[Federal Register: December 31, 2008 (Volume 73, Number 251)]
[Notices]
[Page 80464-80468]
[DOCID:fr31de08-105]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-28570; File No. 812-13402]

Sun Life Assurance Company of Canada (U.S.), et al., Notice of
Application

December 23, 2008.
AGENCY: Securities and Exchange Commission (the ``Commission'').

ACTION: Notice of application for an order of approval pursuant to
Section 26(c) of the Investment Company Act of 1940, as amended (the
``Act''), and an order of exemption pursuant to Section 17(b) of the
Act from Section 17(a) of the Act.

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    Applicants: Sun Life Assurance Company of Canada (U.S.) (``Sun Life
U.S.''), Sun Life Insurance and Annuity Company of New York (``Sun Life
N.Y.'') (together with Sun Life U.S., the ``Companies''), Sun Life of
Canada (U.S.) Variable Account F (``Account F''), Sun Life of Canada
(U.S.) Variable Account G (``Account G''), Sun Life of Canada (U.S.)
Variable Account I (``Account I''), Sun Life (N.Y.) Variable Account C
(``Account C''), Sun Life (N.Y.) Variable Account D (``Account D''),
and Sun Life (N.Y.) Variable Account J (``Account J'') (collectively,
the ``Applicants''). Applicants, together with Sun Capital Advisers
Trust (``Sun Capital Trust'') are ``Section 17(b) Applicants.''
    Summary of Application: Applicants seek an order approving the
proposed substitutions (the ``Substitutions'') under certain variable
life insurance policies and variable annuity contracts (``Contracts'')
of Class VC shares of the Lord Abbett Growth and Income Portfolio and
the Lord Abbett Mid-Cap Value Portfolio of Lord Abbett Series Fund,
Inc. (``LA Series''), and Administrative Class shares of the PIMCO High
Yield Portfolio and the PIMCO Low Duration Portfolio of the PIMCO
Variable Insurance Trust with Initial Class shares of the following
portfolios of Sun Capital Trust, respectively: The SC Lord Abbett
Growth & Income Fund, the SC Goldman Sachs Mid Cap Value Fund, the SC
PIMCO High Yield Fund, and the SC Goldman Sachs Short Duration Fund.
Section 17(b) Applicants also seek an order pursuant to Section 17(b)
of the Act to permit certain in-kind transactions in connection with
the Substitutions.
    Filing Date: The application was originally filed on July 9, 2007,
and an amended and restated application was filed on December 18, 2008.
    Hearing or Notification of Hearing: An order granting the
application will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Secretary of
the Commission and serving Applicants with a copy of the request,
personally or by mail. Hearing requests must be received by the
Commission by 5:30 p.m. on January 21, 2009, and should be accompanied
by proof of service on Applicants in the form of an affidavit or, for
lawyers, a certificate of service. Hearing requests should state the
nature of the requester'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 Secretary of the Commission.

ADDRESSES: The Commission: Secretary, Securities and Exchange
Commission, 100 F Street, NE., Washington, DC 20549-1090; Applicants:
c/o Maura A. Murphy, Esq., Sun Life Assurance Company of Canada (U.S.),
One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481.

FOR FURTHER INFORMATION CONTACT: Rebecca A. Marquigny, Senior Counsel,
or Joyce M. Pickholz, Branch Chief, Office of Insurance Products,
Division of Investment Management, at<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:  The following is a summary of the
application. The complete application is available for a fee from the
Public Reference Branch of the Commission, 100 F Street, NE.,
Washington, DC 20549<PHONE_NUMBER>).
    Applicants' and Section 17 Applicants' Representations and
Conditions:
    1. Sun Life U.S. is a stock life insurance company ultimately
controlled by Sun Life Financial Inc. (``Sun Life Financial''), a
Canadian reporting company under the Securities Exchange Act of 1934
(the ``1934 Act''). Sun Life U.S. is the depositor and sponsor of
Account F, Account G, and Account I.
    2. Account F is registered as a unit investment trust (File No.
811-05846); its interests are offered through Contracts (the ``Account
F Contracts'') registered under the Securities Act of 1933 (``1933
Act'') on Form N-4 (File Nos. 033-41628, 333-37907, 333-05227, 333-
30844, 333-31248, 333-41438, 333-74844, 333-82957, 333-83362, 333-
83364, 333-83516, 333-115536, and 333-115525). Similarly, Account G,
registered as a unit investment trust (File No. 811-07837) offers its
interests through Contracts (the ``Account G Contracts'') registered
under the 1933 Act on Form N-6 (File Nos. 333-65048, 333-13087, and
333-111688). Account I, registered as a unit investment trust (File No.
811-09137) also offers its interests through Contracts (the ``Account I
Contracts'') registered under the 1933 Act on Form N-6 (File Nos. 333-
68601, 333-100831, 333-59662, 333-100829, 333-94359, 333-143353, 333-
143354, and 333-144628).
    3. Sun Life N.Y., a wholly owned subsidiary of Sun Life U.S., is a
stock life insurance company and is the depositor and sponsor of
Account C, Account D, and Account J.
    4. Account C, a registered unit investment trust (File No. 811-
04440), also offers its interests through certain Contracts (the
``Account C Contracts'') registered under the 1933 Act on Form N-4
(File Nos. 333-05037, 333-67864, 333-119151, 333-119154, 333-100474,
333-107983, 333-99907, and 333-100475). Similarly, Account D,
registered as a unit investment trust (File No. 811-04633) offers its
interests through Contracts (the ``Account D Contracts'') registered
under the 2933 Act on Form N-6 (File Nos. 333-105437, 333-105438, and
333-105441). Account J, registered as a unit investment trust (File No.
811-21937) also offers its interests through Contracts (the ``Account J
Contracts'') registered under the 1933 Act on Form N-6 (File Nos. 333-
136433 and 333-136435).
    5. All of the Contracts involved in the Substitutions (a) reserve
the right to substitute shares of one portfolio for shares of another;
(b) permit transfers of contract value among the subaccounts pursuant
to the limitations of the particular Contract, (c) impose or

reserve the right to impose a transfer charge (except Accounts G and
J); and (d) are subject to market timing policies and procedures that
may operate to limit transfers.
    6. Applicants represent that all of the portfolios involved in the
Substitutions are currently available to new and existing Contract
owners (and will continue to be available until the time the
substitutions occur) for the allocation of purchase payments and
transfer of contract value.
    7. Lord Abbett Growth and Income Portfolio (``Old Growth &
Income'') and Lord Abbett Mid-Cap Value Portfolio (``Old Mid-Cap
Value'') (each, individually, an ``Old Portfolio'' and collectively,
``Old LA Portfolios'') are portfolios of LA Series, a registered,
diversified, open-end management investment company (File No. 811-
05876). Class VC shares of Old LA Portfolios are registered under the
1933 Act on Form N-1A (File No. 33-31072). The investment adviser to
Old LA Portfolios is Lord Abbett & Co., LLC (``Lord Abbett'').
    8. PIMCO High Yield Portfolio (``Old High Yield'') and PIMCO Low
Duration Portfolio (``Old Low Duration'') (each, individually, an ``Old
Portfolio'' and collectively, ``Old PIMCO Portfolios'') are portfolios
of PIMCO Variable Insurance Trust, a registered, diversified, open-end
management investment company (File No. 811-08399). Administrative
Class shares of Old PIMCO Portfolios are registered under the 1933 Act
on Form N-1A (File No. 333-37115). The investment adviser to Old PIMCO
Portfolios is Pacific Investment Management Company LLC (``PIMCO'').
    9. The following ``New Portfolios'' (each, individually, a ``New
Portfolio'') are portfolios of Sun Capital Trust, a registered,
diversified, open-end management investment company (File No. 811-
08879): SC Lord Abbett Growth & Income Fund (``New Growth & Income''),
SC Goldman Sachs Mid Cap Value Fund (``New Mid Cap Value''), SC PIMCO
High Yield Fund (``New High Yield''), and SC Goldman Sachs Short
Duration Fund (``New Short Duration''). Initial Class shares of New
Portfolios are registered under the 1933 Act on Form N-1A (File No.
333-59093) and are not subject to a distribution fee.
    10. Sun Capital Advisers LLC (``Sun Capital''), an indirect, wholly
owned subsidiary of Sun Life Financial, is investment adviser to all
the Sun Capital Trust portfolios. Through an order from the Commission
pursuant to Section 6(c) of the Act, Sun Capital is exempt from Section
15(a) of the Act and Rule 18f-2 thereunder with respect to subadvisory
agreements (the ``Manager of Managers Order'').\1\
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    \1\ Sun Capital Advisers Trust and Sun Capital Advisers, Inc.,
1940 Act Rel. No. 24401 (April 24, 2000) (Order), File No. 812-
11790; see also Sun Capital Advisers Trust and Sun Capital Advisers,
Inc., 1940 Act Rel. No. 23793 (Apr. 20, 1999) (Order), File No. 812-
11464.
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    11. Applicants represent that the relief granted in the Manager of
Managers Order extends to New Portfolios permitting Sun Capital to
enter into and materially amend investment subadvisory agreements
without obtaining shareholder approval. Applicants also indicate that
the prospectus for the New Portfolios will disclose and explain the
existence, substance and effect of the Manager of Managers Order.
    12. Applicants propose to substitute Initial Class shares of (a)
New Growth & Income for Class VC shares of Old Growth & Income; (b) New
Mid Cap Value for Class VC shares of Old Mid Cap Value; (c) New High
Yield for Administrative Class shares of Old High Yield; and (d) New
Short Duration for Administrative Class shares of Old Low Duration.
Applicants state that the proposed Substitutions are not intended to
effect an overall reorganization or merger of any of the underlying
investment options offered in the Contracts. Applicants assert their
belief that:
    (a) Reducing the number of nonproprietary funds will provide the
Companies with more control over fund changes that affect the
Contracts;
    (b) The New Portfolios better promote their goals of increasing
administrative efficiency of, and control over, their Contracts as the
New Portfolios are part of their proprietary fund family;
    (c) This streamlining will allow the Companies to enhance their
communication efforts to Contract owners and sales representatives
regarding the available portfolios, and may provide for more enhanced
and timely reporting from the Companies to Contract owners with respect
to changes in the underlying funds.
    13. Applicants represent that because the New Portfolios operate
pursuant to the Manager of Managers Order (and assuming that the
Applicants first obtain shareholder approval of a change in a New
Portfolio's subadviser or of a New Portfolio's continued ability to
rely on the Manager of Manager's Order), the Substitutions would
provide protection to Contract owners by giving Sun Capital the agility
and flexibility to change the subadviser of the New Portfolios should
such a change become warranted or advisable. In support of the
Substitutions, Applicants assert that the investment objectives and
policies of the New Portfolios are sufficiently similar to those of the
corresponding Old Portfolios that Contract owners will have reasonable
continuity in investment expectations. The following summarizes the
more complete comparison of New and Old Portfolios provided in the
Application.
    14. Growth & Income Portfolio Substitution
    Applicants state that both Old Growth & Income and New Growth &
Income share the identical investment objective to ``seek long-term
growth of capital and income without excessive fluctuations in market
value.'' Applicants state that the principal investment strategies of
the two portfolios are virtually identical noting that both invest at
least 80% of net assets in equity securities of large companies defined
as those having capitalization within the range of the companies in the
Russell 1000 Index at the time of purchase. Both portfolios primarily
purchase equity securities of large, seasoned, U.S. and multinational
companies that are believed to be undervalued, and both attempt to
invest in securities selling at reasonable prices in relation to their
potential value. Applicants also represent that both portfolios share
substantially similar risk profiles.
    Charges for Class VC of Old Growth & Income include Management Fees
of 0.47% and Other Expenses of 0.41%.\2\ Total Operating Expenses for
Initial Class shares of New Growth & Income are 0.88% which represents
0.01% in Other Expenses and a 0.87% unified management fee (subject to
a 0.87% contractual limitation on Total Operating Expenses). Neither
portfolio charges a 12b-1 Fee. Old Growth & Income's total gross and
net operating expenses are both 0.88%. Respectively, New Growth &
Income's total gross and net operating expenses are 0.88% and 0.87%
(reflecting the contractual expense limitation agreement).
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    \2\ For the descriptions of charges involved in the
Substitution, all percentages for the Management Fees, 12b-1 Fees,
Other Expenses, Fee Reductions, Total Gross and Net Annual Operating
Expenses, and Separate Account Fees represent a percentage of
average annual assets.
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    15. Mid Cap Value Portfolio Substitution
    Applicants state that both Old Mid Cap Value and New Mid Cap Value
share a similar investment objective because Old Mid Cap Value ``seeks
capital appreciation through investments, primarily in equity
securities, which are believed to be undervalued in the marketplace''
and New Mid Cap Value ``seeks long-term return of capital.'' Applicants
state that

the principal investment strategies of the two portfolios are similar
noting that both employ a value approach to investing and normally
invest at least 80% of net assets, plus the amount of any borrowings
for investment purposes, in securities of mid-sized companies.
Applicants represent that both Old Mid Cap Value and New Mid Cap Value
have substantially similar risk characteristics which are presented in
greater detail in the Application.
    Charges for Class VC of Old Mid Cap Value include Management Fees
of 0.74% and Other Expenses of 0.38%. Total Operating Expenses for
Initial Class shares of New Mid Cap Value are 1.06% which represents
0.01% in Other Expenses and a 1.05% unified management fee (subject to
a 1.07% contractual limitation on Total Operating Expenses). Neither
portfolio charges a 12b-1 Fee. Old Mid Cap Value's total gross and net
operating expenses are both 1.12% while New Mid Cap Value's total gross
and net operating expenses are both 1.06%.
    16. High Yield Portfolio Substitutions
    Applicants represent that Old High Yield and New High Yield share a
virtually identical investment objective because New High Yield seeks
``maximum total return, consistent with capital preservation'' and Old
High Yield seeks the same ``and prudent investment management.''
Applicants represent that under normal circumstances both invest at
least 80% of assets in a diversified portfolio of high yield junk bonds
rated at least Caa by Moody's or equivalently rated by S&P or Fitch,
or, if unrated, determined by the adviser or subadviser to be of
comparable quality. Applicants state that neither portfolio may invest
more than 5% of total assets in securities of equal or lower rating.
Applicants represent that both portfolios employ an average portfolio
duration within a two-to-six year time frame and may invest up to the
same percentages of total assets in issuers located in countries with
developing economies. Applicants assert that the limits for investment
in foreign currency denominated securities and U.S. dollar-denominated
securities of foreign issuers are the same for both portfolios.
Applicants also identify other similar strategies including that both
portfolios may invest all of their assets in derivative instruments. In
addition, Applicants represent that both Old High Yield and New High
Yield have substantially similar risk characteristics discussed at
length in the Application.
    Charges for Administrative Class shares of Old High Yield include
Management Fees of 0.25%, Service Fees of 0.15%, and Other Expenses of
0.35%. Charges for Initial Class shares of New High Yield include a
0.74% unified management fee and 0.01% in Other Expenses. New High
Yield does not charge a service fee, and neither portfolio charges a
12b-1 Fee. The total gross and net operating expenses for both Old High
Yield and New High Yield are 0.75%. In addition, New High Yield's fees
are also subject to a 0.75% contractual expense limitation on total
operating expenses for at least 24 months following the date of the
Substitutions.
    17. Low/Short Duration Portfolio Substitutions
    Applicants represent that Old Low Duration and New Short Duration
share a similar investment objective in that Old Low Duration ``seeks
maximum total return, consistent with preservation of capital and
prudent investment management,'' while New Short Duration ``primarily
seeks a high level of current income, with capital appreciation as a
secondary goal.'' Applicants also represent that the principal
investment strategies of the two portfolios are similar. Both invest
primarily in fixed income securities at levels of total assets equal to
at least 65% for Old Low Duration and 80% for New Short Duration. In
addition, Applicants represent that both Old Low Duration and New Short
Duration have similar risk characteristics discussed at length in the
Application.
    Charges for Administrative Class shares of Old Low Duration include
Management Fees of 0.25%, Service Fees of 0.15%, and Other Expenses of
0.25%. Charges for Initial Class shares of New Short Duration include a
0.64% unified management fee and 0.01% in Other Expenses. New Short
Duration does not charge a service fee, and neither portfolio charges a
12b-1 Fee. The total gross and net operating expenses for both Old Low
Duration and New Short Duration are 0.65%. In addition, New Short
Duration's fees are also subject to a 0.65% contractual expense
limitation on total operating expenses for at least 24 months following
the date of the Substitutions.
    18. Applicants assert that as of the effective date of the
Substitutions (``Effective Date'' or ``Substitution Date''), each
Separate Account will redeem shares of the applicable Old Portfolio in-
kind. Applicants state that if Sun Capital declines to accept
particular portfolio securities of any of the Old Portfolios for
purchase in-kind of shares of the New Portfolios, the applicable Old
Portfolio will liquidate portfolio securities as necessary, and shares
of the New Portfolio will be purchased with cash. Applicants represent
that in either event, the proceeds of such redemptions will then be
used to purchase shares of the New Portfolios, with each subaccount of
the applicable Separate Account investing the proceeds of its
redemption from the Old Portfolios in the applicable New Portfolio.
    19. Applicants further state that redemption requests and purchase
orders will be placed simultaneously so that contract values will
remain fully invested at all times. Applicants represent that all
redemptions of shares of the Old Portfolios and purchases of shares of
the New Portfolios will be effected in accordance with Section 22(c) of
the Act and Rule 22c-1 thereunder. Applicants state that the
Substitutions will take place at relative net asset value as of the
Effective Date with no change in the amount of any Contract owner's
contract value or death benefit or in the dollar value of his or her
investments in any of the subaccounts. Applicants represent that
Contract values attributable to investments in the Old Portfolios will
be transferred to the New Portfolios without charge and without
counting toward the number of transfers that may be permitted without
charge.
    20. Applicants further represent that all expenses incurred in
connection with the Substitutions, including legal, accounting,
transactional, and other fees and expenses, including brokerage
commissions, will be paid by Sun Life U.S. or Sun Life N.Y. Applicants
also state that, as a result of the Substitutions, Contract owners will
not incur any additional fees or charges, nor will their rights or
insurance benefits or the Companies' obligations under the Contracts be
altered. Applicants assert that the Substitutions: (a) Will not impose
any tax liability on Contract owners; and (b) will not cause the
Contract fees and charges currently being paid by existing Contract
owners to be greater after the Substitutions than before the
Substitutions. Applicants represent that neither Sun Life U.S. nor Sun
Life N.Y. will exercise any right either may have under the Contracts
to impose restrictions on transfers under the Contracts for the period
from the date the Application was filed with the Commission through at
least thirty days following the Effective Date.
    21. The Companies represent that during the twenty-four months
following the Effective Date, the total net operating expenses of each
New Portfolio (taking into account any expense waiver or reimbursement)
will not exceed the net expense level of the corresponding Old
Portfolio for the fiscal year ended December 31, 2007.

Applicants also state that for at least twenty-four months following
the date of the Substitutions, Sun Capital has contractually agreed to
waive its management fee and, if necessary, to limit other ordinary
operating expenses so that total operating expenses, as a percentage of
average net assets, do not exceed 0.87%, 1.07%, 0.75%, or 0.65%, as
applicable. In addition, Applicants represent that for twenty-four
months following the date of the Substitutions, the Companies will not
increase asset-based fees or charges for Contracts outstanding on the
Effective Date.
    22. Applicants represent that a prospectus for the New Portfolio
containing disclosure describing the existence, substance and effect of
the Manager of Managers Order will be provided to each Contract owner
prior to or at the time of the Substitutions. Notwithstanding the
Manager of Managers Order, the Applicants agree not to change any New
Portfolio's subadviser, add a new subadviser, or otherwise rely on the
Manager of Managers Order without first obtaining shareholder approval,
following the Effective Date of the Substitutions, of either: (1) The
subadviser change; or (2) the New Portfolio's continued ability to rely
on the Manager of Managers Order.
    23. Applicants state that Contract owners were or will be notified
of the proposed Substitutions by means of a prospectus or prospectus
supplement for each of the Contracts stating that the Applicants filed
the Application and seek approval for the Substitutions (``Pre-
Substitution Notice''). The Pre-Substitution Notice sets forth the
anticipated Effective Date and explains that contract values
attributable to investments in the Old Portfolios will be transferred
to the New Portfolios on the Effective Date without charge (including
sales charges or surrender charges) and without counting toward the
number of transfers that may be permitted without charge. Applicants
indicate that the Pre-Substitution Notice states that, from the date
the initial application was filed with the Commission through the date
thirty days after the Substitutions, Contract owners may make one
transfer of contract value from each subaccount investing in the Old
Portfolios (before the Substitutions) or a New Portfolio (after the
Substitutions) to one or more other subaccount(s) without a transfer
charge and without that transfer counting against their contractual
transfer limitations.
    24. Applicants represent that all Contract owners will have
received a copy of the most recent prospectus for the New Portfolios
prior to the Substitutions. Applicants also agree that, within five
days following the Substitutions, Contract owners affected by the
Substitutions will be notified in writing that the Substitutions were
carried out and that this notice will restate the information set forth
in the Pre-Substitution Notice.

Applicants' Legal Analysis

    1. Section 26(c) of the Act makes it unlawful for any depositor or
trustee of a registered unit investment trust holding the security of a
single issuer to substitute another security for such security unless
the Commission approves the substitution. The Commission shall approve
such a substitution if the evidence establishes that it is consistent
with the protection of investors and the purposes fairly intended by
the policy and provisions of the Act.
    2. Applicants submit that the Substitutions meet the standards set
forth in Section 26(c) and assert that replacement of the Old
Portfolios with the New Portfolio is consistent with the protection of
Contract owners and the purposes fairly intended by the policy and
provisions of the Act. Applicants have reserved the right to make such
a substitution under the Contracts and represent that this reserved
right is disclosed in the prospectus for the Contracts.
    3. Section 17(a)(1) of the Act, in relevant part, prohibits any
affiliated person of a registered investment company, or any affiliated
person of such person, acting as principal, from knowingly selling any
security or other property to that company. Section 17(a)(2) of the Act
generally prohibits the persons described above, acting as principal,
from knowingly purchasing any security or other property from the
registered company. Pursuant to Section 17(a)(1) of the Act, the
Section 17(b) Applicants may be considered affiliates of one or more of
the portfolios involved in the Substitutions. Because the Substitutions
may be effected, in whole or in part, by means of in-kind redemptions
and subsequent purchases of shares and by means of in-kind
transactions, the Substitutions may be deemed to involve one or more
purchases or sales of securities or property between affiliates.
    4. Section 17(b) of the Act provides that the Commission may, upon
application, grant an order exempting any transaction from the
prohibitions of Section 17(a) if the evidence establishes that: the
terms of the proposed 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; the proposed
transaction is consistent with the policy of each registered investment
company concerned, as recited in its registration statement and records
filed under the Act; and the proposed transaction is consistent with
the general purposes of the Act.
    5. The Section 17(b) Applicants state that the terms under which
the in-kind redemptions and purchases will be effected are reasonable
and fair and do not involve overreaching on the part of any person
principally because the Substitutions will conform with all but one of
the conditions enumerated in Rule 17a-7. Applicants assert that the use
of in-kind transactions will not cause Contract owner interests to be
diluted. In support, Applicants represent that: (a) The proposed
transactions will take place at relative net asset value as of the
Effective Date in conformity with the requirements of Section 22(c) of
the 1940 Act and Rule 22c-1 thereunder with no change in the amount of
any Contract owner's contract value or death benefit or in the dollar
value of his or her investment in any of the Separate Accounts; (b)
Contract owners will not suffer any adverse tax consequences as a
result of the Substitutions; and (c) fees and charges under the
Contracts will not increase because of the Substitutions.
    6. Further, though the Section 17(b) Applicants may not rely on
Rule 17a-7 because they cannot meet all of its conditions, the Section
17(b) Applicants agree to carry out the proposed in-kind purchases in
conformity with all of the conditions of Rule 17a-7 and the procedures
adopted thereunder, except that the consideration paid for the
securities being purchased or sold may not be entirely cash. However,
Applicants assert that the circumstances surrounding the Substitutions
will offer the same degree of protection to the New Portfolios from
overreaching that Rule 17a-7 provides to it generally in connection
with its purchase and sale of securities under that Rule in the
ordinary course of its business.
    7. Applicants assert that the Board of Sun Capital Trust has
adopted procedures, as required by paragraph (e)(1) of Rule 17a-7,
pursuant to which its portfolios may purchase and sell securities to
and from their affiliates. Applicants also note that the Companies (or
any of their affiliates) cannot effect the proposed Substitutions at a
price disadvantageous to the New Portfolio. Although the Substitutions
may not be entirely for cash, Applicants represent that each will be
effected based upon (1) the independent market price of the portfolio
securities valued as specified

in paragraph (b) of Rule 17a-7, and (2) the net asset value per share
of each portfolio involved valued according to the procedures disclosed
in its registration statement and as required by Rule 22c-1 under the
Act. The Section 17(b) Applicants state that if Sun Capital declines to
accept particular portfolio securities of either of the Old Portfolios
for purchase in-kind of shares of a New Portfolio, the applicable Old
Portfolio will liquidate portfolio securities as necessary and shares
of the New Portfolios will be purchased with cash. Consistent with Rule
17a-7(d), Applicants also agree that no brokerage commissions, fees, or
other remuneration will be paid in connection with the in-kind
transactions.

Conclusions

    1. Applicants submit that for the reasons and upon the facts set
forth in their application, the requested order pursuant to Section
26(c) of the Act is consistent with the protection of investors and the
purposes fairly intended by the policy of the Contracts and provisions
of the Act and should, therefore, be granted.
    2. Section 17 Applicants represent that the proposed in-kind
transactions are consistent with the general purposes of the Act, do
not present any of the conditions or abuses the Act was designed to
prevent, and that an exemption should be granted, to the extent
necessary, from the provisions of Section 17(a).

    For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-31088 Filed 12-30-08; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register Volume 78, Number 110 (Friday, June 7, 2013)]
[Notices]
[Pages 34367-34368]
[FR Doc No: 2013-13589]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings

    Take notice that the Commission has received the following Natural
Gas Pipeline Rate and Refund Report filings:

    Docket Numbers: RP13-935-000.
    Applicants: Kinder Morgan Louisiana Pipeline LLC.
    Description: Periodic Rate Adjustment to be effective 7/1/2013.
    Filed Date: 5/30/13.
    Accession Number: 20130530-5044.
    Comments Due: 5 p.m. ET 6/11/13.

    Docket Numbers: RP13-936-000.
    Applicants: Gulf South Pipeline Company, LP.
    Description: ONEOK 34951 to BG 40982 Cap Rel Neg Rate Agmt to be
effective 6/1/2013.
    Filed Date: 5/30/13.
    Accession Number: 20130530-5102.
    Comments Due: 5 p.m. ET 6/11/13.

    Docket Numbers: RP13-937-000.
    Applicants: Big Sandy Pipeline, LLC.
    Description: Phase 2 Clarifications and Enhancements to be
effective 8/1/2013.
    Filed Date: 5/30/13.
    Accession Number: 20130530-5176.
    Comments Due: 5 p.m. ET 6/11/13.

    Docket Numbers: RP13-938-000.
    Applicants: Tallgrass Interstate Gas Transmission, L.
    Description: Neg Rate 2013-05-30 CSU A&R NC NRA to be effective 6/
1/2013.
    Filed Date: 5/30/13.
    Accession Number: 20130530-5215.
    Comments Due: 5 p.m. ET 6/11/13.

    Docket Numbers: RP13-939-000.
    Applicants: Guardian Pipeline, L.L.C.
    Description: Scheduling Charges and Penalities to be effective 7/1/
2013.
    Filed Date: 5/30/13.
    Accession Number: 20130530-5217.
    Comments Due: 5 p.m. ET 6/11/13.

    Docket Numbers: RP07-34-000.
    Applicants: PANHANDLE JOINT PARTIES, Southwest Gas Storage Company,
Panhandle Complainants, Panhandle Complainants v. Southwest Gas.
    Description: Semi-Annual Compliance Report, for the period November
1, 2012 through April 30, 2013.
    Filed Date: 5/31/13.
    Accession Number: 20130531-5246.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-714-001.
    Applicants: Hardy Storage Company, LLC.
    Description: Hardy Storage Progress Report.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5055.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-940-000.
    Applicants: Elba Express Company, L.L.C.
    Description: Net Monthly Imbalance Clarification Filing to be
effective 7/1/2013.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5027.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-941-000.
    Applicants: Southern Star Central Gas Pipeline, Inc.
    Description: Rate Case Filing May 2013 to be effective 7/1/2013.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5051.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-942-000.
    Applicants: Panther Interstate Pipeline Energy, LLC.
    Description: Panther Filing to Revise Non-Jurisdictional Gathering
to be effective 7/1/2013.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5056.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-943-000.
    Applicants: Equitrans, L.P.
    Description: Negotiated Rate Service Agreements--EQT Energy, LLC to
be effective 6/1/2013.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5067.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-944-000.
    Applicants: Florida Gas Transmission Company, LLC.
    Description: Exhibit B Amendment--Riviera East to be effective 6/1/
2013.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5073.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-945-000.
    Applicants: Elba Express Company, L.L.C.
    Description: Annual Cashout True-Up Report.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5077.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-946-000.
    Applicants: Discovery Gas Transmission LLC.
    Description: Report of Discovery Gas Transmission LLC.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5079.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-947-000.
    Applicants: MarkWest Pioneer, L.L.C.
    Description: MarkWest Pioneer--Revisions to Pro Forma IT Agreement
to be effective 7/1/2013.
    Filed Date: 05/31/2013.

    Accession Number: 20130531-5095.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-948-000.
    Applicants: Kern River Gas Transmission Company.
    Description: 2013 LADWP Nonconforming to be effective 5/28/2013.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5113.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-949-000.
    Applicants: Eastern Shore Natural Gas Company.
    Description: Fuel Retention Adjustment/Cash-Out Refund to be
effective 7/1/2013.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5126.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-950-000.
    Applicants: CenterPoint Energy--Mississippi River T.
    Description: Negotiated Rate Filing to Remove 4100 and
Amend 3575--06-01-13 to be effective 6/1/2013.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5132.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-951-000.
    Applicants: Ruby Pipeline, L.L.C.
    Description: EPC and FL&U Rate Adjustment effective 7/1/13 to be
effective 7/1/2013.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5155.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-952-000.
    Applicants: MarkWest Pioneer, L.L.C.
    Description: Quarterly Fuel Adjustment Filing of MarkWest Pioneer,
L.L.C.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5162.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-953-000.
    Applicants: Colorado Interstate Gas Company, L.L.C.
    Description: Quarterly FL&U Filing effective July 1, 2013 to be
effective 7/1/2013.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5164.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-954-000.
    Applicants: Transwestern Pipeline Company, LLC.
    Description: 2013 TW Phoenix Rates for FTS-1, FTS-4, LFT and ITS-1
to be effective 7/1/2013.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5173.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-955-000.
    Applicants: CenterPoint Energy Gas Transmission Comp.
    Description: CEGT LLC-2013 Negotiated Rate Filing-June to be
effective 6/1/2013.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5176.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-956-000.
    Applicants: TransColorado Gas Transmission Company L.
    Description: Negotiated Rate Agreement Update to be effective 6/1/
2013.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5182.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-957-000.
    Applicants: Colorado Interstate Gas Company, L.L.C.
    Description: High Plains 2013 Expansion Compliance to be effective
7/1/2013.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5195.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-958-000.
    Applicants: Northern Natural Gas Company.
    Description: 20130531 Negotiated Rate to be effective 6/1/2013.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5254.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-959-000.
    Applicants: Ozark Gas Transmission, L.L.C.
    Description: Neg Rate--Tenaska Marketing Ventures 6-1-2013 to be
effective 6/1/2013.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5268.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-960-000.
    Applicants: Columbia Gulf Transmission, LLC.
    Description: Pooling to be effective 7/1/2013.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5271.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-961-000.
    Applicants: Trailblazer Pipeline Company LLC.
    Description: 2013-05-31 Receipts to Deliveries to be effective 7/1/
2013.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5272.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-962-000.
    Applicants: ANR Pipeline Company.
    Description: STS Availability Revision to be effective 7/1/2013.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5290.
    Comment Date: 5 p.m. ET 6/12/13.

    Docket Numbers: RP13-963-000.
    Applicants: Tallgrass Interstate Gas Transmission, L.
    Description: Neg Rate 2013-05-31 NC Black Hills, NRA Midwest Energy
to be effective 6/1/2013.
    Filed Date: 05/31/2013.
    Accession Number: 20130531-5347.
    Comment Date: 5 p.m. ET 6/12/13.

    The filings are accessible in the Commission's eLibrary system by
clicking on the links or querying the docket number.
    Any person desiring to intervene or protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00
p.m. Eastern time on the specified comment date. Protests may be
considered, but intervention is necessary to become a party to the
proceeding.
    eFiling is encouraged. More detailed information relating to filing
requirements, interventions, protests, service, and qualifying
facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call<PHONE_NUMBER>
(toll free). For TTY, call<PHONE_NUMBER>.

    Dated June 3, 2013.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2013-13589 Filed 6-6-13; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register: October 26, 2010 (Volume 75, Number 206)]
[Notices]
[Page 65680-65683]
[DOCID:fr26oc10-130]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63139; File No. SR-ISE-2010-99]

Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Order Granting Accelerated Approval of
Proposed Rule Change To Adopt ISE Rule 421 Relating to Proxy Voting

October 20, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on October 6, 2010, the International Securities Exchange, LLC (``ISE''
or ``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been substantially prepared by the Exchange.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons, and is approving the
proposed rule change on an accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    The Exchange proposes to adopt Rule 421 (Proxy Voting), in
accordance with the provisions of Section 957 of the Dodd-Frank Wall
Street Reform and Consumer Protection Act (the ``Dodd-Frank Act'').
    The text of the proposed rule change is available on the Exchange's
Internet Web site at http://www.ise.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange is proposing to adopt ISE Rule 421 (Proxy Voting), in
accordance with the provisions of Section 957 of the Dodd-Frank Act, to
prohibit Members from voting uninstructed shares if the matter voted on
relates to (i) the election of a member of the board of directors of an
issuer (other than an uncontested election of a director of an
investment company registered under the Investment Company Act of 1940
(the ``Investment Company Act'')), (ii) executive compensation, or
(iii) any other significant matter, as determined by the Commission, by
rule.
    Section 957 of the Dodd-Frank Act amends Section 6(b) \3\ of the
Act to

require the rules of each national securities exchange to prohibit any
member organization that is not the beneficial owner of a security
registered under Section 12 \4\ of the Act from granting a proxy to
vote the security in connection with certain stockholder votes, unless
the beneficial owner of the security has instructed the member
organization to vote the proxy in accordance with the voting
instructions of the beneficial owner. The stockholder votes covered by
Section 957 include any vote with respect to (i) the election of a
member of the board of directors of an issuer (other than an
uncontested election of a director of an investment company registered
under the Investment Company Act), (ii) executive compensation, or
(iii) any other significant matter, as determined by the Commission, by
rule.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 781.
---------------------------------------------------------------------------

    Accordingly, in order to carry out the requirements of Section 957
of the Dodd-Frank Act, the Exchange proposes to adopt proposed ISE Rule
421 to prohibit any Member from giving a proxy to vote stock that is
registered in its name, unless: (i) Such Member is the beneficial owner
of such stock; (ii) pursuant to the written instructions of the
beneficial owner; or (iii) pursuant to the rules of any national
securities exchange or association of which it is a member provided
that the records of the Member clearly indicate the procedure it is
following. The Exchange is proposing to adopt these rules because other
national securities exchanges and associations do allow proxy voting
under certain limited circumstances while the current Exchange Rules
are silent on such matters. Therefore, a Member that is also a member
of another national securities exchange or association may vote the
shares held for a customer when allowed under its membership at another
national securities exchange or association, provided that the records
of the Member clearly indicate the procedure it is following.
    More specifically, a Member that is not the beneficial owner of a
security registered under Section 12 of the Act is prohibited from
granting a proxy to vote the security in connection with a shareholder
vote with respect to the election of a member of the board of directors
of an issuer (except for a vote with respect to uncontested election of
a member of the board of directors of any investment company registered
under the Investment Company Act), executive compensation, or any other
significant matter, as determined by the Commission, by rule, unless
the beneficial owner of the security has instructed the Member to vote
the proxy in accordance with the voting instructions of the beneficial
owner.
    Because Section 957 of the Dodd-Frank Act does not provide for a
transition phase, the Exchange is proposing to adopt the proposed rule
change pursuant to Section 19(b) of the Act to comply with Section 957
of the Dodd-Frank Act and is requesting that the Commission approve the
proposal on an accelerated basis. Additionally, proposed ISE Rule
421(a) is based on NYSE Arca, Inc. (``NYSE Arca'') rule 9.4 and
Financial Industry Regulatory Authority (``FINRA'') rule 2251 and
proposed ISE Rule 421(b) is based on Nasdaq rule 2251(d).
2. Statutory Basis
    The basis under the Act for these proposed rule changes is the
requirement under Section 6(b)(5) \5\ to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to remove impediments to, and perfect the
mechanism of a free and open market and, in general, to protect
investors and the public interest. The Exchange is adopting this
proposed rule change to comply with the requirements of Section 957 of
the Dodd-Frank Act, and therefore believes the proposed rule change to
be consistent with the Act, particularly with respect to the protection
of investors and the public interest.
---------------------------------------------------------------------------

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

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

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

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

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from members or other interested
parties.

III. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number SR-ISE-2010-99 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ISE-2010-99. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street, NE.,
Washington DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of ISE. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-ISE-2010-99 and should be
submitted on or before November 16, 2010.

IV. Commission's Findings and Order Granting Accelerated Approval of
the Proposed Rule Change

    In its filing, ISE requested that the Commission approve the
proposal on an accelerated basis so that the Exchange could immediately
comply with the requirements imposed by the Dodd-Frank Act, and because
the proposed rule text is based upon NYSE Arca Rule 9.4, FINRA Rule
2251, and Nasdaq Rule 2251(d). After careful consideration, the
Commission finds that the proposed

rule change is consistent with the requirements of the Act and the
rules and regulations thereunder applicable to a national securities
exchange.\6\
---------------------------------------------------------------------------

    \6\ In approving this rule change, the Commission notes that it
has considered the proposed rule's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    The Commission believes that proposed Rule 421(a) is consistent
with Section 6(b)(5) \7\ of the Act, which provides, among other
things, that the rules of the Exchange must be designed to promote just
and equitable principles of trade, remove impediments to and perfect
the mechanism of a free and open market and a national market system,
and, in general, to protect investors and the public interest, and are
not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.
---------------------------------------------------------------------------

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

    Under proposed Rule 421(a), a Member shall be prohibited from
voting uninstructed shares unless: (1) That member is the beneficial
owner of the stock; (2) pursuant to the written instructions of the
beneficial owner; or (3) pursuant to the rules of any national
securities exchange or association of which it is also a member,
provided that the member's records clearly indicate the procedure it is
following. This provision is based upon NYSE Arca Rule 9.4 and FINRA
Rule 2251, which were previously approved by the Commission.\8\ The
Commission notes that the proposed change to Rule 421(a) will provide
clarity to ISE members going forward on whether broker discretionary
voting is permitted by ISE members under limited circumstances when the
ISE member is also a member of another national securities exchange
that permits broker discretionary voting. In approving this portion of
the ISE proposal, the Commission notes that it does not go outside the
scope of the rules of other national securities exchanges or national
securities association, and for ISE members who are not also members of
another national securities exchange prohibits broker discretionary
voting on any matter, consistent with investor protection and the
public interest.
---------------------------------------------------------------------------

    \8\ See Securities Exchange Act Release No. 48735 (October 31,
2003), 68 FR 63173 (November 7, 2003) (SR-PCX-2003-50); 61052
(November 23, 2009), 74 FR 62857 (December 1, 2009) (SR-FINRA-2009-
066) (finding that the proposed rule change was consistent with the
Act because the Rule ``will continue to provide FINRA members with
guidance on the forwarding of proxy and other issuer-related
materials.'').
---------------------------------------------------------------------------

    The Commission believes that proposed Rule 421(b) is consistent
with Section 6(b)(10) \9\ of the Act, which requires that national
securities exchanges adopt rules prohibiting members that are not
beneficial holders of a security from voting uninstructed proxies with
respect to the election of a member of the board of directors of an
issuer (except for uncontested elections of directors for companies
registered under the Investment Company Act), executive compensation,
or any other significant matter, as determined by the Commission by
rule.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b)(10).
---------------------------------------------------------------------------

    The Commission believes that proposed Rule 421(b) is consistent
with Section 6(b)(10) of the Act because it adopts revisions that
comply with that section. As noted in the accompanying Senate Report,
Section 957, which enacted Section 6(b)(10), reflects the principle
that ``final vote tallies should reflect the wishes of the beneficial
owners of the stock and not be affected by the wishes of the broker
that holds the shares.'' \10\ The proposed rule change will make ISE
compliant with the new requirements of Section 6(b)(10) by specifically
prohibiting, in ISE's rule language, broker-dealers, who are not
beneficial owners of a security, from voting uninstructed shares in
connection with a shareholder vote on the election of a member of the
board of directors of an issuer (except for a vote with respect to the
uncontested election of a member of the board of directors of any
investment company registered under the Investment Company Act of
1940), executive compensation, or any other significant matter, as
determined by the Commission by rule, unless the member receives voting
instructions from the beneficial owner of the shares.\11\
---------------------------------------------------------------------------

    \10\ See S. Rep. No. 111-176, at 136 (2010).
    \11\ The Commission has not, to date, adopted rules concerning
other significant matters where uninstructed broker votes should be
prohibited, although it may do so in the future. Should the
Commission adopt such rules, we would expect ISE to adopt
coordinating rules promptly to comply with the statute.
---------------------------------------------------------------------------

    The Commission also believes that proposed Rule 421(b) is
consistent with Section 6(b)(5) \12\ of the Act, which provides, among
other things, that the rules of the Exchange must be designed to
promote just and equitable principles of trade, remove impediments to
and perfect the mechanism of a free and open market and a national
market system, and, in general, to protect investors and the public
interest, and are not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission believes that the rule assures that shareholder
votes on the election of the board of directors of an issuer (except
for a vote with respect to the uncontested election of a member of the
board of directors of any investment company registered under the
Investment Company Act of 1940) and on executive compensation matters
are made by those with an economic interest in the company, rather than
by a broker that has no such economic interest, which should enhance
corporate governance and accountability to shareholders.\13\
---------------------------------------------------------------------------

    \13\ As the Commission stated in approving NYSE rules
prohibiting broker voting in the election of directors, having those
with an economic interest in the company vote the shares, rather
than the broker who has no such economic interest, furthers the goal
of enfranchising shareholders. See Securities Exchange Act Release
No. 60215 (July 1, 2009), 74 FR 33293 (July 10, 2009) (SR-NYSE-2006-
92).
---------------------------------------------------------------------------

    Based on the above, the Commission finds that the ISE proposal will
further the purposes of Sections 6(b)(5) and 6(b)(10) of the Act
because it should enhance corporate accountability to shareholders
while also serving to fulfill the Congressional intent in adopting
Section 6(b)(10) of the Act.
    The Commission also finds good cause, pursuant to Section 19(b)(2)
of the Act,\14\ for approving the proposed rule change prior to the
30th day after the date of publication of notice in the Federal
Register. The Commission believes that good cause exists to grant
accelerated approval to proposed Rule 421(a), because this proposed
rule will conform the ISE rule to NYSE Arca Rule 9.4 and FINRA Rule
2251, which were published for public comment in the Federal Register
and approved by the Commission, and for which no comments were
received.\15\ Because proposed Rule 421(a) is substantially similar to
the NYSE Arca and FINRA rules, it raises no new regulatory issues.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(2).
    \15\ See note 8 supra.
---------------------------------------------------------------------------

    The Commission also believes that good cause exists to grant
accelerated approval to proposed Rule 421(b), which conforms the ISE
rules to the requirements of Section 6(b)(10) of the Act. Section
6(b)(10) of the Act, enacted under Section 957 of the Dodd-Frank Act,
does not provide for a transition phase, and requires rules of national
securities exchanges to prohibit broker voting on the election of a
member of the board of directors of an issuer (except for a vote with
respect to the uncontested election of a member of the board of
directors of any investment company registered under the Investment
Company Act of 1940), executive compensation, or any other significant
matter, as determined by the Commission by rule. The Commission
believes that good cause exists to grant

accelerated approval to proposed Rule 421(b), because it will conform
the ISE rules to the requirements of Section 6(b)(10) of the Act.

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\16\ that the proposed rule change (SR-ISE-2010-99) be, and it
hereby is, approved on an accelerated basis.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
---------------------------------------------------------------------------

    \17\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-26993 Filed 10-25-10; 8:45 am]
BILLING CODE 8011-01-P


MEMORANDUM: Overview of the Final Rule Regarding HCFC Allowances for 2012, 2013 and 2014
On January 4, 2012, EPA proposed and requested comment on a number of options for issuing HCFC-22 and HCFC-142b allowances for 2012-2014 (77 FR 237). Since this rulemaking only addresses HCFC-22 and HCFC-142b, baseline and calendar-year allocations for all other HCFCs are the same as in the 2009 Final Rule (74 FR 66412). Via this final rule, titled "Adjustments to the Allowance System for Controlling HCFC Production, Import, and Export," EPA has decided to:
   (1) Continue to use the same HCFC-22 and HCFC-142b baselines established in the 2011 Interim Final Rule (76 FR 47451)
   (2) Provide the same number of HCFC-142b consumption and production allowances as the agency did in the 2011 Interim Final Rule
   (3) Provide fewer HCFC-22 consumption allowances relative to the 2009 Final Rule
   (4) Provide the same percentage of baseline for HCFC-22 production allowances relative to the 2009 Final Rule in 2013-2014
   (5) Provide recoupment allowances to address the U.S. Court of Appeals for the D.C. Circuit's decision in Arkema v. EPA
   (6) Clarify EPA's position on inter-pollutant transfers in the regulations
A summary of each decision is provided below. Full discussion, including a summary of comments received and EPA's response to those comments, can be found in the Final Rule preamble, and the accompanying Response to Comments document (see docket EPA-HQ-OAR-2011-0354).
   1) Baselines are the same as set in the 2011 IFR
         a. 2008 inter-pollutant trades made by Arkema and Solvay are reflected in the finalized baselines, consistent with the decision in Arkema v. EPA
         b. Single-pollutant, inter-company trades that occurred after the 2009 Final Rule are reflected
         c. All other baselines are the same as in the 2009 Final Rule
   2) Annual HCFC-142b Allocation

                                     2012
                                     2013
                                     2014

                                      MT
                                    ODP MT
                                      MT
                                    ODP MT
                                      MT
                                    ODP MT
                                  Consumption
                                      100
                                       7
                                      100
                                       7
                                      100
                                       7
                                  Production
                                      463
                                      30
                                      463
                                      30
                                      463
                                      30
                            % of Baseline Allocated
                                     4.9%
                                     4.9%
                                     4.9%
      NB: The numbers listed here are rounded and do not include recoupment allowances.

   3) Annual HCFC-22 Consumption Allocation
   To account for changes in the marketplace, EPA is finalizing HCFC-22 consumption allocations for 2012-2014 that are almost 30 percent lower than the amounts provided in the 2009 Final Rule.

                                     2012
                                     2013
                                     2014

                                      MT
                                    ODP MT
                                      MT
                                    ODP MT
                                      MT
                                    ODP MT
                                  Consumption
                                    25,100
                                     1,400
                                    25,500
                                     1,400
                                    20,200
                                     1,100
                            % of Baseline Allocated
                                     17.7%
                                     18.0%
                                     14.2%
NB: The numbers listed here are rounded and do not include recoupment allowances.

   4) Annual HCFC-22 Production Allocation
   EPA is using the same percentage of baseline as used in the 2009 Final Rule for 2013 and 2014. Since the baseline amount is higher, the number of HCFC-22 production allowances provided is higher relative to the 2009 Final Rule in 2013-2014. For 2012, the agency is issuing production allowances commensurate with the amount of production authorized in the January 20, 2012, No Action Assurance.

                                     2012
                                     2013
                                     2014

                                      MT
                                    ODP MT
                                      MT
                                    ODP MT
                                      MT
                                    ODP MT
                                  Production
                                    22,800
                                     1,300
                                    38,900
                                     2,100
                                    33,700
                                     1,900
                            % of Baseline Allocated
                                     17.7%
                                       -
                                     30.1%
                                       -
                                     26.1%
                                       -
NB: The numbers listed here are rounded and do not include recoupment allowances.

   5) Addressing 2010 Allowances
   To address the Court's decision in Arkema, the agency is providing "recoupment" allowances to the following entities:
                                    Company
                                   Chemical
                          Consumption Allowances (MT)
                          Production Allowances (MT)
                                    Arkema
                                    HCFC-22
                                     4,750
                                     4,612
                                    DuPont
                                   HCFC-142b
                                       2
                                       0
                                   Honeywell
                                   HCFC-142b
                                      58
                                      107
                               Solvay Fluorides
                                    HCFC-22
                                     1,158
                                       0
                                Solvay Solexis
                                   HCFC-142b
                                       0
                                      290
                      NB: The numbers listed here are rounded.
The agency is providing these allowances "in addition to the pie" over the course of two years, issuing half to each company in 2013 and the other half in 2014.
   6) Inter-pollutant transfers
   As proposed, EPA is clarifying that future inter-pollutant transfers of baseline allowances are not allowed.