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                             Supporting Statement
Data Requirements Rule for the 1-Hour Sulfur Dioxide Primary National Ambient Air Quality Standard (NAAQS) (Renewal)

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EPA ICR #2495.03

PART A

1. Identification of the Information Collection

     	   	 (a) Title of the Information Collection

 "Data Requirements Rule for the 1-Hour Sulfur Dioxide Primary National Ambient Air Quality Standard (NAAQS) - Renewal"

 	 (b) Short Characterization/Abstract

	This ICR includes 1) estimates for ambient air monitoring data reporting, and other supporting measurements, as well as record keeping activities, and 2) estimates for emissions and emissions-related information and ambient air dispersion modeling reporting and activities, associated with the 40 CFR part 51 Requirements for Preparation, Adoption and Submittal of Implementation Plans. These data and information are collected by various state and local air quality management agencies and reported to the U.S. Environmental Protection Agency (EPA). State and local air management agencies chose to submit either monitoring or modeling information in order to meet the initial and ongoing requirements, as applicable, under the final Data Requirements for the 2010 1-Hour Sulfur dioxide (SO2) Primary National Ambient Air Quality Standards rule (SO2 Data Requirements Rule) (See 80 FR 51052, August 21, 2015). This ICR reflects revisions to the initial ICR, covers the period of October 1, 2019-September 30, 2022, and includes estimates of the burden for sources, state and local air agencies, and EPA associated with developing, submitting, and processing the information described for purposes of satisfying ongoing requirements under the SO2 Data Requirements Rule.

      The SO2 Data Requirements Rule directed state, local, and tribal air quality management agencies to provide data to initially characterize current air quality in areas with certain sources of SO2 emissions. The rule described the criteria for identifying and listing the source areas where air agencies needed to characterize SO2 air quality. The rule also requires states to continue to provide monitoring, modeling, and emissions data from a subset of these sources, that meet certain requirements under the rule, which may serve to inform an air agency's continued understanding of whether these areas meet the 2010 SO2 NAAQS. It described the process and timetables by which air quality management agencies were required to characterize air quality in source areas through ambient monitoring and/or air quality modeling techniques and submit this data to EPA, both initially and for the ongoing requirements. The air quality data developed by the states in accordance with this rule may be used in designations as well as other programs, and are intended to be used by EPA to assist in the remaining round(s) of area designations for the 2010 SO2 NAAQS.

      More specifically, through the SO2 Data Requirements Rule and the initial ICR, EPA required states to characterize ambient air quality around SO2 sources with emissions that were greater than 2,000 tons per year (tpy) or that were otherwise included as a listed source. Based upon 2011 emissions data, the initial action identified approximately 412 SO2 sources in 43 states. In this ICR renewal, EPA is addressing ongoing requirements that 1) apply to listed sources for which air agencies chose the monitoring pathway, and 2) apply to listed sources for which air agencies chose the modeling pathway and which were designated attainment/unclassifiable or unclassifiable/attainment based on air quality modeling of actual emissions. The number of listed sources for which air agencies chose the monitoring pathway, and thus are required to submit ongoing monitoring information, are 73 sources in 24 states (77 monitors total). The number of listed sources for which air agencies chose the modeling pathway that are required to submit ongoing data reports, and, potentially, updated modeling, are 170 sources in 43 states.

	For those air quality management agencies that elected to conduct ambient monitoring for listed DRR sources to provide the necessary ongoing air quality data to EPA, the state and local air quality management agencies are responsible for reporting ambient air quality data information, as requested in this ICR, and will submit these data electronically to EPA's Air Quality System (AQS) and voluntary databases. Quality assurance/quality control records and monitoring network documentation are also maintained by each state and local agency, in AQS electronic format where possible.

      For those air quality management agencies that elected to conduct air quality modeling of the areas containing listed DRR sources to provide the necessary air quality data to EPA and which were designated either unclassifiable/attainment or attainment/unclassifiable based on modeling of actual emissions of the area, state and local air quality management agencies are responsible for submitting ongoing data reports. These reports are required to be submitted annually as either a stand-alone document made available for public inspection or as an appendix to the air agency's Annual Monitoring Network Plan, and are required to include the annual SO2 emissions of each applicable source in each such area, provide an assessment of the cause of any emissions increase from the previous year, and include a recommendation from the air agency regarding whether additional modeling is needed to characterize air quality in the area to determine whether the area meets or does not meet the 2010 SO2 NAAQS. If EPA requires that the air agency conduct updated air quality modeling for the area, the air agency has 12 months to submit the updated modeling to EPA.

	There are two cost estimates included in this ICR renewal: 1) total ongoing estimated costs for the modeling option if air agencies determined it was necessary to conduct additional modeling for all listed sources subject to the ongoing modeling requirements, which includes within it the estimation of costs for the required submission of the ongoing data reports for such source areas, and 2) total ongoing estimated costs incurred for the monitoring option sources regardless of the source of the funding.

	2. Need for and Use of the Collection

	(a) Need/Authority for the Collection

      The information requirements included within this ICR are necessary to provide EPA with ambient air quality surveillance data, which includes monitoring data, emissions data, and/or modeling data, to determine the United States air quality status, to make attainment decisions with respect to the NAAQS, to assist in developing necessary control strategies to ensure attainment of the NAAQS, to assess national trends in air pollution, to inform the public of air quality, and to determine the population's exposure to various ambient air pollutants. EPA's goal of attaining the NAAQS in all areas of the United States is directly dependent upon the availability of ambient air quality data (monitoring, emissions, and/or modeling data) requested in this information collection. Additionally, EPA, state, and local air quality management agencies, environmental groups, industrial groups, and academic organizations use these data to study atmospheric chemistry, e.g., the formation and fate of SO2, to determine the most appropriate and effective control strategies necessary to reduce air pollution.

      The principal legal authority for this information collection is the Clean Air Act, 42 U.S.C. 7403, 7410, and 7511a, from which the 40 CFR part 51 regulations were promulgated.

      Under 7403(c), the Administrator is required to conduct a program of research, testing, and development of methods for sampling, measurement, monitoring, analysis, and modeling of air pollutants, specifically including a requirement to establish a national network to monitor, collect, and compile data with quantification of certainty in the status and trends of air emissions and air quality. This program will also include the development of improved methods and technologies to increase the understanding of the sources of nitrogen oxides, its formation, transport, regional influences and trends, and interactions with other pollutants.

      Section 7410 (a) and (k) contain the SIP requirements, which include a requirement that each state submit a SIP that: 1) provides for the establishment and operation of appropriate devices, methods, systems, and procedures necessary to monitor, compile, analyze, and make available to the Administrator data on ambient air quality, and 2) provides for the performance of such air quality modeling as the Administrator may prescribe for the purpose of predicting the effect on ambient air quality of any emissions of any air pollutant for which the Administrator has established a national ambient air quality standard, and the submission, upon request, of data related to such air quality modeling to the designee as stipulated in the rule.

2(b) Practical Utility/Users of the Data

      The EPA may use the ambient air quality data (monitoring, emissions, and/or the modeling data) submitted pursuant to this collection for area designations and other decisions with respect to the SO2 NAAQS and SO2 air quality. Affected state or local air quality management agencies must develop an appropriate SIP for any area designated as nonattainment in order to improve air quality in the area such that it meets the applicable NAAQS expeditiously. The EPA and air agencies would also use the ongoing submission of ambient air quality monitoring data, emissions data, and/or modeling data to increase their understanding regarding whether areas under the rule ongoing requirements are meeting the standard.

      To identify how the nation is progressing in improving air quality, the OAQPS prepares annually the National Air Quality and Emissions Trends report (http://www.epa.gov/airtrends) using the ambient air quality data collected through monitoring-related ICRs. The state and local air quality management agencies use these data for multiple purposes including tracking their progress toward achieving and maintaining air quality within the established NAAQS and any statewide standards they have established.

3. NON-DUPLICATION, CONSULTATIONS, AND OTHER COLLECTION CRITERIA

3(a) Non-duplication

      This collection of monitoring, emissions data, and modeling information, including the use of air dispersion modeling to characterize air quality and calculate design values for comparison to the NAAQS, is not unnecessarily duplicative of information otherwise reasonably accessible to the agency. The AQS and AIRNow systems, which contain information for these sources based solely on this collection, are the only national air quality data repositories available to EPA. AERMOD is the preferred regulatory air quality model and states use this as their primary mechanism for modeling and meeting the ongoing reporting requirements. The ambient air quality surveillance data and related information collected through this information collection are not otherwise reasonably accessible to EPA.

      A few state and local air quality management agencies have their own data storage systems (e.g., the California Air Resources Board); however, most state and local air quality management agencies use the AQS and AIRNow as their primary repositories for all air quality data.

3(b) Public Notice Required Prior to ICR Submission to OMB

      The 1995 Paperwork Reduction Act requires that, except as provided under 44 U.S.C. §3507(j) or in the case of proposed collections of information contained in proposed rules, any agency proposing an ICR or extension of an ICR must solicit public comments for a 60-day period prior to submitting the ICR to OMB. Notice of a 60-day comment period on the proposed renewal of this ICR was published in the Federal Register prior to submitting to OMB. See 84 FR 33257, July 12, 2019.

3(c) Consultations

	Through the course of planning, monitoring, and improving upon this collection and its associated regulation, EPA regularly consults with affected state and local air quality management agencies through various methods including the regulatory process, regular meetings, and training courses. The EPA conducts workshops and training on the AQS reporting system. The EPA Regional offices conduct annual ambient air monitoring meetings with their affected state and local air quality management agencies to assist these affected agencies with this collection and its associated regulation. The EPA's OAQPS also meets regularly with leading state and local air monitoring managers to discuss the Nation's ambient air monitoring program and this collection, via large monthly phone calls and smaller in person meetings two or three times per year. Prior to the initial ICR, EPA conducted several stakeholder meetings to discuss issues associated with implementation of the SO2 standard. In addition, EPA developed two Technical Assistance Documents for monitoring and modeling. These documents provide technical advice on the use of modeling and monitoring to determine if an area meets the 2010 SO2 NAAQS.

3(d) Effects of Less Frequent Collection

	Sanctions do not automatically accrue to state or local air quality management agencies that fail to meet these requirements.  The effects of less frequent collection include:

      :: 	A national database that is not consistently updated and available for public consumption;

      :: 	Less timely attainment designations with respect to the NAAQS;

      :: 	More difficulty in identifying and repairing problems with an ambient air monitor--i.e., data are used to check a monitor's operating condition, and reporting data less frequently would delay a state or local agency's ability to recognize a problem with a monitor or a laboratory procedure; and

      :: 	The EPA would not be able to consistently answer questions from the public in a timely fashion regarding air quality in various areas of the country.

3(e) General Guidelines

      With the following exceptions, all of the OMB's general guidelines for information collections in 5 CFR 1320.6 are met by this ICR.

      :: 	Monitoring data reporting is required on a quarterly basis. Nearly all respondents voluntarily report on a monthly basis. If the modeling of ongoing requirements applies to a source, annual data reports are required, and updated dispersion modeling could be determined necessary and/or required where needed to determine whether the area meets or does not meet the 2010 SO2 NAAQS.

      ::	Record retention is for no more than 3 years (most records are kept by EPA data repository, not the affected state and local air quality management agencies)

      ::	Monitoring information is maintained and reported in the standardized electronic AQS format.

3(f) Confidentiality

      Information that is considered personal, private, proprietary, or confidential is not required for this collection. One purpose of collecting ambient air data through AQS and AIRNow, or modeling with AERMOD, is to inform the public of general air quality in ambient air (air considered generally accessible to the public), and as such, does not present a need for maintaining a confidential nature. Security measures are taken to prevent tampering with the AQS electronic database by limiting the access to the AQS mainframe only to authorized users.

3(g) Sensitive Questions

	This section is not applicable to this ICR because no information involving matters of a sensitive nature is collected related to this rule.

4. THE RESPONDENTS AND THE INFORMATION REQUESTED

4(a) Respondents/SIC Codes

      This ICR affects state and local governments (SIC code 951, Administration of Environmental Quality Program) that are currently operating and maintaining established ambient air quality networks. The 40 CFR part 51 regulations associated with this request require that state and local air quality management agencies on an ongoing basis either 1) submit annual emissions data reports, and may require submission of additional updated modeling, or 2) conduct ambient air quality monitoring and report the data to EPA quarterly each year. Although industrial, environmental, and research organizations may use the data available through the AQS, they are not required to report any information for this information collection. Monitoring data submitted to AIRNow is voluntary for all organizations, but most state and local agencies reporting to AQS also report to AIRNow.

4(b) Information Requested for Areas Where the Monitoring Option is Implemented

(i) Data items, including record keeping requirements (Monitoring Option)

	These data items are submitted electronically to EPA's AQS as required by 40 CFR parts 51 and 58. These data are stored electronically within EPA's AQS, and separate records kept by the state or local air quality management agency are not required.

      ::	Hourly and sub-hourly (5-minute) ambient air pollutant concentrations of SO2 collected at SLAMS sites or any third-party monitoring sites identified and eligible to satisfy the requirements of the rule.

      ::	Precision and accuracy data for all SLAMS sites, Special Purpose Monitors (SPM), and any third-party monitor identified as eligible to satisfy requirements of the rule.

      ::	Monitoring network description information, including the site AQS identification number, site location, sampling and analysis method, operating schedule, monitoring objective, site's scale of representation, identity of the urban area represented, and quality assurance plan.

      ::	Results of the annual ambient air monitoring network and quality assurance plan review.

      ::	Annual SLAMS summary report which includes the location, date, pollution source, and duration of each incident of air pollution during which ambient levels of a pollutant reached or exceeded the significant harm levels as defined in 40 CFR 51.151, the certification of the report's accuracy by a designated state air pollution control officer, and various other summary statistics as provided by the AQS system.

(ii) Respondent Activities (Monitoring Option)

      A typical respondent would engage in the following activities to comply with this information request:

      ::	Conduct or otherwise provide oversight to ambient air quality monitoring, incorporating all appropriate quality assurance procedures such as calibrations, precision and accuracy checks, and, if necessary, concurrent monitoring.

      ::	Validate the ambient air data for quality assurance considerations.

      ::	Electronically submit the complete and validated ambient air data to AQS.

      ::	Prepare and submit to EPA annually the SLAMS sites summary report.

4(c) Information Requested for Areas Where the Modeling Option is Implemented

(i) Data items, including record keeping requirements (Modeling Option)

	These data items are submitted to EPA's Regional offices as required by the SO2 Data Requirements Rule under 40 CFR section 51.1205(b). These data are stored electronically, or by hard copy, at EPA's Regional offices, and separate records kept by the state or local air quality management agency are not required.

      ::     A report, submitted annually, that assesses the annual SO2 emissions of each applicable source in the area and provides the cause of any emissions increase from the previous year, along with a recommendation for whether updated modeling is needed to determine whether the area is currently meeting the 2010 SO2 NAAQS.

 If updated modeling is required for an area, revised modeling with updated emission and meteorological inputs and any other input parameters that may be needed to conduct an accurate updated characterization of the area within 12 months of the modeling having been determined necessary.
  (ii) Respondent Activities (Modeling Option)

 Gather most recent emissions data for source(s) in designated area and compare against previous emissions data.
 If emissions have increased, determine why emissions have increased and include that reasoning in annual report along with a recommendation of whether updated modeling is needed under the DRR.
 Submit annual report to EPA after making available for public inspection.
 If emissions have increased to the point that modeling is needed, gather meteorological data, emissions data, source characterization data (i.e. building information) to conduct modeling with the latest emissions following the SO2 Modeling Technical Assistance Document. Specifically, if updated modeling is required under the ongoing reporting requirements, air agencies should use EPA's preferred near-field dispersion model, the AERMOD modeling system. The use of AERMOD includes the following regulatory components:
             AERMOD dispersion model
             AERMAP terrain processor
             AERMET meteorological processor
      Other components can be used with AERMOD, depending on the application, including:
             BPIPPRM building processor (for downwash)
             AERMINUTE 1-minute ASOS winds pre-processor for input into AERMET
             AERSURFACE surface characteristics pre-processor for input into AERMET
             AERSCREEN, a screening version of AERMOD.
      The dispersion modeling for the ongoing reporting requirements for SO2 under the Data Requirements Rule uses:
             Source characterization information and emissions inputs for modeled sources
             Representative meteorological data of the area
             Terrain data to generate elevations for sources and receptors
             Receptor locations
             Background concentrations, and
             Building data for sources that will be affected by downwash.
      Each modeling application is unique; therefore the following inputs may be needed for analyses, which may affect modeling costs:
             Determining the appropriate size of the modeling domain to capture potential modeled NAAQS violations
             Determining sources to model explicitly in the modeling, and sources to characterize in the modeling via background concentrations
             Estimating time-varying emissions for modeled sources
             Obtaining stack parameters for modeled sources
             Obtaining building information for sources subject to downwash effects
             Determining the receptor grid spacing and creating the elevations in the receptor grid via AERMAP
             Determining the representative meteorological surface and upper air stations for the model domain, downloading the meteorological and land use data for input into AERMINUTE, AERMET and AERSURFACE
             Calculating the appropriate background concentrations
      Once these inputs have been generated and processed through the appropriate programs, AERMOD can be run and post-processed to generate design values to compare against the NAAQS. The level of post-processing (charts, tables, maps, etc.) can affect modeling costs as well.

 Post-process model output to calculate design concentrations to compare against the NAAQS to assess if the area is violating the NAAQS.
 Submit modeling to EPA within 12 months in accordance with the final rule.
   Each of these activities can be conducted using existing reporting and recordkeeping practices.

5. THE INFORMATION COLLECTED--AGENCY ACTIVITIES, COLLECTION METHODOLOGY, AND INFORMATION MANAGEMENT

5(a) Agency Activities

      The EPA conducts the following activities to implement the modeling and monitoring option of this ICR and associated regulation:

      ::	Periodically review the 40 CFR part 58 regulations to update the information collection and monitoring requirements in light of new technological developments or new air pollutant standards. Develop revisions to the regulations in response to legislative action and program changes.

      ::	Establish, maintain, and support the AQS national repository for all state and local air quality management agency ambient air quality data and monitoring information. Periodically evaluate and improve upon this system as new technologies, and new regulatory requirements would dictate.

      ::	Answer respondent (generally state and local air quality management agencies, but also industrial organizations, environmental groups, and others) questions about ambient air monitoring, the 40 CFR part 58 regulatory requirements, and AQS. This includes the establishment of the Ambient Monitoring Technology Information Center bulletin board, the AQS toll-free hotline, and other written or verbal communication.

      ::	Support the quality assurance program by working within EPA and with the respondents to evaluate precision and accuracy data, oversee the National Performance Audit Program, participate in systems audits, and conduct data validation checks on the AQS data submittal.

      ::	Provide within the AQS mechanisms for statistical calculations, such as the number of times a particular ambient air quality monitoring site exceeds the NAAQS. Distribute the AQS data in various ways including upon written request, by Freedom of Information Act request, by press release, and in the annual National Air Quality and Emissions Trends Report.

 Provide adequate electronic storage space within the AQS for all ambient air quality surveillance data and information.

 When necessary, post-process model outputs to calculate design concentrations to compare against the NAAQS to assess if the area is violating the NAAQS.

 Review emissions information submitted by air management agencies to determine whether there are increases in emissions in the affected area that may warrant updated modeling to determine whether the area continues to meet the standard.

 For areas for which EPA is requiring updated modeling for the ongoing reporting requirements, per 51.1205(b), analyze and compare the updated modeling results to the NAAQS.

 Answer respondent (generally state and local air quality management agencies, but also industrial organizations, environmental groups, and others) questions about modeling submitted to meet the requirements of the SO2 Data Requirements Rule, including meteorological and emissions data.
5(b) Collection Methodology and Management

      All state and local ambient air monitoring networks have access to and use well-established quality assurance procedures as defined in the Quality Assurance Handbook for Air Pollution Measurement Systems, Volumes I and II, EPA/600/R-94/038a & b. These documents ensure that all ambient air quality data are accurate and reliable.

      The EPA has provided and will continue to provide resources for the maintenance and operation of AQS. All monitoring data required by this collection are submitted electronically to reduce the burden of the collection and to improve data quality, agency efficiency, and responsiveness to the public. Various statistical and graphical summaries are also provided by AQS which enhance the utility of the information for consumption by the public and all affected state and local air quality management agencies. In submitting ambient air data into AQS, we ensure that the data are publicly available, electronically stored, and electronically retrievable. State and local air quality management agencies and EPA have been submitting data to the AQS since its inception in 1987.

      For air quality modeling, EPA has provided the SO2 Modeling Technical Assistance Document and the Guideline on Air Quality Models, Appendix W to 40 CFR Part 51 to assist the air agencies and ensure that they can successfully use AERMOD to estimate design values that are accurate and conform to the DRR requirements. Appendix W is updated via the public review and comment process to incorporate the latest regulatory changes and model performance enhancements into EPA's suite of regulatory models, including AERMOD. All regulatory modeling is made available to the public upon request.

5(c) Small Entity Flexibility

      This collection contains a minimum amount of information in order to manage the air quality program for the United States. The smallest entities affected by this collection are local air quality management agencies, typically consisting of the governing agencies for a county or group of counties, or a smaller metropolitan area (e.g., cities with a population of 50,000). This collection reduces to the extent practicable and appropriate the burden on entities that provide ambient air quality data and information to or for EPA, including with respect to small entities, as defined in the Regulatory Flexibility Act (5 U.S.C. 601(6)), the use of such techniques as:

      ::   	Clarification, consolidation, or simplification of compliance and reporting requirements (e.g., by establishing, maintaining, and improving as needed the AQS and AIRNow national repositories for ambient air quality data and information).

5(d) Collection Schedule for Monitoring Data

      Ambient air quality monitoring data and precision and accuracy data for criteria air pollutants are submitted according to the schedule defined in 40 CFR 58.16. These current regulations require that state and local air quality management agencies report their data within 90 days after the end of the quarter during which the data were collected.

      The annual SLAMS report is submitted by May 1 of each year for data collected from January 1 through December 31 of the previous year in accordance with 40 CFR 58.15. This certification applies to all SLAMS and all SPM monitoring data that have been submitted by May 1.

      The annual air quality surveillance network reviews are conducted and reports are submitted to EPA on a schedule that is determined by the affected state or local air quality management agency and EPA Regional office.

      Ambient air quality data and information are made available to the public at any time in various ways, including:

      ::	Upon request to the appropriate EPA Regional office, or to the OAQPS;

      ::	By Freedom of Information Act Request to the appropriate EPA Regional office or the OAQPS;

      ::	From the state or local air quality management agency responsible for collecting the ambient air quality data and information;

      ::	By obtaining access, through appropriate EPA channels, to AQS;

      ::	Through EPA public reports, such as the annual "National Air Quality and Emissions Trends Report"; or

      ::	Through AQI reporting mechanisms which include newspaper, television, Internet and other publicly available notices (see www.epa.gov/airnow).

5(e) Collection Schedule for Annual Data Reports and Potential Modeling Revisions

	For areas where modeling of actual SO2 emissions served as the basis for designating the area attainment/unclassifiable or unclassifiable/attainment for the 2010 SO2 NAAQs, an annual report is required to be submitted to EPA Regional Administrator by July 1 of each year that documents the annual SO2 emissions of each applicable source and assesses the cause of any emissions increase from the previous year, per 51.1205(b). For any areas that EPA Regional Administrator, as a result of evaluating the annual report, requires the air agency to update its air quality modeling, the air agency must submit that modeling to EPA within 12 months.

6. 	ESTIMATING THE BURDEN AND COST OF THE COLLECTION FOR THE MONITORING AND MODELING OPTIONS

6(a) Estimating Respondent Burden

      All activities listed within section 4(b)(ii) of this ICR Supporting Statement are presented in Worksheet 1. The detailed burden and cost estimates for the different types of monitors are based on information provided in the version of Guidance for Estimating Ambient Air Monitoring Costs for Criteria Pollutants and Selected Air Toxic Pollutants (prepared by Desert Research Institute for EPA Office of Air Quality Planning and Standards, Air Quality Assessment Division, Ambient Air Monitoring Group, January 2005). The monitoring cost estimates presented in this guidance document were based on existing literature and direct monitoring experience. The costs for equipment and supplies were verified with vendors. The monitoring costs were based on vendor quotes for the monitor type that EPA expects respondents to use to comply with the requirements. Costs for level of effort estimates were verified with selected state and local agencies.

	For use in preparing the burden estimates for the monitoring option of this ICR, costs for the monitoring requirements were inflated to 2019, 2020, and 2021. The cost escalation factors were estimated based on the appropriate Gross Domestic Product (GDP) price indices. Tables showing the detailed burden estimate calculations are presented below. A summary of the average annual respondent burden costs follows.

  Worksheet 1: Annual Average Respondent Burden Estimates (Monitoring Option)

                                  Collection
                                  Activities
                               Total Labor Hours
                            Per Respondent Per Year
                               ( 24 respondents)
1. Network design
                                       0
2. Site installation
                                       9
3. Sampling & analysis
                                      385
4. Maintenance & repairs
                                      218
5. Data management
                                      125
6. Quality assurance
                                      251
7. Supervision
                                       135
                                     TOTAL
                                     1,123

      For the modeling option, we are using a simplified, turnkey estimate ($30,000 per model run) for the costs (see section 6(b) below) associated with assessing the emissions inventory, generating the annual report, and updating the modeling as required. This includes a labor burden of 5 percent of the overall cost per source per year.

6(b) Estimating Respondent Costs

      All activities listed with section 4(b)(ii) of this ICR Supporting Statement are included in the Worksheet 2 for the monitoring option. A summary of the average annual respondent burden costs follows.

   Worksheet 2: Annual Average Respondent Cost Estimates (Monitoring Option)

                                  Collection
                                  Activities
                               Total Labor Cost
                           Per Respondent Per Year
                               (24 respondents)
1. Network design
                                      $0
2. Site installation
                                      $661
3. Sampling & analysis
                                    $31,005
4. Maintenance & repairs
                                    $16,338
5. Data management
                                     $9,604
6. Quality assurance
                                    $19,741
7. Supervision
                                    $11,129
                                     TOTAL
                                    $88,478

      A total of 170 sources in 43 states chose to characterize air quality via the modeling pathway. Of those 170 sources, some will be required to remodel their emissions in addition to and as part of their annual reporting obligation. Others will not have to remodel but will have to submit only a report on their emissions changes. The report-only obligation is a much lower annual burden than one in which updated modeling is required. However, for the purposes of this ICR, we are assuming that all 170 sources will undergo annual revised modeling, the results of which are incorporated into the annual report.

      Based on market research, stakeholder feedback, and the assumptions of the use of modeling for the ongoing data verification reports, a conservative estimate of modeling costs, where additional modeling is determined to be necessary, is $30,000 for a single modeling run centered on an identified source. This cost estimate also includes the time necessary to develop an appropriate emissions inventory for the modeling run. In the unlikely event that air agencies/EPA determined that it was necessary for all 170 sources that are subject to the ongoing modeling requirements conduct additional modeling, the total annual national costs are estimated at approximately $5,100,000.  For purposes of the burden calculations in this ICR renewal, we are being highly conservative and assuming this "worst case" scenario will occur in each of the three years that this collection will be active.

      In instances where additional modeling is not required, our burden estimate for model execution, analysis, and report preparation, is equal to 5 percent of the overall costs of the full-scale modeling estimate. Should it be the case that all 170 sources require no new modeling for the duration of this collection, the annual burden cost estimate would be $255,000.

      Regardless of which response type is required, for burden associated with sources using the modeling option, we are assuming that most of the cost (approximately 90%) is for labor leaving 10% as non-labor burden.

6(c) Estimating Agency Burden and Cost

      We estimated the Agency burden and cost by using current burden and cost of the ambient air monitoring program related to this collection. We included burden and cost for the OAQPS, the ten Regional offices, and associated contract activities. The in-house activities for this collection are completed by a variety of individuals with a variety of salaries; therefore, we used the actual salary as an average for computing the program costs. Actual contractor expenses were used for those activities completed using extramural resources. We estimated a total annual average of 52,717 hours and $827,507 in agency burden.

      For the modeling option, we assumed that on average, 40 hours would be needed to review each of the annual reports, including an evaluation of the modeling analysis. If all 170 sources are assumed to update modeling as part of the annual requirement, then 6800 hours would be the total labor estimate for OAQPS, the ten Regional offices, and associated contract activities. Using a rough average hourly rate of $100, the average annual agency cost would be $680,000. If no modeling is being submitted for all 170 sources, we assume that 8 hours would be needed to review the annual submission for each source. Thus, the low end of the cost range would be $136,000. For total burden estimates below we are assuming that all 170 sources are submitting modeling.

6(d)	Estimating the Respondent Universe and Total Burden and Costs

      Worksheet 3 shows the total annual respondent hourly burdens and costs which was taken from section 6(b) above for the estimated 24 respondents. The total estimated annual burden for monitoring is 26,948 hours at a total cost of $2,123,474.

Worksheet 3: Annual Total Respondent Labor Burden/Cost Estimates
 (Monitoring Option)

                                  Collection
                                   Activities
                               Total Labor Hours
                                   Per Year
                               Total Labor Cost
                                   Per Year
1. Network design
                                       0
                                      $0
2. Site installation
                                      222
                                    $15,864
3. Sampling & analysis
                                     9240
                                   $744,114
4. Maintenance & repairs
                                     5236
                                   $392,117
5. Data management
                                     3003
                                   $230,501
6. Quality assurance
                                      6013
                                    $473,789
7. Supervision
                                     3234
                                   $267,089
                                     TOTAL
                                    26,948
                                   $2,123,474

      For the modeling option, the average annual respondent cost is $5,100,000 if modeling is submitted for all 170 sources. Specific hours for modeling have not been estimated, but labor costs are included in the modeling estimate above.

6(e) Bottom Line Burden Hours and Cost Tables

      (i) Respondent Tally

      For the monitoring option:
      Number of Respondents: 24
      Number of Annual Responses: 96
      Respondent Annual Burden: 26,948
      Respondent Total Annual Costs: $2,539,814
      Respondent Annual Non-Labor Costs $416,340

      For the modeling option:
      Number of Respondents: 43
      Number of Annual Responses: 170
      Respondent Annual Burden: Number of hours not calculated
      Respondent Total Annual Costs: $5,100,000
      Respondent Annual Non-Labor Costs $510,000

      Grand Total:
      Number of Annual Responses: 266
      Respondent Annual Burden: 26,948
      Respondent Total Annual Costs:  $7,639,814
      Respondent Annual Non-Labor Costs $926,340

      (ii) The Agency Tally

      For the monitoring option:
      Agency total annual Burden = 45,917 hours
      Agency total annual Cost = $147,507

      For the modeling option:
            Agency total annual burden = 6,800 hours
            Agency Total Annual Cost = $680,000

      Agency grand total:
            Agency total annual burden = 52,717
            Agency Total Annual Cost = $827,507

6(f) Reasons for Change in Burden

      The revised monitoring and modeling burden requested in this ICR results from the requirements under the SO2 Data Requirements Rule.  The final rule gave the air monitoring agencies the flexibility to characterize air quality using either appropriately sited ambient air quality monitors or modeling of source emissions.  Each agency was required to identify for each source area with emissions above 2,000 tpy of SO2 which approach (ambient monitoring or air quality modeling) it would use to characterize air quality.  Due to the unknown approach each agency would choose, the initial ICR assumed all agencies would choose the ambient monitoring approach and all agencies would choose the modeling approach which overly estimated the potential burden.  The agencies have now submitted their selected approach and this ICR revises the burden estimates to accurately reflect the burden for agencies which have chosen to conduct ambient air monitoring as well as the burden for those agencies which have chosen to conduct air quality monitoring.  For the modeling burden estimates, EPA has more accurately reflected the majority of the costs as labor versus non-labor, as was shown in the initial ICR.  EPA modeling estimates are still conservative, and therefore on the high end of estimate due to the assumption that all agencies will need to re-model when in fact, based on their review of updated emissions data, a new modeling run may not be required.  EPA will continue to work closely with those agencies and update burden estimates as appropriate in future ICR renewals.

6(g) Burden Statement

      The annual public reporting and recordkeeping burden for this collection of information for state and local air agencies is estimated to average 1122.3 hours per respondent under the monitoring option. Under the modeling option, the labor burden was estimated as a percentage  of the overall cost of the project rather than an estimated number of hours per respondent. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.

	To comment on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including the use of automated collection techniques, EPA has established a public docket for this ICR under Docket ID Number EPA-HQ-OAR-2013-0711, which is available for online viewing at www.regulations.gov, or in person viewing at the Air Docket in EPA Docket Center (EPA/DC), EPA William Jefferson Clinton West Building, Room 3334, 1301 Constitution Avenue, NW, Washington, D.C. The EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Reading Room is<PHONE_NUMBER>, and the telephone number for the Air Docket is<PHONE_NUMBER>. An electronic version of the public docket is available at www.regulations.gov. This site can be used to submit or view public comments, access the index listing of the contents of the public docket, and to access those documents in the public docket that are available electronically. When in the system, select "search," then key in the Docket ID Number identified above. Also, you can send comments to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW, Washington, D.C. 20503, Attention: Desk Officer for EPA. Please include EPA Docket ID Number EPA-HQ-OAR-2013-0711 and OMB Control Number 2060-0696 in any correspondence.

PART B OF SUPPORTING STATEMENT
      This section is not applicable to this ICR because statistical methods are not used in the data collection associated with the rule amendments.


[Federal Register: October 10, 2007 (Volume 72, Number 195)]
[Notices]
[Page 57617-57619]
[DOCID:fr10oc07-126]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56594; File No. SR-BSE-2007-25]

Self-Regulatory Organizations; Boston Stock Exchange, Inc.;
Notice of Filing and Order Granting Accelerated Approval to Proposed
Rule Change, as Modified by Amendments No. 1, 2, and 3 Thereto,
Relating to Registration Filing Requirements and Reporting Requirements

October 1, 2007.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') and Rule 19b-4 thereunder,\2\ notice is hereby given
that on June 19, 2007, the Boston Stock Exchange, Inc. (``BSE'' 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.
On August 7, 2007, BSE filed Amendment No. 1 to the proposed rule
change.\3\ On September 7, 2007, BSE filed Amendment No. 2 to the
proposed rule change.\4 \On September 26, 2007, BSE filed Amendment No.
3 to the proposed rule change.\5\ The Commission is publishing this
notice to solicit comments on the proposed rule change, as modified by
Amendments No. 1, 2, and 3 thereto, from interested persons and approve
the proposed rule change on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 superseded and replaced the original rule
filing in its entirety.
    \4\ Amendment No. 2 superseded and replaced Amendment No. 1 in
its entirety.
    \5\ Amendment No. 3 superseded and replaced Amendment No. 2 in
its entirety.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The BSE proposes to: (1) Amend BSE Rules Chapter I-B Sections 4, 5,
and 6 and Chapter XVIII Section 4 and Boston Options Exchange (``BOX'')
Rules Chapter II Sections 1(b)(i) and Section 4(b), Chapter XI Sections
2(b), 3(a), and 4(c) and Chapter X Section 2(e), to require all
members, and member and participant organizations, that do not already
participate in Web Central Registration Depository (``Web CRD'') as a
member of a participating exchange or the Financial Industry Regulatory
Authority, Inc. (``FINRA'') to submit Forms U4, U5, BD and amendments
thereto as well as fingerprints, to the Web CRD; \6\ (2) amend Exchange
Rules Chapter I-B Sections 4, 5, and 6 and Chapter XVIII Section 4 to
add language specifying a timeframe in which to amend Form U4, Form U5,
and Form BD; and (3) amend its Minor Rule Violation Plan (``MRVP'') by
adopting new provisions for failures to submit amendments to Form U4,
Form U5, and Form BD.\7\
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    \6\ Web CRD is a Web-based system that provides broker-dealers
and their associated persons ``one-stop filing'' with the
Commission, FINRA, and other self-regulatory organizations and
regulators. Web CRD is operated by FINRA and is utilized by
participating securities regulators in connection with registering
and licensing broker-dealers and their associated persons.
    \7\ Rule 19d-1(c)(1) under the Act, 17 CFR 240.19d-1(c)(1),
requires any self-regulatory organization, for which the Commission
is the appropriate regulatory agency, that takes any final
disciplinary action with respect to any person to promptly file a
notice thereof with the Commission. However, rule violations
resulting in a fine not exceeding $2,500 are not deemed final and
therefore not subject to the same reporting requirements.
---------------------------------------------------------------------------

    The text of the proposed rule change is available at the principal
office of the BSE, the Commission's Public Reference Room, and http://www.bostonstock.com
.

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

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

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

1. Purpose
    The purpose of the proposed rule change is to create a more
efficient, centralized registration process by migrating from a manual
paper-based Exchange procedure to Web CRD for registration and
fingerprinting, with more defined deadlines and a more streamlined
disciplinary process.

Web CRD

    The Web CRD process would assist in maintaining all historical
information related to associated persons of member, and participant
organizations in one central repository, as well as creating efficient
disclosure utilizing an online database, which can be accessed by other
exchanges and regulators. Additionally, the Web CRD process would track
and capture information related to registration and continuing
education. Finally, the Web CRD system would capture information
related to fingerprinting and statutory disqualification.
    Members, and member and/or participant organizations, would be
required to submit Forms U4 and U5 (and amendments thereto) through the
Web CRD system rather than in paper form to the Exchange. Currently,
members, and member and/or participant organizations, submit Forms U4
and U5 in paper form to the Exchange. Although Form BD is required to
be submitted to Web CRD, the proposed rule change codifies this
requirement into BSE Rules Chapter I-B Sections 4, 5, and 6 and Chapter
XVIII Section 4 and BOX Rules Chapter II Sections 1(b)(i) and Section
4(b), Chapter XI Sections 2(b), 3(a), and 4(c) and Chapter X Section
2(e), and applies to amendments as well.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 240.15b-1.
---------------------------------------------------------------------------

    Members, and member and/or participant organizations, also
currently file manual rolled fingerprint cards \9\ with the Exchange,
which the Exchange then forwards to the FBI, the fingerprint processing
arm of the Office of the Attorney General of the United States. The FBI
identifies submitted fingerprints, retrieves relevant criminal history
information, and returns fingerprint reports (including the original
fingerprint cards) to the Exchange. Upon receipt of the approved
fingerprint cards, the Exchange sends this information to the member
organization and keeps a copy for its records. This proposed rule
change would require the members, and member and/or participant
organizations, to send the fingerprint cards to FINRA for processing.
All trading personnel and other associated persons of members, and
member or participant organizations, who are not registered and only
submit fingerprint cards to FINRA, will be classified as Non-Registered
Fingerprint (``NRF'') filers.
---------------------------------------------------------------------------

    \9\ FINRA will accept Federal Bureau of Investigation (``FBI'')
fingerprint results in lieu of fingerprint cards.
---------------------------------------------------------------------------

    The Exchange anticipates that the proposed migration to Web CRD
will take place on October 1, 2007. The Exchange will provide
notification in writing to the membership of the effective date of the
rule change.
    Additionally, the Exchange is amending the language in BOX Chapter

XI Doing Business With The Public, Section 2(b) to clarify the
registration obligations of Options Principals.

Minor Rule Violation Plan

    The Exchange is adding language to BSE's and BOX's MRVPs to clarify
the timeframe within which members, and member and/or participant
organizations, must amend Forms U4, U5, and BD to allow for prompt
disclosure. The Exchange proposes a timeframe of thirty days from the
time the filer knew of or should have known of the facts which gave
rise to the need for an amendment, to submit amended Forms U4, U5, and
BD. By including this language in the Exchange Rules, Boston Stock
Exchange Regulation (``BSER'') would retain the discretion to initiate
formal disciplinary proceedings.\10\ The Exchange believes that the
proposed change should encourage member organizations and participant
organizations to timely file Forms U4, U5, and BD and thereby timely
disclose the information contained in those forms. The disclosure of
this information should enable the Exchange and the public to receive
current information on registered persons and entities.
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    \10\ Section 6(b)(6) requires an exchange to have rules that
provide for members and associated persons to be appropriately
disciplined for violations of the Act, the rules thereunder, and the
Exchange's rules. 15 U.S.C. 78f(b)(6). Inclusion of a rule in an
MRVP permits an exchange to impose a fine, under appropriate
circumstances under the MRVP. However, including a rule in an MRVP
does not limit an exchange's ability to bring a formal disciplinary
action against a member or an associated person.
---------------------------------------------------------------------------

    Specifically, the proposed changes to the MRVP would authorize the
Exchange to impose a fine on any member or participant organization
without formal disciplinary action. As proposed, BSER would review the
number and seriousness of the violation(s), as well as the previous
disciplinary history of the violator, to determine if a matter is
appropriate for disposition under the MRVP. Once a member or
participant organization is fined under the MRVP, BSER may issue
progressively higher fines for all subsequent violations within a
rolling twelve-month period, or it may choose to initiate formal
disciplinary proceedings. The addition of these changes to the
Exchange's MRVP should allow BSER to impose more meaningful sanctions
for violations that would otherwise receive a cautionary letter, for
example, but do not necessarily rise to the level of a formal
disciplinary proceeding.
    Additionally, the proposed changes would allow for disposition of
minor or technical violations of Exchange rules by means of a less
costly and less time consuming process as compared to a formal
disciplinary process. Expediting resolutions for technical violations,
while retaining the discretion to bring formal disciplinary action,
should allow for efficient dispositions of rule violations.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act \11\ in general, and furthers the objectives of Section
6(b)(5) of the Act \12\ in particular, in that it is designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, to foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest, by providing information to
a central repository.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Importantly, the Exchange believes, moving to Web CRD provides a
central location where information is available. This enables easier
access to all members and member and/or participant organizations.
Further, most other exchanges participate in Web CRD registration.

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.

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

    The Exchange has neither solicited nor received comments on the
proposed rule change.

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-BSE-2007-25 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BSE-2007-25. 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 inspection and
copying 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 the BSE. 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-BSE-2007-25 and should be
submitted on or before October 31, 2007.

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

    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.\13\ In
particular, the Commission finds that the proposed

rule change is consistent with Section 6(b)(5) of the Act,\14\ which
requires, among other things, that the Exchange's rules be designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, to remove impediments to and perfect
the mechanism of a free and open market and a national market system,
and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \13\ In approving this proposal, the Commission has considered
its impact on efficiency, competition, and capital formation. See 15
U.S.C. 78c(f).
    \14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission believes that the changes proposed by BSE should
result in a more efficient process for members to register and to keep
information current and should make regulatory information with respect
to members and their associated persons more readily available to
regulators as well as the public. Furthermore, it will align the rules
of the Exchange regarding electronic registration more closely with
those at other exchanges.
    In addition, the Commission believes the proposed rule change is
consistent with the Act because it is designed to allow BSE to
discipline or sanction members under its MRVP for violation of the
provisions of the rules of the Exchange for these rules. In approving
the proposed rule change, the Commission in no way minimizes the
importance of compliance with Exchange rules and all other rules
subject to the imposition of fines under the MRVP. The Commission
believes that the violation of a self-regulatory organization's rules,
as well as Commission rules, is a serious matter. However, in an effort
to provide the Exchange with greater flexibility in addressing certain
violations of its rules, the MRVP provides a reasonable means to
address violations that do not rise to the level of requiring formal
BSE disciplinary proceedings. The Commission expects that BSE will
continue to conduct surveillance with due diligence, and make a
determination based on its findings whether fines of more or less than
the recommended amount are appropriate for violations of Exchange rules
under the MRVP, on a case by case basis, or if a violation requires
formal disciplinary action.
    BSE has requested that the Commission find good cause for approving
the proposed rule change before the thirtieth day after publication of
the notice in the Federal Register. The Commission believes that
granting accelerated approval of the proposal will allow the Exchange
to migrate to Web CRD on its intended date, October 1, 2007. The
Commission notes that it has approved similar proposals to implement
electronic registration for Chicago Board Options Exchange,
Incorporated \15\ and the Philadelphia Stock Exchange.\16\ The
Commission believes that BSE's proposal raises no new regulatory
issues, and it should make regulatory information with respect to its
members and their associated persons more readily available without
further delay.
---------------------------------------------------------------------------

    \15\ See Securities Exchange Act Release No. 46308 (August 2,
2002), 67 FR 51905 (August 9, 2002) (SR-CBOE-2001-66).
    \16\ See Securities Exchange Act Release No. 54960 (December 12,
2006), 71 FR 77851 (December 27, 2006) (SR-Phlx-2006-83).
---------------------------------------------------------------------------

    Accordingly, the Commission finds good cause, consistent with
Section 19(b)(2) of the Act,\17\ to grant accelerated approval to the
proposed rule change before the thirtieth day after the publication of
notice thereof in the Federal Register.
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\18\ that the proposed rule change (SR-BSE-2007-25), as modified by
Amendments No. 1, 2, and 3, be, and it hereby is, approved on an
accelerated basis.
---------------------------------------------------------------------------

    \18\ Id.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\19\
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Nancy M. Morris,
Secretary.
[FR Doc. E7-19906 Filed 10-9-07; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register: October 23, 2006 (Volume 71, Number 204)]
[Notices]
[Page 62137-62141]
[DOCID:fr23oc06-89]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 27518; 812-13043]

Pioneer America Income Trust, et al., Notice of Application

October 16, 2006.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for an order under section 12(d)(1)(J) of
the Investment Company Act of 1940 (``Act'') for an exemption from
sections 12(d)(1)(A) and (B) of the Act and under sections 6(c) and
17(b) of the Act for an exemption from section 17(a) of the Act.

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    Summary of the Applications: The order would permit certain
registered open-end management investment companies to acquire shares
of other registered open-end management investment companies both
within and outside the same group of investment companies.
    Applicants: Pioneer America Income Trust, Pioneer Balanced Fund,
Pioneer Bond Fund, Pioneer Emerging Growth Fund, Pioneer Emerging
Markets Fund, Pioneer Equity Income Fund, Pioneer Equity Opportunity
Fund, Pioneer Europe Select Equity Fund, Pioneer Fund, Pioneer
Fundamental Growth Fund, Pioneer Global High Yield Fund, Pioneer Growth
Shares, Pioneer High Yield Fund, Pioneer Ibbotson Asset Allocation
Series, Pioneer Independence Fund, Pioneer International Equity Fund,
Pioneer International Value Fund, Pioneer Mid Cap Growth Fund, Pioneer
Mid Cap Value Fund, Pioneer Money Market Trust, Pioneer Real Estate
Shares, Pioneer Research Fund, Pioneer Select Equity Fund, Pioneer
Select Value Fund, Pioneer Series Trust I, Pioneer Series Trust II,
Pioneer Series Trust III, Pioneer Series Trust IV, Pioneer Series Trust
V, Pioneer Short Term Income Fund, Pioneer Small Cap Value Fund,
Pioneer Strategic Income Fund, Pioneer Tax Free Income Fund, Pioneer
Value Fund, Pioneer Variable Contracts Trust (each a ``Fund'') and
Pioneer Investment Management, Inc. (``PIM'').
    Filing Dates: The application was filed on November 12, 2003, and
amended on September 22, 2006.
    Hearing or Notification of Hearing: An order granting the
application will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicants with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on November 9, 2006, and should be accompanied by proof of
service on applicants in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street NE., Washington, DC 20549-1090. Applicants, 60 State Street,
Boston, MA 02109.

FOR FURTHER INFORMATION CONTACT: Bruce R. MacNeil, Senior Counsel, at
(202) 551-6817 and Mary Kay Frech, Branch Chief, at<PHONE_NUMBER>
(Office of Investment Company Regulations, Division of Investment
Management).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained for a fee at the
Commission's Public Reference Branch, 100 F Street NE., Washington, DC
20549-0102,<PHONE_NUMBER>.

Applicants' Representations

    1. Each of the Funds is an open-end management investment company
registered under the Act. Certain of the Funds are comprised of
separate series (each series, also a ``Fund''). Pioneer Variable
Contracts Trust serves as a funding vehicle for separate accounts
registered under the Act (``Registered Separate Accounts'') and
separate accounts exempt from registration under the Act
(``Unregistered Separate Accounts,'' together with the Registered
Separate Accounts, the ``Separate Accounts'') of unaffiliated insurance
companies. PIM is an investment adviser registered under the Investment
Advisers Act of 1940.\1\
    2. Applicants request relief to permit certain Funds (the ``Funds
of Funds'') to acquire shares of registered open-end management
investment companies that are part of the same group of investment
companies, as defined in section 12(d)(1)(G)(ii) of the Act, as the
Funds (``Same Group Funds'') and shares of registered open-end
management investment companies that are not part of the same group of
investment companies as the Funds (``Other Group Funds,'' together with
Same Group Funds, the ``Underlying Funds'') in excess of the limits set
forth in section 12(d)(1)(A) of the Act, and Same Group Funds and Other
Group Funds, their principal underwriter, and any broker or dealer to
sell their shares to the Fund of Funds in excess of the limits set
forth in section 12(d)(1)(B) of the Act.\2\

Applicants also seek relief to permit Same Group Funds and Other Group
Funds that are affiliated persons of a Fund of Funds to sell shares to,
and redeem shares from, the Fund of Funds. Each Fund of Funds may also
make direct investments, including stocks, bonds and other securities,
which are consistent with its investment objective.
    3. Applicants state that each Fund of Funds will provide an
efficient and simple method of allowing investors to create either a
comprehensive asset allocation program or achieve diversification in
the market with just one investment. Applicants assert that the Fund of
Funds structure is helpful for investors who are able to identify their
investment goals but are not comfortable deciding how to invest their
assets to achieve those goals.

Applicants' Legal Analysis

A. Section 12(d)(1) of the Act

    1. Section 12(d)(1)(A) prohibits a registered investment company
from acquiring shares of any other investment company if the securities
represent more than 3% of the total outstanding voting stock of the
acquired company, more than 5% of the total assets of the acquiring
company or, together with the securities of other investment companies,
more than 10% of the total assets of the acquiring company. Section
12(d)(1)(B) prohibits a registered open-end investment company, its
principal underwriter and any broker or dealer from selling shares of
the company to another investment company if the sale will cause the
acquiring company to own more than 3% of the acquired company's
outstanding voting stock or more than 10% of the acquired company's
voting stock to be owned by investment companies generally.
    2. Section 12(d)(1)(J) of the Act provides that the Commission may
exempt any person, security or transaction from any provisions of
section 12(d)(1) if the exemption is consistent with the public
interest and the protection of investors. Applicants seek an exemption
under section 12(d)(1)(J) to permit a Fund of Funds to acquire shares
of Same Group Funds and Other Group Funds, and Same Group Funds and
Other Group Funds and their principal underwriter and any broker or
dealer to sell shares to a Fund of Funds, beyond the limits set forth
in sections 12(d)(1)(A) and (B) of the Act.
    3. Applicants state that the proposed arrangement will not give
rise to the policy concerns underlying sections 12(d)(1)(A) and (B),
which include concerns about undue influence by a fund of funds over
underlying funds, excessive layering of fees, and overly complex fund
structures. Accordingly, applicants believe that the requested
exemption is consistent with the public interest and the protection of
investors.
    4. Applicants state that the proposed arrangement will not result
in undue influence by a Fund of Funds or its affiliates over any Other
Group Fund. To limit the influence that a Fund of Funds may have over
an Other Group Fund, applicants propose a condition prohibiting (a)(i)
the Manager, (ii) any person controlling, controlled by or under common
control with the Manager, and (iii) any investment company or issuer
that would be an investment company but for section 3(c)(1) or 3(c)(7)
of the Act advised by the Manager or any person controlling, controlled
by or under common control with the Manager (collectively, the
``Group''), and (b)(i) any investment adviser within the meaning of
section 2(a)(20)(B) of the Act (``Subadviser'') of a Fund of Funds,
(ii) any person controlling, controlled by or under common control with
the Subadviser, and (iii) any investment company or issuer that would
be an investment company but for section 3(c)(1) or 3(c)(7) of the Act
(or portion of such investment company or issuer) advised by the
Subadviser or any person controlling, controlled by or under common
control with the Subadviser (collectively, the ``Subadviser Group'')
from controlling (individually or in the aggregate) an Other Group Fund
within the meaning of section 2(a)(9) of the Act.
    5. Applicants also propose conditions 2-7, stated below, to
preclude a Fund of Funds and its affiliated entities from taking
advantage of an Other Group Fund with respect to transactions between
the entities and to ensure the transactions will be on an arm's length
basis. Condition 2 precludes a Fund of Funds and its Manager, any
Subadviser, promoter, principal underwriter and any person controlling,
controlled by or under common control with any of these entities (each,
a ``Fund of Funds Affiliate'') from causing any existing or potential
investment by the Fund of Funds in an Other Group Fund to influence the
terms of any services or transactions between the Fund of Funds or a
Fund of Funds Affiliate and the Other Group Fund or its investment
adviser(s), promoter, principal underwriter and any person controlling,
controlled by or under common control with any of these entities (each,
an ``Other Group Fund Affiliate''). Condition 5 precludes a Fund of
Funds and Fund of Funds Affiliates (except to the extent they are
acting in their capacity as an investment adviser to an Other Group
Fund) from causing an Other Group Fund to purchase a security in an
offering of securities during the existence of any underwriting or
selling syndicate of which a principal underwriter is an officer,
director, member of an advisory board, Manager, Subadviser or employee
of a Fund of Funds, or a person of which any such officer, director,
member of an advisory board, Manager, Subadviser or employee is an
affiliated person (each, an ``Underwriting Affiliate,'' except any
person whose relationship to the Other Group Fund is covered by section
10(f) of the Act is not an Underwriting Affiliate). An offering of
securities during the existence of an underwriting or selling syndicate
of which a principal underwriter is an Underwriting Affiliate is an
``Affiliated Underwriting.''
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    \1\ Applicants also request relief for any other registered
open-end management investment company, or series thereof, that
currently or in the future is part of the same group of investment
companies, as defined in section 12(d)(1)(G)(ii) of the Act, as the
Funds (included in the term ``Funds'') and is advised by PIM or an
entity controlling, controlled by or under common control with PIM
(together with PIM, the ``Manager''). All entities that currently
intend to rely on the requested order are named as applicants. Any
other entities that rely on the order in the future will comply with
the terms and conditions of the application.
    \2\ The initial Funds of Funds are Pioneer Ibbotson Conservative
Allocation Fund, Pioneer Ibbotson Moderate Allocation Fund, Pioneer
Ibbotson Growth Allocation Fund and Pioneer Ibbotson Aggressive
Allocation Fund, each a series of Pioneer Ibbotson Asset Allocation
Series, and Pioneer Ibbotson Moderate Allocation VCT Portfolio,
Pioneer Ibbotson Growth Allocation VCT Portfolio, and Pioneer
Ibbotson Aggressive Allocation VCT Portfolio, each a series of
Pioneer Variable Contracts Trust.
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    6. In addition, as an assurance that an Other Group Fund
understands the implications of an investment by a Fund of Funds
operating in reliance on the requested exemptive relief from sections
12(d)(1)(A) and (B), prior to any investment by a Fund of Funds in the
Other Group Fund in excess of the limit set forth in section
12(d)(1)(A)(i), condition 8 requires the Fund of Funds and the Other
Group Fund to execute an agreement stating, without limitation, that
their boards of directors or trustees and their investment advisers
understand the terms and conditions of the order and agree to fulfill
their responsibilities under the order. Applicants note that the Other
Group Fund has the right to reject an investment from a Fund of Funds.
    7. Applicants do not believe that the proposed arrangement will
involve excessive layering of fees. With respect to investment advisory
fees, applicants state that, prior to reliance on the order and
subsequently in connection with the approval of any investment advisory
contract under section 15 of the Act, the board of directors or
trustees of a Fund of Funds (``Board''), including a majority of the
directors or trustees who are not ``interested persons,'' as defined in
section 2(a)(19) of the Act (``Independent Trustees''), will find that
the advisory fees charged to the Fund of Funds under its investment
advisory contract(s) are based on services provided that are in
addition to, rather than duplicative of, services provided under the
investment advisory contract(s) of any Same Group Fund and Other Group
Fund. Applicants further state that the Manager to a Fund of Funds will
waive fees otherwise payable to the Manager by a Fund of Funds in an
amount at least equal to any compensation (including fees received

pursuant to a plan adopted by the Other Group Fund under rule 12b-1
under the Act (``12b-1 Fees'')) received from the Other Group Fund by
the Manager, or an affiliated person of the Manager, other than any
advisory fees paid to the Manager or its affiliated person, in
connection with the investment by the Fund of Funds in the Other Group
Fund. Applicants also state that any Subadviser to a Fund of Funds will
waive fees otherwise payable to the Subadviser by the Fund of Funds in
an amount at least equal to any compensation received from the Other
Group Fund by the Subadviser, or an affiliated person of the
Subadviser, other than any advisory fees paid to the Subadviser or its
affiliated person, in connection with the investment by the Fund of
Funds in the Other Group Fund made at the direction of the Subadviser.
Applicants agree that the benefit of any such waiver by a Subadviser
will be passed through to the Fund of Funds.
    8. Applicants represent that the aggregate sales charges and/or
service fees (as defined in the NASD Conduct Rules) charged with
respect to any Fund of Funds will not exceed the limits applicable to
funds of funds set forth in NASD Conduct Rule 2830 (``Rule 2830'').
Applicants also represent that with respect to Registered Separate
Accounts that invest in a Fund of Funds, no sales load will be charged
at the Fund of Funds level or at the Underlying Fund level. Moreover,
the prospectus and sales literature for a Fund of Funds will contain
clear, concise, ``plain English'' disclosure tailored to the particular
document designed to inform investors of the unique characteristics of
the Fund of Funds' structure, including but not limited to, its expense
structure and the additional expenses of investing in Same Group Funds
and Other Group Funds. Each Fund of Funds will comply with the
disclosure requirements concerning aggregate costs of investing in the
Underlying Funds set forth in Investment Company Act Release No. 27399
by the compliance date set forth therein.
    9. Applicants contend that the proposed arrangement will not create
an overly complex fund structure. Applicants note that the Underlying
Funds will be prohibited from acquiring securities of any investment
company or company relying on section 3(c)(1) or 3(c)(7) of the Act in
excess of the limits contained in section 12(d)(1)(A), except to the
extent that such Underlying Fund (a) receives securities of another
investment company as a dividend or as a result of a plan of
reorganization of a company (other than a plan devised for the purpose
of evading section 12(d)(1)); or (b) acquires (or is deemed to have
acquired) securities of another investment company pursuant to
exemptive relief from the Commission permitting such Underlying Fund to
(i) acquire securities of one or more affiliated investment companies
for short-term cash management purposes or (ii) engage in interfund
borrowing and lending transactions.

B. Section 17(a) of the Act

    1. Section 17(a) generally prohibits purchases and sales of
securities, on a principal basis, between a registered investment
company and any affiliated person or promoter of, or principal
underwriter for, the company, and affiliated persons of such persons.
Section 2(a)(3) of the Act defines an ``affiliated person'' of another
person to include, among other things, any person directly or
indirectly owning, controlling or holding with power to vote 5% or more
of the other's outstanding voting securities; any person 5% or more of
whose outstanding voting securities are directly or indirectly owned,
controlled or held with power to vote by the other person; any person
directly or indirectly controlling, controlled by or under common
control with the other person; and any investment adviser to an
investment company.
    2. Section 17(b) authorizes the Commission to grant an order
permitting a transaction otherwise prohibited by section 17(a) if it
finds that (a) the terms of the proposed transaction, including the
consideration to be paid and received, are fair and reasonable and do
not involve overreaching on the part of any person concerned; (b) the
proposed transaction is consistent with the policies of each registered
investment company concerned; and (c) the proposed transaction is
consistent with the general purposes of the Act. Section 6(c) permits
the Commission to exempt any person or transaction, or any class or
classes of persons or transactions from any provisions of the Act, if
such exemption is necessary or appropriate in the public interest and
consistent with the protection of investors and the purposes fairly
intended by the policy and provisions of the Act.
    3. Applicants state that a Fund of Funds and the Same Group Funds
may be deemed to be under common control since both are advised by the
Manager. Applicants also state that an Underlying Fund might be deemed
to be an affiliated person of a Fund of Funds if the Fund of Funds
acquires 5% or more of the Underlying Fund's outstanding voting
securities. Accordingly, section 17(a) could prevent a Same Group Fund
or an Other Group Fund from selling shares to, and redeeming shares
from, a Fund of Funds.
    4. Applicants seek an exemption under sections 6(c) and 17(b) to
allow the proposed transactions. Applicants state that the transactions
satisfy the standards for relief under sections 6(c) and 17(b).
Specifically, applicants state that the terms of the transactions are
fair and reasonable and do not involve overreaching. Applicants
represent that the proposed transactions will be consistent with the
policies of each Fund of Funds and Underlying Fund, and with the
general purposes of the Act. In addition, applicants note that the
consideration paid in sales and redemptions permitted under the
requested order of shares of the Underlying Funds will be based on the
net asset values of the Underlying Funds.

Applicants' Conditions

    Applicants agree that the order granting the requested relief will
be subject to the following conditions:
    1. The members of the Group will not control (individually or in
the aggregate) an Other Group Fund within the meaning of section
2(a)(9) of the Act. The members of the Subadviser Group will not
control (individually or in the aggregate) an Other Group Fund within
the meaning of section 2(a)(9) of the Act. If, as a result of a
decrease in the outstanding voting securities of an Other Group Fund,
the Group or the Subadviser Group, each in the aggregate, becomes a
holder of more than 25 percent of the outstanding voting securities of
an Other Group Fund, the Group and the Subadviser Group (except for any
member of the Group or the Subadviser Group that is a Separate Account)
will vote its shares of the Other Group Fund in the same proportion as
the vote of all other holders of the Other Group Fund's shares. A
Registered Separate Account will seek voting instructions from its
contract holders and will vote its shares of an Other Group Fund in
accordance with the instructions received and will vote those shares
for which no instructions were received in the same proportion as the
shares for which instructions were received. An Unregistered Separate
Account will either (a) vote its shares of the Other Group Fund in the
same proportion as the vote of all other holders of the Other Group
Fund's shares; or (b) seek voting instructions from its contract
holders and vote its shares in accordance with the instructions
received and vote those

shares for which no instructions were received in the same proportion
as the shares for which instructions were received. This condition
shall not apply to the Subadviser Group with respect to an Other Group
Fund for which the Subadviser, or a person controlling, controlled by,
or under common control with the Subadviser, acts as the investment
adviser within the meaning of section 2(a)(20)(A) of the Act.
    2. No Fund of Funds or Fund of Funds Affiliate will cause any
existing or potential investment by the Fund of Funds in an Other Group
Fund to influence the terms of any services or transactions between the
Fund of Funds or a Fund of Funds Affiliate and the Other Group Fund or
an Other Group Fund Affiliate.
    3. The Board of each Fund of Funds, including a majority of the
Independent Trustees, will adopt procedures reasonably designed to
assure that the Manager and any Subadviser to the Fund of Funds are
conducting the investment program of the Fund of Funds, including the
initial selection of Other Group Funds and any subsequent changes,
without taking into account any consideration received by the Fund of
Funds or a Fund of Funds Affiliate from an Other Group Fund or an Other
Group Fund Affiliate in connection with any services or transactions
including any revenue sharing or similar payments by an Other Group
Fund Affiliate to a Fund of Funds Affiliate.
    4. Once an investment by a Fund of Funds in the securities of an
Other Group Fund exceeds the limit in section 12(d)(1)(A)(i) of the
Act, the board of directors or trustees of the Other Group Fund,
including a majority of the Independent Trustees, will determine that
any consideration paid by the Other Group Fund to the Fund of Funds or
a Fund of Funds Affiliate in connection with any services or
transactions: (a) Is fair and reasonable in relation to the nature and
quality of the services and benefits received by the Other Group Fund;
(b) is within the range of consideration that the Other Group Fund
would be required to pay to another unaffiliated entity in connection
with the same services or transactions; and (c) does not involve
overreaching on the part of any person concerned. This condition does
not apply with respect to any services or transactions between an Other
Group Fund and its investment adviser(s), or any person controlling,
controlled by, or under common control with such investment adviser(s).
    5. No Fund of Funds or Fund of Funds Affiliate (except to the
extent it is acting in its capacity as an investment adviser to an
Other Group Fund) will cause an Other Group Fund to purchase a security
in an Affiliated Underwriting.
    6. The board of directors or trustees of an Other Group Fund,
including a majority of the Independent Trustees, will adopt procedures
reasonably designed to monitor any purchases of securities by the Other
Group Fund in Affiliated Underwritings, once an investment by a Fund of
Funds in shares of the Other Group Fund exceeds the limit of section
12(d)(1)(A)(i) of the Act, including any purchases made directly from
an Underwriting Affiliate. The board will review these purchases
periodically, but no less frequently than annually, to determine
whether the purchases were influenced by the investment by a Fund of
Funds in shares of the Other Group Fund. The board should consider,
among other things: (a) Whether the purchases were consistent with the
investment objectives and policies of the Other Group Fund; (b) how the
performance of securities purchased in an Affiliated Underwriting
compares to the performance of comparable securities purchased during a
comparable period of time in underwritings other than Affiliated
Underwritings or to a benchmark such as a comparable market index; and
(c) whether the amount of securities purchased by the Other Group Fund
in Affiliated Underwritings and the amount purchased directly from an
Other Group Fund have changed significantly from prior years. The board
shall take any appropriate actions based on its review, including, if
appropriate, the institution of procedures designed to assure that
purchases of securities in Affiliated Underwritings are in the best
interest of shareholders.
    7. Each Other Group Fund shall maintain and preserve permanently in
an easily accessible place a written copy of the procedures described
in the preceding condition, and any modifications, and will maintain
and preserve for a period of not less than six years from the end of
the fiscal year in which any purchase in an Affiliated Underwriting
occurred, the first two years in an easily accessible place, a written
record of each purchase of securities in Affiliated Underwritings once
an investment by a Fund of Funds in the securities of the Other Group
Fund exceeds the limit of section 12(d)(1)(A)(i) of the Act, setting
forth from whom the securities were acquired, the identity of the
underwriting syndicate's members, the terms of the purchase, and the
information or materials upon which the board's determinations were
made.
    8. Before investing in an Other Group Fund in excess of the limit
in section 12(d)(1)(A)(i), each Fund of Funds and the Other Group Fund
will execute an agreement stating, without limitation, that their
boards of directors or trustees and their investment advisers
understand the terms and conditions of the order and agree to fulfill
their responsibilities under the order (``Participation Agreement'').
At the time of its investment in shares of an Other Group Fund in
excess of the limit in section 12(d)(1)(A)(i), a Fund of Funds will
notify the Other Group Fund of the investment. At such time, the Fund
of Funds will also transmit to the Other Group Fund a list of the names
of each Fund of Funds Affiliate and Underwritings Affiliate. The Fund
of Funds will notify the Other Group Fund of any changes to the list of
names as soon as reasonably practicable after a change occurs. The
Other Group Fund and the Fund of Funds will maintain and preserve a
copy of the order, the Participation Agreement and the list with any
updated information for the duration of the investment and for a period
of not less than six years thereafter, the first two years in an easily
accessible place.
    9. Before approving any advisory contract under section 15 of the
Act, the Board of each Fund of Funds, including a majority of the
Independent Trustees, will find that the advisory fees charged under
such advisory contract(s) are based on services provided that will be
in addition to, rather than duplicative of, the services provided under
the advisory contract(s) of any Underlying Fund in which the Fund of
Funds may invest. These findings and their basis will be recorded fully
in the minute books of the appropriate Fund of Funds.
    10. The Manager will waive fees otherwise payable to the Manager by
the Fund of Funds, in an amount at least equal to any compensation
(including fees received pursuant to any plan adopted by an Other Group
Fund under rule 12b-1 under the Act) received from an Other Group Fund
by the Manager, or an affiliated person of the Manager, other than any
advisory fees paid to the Manager or its affiliated person by the Other
Group Fund, in connection with the investment by the Fund of Funds in
the Other Group Fund. Any Subadviser will waive fees otherwise payable
to the Subadviser, directly or indirectly, by the Fund of Funds in an
amount at least equal to any compensation received from an Other Group
Fund by the Subadviser, or an affiliated person of the Subadviser,
other than any advisory fees paid to the Subadviser or its affiliated
person by the Other Group Fund, in

connection with the investment by the Fund of Funds in the Other Group
Fund made at the direction of the Subadviser. In the event that the
Subadviser waives fees, the benefit of the waiver will be passed
through to the Fund of Funds.
    11. With respect to Registered Separate Accounts that invest in a
Fund of Funds, no sales load will be charged at the Fund of Funds level
or at the Underlying Fund level. Other sales charges and services fees,
as defined in Rule 2830, if any, will only be charged at the Fund of
Funds level or at the Underlying Fund level, but not both. With respect
to other investments in a Fund of Funds, any sales charges and/or
service fees will not exceed the limits applicable to a fund of funds
as set forth in Rule 2830.
    12. No Underlying Fund will acquire securities of any investment
company or company relying on section 3(c)(1) or 3(c)(7) of the Act in
excess of the limits contained in section 12(d)(1)(A) of the Act except
to the extent the Underlying Fund (a) receives securities of another
investment company as a dividend or as a result of a plan of
reorganization of a company (other than a plan devised for the purpose
of evading section 12(d)(1) of the Act); or (b) acquires (or is deemed
to have acquired) securities of another investment company pursuant to
exemptive relief from the Commission permitting the Underlying Fund to
(i) acquire securities of one or more affiliated investment companies
for short-term cash management purposes; or (ii) engage in interfund
borrowing or lending transactions.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Nancy M. Morris,
Secretary.
 [FR Doc. E6-17619 Filed 10-20-06; 8:45 am]

BILLING CODE 8011-01-P