calendar
spreads but applies to all such orders entered from the floor of the
CBOE.
---------------------------------------------------------------------------

    The Exchange notes that ECOs that are not rejected by the
Reasonability Checks would still be subject to the Price Protection
Filter.\20\
---------------------------------------------------------------------------

    \20\ See proposed Commentary .06(b) to Rule 6.91-O; see also
supra note 6 [sic].
---------------------------------------------------------------------------

Implementation
    The Exchange will announce by Trader Update the implementation date
of the proposed rule change within 90 days of the effective date of
this rule filing.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Securities Exchange Act of 1934 (the ``Act''),\21\ in
general, and furthers the objectives of Section 6(b)(5) of the Act,\22\
in particular, in that it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to remove impediments to and perfect the mechanism
of a free and open market and a national market system, and, in
general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \21\ 15 U.S.C. 78f(b).
    \22\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In particular, the Exchange believes the proposed Reasonability
Checks would protect investors and the public interest and maintain
fair and orderly markets by mitigating potential risks associated with
market participants entering Complex Orders at clearly unintended
prices that are inconsistent with their strategies. Specifically, a
Complex Order strategy where all legs are to sell (buy) will be
rejected if it is entered at a price that is less (more) than the
minimum (maximum) price. The Exchange believes it is reasonable to
reject such orders upon entry as they are not executable. Allowing such
orders to be entered would create investor confusion; as such orders
would not receive an execution and would remain pending until canceled.
Similarly, the

Exchange believes that rejecting orders for vertical spread
strategies--as well as calendar spread strategies--that are entered at
a negative price also protects investors from executing orders that
were likely entered in error.
    Regarding orders for calendar spreads, the Exchange recognizes that
it may not be appropriate to apply the Reasonability Checks to calendar
spreads in unusual market conditions, such as corporate actions that
result in changes in price to the underlying security.\23\ The Exchange
therefore believes it would remove impediments and perfect the
mechanism of a free and open market and a national market system for
the Exchange to temporarily deactivate the checks in the event of
unusual market conditions, which flexibility is consistent with other
exchange rules.\24\ Further, the Exchange also recognizes that the
applicable protections are not appropriate for orders entered manually
on the Trading Floor, because such orders would be subject to an
additional check of then-market conditions by the individual entering
the order, which flexibility is consistent with the rules of other
exchanges.\25\
---------------------------------------------------------------------------

    \23\ See supra note 17 [sic].
    \24\ See supra note 18 [sic].
    \25\ See supra note 20 [sic].
---------------------------------------------------------------------------

    The Exchange's proposed Reasonability Checks are similar to similar
protections offered on other options exchanges, including ISE. To the
extent there are differences between the proposed Reasonability Checks,
as described above (see supra notes12 and 15) [sic], the Exchange does
not believe such differences raise any new or significant policy
concerns. Further, despite the differences, the proposed Reasonability
Checks would otherwise operate in a similar manner to the checks on
ISE. As such, the Exchange merely desires to adopt functionality that
is similar to what already exists on ISE.\26\ Permitting the Exchange
to operate on an even playing field relative to other exchanges that
have similar functionality removes impediments to and perfects the
mechanism for a free and open market and a national market system.
---------------------------------------------------------------------------

    \26\ See supra note 7 [sic].
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change would
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
    The proposed Reasonability Checks specify circumstances in which
the Exchange would reject certain ECOs in the interest of protecting
investors against the execution of erroneous orders or the execution of
orders at erroneous prices. As such, the proposal does not impose any
burden on competition. To the contrary, the Exchange believes that the
proposed Reasonability Checks may foster more competition.
Specifically, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues. The Exchange's proposed rule change would enhance its
ability to compete with other exchanges that already offer similar
reasonability checks. Thus, the Exchange believes that this type of
competition amongst exchanges is beneficial to the market place as a
whole as it can result in enhanced processes, functionality, and
technologies. The Exchange further believes that because the proposed
rule change would be applicable to all OTP Holders and OTP Firms, it
would not impose any burden on intra-market competition that is not
necessary or appropriate in furtherance of the purposes of the Act.

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

    No written comments were solicited or received with respect to the
proposed rule change.

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

    Because the proposed rule change does not (i) significantly affect
the protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative for 30
days from the date on which it was filed, or such shorter time as the
Commission may designate, it has become effective pursuant to Section
19(b)(3)(A) of the Act \27\ and Rule 19b-4(f)(6) thereunder.\28\
---------------------------------------------------------------------------

    \27\ 15 U.S.C. 78s(b)(3)(A).
    \28\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written
notice of its intent to file the proposed rule change, along with a
brief description and the text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \29\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \30\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. NYSE Arca has
asked the Commission to waive the 30-day operative delay. NYSE Arcs
believes that waiving the operative delay would protect investors by
enabling the Exchange to provide greater protections from potentially
erroneous executions and potentially reduce the attendant risks of such
executions. As noted above, the proposal provides that a Complex Order
strategy where all legs are to sell (buy) will be rejected if it is
entered at a price that is less (more) than the minimum (maximum)
price. NYSE Arca notes that such an order is not executable, and that
allowing such an order to be entered would create investor confusion
because the order would not receive an execution and would remain
pending until canceled. Similarly, the Exchange believes that rejecting
orders for vertical and calendar spread strategies that are entered at
a negative price will protect investors from executing orders that were
likely entered in error.\31\ The Commission believes that waiver of the
operative delay is consistent with the protection of investors and the
public interest because the proposed rules are designed to reduce
investor confusion and to prevent the entry and execution of
erroneously priced ECOs. Therefore, the Commission hereby waives the
operative delay and designates the proposed rule change operative upon
filing.\32\
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    \29\ 17 CFR 240.19b-4(f)(6).
    \30\ 17 CFR 240.19b-4(f)(6)(iii).
    \31\ As discussed above, the proposal also allows the Exchange
to deactivate the Reasonability Check for calendar spread
strategies. The Exchange will notify OTP Holders and OTP Firms by
electronic message of any such deactivation or re-activation. The
Exchange believes that this discretion is necessary because a
corporate action, for example, could result in the Reasonability
Check for calendar spread strategies rejecting an otherwise valid
strategy. The proposal also provides that the Reasonability Check
for calendar spread strategies will not apply to ECOs that are
entered on the Trading Floor. The Exchange notes that such orders
are subject to manual handling by individuals who will have
evaluated the price of the order based on market conditions. The
Exchange further notes that another exchange has adopted a similar
rule. See note 19, supra.
    \32\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the

Commission shall institute proceedings to determine whether the
proposed rule change should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSEArca-2017-93 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2017-93. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEArca-2017-93 and should
be submitted on or before October 3, 2017.
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    \33\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\33\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-19241 Filed 9-11-17; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: September 28, 2009 (Volume 74, Number 186)]
[Notices]
[Page 49412-49415]
[DOCID:fr28se09-109]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-28909; 812-13612]

Annuity Investors Life Insurance Company, et al., Notice of
Application

September 22, 2009.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for an order pursuant to Section 6(c) of
the Investment Company Act of 1940 (the ``Act'') granting exemptions
from Sections 2(a)(32) and 27(i)(2)(A) of the Act and Rule 22c-1
thereunder for the recapture of certain bonus credits.

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Applicants: Annuity Investors Life Insurance Company (``Annuity
Investors Life''), Annuity Investors Variable Account C (``Variable
Account C''), and Great American Advisors, Inc. (``GAA'').

Summary of Application: Applicants seek an order to permit, under
specified circumstances, the recapture of certain Bonuses (defined
below) applied to Purchase Payments (defined below) made under: (1)
Certain deferred variable annuity contracts and certificates, described
herein, that Annuity Investors Life has issued, currently issues, or
will issue through Variable Account C under a registration statement
field with the Commission under Securities Act of 1933 File No. 333-
148459 (the contracts and certificates, including applicable data pages
and endorsements, are collectively referred to herein as the ``Current
Bonus Contracts''); and (2) deferred variable annuity contracts and
certificates, including applicable data pages and endorsements, other
than Current Bonus Contracts that Annuity Investors Life may issue in
the future (``Future Bonus Contracts,'' and together with the Current
Bonus Contracts, the ``Contracts'') through Variable Account C, through
any of its existing separate accounts (together with Variable Account
C, the ``Current Accounts''), or through any future separate account of
Annuity Investors Life (``Future Accounts,'' and together with the
Current Accounts, the ``Accounts''). Such Future Bonus Contracts will
be substantially similar to the Current Bonus Contracts in all material
respects. Applicants also request that the order being sought extend to
any other Financial Industry Regulatory Authority (``FINRA'') member
broker-dealer controlling or controlled by, or under common control
with Annuity Investors Life, whether existing or created in the future,
that serves as a distributor or principal underwriter of the Contracts
offered through the Accounts (``Future Underwriters'').

DATES: Filing Dates: The application was filed on December 12, 2008,
and an amended and restated application was filed on April 14, 2009 and
September 18, 2009.

Hearing or Notification of Hearing: An order granting the application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Secretary of the
Commission and serving Applicants with a copy of the request personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on October 19, 2009, and should be accompanied by proof of
service on Applicants, in the form of an affidavit or for lawyers a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request and the issues contested.
Persons may request notification of a hearing by writing to the
Secretary of the Commission.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street,
NE., Washington, DC 20549-1090. Applicants, c/o Annuity Investors Life
Insurance Company, 525 Vine Street, 7th Floor, Cincinnati, OH 45202,
Attn: Karen McLaughlin, Esq. Copy to: Richard Choi, Jorden Burt LLP,
1025 Thomas Jefferson Street, Suite 400 East, Washington, DC 20007.

FOR FURTHER INFORMATION CONTACT: Michael L. Kosoff, Attorney, or Harry
Eisenstein, Branch Chief, Office of Insurance Products, Division of
Investment Management, at<PHONE_NUMBER>.

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

Applicants' Representations

    1. Annuity Investors Life desires the flexibility, and is
requesting exemptive relief, to recapture Bonuses of up to 5% of each
Purchase Payment credited to Purchase Payments under a Contract if the
owner returns the Contract for a refund during the free-look period. In
addition, Annuity Investors Life is seeking exemptive relief to enable
it to recapture the amount of any Bonus of up to 5% of each Purchase
Payment credited to a Purchase Payment made under a Contract within the
12 month period that ends on the Death Benefit Valuation Date.\1\
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    \1\ The Death Benefit Valuation Date means the earlier of (1)
the date that the Company has received both due proof of death and a
written request with instructions as to the form of the death
benefit or (2) the Death Benefit Commencement Date, which is the
first day of the first payment interval for a death benefit that is
paid as periodic payments or the date of payment for a death benefit
that is paid as a lump sum.
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    2. Annuity Investors Life is a wholly owned subsidiary of Great
American Life Insurance Company, which is a wholly owned subsidiary of
Great American Financial Resources, Inc. (``GAFRI''). GAFRI is a wholly
owned subsidiary of American Financial Group, Inc., a publicly traded
holding company. Annuity Investors Life serves as depositor of Variable
Account C, which was established on November 7, 2001. Annuity Investors
Life may establish one or more Future Accounts for which it will serve
as depositor.
    3. Great American Advisors, Inc. (``GAA'') is the principal
underwriter of the variable annuity products issued by Annuity
Investors Life. GAA is a wholly owned subsidiary of Great American
Financial Resources, Inc. GAA is registered with the Commission as a
broker-dealer under the Securities Exchange Act of 1934 (``Exchange
Act'') and is a member of FINRA. The Contracts are offered or will be
offered through registered representatives of GAA or others who are
registered broker-dealers under the Exchange Act and FINRA members, and
who have entered into selling agreements with GAA or any Future
Underwriter. GAA or any Future Underwriter may act as principal
underwriter for any Current or Future Bonus Contracts issued through
any of the Accounts.
    4. Each of the Accounts is or will be a segregated asset account of
Annuity Investors Life that is or will be

registered with the Commission as a unit investment trust under the Act
to the extent required thereby. Each of the Accounts funds or will fund
the variable benefits available under the Contracts issued through that
Account. Units of interest in the Accounts are registered or will be
registered under the Securities Act of 1933 (``1933 Act'') to the
extent required thereby. Annuity Investors Life, on behalf of itself
and Variable Account C, filed a Form N-4 registration statement
relating to the Current Bonus Contract on January 4, 2008 (File No.
333-148459), which was declared effective on April 30, 2008.
    5. Annuity Investors Life may issue Future Bonus Contracts through
its Current Accounts or Future Accounts. That portion of the assets of
the Current Accounts that is equal to the reserves and other contract
liabilities with respect to the Current Accounts is not chargeable with
liabilities arising out of any other business of Annuity Investors
Life, as the case may be. Any income, gains or losses, realized or
unrealized, from assets allocated to any Current Account are, in
accordance with the Contracts, credited to or charged against the
Current Account, without regard to other income, gains or losses of
Annuity Investors Life, as the case may be. The same will be true of
any Future Accounts of Annuity Investors Life.
    6. The Current Bonus Contracts (file no. 333-148459) are individual
or group flexible premium deferred annuity contracts that may be issued
on a tax-qualified or non-tax-qualified basis. Presently, the Current
Bonus Contracts may be purchased with a minimum initial Purchase
Payment of $20,000. A Current Bonus Contract owner may make additional
Purchase Payments, subject to a $50 minimum. The current maximum single
Purchase Payment under a Current Bonus Contract is $1,000,000 without
prior approval from Annuity Investors Life. These maximums and minimums
may be different for Future Bonus Contracts, and may be prospectively
changed by rider or endorsement for Current Bonus Contracts. Any such
changes also would be disclosed in the applicable prospectus(es). A
``Purchase Payment'' under the Current Bonus Contract means the amount
received by Annuity Investors Life after the deduction of applicable
premium or other taxes. Future Bonus Contracts will be substantially
similar in all material respects to the Current Bonus Contracts.
    7. Each time Annuity Investors Life receives a Purchase Payment
from an owner of a Current Bonus Contract during the first 10 Contract
Years (as defined in the Current Bonus Contract), it will credit to the
owner's account value a bonus (``Bonus'') equal to 4% of each Purchase
Payment (5% if the Bonus Base Amount, as defined in the Current Bonus
Contract, equals or exceeds $250,000). The Bonus Base Amount at any
point in time is equal to the total of all Purchase Payments that
Annuity Investors Life has received since the Contract effective date,
before deduction of premium tax or other taxes; less all withdrawals
since the Contract effective date. The Bonus Base Amount does not
include any bonuses paid on Purchase Payments.
    8. The Bonus will be allocated according to the allocation
instructions in effect for Purchase Payments under the particular
Current Bonus Contract, and will generally be deemed to be a Purchase
Payment thereunder.
    9. Annuity Investors Life will fund Bonus amounts from its general
account assets. Annuity Investors Life will recapture from a Current
Bonus Contract owner: (1) Any Bonus previously credited if the owner
returns the Current Bonus Contract for a refund during the free-look
period; and (2) the amount of any Bonus credited to a Purchase Payment
made under a Current Bonus Contract within the 12 month period that
ends on the Death Benefit Valuation Date, as defined in the Current
Bonus Contract. The owner of an individual Current Bonus Contract may
cancel it before midnight of the 20th day following the date the owner
receives it unless a longer period is required by State law. If the
owner cancels the Current Bonus Contract during the applicable time
period, it will be void, and Annuity Investors Life will refund the
Purchase Payment(s) in full, less the Bonus amounts credited to the
Purchase Payment(s) and plus or minus any investment gains or losses
under the Current Bonus Contract as of the end of the valuation period
during which the returned Contract or the cancellation request is
received by Annuity Investors Life (unless a return of Purchase
Payments is required under State law).
    10. Current Bonus Contract owners may allocate their Purchase
Payments to any of the available sub-accounts or fixed account options.
Each sub-account invests in shares of a corresponding registered
investment company or series thereof (each, a ``Portfolio'').
    11. The Current Bonus Contracts provide for various optional living
benefits, surrender options, annuity benefits, and annuity payout
options, as well as transfer privileges among the Portfolios, dollar
cost averaging, and other features. The Current Bonus Contracts contain
the following charges: (1) A contingent deferred sales charge based on
the number of full years elapsed between the date of receipt of the
Purchase Payment and the date that the request for withdrawal,
surrender, or annuitization was received equal to a maximum of 9% of
Purchase Payments (including any Bonuses credited thereto) withdrawn,
surrendered, or annuitized, declining to 0% after eight years, which
may be waived in certain circumstances as disclosed in the prospectus
for the Current Bonus Contract; (2) a $30 annual Contract maintenance
fee, which may be waived in certain circumstances as disclosed in the
prospectus for the Current Bonus Contract; (3) a mortality and expense
risk fee at an effective annual rate of 1.40% (1.60% with enhanced
death benefit rider); (4) an administration charge at an effective
annual rate of 0.15%, which may be waived where Annuity Investors Life
incurs reduced sales and servicing expenses; (5) a current transfer fee
of $25 for each transfer in excess of twelve in any Contract year; (6)
any applicable State and local government premium taxes; and (7)
optional living benefit rider charges currently ranging, depending on
the rider selected, from an annual rate of 0.40% to 0.95% of the
benefit base amount determined under the Contract. In addition, assets
invested in the Portfolios are charged with annual operating expenses
of those Portfolios. All such fees and charges, and circumstances under
which such fees and charges may be reduced or waived, are described in
greater detail in the ``Charges And Deductions'' section of the
prospectus contained in the Form N-4 Registration Statement for file
no. 333-148459 of Annuity Investors Life and Current Accounts that has
been incorporated by reference into the Application.

Applicants' Legal Analysis

    1. Section 6(c) of the Act authorizes the Commission to exempt any
person, security or transaction, or any class or classes of persons,
securities or transactions from the provisions of the Act and the rules
promulgated thereunder, if and to the extent that such exemption is
necessary or appropriate in the public interest and consistent with the
policy and provisions of the Act.
    2. Section 27(i) of the Act provides that Section 27 does not apply
to any registered separate account funding variable insurance
contracts, or to the sponsoring insurance company and principal
underwriter of such account, except as provided in paragraph (2) of the
subsection. Paragraph (2) provides that it shall be unlawful for any

registered separate account funding variable insurance contracts or a
sponsoring insurance company of such account to sell a contract funded
by the registered separate account unless such contract is a
``redeemable security.''8 Section 2(a)(32) of the Act defines
``redeemable security'' as any security, other than short-term paper,
under the terms of which the holder, upon presentation to the issuer,
is entitled to receive approximately his proportionate share of the
issuer's current net assets, or the cash equivalent thereof.
    3. Rule 22c-1 under the Act prohibits a registered investment
company issuing any redeemable security, a person designated in such
issuer's prospectus as authorized to consummate transactions in any
such security, and a principal underwriter of, or dealer in, such
security, from selling, redeeming, or repurchasing any such security
except at a price based on the current net asset value of such security
which is next computed after receipt of a tender of such security for
redemption or of an order to purchase or sell such security.
    4. Applicants request exemptions pursuant to Section 6(c) from
Sections 2(a)(32), and 27(i)(2)(A) of the Act and Rule 22c-1 thereunder
to the extent deemed necessary to permit Applicants to recapture: (1)
Any Bonus previously credited if the owner returns the Current Bonus
Contract for a refund during the free-look period; and (2) the amount
of any Bonus credited to a Purchase Payment made under a Current Bonus
Contract within the 12 month period that ends on the Death Benefit
Valuation Date, as defined in the Current Bonus Contract. Applicants
believe that the requested exemptions are appropriate in the public
interest and consistent with the protection of investors and the
purposes fairly intended by the policy and provisions of the Act.
    5. Applicants also request that the Commission, pursuant to Section
6(c) of the Act, grant the above exemptions with respect to the Current
Bonus Contracts and any Future Bonus Contracts funded by the Current
Accounts or Future Accounts that are issued by Annuity Investors Life
and underwritten or distributed by GAA or any Future Underwriters.
Applicants undertake that Future Bonus Contracts funded by the Current
Accounts or by the Future Accounts which seek to rely on the order
issued pursuant to this Application will be substantially similar in
all material respects to the Current Bonus Contracts. Applicants submit
that their request for an order that applies to the Current Accounts or
any Future Accounts established by Annuity Investors Life, in
connection with the issuance of the Current Bonus Contracts and Future
Bonus Contracts that are substantially similar in all material respects
to the Current Bonus Contracts described herein, and that are
underwritten or distributed by GAA or any Future Underwriter, is
appropriate in the public interest. Applicants submit that such an
order would promote competitiveness in the variable annuity market by
eliminating the need to file redundant exemptive applications, thereby
reducing administrative expenses and maximizing the efficient use of
Applicants' resources as well as those of the Commission. Investors
would not receive any benefit or additional protection by requiring
Applicants to repeatedly seek exemptive relief that would present no
issue under the Act that has not already been addressed in this
Application. Further, having Applicants file additional applications
would impair their ability quickly and effectively to take advantage of
business opportunities as they arise.
    6. Applicants submit that the recapture of the Bonuses will not
raise concerns under sections 2(a)(32), and 27(i)(2)(A) of the Act, and
rule 22c-1 thereunder. The amounts recaptured will equal the Bonuses
paid for by Annuity Investors Life out of its general account assets.
Therefore, the Bonus recapture provisions described herein will not
deprive a Contract owner of his or her proportionate share of the
issuer's current net assets.
    7. Applicants represent that under the terms of the Current Bonus
Contract a Contract owner's interest in the amount of the Bonus
allocated to his or her annuity account value upon receipt of an
initial Purchase Payment is not vested if the Contract is returned
during the applicable free-look period. Similarly, under the terms of
the Current Bonus Contract a Contract owner's interest in the amount of
any Bonuses allocated upon receipt of any Purchase Payments made during
the 12 month period ending on the Death Benefit Valuation Date is not
vested. Until or unless the amount of any Bonus is vested, Annuity
Investors Life retains the right and interest in the Bonus amount,
although not in the earnings attributable to that amount. Thus, when
any Bonus amounts are recaptured, Annuity Investors Life is simply
retrieving its own assets. Since the Contract owner's interest in the
Bonus is not vested, the Contract owner has not been deprived of a
proportionate share of the applicable Account's assets.
    8. With respect to the Bonus recapture upon the exercise of the
free-look privilege, the Applicants assert that it would be patently
unfair to allow a Contract owner to exercise that privilege and retain
a Bonus amount under a Contract that has been returned for a refund
after a period of a few weeks or days. If Annuity Investors Life could
not recapture the Bonus, individuals could purchase a Contract with no
intention of retaining it, and simply return it for a quick profit.
    9. Furthermore, Applicants assert that the recapture of the amount
of any Bonus credited to a Purchase Payment made under a Current Bonus
Contract within the 12 month period that ends on the Death Benefit
Valuation Date, as defined in the Current Bonus Contract, is designed
to afford Annuity Investors Life with a measure of protection from
anti-selection. The risk here is that the Contract owner could make
very large Purchase Payments shortly before death, thereby leaving
Annuity Investors Life less time to recover the cost of the Bonuses, to
its financial detriment.\2\
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    \2\ Annuity Investors Life intends to recover the cost of the
Bonuses applied from the revenue from the charges imposed under the
Current Bonus Contracts, which are described earlier in this
Application. Annuity Investors Life may use any excess to recover
distribution costs relating to the Current Bonus Contracts and as a
source of profit.
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    10. Applicants submit that the recapture of a Bonus might be viewed
as resulting in the redemption of redeemable securities for a price
other than one based on the current net asset value of the Accounts.
Applicants contend, however, that recapture of any Bonus would not
violate Rule 22c-1.
    11. Applicants maintain that the recapture does not involve either
of the problems that Rule 22c-1 was designed to prevent, namely (i) the
dilution of the value of outstanding redeemable securities of
registered investment companies through their sale at a price below net
asset value or their redemption or repurchase at a price above it, and
(ii) other unfair practices such as speculative trading practices.\3\
These problems were the result of backward pricing, the practice of
basing the price of a mutual fund share on the net asset value per
share determined as of the close of the market on the previous day.
Backward pricing allowed investors to take advantage of increases in
net asset value that were not yet reflected in the price, thereby
diluting the value of outstanding mutual fund shares.
---------------------------------------------------------------------------

    \3\ See Adoption of Rule 22c-1 under the Act, Investment Company
Act Release No. 5519 (Oct. 16, 1968).
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    12. Applicants also maintain that the proposed recapture of the
Bonus poses no threat of dilution. To effect a

recapture of a Bonus, Annuity Investors Life will redeem interests in
the Contract owner's annuity account at a price determined on the basis
of current net asset value of the relevant Account. The amount
recaptured will equal the amount of the Bonus that Annuity Investors
Life paid or will pay out of its general account assets. Although
Contract owners will be entitled to retain any investment gain
attributable to the Bonus, the amount of such gain will be determined
on the basis of the current net asset value of the relevant Account.
Thus, no dilution will result from the recapture of the Bonus. The
second problem that Rule 22c-1 was designed to address, namely,
speculative trading practices calculated to take advantage of backward
pricing, also will not occur as a result of the recapture of the Bonus.
    Because neither of the problems that Rule 22c-1 was designed to
address is found in the recapture of the Bonus, Rule 22c-1 should have
no application to any Bonus under the Current Bonus Contracts or Future
Bonus Contracts. However, to avoid any uncertainty as to full
compliance with the Act, Applicants request exemptions from the
provisions of Rule 22c-1 to the extent deemed necessary to permit them
to recapture the Bonus under the Current Bonus Contracts and Future
Bonus Contracts.
    13. Applicants assert that the Bonus is and will be attractive to
and in the interests of investors because it will allow Contract owners
to apply 104% or 105%, as the case may be, of their Purchase Payments
to work for them in their selected investment options. Also, any
earnings attributable to the Bonus will be retained by the Contract
owner, and the principal amount of the Bonus also will be retained if
the contingencies set forth in this Application are satisfied, i.e.,
the Contract is not returned for a refund during the free-look period
and the Bonus is not credited to a Purchase Payment made under the
Contract within the 12 month period that ends on the Death Benefit
Valuation Date.
    14. Further, Applicants submit that the recapture of any Bonus only
applies in relation to the risk of anti-selection against Annuity
Investors Life. In the context of the contingencies described in this
Application, anti-selection can generally be described as a risk that
Contract owners obtain an undue advantage based on elements of fairness
to Annuity Investors Life and the actuarial and other factors it takes
into account in designing the Contracts. Annuity Investors Life
provides the Bonuses from its general accounts on a guaranteed basis.
Thus, Annuity Investors Life undertakes a financial obligation that
contemplates the retention of the Contracts by its owners over an
extended period, consistent with the long term nature of retirement
planning. Annuity Investors Life generally expects to recover its
costs, including Bonuses, over an anticipated duration while a Contract
is in force. The right to recapture Bonuses credited to Purchase
Payments made within the 12 month period ending on the Death Benefit
Valuation Date protects Annuity Investors Life against the risk that
Contract owners will contribute larger amounts shortly before death,
while avoiding Contract charges over the long term. With respect to
refunds paid upon the return of Contracts within the free-look period,
the amount payable by the applicable Annuity Investors Life must be
reduced by the allocated Bonuses. Otherwise, purchasers could apply for
Contracts for the sole purpose of exercising the free-look refund
provision and making a quick profit.

Conclusion

    For the reasons summarized above, Applicants submit that their
exemptive request meets the standards set out in Sections 6(c) of the
Act, namely, that the exemptions requested are necessary or appropriate
in the public interest and consistent with the protection of investors
and the purposes fairly intended by the policy and provisions of the
Act, and that, therefore, the Commission should grant the requested
order.

    For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-23277 Filed 9-25-09; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 88, Number 218 (Tuesday, November 14, 2023)]
[Notices]
[Pages 78017-78019]
[FR Doc No: 2023-24988]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OPPT-2023-0520; FRL-11518-01-OCSPP]

Modifications to the Safer Choice Standard and Potential
Implementation of a Safer Choice Cleaning Service Certification
Program; Notice of Availability, Webinar and Request for Comment

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: The Environmental Protection Agency (EPA) is announcing the
availability of and seeking public comment on a document that announces
several proposed changes to EPA's Safer Choice Standard (``the
Standard''), including a name change to the Safer Choice and Design for
the Environment (DfE) Standard, an update to the packaging criteria,
the addition of a Safer Choice certification for cleaning service
providers, a provision allowing for preterm partnership termination

under exceptional circumstances, and the addition of several product
and functional use class requirements. Safer Choice helps consumers,
businesses, and purchasers find products that perform and contain
ingredients that are safer for human health and the environment. DfE is
a similar program currently used by EPA for the purpose of helping
consumers and commercial buyers identify antimicrobial products that
meet the health and safety standards of the normal pesticide
registration process required by the Federal Insecticide, Fungicide and
Rodenticide Act (FIFRA) as well as other EPA DfE criteria. The Agency
will hold a webinar and is requesting written stakeholder comment on
the proposed changes to the Standard.

DATES:
    Webinar: December 19, 2023, 2-3 p.m. EST. To receive the webcast
meeting link and audio teleconference information before the meeting,
you must register by 5 p.m. EST on December 18, 2023.
    Special Accommodations: To allow EPA time to process your request
for special accommodations, please submit the request by December 12,
2023.
    Written Comments: Comments must be received on or before January
16, 2024.

ADDRESSES:
    Webinar: Register online at https://abtassociates.webex.com/weblink/register/r9dc802a48d8b04aca3fbf9da33f6e603.
    Special Accommodations: Please contact the person listed under FOR
FURTHER INFORMATION CONTACT.
    Written Comments: Submit your comments, identified by docket
identification (ID) number EPA-HQ-OPPT-2023-0520, through https://www.regulations.gov. Follow the online instructions for submitting
comments. Do not submit electronically any information you consider to
be Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Additional instructions on
commenting or visiting the docket, along with more information about
dockets generally, is available at https://www.epa.gov/dockets.

FOR FURTHER INFORMATION CONTACT:
    For technical information contact: Melanie Adams, Safer Choice
Program (7406M), Office of Chemical Safety and Pollution Prevention,
Environmental Protection Agency, 1201 Constitution Ave. NW, Washington,
DC 20004; telephone number:<PHONE_NUMBER>; email address:
[email protected].
    For general information contact: The TSCA-Hotline, ABVI-Goodwill,
422 South Clinton Ave., Rochester, NY 14620; telephone number: (202)
554-1404; email address: [email protected].

SUPPLEMENTARY INFORMATION:

I. Executive Summary

A. Does this action apply to me?

    You may be affected by this action if you participate in or apply
for certification under the Safer Choice or Design for the Environment
(DfE) programs and use or hope to use the programs' label or logo,
respectively, on your products. Also potentially affected are
consumers, institutional purchasers, retailers, and distributors of
Safer Choice- or DfE-certified products who use the label or logo to
identify products that have met the Agency's safer-product criteria.
The following list of North American Industrial Classification System
(NAICS) codes is not intended to be exhaustive, but rather provides a
guide to help readers determine whether this document applies to them.
Affected entities may include:
     Other Basic Inorganic Chemical Manufacturing (NAICS code
325180);
     All Other Basic Organic Chemical Manufacturing (Primary)
(NAICS code 325199);
     Pesticide and Other Agricultural Chemical Manufacturing
(NAICS code 325320);
     Paint and Coating Manufacturing (NAICS code 325510);
     Adhesive Manufacturing (NAICS code 325520);
     Soap and Other Detergent Manufacturing (NAICS code
325611);
     Polish and Other Sanitation Good Manufacturing (NAICS code
325612);
     Surface Active Agent Manufacturing (Primary) (NAICS code
325613);
     Toilet Preparation Manufacturing (NAICS code 325620);
     Photographic Film, Paper, Plate, and Chemical
Manufacturing (NAICS code 325992);
     All Other Miscellaneous Chemical Product and Preparation
Manufacturing (NAICS code 325998);
     Service Establishment Equipment and Supplies Merchant
Wholesalers (Primary) (NAICS code 423850);
     Other Chemical and Allied Products Merchant Wholesalers
(Primary) (NAICS code 424690);
     Supermarkets and Other Grocery (except Convenience) Stores
(Primary) (NAICS code 445110);
     All Other Specialty Food Stores (NAICS code 445299);
     Pharmacies and Drug Stores (NAICS code 446110);
     Office Supplies and Stationery Stores (NAICS code 453210);
     All Other Miscellaneous Store Retailers (except Tobacco
Stores) (Primary) (NAICS code 453998);
     Electronic Shopping and Mail-Order Houses (NAICS code
454110);
     Research and Development in Biotechnology (except
Nanobiotechnology) (Primary) (NAICS code 541714);
     Facilities Support Services (NAICS code 561210).
Janitorial Services (NAICS code 561720);
     Carpet and Upholstery Cleaning Services (NAICS code
561740);
     Elementary and Secondary Schools (NAICS code 611110);
     Colleges, Universities, and Professional Schools (NAICS
code 611310);
     Promoters of Performing Arts, Sports, and Similar Events
with Facilities (NAICS code 711310);
     Drycleaning and Laundry Services (NAICS code 8123);
     Civic and Social Organizations (Primary) (NAICS code
813410);
     Business Associations (Primary) (NAICS code 813910);
     Other General Government Support (NAICS code 921190); and
     Administration of Air and Water Resource and Solid Waste
Management Programs (Primary) (NAICS code 924110).

B. What action is the Agency taking?

    EPA is issuing a document, entitled ``Proposed Revisions to EPA's
Safer Choice Standard,'' that proposes several changes to the existing
Safer Choice Standard. The Agency is proposing new packaging
requirements to ensure that its Standard sets a suitable and up-to-date
bar for sustainable packaging and to respond to increased demand for
more sustainable practices. The Agency is also proposing the creation
of a Safer Choice Cleaning Service Certification for cleaning service
providers that use Safer Choice-certified products for cleaning and
DfE-certified products for disinfecting. EPA is proposing several
additional changes, including a provision allowing for preterm
partnership termination given exceptional circumstances, the addition
of several product class requirements, and other changes. EPA is
additionally proposing several technical changes throughout the
Standard. The Agency is requesting comment on the changes that as
indicated in the document entitled ``Proposed Revisions to EPA's Safer
Choice Standard'' and may make further programmatic changes based on
the comments received.
    EPA is also announcing a stakeholder engagement opportunity through
a

webinar and is requesting stakeholder comment on the Standard updates.
During the webinar, EPA will give a presentation on the Agency's
proposed plans for updating the Standard. After the presentation, there
will be time for attendees to ask questions. The Agency will respond to
those questions during the webinar and asks for written submission of
any comments after the webinar.

C. What should I consider as I prepare my comments for EPA?

    1. Submitting CBI.
    Do not submit Confidential Business Information (CBI) to EPA
through regulations.gov or email. Clearly mark the part or all of the
information that you claim to be CBI. In addition to one complete
version of the comment that includes information claimed as CBI, a copy
of the comment that does not contain the information claimed as CBI
must be submitted for inclusion in the public docket. Information so
marked will not be disclosed except in accordance with procedures set
forth in 40 CFR part 2.
    2. Multimedia submissions.
    Multimedia submissions (audio, video, etc.) must be accompanied by
a written comment. The written comment is considered the official
comment and should include discussion of all points you wish to make.
The EPA will generally not consider comments or comment contents
located outside of the primary submission (i.e., on the web, cloud, or
other file sharing system).
    3. Tips for preparing your comments.
    When preparing and submitting your comments, see the commenting
tips at https://www.epa.gov/dockets/comments.html. Please note that
once submitted, comments cannot be edited or removed from the docket.
The EPA may publish any comment received to its public docket.
    In addition, information provided in response to this request may
result in further programmatic changes based on the comments received.
To facilitate commenting, EPA is requesting comment on specific aspects
of the changes as indicated in the document titled ``Proposed Revisions
to EPA's Safer Choice Standard'' that is available in the docket.
Please identify the topic you are responding to when submitting your
comments. Note that you do not need to address every request for
comment and may focus on those where you have relevant expertise or
experience.

II. Background

A. What is the Safer Choice program?

    As part of its environmental mission, the Safer Choice program
partners with businesses to help consumers and commercial buyers
identify products with safer chemical ingredients, without sacrificing
quality or performance. The Safer Choice program certifies products
containing ingredients that have met the program's specific and
rigorous human health and environmental toxicological criteria. The
Safer Choice program allows companies to use its label on certified
products that contain safer ingredients and perform, as determined by
expert evaluation. The Safer Choice program certification represents a
high level of achievement in formulating products that are safer for
people and the environment. For more information on the Safer Choice
program, please see: https://www.epa.gov/saferchoice.

B. What is the DfE program?

    The DfE program is a similar program currently used by EPA for the
purpose of helping consumers and commercial buyers identify
antimicrobial products that meet the health and safety standards of the
normal pesticide registration process required by FIFRA as well as
meeting the DfE certification criteria (as described in the Safer
Choice Standard). For more information on the DfE program, please see:
https://www.epa.gov/pesticide-labels/learn-about-design-environment-dfe-certification.
    Authority: 15 U.S.C. 2601 et seq.

    Dated: November 7, 2023.
Michal Freedhoff,
Assistant Administrator, Office of Chemical Safety and Pollution
Prevention.
[FR Doc. 2023-24988 Filed 11-13-23; 8:45 am]
BILLING CODE 6560-50-P