[Federal Register Volume 82, Number 244 (Thursday, December 21, 2017)]
[Notices]
[Pages 60656-60663]
[FR Doc No: 2017-27468]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82340; File No. SR-NYSEArca-2017-112]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Amendment No. 2 and Order Approving on an Accelerated Basis a
Proposed Rule Change, as Modified by Amendment No. 2, To List and Trade
Shares of the GraniteShares Palladium Trust Under NYSE Arca Rule 8.201-
E

December 15, 2017.

I. Introduction

    On September 12, 2017, NYSE Arca, Inc. (``NYSE Arca'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Exchange Act'' or ``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to list and trade shares of the
GraniteShares Palladium Trust under NYSE Arca Rule 8.201-E. The
proposed rule change was published for comment in the Federal Register
on October 3, 2017.\3\ On October 24, 2017, the Exchange filed
Amendment No. 1 to the proposed rule change, which superseded the
proposed rule change as originally filed. On November 16, 2017, the
Exchange filed Amendment No. 2 to the proposed rule change, which
superseded the proposed rule change as modified by Amendment No. 1.\4\
The Commission has not received any comments on the proposed rule
change. The Commission is publishing this notice to solicit comments on
Amendment No.2 from interested persons, and is approving the proposed
rule change, as modified by Amendment No. 2, on an accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 81737 (Sept. 27,
2017), 82 FR 46106.
    \4\ In Amendment No. 2, the Exchange: (1) Clarified the
permitted investments of the Trust (as defined herein); (2)
supplemented its description of the duties of the Trust Custodian
(as defined herein); (3) provided information about palladium
futures; (4) supplemented its description of the process of Share
(as defined herein)redemptions; (5) supplemented its description of
how the Trust's net asset value (``NAV'') will be calculated; (6)
increased the minimum number of Shares that the Exchange will
require to be outstanding at the commencement of trading; (7)
expanded the circumstances in which the Exchange would or might halt
trading in the Shares; (8) specified that the Shares would trade in
all of the Exchange's trading sessions; (9) represented that
palladium futures trade on significant exchanges, including the
NYMEX (as defined herein), which is regulated by the CFTC (as
defined herein) and is a member of ISG (as defined herein); and (10)
made certain technical corrections. Amendment No. 2 is available at:
https://www.sec.gov/comments/sr-nysearca-2017-112/nysearca2017112-2693354-161503.pdf.
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change, as Modified by Amendment
No. 2

    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 those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.

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

1. Purpose
    The Exchange proposes to list and trade shares (``Shares'') of the
GraniteShares Palladium Trust (the ``Trust''), under NYSE Arca Rule
8.201-E.\5\ Under NYSE Arca Rule 8.201-E, the Exchange may propose to
list and/or trade pursuant to unlisted trading privileges (``UTP'')
Commodity-Based Trust Shares.\6\
---------------------------------------------------------------------------

    \5\ On September 8, 2017, the Trust submitted to the Commission
its draft registration statement on Form S-1 (the ``Registration
Statement'') under the Securities Act of 1933 (15 U.S.C. 77a)
(``Securities Act''). The Jumpstart Our Business Startups Act,
enacted on April 5, 2012, added Section 6(e) to the Securities Act.
Section 6(e) of the Securities Act provides that an ``emerging
growth company'' may confidentially submit to the Commission a draft
registration statement for confidential, non-public review by the
Commission staff prior to public filing, provided that the initial
confidential submission and all amendments thereto shall be publicly
filed not later than 21 days before the date on which the issuer
conducts a road show, as such term is defined in Securities Act Rule
433(h)(4). An emerging growth company is defined in Section 2(a)(19)
of the Securities Act as an issuer with less than $1,000,000,000
total annual gross revenues during its most recently completed
fiscal year. The Trust meets the definition of an emerging growth
company and consequently has submitted its Form S-1 Registration
Statement on a confidential basis with the Commission.
    \6\ Commodity-Based Trust Shares are securities issued by a
trust that represents investors' discrete identifiable and undivided
beneficial ownership interest in the commodities deposited into the
Trust.
---------------------------------------------------------------------------

    The Trust will not be registered as an investment company under the
Investment Company Act of 1940, as amended,\7\ and is not required to
register under such act. The Trust is not a commodity pool for purposes
of the Commodity Exchange Act, as amended.\8\
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 80a-1.
    \8\ 17 U.S.C. 1.
---------------------------------------------------------------------------

    The Sponsor of the Trust is GraniteShares LLC, a Delaware limited
liability company. The Bank of New York Mellon is the trustee of the
Trust (the ``Trustee'') \9\ and ICBC Standard Bank PLC is the custodian
of the Trust (the ``Custodian'').\10\
---------------------------------------------------------------------------

    \9\ The Trustee is responsible for the day-to-day administration
of the Trust. The responsibilities of the Trustee include (1)
processing orders for the creation and redemption of Baskets; (2)
coordinating with the Custodian the receipt and delivery of
palladium transferred to, or by, the Trust in connection with each
issuance and redemption of Baskets; (3) calculating the net asset
value of the Trust on each business day; and (4) selling the Trust's
palladium as needed to cover the Trust's expenses. The Trust does
not have a Board of Directors or persons acting in a similar
capacity.
    \10\ The Custodian is responsible for safekeeping the palladium
owned by the Trust. The Custodian is appointed by the Trustee and is
responsible to the Trustee under the Trust's palladium custody
agreements. The Custodian will facilitate the transfer of palladium
in and out of the Trust through the unallocated palladium accounts
it may maintain for each Authorized Participant or unallocated
palladium accounts that may be maintained for an Authorized
Participant by another palladium-clearing bank approved by the
London Palladium and Palladium Market (``LPPM''), and through the
loco London account maintained for the Trust by the Custodian on an
unallocated basis pursuant to the Trust unallocated account
agreement (the ``Trust Unallocated Account''). The Custodian is
responsible for allocating specific bars of palladium to the loco
London account maintained for the Trust by the Custodian on an
allocated basis pursuant to the Trust agreement (the ``Trust
Allocated Account''). The Custodian will provide the Trustee with
regular reports detailing the palladium transfers in and out of the
Trust Unallocated Account with the Custodian and identifying the
palladium bars held in the Trust Allocated Account.
---------------------------------------------------------------------------

    The Commission has previously approved listing on the Exchange
under NYSE Arca Rule 8.201-E of other precious metals and palladium-
based commodity trusts, including the ETFS Platinum Trust,\11\ the ETFS
Palladium

Trust,\12\ and the Sprott Physical Platinum and Palladium Trust.\13\
---------------------------------------------------------------------------

    \11\ Securities Exchange Act Release No. 61219 (December 22,
2009), 74 FR 68886 (December 29, 2009) (SR-NYSEArca-2009-95).
    \12\ Securities Exchange Act Release No. 61220 (December 22,
2009), 74 FR 68895 (December 29, 2009) (SR-NYSEArca-2009-94).
    \13\ Securities Exchange Act Release No. 68430 (December 13,
2012), 77 FR 75239 (December 13, 2012) [sic] (SR-NYSEArca-2012-111).
---------------------------------------------------------------------------

    The Exchange represents that the Shares satisfy the requirements of
NYSE Arca Rule 8.201-E and thereby qualify for listing on the
Exchange.\14\
---------------------------------------------------------------------------

    \14\ With respect to the application of Rule 10A-3 (17 CFR
240.10A-3) under the Act, the Trust relies on the exemption
contained in Rule 10A-3(c)(7).
---------------------------------------------------------------------------

Operation of the Trust \15\
---------------------------------------------------------------------------

    \15\ The description of the operation of the Trust, the Shares
and the palladium market contained herein are based, in part, on the
Registration Statement. See note 5, supra.
---------------------------------------------------------------------------

    The investment objective of the Trust will be for the Shares to
reflect the performance of the price of palladium, less the expenses
and liabilities of the Trust. The Trust will issue Shares which
represent units of fractional undivided beneficial interest in and
ownership of the Trust.
    The Trust will not hold or trade in any instrument or asset on any
futures exchange or over the counter (``OTC'') other than physical
palladium bullion. The Trust will take delivery of physical palladium
bullion that complies with the LPPM palladium delivery rules.
    The Shares are intended to constitute a simple and cost-effective
means of making an investment similar to an investment in palladium.
Although the Shares are not the exact equivalent of an investment in
palladium, they provide investors with an alternative that allows a
level of participation in the palladium market through the securities
market.
Operation of the Palladium Market
    The global trade in palladium consists of OTC transactions in spot,
forwards, and options and other derivatives, together with exchange-
traded futures and options. According to the Registration Statement,
most trading in physical palladium is conducted on the OTC market,
predominantly in Zurich and London. The LPPM coordinates various OTC
market activities, including clearing and vaulting, acts as the
principal intermediary between physical palladium market participants
and the relevant regulators, promotes good trading practices and
develops standard market documentation. In addition, the LPPM promotes
refining standards for the palladium market by maintaining the
``London/Zurich Good Delivery List,'' which are the lists of LPPM
accredited melters and assayers of palladium.
    The most significant palladium futures exchanges are the New York
Mercantile Exchange, Inc. (``NYMEX''), a subsidiary of the Chicago
Mercantile Exchange Group (the ``CME Group''), and the Tokyo Commodity
Exchange.\16\ U.S. futures exchanges are registered with the
Commodities Futures Trading Commission (``CFTC'') and seek to provide a
neutral, regulated marketplace for the trading of derivatives contracts
for commodities, such as futures, options and certain swaps. The
palladium contract market is of significant size and liquidity.
---------------------------------------------------------------------------

    \16\ NYMEX is a member of the Intermarket Surveillance Group
(``ISG'').
---------------------------------------------------------------------------

    The basis for settlement and delivery of a spot trade is payment
(generally in U.S. dollars) two business days after the trade date
against delivery. Delivery of the palladium can either be by physical
delivery or through the clearing systems to an unallocated account. The
unit of trade in London and Zurich is the troy ounce, whose conversion
between grams is: 1,000 grams is equivalent to 32.1507465 troy ounces,
and one troy ounce is equivalent to 31.1034768 grams.
    A good delivery palladium plate or ingot is acceptable for delivery
in settlement of a transaction on the OTC market (a ``Good Delivery
Palladium Plate or Ingot''). A Good Delivery Palladium Plate or Ingot
must contain between 32 and 192 troy ounces of palladium with a minimum
fineness (or purity) of 999.5 parts per 1,000 (99.95%), be of good
appearance, and be easy to handle and stack. A Good Delivery Palladium
Plate or Ingot must also bear the stamp of one of the melters and
assayers who are on the LPPM approved list. Unless otherwise specified,
the palladium spot price always refers to the ``Good Delivery
Standards'' set by the LPPM.
Creation and Redemption of Shares
    The Trust will create and redeem Shares on a continuous basis in
one or more blocks of 15,000 Shares (a block of 15,000 Shares is called
a ``Basket''). As described below, the Trust will issue Shares in
Baskets to certain authorized participants (``Authorized
Participants'') on an ongoing basis. Baskets of Shares will only be
issued or redeemed in exchange for an amount of palladium represented
by the aggregate number of Shares issued or redeemed. No Shares will be
issued unless the Custodian has allocated to the Trust's account the
corresponding amount of palladium. Initially, a Basket will require
delivery of 1,500 ounces of palladium. The amount of palladium
necessary for the creation of a Basket, or to be received upon
redemption of a Basket, will decrease over the life of the Trust, due
to the payment or accrual of fees and other expenses or liabilities
payable by the Trust.
    Baskets may be created or redeemed only by Authorized Participants.
Orders must be placed by 3:59 p.m. Eastern Time (``ET''). The day on
which a Trust receives a valid purchase or redemption order is the
order date.
    Each Authorized Participant must be a registered broker-dealer, a
participant in Depository Trust Corporation (``DTC''), have entered
into an agreement with the Trustee (the ``Authorized Participant
Agreement'') and have established a palladium unallocated account with
the Custodian or another LPPM-approved palladium clearing bank. The
Authorized Participant Agreement provides the procedures for the
creation and redemption of Baskets and for the delivery of palladium in
connection with such creations or redemptions.
    According to the Registration Statement, Authorized Participants,
acting on authority of the registered holder of Shares or on their own
account, may surrender Baskets of Shares in exchange for the
corresponding amount of palladium (measured in ounces) announced by the
Trustee (the ``Basket Amount''). Upon surrender of such Shares and
payment of the Trustee's applicable fee and of any expenses, taxes or
charges (such as stamp taxes or stock transfer taxes or fees), the
Trustee will deliver to the order of the redeeming Authorized
Participant the amount of palladium corresponding to the redeemed
Baskets. Shares can only be surrendered for redemption in Baskets of
15,000 Shares each.
    Before surrendering Baskets of Shares for redemption, an Authorized
Participant must deliver to the Trustee a written request indicating
the number of Baskets it intends to redeem. The date the Trustee
receives that order determines the Basket Amount to be received in
exchange. However, orders received by the Trustee after 3:59 p.m. ET on
a business day or on a business day when the London Bullion Market
Association (``LBMA'') Palladium Price PM or other applicable benchmark
price is not announced, will not be accepted.
    The redemption distribution from the Trust will consist of a credit
to the redeeming Authorized Participant's unallocated account
representing the amount of the palladium held by the Trust evidenced by
the Shares being redeemed as of the date of the redemption order.

Net Asset Value
    The NAV of the Trust will be calculated by subtracting the Trust's
expenses and liabilities on any day from the value of the palladium
owned by the Trust on that day; the NAV per Share will be obtained by
dividing the NAV of the Trust on a given day by the number of Shares
outstanding on that day. On each day on which the Exchange is open for
regular trading, the Trustee will determine the NAV as promptly as
practicable after 4:00 p.m. ET. The Trustee will value the Trust's
palladium on the basis of LBMA Palladium Price PM. If there is no LBMA
Palladium Price PM on any day, the Trustee is authorized to use the
LBMA Palladium Price AM announced on that day. If neither price is
available for that day, the Trustee will value the Trust's palladium
based on the most recently announced LBMA Palladium Price PM or LBMA
Palladium Price AM. If the Sponsor determines that such price is
inappropriate to use, the Sponsor will identify an alternate basis for
evaluation to be employed by the Trustee by consulting other public
sources of pricing information. For instance, the Sponsor could use the
palladium spot price published by Bloomberg.
    Authorized Participants will offer Shares in the secondary market
at an offering price that will vary, depending on, among other factors,
the price of palladium and the trading price of the Shares on the
Exchange at the time of offer. Authorized Participants will not receive
from the Trust, the Sponsor, the Trustee or any of their affiliates any
fee or other compensation in connection with the offering of the
Shares.
Secondary Market Trading
    While the Trust seeks to reflect generally the performance of the
price of palladium less the Trust's expenses and liabilities, Shares
may trade at, above or below their NAV. The NAV of Shares will
fluctuate with changes in the market value of the Trust's assets. The
trading prices of Shares will fluctuate in accordance with changes in
their NAV as well as market supply and demand. The amount of the
discount or premium in the trading price relative to the NAV may be
influenced by non-concurrent trading hours between the major palladium
markets and the Exchange. While the Shares trade on the Exchange until
8:00 p.m. ET, liquidity in the market for palladium may be reduced
after the close of the major world palladium markets, including London,
Zurich and NYMEX. As a result, during this time, trading spreads, and
the resulting premium or discount, on Shares may widen.
Availability of Information Regarding Palladium
    Currently, the Consolidated Tape Plan does not provide for
dissemination of the spot price of a commodity such as palladium over
the Consolidated Tape. However, there will be disseminated over the
Consolidated Tape the last sale price for the Shares, as is the case
for all equity securities traded on the Exchange (including exchange-
traded funds). In addition, there is a considerable amount of
information about palladium and palladium markets available on public
websites and through professional and subscription services.
    Investors may obtain palladium pricing information on a 24-hour
basis based on the spot price for an ounce of palladium from various
financial information service providers, such as Reuters and Bloomberg.
    Reuters and Bloomberg provide at no charge on their websites
delayed information regarding the spot price of palladium and last sale
prices of palladium futures, as well as information about news and
developments in the palladium market. Reuters and Bloomberg also offer
a professional service to subscribers for a fee that provides
information on palladium prices directly from market participants. ICAP
plc provides an electronic trading platform called EBS for the trading
of spot palladium, as well as a feed of real-time streaming prices,
delivered as record-based digital data from the EBS platform to its
customer's market data platform via Bloomberg or Reuters.
    Complete real-time data for palladium futures and options prices
traded on the NYMEX are available by subscription from Reuters and
Bloomberg. The NYMEX also provides delayed futures and options
information on current and past trading sessions and market news free
of charge on its website. There are a variety of other public websites
providing information on palladium, ranging from those specializing in
precious metals to sites maintained by major newspapers, such as The
Wall Street Journal.
Availability of Information
    The intraday indicative value (``IIV'') per Share for the Shares
will be disseminated by one or more major market data vendors at least
every 15 seconds during the Core Trading Session. The IIV will be
calculated based on the amount of palladium held by the Trust and a
price of palladium derived from updated bids and offers indicative of
the spot price of palladium.\17\
---------------------------------------------------------------------------

    \17\ The IIV on a per Share basis disseminated during the Core
Trading Session should not be viewed as a real-time update of the
NAV, which is calculated once a day.
---------------------------------------------------------------------------

    The website for the Trust (www.graniteshares.com) will contain the
following information, on a per Share basis, for the Trust: (a) The
mid-point of the bid-ask price \18\ at the close of trading (``Bid/Ask
Price''), and a calculation of the premium or discount of such price
against such NAV; and (b) data in chart format displaying the frequency
distribution of discounts and premiums of the Bid/Ask Price against the
NAV, within appropriate ranges, for each of the four previous calendar
quarters. The website for the Trust will also provide the Trust's
prospectus. Finally, the Trust's website will provide the prior day's
closing price of the Shares as traded in the U.S. market. In addition,
information regarding market price and trading volume of the Shares
will be continually available on a real-time basis throughout the day
on brokers' computer screens and other electronic services. Information
regarding the previous day's closing price and trading volume
information for the Shares will be published daily in the financial
section of newspapers.
---------------------------------------------------------------------------

    \18\ The bid-ask price of the Shares will be determined using
the highest bid and lowest offer on the Consolidated Tape as of the
time of calculation of the closing day NAV.
---------------------------------------------------------------------------

Criteria for Initial and Continued Listing
    The Trust will be subject to the criteria in NYSE Arca Equities
Rule 8.201(e) for initial and continued listing of the Shares.
    A minimum of two Baskets or 30,000 Shares will be required to be
outstanding at the start of trading, which is equivalent to 3,000
ounces of palladium. The Exchange believes that the anticipated minimum
number of Shares outstanding at the start of trading is sufficient to
provide adequate market liquidity.
Trading Rules
    The Exchange deems the Shares to be equity securities, thus
rendering trading in the Shares subject to the Exchange's existing
rules governing the trading of equity securities. Trading in the Shares
on the Exchange will occur during all three trading sessions in
accordance with NYSE Arca Rule 7.34-E(a). The Exchange has appropriate
rules to facilitate transactions in the Shares during all trading
sessions. As provided in NYSE Arca Rule 7.6-E, the minimum price
variation (``MPV'') for quoting and

entry of orders in equity securities traded on the NYSE Arca
Marketplace is $0.01, with the exception of securities that are priced
less than $1.00 for which the MPV for quoting and order entry is
$0.0001.
    Further, NYSE Arca Rule 8.201-E sets forth certain restrictions on
ETP Holders \19\ acting as registered Market Makers in the Shares to
facilitate surveillance. Under NYSE Arca Rule 8.201-E(g), an ETP Holder
acting as a registered Market Maker in the Shares is required to
provide the Exchange with information relating to its trading in the
underlying palladium, related futures or options on futures, or any
other related derivatives. Commentary .04 of NYSE Arca Rule 11.3
requires an ETP Holder acting as a registered Market Maker in the
Shares and its affiliates to establish, maintain and enforce written
policies and procedures reasonably designed to prevent the misuse of
any material nonpublic information with respect to such products, any
components of the related products, any physical asset or commodity
underlying the product, applicable currencies, underlying indexes,
related futures or options on futures, and any related derivative
instruments (including the Shares).
---------------------------------------------------------------------------

    \19\ An ``ETP Holder'' means a sole proprietorship, partnership,
corporation, limited liability company or other organization in good
standing that is a registered broker-dealer and has been issued an
Equity Trading Permit by the Exchange. See NYSE Arca Rules 1.1(n)
and (o).
---------------------------------------------------------------------------

    As a general matter, the Exchange has regulatory jurisdiction over
its ETP Holders and their associated persons, which include any person
or entity controlling an ETP Holder. A subsidiary or affiliate of an
ETP Holder that does business only in commodities or futures contracts
would not be subject to Exchange jurisdiction, but the Exchange could
obtain information regarding the activities of such subsidiary or
affiliate through surveillance sharing agreements with regulatory
organizations of which such subsidiary or affiliate is a member.
    With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares. Trading on the Exchange in the Shares may be
halted because of market conditions or for reasons that, in the view of
the Exchange, make trading in the Shares inadvisable. These may
include: (1) The extent to which conditions in the underlying palladium
market have caused disruptions and/or lack of trading, or (2) whether
other unusual conditions or circumstances detrimental to the
maintenance of a fair and orderly market are present. In addition,
trading in Shares will be subject to trading halts caused by
extraordinary market volatility pursuant to the Exchange's ``circuit
breaker'' rule.\20\ The Exchange will halt trading in the Shares if the
NAV of the Trust is not calculated or disseminated daily or if not made
available to all participants at the same time. The Exchange may halt
trading during the day in which an interruption occurs to the
dissemination of the IIV, as described above. If the interruption to
the dissemination of the IIV persists past the trading day in which it
occurs, the Exchange will halt trading no later than the beginning of
the trading day following the interruption. The Exchange will also
consider halting trading on a business day when the LBMA Palladium
Price PM or other applicable benchmark price is not announced.
---------------------------------------------------------------------------

    \20\ See NYSE Arca Rule 7.12-E.
---------------------------------------------------------------------------

Surveillance
    The Exchange represents that trading in the Shares will be subject
to the existing trading surveillances administered by the Exchange, as
well as cross-market surveillances administered by the Financial
Industry Regulatory Authority (``FINRA'') on behalf of the Exchange,
which are designed to detect violations of Exchange rules and
applicable federal securities laws.\21\ The Exchange represents that
these procedures are adequate to properly monitor Exchange trading of
the Shares in all trading sessions and to deter and detect violations
of Exchange rules and federal securities laws applicable to trading on
the Exchange.
---------------------------------------------------------------------------

    \21\ FINRA conducts cross-market surveillances on behalf of the
Exchange pursuant to a regulatory services agreement. The Exchange
is responsible for FINRA's performance under this regulatory
services agreement.
---------------------------------------------------------------------------

    The surveillances referred to above generally focus on detecting
securities trading outside their normal patterns, which could be
indicative of manipulative or other violative activity. When such
situations are detected, surveillance analysis follows and
investigations are opened, where appropriate, to review the behavior of
all relevant parties for all relevant trading violations.
    The Exchange or FINRA, on behalf of the Exchange, or both, will
communicate as needed regarding trading in the Shares with other
markets and other entities that are members of the ISG, and the
Exchange or FINRA, on behalf of the Exchange, or both, may obtain
trading information regarding trading in the Shares from such markets
and other entities. In addition, the Exchange may obtain information
regarding trading in the Shares from markets and other entities that
are members of ISG or with which the Exchange has in place a
comprehensive surveillance sharing agreement.\22\
---------------------------------------------------------------------------

    \22\ For a list of the current members of ISG, see
www.isgportal.org.
---------------------------------------------------------------------------

    Also, pursuant to NYSE Arca Rule 8.201-E(g), the Exchange is able
to obtain information regarding trading in the Shares and the
underlying palladium, palladium futures contracts, options on palladium
futures, or any other palladium derivative, through ETP Holders acting
as registered Market Makers, in connection with such ETP Holders'
proprietary or customer trades through ETP Holders which they effect on
any relevant market.
    In addition, the Exchange also has a general policy prohibiting the
distribution of material, non-public information by its employees.
    All statements and representations made in this filing regarding
(a) the description of the portfolio or reference asset, (b)
limitations on portfolio holdings or reference assets, or (c) the
applicability of Exchange listing rules specified in this rule filing
shall constitute continued listing requirements for listing the Shares
of the Trust on the Exchange.
    The issuer has represented to the Exchange that it will advise the
Exchange of any failure by the Trust to comply with the continued
listing requirements, and, pursuant to its obligations under Section
19(g)(1) of the Act, the Exchange will monitor for compliance with the
continued listing requirements. If the Trust is not in compliance with
the applicable listing requirements, the Exchange will commence
delisting procedures under NYSE Arca Rule 5.5-E(m).
Information Bulletin
    Prior to the commencement of trading, the Exchange will inform its
ETP Holders in an Information Bulletin of the special characteristics
and risks associated with trading the Shares. Specifically, the
Information Bulletin will discuss the following: (1) The procedures for
purchases and redemptions of Shares in Baskets (including noting that
Shares are not individually redeemable); (2) NYSE Arca Rule 9.2-E(a),
which imposes a duty of due diligence on its ETP Holders to learn the
essential facts relating to every customer prior to trading the Shares;
(3) how information regarding the IIV is disseminated; (4) the
requirement that ETP Holders deliver a prospectus to investors
purchasing newly issued Shares prior to or

concurrently with the confirmation of a transaction; (5) the
possibility that trading spreads and the resulting premium or discount
on the Shares may widen as a result of reduced liquidity of palladium
trading during the Core and Late Trading Sessions after the close of
the major world palladium markets; and (6) trading information. For
example, the Information Bulletin will advise ETP Holders, prior to the
commencement of trading, of the prospectus delivery requirements
applicable to the Trust. The Exchange notes that investors purchasing
Shares directly from the Trust will receive a prospectus. ETP Holders
purchasing Shares from the Trust for resale to investors will deliver a
prospectus to such investors.
    In addition, the Information Bulletin will reference that the Trust
is subject to various fees and expenses as will be described in the
Registration Statement. The Information Bulletin will also reference
the fact that there is no regulated source of last sale information
regarding physical palladium, that the Commission has no jurisdiction
over the trading of palladium as a physical commodity, and that the
CFTC has regulatory jurisdiction over the trading of palladium futures
contracts and options on palladium futures contracts.
    The Information Bulletin will also discuss any relief, if granted,
by the Commission or the staff from any rules under the Act.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) \23\ that an exchange have rules that
are designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to remove
impediments to, and perfect the mechanism of a free and open market
and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices in that the
Shares will be listed and traded on the Exchange pursuant to the
initial and continued listing criteria in NYSE Arca Rule 8.201-E. The
Exchange has in place surveillance procedures that are adequate to
properly monitor trading in the Shares in all trading sessions and to
deter and detect violations of Exchange rules and applicable federal
securities laws. The Exchange may obtain information via ISG from other
exchanges that are members of ISG or with which the Exchange has
entered into a comprehensive surveillance sharing agreement. The most
significant palladium futures exchange in the U.S. is the NYMEX, which
is a member of ISG. U.S. futures exchanges are registered with the CFTC
and seek to provide a neutral, regulated marketplace for the trading of
derivatives contracts for commodities, such as futures, options and
certain swaps. The palladium contract market is of significant size and
liquidity.
    The proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
that there is a considerable amount of palladium price and palladium
market information available on public websites and through
professional and subscription services. Investors may obtain palladium
pricing information on a 24-hour basis based on the spot price for an
ounce of palladium from various financial information service
providers. Delayed information regarding the spot price of palladium
and last sale prices of palladium futures, as well as information about
news and developments in the palladium market, are also available from
financial information service providers. Information on palladium
prices directly from market participants is also available from
financial information service providers. An electronic trading platform
called EBS for the trading of spot palladium, as well as a feed of
real-time streaming prices, is also available from information service
providers.
    The NAV of the Trust will be published by the Sponsor on each day
that the NYSE Arca is open for regular trading and will be posted on
the Trust's website. The IIV relating to the Shares will be widely
disseminated by one or more major market data vendors at least every 15
seconds during the Core Trading Session. The Trust's website will also
provide the Trust's prospectus, as well as the two most recent reports
to stockholders. In addition, information regarding market price and
trading volume of the Shares will be continually available on a real-
time basis throughout the day on brokers' computer screens and other
electronic services. Information regarding the previous day's closing
price and trading volume information for the Shares will be published
daily in the financial section of newspapers.
    The proposed rule change is designed to perfect the mechanism of a
free and open market and, in general, to protect investors and the
public interest in that it will facilitate the listing and trading of
an additional type of exchange-traded product that will enhance
competition among market participants, to the benefit of investors and
the marketplace. As noted above, the Exchange has in place surveillance
procedures relating to trading in the Shares and may obtain information
via ISG from other exchanges that are members of ISG or with which the
Exchange has entered into a comprehensive surveillance sharing
agreement. In addition, as noted above, investors will have ready
access to information regarding palladium pricing.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange believes the
proposed rule change will enhance competition by accommodating Exchange
trading of an additional exchange-traded product relating to physical
palladium.

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

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

III. Discussion and Commission Findings

    After careful review, the Commission finds that the Exchange's
proposed rule change, as modified by Amendment No. 2 to list and trade
the Shares is consistent with the Act and the rules and regulations
thereunder applicable to a national securities exchange.\24\ In
particular, the Commission finds that the proposed rule change is
consistent with Section 6(b)(5) of the Exchange Act,\25\ which
requires, among other things, that the Exchange's rules be designed to
prevent fraudulent and manipulative acts and practices, promote just
and equitable principles of trade, to remove impediments to and perfect
the mechanism of a free and open market and a national market system,
and, in general, to protect investors and the public interest. The
Commission notes that the Exchange has represented that it will be able
to share surveillance information with a significant, regulated market
for trading futures on palladium.\26\ The

Commission also notes that it previously approved the listing and
trading of shares of another issue of Commodity-Based Trust Shares
overlying palladium.\27\
---------------------------------------------------------------------------

    \24\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \25\ 15 U.S.C. 78f(b)(5).
    \26\ Specifically, according to the Exchange, NYMEX, which is
regulated by the Commodity Futures Trading Commission, is a member
of the ISG, which will allow the Exchange to obtain surveillance
information. See Amendment No. 2, supra note 4, at 6, 14.
    \27\ See Securities Exchange Act Release No. 61220 (Dec. 22,
2009), 74 FR 68895 (Dec. 29, 2009) (SR-NYSEArca-2009-94) (approving
the listing and trading of the ETFS Physical Palladium Trust). See
also Securities Exchange Act Release Nos. 62692 (Aug. 11, 2010), 75
FR 50789 (Aug. 17, 2010) (SR-NYSEArca-2010-56) (approving the
listing and trading of the ETFS Physical Precious Metals Basket
Trust); 62875 (Sept. 9, 2010), 75 FR 56156 (Sept. 15, 2010) (SR-
NYSEArca-2010-71) (approving the listing and trading of the ETFS
Physical White Metals Basket Trust); and 68101 (Oct. 24, 2012), 77
FR 65732 (Oct. 30, 2012) (SR-NYSEArca-2012-111) (approving the
listing and trading of the Sprott Physical Platinum and Palladium
Trust).
---------------------------------------------------------------------------

    The Commission also finds that the proposal is consistent with
Section 11A(a)(1)(C)(iii) of the Act,\28\ which sets forth Congress'
finding that it is in the public interest and appropriate for the
protection of investors and the maintenance of fair and orderly markets
to assure the availability to brokers, dealers, and investors of
information with respect to quotations for and transactions in
securities. The last-sale price of the Shares will be disseminated over
the Consolidated Tape. In addition, information regarding market price
and trading volume of the Shares will be continually available on a
real-time basis throughout the day on brokers' computer screens and
other electronic services. Information regarding the previous day's
closing price and trading volume information for the Shares will be
published daily in the financial section of newspapers.
---------------------------------------------------------------------------

    \28\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
---------------------------------------------------------------------------

    The Commission believes that the proposed rule change is reasonably
designed to promote fair disclosure of information that may be
necessary to price the Shares appropriately. NYSE Arca Rule 8.201-
E(e)(2)(v) requires that an IIV (which is referred to in the rule as
the ``Indicative Trust Value'') be made available at least every 15
seconds. The IIV will be calculated based on the amount of palladium
held by the Trust and a price of palladium derived from updated bids
and offers indicative of the spot price of palladium.\29\ The Exchange
states that the IIV relating to the Shares will be widely disseminated
by one or more major market data vendors at least every 15 seconds
during the Core Trading Session.\30\ According to the Exchange, there
is a considerable amount of information about palladium markets
available on public websites and through professional and subscription
services. Investors may obtain palladium pricing information on a 24-
hour basis based on the spot price for an ounce of palladium from
various financial information service providers.\31\
---------------------------------------------------------------------------

    \29\ See Amendment No. 2, supra note 4, at 9-10.
    \30\ See id. at 9.
    \31\ See Amendment No. 2, supra note 4, at 9. The Exchange
states that Reuters and Bloomberg, for example, provide at no charge
on their websites delayed information regarding the spot price of
palladium and last sale prices of palladium, as well as information
about news and developments in the palladium market. Reuters and
Bloomberg also offer a professional service to subscribers for a fee
that provides information on palladium prices directly from market
participants. ICAP plc provides an electronic trading platform
called EBS for the trading of spot palladium, as well as a feed of
real-time streaming prices, delivered as record-based digital data
from the EBS platform to its customer's market data platform via
Bloomberg or Reuters. Complete real-time data for palladium futures
and options prices traded on the New York Mercantile Exchange, Inc.
(``NYMEX'') are available by subscription from Reuters and
Bloomberg. There are a variety of other public websites providing
information on palladium, ranging from those specializing in
precious metals to sites maintained by major newspapers. See id.
---------------------------------------------------------------------------

    Additionally, the NAV of the Trust will be published by the Sponsor
on each day that the NYSE Arca is open for regular trading and will be
posted on the Trust's website.\32\ The Trust also will publish the
following information on its website: (1) The mid-point of the Bid/Ask
Price as of close of trading, and a calculation of the premium or
discount of such price against the NAV; (2) data in chart format
displaying the frequency distribution of discounts and premiums of the
Bid/Ask Price against the NAV, within appropriate ranges, for each of
the four previous calendar quarters; (3) the Trust's prospectus, as
well as the two most recent reports to stockholders; and (4) the prior
day's closing price of the Shares as traded in the U.S. market.\33\
---------------------------------------------------------------------------

    \32\ See id. at 14.
    \33\ See id. at 10, 14.
---------------------------------------------------------------------------

    The Commission also believes that the proposal is reasonably
designed to prevent trading when a reasonable degree of transparency
cannot be assured. With respect to trading halts, the Exchange may
consider all relevant factors in exercising its discretion to halt or
suspend trading in the Shares. Trading on the Exchange in the Shares
may be halted because of market conditions or for reasons that, in the
view of the Exchange, make trading in the Shares inadvisable. These may
include: (1) The extent to which conditions in the underlying palladium
market have caused disruptions or lack of trading, or (2) whether other
unusual conditions or circumstances detrimental to the maintenance of a
fair and orderly market are present. In addition, trading in Shares
will be subject to trading halts caused by extraordinary market
volatility pursuant to the Exchange's ``circuit breaker'' rule.\34\ The
Exchange will halt trading in the Shares if the NAV of the Trust is not
calculated or disseminated daily or if not made available to all
participants at the same time.\35\ The Exchange may halt trading during
the day in which an interruption occurs to the dissemination of the
IIV; if the interruption to the dissemination of the IIV persists past
the trading day in which it occurs, the Exchange will halt trading no
later than the beginning of the trading day following the
interruption.\36\
---------------------------------------------------------------------------

    \34\ See id. at 11, n.18 and accompanying text.
    \35\ See id. at 11.
    \36\ See id. at 11-12.
---------------------------------------------------------------------------

    Additionally, the Commission notes that market makers in the Shares
would be subject to the requirements of NYSE Arca Rule 8.201-E(g),
which allow the Exchange to ensure that they do not use their positions
to violate the requirements of Exchange rules or applicable federal
securities laws.\37\
---------------------------------------------------------------------------

    \37\ Commentary .04 of NYSE Arca Equities Rule 11.3 requires
that an ETP Holder acting as a registered market maker in the
Shares, and its affiliates, establish, maintain and enforce written
policies and procedures reasonably designed to prevent the misuse of
any material nonpublic information with respect to such products,
any components of the related products, any physical asset or
commodity underlying the product, applicable currencies, underlying
indexes, related futures or options on futures, and any related
derivative instruments.
---------------------------------------------------------------------------

    In support of this proposal, the Exchange has made the following
additional representations:
    (1) The Shares will be listed and traded on the Exchange pursuant
to the initial and continued listing criteria in NYSE Arca Rule 8.201-
E.\38\
---------------------------------------------------------------------------

    \38\ See Amendment No. 2, supra note 4, at 14.
---------------------------------------------------------------------------

    (2) The Exchange has appropriate rules to facilitate transactions
in the Shares during all trading sessions.\39\
---------------------------------------------------------------------------

    \39\ See id. at 10.
---------------------------------------------------------------------------

    (3) The Exchange deems the Shares to be equity securities.\40\
---------------------------------------------------------------------------

    \40\ See id. The Commission notes that, as a result, trading of
the Shares will be subject to the Exchange's existing rules
governing the trading of equity securities.
---------------------------------------------------------------------------

    (4) The Exchange also has a general policy prohibiting the
distribution of material, non-public information by its employees.\41\
---------------------------------------------------------------------------

    \41\ See id. at 12-13.
---------------------------------------------------------------------------

    (5) Trading in the Shares will be subject to the existing trading
surveillances administered by the Exchange, as well as cross-market
surveillances administered by FINRA on behalf of the Exchange, which
are designed to detect violations of

Exchange rules and applicable federal securities laws, and that these
procedures are adequate to properly monitor Exchange trading of the
Shares in all trading sessions and to deter and detect violations of
Exchange rules and federal securities laws applicable to trading on the
Exchange.\42\
---------------------------------------------------------------------------

    \42\ FINRA conducts cross-market surveillances on behalf of the
Exchange pursuant to a regulatory services agreement. The Exchange
is responsible for FINRA's performance under this regulatory
services agreement. See id. at 12, n.19.
---------------------------------------------------------------------------

    (6) The Exchange or FINRA, on behalf of the Exchange, or both, will
communicate as needed regarding trading in the Shares with other
markets and other entities that are members of the ISG, and the
Exchange or FINRA, on behalf of the Exchange, or both, may obtain
trading information regarding trading in the Shares from such markets
and other entities. In addition, the Exchange may obtain information
regarding trading in the Shares from markets and other entities that
are members of ISG or with which the Exchange has in place a
comprehensive surveillance sharing agreement.\43\
---------------------------------------------------------------------------

    \43\ See id. at 12.
---------------------------------------------------------------------------

    (7) Prior to the commencement of trading, the Exchange will inform
its ETP Holders in an Information Bulletin of the special
characteristics and risks associated with trading the Shares.
Specifically, the Information Bulletin will discuss the following: (1)
The procedures for purchases and redemptions of Shares in Baskets
(including noting that Shares are not individually redeemable); (2)
NYSE Arca Equities Rule 9.2(a), which imposes a duty of due diligence
on its ETP Holders to learn the essential facts relating to every
customer prior to trading the Shares; (3) how information regarding the
IIV is disseminated; (4) ETP Holders deliver a prospectus to investors
purchasing newly issued Shares prior to or concurrently with the
confirmation of a transaction; (5) the possibility that trading spreads
and the resulting premium or discount on the Shares may widen as a
result of reduced liquidity of palladium trading during the Core and
Late Trading Sessions after the close of the major world palladium
markets; and (6) trading information.\44\
---------------------------------------------------------------------------

    \44\ See id. at 13.
---------------------------------------------------------------------------

    (8) All statements and representations made in the Exchange's
filing regarding (a) the description of the portfolio or reference
asset, (b) limitations on portfolio holdings or reference assets, or
(c) the applicability of Exchange listing rules specified in this rule
filing shall constitute continued listing requirements for listing the
Shares of the Trust on the Exchange.\45\
---------------------------------------------------------------------------

    \45\ See id.
---------------------------------------------------------------------------

    (9) The issuer has represented to the Exchange that it will advise
the Exchange of any failure by the Trust to comply with the continued
listing requirements and, pursuant to its obligations under Section
19(g)(1) of the Act, the Exchange will monitor \46\ for compliance with
the continued listing requirements. If the Trust is not in compliance
with the applicable listing requirements, the Exchange will commence
delisting procedures under the NYSE Arca Rule 5.5-E(m).\47\
---------------------------------------------------------------------------

    \46\ The Commission notes that certain proposals for the listing
and trading of exchange-traded products include a representation
that the exchange will ``surveil'' for compliance with the continued
listing requirements. See, e.g., Securities Exchange Act Release No.
77499 (April 1, 2016), 81 FR 20428, 20432 (April 7, 2016) (SR-BATS-
2016-04). In the context of this representation, it is the
Commission's view that ``monitor'' and ``surveil'' both mean ongoing
oversight of compliance with the continued listing requirements.
Therefore, the Commission does not view ``monitor'' as a more or
less stringent obligation than ``surveil'' with respect to the
continued listing requirements.
    \47\ See id.
---------------------------------------------------------------------------

    This approval order is based on all of the Exchange's
representations--including those set forth above and in Amendment No.
2--and the Exchange's description of the Trust.
    For the foregoing reasons, the Commission finds that the proposed
rule change, as modified by Amendment No. 2, is consistent with Section
6(b)(5) of the Act \48\ and the rules and regulations thereunder
applicable to a national securities exchange.
---------------------------------------------------------------------------

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

IV. Solicitation of Comments on Amendment No. 2 to the Proposed Rule
Change

    Interested persons are invited to submit written data, views, and
arguments concerning Amendment No. 2 to the proposed rule change.
Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-NYSEArca-2017-112 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2017-112. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (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 website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of this filing will also be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSEArca-2017-112 and should be
submitted on or before January 11, 2018.

V. Accelerated Approval of Proposed Rule Change, as Modified by
Amendment No. 2

    The Commission finds good cause to approve the proposed rule
change, as modified by Amendment No. 2, prior to the 30th day after the
date of publication of notice of Amendment No. 2 in the Federal
Register. Amendment No. 2 supplements the proposal by providing
additional information regarding the Trust and the palladium futures
market, and by expanding the circumstances in which the Exchange would
or might halt trading in the Shares. These changes assisted the
Commission in evaluating the Shares' susceptibility to manipulation,
and in determining that the listing and trading of the Shares is
consistent with the protection of investors and the public interest.
Accordingly, the Commission finds good cause, pursuant to Section
19(b)(2) of the Exchange Act,\49\ to approve the proposed rule change,
as

modified by Amendment No. 2, on an accelerated basis.
---------------------------------------------------------------------------

    \49\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act,\50\ that the proposed rule change (SR- NYSEArca-2017-
112), as modified by Amendment No. 2 be, and it hereby is, approved on
an accelerated basis.
---------------------------------------------------------------------------

    \50\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\51\
---------------------------------------------------------------------------

    \51\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017-27468 Filed 12-20-17; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 230 (Friday, November 29, 2019)]
[Rules and Regulations]
[Pages 65668-65670]
[FR Doc No: 2019-25540]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Docket No. FAA-2018-1002; Airspace Docket No. 18-AWP-23]
RIN 2120-AA66

Amendment of Class E Airspace: Madera, CA

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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

SUMMARY: This action modifies the Class E airspace extending upward
from 700 feet above the surface at Madera Municipal Airport, Madera,
CA, eliminates references to the Clovis and Friant Very High Frequency
Omni-Directional Range/Tactical Air Navigation Aids (VORTAC) from the
Airspace description, and updates the airport's geographic coordinates
to match the FAA's aeronautical database. In addition, this action
updates the airspace lateral dimensions to meet current requirements.
This action supports the operation of Instrument flight Rules (IFR)
under standard instrument approach and departure procedures in the
National Airspace System.

DATES: Effective 0901 UTC, January 30, 2020. The Director of the
Federal Register approves this incorporation by reference action under
Title 1, Code of Federal Regulations, part 51, subject to the annual
revision of FAA Order 7400.11 and publication of conforming amendments.

ADDRESSES: FAA Order 7400.11D, Airspace Designations and Reporting
Points, and subsequent amendments can be viewed on line at https://www.faa.gov/air_traffic/publications/. For further information, you can
contact the Airspace Policy Group, Federal Aviation Administration, 800
Independence Avenue SW, Washington, DC 20591; telephone: (202) 267-
8783. The Order is also available for inspection at the National
Archives and Records Administration (NARA). For information on the
availability of FAA Order 7400.11D at NARA, email<EMAIL_ADDRESS>or go to https://www.archives.gov/federal_register/cfr/ibr_locations.html.

FOR FURTHER INFORMATION CONTACT: Richard Roberts, Federal Aviation
Administration, Western Service Center, Operations Support Group, 2200
S. 216th Street, Des Moines, WA 98198; telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Authority for This Rulemaking

    The FAA's authority to issue rules regarding aviation safety is
found in Title 49 of the United States Code. Subtitle I, Section 106
describes the authority of the FAA Administrator. Subtitle VII,
Aviation Programs, describes in more detail the scope of the agency's
authority. This rulemaking is promulgated under the authority described
in Subtitle VII, Part A, Subpart I, Section 40103. Under that section,
the FAA is charged with prescribing regulations to assign the use of
airspace necessary to ensure the safety of aircraft and the efficient
use of airspace. This regulation is within the scope of that authority
as it amends the Class E airspace extending upward from 700 feet above
the surface at Madera Municipal Airport, Madera, CA, and updates the
airspace lateral dimensions to meet current requirements, to support
IFR operations at the airport.

History

    The FAA published a notice of proposed rulemaking in the Federal
Register (84 FR 25205; May 31, 2019) DOCKET NO. FAA-2018-1002, to
modify Class E airspace extending upward from 700 feet above the
surface at Madera Municipal Airport, Madera, CA, and to update the
airspace lateral dimensions to meet current requirements. Interested
parties were invited to participate in this rulemaking effort by
submitting written comments on the proposal to the FAA. The FAA
received a single anonymous comment asking ``[h]ow will this effect
(sic) global warming?'' The FAA does not find this a substantive
comment to the proposal. The airspace does not control where aircraft
fly but defines the area within which all aircraft operators are
subject to operating rules and equipment requirements.
    Class E airspace designations are published in paragraph 6005 of
FAA Order 7400.11D, dated August 8, 2019, and effective September 15,
2019, which is incorporated by reference in 14 CFR 71.1. The Class E
airspace designations listed in this document will be published
subsequently in that Order. FAA Order 7400.11, Airspace Designations
and Reporting Points, is published yearly and effective on September
15.

Availability and Summary of Documents for Incorporation by Reference

    This document amends FAA Order 7400.11D, Airspace Designations and
Reporting Points, dated August 8, 2019, and effective September 15,
2019. FAA Order 7400.11D is publicly available as listed in the
ADDRESSES section of this document. FAA Order 7400.11D lists Class A,
B, C, D, and E airspace areas, air traffic service routes, and
reporting points.

The Rule

    The FAA is amending Title 14 Code of Federal Regulations (14 CFR)
part 71 by modifying the Class E airspace extending upward from 700
feet above the surface at Madera Municipal Airport, Madera, CA,
eliminating references to the Clovis and Friant Very High Frequency
Omni-Directional Range/Tactical Air Navigation Aids (VORTAC) from the
legal description, as they are no longer needed. This action also
updates the airport's geographic coordinates to match the FAA's
aeronautical database. Finally, this action updates the lateral
dimensions to meet current airspace requirements by removing 4.4 miles
of airspace extending to the southeast, adding 0.4 miles to the radius
around the Airport Reference Point and adding a portion that extends 1
mile each side of the 316[deg] bearing from the 4.4 mile radius to 1.5
miles northwest. This action supports the operation of Instrument
Flight Rules (IFR) under standard instrument approach and departure
procedures in the National Airspace System.

Regulatory Notices and Analyses

    The FAA has determined that this regulation only involves an
established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current, is
non-controversial and unlikely to result in adverse or negative
comments. It, therefore: (1) Is not a ``significant regulatory action''
under Executive Order 12866; (2) is not a ``significant rule'' under
DOT Regulatory Policies and Procedures (44 FR 11034; February 26,
1979); and (3) does not warrant preparation of a Regulatory Evaluation
as the anticipated impact is so minimal. Given this is a routine matter
that only affects air traffic procedures and air navigation, it is
certified that this rule, when promulgated, will not have a significant
economic impact on a substantial number of small entities under the
criteria of the Regulatory Flexibility Act.

Environmental Review

    The FAA has determined that this action qualifies for categorical
exclusion under the National Environmental Policy Act in accordance
with FAA Order 1050.1F, ``Environmental Impacts: Policies and
Procedures,'' paragraph 5-6.5a. This airspace action is not expected to
cause any potentially significant environmental impacts, and no
extraordinary circumstances exist that warrant preparation of an
environmental assessment.

Lists of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (air).

Adoption of the Amendment

    In consideration of the foregoing, the Federal Aviation
Administration amends 14 CFR part 71 as follows:

PART 71--DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND REPORTING POINTS

0
1. The authority citation for part 71 continues to read as follows:

    Authority:  49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O.
10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.

Sec.  71.1  [Amended]

0
2. The incorporation by reference in 14 CFR 71.1 of FAA Order 7400.11D,
Airspace Designations and Reporting Points, dated August 8, 2019, and
effective September 15, 2019, is amended as follows:

Paragraph 6005. Class E Airspace Areas Extending Upward From 700
Feet or More Above the Surface of the Earth.

* * * * *

AWP CA E5 Madera, CA [Amend]

Madera Municipal Airport, CA
    (Lat. 36[deg]59'11'' N., long. 120[deg]06'45'' W.)

    That airspace extending upward from 700 feet above the surface
within a 4.4-mile radius of the Madera Municipal Airport and within
2.8 miles each side of the 112[deg] bearing from the airport
extending from the 4.4-mile radius to 6 miles southeast of the
airport and that airspace 1.8 miles either side of the 80[deg]
bearing from a point in space, coordinates lat. 37[deg] 01' 29'' N.,
long. 120[deg] 09' 06'' W., extending from the 4.4 mile radius to
7.2 miles from the point in space coordinates and that airspace 1
mile either side of the 316[deg] bearing from the Madera Municipal
Airport extending from the 4.4-mile radius to 5.5 miles northwest.

    Issued in Seattle, Washington, November 19, 2019.
Byron Chew,
Manager, Operations Support Group, Western Service Center.
[FR Doc. 2019-25540 Filed 11-27-19; 8:45 am]
BILLING CODE 4910-13-P