[Federal Register Volume 87, Number 133 (Wednesday, July 13, 2022)]
[Notices]
[Pages 41711-41712]
[FR Doc No: 2022-14924]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. RM98-1-000]

Records Governing Off-the-Record Communications; Public Notice

    This constitutes notice, in accordance with 18 CFR 385.2201(b), of
the receipt of prohibited and exempt off-the-record communications.
    Order No. 607 (64 FR 51222, September 22, 1999) requires Commission
decisional employees, who make or receive a prohibited or exempt off-
the-record communication relevant to the merits of a contested
proceeding, to deliver to the Secretary of the Commission, a copy of
the communication, if written, or a summary of the substance of any
oral communication.
    Prohibited communications are included in a public, non-decisional
file associated with, but not a part of, the decisional record of the
proceeding. Unless the Commission determines that the prohibited
communication and any responses thereto should become a part of the
decisional record, the prohibited off-the-record communication will not
be considered by the Commission in reaching its decision. Parties to a
proceeding may seek the opportunity to respond to any facts or
contentions made in a prohibited off-the-record communication and may
request that the Commission place the prohibited communication and
responses thereto in the decisional record. The Commission will grant
such a request only when it determines that fairness so requires. Any
person identified below as having made a prohibited off-the-record
communication shall serve the document on all parties listed on the
official service list for the applicable proceeding in accordance with
Rule 2010, 18 CFR 385.2010.
    Exempt off-the-record communications are included in the decisional
record of the proceeding, unless the communication was with a
cooperating agency as described by 40 CFR 1501.6, made under 18 CFR
385.2201(e)(1)(v).
    The following is a list of off-the-record communications recently
received by the Secretary of the Commission. The communications listed
are grouped by docket numbers in ascending order. These filings are
available for electronic review at the Commission in the Public
Reference Room or may be viewed on the Commission's website at http://www.ferc.gov using the eLibrary link. Enter the docket number,
excluding the last three digits, in the docket number field to access
the document. For assistance, please contact FERC Online Support at
[email protected] or toll free at<PHONE_NUMBER>, or for TTY,
contact<PHONE_NUMBER>.

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           Docket No.               File date     Presenter or requester
------------------------------------------------------------------------
Prohibited:
    1. P-553-235...............        7-5-2022  FERC Staff.\1\
Exempt:
    1. P-2530-000..............        6-9-2022  U.S. Senator Angus S.
                                                  King, Jr.
    2. P-14803-001, P-2082-063.       6-23-2022  FERC Staff.\2\
    3. CP16-454-000............       6-28-2022  U.S. Congress.\3\
    4. CP22-466-000............        7-1-2022  U.S. Congress.\4\
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\1\ Memorandum regarding ex parte communications from 7/5/22 with the
  Upper Skagit Indian Tribe.
\2\ Representatives Cliff Bentz and Doug LaMalfa.
\3\ Senators John Cornyn, Ted Cruz, and Representatives Vicente
  Gonzales, Lizzie Fletrcher, Henry Cuellar, and Dan Crenshaw.
\4\ Senators Joe Hoeven, Kevin Cramer and Representative Kelly
  Armstrong.

    Dated: July 7, 2022.
Kimberly D. Bose,
Secretary.
[FR Doc. 2022-14924 Filed 7-12-22; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register: January 25, 2008 (Volume 73, Number 17)]
[
Notices]
[Page 4658-4665]
[DOCID:fr25ja08-150]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 28123; 812-13363]

The TIGERS Revenue Trust and VTL Associates, LLC; Notice of
Application

January 18, 2008.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application for an order under section 6(c) of the
Investment Company Act of 1940 (the ``Act'') for an exemption from
sections 2(a)(32), 5(a)(1), 22(d), and 24(d) of the Act and rule 22c-1
under the Act; under sections 6(c) and 17(b) of the Act for an
exemption from sections 17(a)(1) and (a)(2) of the Act; and under
section 12(d)(1)(J) of the Act for exemption from sections 12(d)(1)(A)
and 12(d)(1)(B) of the Act.

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Summary of the Application:  The applicants request an order that would
permit (a) series of open-end management investment companies to issue
shares (``Shares'') that can be redeemed only in large aggregations
(``Creation Units''); (b) secondary market transactions in Shares to
occur at negotiated prices; (c) dealers to sell Shares to purchasers in
the secondary market unaccompanied by a prospectus when prospectus
delivery is not required by the Securities Act of 1933 (``Securities
Act''); (d) certain affiliated persons of the series to deposit
securities into, and receive securities from, the series in connection
with the purchase and redemption of Creation Units; and (e) certain
registered management investment companies and unit investment trusts
outside of the same group of investment companies as the series to
acquire Shares.

Applicants:  The TIGERS Revenue Trust (the ``Trust'') and VTL
Associates, LLC (the ``Adviser'').

Filing Dates:  The application was filed on February 8, 2007 and
amended on September 5, 2007 and December 7, 2007. Applicants have
agreed to file an amendment during the notice period, the substance of
which is reflected in the notice.

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 Commission's Secretary
and serving applicants with a copy of the request, personally or by
mail. Hearing requests should be received by the Commission by 5:30
p.m. on February 12, 2008, and should be accompanied by proof of
service on applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street, NE., Washington, DC 20549-1090; Applicants, One Commerce
Square, 2005 Market Street, Suite 2020, Philadelphia, PA 19103.

FOR FURTHER INFORMATION CONTACT: Barbara T. Heussler, Senior Counsel,
at<PHONE_NUMBER>, or Janet M. Grossnickle, Branch Chief, at (202) 551-
6821 (Division of Investment Management, Office of Investment Company
Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained for a fee at the
Public Reference Desk, U.S. Securities and Exchange Commission, 100 F
Street, NE., Washington DC 20549-0102 (telephone<PHONE_NUMBER>).

Applicants' Representations

    1. The Trust is registered as an open-end management investment
company and is organized as a Delaware statutory trust authorized to
issue multiple series or portfolios. The Trust intends to offer and
sell Shares of at least one or more separate investment portfolios
(``each an ``Index Fund'').\1\ The Adviser is registered as an
investment adviser under the Investment Advisers Act of 1940, as
amended (the ``Advisers Act'') and will serve as the investment adviser
to each Index Fund. The Adviser will enter into a sub-advisory
agreement with The Bank of New York (``BNY'') to serve as a sub-adviser
with respect to the Initial Index Funds. BNY, and any

other sub-adviser to the Index Funds, is or will be registered as an
investment adviser under the Advisers Act. Foreside Fund Services, LLC
(``Distributor''), a broker-dealer registered under the Securities
Exchange Act of 1934 (the ``Exchange Act''), will serve as the
principal underwriter and distributor for the Index Funds.
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    \1\ All Index Funds and the Trust, wherever appropriate, are
collectively referred to herein as the ``Trust.'' The Trust
currently intends to offer three series, the TIGERS Revenue-Weighted
Large Cap Index Fund, TIGERS Revenue-Weighted Mid Cap Index Fund and
TIGERS Revenue-Weighted Small Cap Index Fund (collectively, the
``Initial Index Funds'').
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    2. Each Index Fund will hold certain securities (``Portfolio
Securities'') selected to correspond generally to the price and yield
performance, before fees and expenses, of a specified index of domestic
equity securities (an ``Underlying Index''). No entity that creates,
compiles, sponsors or maintains an Underlying Index (``Index
Provider'') is or will be an affiliated person, as defined in section
2(a)(3) of the Act, or an affiliated person of an affiliated person, of
the Trust, its investment adviser (``VTL''), any sub-adviser of a
series of the Trust (including BNY), a promoter of the Trust or any of
its series, or the Trust's distributor (including Foreside Fund
Services, LLC). The Underlying Index for the TIGERS Revenue-Weighted
Large Cap Index Fund is the RevenueShares Large Cap Index; the
Underlying Index for the TIGERS Revenue-Weighted Mid Cap Index Fund is
the RevenueShares Mid Cap Index; and the Underlying Index for the
TIGERS Revenue-Weighted Small Cap Index Fund is the RevenueShares Small
Cap Index. The Trust may offer additional Index Funds in the future
based on other Underlying Indexes comprised of domestic equity
securities (``Future Index Funds'').\2\ Any Future Index Funds relying
on any order granted pursuant to this Application will comply with the
terms and conditions stated in this application and will be advised by
the Adviser or an entity controlling, controlled by or under common
control with the Adviser.
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    \2\ For purposes of this Application, references to ``Index
Funds'' include both the Initial Index Funds and all Future Index
Funds.
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    3. The investment objective of each Index Fund will be to provide
investment results that correspond generally to the price and yield
performance, before fees and expenses, of its Underlying Index. Intra-
day values of the Underlying Index will be disseminated every 15
seconds throughout the trading day. An Index Fund will utilize either a
``replication strategy'' or ``representative sampling'' which will be
disclosed with regard to each Index Fund in its prospectus
(``Prospectus'').\3\ An Index Fund using a ``replication strategy''
generally will invest in all of the Component Securities in its
Underlying Index in approximately the same weightings as in the
Underlying Index. In certain circumstances, such as when there are
practical difficulties or substantial costs involved in holding every
security in an Underlying Index or when a Component Security is
illiquid, an Index Fund may use a ``representative sampling'' strategy
pursuant to which it will invest in some, but not all of the relevant
Component Securities.\4\ Applicants anticipate that an Index Fund that
utilizes a ``representative sampling'' strategy will not track the
price and yield performance of its Underlying Index with the same
degree of accuracy as an investment vehicle that invests in every
Component Security of the Underlying Index in the same weighting as the
Underlying Index. Applicants expect that each Index Fund's tracking
error relative to the performance of its Underlying Index should be 5%
or less.
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    \3\ Applicants represent that an Index Fund will normally invest
at least 95% of its total assets in the component securities that
comprise its Underlying Index (``Component Securities''). Each Index
Fund also may invest up to 5% of its assets in certain futures
contracts, options on futures contracts, options, and swaps, as well
as cash and cash equivalents, and other securities that are not
included in its Underlying Index.
    \4\ Under the ``representative sampling'' strategy, the Adviser
or BNY will seek to construct an Index Fund's portfolio so that its
market capitalization, industry weightings, fundamental
characteristics (such as return variability, earnings valuation and
yield) and liquidity measures perform like those of the Underlying
Index.
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    4. Shares of the Index Funds will be sold in Creation Units of
50,000 Shares, as will be specified in the Index Funds' Prospectus. All
orders to purchase Creation Units must be placed with the Distributor
by or through a party that has entered into an agreement with the Trust
and the Distributor (``Authorized Participant''). An Authorized
Participant must be either: (a) A broker-dealer or other participant in
the continuous net settlement system of the National Securities
Clearing Corporation (``NSCC''), a clearing agency registered with the
Commission; or (b) a participant (``DTC Participant'') in the
Depository Trust Company (``DTC''). Shares of each Index Fund generally
will be sold in Creation Units in exchange for an in-kind deposit by
the purchaser of a portfolio of securities designated by the Adviser to
correspond generally to the price and yield performance, before fees
and expenses, of the relevant Underlying Index (the ``Deposit
Securities''), together with the deposit of a specified cash payment
(``Cash Component'').\5\ The Cash Component is generally an amount
equal to the difference between (a) the net asset value (``NAV'') (per
Creation Unit) of the Index Fund and (b) the total aggregate market
value (per Creation Unit) of the Deposit Securities.\6\ Each Index Fund
reserves the right to permit, under certain circumstances, a purchaser
of Creation Units to substitute cash in lieu of depositing some or all
of the requisite Deposit Securities. An investor purchasing or
redeeming a Creation Unit from a Fund will be charged a fee
(``Transaction Fee'') to prevent the dilution of the interests of the
remaining shareholders resulting from costs in connection with the
purchase of Creation Units.\7\ The maximum Transaction Fees relevant to
each Index Fund will be fully disclosed in the Prospectus of such Index
Fund and the method for calculating the Transaction Fees will be
disclosed in each Index Fund's Prospectus or statement of additional
information (``SAI''). Orders to purchase Creation Units will be placed
with the Distributor who will be responsible for transmitting the
orders to the Trust. The Distributor also will be responsible for
delivering the Index Fund's Prospectus to those persons purchasing
Creation Units, and for maintaining records of both the orders placed
with it and the confirmations of acceptance furnished by it. In
addition, the Distributor will maintain a record of the instructions
given to the Trust to implement the delivery of Shares.
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    \5\ The deposit of the requisite Deposit Securities and the Cash
Component are collectively referred to as a ``Fund Deposit.''
    \6\ The Trust will sell and redeem Creation Units of each Index
Fund on any day that the Index Fund is open for business, including
as required by section 22(e) of the Act (a ``Business Day''). In
addition to the list of names and amount of each security
constituting the current Deposit Securities, it is intended that, on
each Business Day, the Cash Component effective as of the previous
Business Day, per outstanding Share of each Index Fund, will be made
available. The Exchanges intend to disseminate, every 15 seconds,
during their respective regular trading hours, through the
facilities of the Consolidated Tape Association, an approximate
amount per Share representing the sum of the estimated Cash
Component effective through and including the previous Business Day,
plus the current value of the Deposit Securities, on a per Share
basis.
    \7\ Where an Index Fund permits an in-kind purchaser to
substitute cash in lieu of depositing a portion of the requisite
Deposit Securities, the purchaser may be assessed a higher
Transaction Fee to cover the cost of purchasing such Deposit
Securities, including brokerage costs, and part or all of the spread
between the expected bid and the offer side of the market relating
to such Deposit Securities.
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    5. Purchasers of Shares in Creation Units may hold such Shares or
may sell such Shares into the secondary market.

Shares will be listed and traded on the NYSE Arca, Inc. (the ``NYSE'')
or another U.S. national securities exchange as defined in section
2(a)(26) of the Act (``Other Exchanges'') (the NYSE and the Other
Exchanges are herein each referred to as an ``Exchange'' and
collectively as the ``Exchanges''). It is expected that one or more
member firms of a listing Exchange will be designated to act as a
specialist and maintain a market on the Exchange for Shares trading on
the Exchange (the ``Exchange Specialist''). If the Nasdaq Stock Market,
Inc. (``Nasdaq'') is the listing Exchange, one or more member firms of
Nasdaq will act as a market maker (``Market Maker'') and maintain a
market on Nasdaq for Shares trading on Nasdaq.\8\ Prices of Shares
trading on an Exchange will be based on the current bid/offer market.
Shares sold on an Exchange will be subject to customary brokerage
commissions and charges. Applicants expect that purchasers of Creation
Units will include institutional investors and arbitrageurs (which
could include institutional investors). An Exchange Specialist or
Market Maker, in providing a fair and orderly secondary market for the
Shares, may find it appropriate to purchase Creation Units for use in
its market-making activities. Applicants expect that secondary market
purchasers of Shares will include both institutional investors and
retail investors.\9\ Applicants expect that the price at which Shares
trade will be disciplined by arbitrage opportunities created by the
option continually to purchase or redeem Creation Units at their NAV,
which should ensure that Shares will not trade at a material discount
or premium in relation to their NAV.
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    \8\ If Shares are listed on the Nasdaq, no particular Market
Maker will be contractually obligated to make a market in Shares,
although Nasdaq's listing requirements stipulate that at least two
Market Makers must be registered as Market Makers in Shares to
maintain the listing. Applicants state that registered Market Makers
are required to make a continuous, two-sided market at all times or
be subject to regulatory sanctions.
    \9\ Shares will be registered in book-entry form only. DTC or
its nominee will be the registered owner of all outstanding Shares.
DTC or DTC Participants will maintain records reflecting beneficial
owners of Shares.
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    6. Shares will not be individually redeemable, and owners of Shares
may acquire those Shares from the Index Fund, or tender such Shares for
redemption to the Index Fund, in Creation Units only. To redeem, an
investor will have to accumulate enough Shares to constitute a Creation
Unit. Redemption orders must be placed by or through an Authorized
Participant. An investor redeeming a Creation Unit generally will
receive (a) Portfolio Securities designated to be delivered for
Creation Unit redemptions (``Fund Securities'') on the date that the
request for redemption is submitted, which may not be identical to the
Deposit Securities required to purchase Creation Units on that
date,\10\ and (b) a ``Cash Redemption Amount,'' consisting of an amount
calculated in the same manner as the Cash Component, although the
actual amounts may differ if the Fund Securities received upon
redemption are not identical to the Deposit Securities on the same day.
The relevant Index Fund may also make redemptions in cash in lieu of
transferring one or more Fund Securities to a redeeming investor if the
Trust determines that it is warranted due to unusual circumstances,
such as when a redeeming entity is restrained by regulation or policy
from transacting in certain Fund Securities.
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    \10\ As a general matter, the Deposit Securities and Fund
Securities will correspond pro rata to the Portfolio Securities held
by each Fund, but Fund Securities received on redemption may not
always be identical to Deposit Securities, which are deposited in
connection with the purchase of Creation Units for the same day. The
Funds will comply with the federal securities laws in accepting
Deposit Securities and satisfying redemptions with Fund Securities,
including that the Deposit Securities and Fund Securities are sold
in transactions that would be exempt from registration under the
Securities Act.
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    7. Neither the Trust nor any Index Fund will be marketed or
otherwise held out as a traditional open-end investment company or a
mutual fund. The designation of the Trust and the Index Funds in all
marketing materials will be limited to the terms ``exchange-traded
fund,'' an ``investment company,'' a ``fund,'' or a ``trust.'' All
marketing materials that describe the method of obtaining, buying or
selling Creation Units, or Shares traded on the Exchange, or refer to
redeemability, will prominently disclose that Shares are not
individually redeemable and that the owners of Shares may purchase or
redeem those Shares from the Index Fund in Creation Units only. The
same approach will be followed in the SAI, shareholder reports and
investor educational materials issued or circulated in connection with
the Shares. The Index Funds will provide copies of their annual and
semi-annual shareholder reports to DTC Participants for distribution to
beneficial owners of Shares.

Applicants' Legal Analysis

    1. Applicants request an order under section 6(c) of the Act for an
exemption from sections 2(a)(32), 5(a)(1), 22(d) and 24(d) of the Act
and rule 22c-1 under the Act; under section 12(d)(1)(J) for an
exemption from sections 12(d)(1)(A) and (B) of the Act, and under
sections 6(c) and 17(b) of the Act for an exemption from sections
17(a)(1) and 17(a)(2) of the Act.
    2. Section 6(c) of the Act provides that the Commission may exempt
any person, security or transaction, or any class of persons,
securities or transactions, from any provision of the Act, if and to
the extent that such exemption is necessary or appropriate in the
public interest and consistent with the protection of investors and the
purposes fairly intended by the policy and provisions of the Act.
Section 17(b) of the Act authorizes the Commission to exempt a proposed
transaction from section 17(a) of the Act if evidence establishes that
the terms of the transaction, including the consideration to be paid or
received, are reasonable and fair and do not involve overreaching on
the part of any person concerned, and the proposed transaction is
consistent with the policies of the registered investment company and
the general provisions of the Act. Section 12(d)(1)(J) of the Act
provides that the Commission may exempt any person, security, or
transaction, or any class or classes of persons, securities or
transactions, from any provisions of section 12(d)(1) if the exemption
is consistent with the public interest and protection of investors.

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

    3. Section 5(a)(1) of the Act defines an ``open-end company'' as a
management investment company that is offering for sale or has
outstanding any redeemable security of which it is the issuer. Section
2(a)(32) of the Act defines a redeemable security as any security,
other than short-term paper, under the terms of which the holder, upon
its presentation to the issuer, is entitled to receive approximately
his proportionate share of the issuer's current net assets, or the cash
equivalent. Because Shares will not be individually redeemable,
applicants request an order that would permit the Trust to register as
an open-end management investment company and issue individual Shares
of each Index Fund that are redeemable in Creation Units only.
Applicants state that investors may purchase or redeem Creation Units
from an Index Fund. Applicants further state that the price at which
Shares trade should be disciplined by arbitrage opportunities created
by the option to purchase or redeem continually Shares in Creation
Units, which should help ensure that Shares will not trade at a
material

discount or premium in relation to their NAV.

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

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

Section 24(d) of the Act

    7. Section 24(d) of the Act provides, in relevant part, that the
prospectus delivery exemption provided to dealer transactions by
section 4(3) of the Securities Act does not apply to any transaction in
a redeemable security issued by an open-end investment company.
Applicants seek relief from section 24(d) to permit dealers selling
Shares to rely on the prospectus delivery exemption provided by section
4(3) of the Securities Act.\11\
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    \11\ Applicants state that they are not seeking relief from the
prospectus delivery requirement for non-secondary market
transactions, such as transactions in which an investor purchases
Shares from the Trust or an underwriter. Applicants further state
that the Prospectus will caution broker-dealers and others that some
activities on their part, depending on the circumstances, may result
in their being deemed statutory underwriters and subject them to the
prospectus delivery and liability provisions of the Securities Act.
For example, a broker-dealer firm and/or its client may be deemed a
statutory underwriter if it purchases Creation Units from an Index
Fund, breaks them down into the constituent Shares, and sells those
Shares directly to customers, or if it chooses to couple the
creation of a supply of new Shares with an active selling effort
involving solicitation of secondary market demand for Shares. Each
Index Fund's Prospectus will state that whether a person is an
underwriter depends upon all of the facts and circumstances
pertaining to that person's activities. Each Index Fund's Prospectus
will caution dealers who are not ``underwriters'' but are
participating in a distribution (as contrasted to ordinary secondary
market trading transactions), and thus dealing with Shares that are
part of an ``unsold allotment'' within the meaning of section
4(3)(C) of the Securities Act, that they would be unable to take
advantage of the prospectus delivery exemption provided by section
4(3) of the Securities Act.
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    8. Applicants state that Shares are bought and sold in the
secondary market in the same manner as closed-end fund shares.
Applicants note that transactions in closed-end fund shares are not
subject to section 24(d), and thus closed-end fund shares are sold in
the secondary market without prospectuses. Applicants contend that
Shares likewise merit a reduction in the unnecessary compliance costs
and regulatory burdens resulting from the imposition of the prospectus
delivery obligations in the secondary market. Because Shares will be
listed on an Exchange, prospective investors will have access to
information about the product over and above what is normally available
about an open-end security. Applicants state that information regarding
market price and volume will be continually available on a real time
basis throughout the day on brokers' computer screens and other
electronic services. The previous day's price and volume information
will be published daily in the financial section of newspapers. The
Trust intends to maintain a website that will include the Prospectus
and SAI, the relevant Underlying Index for each Index Fund, and
additional quantitative information that is updated on a daily basis,
including daily trading volume, closing price and the NAV for each
Index Fund and information about the premiums and discounts at which
the Index Fund's Shares have traded.
    9. Applicants will arrange for broker-dealers selling Shares in the
secondary market to provide purchasers with a product description
(``Product Description'') that describes, in plain English, the
relevant Index Fund and the Shares it issues. Applicants state that a
Product Description is not intended to substitute for a full
Prospectus. Applicants state that the Product Description will be
tailored to meet the information needs of investors purchasing Shares
in the secondary market.

Section 12(d)(1)

    10. Section 12(d)(1)(A) of the Act prohibits a registered
investment company from acquiring securities of an investment company
if such securities represent more than 3% of the total outstanding
voting stock of the acquired company, more than 5% of the total assets
of the acquiring company, or, together with the securities of any other
investment companies, more than 10% of the total assets of the
acquiring company. Section 12(d)(1)(B) of the Act prohibits a
registered open-end investment company, its principal underwriter, and
any broker or dealer from selling its shares to another investment
company if the sale will cause the acquiring company to own more than
3% of the acquired company's voting stock, or if the sale will cause
more than 10% of the acquired company's voting stock to be owned by
investment companies generally.
    11. Applicants request an exemption to permit management investment
companies (``Investing Management Companies'') and unit investment
trusts (``Investing Trusts,'' collectively with Investing Management
Companies, ``Investing Funds'') registered under the Act that are not
part of the same ``group of investment companies,'' as defined in
section 12(d)(1)(G)(ii) of the Act, as the Trust, to acquire shares of
an Index Fund beyond the limits of sections 12(d)(1)(A) and (B).
Investing Funds exclude registered investment companies that are, or in
the future may be, part of the same ``group of investment companies,''
within the

meaning of section 12(d)(1)(G)(ii) of the Act as the Index Funds. In
addition, Applicants request an order that would permit the Distributor
and any brokers or dealers (``Brokers'') that are registered under the
Exchange Act to knowingly sell shares of the Index Fund to an Investing
Fund in excess of the limits of section 12(b)(1)(B). Applicants request
that the relief sought apply to: (a) Index Funds that are advised by
the Adviser and in the same group of investment companies as the Trust;
(b) each Investing Fund that enters into a participation agreement with
the Index Fund (the ``Participation Agreement''); and (c) any
Broker.\12\
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    \12\ All parties that currently intend to rely on the requested
relief from section 12(d)(1) are named as Applicants. Other parties
that may rely on the order in the future will comply with the terms
and conditions of the application. An Investing Fund may rely on the
requested order only to invest in the Index Funds and any Future
Index Funds and not in any other registered investment company.
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    12. Each Investing Management Company will be advised by an
investment adviser within the meaning of section 2(a)(20)(A) of the Act
(the ``Investing Fund Adviser'') and may be sub-advised by one or more
investment advisers within the meaning of section 2(a)(20)(B) of the
Act (each an ``Investing Fund SubAdviser''). Any Investing Fund Adviser
or Investing Fund SubAdviser will be registered under the Advisers Act.
Each Investing Trust will be sponsored by a sponsor (``Sponsor'').
    13. Applicants submit that the proposed conditions to the relief
requested adequately address the concerns underlying the limits in
sections 12(d)(1)(A) and (B) of the Act, which include concerns about
large scale redemptions of the acquired fund's shares, excessive
layering of fees, and overly complex fund structures. Applicants
believe that the requested exemption is consistent with the public
interest and the protection of investors.
    14. Applicants believe that neither the Investing Funds nor
Investing Fund Affiliates would be able to exert undue influence over
the Index Funds.\13\ To limit the control that an Investing Fund may
have over an Index Fund, applicants propose a condition prohibiting the
Investing Fund Adviser or Sponsor, any person controlling, controlled
by, or under common control with the Investing Fund Adviser or Sponsor,
and any investment company and any issuer that would be an investment
company but for sections 3(c)(1) or 3(c)(7) of the Act that is advised
or sponsored by the Investing Fund Adviser or Sponsor, or any person
controlling, controlled by, or under common control with the Investing
Fund Adviser or Sponsor (``Investing Fund's Advisory Group'') from
controlling (individually or in the aggregate) an Index Fund within the
meaning of section 2(a)(9) of the Act. The same prohibition would apply
to any Investing Fund SubAdviser, any person controlling, controlled by
or under common control with the Investing Fund SubAdviser, and any
investment company or issuer that would be an investment company but
for section 3(c)(1) or 3(c)(7) of the Act (or portion of such
investment company or issuer) advised or sponsored by the Investing
Fund SubAdviser or any person controlling, controlled by or under
common control with the Investing Fund SubAdviser (``SubAdviser
Group''). Applicants propose other conditions to limit the potential
for undue influence over the Index Funds, including that no Investing
Funds or Investing Fund Affiliate (except to the extent it is acting in
its capacity as an investment adviser to an Index Fund) will cause an
Index Fund to purchase a security in an offering of securities during
the existence of any underwriting or selling syndicate of which a
principal underwriter is an Underwriting Affiliate (``Affiliated
Underwriting''). An ``Underwriting Affiliate'' is a principal
underwriter in any underwriting or selling syndicate that is an
officer, director, member of an advisory board, Investing Fund Adviser,
Investing Fund SubAdviser, Sponsor, or employee of the Investing Fund,
or a person of which any such officer, director, member of an advisory
board, Investing Fund Adviser, Investing Fund SubAdviser, Sponsor or
employee is an affiliated person. An Underwriting Affiliate does not
include a person whose relationship to an Index Fund is covered by
section 10(f) of the Act.
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    \13\ An ``Investing Fund Affiliate'' is an Investing Fund
Adviser, Investing Fund SubAdviser, Sponsor, promoter, or principal
underwriter of an Investing Fund, and any person controlling,
controlled by, or under common control with any of those entities.
An ``Index Fund Affiliate'' is an investment adviser, promoter, or
principal underwriter of an Index Fund, and any person controlling,
controlled by, or under common control with any of those entities.
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    15. Applicants do not believe that the proposed arrangement will
involve excessive layering of fees. The board of directors or trustees
of any Investing Management Company, including a majority of the
directors or trustees who are not ``interested persons'' (within the
meaning of section 2(a)(19) of the Act), will find that the advisory
fees charged under the advisory contract are based on services provided
that will be in addition to, rather than duplicative of, the services
provided under the advisory contract(s) of any Index Fund in which the
Investing Management Company may invest. Except as provided in
condition 11, an Investing Fund Adviser, or trustee or Sponsor of an
Investing Trust will waive fees otherwise payable to it by the
Investing Management Company or Investing Trust in an amount at least
equal to any compensation (including fees received pursuant to any plan
adopted by an Index Fund under rule 12b-1 under the Act) received by
the Investing Fund Adviser or trustee or Sponsor to the Investing Trust
or an affiliated person of the Investing Fund Adviser, trustee or
Sponsor from the Index Funds in connection with the investment by the
Investing Management Company or Investing Trust in the Index Fund.
Applicants state that any sales loads or service fees charged with
respect to shares of the Investing Fund will not exceed the limits
applicable to a fund of funds as set forth in Conduct Rule 2830 of the
National Association of Securities Dealers, Inc. (``NASD'').
    16. Applicants submit that the proposed arrangement will not create
an overly complex fund structure. Applicants note that no Index Fund
will acquire securities of any other investment company or company
relying on section 3(c)(1) or 3(c)(7) of the Act in excess of the
limits contained in section 12(d)(1)(A) of the Act, except to the
extent permitted by exemptive relief from the Commission that allows
the Index Fund to purchase shares of a money market fund for short-term
cash management purposes. To ensure that Investing Funds comply with
the terms and conditions of the requested relief from section 12(d)(1)
of the Act, a Participation Agreement will be entered into between the
Index Fund and the Investing Fund. The Participation Agreement will
require the Investing Fund to adhere to the terms and conditions of the
requested order. The Participation Agreement will include an
acknowledgment from the Investing Fund that it may rely on the
requested order only to invest in the Index Funds and not in any other
registered investment company. Applicants represent that each Investing
Fund will represent in the Participation Agreement that if it exceeds
the 5% or 10% limitation in section 12(d)(1)(A)(ii) and (iii) of the
Act, it will disclose in its prospectus that it may invest in the Index
Funds, and disclose in ``plain English'' in its prospectus the unique
characteristics of doing so, including but not limited to, the expense
structure

and any additional expenses of investing in the Index Funds. Each
Investing Fund will also be required to represent in the Participation
Agreement that it will comply with the disclosure requirements set
forth in Investment Company Act Release No. 27399 (June 20, 2006).
    17. Applicants also note that an Index Fund may choose to reject a
direct purchase by an Investing Fund. To the extent that an Investing
Fund purchases Shares in the secondary market, the Index Fund would
still retain its ability to reject purchases of Shares made in reliance
on this order by declining to enter into the Participation Agreement
prior to any investment by an Investing Fund in excess of the limits of
section 12(d)(1)(A).

Section 17(a)(1) and (2) of the Act

    18. Section 17(a) of the Act generally prohibits an affiliated
person of a registered investment company, or affiliated persons of
affiliated persons (``Second-Tier Affiliate'') from selling any
security to or purchasing any security from the company. Section
2(a)(3) of the Act defines ``affiliated person'' to include (a) any
person directly or indirectly owning, controlling or holding with power
to vote 5% or more of the outstanding voting securities of the other
person, (b) any person 5% or more of whose outstanding voting
securities are directly or indirectly owned, controlled or held with
the power to vote by the other person, and (c) any person directly or
indirectly controlling, controlled by or under common control with the
other person. Section 2(a)(9) of the Act further states that a control
relationship will be presumed where one person owns more than 25% of
another person's voting securities. In addition, the Index Funds may be
deemed to be controlled by the Adviser or an entity controlling,
controlled by or under common control with the Adviser and hence
affiliated persons of each other. The Index Funds also may be deemed to
be under common control with any other registered investment company
(or series thereof) advised by the Adviser or an entity controlling,
controlled by or under common control with the Adviser (an ``Affiliated
Fund''). Applicants state that if Creation Units of all of the Index
Funds or of one or more particular Index Funds are held by twenty or
fewer investors, including an Exchange Specialist or Market Maker, some
or all of such investors will be 5% owners of the Trust or such Index
Funds, and one or more investors may hold in excess of 25% of the Trust
or such Index Funds. Such investors would be deemed to be affiliated
persons of the Trust or such Index Funds.
    19. Applicants request an exemption from section 17(a) of the Act
pursuant to sections 17(b) and 6(c) of the Act to permit persons that
are affiliated persons or Second-Tier Affiliates of the Index Funds
solely by virtue of: (a) Holding 5% or more, or in excess of 25%, of
the outstanding Shares of one or more Index Funds; (b) having an
affiliation with a person with an ownership interest described in (a);
or (c) holding 5% or more, or more than 25%, of the Shares of one or
more Affiliated Funds, to effectuate in-kind purchases and redemptions.
Applicants further request exemptive relief pursuant to sections 6(c)
and 17(b) of the Act to permit an Index Fund, 5% or more of whose
Shares are held by an Investing Fund prior to a particular purchase or
redemption transaction, to sell its Shares to and redeem its Shares
from an Investing Fund.
    20. Applicants assert that no useful purpose would be served by
prohibiting these types of affiliated persons from making in-kind
purchases or in-kind redemptions of Shares of an Index Fund in Creation
Units. The deposit procedures for both in-kind purchases and in-kind
redemptions of Creation Units will be effected in exactly the same
manner. Deposit Securities and Fund Securities will be valued in the
same manner as Portfolio Securities. Therefore, applicants state that
in-kind purchases and in-kind redemptions will afford no opportunity
for the affiliated persons of an Index Fund, or the Second-Tier
Affiliates, to effect a transaction detrimental to other holders of
Shares. Applicants also believe that in-kind purchases and redemptions
will not result in self-dealing or overreaching of the Index Fund.
    21. Applicants also seek relief from section 17(a) of the Act for
any transaction in Creation Units directly between an Index Fund and
any Investing Fund that owns 5% or more of an Index Fund prior to such
transaction.\14\ Applicants state that the terms of the transactions
are fair and reasonable and do not involve overreaching. Applicants
note that any consideration paid by an Investing Fund for the purchase
or redemption of Shares directly from an Index Fund will be based on
the NAV of the Index Fund.\15\ Applicants state that the proposed
transactions will be consistent with the policies of each Index Fund
and Investing Fund and with the general purposes of the Act. The
Participation Agreement will require any Investing Fund that purchases
Creation Units directly from an Index Fund to represent that purchases
of Creation Units from an Index Fund by an Investing Fund will be
accomplished in compliance with the investment restrictions of the
Investing Fund and will be consistent with the investment policies set
forth in the Investing Fund's registration statement.
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    \14\ Applicants acknowledge that receipt of compensation by (a)
an affiliated person of an Investing Fund, or an affiliated person
of such person, for the purchase by the Investing Fund of Shares of
an Index Fund or (b) an affiliated person of an Index Fund, or an
affiliated person of such person, for the sale by the Index Fund of
its Shares to an Investing Fund may be prohibited by section
17(e)(1) of the Act. The Participation Agreement also will include
this acknowledgment.
    \15\ To the extent that purchases and sales of shares of an
Index Fund occur in the secondary market and not through principal
transactions directly between an Investing Fund and an Index Fund,
relief from section 17(a) would not be necessary. However, the
requested relief would apply to direct sales of Shares in Creation
Units by an Index Fund to an Investing Fund and redemptions of those
Shares.
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Applicants' Conditions

    Applicants agree that any order of the Commission granting the
requested relief to permit the operations of the Index Funds will be
subject to the following conditions:
    1. Each Index Fund's Prospectus and Product Description will
clearly disclose that, for purposes of the Act, Shares are issued by
the Index Fund and that the acquisition of Shares by investment
companies is subject to the restrictions of section 12(d)(1) of the
Act, except as permitted by an exemptive order that permits registered
investment companies to invest in an Index Fund beyond the limits of
section 12(d)(1) of the Act, subject to certain terms and conditions,
including that the registered investment company enter into a
Participation Agreement with the Trust regarding the terms of the
investment.
    2. As long as the Trust operates in reliance on the requested
order, the Shares will be listed on an Exchange.
    3. Neither the Trust nor any Index Fund will be advertised or
marketed as an open-end fund or a mutual fund. Each Index Fund's
Prospectus will prominently disclose that the Shares are not
individually redeemable shares and will disclose that the owners of the
Shares may acquire those Shares from the Index Fund and tender those
Shares for redemption to the Index Fund in Creation Units only. Any
advertising material that describes the purchase or sale of Creation
Units or refers to redeemability will prominently disclose that the
Shares are not individually redeemable, and that owners of Shares

may acquire those Shares from the Index Fund and tender those Shares
for redemption to the Index Fund in Creation Units only.
    4. The website for the Trust, which will be publicly accessible at
no charge, will contain the following information, on a per Share
basis, for each Index Fund: (i) The prior Business Day's NAV and the
reported closing price, and a calculation of the premium or discount of
such price against such NAV; and (ii) 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. In addition, the Product
Description for each Index Fund will state that the website for the
Trust has information about the premiums and discounts at which the
Shares have traded.
    5. The Prospectus and annual report for each Index Fund also will
include: (i) The information listed in condition 4(ii), (a) in the case
of the Prospectus, for the most recently completed year (and the most
recently completed quarter or quarters, as applicable), and (b) in the
case of the annual report, for the immediately preceding five years, as
applicable; and (ii) the following data, calculated on a per Share
basis for one, five and ten year periods (or the life of the Index
Fund): (a) The cumulative total return and the average annual total
return based on NAV and closing price, and (b) the cumulative total
return of the relevant Underlying Index.
    6. Before an Index Fund may rely on this order, the Commission will
have approved, pursuant to rule 19b-4 under the Exchange Act, an
Exchange rule requiring Exchange members and member organizations
effecting transactions in Shares to deliver a Product Description to
purchasers of Shares.
    The Applicants agree that any order of the Commission granting the
requested relief from section 12(d)(1) will be subject to the following
conditions:
    7. The members of an Investing Fund's Advisory Group will not
control (individually or in the aggregate) an Index Fund within the
meaning of section 2(a)(9) of the Act. The members of the SubAdviser
Group will not control (individually or in the aggregate) an Index Fund
within the meaning of section 2(a)(9) of the Act. If, as a result of a
decrease in the outstanding voting securities of an Index Fund, an
Investing Fund's Advisory Group or the SubAdviser Group, each in the
aggregate, becomes a holder of more than 25% of the outstanding voting
securities of an Index Fund, it will vote its shares of the Index Fund
in the same proportion as the vote of all other holders of the Index
Fund's shares. This condition does not apply to the SubAdviser Group
with respect to an Index Fund for which the Investing Fund SubAdviser
or a person controlling, controlled by, or under common control with
the Investing Fund SubAdviser acts as the investment adviser within the
meaning of section 2(a)(20)(A) of the Act.
    8. No Investing Fund or Investing Fund Affiliate will cause any
existing or potential investment by the Investing Fund in an Index Fund
to influence the terms of any services or transactions between the
Investing Fund or Investing Fund Affiliate and the Index Fund or Index
Fund Affiliate.
    9. The board of directors or trustees of an Investing Management
Company, including a majority of the disinterested directors or
trustees, will adopt procedures reasonably designed to assure that the
Investing Fund's Adviser and any Investing Fund SubAdviser are
conducting the investment program of the Investing Management Company
without taking into account any consideration received by the Investing
Management Company or an Investing Fund Affiliate from an Index Fund or
an Index Fund Affiliate in connection with any services or
transactions.
    10. Once an investment by an Investing Fund in the securities of an
Index Fund exceeds the limit in section 12(d)(1)(A)(i) of the Act, the
Trust's Board of Trustees (``Board''), including a majority of the
disinterested Board members, will determine that any consideration paid
by an Index Fund to the Investing Fund or an Investing Fund Affiliate
in connection with any services or transactions: (i) Is fair and
reasonable in relation to the nature and quality of the services and
benefits received by the Index Fund; (ii) is within the range of
consideration that the Index Fund would be required to pay to another
unaffiliated entity in connection with the same services or
transactions; and (iii) does not involve overreaching on the part of
any person concerned. This condition does not apply with respect to any
services or transactions between an Index Fund and its investment
adviser(s), or any person controlling, controlled by, or under common
control with such investment adviser(s).
    11. An Investing Fund Adviser, or a trustee or Sponsor of an
Investing Trust will waive fees otherwise payable to it by the
Investing Management Company or Investing Trust in an amount at least
equal to any compensation (including fees received pursuant to any plan
adopted by an Index Fund under rule 12b-1 under the Act) received from
an Index Fund by the Investing Fund Adviser, trustee, or Sponsor to the
Investing Trust or an affiliated person of the Investing Fund Adviser,
trustee or Sponsor, other than any advisory fees paid to the Investing
Fund Adviser, trustee or Sponsor or an affiliated person of the
Investing Fund Adviser, trustee or Sponsor by the Index Fund, in
connection with the investment by the Investing Management Company or
Investing Trust in the Index Fund. Any Investing Fund SubAdviser will
waive fees otherwise payable to the Investing Fund SubAdviser, directly
or indirectly, by the Investing Management Company in an amount at
least equal to any compensation received from an Index Fund by the
Investing Fund SubAdviser, or an affiliated person of the Investing
Fund SubAdviser, other than any advisory fees paid to the Investing
Fund SubAdviser or its affiliated person by the Index Fund, in
connection with the investment by the Investing Management Company in
the Index Fund made at the direction of the Investing Fund SubAdviser.
In the event that the Investing Fund SubAdviser waives fees, the
benefit of the waiver will be passed through to the Investing
Management Company.
    12. No Investing Fund or Investing Fund Affiliate (except to the
extent it is acting in its capacity as an investment adviser to an
Index Fund) will cause an Index Fund to purchase a security in any
Affiliated Underwriting.
    13. The Board, including a majority of the disinterested Board
members, will adopt procedures reasonably designed to monitor any
purchases of securities by an Index Fund in an Affiliated Underwriting
once an investment by an Investing Fund in Shares of the Index Fund
exceeds the limit of section 12(d)(1)(A)(i) of the Act, including any
purchases made directly from an Underwriting Affiliate. The Board will
review these purchases periodically, but no less frequently than
annually, to determine whether the purchases were influenced by the
investment by the Investing Fund in the Index Fund. The Board will
consider, among other things: (i) Whether the purchases were consistent
with the investment objectives and policies of the Index Fund; (ii) how
the performance of securities purchased in an Affiliated Underwriting
compares to the performance of comparable securities purchased during a
comparable period of time in underwritings other than Affiliated
Underwritings or to a benchmark such as a comparable market index; and
(iii) whether the amount of securities purchased by the Index Fund

in Affiliated Underwritings and the amount purchased directly from an
Underwriting Affiliate have changed significantly from prior years. The
Board will take any appropriate actions based on its review, including,
if appropriate, the institution of procedures designed to assure that
purchases of securities in Affiliated Underwritings are in the best
interest of shareholders.
    14. Each Index Fund will maintain and preserve permanently in an
easily accessible place a written copy of the procedures described in
the preceding condition, and any modifications to such procedures, and
will maintain and preserve for a period of not less than six years from
the end of the fiscal year in which any purchase in an Affiliated
Underwriting occurred, the first two years in an easily accessible
place, a written record of each purchase of securities in Affiliated
Underwritings once an investment by an Investing Fund in the securities
of the Index Fund exceeds the limits in section 12(d)(1)(A)(i) of the
Act, setting forth from whom the securities were acquired, the identity
of the underwriting syndicate's members, the terms of the purchase, and
the information or materials upon which the Board's determinations were
made.
    15. Before investing in an Index Fund in excess of the limits in
section 12(d)(1)(A), the Investing Fund and the Index Fund will execute
a Participation Agreement stating, without limitation, that their
boards of directors or trustees and their investment advisers, and the
trustee and Sponsor of an Investing Trust, as applicable, understand
the terms and conditions of the order, and agree to fulfill their
responsibilities under the order. At the time of its investment in
Shares of an Index Fund in excess of the limit in section
12(d)(1)(A)(i), an Investing Fund will notify the Index Fund of the
investment. At such time, the Investing Fund will also transmit to the
Index Fund a list of names of each Investing Fund Affiliate and
Underwriting Affiliate. The Investing Fund will notify the Index Fund
of any changes to the list of names as soon as reasonably practicable
after a change occurs. The Index Fund and the Investing Fund will
maintain and preserve a copy of the order, the Participation Agreement,
and the list with any updated information for the duration of the
investment and for a period of not less than six years thereafter, the
first two years in an easily accessible place.
    16. Before approving any advisory contract under section 15 of the
Act, the board of directors or trustees of each Investing Management
Company, including a majority of the disinterested directors or
trustees, will find that the advisory fees charged under such advisory
contract are based on services provided that will be in addition to,
rather than duplicative of, the services provided under the advisory
contract(s) of any Index Fund in which the Investing Management Company
may invest. These findings and their basis will be recorded fully in
the minute books of the appropriate Investing Management Company.
    17. Any sales charges and/or service fees charged with respect to
shares of an Investing Fund will not exceed the limits applicable to a
fund of funds as set forth in Conduct Rule 2830 of the NASD.
    18. No Index Fund will acquire securities of any investment company
or company relying on sections 3(c)(1) or 3(c)(7) of the Act in excess
of the limits contained in section 12(d)(1)(A) of the Act, except to
the extent permitted by exemptive relief from the Commission that
allows the Index Fund to purchase shares of a money market fund for
short-term cash management purposes.

    For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Nancy M. Morris,
Secretary.
 [FR Doc. E8-1253 Filed 1-24-08; 8:45 am]

BILLING CODE 8011-01-P


1 Sources are required to begin the initial comprehensive performance test by 180 days after the compliance date, to complete testing within 30 days, and to submit the NOC within 90 days of completing the testing. Upon postmark of the NOC, sources must begin complying with the operating parameter limits demonstrated during the performance test. October 15, 2002 NOTE SUBJECT: Stakeholder Review of Draft Technical Correction FROM: Robert Holloway Environmental Engineer, OSW, USEPA TO: The Docket This is to document that industry stakeholders were given notice and opportunity to comment on a technical correction we plan to make to the September 30, 1999 NESHAP for hazardous waste combustors. The correction is needed to remove an impediment to early compliance with the standards, as we intended in previous revisions to the 1999 rule. The correction would waive the requirement to submit the Notification of Compliance ( NOC) within 90 days of completion of the performance test for sources that comply early.

We had previously proposed regulatory language to address this issue. See 66 FR at 35153. Even though we did not receive adverse comments on the proposed regulatory revision, we have determined that the wording of the amendment may not have ensured that a source eligible for the waiver would actually be required to comply early. Accordingly, we plan to revise the amendment to require that a source that conducts the performance test prior to the compliance date, and that takes advantage of the waiver of the requirement to submit the NOC within 90 days of completing the test, must nonetheless submit the NOC by the compliance date or 90 days after completing the test, whichever is later. This provision ensures that sources using the waiver will begin complying with the emission standards using operating parameter limits documented by a performance test well before the regulatory deadline. 1 I apprised Melvin Keener, Coalition for Responsible Waste Incineration, in early October, 2002, of our intent to make this technical correction and to revise the regulatory language ( as discussed above) that we proposed at 66 FR at 35153. Mr. Keener subsequently indicated that he apprised other industry organizations ( e. g., Cement Kiln Recycling Coalition) of our intent, and that neither CRWI nor the other industry representatives had adverse comments.

In addition, Jim Berlow, Director, Hazardous Waste Minimization and Management Division, OSW, recently called Jim Pew, Earth Justice, and left a detailed voicemail message explaining that we intended to issue a technical correction with the early compliance provision discussed above. Mr. Berlow asked Mr. Pugh to call him to discuss any concerns that he may have with that approach. Mr. Pugh did not return the call, and we assume he had no objections.


[Federal Register Volume 82, Number 155 (Monday, August 14, 2017)]
[Notices]
[Pages 37917-37920]
[FR Doc No: 2017-17052]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81347; File No. SR-ICC-2017-011]

Self-Regulatory Organizations; ICE Clear Credit LLC; Order
Granting Accelerated Approval of Proposed Rule Change Relating to the
ICC Liquidity Risk Management Framework and the ICC Stress Testing
Framework

August 8, 2017.

I. Introduction

    On June 28, 2017, ICE Clear Credit LLC (``ICC'' or ``ICE Clear
Credit'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Exchange Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change (SR-ICC-2017-011) to revise the
ICC Liquidity Risk Management Framework and the ICC Stress Testing
Framework. The proposed rule change was published for comment in the
Federal Register on July 12, 2017.\3\ The Commission did not receive
comments regarding the proposed changes. For the reasons discussed
below, the Commission is approving the proposed rule change on an
accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Exchange Act Release No. 34-81132 (July 12, 2017), 82 FR
32895 (July 18, 2017) (SR-ICC-2017-011) (``Notice'').
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II. Description of the Proposed Rule Change

    ICC stated that the proposed revisions to its Liquidity Risk
Management Framework and Stress Testing Framework are for the purpose
of revising its liquidity monitoring program to enhance compliance with
U.S. Commodity Futures Trading Commission (``CFTC'') regulations,
including Regulations 39.11, 39.33, and 39.36.\4\ ICC represented that
the proposed revisions will also facilitate the prompt and accurate
clearance and settlement of securities transactions and derivative
agreements, contracts, and transactions for which it is responsible.
These revisions would not require any changes to the ICC Clearing Rules
(``Rules'').
---------------------------------------------------------------------------

    \4\ 17 CFR 39.11; 17 CFR 39.33; 17 CFR 39.36.
---------------------------------------------------------------------------

A. Liquidity Risk Management Framework

    ICC proposed to reorganize the format of the Liquidity Risk
Management Framework to consist of three elements: Liquidity Risk
Management Model; Measurement and Monitoring; and Governance. The
Regulatory Requirements element, previously included as an element of
the framework, would be deleted; however, the regulatory requirements
applicable to liquidity risk management would still be referenced in
the framework.
1. Liquidity Risk Management Model
    ICC proposed to enhance the description of several components of
its Liquidity Risk Management Model. As revised, the Liquidity Risk
Management Model now includes, but is not limited to, the following
components: Currency-Specific Risk Requirements; Acceptable Collateral;
Liquidity Requirements; Collateral Valuation Methodology; Investment
Strategy; Clearing Participant (``CP'') Deposits as a Liquidity Pool,
Liquidity Facilities (including committed repo facilities and committed
foreign exchange (``FX'') facilities); and Liquidity Waterfall.
    For the Currency-Specific Risk Requirements component, ICC proposed
to add language to cross reference ICC's current policy of maintaining
cash and collateral assets posted by CPs (on behalf of themselves and/
or their clients) to meet currency-specific Initial Margin (``IM'') and
Guaranty Fund (``GF'') requirements, to ensure ICC has sufficient total
resources in the required currencies of denomination.
    With respect to the Liquidity Requirements component,\5\ ICC
proposed to add a cross reference to ICC's requirement that each CP
contribute to the GF a minimum of 20 million wholly in U.S. Dollars
(``USD''), which is not a change but rather a restatement of ICC's
current rules.\6\ Further, ICC proposed revisions to extend ICC's
margin risk horizon up to 6-days in order to account for the risk
associated with clearing Asia Pacific products. This change would apply
throughout the framework.
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    \5\ The Liquidity Requirements component also reflects the
changes to ICC's liquidity thresholds for Euro (``EUR'') denominated
products approved by the Commission in rule filing ICC-2017-002. See
Exchange Act Release No. 34-80324 (Mar. 28, 2017), 82 FR 16244 (Apr.
3, 2017).
    \6\ See Schedule 401 of the ICC Rules.
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    With respect to the Liquidity Facilities component, ICC proposed
revisions to add reference to its committed repurchase facility,
consisting of committed repo lines from multiple financial institutions
(as opposed to committed repurchase agreements as before), and its
recently instituted committed FX facilities for converting USD cash to
EUR cash. ICC also proposed removing reference to FX Swaps and
Immediate FX Spot Transactions because these arrangements are not
committed and therefore are not ``qualifying liquidity resources''
under CFTC Regulation 39.33, according to ICC.\7\ ICC also proposed
removing reference to the Intercontinental Exchange, Inc. committed
line of credit because ICC no longer participates in the arrangement.
---------------------------------------------------------------------------

    \7\ 17 CFR 39.33.
---------------------------------------------------------------------------

    In the Liquidity Waterfall component, ICC proposed revisions to its
definition of Available Liquidity Resources (``ALR'') to note that ALR
consists of the available deposits currently in cash of the required
currency of denomination and the cash equivalent of the available
deposits in collateral types that ICC can convert to cash, in the
required currency of denomination, using all sources of liquidity
available to it. For reference, the Liquidity Waterfall classifies ALR
on any given day into four levels. Level One includes the House IM and
GF cash deposits of the defaulting CP. Level Two includes GF cash
deposits of ICC and non-defaulting CPs. Level Three includes House IM
cash deposits of the non-defaulting CPs. Level Four includes committed
repo facilities and FX facilities, as described above in the changes to
the Liquidity Facilities component.
    A few of the Liquidity Risk Management Model components would
remain the same or substantially the same. The Acceptable Collateral
component would remain the same and will note that CPs may post IM and
GF deposits that meet ICC's acceptable collateral criteria as described
in ICC's Treasury Operations Policies and Procedures and Schedule 401
of the ICC Rules. The Investment Strategy component would remain
substantially the same and was proposed to be revised to note that,
when beneficial, ICC diversifies its cash investments across multiple
depository institutions to reduce its liquidity exposure to any single
depository. The CP Deposits as a Liquidity Pool and Collateral
Valuation Methodology components also would remain substantially the
same.
2. Measurement and Monitoring
    With respect to the Measurement and Monitoring element of the
Liquidity Risk Management Framework, ICC

proposed changes to the Methodology section to change the calculation
for ALR. In response to CFTC feedback to ensure consistency with CFTC
Regulation 39.33,\8\ ICC proposed replacing the estimation of minimum
ALR based on risk requirements with the observation of cash and
collateral on deposit (excluding cash that will be unavailable by the
applicable ICC Payout Deadline because it has been invested by ICC).
Accordingly, ICC proposed removing the section from the Liquidity Risk
Management Framework which described the process for computing the
estimation of minimum ALR. In addition, ICC proposed removing other
references throughout the framework related to the estimation of
minimum ALR. Thus, under its revised approach, ICC proposed executing
stress test analysis by using the amount of liquid assets currently on
deposit.
---------------------------------------------------------------------------

    \8\ 17 CFR 39.33.
---------------------------------------------------------------------------

    ICC proposed additional changes to the Methodology section. Among
other things, the proposed revisions clarify that ICC's measurement and
monitoring methodology assesses the adequacy of ICC's established
liquidity resources in response to historically observed and
hypothetically created (forward looking) scenarios with risk horizons
up to and including 6-days. The analyzed scenarios feature assumptions
that directly impact the ability of ICC to meet its payment
obligations. Based on available IM and GF collateral on deposit on the
day of the considered default(s), the analysis determines currency-
specific ALR by liquidity waterfall level, and compares these ALRs to
the currency-specific Liquidity Obligations resulting from the analyzed
scenarios on each day of the considered time horizon. According to ICC,
to be conservative, the analysis assumes no client-related ALR and that
only the day-1 ALR are available throughout the considered time horizon
(i.e., the analysis does not consider ICC's ability during the
considered time horizon to liquefy non-cash collateral on deposit or
transform the currency of cash on deposit).
    In addition, ICC proposed changes to the Historical Analysis
section of the Measurement and Monitoring element of the Liquidity Risk
Management Framework. ICC proposed adding language to note that, as
part of its historical liquidity analysis, ICC analyzes historical data
sets to assess the level of liquidity coverage achieved for each
currency. Under the revised framework, ICC would continue to conduct a
historical liquidity analysis on both an individual affiliate group
(``AG'') basis and a cover-2 basis.
    ICC also proposed the use of the Basel Traffic Light System \9\ to
determine if the minimum cash component of its risk requirements truly
covers historically observed 1-day liquidity obligations with a 99%
level of confidence. ICC's risk requirements are designed to meet at
least a 99% N-day VaR equivalent level of coverage. CPs must meet their
IM and GF requirements with a minimum cash component equivalent to the
1-day portion of the N-day requirement, computed using the square-root-
of-time approach.\10\
---------------------------------------------------------------------------

    \9\ See Basel Committee on Banking Supervision (``BCBS''),
Supervisory Framework for the use of ``Backtesting'' in Conjunction
with the Internal Models Approach to Market Risk Capital
Requirements (Jan. 1996).
    \10\ See BCBS, Amendment to the Capital Accord to Incorporate
Market Risk (Jan. 1996).
---------------------------------------------------------------------------

    ICC proposed additional enhancements to consider the simultaneous
default of the two worst-case AGs of CPs, rather than the two worst-
case CPs, which, according to ICC, is consistent with CFTC regulations,
including CFTC Regulation 39.33(c)(1)(ii).\11\ Under the revised
framework, when computing a CP's combined house and client origin
liquidity obligation for the purposes of selecting which AGs are
considered to be in a state of default, ICC proposed to eliminate the
application of house origin gains against client origin losses, or
house origin losses against client origin gains. This analysis is
designed to demonstrate to what extent the liquidity resources
available to ICC were sufficient to meet historical single and multi-
day cover-2 Liquidity Obligations, consistent with CFTC Regulation
39.33(c)(1)(ii), according to ICC.\12\
---------------------------------------------------------------------------

    \11\ 17 CFR 39.33(c)(1)(ii).
    \12\ Id.
---------------------------------------------------------------------------

    ICC also proposed enhancements to note that, for each day of its
historical analysis and on a currency specific basis, its Risk
Department explores predefined cover-2 scenarios considering the
default of the CPs within two AGs creating the largest remaining
Liquidity Obligation after applying the IM and GF cash deposits of each
constituent CP to that CP's Liquidity Obligation.\13\
---------------------------------------------------------------------------

    \13\ ICC's cover-2 analysis considers the liquidity resources
provided by the defaulting CPs, the GF, IM liquidity resources
provided by the non-defaulting CPs and ICC, and any externally
available liquidity resources.
---------------------------------------------------------------------------

    ICC proposed clarifying changes to note that the prices considered
for historical analysis purposes are ``dirty'' prices as they include
riskless (deterministic) payments (e.g., upfront fees, coupon payments,
credit event payments, interest on mark-to-market margin). ICC proposed
adding explanatory language regarding its calculation of the N-day
worst-case cumulative (combined house and client origin) liquidity
obligations. ICC also proposed removing a measurement and monitoring
framework diagram, representing that the diagram was no longer relevant
or necessary in light of the larger changes to the framework.
    Finally, ICC proposed revisions to note that ICC reports cover-2
results from the observed immediate liquidity obligation scenarios and
the worst-case five-day liquidity obligation scenarios to various
audiences, depending on the results. ICC notes that the results should
exhibit no deficiencies of the combined resources in Levels One through
Four of the Liquidity Waterfall.
    ICC proposed changes to the Stress Testing Analysis section of the
Measurement and Monitoring element of the Liquidity Risk Management
Framework. ICC proposed re-categorizing and adding to the stress
testing scenarios. Under the revised approach, ICC would enhance its
description of its historically observed extreme but plausible market
scenarios to note that the scenarios define spread or price shocks
based on observations during specific historical events. The historical
data set from which ICC derives the proposed scenarios will continue to
begin on April 1, 2007 and include periods of extreme market events
such as the Bear Stearns collapse, the Lehman Brothers default, the
2009 Credit Crisis, the US ``Flash Crash'' event, and the European
Sovereign Crisis. The scenarios are similar to the stress testing
currently performed under the financial resources Stress Testing
Framework.
    ICC proposed eliminating all scenarios not expected to be realized
as market outcomes (i.e., those considered extreme and not plausible).
Under the revised approach, ICC would continue to have the ability to
execute liquidity analyses based on extreme but not plausible scenarios
on an ad-hoc basis. Further, ICC proposed to add 1-day, 2-day, and N-
day analogues in place of existing 5-day scenarios. Under the revised
framework, each historically observed scenario would have three
analogues: one representing a 1-day horizon, one representing a 2-day
horizon, and one representing an N-day horizon. Previously, only
analogues representing an N-day horizon were considered. The addition
of the 1-day analogue would demonstrate ICC's ability to meet its
immediate payment obligations over a one-day period (e.g., intraday and
same-day obligations),

while the 2-day and N-day analogues would demonstrate ICC's ability to
meet its payment obligations over a multiday period.
    ICC also proposed adding a number of hypothetically constructed
(forward looking) extreme but plausible market scenarios comprised of a
given historically observed extreme but plausible market scenario and
additional stress enhancements representing forward looking
hypothetical adverse market events. Specifically, two sets of
hypothetically constructed (forward looking) extreme but plausible
market scenarios were proposed: loss-given default scenarios and one-
service-provider-down scenarios. The loss-given default scenarios
consider the addition of up to three adverse credit events including
the holder of the considered portfolio, one additional CP name, and one
additional non-CP name. The one-service-provider-down scenarios
consider a reduction in ALR designed to represent ICC's worst-case
exposure to a single service provider at which it maintains cash
deposits or investments, due to ICC's potential inability to access
those deposits and/or investments when required. ICC proposed that the
reduction in ALR used in the one-service-provider-down scenarios is
based on ICC's analysis of the diversification of its deposits and
investments across its multiple service providers. Additionally, ICC
proposed revisions to further describe its analysis under the above
referenced scenarios.
    ICC proposed revisions to consider the simultaneous default of the
two worst-case AGs of CPs, rather than the two worst-case CPs, to
conform with CFTC regulations, including CFTC Regulation
39.33(c)(1)(ii), as ICC interprets such regulations.\14\ Under the
proposed revisions, ICC would perform cover-2 analysis in which, for
each scenario, it determines the two AGs creating the largest remaining
Liquidity Obligation after applying the IM and GF cash deposits of each
constituent CP to its own Liquidity Obligation. ICC would compare the
remaining Liquidity Obligation of the AG to the remaining liquidity
resources to determine if there are sufficient resources to meet the
obligation.
---------------------------------------------------------------------------

    \14\ 17 CFR 39.33(c)(1)(ii).
---------------------------------------------------------------------------

    ICC proposed enhancements to describe its cover-N analysis in
which, for each scenario, it first considers the default of one AG,
then the defaults of two AGs, then three AGs, and so forth. The
sequence of selecting AGs is based on the remaining Liquidity
Obligation associated with the constituent CP's portfolios after
applying the IM and GF cash deposits of each constituent CP to its own
Liquidity Obligation. AGs are sequenced from largest to smallest
remaining Liquidity Obligation. For each set of AGs considered to be in
a state of default (1 AG, 2 AGs, 3 AGs, etc.), ICC compares the total
remaining Liquidity Obligation to the remaining liquidity resources to
determine if there are sufficient resources to meet the obligation. In
this way, ICC determines how many AGs it would require to be in a state
of default to consume all available liquidity resources.
    To determine the Liquidity Obligations in the above analysis, ICC
applies the stress scenarios to actual cleared portfolios to determine
a currency-specific profit/loss for each CP, representing the largest
cumulative loss over the specified risk horizon. The considered profit/
loss in the analysis is the sum of the upfront fee changes
corresponding to the clean prices associated with the hypothetical
scenarios, and excluding the riskless (deterministic) payments.
    To determine ICC's liquidity needs for each scenario, ICC's Risk
Department computes Liquidity Obligations for futures commission
merchant and broker-dealer CPs by combining the net payments for house
and client origin accounts. For the purposes of selecting defaulting
AGs, ICC's Risk Department does not offset client origin losses with
house origin gains, or offset house origin losses with client origin
gains.
3. Governance
    With respect to the Governance element of the Liquidity Risk
Management Framework, the Required Analysis and Interpretation of
Results and Potential Actions sections would remain substantially the
same. The Model Validation section would be revised to note that the
Liquidity Risk Management Framework is under the purview of the Model
Validation Framework and subject to initial validations.
    In the Materiality and Reporting Framework section, ICC proposed a
change that would note that, at each ICC Risk Committee meeting, ICC's
Risk Department would provide a summary of historical liquidity
analysis and liquidity stress testing analysis intended to demonstrate
the adequacy of ICC's liquidity resources to cover Liquidity
Obligations over N-days. Such analyses would also include any instance
where Level Three resources were required to meet Liquidity Obligations
in response to any of the considered historical liquidity or liquidity
stress testing scenarios.
    Further, ICC proposed revisions to note that, when exceedances of
funded and/or unfunded resources are identified, ICC's Risk Department
would be required to report them to the senior management team and the
ICC Risk Committee, and (i) demonstrate that the breaches do not
highlight a significant liquidity risk management weaknesses or (ii)
recommend specific liquidity risk management model enhancements that
produce an adequate increase in funded and/or unfunded liquidity
resources under the identified scenario(s). In addition to the
reporting described above, ICC's Risk Department would also report to
the ICC Risk Committee any instances where the Basel Traffic Light
System categorizes the number of observed exceedances in its individual
AG historical analysis as being in the predefined ``red zone.'' In
these instances, ICC's Risk Department would discuss with ICC's Risk
Committee the appropriateness of its liquidity thresholds, and if
appropriate, make revisions.

B. Stress Testing Framework

    ICC proposed revisions to its Stress Testing Framework to unify the
stress testing scenarios with the liquidity stress testing scenarios
set forth in the Liquidity Risk Management Framework. ICC operates its
stress testing and liquidity stress testing on a unified set of stress
testing scenarios and systems. As such, revisions to the stress testing
scenarios are necessary to ensure scenario unification following
changes to the Liquidity Risk Management Framework. The proposed
revisions are described in detail as follows.
    ICC proposed to introduce Risk Factor specific scenarios for all
stress test scenarios. Previously, corporate single names were
considered at the sector level, as opposed to the Risk Factor level.
This change would be reflected throughout the framework.
    ICC also proposed to add clarifying language to note that the
predefined stress testing scenarios set forth in its Stress Testing
Framework would be applied to all cleared instruments, and that name-
specific scenarios would be applied to all sovereign and corporate
reference entities.
    ICC proposed revisions to extend ICC's margin risk horizon up to 6-
days, to account for the risk associated with clearing Asia Pacific
products. This change would apply throughout the framework.
    ICC also proposed to revise its description of the Historically
Observed Extreme but Plausible Market Scenarios section to note that
the stress spread changes considered as part of each

scenario are extracted from the market history of the most actively
traded instrument for the considered Risk Factors.
    ICC proposed to revise the Hypothetically Constructed (Forward
Looking) Extreme but Plausible Market Scenarios section to ensure
consistency with the loss-given default stress scenario set forth in
the Liquidity Risk Management Framework, which combines a given
historically observed extreme but plausible market scenario with
explicit Jump-to-Default events. The proposed revisions specify that
there would be up to two reference entities selected for a hypothetical
adverse credit event.
    Finally, ICC proposed to revise the description of the discordant
scenarios (i.e., scenarios under which selected risk factors move in
opposite directions) in the Stress Testing Framework to reflect the
introduction of Risk Factor specific scenarios. According to ICC, the
discordant scenarios are designed to reproduce significant discordant
market outcomes observed during the considered historical period. ICC
creates discordant scenarios for North American corporate single names
and indices; European corporate single names and indices; and sovereign
reference entities.

III. Discussion and Commission Findings

    Section 19(b)(2)(C) of the Exchange Act directs the Commission to
approve a proposed rule change of a self-regulatory organization if it
finds that such proposed rule change is consistent with the
requirements of the Exchange Act and the rules and regulations
thereunder applicable to such organization.\15\ Section 17A(b)(3)(F) of
the Exchange Act requires, among other things, that the rules of a
registered clearing agency be designed to promote the prompt and
accurate clearance and settlement of securities transactions and, to
the extent applicable, derivative agreements, contracts, and
transactions.\16\ Rule 17Ad-22(d)(11) requires, in relevant part, that
a registered clearing agency establish default procedures that ensure
that the clearing agency can take timely action to contain losses and
liquidity pressures and to continue meeting its obligations in the
event of a participant default.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(2)(C).
    \16\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    The Commission finds that the proposed rule change, which revises
ICC's Liquidity Risk Management Framework and makes conforming changes
to ICC's Stress Testing Framework, is consistent with Section 17A of
the Exchange Act and Rule 17Ad-22(d)(11) thereunder. As represented by
ICC, the various elements set forth in the Liquidity Risk Management
Framework, and described above, ensure that ICC has sufficient
liquidity resources to effectively measure, monitor, and manage its
liquidity risk. Further, ICC represented the Liquidity Risk Management
Framework supports ICC's ability to maintain sufficient liquid
resources in all relevant currencies to effect same-day and, where
appropriate, intraday and multiday settlement of payment obligations
with a high degree of confidence under a wide range of potential stress
scenarios. ICC represented that changes to the Stress Testing Framework
were necessary following recent changes to the Liquidity Risk
Management Framework, as ICC operates its stress testing and liquidity
stress testing on a unified set of stress testing scenarios and
systems. ICC stated that its stress testing practices will continue to
ensure the adequacy of systemic risk protections. ICC represented that
the revised stress test scenarios set forth in the Stress Testing
Framework will continue to ensure that ICC maintains sufficient
financial resources to withstand a default by the CP family to which it
has the largest exposure in extreme but plausible market conditions.
The Commission therefore believes that the proposed revisions to the
ICC Liquidity Risk Management Framework and Stress Testing Framework
are designed to promote the prompt and accurate settlement of
securities transactions, derivatives agreements, contracts, and
transactions for which ICC is responsible, consistent with Section
17A(b)(3)(F) of the Exchange Act. Furthermore, for similar reasons, the
Commission finds that the proposed revisions are consistent with the
requirements of Rule 17Ad-22(d)(11).
    Section 19(b)(2)(C)(iii) of the Exchange Act allows the Commission
to approve a proposed rule change earlier than 30 days after the date
of publication of the notice of the proposed rule change in the Federal
Register where the Commission finds good cause for so doing and
publishes the reason for the finding.\17\ In its filing, ICC requested
that the Commission approve the proposed rule change on an accelerated
basis for good cause shown. ICC represented that the amendments to
ICC's Liquidity Risk Management Framework and Stress Testing Framework
set forth in the proposed rule change further ICC's compliance with
CFTC regulations. The Commission also notes that the CFTC is the
supervisory agency for ICC under Section 803(8)(A)(ii) of the Payment,
Clearing, and Settlement Supervision Act of 2010.\18\ Based on the
foregoing, the Commission finds that good cause exists to approve the
proposed rule change on an accelerated basis pursuant to Section
19(b)(2)(C)(iii) of the Exchange Act.
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78s(b)(2)(C)(iii).
    \18\ 12 U.S.C. 5462(8)(A)(ii).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered pursuant to Section 19(b)(2) of the
Exchange Act that the proposed rule change (SR-ICC-2017-011) be, and
hereby is, approved on an accelerated basis.\19\
---------------------------------------------------------------------------

    \19\ In approving the proposed rule change, the Commission
considered the proposal's impact on efficiency, competition, and
capital formation. 15 U.S.C. 78c(f).
    \20\ 17 CFR 200.30-3(a)(12).

    For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\20\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-17052 Filed 8-11-17; 8:45 am]
BILLING CODE 8011-01-P