[Federal Register: January 29, 2010 (Volume 75, Number 19)]
[Proposed Rules]
[Page 4742-4745]
[DOCID:fr29ja10-18]

=======================================================================
-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2009-0269; FRL-9107-6]

Approval and Promulgation of Implementation Plans; State of
California; Legal Authority

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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

SUMMARY: EPA is proposing to clarify the contents of the applicable
implementation plan for the State of California under the Clean Air
Act. Specifically, EPA is proposing to clarify that the statutory
provisions submitted by California and approved by EPA in 1972
supporting the State's legal authority chapter of the original
implementation plan were superseded by a subsequent approval by EPA in
1980 of California's revision to the legal authority chapter of the
plan. EPA is proposing this action to clarify the status in the
California plan of the statutory provisions submitted and approved in
1972.

DATES: Any comments must arrive by March 1, 2010.

ADDRESSES: Submit comments, identified by docket number EPA-R09-OAR-
2009-0269, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov.
Follow the online instructions.
     E-mail<EMAIL_ADDRESS>     Mail or deliver: Gerardo Rios, Chief, Permits Office (AIR-
3), U.S. Environmental Protection Agency, Region IX, 75 Hawthorne
Street, San Francisco, CA 94105.
    Instructions: All comments will be included in the public docket
without change and may be made available online at http://
www.regulations.gov, including any personal information provided,
unless the comment includes Confidential Business Information (CBI) or
other information whose disclosure is restricted by statute.
Information that you consider CBI or otherwise protected should be
clearly identified as such and should not be submitted through http://
www.regulations.gov or e-mail. http://www.regulations.gov is an
``anonymous access'' system, and EPA will not know your identity or
contact information unless you provide it in the body of your comment.
If you send e-mail directly to EPA, your e-mail address will be
automatically captured and included as part of the public comment. If
EPA cannot read your comment due to technical difficulties and cannot
contact you for clarification, EPA may not be able to consider your
comment.
    Docket: The index to the docket for this action is available
electronically at http://www.regulations.gov and in hard copy at EPA
Region IX, 75 Hawthorne Street, San Francisco, California. While all
documents in the docket are listed in the index, some information may
be publicly available only at the hard copy location (e.g., copyrighted
material), and some may not be publicly available in either location
(e.g., CBI). To inspect the hard copy materials, please schedule an

appointment during normal business hours with the contact listed in the
FOR FURTHER INFORMATION CONTACT section below.

FOR FURTHER INFORMATION CONTACT: Gerardo Rios, Chief, Permits Office
(AIR-3), U.S. Environmental Protection Agency, Region IX, (415) 972-
3974<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us'' and
``our'' refer to EPA.

Table of Contents

I. Summary of Today's Proposed Action
II. Background
III. Proposed Action
IV. Public Comment and Final Action
V. Statutory and Executive Order Reviews

I. Summary of Today's Proposed Action

    In today's action, under the Clean Air Act (CAA or ``Act''), we are
proposing to clarify that the statutory provisions submitted by
California in 1972 supporting the State's legal authority chapter of
the original implementation plan were superseded by a subsequent
approval by EPA in 1980 of a revision to California's legal authority
chapter of the plan.

II. Background

    Pursuant to the Clean Air Act (CAA or ``Act''), as amended in 1970,
EPA promulgated national ambient air quality standards (NAAQS) for
certain air pollutants, including photochemical oxidants, hydrocarbons,
carbon monoxide, nitrogen dioxide, sulfur oxides, and particulate
matter. The 1970 Amended Act required each state to submit to EPA a
plan which provides for the implementation, maintenance, and
enforcement of the NAAQS within the state. These plans are referred to
as state implementation plans (SIPs).
    The 1970 Amended Act also established content requirements for
SIPs. Among other elements, the 1970 Amended Act required SIPs to
provide ``necessary assurances that the State will have adequate * * *
authority to carry out such implementation plan, * * *.'' See section
110(a)(2)(F)(i) of the 1970 Amended Act. In 40 CFR 51.11 (now codified
at 40 CFR 51.230-51.232), EPA regulations further specify that ``Each
plan shall show that the State has legal authority to carry out the
plan, including authority to (1) Adopt emission standards and
limitations, * * *. (2) Enforce applicable laws, regulations,
standards, * * *.'' EPA regulations further specify: ``The provisions
of law or regulation which the State determines provide the authorities
required under this section shall be specifically identified, and
copies of such laws or regulations shall be submitted with the plan.''
See 40 CFR 51.11(c) (1972). In other words, the laws or regulations
relied upon by the State to provide the necessary assurances of
adequate legal authority must be identified in the plan, but copies of
the actual laws or regulations themselves, while they must be submitted
with the plan, need not be part of the plan itself.
    On February 21, 1972, Governor Ronald Reagan submitted the original
California SIP to EPA. The original SIP consisted of 13 parts, the
first of which was referred to as the ``State General Plan.'' The other
parts contained air-basin-specific elements and appendices. The ``State
General Plan'' was divided into eight chapters. Chapter 7 (``Legal
Considerations,'' or, as referred to herein, the ``legal authority''
chapter) was submitted as part of the original SIP to meet the
statutory and regulatory requirements described above in connection
with legal authority. Chapter 7 describes, among other things, the
history of air pollution control in California, the legal authority of
the California Air Resources Board (ARB) and the local air districts to
adopt emission limitations, enforce applicable laws, prevent new
construction, obtain emission information, require source monitoring,
and describes various principles governing transportation and land use
controls. Chapter 7 includes many citations to individual sections
within the California Health & Safety, Penal, Civil Procedure,
Government, and Vehicle codes, as well as citations to (then) recently
approved legislation, and attorney general opinions as support for the
assurance that adequate legal authority exists in the state to meet CAA
and EPA SIP requirements.
    The state included an appendix to chapter 7 (entitled ``Appendix
II: State Statutes and other Legal Documents Pertinent to Air Pollution
Control in California'') in the plan (herein, ``appendix II'') that
included the specific sections of California code and other legal
documents cited in chapter 7, but also included many sections of the
California Health & Safety Code (CH&SC) that were not cited
specifically in chapter 7. Appendix II was organized into 14
categories: CH&SC provisions related to air pollution and pertinent
1971 amendments (not then yet codified), certain Penal Code sections,
Senate Bill 678 (related to authority of attorney general to protect
the environment), the California Emergency Services Act, an order
approved by the Governor related to emergencies, certain California
Code of Civil Procedure sections, certain Government Code sections,
examples of continuous monitoring rules, the California Public Records
Act, a Letter Opinion of the California Attorney General dated March 8,
1971 related to authority for regulating fuel composition, a Letter
Opinion of the California Attorney General dated October 6, 1971
related to authority of the San Francisco Bay Area air pollution
control district to prevent new construction, certain California
Vehicle Code sections related to bus and commuter freeway lanes, SB 325
(1971) establishing a sales tax on gasoline, and various land use laws,
including Assembly Bill (AB) 2070 (1970) related to land use planning
requirements and the establishment of the Office of Planning and
Research, certain California Government Code provisions, and AB 1301
(1970) related to consistency between zoning and general plans.
    In May 1972, EPA approved in part and disapproved in part the
original California SIP. See 37 FR 10842 (May 31, 1972) and 40 CFR
52.220(b). With respect to legal authority, EPA approved the submittal
but found that the SIP did not meet certain requirements related to air
pollution emergencies and availability of emission data. See 37 FR
10842, at 10852 and 40 CFR 52.225. EPA's approval included both chapter
7 and the statutory and other documents contained in appendix II as
described above.
    In response to EPA's request and in response to the Clean Air Act
Amendments of 1977, California undertook a comprehensive update to the
California SIP. On March 16, 1979, the ARB submitted a revision to the
legal authority chapter of the SIP, entitled ``Chapter 3--Legal
Authority, Revision to State of California Implementation Plan for the
Attainment and Maintenance of Ambient Air Quality Standards (December
1978),'' (also referred to herein as the revised ``legal authority''
chapter). Much like the original legal authority chapter, the revised
legal authority chapter provides an overview of air pollution control
in California, generally describes the statutory responsibilities and
authority of the ARB and the air pollution control districts, and
addresses specific legal authorities for enforcement of the SIP, right
of entry and source information gathering, public availability of data,
emergency episodes, new source review, vehicular controls, and
transportation and land use controls. While the general topics covered
in the revised legal authority chapter were similar to those covered in
the original legal authority chapter, the discussion is completely re-
organized and updated to reflect, among other things, recodifications
of statutory

provisions. Also, like the legal authority chapter in the original SIP,
the revised legal authority chapter includes numerous citations to
individual sections of the CH&SC (which had been re-numbered and re-
codified since the time of the original SIP), certain citations to
other California codes (e.g., Business and Professions Code,
Administrative Code, Government Code and Vehicle Code) and an attorney
general's letter opinion. However, unlike the legal authority chapter
in the original SIP, the revised legal authority chapter, as submitted
in 1979, did not include physical copies of the actual statutory
provisions nor the other documents cited in the chapter. Instead, the
1979 SIP revision simply incorporates by reference the 1978 edition of
California Air Pollution Control Laws as ``appendix 3-A'' to the
chapter. Later in 1979, we proposed approval of the revised SIP
``Chapter 3--Legal Authority'' as an update and clarification of the
1972 SIP. See 44 FR 38912 (July 3, 1979). The following year, we took
final action, effective September 10, 1980, to approve the revised
legal authority chapter. See 45 FR 53136 (August 11, 1980) and 40 CFR
52.220(c)(48). Since that time, EPA has not approved any other revision
to the chapter that addresses legal authority in the California SIP.
    Recently, the status of the statutory provisions from the original
SIP has come into question in the context of third party litigation, an
EPA rulemaking action on a revision to new source review rules in the
San Joaquin Valley, and a lawsuit filed against EPA challenging certain
EPA actions on the premise that such actions were arbitrary and
capricious if a certain statutory provision submitted and approved by
EPA in connection with the original SIP remains in effect as part of
the current applicable California SIP.\1\ Thus, we believe that
clarification of the status of the statutory provisions (and other
legal documents) submitted in connection with the original SIP is
necessary and appropriate at this time.
---------------------------------------------------------------------------

    \1\ See Ass'n of Irritated Residents v. C&R Vanderham Dairy, No.
1:05-CV-01593(OWW) (E.D. Cal.) (third-party litigation); 73 FR 9260
(February 20, 2008) (EPA proposed rule approving changes to San
Joaquin Valley new source review rules); and Sierra Club v. EPA, No.
08-70395 (9th Cir. filed January 28, 2008) (petition for review of
three EPA actions). The particular provision at issue in these
examples is CH&SC section 24265, which excludes certain categories
of emissions sources, including equipment used in agricultural
operations in the growing of crops or raising of fowls or animals,
from the general grant of authority to local air districts to
require permits for new and existing emissions sources. CH&SC
section 24265 was not cited specifically in the legal authority
chapter of the original SIP but was included within the large
excerpt from the CH&SC submitted by the State of California in
support of the original legal authority chapter. (CH&SC section
24265 was later re-codified as CH&SC section 42310.) As proposed in
this action, it is clear that the statutory agricultural permitting
exemption from the original SIP does not remain in effect as part of
the current applicable California SIP. For the purposes of State
law, effective January 1, 2004, Senate Bill 700 (2003) repealed the
full permitting exemption for agricultural sources then in CH&SC
42310(e) and added a new section that provides a limited permitting
exemption for minor agricultural sources. However, the California
SIP has historically included, and continues to include, certain
local district permitting rules that explicitly exempt agricultural
sources or refer to the statutory agricultural exemption. EPA
expects California to continue the process of revising local
district permitting rules as necessary to amend the SIP consistent
with the provisions of Senate Bill 700.
---------------------------------------------------------------------------

III. Proposed Action

    As shown from the State's submittals and the regulatory history of
EPA's actions on the legal authority chapter, and revisions thereto, of
the California SIP (as described in the previous section of this
document), the statutory provisions and other legal documents submitted
in support of the legal authority chapter in the original SIP are no
longer part of the California SIP. The statutory provisions and other
legal documents were superseded by our 1980 approval of the revised
legal authority chapter of the California SIP (codified at 40 CFR
52.220(c)(48)). Our conclusion in this regard follows from our finding,
based on the nature and scope of the revised chapter and the mismatch
between the statutory citations in the revised chapter and those
contained in the original chapter, that the 1979 submittal of the
revised legal authority chapter represented a wholesale replacement of
the original chapter.\2\ We also note that the actual statutory
provisions and other legal documents relied upon to support a state's
assurance of adequate legal authority need not be approved into the SIP
under CAA section 110 or EPA's SIP regulations in 40 CFR part 51
(although such provisions are required to be submitted with the plan).
Thus, EPA could approve, consistent with CAA and EPA requirements, and
did so in this instance, a wholesale revision to the original legal
authority chapter without also approving the actual statutory
provisions and other legal documents cited therein.\3\
---------------------------------------------------------------------------

    \2\ ARB described the nature and purpose of that agency's
comprehensive update of the California SIP during the late 1970's as
follows: ``The [EPA] has formally requested that the [ARB] update
the State of California Implementation Plan for Achieving and
Maintaining the National Ambient Air Quality Standards, usually
referred to simply as the `SIP.' The original SIP document,
submitted to EPA in 1972, has become obsolete largely because of the
many modifications to federal, state, and local air pollution rules
and regulations and substantial advancements in technical aspects of
air pollution prediction and control. A new SIP 1978 Working
Document has been prepared as an initial response to the EPA request
and contains an updated summary and description of the California
SIP. * * * The SIP 1978 Working Document is a step towards replacing
the obsolete 1972 SIP.'' See page 1 of Chapter 1 (``Introduction'')
(April 1978) of the SIP--78 Working Document. Therefore, the revised
legal authority was intended by ARB, and approved by EPA, as a
wholesale replacement of the original legal authority chapter,
including the related statutory provisions and other materials
submitted in support of the original chapter.
    \3\ We view the revised legal authority chapter's incorporation
(as appendix 3-A) of the 1978 edition of California Air Pollution
Control Laws as simply providing a general reference to where the
statutory citations in the chapter could be located rather than as
having the effect of a literal reading of the provisions into the
chapter.
---------------------------------------------------------------------------

    To memorialize our interpretation of the effect of our 1980
approval of the revised legal authority chapter of the California SIP
and thereby clarify the status of the statutory and other legal
documents submitted in connection with the original California SIP's
legal authority chapter, we propose today under CAA section 301(a)(1)
\4\ to revise 40 CFR 52.220(b)(12)(i).
---------------------------------------------------------------------------

    \4\ CAA section 301(a)(1) states: ``The Administrator is
authorized to prescribe such regulations as are necessary to carry
out his functions under this chapter. * * *.'' We believe that our
rule proposed herein today is necessary to clarify the contents of
the California SIP and thereby carry out the functions of EPA in
connection with the state's plan.
---------------------------------------------------------------------------

    The relevant provision of the CFR, 40 CFR 52.220(b)(12), currently
lists certain CH&SC provisions related to variances that EPA deleted
from the California SIP in 2004. See 69 FR 67062 (November 16, 2004).
In today's action, we are proposing to revise 40 CFR 52.220(b)(12) to
clarify that none of the statutory provisions (and other legal
documents) submitted in connection with chapter 7 (Legal
Considerations) of the original California SIP remain in the SIP, not
just the few provisions currently listed. We propose to revise 40 CFR
52.220(b)(12) to codify the date (September 10, 1980) on which the
statutory provisions (and other legal documents) were superseded in the
California SIP.
    The effect of our action, if finalized as proposed, would be to
clarify that the subject statutory provisions, including the statutory-
based agricultural permitting exemption contained in CH&SC section
24265, have not been part of the California SIP since the effective
date (September 10, 1980) of our 1980 approval of the revised legal
authority chapter of the California SIP.\5\
---------------------------------------------------------------------------

    \5\ However, as noted in footnote 1 in this document,
the California SIP has historically included, and continues to
include, certain local district permitting rules that explicitly
exempt agricultural sources or refer to the statutory agricultural
exemption. EPA expects California to continue the process of
revising local district permitting rules as necessary to amend the
SIP consistent with the provisions of Senate Bill 700.

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

IV. Public Comment and Final Action

    Under CAA section 301(a)(1) and for the reasons discussed above,
EPA is proposing to clarify that the statutory provisions and other
legal documents submitted in connection with the legal authority
chapter of the original 1972 California SIP were superseded by EPA's
approval of a revised legal authority chapter in 1980 (and codified at
40 CFR 52.220(c)(48)). To memorialize EPA's interpretation of the
effect of the 1980 final rule on the earlier submitted and approved
statutory provisions and other legal documents, EPA is proposing to
revise 40 CFR 52.220(b)(12)(i) to read as follows:

    ``(i) Previously approved on May 31, 1972 and deleted without
replacement, effective September 10, 1980, chapter 7 of part I and
all of the statutory provisions and other legal documents contained
in appendix II to chapter 7 (Legal Considerations).''

    EPA is soliciting public comments on the issues discussed in this
document and will accept comments for the next 30 days. These comments
will be considered before taking final action.

V. Statutory and Executive Order Reviews

    Under the Clean Air Act, the Administrator is required to approve a
SIP submission that complies with the provisions of the Act and
applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a).
Thus, in reviewing SIP submissions, EPA's role is to approve state
choices, provided that they meet the criteria of the Clean Air Act.
Accordingly, this action merely proposes to clarify the effect of a
previous approval by EPA of a state submittal as meeting Federal
requirements and does not impose additional requirements beyond those
imposed by state law. For that reason, this proposed action:
     Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Order
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the Clean Air Act; and
     Does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this proposed rule does not have tribal implications
as specified by Executive Order 13175 (65 FR 67249, November 9, 2000),
because the SIP is not approved to apply in Indian country located in
the state, and EPA notes that it will not impose substantial direct
costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Intergovernmental
relations, Oxides of nitrogen, Ozone, Reporting and recordkeeping
requirements, Volatile organic compounds.

    Accordingly, 40 CFR Part 52 is proposed to be amended as follows:

PART 52--[AMENDED]

    1. The authority citation for part 52 continues to read as follows:

    Authority:  42 U.S.C. 7401 et seq.

    2. Section 52.220 is amended by revising paragraph (b)(12)(i) to
read as follows:

Sec.  52.220  Identification of plan.

* * * * *
    (b) * * *
    (12) * * *
    (i) Previously approved on May 31, 1972 and deleted without
replacement, effective September 10, 1980, chapter 7 of part I and all
of the statutory provisions and other legal documents contained in
appendix II to chapter 7 (Legal Considerations).
* * * * *

    Dated: January 21, 2010.
Jared Blumenfeld,
Regional Administrator, Region IX.
[FR Doc. 2010-1839 Filed 1-28-10; 8:45 am]
BILLING CODE 6560-50-P


27555 Federal Register / Vol. 68, No. 97 / Tuesday, May 20, 2003 / Notices order. The Commission will issue further orders as that review progresses.

Magalie R. Salas, Secretary. [ FR Doc. 03   12623 Filed 5   19   03; 8: 45 am]

BILLING CODE 6717   01   P ENVIRONMENTAL PROTECTION AGENCY [ OW   2003   0013, FRL   7501   2]

Agency Information Collection Activities: Title IV of the Public Health Security and Bioterrorism Preparedness and Response Act of 2002: Drinking Water Security and Safety ( Act); Comment Request AGENCY: Environmental Protection Agency. ACTION: Notice.

SUMMARY: In compliance with the Paperwork Reduction Act ( 44 U. S. C. 3501 et seq.), this document announces that EPA is planning to submit the following continuing Information Collection Request ( ICR) to the Office of Management and Budget ( OMB): Title IV of the Public Health Security and Bioterrorism Preparedness and Response Act of 2002: Drinking Water Security and Safety ( Act), hereinafter referred to as the Bioterrorism Act; ICR No. 2103.02; OMB Control No. 2040   0253; expiration date September 30, 2003. Before submitting this continuing ICR to OMB for review and approval, EPA is soliciting comments on specific aspects of the proposed information collection as described below. DATES: Comments must be submitted on or before July 21, 2003. ADDRESSES: Follow the detailed instructions in SUPPLEMENTARY INFORMATION.

FOR FURTHER INFORMATION CONTACT: Susan Dolgin, Water Protection Task Force, Office of Ground Water and Drinking Water, 4601M, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone number: ( 202) 564   9895; fax number: ( 202) 564   3753; e mail address: dolgin. susan@ epa. gov. SUPPLEMENTARY INFORMATION: EPA has established a public docket for this ICR under Docket ID number OW   2003   0013, which is available for public viewing at the Water Docket in the EPA Docket Center ( EPA/ DC), EPA West, Room B102, 1301 Constitution Ave., NW., Washington, DC. 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 ( 202) 566   1744, and the telephone number for the Water Docket is ( 202) 566   2426. An electronic version of the public docket is available through EPA Dockets ( EDOCKET) at http:// www. epa. gov/ edocket. Use EDOCKET to obtain a copy of the draft collection of information, 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. Once in the system, select `` search,'' then key in the docket ID number identified above. Any comments related to this ICR should be submitted to EPA within 60 days of this notice, and according to the following detailed instructions: ( 1) Submit your comments to EPA online using EDOCKET ( our preferred method), ( 2) by email to OW Docket@ epa. gov, or ( 3) by mail to: EPA Docket Center, Environmental Protection Agency, Water Docket ( mail code 4101T), 1200 Pennsylvania Ave., NW., Washington, DC 20460. EPA's policy is that public comments, whether submitted electronically or on paper, will be made available for public viewing in EDOCKET as EPA receives them and without change, unless the comment contains copyrighted material, CBI, or other information for which public disclosure is restricted by statute. When EPA identifies a comment containing copyrighted material, EPA will provide a reference to that material in the version of the comment that is placed in EDOCKET. The entire printed comment, including the copyrighted material, will be available in the public docket. Although identified as an item in the official docket, information claimed as CBI, or whose disclosure is otherwise restricted by statute, is not included in the official public docket, and will not be available for public viewing in EDOCKET. For further information about the electronic docket, see EPA's Federal Register notice describing the electronic docket at 67 FR 38102 ( May 31, 2002), or go to http:/ / www. epa. gov./ edocket. Affected Entities: Entities potentially affected by this action are community water systems serving more than 3,300 people. Title: Title IV of the Public Health Security and Bioterrorism Preparedness and Response Act of 2002: Drinking Water Security and Safety ( Act); OMB Control Number 2040   0253; EPA ICR Number 2103.02; expiring September 30, 2003. Abstract: The Bioterrorism Act requires each community water system serving a population of more than 3,300 people to conduct a vulnerability assessment of its water system and to prepare or revise an emergency response plan that incorporates the results of the vulnerability assessment. These requirements are mandatory under the statute. EPA will use the information collected under this ICR to determine whether community water systems have conducted vulnerability assessments and prepared or revised emergency response plans in compliance with that Act. EPA is required to protect all vulnerability assessments and all information derived from them from disclosure to unauthorized parties and has established an Information Protection Protocol describing how that will be accomplished. This Notice provides the opportunity to comment on EPA's request to renew this ICR, which was approved by the Office of Management and Budget ( OMB) on an emergency basis for 180 days, beginning March 31, 2003. During the 10 day comment period that was provided during that action, the following comments were raised: i. EPA should reassess its burden estimates for developing emergency response plans; ii. EPA should present total burden estimates in a clearer format; iii. EPA should explain more clearly what is meant by a `` compliance review;'' iv. EPA should clarify the statutory deadlines for submitting emergency response plan certifications. EPA has changed the information document that supports this Notice to explain more clearly what is meant by a vulnerability assessment `` compliance review'' and also to clarify the statutory deadlines for submitting emergency response plan certifications to EPA. At this time, EPA would like to solicit comments to: ( i) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility; ( ii) evaluate the accuracy of the Agency's estimate of the burden of the proposed collection of information ( especially pertaining to the development of emergency response plans), including the validity of the methodology and assumptions used; ( iii) enhance the quality, utility, and clarity of the information to be collected; and ( iv) minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated electronic, mechanical, or other technological VerDate Jan< 31> 2003 18: 30 May 19, 2003 Jkt 200001 PO 00000 Frm 00038 Fmt 4703 Sfmt 4703 E:\ FR\ FM\ 20MYN1. SGM 20MYN1 27556 Federal Register / Vol. 68, No. 97 / Tuesday, May 20, 2003 / Notices collection techniques or other forms of information technology, e. g., permitting electronic submission of responses. 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. Burden Statement: 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. Respondents or Affected Entities: Community water systems serving populations greater than 3,300 persons. Estimated Number of Respondents: 8,487 systems. Average Annual Reporting Burden: 2,652,393 hours/ year over a three year period. This includes the burden required for all affected community water systems to conduct vulnerability assessments, prepare or update emergency response plans, and submit the required items to EPA. The total burden for these systems is 7,957,179 hours, which is largely concentrated in calendar years 2003 and 2004. Average burden per response: 117.9 hours/ response. This figure is an average that was calculated from burden estimates applicable to systems ranging in size from the smallest ( serving 3,301 persons) up to the very largest ( serving millions of persons). The burden hours vary widely, then, depending on system size, and the average burden figure should not be interpreted as applicable to all systems. Frequency of Response: Varies based on statutory schedule and system size. Average Annual Cost: $ 156,540,365; includes $ 82,211 O& M costs and $ 0 capital and startup costs.

Dated: May 13, 2003. Cynthia C. Dougherty, Director, Office of Ground Water and Drinking Water. [ FR Doc. 03   12617 Filed 5   19   03; 8: 45 am]

BILLING CODE 6560   50   P ENVIRONMENTAL PROTECTION AGENCY [ FRL   7501   1]

Notice of Extension of Public Comment Period for Development of a National Agenda for the Environment and the Aging AGENCY: Environmental Protection Agency ( EPA). ACTION: Notice of extension of public comment period.

SUMMARY: In October 2002 EPA launched an Aging Initiative to study the effects of environmental health hazards on older persons and examine the impact that a rapidly aging population will have on the environment. The Initiative will also identify model programs that will provide opportunities for older persons to volunteer in their communities to reduce environmental hazards and protect the environment for future generations.

DATES: On March 4, 2003 ( 68 FR 10238) EPA published a notice seeking public comment on the National Agenda on the Environment and the Aging with a deadline of May 16, 2003. EPA has extended the deadline for public comments through Tuesday, September 30, 2003.

FOR FURTHER INFORMATION CONTACT: Kathy Sykes, EPA's Aging Initiative Coordinator, at ( 202) 564   2188 or by email: aging. info@ epa. gov.

SUPPLEMENTARY INFORMATION:

I. Identifying Research Gaps in Environmental Health Strategy To Address Environmental Hazards That Threaten the Health of Older Persons: Research and Educational Priorities The National Agenda for the Environment and the Aging will lay out a strategy that combines research and educational programs that promote preventive actions to address environmental health hazards. One fundamental question is: How do environmental hazards affect older persons differently from younger persons? Understanding the biology underlying differing age related responses can inform a scientific rationale for decisions on how to appropriately incorporate the differential sensitivity of those who are aging into environmental risk assessment, decisions and actions. EPA's effort to develop a national agenda to address environmental issues that affect the health and well being of the nation's older persons has been advanced by a workshop on the `` Differential Susceptibility and Exposure of Older Persons to Environmental Hazards'' convened by the National Academy of Sciences in December 2002. At that meeting, experts discussed priority issues for the National Agenda for the Environment and the Aging. Experts focused on exposures to environmental hazards found in drinking water, indoor and outdoor air, and food residues that may have health effects including respiratory and cardiopulmonary disease, neurotoxicity, infectious disease and cancer. EPA invites public comments on environmental hazards that may affect the health of older persons in states and local communities. Among questions which may be considered are: What specific environmental exposures in your community particularly affect the health of older persons? Which health conditions specific to older adults may increase their susceptibility to chemical toxicants? Which lifestyle factors of older adults may increase the exposure to environmental hazards? What steps may individuals and communities take to reduce the potential environmental health risks that older adults may face?

II. Preparing for an Aging Society Impact of an Aging Population on the Environment The EPA invites comments on the extent to which an aging population may affect the environment. The nation's demographics will have changed dramatically by 2030: the U. S. population over 65 years of age is expected to double. The largest cohort born in U. S. history ( 76 million Americans were born between 1946 and 1964) begins to turn 65 in 2011 and will markedly influence the quality of life for both older persons and young people. The National Agenda will focus on the interface between older persons and their environment. As an increasing number of adults approach retirement age, migration may substantially increase to areas characterized by temperate climates, lower population and traffic density, and better environmental quality. These areas may be sparsely populated and ecologically diverse regions. To ensure harmony between the needs of this growing population and preserving important natural resources, it is important to have the tools available for regional and landscape planning. The VerDate Jan< 31> 2003 18: 30 May 19, 2003 Jkt 200001 PO 00000 Frm 00039 Fmt 4703 Sfmt 4703 E:\ FR\ FM\ 20MYN1. SGM 20MYN1


[Federal Register Volume 76, Number 120 (Wednesday, June 22, 2011)]
[Notices]
[Pages 36600-36603]
[FR Doc No: 2011-15608]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64690; File No. SR-NYSEArca-2011-17]

Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting
Approval of Proposed Rule Change Relating to the Listing and Trading of
the Madrona Forward Domestic ETF, Madrona Forward International ETF,
and Madrona Forward Global Bond ETF

June 16, 2011.

I. Introduction

    On April 13, 2011, NYSE Arca, Inc. (``Exchange'' or ``NYSE Arca'')
filed with the Securities and Exchange Commission (``Commission''),
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to
list and trade shares (``Shares'') of the Madrona Forward Domestic ETF,
Madrona Forward International ETF, and Madrona Forward Global Bond ETF
(each a ``Fund,'' and, together, the ``Funds'') under NYSE Arca
Equities Rule 8.600. The proposed rule change was published in the
Federal Register on May 2, 2011.\3\ The Commission received no comments
on the proposal. This order grants approval of the proposed rule
change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 64342 (April 26,
2011), 76 FR 24548 (``Notice'').
---------------------------------------------------------------------------

II. Description of the Proposal

    The Exchange proposes to list and trade the Shares pursuant to NYSE
Arca Equities Rule 8.600. The Shares will be offered by the
AdvisorShares Trust (``Trust''), a statutory trust organized under the
laws of the State of Delaware and registered with the Commission as an
open-end management investment company.\4\ The investment advisor for
the Funds is AdvisorShares Investments, LLC (``Adviser''). Madrona
Funds LLC is the Funds' sub-adviser (``Sub-Adviser'') and provides day-
to-day portfolio management of the Funds. Foreside Fund Services, LLC
(``Distributor'') is the principal underwriter and distributor of the
Funds' Shares. The Bank of New York Mellon Corporation
(``Administrator'') serves as administrator, custodian, and transfer
agent for the Funds. The Exchange states that neither the Adviser nor
the Sub-Adviser is affiliated with a broker-dealer.\5\
---------------------------------------------------------------------------

    \4\ The Trust is registered under the Investment Company Act of
1940 (``1940 Act''). On November 30, 2010, the Trust filed with the
Commission Form N-1A under the Securities Act of 1933 (15 U.S.C.
77a) and under the 1940 Act relating to the Funds (File Nos. 333-
157876 and 811-22110) (``Registration Statement''). The Trust has
also filed an Application for an Order under Section 6(c) of the
1940 Act for exemptions from various provisions of the 1940 Act and
rules thereunder (File No. 812-13677), dated May 6, 2010
(``Exemptive Application'').
    \5\ See Commentary .06 to NYSE Arca Equities Rule 8.600. The
Exchange represents that, in the event (a) the Adviser or Sub-
Adviser becomes newly affiliated with a broker-dealer, or (b) any
new adviser or sub-adviser becomes affiliated with a broker-dealer,
such adviser and/or sub-adviser will implement a fire wall with
respect to such broker-dealer regarding access to information
concerning the composition and/or changes to the portfolio, and will
be subject to procedures designed to prevent the use and
dissemination of material non-public information regarding such
portfolio.
---------------------------------------------------------------------------

    With respect to each of the Funds, the Sub-Adviser will employ a
forward-looking fundamental investment process when making capital
allocation decisions across investment strategies for the Funds. The
underlying investment process for the Madrona Forward Domestic ETF and
the Madrona Forward International ETF is based on a measure of
forecasted earnings and projected growth relative to the price of the
equities. The underlying investment process for the Madrona Forward
Global Bond ETF is based on fundamental yield curve analysis and a
measure of mean reversion for future expected yield curve trajectory.
Each Fund will utilize a core investment allocation strategy seeking to
replace what the Sub-Adviser's investment committee deems inefficient
index methodologies for core investing that are prevalent in the
marketplace. The Funds will invest in actively managed, broadly
diversified portfolios and differ from most traditional indices in that
the proportion, or weighting, of the securities in the Funds are based
on forward-looking fundamental analysis rather than only on market
capitalization of such securities. Risk management guidelines will be
employed to protect against dramatic over- or under-weighting of
individual securities, reducing company specific risks.

Madrona Forward Domestic ETF

    The investment objective of this Fund is to seek long-term capital
appreciation above the capital appreciation of its benchmark, the S&P
500 Index. The Sub-Adviser will seek to achieve the Fund's investment
objective primarily by selecting a portfolio of up to 500 of the
largest U.S. exchange-traded equity securities.\6\ The Sub-Adviser will
select the securities for the Fund's portfolio

using a weighted allocation system based on a consensus of analyst
estimates of the present value of future expected earnings relative to
the share price of each security. The Sub-Adviser's investment
committee will meet on a bi-weekly basis to monitor the portfolio and
make allocation decisions. The investment committee will use third-
party analyst research and a proprietary fundamental process to make
allocation decisions and employ guidelines to protect against dramatic
over- or under-weighting of individual securities in the Fund's
portfolio. The investment committee relies heavily on a stock's price
and market cap relative to its future expected earnings in its analysis
of individual securities. Changes to the Fund's portfolio will
typically occur upon the reporting and analysis of individual
securities through the earnings season and rely heavily on a stock's
price and market cap relative to the future expected earnings.
---------------------------------------------------------------------------

    \6\ The Fund may hold only equity securities traded in the U.S.
on registered exchanges and will hold a minimum of 13 equity
components.
---------------------------------------------------------------------------

    The Fund will utilize the following investment process:
    Step 1: The Sub-Adviser will use third-party research consisting of
analysis of the consensus analyst valuation estimates to drive the
proprietary models that derive the present value of future expected
earnings relative to the current stock price of each stock.
    Step 2: The Sub-Adviser will review the data on a company-by-
company basis, and the companies will be put in order from most
attractive to least attractive, and the Fund will weigh these companies
accordingly.
    Step 3: Risk management guidelines will be established to allocate
the total percentage invested in each quartile of securities. Thus,
each group of up to 125 securities will receive a certain investment
percentage within the Sub-Adviser's established guidelines, ensuring no
dramatic over-weighting or under-weighting of individual securities.
    Step 4: The Fund's portfolio will be consistently monitored when
company-specific data is released, and the Sub-Adviser's models will be
updated to drive allocation changes.

Madrona Forward International ETF

    The investment objective of the this Fund is to seek long-term
capital appreciation above the capital appreciation of its
international benchmarks, the MSCI EAFE Index, the Fund's primary
benchmark, and the BNY Mellon Classic ADR Index, the Fund's secondary
benchmark. The Fund will select a portfolio primarily composed of U.S.
exchange-listed American Depository Receipts (``ADRs'') from among the
largest issuers of Europe, Australasia and the Far East (``EAFE''), and
Canada. The Fund's portfolio may also include U.S. exchange-listed
equity securities of large-capitalization, non-U.S. issuers that
provide exposure to certain markets deemed to be emerging markets.
Securities are selected, weighted, and sold based upon the Sub-
Adviser's proprietary investment process. The Sub-Adviser's investment
committee will meet on a bi-weekly basis to monitor the portfolio and
make allocation decisions. The investment committee will use third-
party analyst research and a proprietary fundamental process to make
allocation decisions. Changes to the Fund's portfolio will typically
occur upon the reporting and analysis of individual securities through
the earnings season and rely heavily on a security's price and market
cap relative to future earnings.
    The composition of the Fund's portfolio, on a continual basis, will
be subject to the following:
    (1) Component stocks, including component stocks underlying ADRs,
that, in the aggregate, account for at least 90% of the weight of the
portfolio, each shall have a minimum market value of at least $100
million;
    (2) Component stocks, including component stocks underlying ADRs,
that, in the aggregate, account for at least 70% of the weight of the
portfolio, each shall have a minimum global monthly trading volume of
250,000 shares, or minimum global notional volume traded per month of
$25,000,000, averaged over the last six months;
    (3) A minimum of 20 component stocks, including component stocks
underlying ADRs, of which the most heavily weighted component stock
shall not exceed 25% of the weight of the portfolio, and the five most
heavily weighted component stocks shall not exceed 60% of the weight of
the portfolio; and
    (4) Each non-U.S. equity security underlying ADRs held by the Fund
will be listed and traded on an exchange that has last-sale reporting.
    The Fund will utilize the following investment process:
    Step 1: The Sub-Adviser will use third-party research consisting of
analysis of the consensus analyst valuation estimates to drive the
proprietary models that derive the present value of future expected
earnings relative to the current stock price of each stock.
    Step 2: The Sub-Adviser will review the data on a company-by-
company basis, and the companies will be put in order from most
attractive to least attractive, and the Fund will weigh these companies
accordingly.
    Step 3: Risk management guidelines will be established to allocate
the total percentage invested in each quartile of securities. Each
quartile will receive a certain investment percentage within the Sub-
Adviser's established guidelines, ensuring no dramatic over-weighting
or under-weighting of individual securities.
    Step 4: The Fund's portfolio will be consistently monitored when
company specific data is released, and the Sub-Adviser's models will be
updated to drive allocation changes.

Madrona Forward Global Bond ETF

    The investment of this Fund is to seek investment results that
exceed the price and yield performance of its benchmark, the Barclays
Capital Aggregate Bond Index. The Sub-Adviser will primarily select a
portfolio of fixed income (bond) U.S. exchange-traded funds (``ETFs'')
and other U.S. exchange-traded products (``ETPs'' and, together with
ETFs, ``Underlying ETPs''), including but not limited to, exchange-
traded notes (``ETNs''), exchange-traded currency trusts, and exchange-
traded commodity pools.\7\ The Fund will invest in indexed Underlying
ETPs that will invest in at least 12 distinct global bond classes,
including, but not limited to, the following: Mortgage Backed/Agency;
Investment Grade U.S. Corporate; Short-Term Treasury; Intermediate-Term
Treasury; Long-Term Treasury; Inflation Protected Treasury (TIPS);
High-Yield U.S. Corporate; International Treasury; Convertible and
Preferred; Emerging Markets; Municipal; International Investment Grade
Corporate;

International High Yield; and Build America Bonds. Each major bond
category would have a three percent minimum percentage inclusion in the
Fund's portfolio.
---------------------------------------------------------------------------

    \7\ Underlying ETPs include Investment Company Units (as
described in NYSE Arca Equities Rule 5.2(j)(3)); Index-Linked
Securities (as described in NYSE Arca Equities Rule 5.2(j)(6));
Portfolio Depositary Receipts (as described in NYSE Arca Equities
Rule 8.100); Trust Issued Receipts (as described in NYSE Arca
Equities Rule 8.200); Commodity-Based Trust Shares (as described in
NYSE Arca Equities Rule 8.201); Currency Trust Shares (as described
in NYSE Arca Equities Rule 8.202); Commodity Index Trust Shares (as
described in NYSE Arca Equities Rule 8.203); Trust Units (as
described in NYSE Arca Equities Rule 8.500); Managed Fund Shares (as
described in NYSE Arca Equities Rule 8.600); and closed-end funds.
The Underlying ETPs will be listed and traded in the U.S. on
registered exchanges. The Madrona Forward Global Bond ETF may invest
in the securities of Underlying ETPs consistent with the
requirements of Section 12(d)(1) of the 1940 Act, or any rule,
regulation, or order of the Commission or interpretation thereof.
The Fund will only make such investments in conformity with the
requirements of Section 817 of the Internal Revenue Code of 1986.
The Underlying ETPs in which the Fund may invest will primarily be
index-based ETFs that hold substantially all of their assets in
securities representing a specific index.
---------------------------------------------------------------------------

    The Fund will invest in an Underlying ETP for each of the bond
classes held in the portfolio. Changes to the Fund's portfolio
typically occur upon the reporting and analysis of each bond category's
risk assessment.
    The Fund will utilize the following investment process:
    Step 1: The Sub-Adviser will select an Underlying ETP for each bond
category based on expense ratios and institutional strengths of each
Underlying ETP provider to ensure efficient internal trading.
    Step 2: The Sub-Adviser will use third-party research consisting of
analysis of the historical class by class yield-curve analysis and how
the curve stands in relation to the current yield-curve of the
particular bond class. Based on the research, the Sub-Adviser will
determine which bond classes will receive higher- and lower-than-
average allocations as compared to typical bond indices.
    Step 3: Risk management guidelines will be established to allocate
the total percentage invested in each bond class. Each class will
receive a minimum investment within the Sub-Adviser's established
guidelines, ensuring no dramatic over-weighting or under-weighting of
individual bond categories.
    Step 4: The Fund's portfolio will be consistently monitored when
bond class data is released, and the Sub-Adviser's models will be
updated to drive allocation changes.

Other Investments of the Funds

    Each Fund may invest 100% of its total assets in short-term, high-
quality debt securities and money market instruments either directly or
through Underlying ETPs to respond to adverse market, economic, or
political conditions.\8\ A Fund may invest in such instruments for
extended periods, depending on the Sub-Adviser's assessment of market
conditions. These debt securities and money market instruments may
include shares of other mutual funds, commercial paper, certificates of
deposit, bankers' acceptances, U.S. Government securities, repurchase
agreements, and bonds that are rated BBB or higher. The Funds also may
invest in shares of REITs, which are pooled investment vehicles that
invest primarily in real estate or real estate-related loans.
---------------------------------------------------------------------------

    \8\ Adverse market conditions would include large downturns in
the broad market value of two or more times current average
volatility, where the Sub-Adviser views such downturns as likely to
continue for an extended period of time. Adverse economic conditions
would include significant negative results in factors deemed
critical at the time by the Sub-Adviser, including significant
negative results regarding unemployment, Gross Domestic Product,
consumer spending or housing numbers. Adverse political conditions
would include events such as government overthrows or instability,
where the Sub-Adviser expects that such events may potentially
create a negative market or economic condition for an extended
period of time.
---------------------------------------------------------------------------

    A Fund will not (i) With respect to 75% of its total assets,
purchase securities of any issuer (except securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities,
or shares of investment companies) if, as a result, more than 5% of its
total assets would be invested in the securities of such issuer; or
(ii) acquire more than 10% of the outstanding voting securities of any
one issuer. For purposes of this policy, the issuer of the underlying
security will be deemed to be the issuer of any respective ADR.
    A Fund will not invest 25% or more of its total assets in the
securities of one or more issuers conducting their principal business
activities in the same industry or group of industries. This limitation
will not apply to investments in securities issued or guaranteed by the
U.S. Government, its agencies or instrumentalities, or shares of
investment companies. Each Fund will not invest 25% or more of its
total assets in any investment company that so concentrates. For
purposes of this policy, the issuer of the underlying security will be
deemed to be the issuer of any respective ADR.
    The Funds will not purchase illiquid securities if, in the
aggregate, more than 15% of their net assets would be invested in
illiquid securities. Except for Underlying ETPs that may hold non-U.S.
issues, the Funds will not otherwise invest in non-U.S.-registered
issues. In addition, the Funds intend to qualify for treatment as a
Regulated Investment Company under the Internal Revenue Code.
    Pursuant to the terms of the Exemptive Application, the Funds will
not invest in options contracts, futures contracts, or swap agreements.
The Funds' investments will be consistent with each Fund's investment
objective and will not be used to enhance leverage.
    Additional information regarding the Trust, the Funds, and the
Shares, the Funds' investment strategies, risks, creation and
redemption procedures, fees, portfolio holdings and disclosure
policies, distributions and taxes, availability of information, trading
rules and halts, and surveillance procedures, among other things, can
be found in the Notice and the Registration Statement, as
applicable.\9\
---------------------------------------------------------------------------

    \9\ See Notice and Registration Statement, supra notes 3 and 4,
respectively.
---------------------------------------------------------------------------

III. Discussion and Commission's Findings

    The Commission has carefully reviewed the proposed rule change and
finds that it is consistent with the requirements of Section 6 of the
Act \10\ and the rules and regulations thereunder applicable to a
national securities exchange.\11\ In particular, the Commission finds
that the proposal is consistent with Section 6(b)(5) of the Act,\12\
which requires, among other things, that the Exchange's rules be
designed 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. The Commission notes that the Shares must comply with
the requirements of NYSE Arca Equities Rule 8.600 to be listed and
traded on the Exchange.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f.
    \11\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \12\ 17 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission finds that the proposal to list and trade the Shares
on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the
Act,\13\ which sets forth Congress' finding that it is in the public
interest and appropriate for the protection of investors and the
maintenance of fair and orderly markets to assure the availability to
brokers, dealers, and investors of information with respect to
quotations for, and transactions in, securities. Quotation and last-
sale information for the Shares will be available via the Consolidated
Tape Association high-speed line. In addition, the Portfolio Indicative
Value, as defined in NYSE Arca Equities Rule 8.600(c)(3), will be
disseminated by the Exchange at least every 15 seconds during the Core
Trading Session. On each business day, before commencement of trading
in Shares in the Core Trading Session on the Exchange, the Funds will
disclose on their Web site the Disclosed Portfolio, as defined in NYSE
Arca Equities Rule 8.600(c)(2), that will form the basis for each
Fund's calculation of the net asset value (``NAV'') at the end of the
business day.\14\ The NAV of each of the

Funds will be determined as of the close of the regular trading session
on the New York Stock Exchange (``NYSE'') (ordinarily 4 p.m. Eastern
Time) on each business day. The intra-day, closing, and settlement
prices of the portfolio securities are readily available from the
national securities exchanges trading such securities, automated
quotation systems, published or other public sources, or on-line
information services such as Bloomberg or Reuters. In addition, a
basket composition file, which includes the security names and share
quantities required to be delivered in exchange for Fund shares,
together with estimates and actual cash components, will be publicly
disseminated daily prior to the opening of the NYSE via the National
Securities Clearing Corporation. Information regarding market price and
trading volume of the Shares is and will be continually available on a
real-time basis throughout the day on brokers' computer screens and
other electronic services, and information regarding the previous day's
closing price and trading volume information will be published daily in
the financial section of newspapers. The Funds' Web site will also
include a form of the prospectus for the Funds, information relating to
NAV, and other quantitative and trading information.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
    \14\ On a daily basis, the Adviser will disclose for each
portfolio security or other financial instrument of the Funds the
following information: Ticker symbol (if applicable), name of
security or financial instrument, number of shares or dollar value
of financial instruments held in the portfolio, and percentage
weighting of the security or financial instrument in the portfolio.
---------------------------------------------------------------------------

    The Commission further believes that the proposal to list and trade
the Shares is reasonably designed to promote fair disclosure of
information that may be necessary to price the Shares appropriately and
to prevent trading when a reasonable degree of transparency cannot be
assured. The Commission notes that the Exchange will obtain a
representation from the issuer of the Shares that the NAV will be
calculated daily, and that the NAV and the Disclosed Portfolio will be
made available to all market participants at the same time.\15\ In
addition, the Exchange will halt trading in the Shares under the
specific circumstances set forth in NYSE Arca Equities Rule
8.600(d)(2)(D), and may halt trading in the Shares if trading is not
occurring in the securities and/or the financial instruments comprising
the Disclosed Portfolio of the Funds, or if other unusual conditions or
circumstances detrimental to the maintenance of a fair and orderly
market are present.\16\ Further, the Commission notes that the
Reporting Authority that provides the Disclosed Portfolio must
implement and maintain, or be subject to, procedures designed to
prevent the use and dissemination of material non-public information
regarding the actual components of the portfolio.\17\ The Exchange
states that neither the Adviser nor the Sub-Adviser is affiliated with
a broker-dealer.\18\
---------------------------------------------------------------------------

    \15\ See NYSE Arca Equities Rule 8.600(d)(2)(D).
    \16\ See NYSE Arca Equities Rule 8.600(d)(2)(C)(ii). With
respect to trading halts, the Exchange may consider other relevant
factors in exercising its discretion to halt or suspend trading in
the Shares of the Funds. Trading in Shares of the Funds will be
halted if the circuit breaker parameters in NYSE Arca Equities Rule
7.12 have been reached. Trading also may be halted because of market
conditions or for reasons that, in the view of the Exchange, make
trading in the Shares inadvisable.
    \17\ See NYSE Arca Equities Rule 8.600(d)(2)(B)(ii).
    \18\ See supra note 5. The Commission notes that an investment
adviser to an open-end fund is required to be registered under the
Investment Advisers Act of 1940 (``Advisers Act''). As a result, the
Adviser and Sub-Adviser and their related personnel are subject to
the provisions of Rule 204A-1 under the Advisers Act relating to
codes of ethics. This Rule requires investment advisers to adopt a
code of ethics that reflects the fiduciary nature of the
relationship to clients as well as compliance with other applicable
securities laws. Accordingly, procedures designed to prevent the
communication and misuse of non-public information by an investment
adviser must be consistent with Rule 204A-1 under the Advisers Act.
In addition, Rule 206(4)-7 under the Advisers Act makes it unlawful
for an investment adviser to provide investment advice to clients
unless such investment adviser has (i) adopted and implemented
written policies and procedures reasonably designed to prevent
violation, by the investment adviser and its supervised persons, of
the Advisers Act and the Commission rules adopted thereunder; (ii)
implemented, at a minimum, an annual review regarding the adequacy
of the policies and procedures established pursuant to subparagraph
(i) above and the effectiveness of their implementation; and (iii)
designated an individual (who is a supervised person) responsible
for administering the policies and procedures adopted under
subparagraph (i) above.
---------------------------------------------------------------------------

    The Exchange represents that the Shares are deemed to be equity
securities, thus rendering trading in the Shares subject to the
Exchange's existing rules governing the trading of equity securities.
In support of this proposal, the Exchange has made representations,
including:
    (1) The Shares will conform to the initial and continued listing
criteria under NYSE Arca Equities Rule 8.600.
    (2) The Exchange has appropriate rules to facilitate transactions
in the Shares during all trading sessions.
    (3) The Exchange's surveillance procedures are adequate to properly
monitor Exchange trading of the Shares in all trading sessions and to
deter and detect violations of Exchange rules and applicable Federal
securities laws.
    (4) Prior to the commencement of trading, the Exchange will inform
its Equity Trading Permit (``ETP'') Holders in an Information Bulletin
of the special characteristics and risks associated with trading the
Shares. Specifically, the Information Bulletin will discuss the
following: (a) The procedures for purchases and redemptions of Shares
in Creation Unit aggregations (and that Shares are not individually
redeemable); (b) NYSE Arca Equities Rule 9.2(a), which imposes a duty
of due diligence on its ETP Holders to learn the essential facts
relating to every customer prior to trading the Shares; (c) the risks
involved in trading the Shares during the Opening and Late Trading
Sessions when an updated Portfolio Indicative Value will not be
calculated or publicly disseminated; (d) how information regarding the
Portfolio Indicative Value is disseminated; (e) the requirement that
ETP Holders deliver a prospectus to investors purchasing newly issued
Shares prior to or concurrently with the confirmation of a transaction;
and (f) trading and other information.
    (5) For initial and/or continued listing, the Funds will be in
compliance with Rule 10A-3 under the Act,\19\ as provided by NYSE Arca
Equities Rule 5.3.
---------------------------------------------------------------------------

    \19\ See 17 CFR 240.10A-3.
---------------------------------------------------------------------------

    (6) The Funds will not invest in non-U.S. equity securities (except
for Underlying ETPs that may hold non-U.S. issues), options contracts,
futures contracts, or swap agreements. In addition, the Funds'
investments will be consistent with each Fund's investment objective
and will not be used to enhance leverage.
    (7) A minimum of 100,000 Shares of each Fund will be outstanding at
the commencement of trading on the Exchange.

This approval order is based on the Exchange's representations.
    For the foregoing reasons, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act \20\ and the
rules and regulations thereunder applicable to a national securities
exchange.
---------------------------------------------------------------------------

    \20\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\21\ that the proposed rule change (SR-NYSEArca-2011-17) be, and it
hereby is, approved.
---------------------------------------------------------------------------

    \21\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
---------------------------------------------------------------------------

    \22\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-15608 Filed 6-21-11; 8:45 am]
BILLING CODE 8011-01-P


UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

REGION III

	1650 Arch Street

	Philadelphia, Pennsylvania  19103

DATE:	November 30, 2010

SUBJECT:	Technical Support Document for Virginia’s Adoption of the Lead Standard, Related Reference Conditions, and Update of Appendices

			/s/

FROM:	Irene Shandruk, Physical Scientist

Office of Air Program Planning

TO:	File

			/s/

THRU: 	Marilyn Powers, Acting Associate Director

Office of Air Program Planning

A.  BACKGROUND

This technical support document (TSD) evaluates the September 27, 2010 submittal of the Virginia State Implementation Plan (SIP) revision pertaining to the ambient air quality standard for lead and related reference conditions.

The Clean Air Act (CAA) specifies that EPA must re-evaluate the appropriateness of its various air quality standards every five years.  As part of the process, EPA reviewed the latest research and determined that revised standards for lead were necessary to protect public health.  EPA revised the level of the primary lead standard to a level of 0.15 micrograms per cubic meter (μg/m3) to provide increased protection for children and other ‘‘at risk’’ populations against an array of adverse health effects, most notably neurological effects in children, which include neurocognitive and neurobehavioral effects.  The secondary standard was also revised to a level of 0.15 μg/m3 to afford increased protection for the environment.  EPA promulgated the more stringent primary and secondary national ambient air quality standards (NAAQS) for lead on November 12, 2008 (73 FR 66964).

B.  STATE SUBMITTAL

On September 27, 2010, the Commonwealth of Virginia submitted a formal revision to its SIP.  The SIP revision consists of an amendment which includes the revised ambient air quality standards for lead, and related reference conditions.  Virginia(s revision incorporates the revised lead standards into the Code of Virginia (9VAC5 Chapter 30).  In addition, the list of appendices to 40 CFR Part 51 was updated under “Documents Incorporated by Reference” (9VAC5-20-21).

The following are the specific provisions that are being modified or added:

9VAC5-20-21:  Documents Incorporated by Reference (modified)

	The list of appendices were updated.

9VAC5-30-15:  Reference Conditions (modified)

The reference conditions for lead were updated.

9VAC5-30-80:  Lead (amended)

The revised primary and secondary ambient air quality standard for lead with a level of 0.15 micrograms per cubic meter was added to this regulation.

C.  EPA EVALUATION

E

•

œ

¥

¦

«

¯

°

´

Ø

Ú

Þ

å

÷

x

z

᠀z

|

Ú

ô

?Virginia’s SIP revisions for the ambient air quality standards for lead are consistent with the Federal standards.

D.  CONCLUSIONS AND RECOMMENDED AGENCY ACTION

EPA approval of the SIP revision is recommended.


[Federal Register Volume 76, Number 22 (Wednesday, February 2, 2011)]
[Notices]
[Pages 5846-5848]
[FR Doc No: 2011-2226]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63780; File No. SR-Phlx-2011-07]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Firm Related Equity Option Cap, Active SQF Port Fees and Other
Membership Fees

January 26, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on January 14, 2011, NASDAQ OMX PHLX LLC (``Phlx'' or ``Exchange'')
filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I, II,
and III, below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    The Exchange proposes to amend the Exchange's Fee Schedule to: (i)
Allow Firms to cap their equity option transaction charges, per month,
when such Firms are trading in their own proprietary account; (ii)
correct a typographical error related to the Active Specialized Quote
Feed (``SQF'') Port Fee and also extended the current $40,000 per month
cap from March 31, 2011 to November 30, 2011; (iii) clarify the
Transfer of Affiliation Fee applies to member organizations; (iv)
clarify when an Initiation Fee is assessed; (v) remove a reference to
Application Fee in the Fee Schedule; and (vi) remove a note associated
with the Options Regulatory Fee which is no longer necessary.
    While changes to the Exchange's Fee Schedule pursuant to this
proposal are effective upon filing, the Exchange has designated this
proposal to be operative on January 17, 2011. The text of the proposed
rule change is available on the Exchange's Web site at http://nasdaqtrader.com/micro.aspx?id=PHLXfilings, at the principal office of
the Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The purpose of the proposed rule change is to amend the types of
equity transaction charges that would count toward the Firm Related
Equity Option Cap. The Exchange believes that this amendment would
encourage organizations that are not members to become members by
further reducing fees. The Exchange is also proposing to extend the
timeframe for members to cap their Active SQF Port Fees in order that
members will have additional time to transition from SQF 5.0 to SQF
6.0. Finally, the Exchange is proposing to make certain clarifying
amendments to the text of the Fee Schedule to more accurately reflect
when certain fees would be assessed on members.
Firm Related Equity Option Cap
    The Exchange currently caps Firms at $75,000 (``Firm Related Equity
Option Cap'') for equity options transactions charges, in the aggregate
for one billing month per member organization, except for orders of
joint back-office (``JBO'') participants.\3\ The Exchange is proposing
to amend the application of the Firm Related Equity Option Cap to state
that the $75,000 Firm Related Equity Option Cap would apply to Firm
equity option transaction charges, in the aggregate for one billing
month per member organization, when such members are trading in their
own proprietary account.\4\ The Firm Related Equity Option Cap would
not apply to orders where a member is acting as agent on behalf of a
non-member. The Firm Related Equity Options Cap would apply to trades
in which a member acts as agent on behalf of another member, provided
those orders are not commingled with orders from a non-member.
---------------------------------------------------------------------------

    \3\ A JBO participant is a member, member organization or non-
member organization that maintains a JBO arrangement with a clearing
broker-dealer (``JBO Broker'') subject to the requirements of
Regulation T Section 220.7 of the Federal Reserve System. See also
Exchange Rule 703.
    \4\ The Firm equity options transaction charges are waived for
members executing facilitation orders pursuant to Exchange Rule 1064
when such members are trading in their own proprietary account.
---------------------------------------------------------------------------

    Members and member organizations would be required to continue to
notify the Exchange, in writing, of all accounts, which under this
proposal are not executed for their own proprietary account. The
purpose of this provision would be to enable the Exchange to accurately
monitor which executions are subject to the Firm Related Equity Option
Cap. Furthermore, the Exchange proposes to specify that it would not
make adjustments to billing invoices where the member/member
organization commingles transactions that are not for their own
proprietary account, and thus not subject to the Firm Related Equity
Option Cap, with transactions for accounts which are proprietary.\5\
---------------------------------------------------------------------------

    \5\ In the initial filing, the Exchange stated that
``[f]urthermore, the Exchange proposes to specify that it would not
make adjustments to billing invoices where the member/member
organization commingles transactions that are not for their own
proprietary account, and thus not subject to the Firm Related Equity
Option Cap, with transactions for accounts which are non-
proprietary.'' The Exchange requested the removal of the letters
``non-'' before the word ``proprietary'' because it was incorrect.
See E-mail from Angela S. Dunn, Assistant General Counsel, Phlx,
dated January 26, 2011.
---------------------------------------------------------------------------

Active SQF Port Fee
    The Exchange recently amended the Active SQF Port \6\ Fee to
establish a tiered schedule of fees.\7\ In that rule change, the
Exchange placed a $40,000 per month cap (``Cap'') on Active SQF Port
Fees from January 3, 2011 through March 31, 2011. In that rule change,
the Exchange noted that it believed that member organizations will
utilize less SQF 6.0 ports than SQF 5.0 ports \8\ and that all member
organizations should have transitioned to SQF 6.0 by March 31, 2011.
---------------------------------------------------------------------------

    \6\ Active SQF ports refer to ports that receive inbound quotes
at any time within that month. SQF is an interface that enables
specialists, Streaming Quote Traders (``SQTs'') and Remote Streaming
Quote Traders (``RSQTs'') to connect and send quotes into Phlx XL.
    \7\ See Securities Exchange Act Release No. 63619 (December 29,
2010), 76 FR 614 (January 5, 2011) (SR-Phlx-2010-181).
    \8\ The Exchange released SQF 6.0 on October 11, 2010. The
Exchange anticipates that member organizations will utilize both SQF
5.0 and SQF 6.0 for a period of time. See Securities Exchange Act
Release No. 63034 (October 4, 2010), 75 FR 62441 (October 8, 2010)
(SR-Phlx-2010-124).
---------------------------------------------------------------------------

    The Exchange now believes that member organizations would require

additional time to properly transition to SQF 6.0 ports and proposes
extending the applicability of the Cap until November 30, 2011. On
December 1, 2011, there will no longer be a Cap in effect for the
Active SQF Port Fee. The purpose of the Cap is to ensure member
organizations are not assessed fees in excess of the Active SQF Port
Fees.
    Additionally, the Exchange proposes to correct a typographical
error within the text of the Fee Schedule for the Active SQF Port Fee.
When the Exchange filed to create the tiered schedule of fees for the
Active SQF Port Fees the Exchange incorrectly noted that there would be
a tier for 19-40 Active SQF Ports and another tier that would be for 40
and over. The last tier should be ``41 and over'' since 40 Active SQF
Ports would be assessed fees in the third tier. The Exchange proposes
renaming the final tier ``41 and over'' and assessing that tier for the
41st Active SQF Port and greater than 41 ports.
Transfer of Affiliation
    The Exchange is proposing to amend the Transfer of Affiliation Fee
which was recently added to the Fee Schedule \9\ to clarify that the
$350 Transfer of Affiliation Fee would be assessed on a permit holder
who applies to transfer affiliation from one member organization to
another member organization. The text currently states from one member
to another member, however the transfer would take place between member
organizations and the Exchange is proposing to clarify its Fee Schedule
to accurately reflect the transfer. The Exchange is also proposing
minor corrections to the Transfer of Affiliation Fee text to simplify
the text. The Exchange therefore proposes the current text for the
Transfer of Affiliation Fee be replaced with the following text, ``The
Exchange will not assess the Initiation Fee on a permit holder who
applies to transfer affiliation from one member organization to another
member organization if the permit holder continuously held his or her
permit without any lapse in membership.'' \10\
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release No. 63569 (December 17,
2010), 75 FR 81323 (December 27, 2010) (SR-Phlx-2010-178).
    \10\ The Exchange is not proposing to amend the $350 fee rate.
---------------------------------------------------------------------------

Initiation Fee
    The Exchange is proposing to clarify the rule text of the
Initiation Fee, as well as the applicability of that fee.
    First, the Exchange proposes to clarify that the Initiation Fee is
imposed on a new member upon the issuance of a permit. The current text
of the Fee Schedule states that an ``Initiation Fee is imposed on a
member upon election * * *'' This language refers to a former process
at the Exchange whereby the former Admissions Committee would review an
application for membership and grant an election to membership, which
would in turn trigger an Initiation Fee to be assessed upon a member.
    The Exchange is proposing to clarify the text of this fee by
instead stating that the Initiation Fee would be imposed on ``* * * a
new member upon the issuance of a permit * * * notwithstanding the fact
that the new member may have been a former permit holder.'' This
language would not change the applicability of this fee, but only
reflect the current practice of admitting members and the actual
trigger for the fee today. Today the Exchange assesses the Initiation
Fee on each new member. This would include new members that formerly
held a Series A-1 permit. The Exchange does not propose to amend the
current applicability of the Initiation Fee, but rather the Exchange
desires to merely clarify for members the applicability of the fee.
Application Fee
    The Exchange is also seeking to clarify the applicability of the
Application Fee with respect to PSX Participants. The Fee Schedule
contains a note which states that,

    Applicants that apply for membership solely to participate in
the NASDAQ OMX PSX equities market are not assessed a Permit Fee,
Application Fee, Initiation Fee, or Account Fee. Should such
approved member or member organization subsequently elect to engage
in business on Phlx XL II, the Exchange's options platform, the
monthly Permit Fee, Application Fee, Initiation Fee and Account Fee
will apply.

The Exchange is proposing to instead state:

    Applicants that apply for membership solely to participate in
the NASDAQ OMX PSX equities market are not assessed a Permit Fee,
Application Fee, Initiation Fee, or Account Fee. Should such
approved member or member organization subsequently elect to engage
in business on Phlx XL II, the Exchange's options platform, the
monthly Permit Fee, Initiation Fee and Account Fee will apply.

Since an Application Fee only applies to new members upon the issuance
of a permit, a PSX Participant that subsequently elects to engage in
options business would not require a new permit because that member
would already possess a Series A-1 permit.\11\ Therefore, the
Application Fee would never be assessed in that scenario.\12\ The
Exchange is proposing to correct this oversight by removing that
language in the note related to Initiation Fee.
---------------------------------------------------------------------------

    \11\ The Exchange included language in the initial filing
stating that it ``was noted above'' that Application Fees only apply
to new member upon the issuance of a new permit. The Exchange
requested the removal of the ``as noted above'' language because it
was incorrect. See E-mail from Angela S. Dunn, Assistant General
Counsel, Phlx, dated January 26, 2011.
    \12\ See Securities Exchange Act Release No. 61863 (April 7,
2010), 75 FR 20021 (April 16, 2010) (SR-Phlx-2010-54). In this rule
change, the Exchange noted ``[a]n Exchange member approved to
participate in PSX would not be assessed an application fee should
it subsequently determine to participate in the Exchange's options
market, but would be charged the one-time initiation fee and would
thereafter be charged the monthly account fee and permit fee.''
---------------------------------------------------------------------------

Options Regulatory Fee
    The Exchange proposes to remove text in the Fee Schedule related to
the Options Regulatory Fee, which is no longer necessary. The Exchange
proposes removing the following language in the Fee Schedule, ``The
Exchange will continue to assess $.0030 until January 3, 2011 at which
time the new rate of $.0035 will be assessed.'' The Exchange has
already commenced assessing the new rate, therefore this text is no
longer necessary and the Exchange proposes deleting this text.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \13\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \14\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among Exchange members and other persons using its
facilities. The Exchange believes that its proposal to amend the Firm
Related Equity Option Cap to apply to members trading in their own
proprietary account is reasonable because it would allow the Exchange
to reduce costs for more member organizations. The Exchange believes
that the proposal is equitable because member organizations that are
JBOs could be subject to the Firm Related Equity Option Cap, as are
other members, as long as the JBO trades were for their own proprietary
account. Additionally, the proposed change would encourage JBOs that
are not members to seek to become member organizations to further
reduce their transaction fees.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The proposed modification to the Firm Related Equity Option Cap is
similar to other fees assessed by the Exchange. Specifically, the Firm
equity

options transaction charges are waived for members executing
facilitation orders \15\ pursuant to Exchange Rule 1064 when such
members are trading in their own proprietary account.\16\ Additionally,
dividend, merger and short stock interest strategies are capped at
$25,000 per member organization per month when such members are trading
in their own proprietary accounts.\17\
---------------------------------------------------------------------------

    \15\ A facilitation occurs when a floor broker holds an options
order for a public customer and a contra-side order for the same
option series and, after providing an opportunity for all persons in
the trading crowd to participate in the transaction, executes both
orders as a facilitation cross. See Exchange Rule 1064.
    \16\ See Securities Exchange Act Release No. 60477 (August 11,
2009), 74 FR 41777 (August 18, 2009) (SR-Phlx-2009-67).
    \17\ See Securities Exchange Act Release Nos. 61115 (December 4,
2009), 74 FR 65571 (December 10, 2009) (SR-Phlx-2009-97) and 63712
(January 12, 2011) (SR-Phlx-2011-01).
---------------------------------------------------------------------------

    The Exchange operates in a highly competitive market in which
sophisticated and knowledgeable market participants can readily send
orders to buy and sell options to competing venues if they deem fee
levels at a particular venue to be excessive. The Exchange believes
that the proposed modification to the Firm Related Equity Option Cap is
necessary to remain competitive with fees charged by other venues and
therefore continues to be reasonable and equitably allocated to those
member organizations that opt to direct orders to the Exchange rather
than competing venues.
    The Exchange believes that its proposal to expand the applicability
of the Cap for Active SQF Port Fees is both reasonable and equitable
because it would allow members additional time to transition from SQF
5.0 to SQF 6.0.
    The Exchange believes that its various proposals to amend the text
of the Fee Schedule to clarify the applicability of certain fees, amend
typographical errors and remove irrelevant text is both reasonable and
equitable because members would benefit from clear guidance in the rule
text describing the manner in which the Exchange would assess fees.

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 not necessary or appropriate in
furtherance of the purposes of the Act.

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\18\ At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number SR-Phlx-2011-07 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-Phlx-2011-07. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room. Copies of the
filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-Phlx-2011-07 and should be submitted on or before
February 23, 2011.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
---------------------------------------------------------------------------

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

Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-2226 Filed 2-1-11; 8:45 am]
BILLING CODE 8011-01-P