[Federal Register Volume 80, Number 91 (Tuesday, May 12, 2015)]
[Rules and Regulations]
[Pages 27081-27086]
[FR Doc No: 2015-09467]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2012-1107; Directorate Identifier 2011-NM-216-AD;
Amendment 39-18143; AD 2015-08-07]
RIN 2120-AA64

Airworthiness Directives; Zodiac Aerotechnics (Formerly
Intertechnique Aircraft Systems) Oxygen Mask Regulators

AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).

ACTION: Final rule.

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SUMMARY: We are adopting a new airworthiness directive (AD) for certain
Zodiac Aerotechnics (formerly Intertechnique Aircraft Systems) oxygen

mask regulators. This AD was prompted by a report of a malfunctioning
mask having an inflatable harness with a high premature rupture rate
due to defective silicon. This AD requires inspecting and replacing
defective harnesses with new or modified serviceable units. We are
issuing this AD to detect and correct defective harnesses, which could
lead, in case of a sudden depressurization event, to a harness rupture,
thereby providing inadequate protection against hypoxia and possibly
resulting in unconsciousness of the affected flightcrew member and
consequent reduced control of the airplane.

DATES: This AD becomes effective June 16, 2015.
    The Director of the Federal Register approved the incorporation by
reference of certain publications listed in this AD as of June 16,
2015.

ADDRESSES: You may examine the AD docket on the Internet at http://www.regulations.gov/#!docketDetail;D=FAA-2012-1107; or in person at the
Docket Management Facility, U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC.
    For Zodiac Aerospace service information identified in this AD,
contact Zodiac Services, Technical Publication Department, Zodiac
Aerotechnics, Oxygen Systems Europe, 61 Rue Pierre Curie-CS20001, 78373
Plaisir Cedex, France; phone: (33) 01 61 34 23 23; fax: (33) 01 30 55
71 61; email<EMAIL_ADDRESS>Internet:
www.services.zodiacaerospace.com. You may view this referenced service
information at the FAA, Transport Airplane Directorate, 1601 Lind
Avenue SW., Renton, WA. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>. It is also available on the
Internet at http://www.regulations.gov by searching for and locating
Docket No. FAA-2012-1107.

FOR FURTHER INFORMATION CONTACT: Ian Lucas, Aerospace Engineer, Boston
Aircraft Certification Office (ACO) ANE-150, FAA, Engine and Propeller
Directorate, 12 New England Executive Park, Burlington, MA 01803;
phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR
part 39 by adding an AD that would apply to certain Zodiac Aerotechnics
(formerly Intertechnique Aircraft Systems) oxygen mask regulators. The
NPRM published in the Federal Register on October 25, 2012 (77 FR
65148).
    The European Aviation Safety Agency (EASA), which is the Technical
Agent for the Member States of the European Union, has issued EASA
Airworthiness Directive 2011-0090R1, dated July 13, 2011 (referred to
after this as the Mandatory Continuing Airworthiness Information, or
``the MCAI''), to detect and correct an unsafe condition on certain
Zodiac Aerotechnics (formerly Intertechnique Aircraft Systems) oxygen
mask regulators. The MCAI states:

    A malfunction of a quick donning mask was reported to [Zodiac
Aerotechnics (formerly] Intertechnique [Aircraft Systems], who
initiated an investigation in order to detect the root cause and the
failure mode. Despite the fact that the analysis did not lead to any
final conclusion, discrete suspected silicon batches have been
identified which have shown an unusually high premature rupture
rate.
    Some of the affected harnesses are known to have been delivered
as spares. Consequently, an inflatable harness belonging to one of
the suspect batches may have become installed on an Oxygen Mask
Regulator, the serial number (s/n) or [part number] P/N of which is
not identified in Appendix II of Intertechnique [Zodiac Aerospace]
Service Bulletin (SB) MXH-35-240.
    This fact widens the Applicability of this [EASA] AD to extend
beyond the individual Oxygen Mask Regulators identified by s/n and
P/N in Appendix II of the SB.
    This condition, if not detected and corrected, could lead, in
case of a sudden depressurization event, to a harness rupture,
thereby providing inadequate protection against hypoxia of the
affected flight crew member, possibly resulting in unconsciousness
and consequent reduced control of the aeroplane.
    For the reasons described above, this [EASA] AD requires the
identification and replacement of all potentially defective
harnesses with serviceable units.
    Note 1: The affected batches were installed on harnesses
manufactured between December 2008 and August 2010, having dates
codes 0850S (week 50 of 2008) through 1031S (week 31 of 2010).
    Note 2: Harness assemblies that do not have a batch code were
manufactured before week 33 of 2008 and are not affected by this
unsafe condition.
    This [EASA] AD has been revised to correct a typographical error
in the Applicability, which inadvertently referred to P/N MA10-12
masks, whereas in fact, all P/N MA10 series could have an affected
harness installed. In addition, this revised [EASA] AD corrects Note
2 (above), which confused harness manufacturing date codes with the
affected harnesses batch codes.
    This [EASA] AD is also revised to make reference to the latest
revisions of the referenced Intertechnique [Zodiac Aerospace]
service publications which identify by s/n and P/N, in Appendix II
of the SB, more oxygen mask regulators that are known or suspected
to have an affected harness installed. Finally, this [EASA] AD is
revised to add a Note to the Required Actions section, to stress the
fact that other oxygen mask regulators could be affected, in
addition to those listed in Appendix II of the SB.

    You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov/#!documentDetail;D=FAA-2012-1107-0003.

Actions Since the NPRM (77 FR 65148, October 25, 2012) was Issued

    We have reviewed Zodiac Aerospace Service Bulletin MXH-35-241,
Revision 3, dated June 23, 2011. The NPRM referenced Zodiac Aerospace
(formerly Intertechnique Aircraft Systems) Service Bulletin MXH-35-241,
Revision 2, dated May 19, 2011, as one of the appropriate sources of
service information for the required actions. Zodiac Aerospace Service
Bulletin MXH-35-241, Revision 3, dated June 23, 2011, corrected
typographical errors and updated a flow chart, but specifies the same
procedures as the earlier revision.
    We have revised the references in paragraphs (g) and (h) of this AD
to refer to Zodiac Aerospace Service Bulletin MXH-35-241, Revision 3,
dated June 23, 2011, as one of the appropriate sources of service
information for the required actions. We have also added Zodiac
Aerospace Service Bulletin MXH-35-241, Revision 2, dated May 19, 2011,
to paragraph (l) of this AD to allow credit for previous actions done
using that service information.

Comments

    We gave the public the opportunity to participate in developing
this AD. The following presents the comments received on the NPRM (77
FR 65148, October 25, 2012) and the FAA's response to each comment.

Request To Revise Service Information Contact

    Zodiac Aerotechnics (formerly Intertechnique Aircraft Systems)
requested revising the contact address, telephone number, and Web site
in paragraph (n)(2) of the NPRM (77 FR 65148, October 25, 2012) to read
``61 Rue Pierre Curie CS20001,'' and ``telephone: (33) 1 61 34 23 23,''
and ``www.services.zodiacaerospace.com.''
    We have revised this AD to identify the legal name of the
manufacturer as published in the most recent technical service order
for crewmember demand oxygen masks. Intertechnique Aircraft

Systems changed its legal name to Zodiac Aerotechnics; therefore we
revised the manufacturer name in the SUMMARY and ADDRESSES sections,
and ``Applicability'' and ``Material Incorporated by Reference''
paragraphs of this AD. We have changed this contact information in the
ADDRESSES section of this final rule and paragraph (o)(3) of this AD
accordingly.

Request To Withdraw NPRM (77 FR 65148, October 25, 2012) or Revise
Compliance Time

    American Airlines (American) requested that we withdraw the NPRM
(77 FR 65148, October 25, 2012). Based on Boeing's analysis referenced
in a Boeing Service Letter, American disagreed with the need for the
NPRM. American stated that the concern in the NPRM has been reviewed by
Boeing for potential safety and was found not to be safety-based on a
numerical risk assessment. American stated that if we do not withdraw
the NPRM, it requests that we extend the threshold specified in the
NPRM to a minimum of 3 years.
    We do not agree with the commenter's request to withdraw the NPRM
(77 FR 65148, October 25, 2012) or extend the compliance time. We agree
with the EASA's finding of an unsafe condition, as explained in EASA AD
2011-0090R1, dated July 13, 2011, as well as the compliance time for
taking corrective action that is specified in the EASA AD 2011-0090R1.
However, affected operators may request approval of an alternative
method of compliance (AMOC) for an extension of the compliance time for
the inspection under the provisions of paragraph (m) of this AD by
submitting data substantiating that the change would provide an
acceptable level of safety. We have not changed this AD in this regard.

Request To Clarify Affected Airplanes for Inspection and Replacement
Requirements

    Horizon Air requested that paragraphs (g)(1), (g)(2), (h), and (k)
of the NPRM (77 FR 65148, October 25, 2012) be revised for clarity.
Horizon stated the NPRM appears to address only the ``as delivered''
condition of the airplanes. Horizon indicated the NPRM stated that
Zodiac Aerospace Service Bulletin MXH-35-240, Revision 7, dated
September 1, 2011, applies ``for all aircraft other than Bombardier
airplanes,'' and Zodiac Aerospace Service Bulletin MXH-35-241, Revision
3, dated June 23, 2011, applies ``for Bombardier airplanes.'' Horizon
stated this is incorrect since Zodiac Aerospace Service Bulletin MXH-
35-240, Revision 7, dated September 1, 2011, could apply to Bombardier
airplanes if the crew oxygen masks delivered with the airplanes were
removed and replaced with masks listed in Zodiac Aerospace Service
Bulletin MXH-35-240, Revision 7, dated September 1, 2011.
    We acknowledge the commenter's concern that it may be possible that
a harness on a Bombardier airplane may be replaced with one listed in
Appendix I of Zodiac Service Bulletin MXH-35-240, Revision 7, dated
September 1, 2011, during the maintenance of the airplane. However,
this AD corresponds to EASA AD 2011-0090R1, dated July 13, 2011, which
specifies using Zodiac Aerospace Service Bulletin MXH-35-241, Revision
3, dated June 23, 2011, for Bombardier airplanes. The suggested changes
would alter the actions currently proposed in the NPRM (77 FR 65148,
October 25, 2012), so additional rulemaking would be required.
    We find that delaying this action would be inappropriate in light
of the identified unsafe condition. Therefore, we have not changed this
AD regarding this issue. However, we might consider further rulemaking
if EASA issues additional rulemaking or we determine that an additional
inspection of Bombardier airplanes for harnesses identified in Appendix
I of Zodiac Service Bulletin MXH-35-240, Revision 7, dated September 1,
2011, is necessary.

Request To Revise Regulatory Paragraph into a Note

    United Airlines (United) requested that we change paragraph (g)(2)
of the NPRM (77 FR 65148, October 25, 2012) to a note. United contends
that paragraph (g)(2) of the NPRM is worded as a clarification as to
whether an operator can use Appendix II of Zodiac Service Bulletin MXH
35 240, Revision 7, dated September 1, 2011; or Appendix II of Zodiac
Service Bulletin MXH 35 241, Revision 3, dated June 23, 2011; alone in
demonstrating compliance to the AD.
    We agree that the wording in paragraph (g)(2) of the NPRM (77 FR
65148, October 25, 2012) is informational and is meant to clarify that
using Appendix II of Zodiac Service Bulletin MXH 35 241, Revision 3,
dated June 23, 2011 alone is not allowed. We have re-designated
paragraph (g)(2) of the NPRM as Note 1 to paragraph (g) of this AD. We
have also re-designated paragraph (g)(1) of the NPRM as paragraph (g)
of this AD.

Request To Revise Compliance Time

    Air Wisconsin Airlines (Air Wisconsin) requested that the phrase
``Before further flight'' specified in paragraph (h) of the NPRM (77 FR
65148, dated October 25, 2012) be replaced using a compliance time of
``Within 24 months after the effective date of this AD,'' to match the
compliance time specified in paragraph (g)(1) of the NPRM. Air
Wisconsin stated paragraph (g)(1) of the NPRM would require an
inspection to determine if the part number and batch number of the
inflatable harness are listed in Appendix I of Zodiac Service Bulletin
MXH-35-241, Revision 2, dated May 19, 2011.
    We agree with the commenter's request because the intent of this
final rule is to replace affected harnesses within a compliance time of
24 months. We have changed the compliance time in paragraph (h) of this
AD to read, ``Within 24 months after the effective date of this AD.''

Request To Revise Exception Paragraph to Include Date of Manufacture
(DMF) Codes

    American requested that the list of excluded part numbers specified
by paragraph 1.A.(4) of Zodiac Service Bulletin MXH-35-240, Revision 7,
dated September 1, 2011, be included in paragraph (i) of the NPRM (77
FR 65148, October 25, 2012), for clarity.
    We agree with the commenter's request to include the excluded part
numbers because the list of excluded oxygen mask regulators specified
by paragraph 1.A.(4), ``Not Concerned Equipment,'' of Zodiac Service
Bulletin MXH-35-240, Revision 7, dated September 1, 2011, is not
directly captured in the content of this AD. We have changed paragraph
(i) of this AD to include those part numbers listed in paragraph
1.A.(4), ``Not Concerned Equipment,'' of Zodiac Service Bulletin MXH-
35-240, Revision 7, dated September 1, 2011.

Request To Revise Applicability

    American requested that paragraph (c) of the NPRM (77 FR 65148,
October 25, 2012) be revised to state the AD is applicable only to
harnesses having DMF codes between (0850S) and (1031S). American
explained that the corresponding EASA AD 2011-0090R1, dated July 13,
2011, requires the identification and replacement of ``all potentially
defective harnesses.'' American explained that specifying which
harnesses had affected DMF codes would provide clarity.
    We disagree with the commenter's request to revise the
applicability specified in paragraph (c) of this AD. The applicability
specified in paragraph (c) of this AD identifies affected oxygen

mask regulators since harnesses can be rotated and replaced on the
oxygen mask regulators. We also note that DMF codes apply to the
regulators and not the harnesses.
    However, we note that paragraph (i) of this AD does clarify which
harnesses are affected by the inspection and replacement requirements
of paragraphs (g) and (h) of this AD. Paragraph (i) of this AD also
states that oxygen mask regulators having certain DMF codes are
excluded from the inspection and replacement requirements of paragraphs
(g) and (h) of this AD. No change has been made to this AD in this
regard.

Request To Clarify Affected Oxygen Mask Regulators

    United requested we revise paragraph (i) of the NPRM (77 FR 65148,
October 25, 2012) by adding the words ``having a part number and batch
number identified in Appendix I of the service information specified in
paragraph (i)(1) or (i)(2) of this AD'' to clarify which masks are
subject to inspection and replacement requirements. United also
requested that we revise paragraph (i) of the NPRM by specifying that
the part number and batch number are those of the ``harness assembly,''
and the date of manufacturing is that of the ``mask assembly.''
    We agree with the commenter's request for the reasons provided by
the commenter. We have revised paragraph (i) of this AD accordingly.

Request To Carry Forward Exceptions and Allow Original Equipment
Manufacturer (OEM) Date in Lieu of DMF Code

    Boeing requested that we revise the NPRM (77 FR 65148, October 25,
2012) to allow the exceptions of paragraph (i) of the NPRM to carry
forward into paragraph (k) of the NPRM for the parts installation
prohibition for new production aircraft. Boeing also requested that we
revise the NPRM to allow the date on which an oxygen mask was serviced
for remanufacture or overhaul by the OEM to replace the date of
manufacture of the original mask. Boeing contends that, where
inflatable harnesses have been serviced, the OEM meets all existing AD
requirements.
    We disagree with both requests for allowing the exceptions to carry
forward and to allow the date of service to replace the date of
manufacture because the root cause of the defective oxygen masks is a
high premature rupture rate due to defective silicon. This
manufacturing defect affected a specific manufacturing batch. Thus, it
is possible that a mask overhaul may not necessarily address the root
cause or unsafe condition. Also, since oxygen mask regulators are
rotable parts, it is possible that an oxygen mask regulator can be
rotated onto a new production aircraft once it is in service. No change
has been made to this AD in this regard.

Request To Revise Wording in Paragraph (k) of the NPRM (77 FR 65148,
October 25, 2012)

    American and Horizon Air requested we revise paragraph (k) of the
NPRM (77 FR 65148, October 25, 2012) by replacing the word ``install''
with the word ``replace.'' American stated if the oxygen mask/regulator
is removed to facilitate maintenance prior to the compliance date of
the AD, the NPRM, as written, would prohibit operators from re-
installing the crew oxygen mask/regulator and would require immediate
installation of a new or re-identified harness in order to comply with
the AD. Horizon stated that the use of the word ``install'' effectively
reduces the compliance time to perform the inspection and replacement
specified by paragraphs (g) and (h) of the NPRM. American stated this
clarification would allow operators adequate time to remove and re-
install a crew oxygen mask/regulator to facilitate maintenance prior to
the compliance date.
    United stated that, while paragraph (h) of the NPRM (77 FR 65148,
October 25, 2012) clearly stated the replacement requirement, United
had concerns regarding Zodiac Service Bulletin MXH-35-240, Revision 7,
dated September 1, 2011. We contacted United for clarification. Where
paragraph 3.C. of the Accomplishment Instructions of Zodiac Service
Bulletin MXH-35-240, Revision 7, dated September 1, 2011, uses the word
``modification,'' United suggested using the word ``replacement.''
    We agree to provide clarification. The intent of the ``Parts
Installation Prohibition'' specified in paragraph (k) of this AD is
that operators replace parts with good parts rather than bad parts.
Although the words ``install,'' and ``modification'' are generally
considered to be broader than the word ``replace,'' for purposes of
this AD, these words should be interpreted as meaning ``replace'' while
remaining within the spirit and intent of the AD. Therefore, simply
reinstalling the same part during maintenance activities is acceptable
for compliance with the requirements of paragraph (k) of this AD for
that reinstallation. However, if an inflatable harness has a part
number and batch number identified as being from a defective batch
during the inspection required by paragraph (g) of this AD, paragraph
(h) of this AD requires replacement before further flight. We have not
changed the final rule regarding this issue.

Request To Reference Flow Chart Contained in Service Information

    Boeing requested that paragraph (k) of the NPRM (77 FR 65148,
October 25, 2012) be revised by adding the words ``This determination
can be made by following the flow chart contained in paragraph 3.,
``Accomplishment Instructions,'' of Zodiac Service Bulletin MXH-35-240,
Revision 7, dated September 1, 2011.'' Boeing stated that, by adding
these words, the NPRM would match EASA AD 2011-0090 R1, dated July 13,
2011. Boeing stated the flow chart includes an acceptance decision
based on the letter ``I'' written on the bushing of the inflatable
harness of the crew oxygen mask to indicate it has been inspected using
this service information.
    We agree with the commenter's request because using the flow chart
in paragraph 3., ``Accomplishment Instructions,'' of Zodiac Service
Bulletin MXH-35-240, Revision 7, dated September 1, 2011, reflects the
current method to determine whether a mask needs to be replaced. We
have revised paragraph (k) of this AD by referring to the flow chart
contained in paragraph 3., ``Accomplishment Instructions,'' of Zodiac
Aerospace Service Bulletin MXH-35-240, Revision 7, dated September 1,
2011, to determine if parts are not listed in Appendix I of Zodiac
Aerospace Service Bulletin MXH-35-240, Revision 7, dated September 1,
2011.
    We have also removed the reference to Zodiac Aerospace Service
Bulletin MXH-35-241, Revision 2, dated May 19, 2011, from paragraph (k)
of the NPRM (77 FR 65148, October 25, 2012), in order to match EASA AD
2011-0090 R1, dated July 13, 2011. For all airplanes, the parts listed
in Appendix I of Zodiac Aerospace Service Bulletin MXH-35-240, Revision
7, dated September 1, 2011, may not be installed.

Removal of ``Airworthy Product'' Paragraph from this AD

    We have removed paragraph (m)(2) of the NPRM (77 FR 65148, October
25, 2012) since the airworthy product statement regarding contacting
the manufacturer or other sources is unnecessary in this AD. We
redesignated paragraph (m)(1) as paragraph (m) of this AD.

Conclusion

    We reviewed the relevant data, considered the comments received,
and determined that air safety and the

public interest require adopting this AD with the changes described
previously and minor editorial changes. We have determined that these
minor changes:
     Are consistent with the intent that was proposed in the
NPRM (77 FR 65148, October 25, 2012) for correcting the unsafe
condition; and
     Do not add any additional burden upon the public than was
already proposed in the NPRM (77 FR 65148, October 25, 2012).
    We also determined that these changes will not increase the
economic burden on any operator or increase the scope of this AD.

Related Service Information Under 1 CFR Part 51

    Zodiac Aerospace has issued Service Bulletin MXH-35-240, Revision
7, dated September 1, 2011; and Service Bulletin MXH-35-241, Revision
3, dated June 23, 2011. The service information describes procedures
for inspecting and replacing defective harnesses with new or modified
serviceable units. This service information is reasonably available at
http://www.regulations.gov by searching for and locating Docket No.
FAA-2012-1107. Or see ADDRESSES for other ways to access this service
information.

Costs of Compliance

    We estimate that this AD affects 5,500 airplanes of U.S. registry.
    We also estimate that it will take about 1 work-hour per product to
comply with the basic requirements of this AD. The average labor rate
is $85 per work-hour. Required parts will cost $0 per product. Based on
these figures, we estimate the cost of this AD on U.S. operators to be
$467,500, or $85 per product.

Authority for this Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. ``Subtitle VII: Aviation
Programs,'' describes in more detail the scope of the Agency's
authority.
    We are issuing this rulemaking under the authority described in
``Subtitle VII, Part A, Subpart III, Section 44701: General
requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce. This regulation is within
the scope of that authority because it addresses an unsafe condition
that is likely to exist or develop on products identified in this
rulemaking action.

Regulatory Findings

    We determined that this AD will not have federalism implications
under Executive Order 13132. This AD will not have a substantial direct
effect on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.
    For the reasons discussed above, I certify that this AD:
    1. Is not a ``significant regulatory action'' under Executive Order
12866;
    2. Is not a ``significant rule'' under the DOT Regulatory Policies
and Procedures (44 FR 11034, February 26, 1979);
    3. Will not affect intrastate aviation in Alaska; and
    4. Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov/#!docketDetail;D=FAA-2012-1107; or in person at the
Docket Management Facility between 9 a.m. and 5 p.m., Monday through
Friday, except Federal holidays. The AD docket contains this AD, the
regulatory evaluation, any comments received, and other information.
The street address for the Docket Operations office (telephone 800-647-
5527) is in the ADDRESSES section.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

Adoption of the Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA amends 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority: 49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive (AD):

2015-08-07 Zodiac Aerotechnics (formerly Intertechnique Aircraft
Systems): Amendment 39-18143. Docket No. FAA-2012-1107; Directorate
Identifier 2011-NM-216-AD.

(a) Effective Date

    This AD becomes effective June 16, 2015.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Zodiac Aerotechnics (formerly Intertechnique
Aircraft Systems) flightcrew oxygen mask regulators, all part number
(P/N) MA10, MC10, MC20, MF10, MF20, MLC20, MLD20, MRA005, MRA022,
and MRA023 series; certificated in any category; installed on, but
not limited to, airplanes manufactured by Airbus, ATR, BAE Systems
(Type Certificate previously held by British Aerospace), Boeing,
Bombardier (Type Certificate previously held by Canadair, De
Havilland Canada), Cessna, Dassault, EADS CASA, EMBRAER, Gulfstream,
Hawker Beechcraft (Type Certificate previously held by Raytheon,
Beech), Israel Aircraft Industries (IAI), McDonnell Douglas,
Piaggio, Pilatus, Piper, and SOCATA.

(d) Subject

    Air Transport Association (ATA) of America Code 35, Oxygen.

(e) Reason

    This AD was prompted by a report of a malfunctioning mask having
an inflatable harness with a high premature rupture rate due to
defective silicon. We are issuing this AD to detect and correct
defective harnesses, which could lead, in case of a sudden
depressurization event, to a harness rupture, thereby providing
inadequate protection against hypoxia and possibly resulting in
unconsciousness of the affected flightcrew member and consequent
reduced control of the airplane.

(f) Compliance

    You are responsible for having the actions required by this AD
performed within the compliance times specified, unless the actions
have already been done.

(g) Inspection

    Except as provided by paragraph (i) of this AD: Within 24 months
after the effective date of this AD, inspect the inflatable harness
fitted to each flightcrew oxygen mask regulator to determine if the
inflatable harness is installed with a part number and a batch
number identified in Appendix I of Zodiac Aerospace Service Bulletin
MXH-35-240, Revision 7, dated September 1, 2011 (for all airplanes
other than Bombardier airplanes); or Appendix I of Zodiac Aerospace
Service Bulletin MXH-35-241, Revision 3, dated June 23, 2011 (for
Bombardier airplanes).

    Note 1 to paragraph (g) of this AD: Referring only to Appendix
II of Zodiac Aerospace Service Bulletin MXH-35-240, Revision 7,
dated September 1, 2011; or Appendix II of Zodiac Aerospace Service
Bulletin MXH-35-241, Revision 3, dated June 23, 2011; to identify a
specific oxygen mask regulator is insufficient to demonstrate that
the inflatable harness fitted to that oxygen mask regulator is not
listed in Appendix I of Zodiac Aerospace Service

Bulletin MXH-35-240, Revision 7, dated September 1, 2011; or
Appendix I of Zodiac Aerospace Service Bulletin MXH-35-241, Revision
3, dated June 23, 2011.

(h) Replacement

    If during the inspection required by paragraph (g) of this AD,
an inflatable harness has a part number and batch number identified
in Appendix I of Zodiac Aerospace Service Bulletin MXH-35-240,
Revision 7, dated September 1, 2011 (for all airplanes other than
Bombardier airplanes); or Appendix I of Zodiac Aerospace Service
Bulletin MXH-35-241, Revision 3, dated June 23, 2011 (for Bombardier
airplanes): Within 24 months after the effective date of this AD,
replace the inflatable harness with a new or re-identified harness,
in accordance with the Accomplishment Instructions of Zodiac
Aerospace Service Bulletin MXH-35-240, Revision 7, dated September
1, 2011 (for all airplanes other than Bombardier airplanes); or
Zodiac Aerospace Service Bulletin MXH-35-241, Revision 3, dated June
23, 2011 (for Bombardier airplanes).

(i) Exception

    Oxygen mask regulators having a date of manufacturing (DMF) code
of November 2008 (112008 or 11-08) or earlier, and those with a DMF
code of January 2011 (012011 or 01-11) or later; and those having a
part number listed in paragraph 1.A.(4), ``Not Concerned
Equipment,'' of Zodiac Aerospace Service Bulletin MXH-35-240,
Revision 7, dated September 1, 2011, are excluded from the
inspection and replacement requirements of paragraphs (g) and (h) of
this AD, provided it can be demonstrated that the inflatable harness
has not been replaced on those masks with an inflatable harness
having a part number and batch number identified in Appendix I of
the applicable service information specified in paragraph (i)(1) or
(i)(2) of this AD. A review of airplane delivery or maintenance
records is acceptable to make the determination specified in this
paragraph, if the part number and batch number of the harness
assembly, and the DMF code of the mask assembly, can be conclusively
determined from that review.
    (1) Zodiac Aerospace Service Bulletin MXH-35-240, Revision 7,
dated September 1, 2011 (for all airplanes other than Bombardier
airplanes).
    (2) Zodiac Aerospace Service Bulletin MXH-35-241, Revision 3,
dated June 23, 2011 (for Bombardier airplanes).

(j) Definition

    For the purpose of this AD, Bombardier airplanes include
airplanes previously manufactured by Canadair or by De Havilland
Canada.

(k) Parts Installation Prohibition

    As of the effective date of this AD, no person may install a
flightcrew oxygen mask regulator having a part number and batch
number on the inflatable harness that is found in Appendix I of
Zodiac Aerospace Service Bulletin MXH-35-240, Revision 7, dated
September 1, 2011 (for all airplanes); on any airplane. Operators
may determine if the part number and batch number are not listed in
Appendix I of Zodiac Aerospace Service Bulletin MXH-35-240, Revision
7, dated September 1, 2011, by following the flow chart contained in
paragraph 3., ``Accomplishment Instructions,'' of Zodiac Aerospace
Service Bulletin MXH-35-240, Revision 7, dated September 1, 2011.

(l) Credit for Previous Actions

    This paragraph provides credit for actions required by paragraph
(g) of this AD, if those actions were performed before the effective
date of this AD using the service information specified in
paragraphs (l)(1) through (l)(4) of this AD, as applicable, which
are not incorporated by reference in this AD.
    (1) Zodiac Aerospace Service Bulletin MXH-35-240, Revision 6,
dated August 16, 2011 (for all airplanes other than Bombardier
airplanes).
    (2) Zodiac Aerospace Service Bulletin MXH-35-240, Revision 5,
dated July 26, 2011 (for all airplanes other than Bombardier
airplanes).
    (3) Zodiac Aerospace Service Bulletin MXH-35-240, Revision 4,
dated June 10, 2011 (for all airplanes other than Bombardier
airplanes).
    (4) Zodiac Aerospace Service Bulletin MXH-35-241, Revision 2,
dated May 19, 2011 (for Bombardier airplanes).

(m) Alternative Methods of Compliance (AMOCs)

    The Manager, Boston Aircraft Certification Office (ACO) ANE-150,
FAA, has the authority to approve AMOCs for this AD, if requested
using the procedures found in 14 CFR 39.19. In accordance with 14
CFR 39.19, send your request to your principal inspector or local
Flight Standards District Office, as appropriate. If sending
information directly to the ACO, send it to ATTN: Ian Lucas,
Aerospace Engineer, Boston ACO, ANE-150, FAA, Engine and Propeller
Directorate, 12 New England Executive Park, Burlington, MA 01803;
phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>. Before using any approved
AMOC, notify your appropriate principal inspector, or lacking a
principal inspector, the manager of the local flight standards
district office/certificate holding district office. The AMOC
approval letter must specifically reference this AD.

(n) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information
(MCAI) EASA Airworthiness Directive 2011-0090R1, dated July 13,
2011, for related information. This MCAI may be found in the AD
docket on the Internet at http://www.regulations.gov/#!documentDetail;D=FAA-2012-1107-0003.
    (2) Service information identified in this AD that is not
incorporated by reference is available at the addresses specified in
paragraphs (o)(3) and (o)(4) of this AD.

(o) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless this AD specifies otherwise.
    (i) Zodiac Aerospace Service Bulletin MXH-35-240, Revision 7,
dated September 1, 2011.
    (ii) Zodiac Aerospace Service Bulletin MXH-35-241, Revision 3,
dated June 23, 2011.
    (3) For Zodiac Aerospace service information identified in this
AD, contact Zodiac Services, Technical Publication Department,
Zodiac Aerotechnics, Oxygen Systems Europe, 61 Rue Pierre Curie-
CS20001, 78373 Plaisir Cedex, France; phone: (33) 01 61 34 23 23;
fax: (33) 01 30 55 71 61; email<EMAIL_ADDRESS>
Internet: www.services.zodiacaerospace.com.
    (4) You may view this service information at the FAA, Transport
Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For
information on the availability of this material at the FAA, call
425-227-1221.
    (5) You may view this service information that is incorporated
by reference at the National Archives and Records Administration
(NARA). For information on the availability of this material at
NARA, call<PHONE_NUMBER>, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Renton, Washington, on April 10, 2015.
Jeffrey E. Duven,
Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2015-09467 Filed 5-11-15; 8:45 am]
 BILLING CODE 4910-13-P


[Federal Register Volume 83, Number 162 (Tuesday, August 21, 2018)]
[Notices]
[Pages 42324-42328]
[FR Doc No: 2018-17936]

=======================================================================
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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 33201; File No. 812-14831]

AXA Equitable Life Insurance Company, et al.

August 15, 2018.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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

    Notice of application for an order approving the substitution of
certain securities pursuant to section 26(c) of the Investment Company
Act of 1940, as amended (the ``Act'') and an order of exemption
pursuant to section 17(b) of the Act from section 17(a) of the Act.

APPLICANTS: AXA Equitable Life Insurance Company (``AXA Equitable''),
MONY Life Insurance Company of America (``MONY America''), Separate
Account 70 of AXA Equitable (``Separate Account 70''), Separate Account
A of AXA Equitable (``Separate Account A''), Separate Account FP of AXA
Equitable (``Separate Account FP''), MONY America Variable Account K
((``MONY America Separate Account K'') and together with Separate
Account 70, Separate Account A and Separate Account FP, the ``Separate
Accounts'') (collectively, the ``Section 26 Applicants''); and Separate
Account 65 of AXA Equitable (``Separate Account 65'') and EQ Advisors
Trust (the ``EQ Trust'' and collectively with Separate Account 65 and
the Section 26 Applicants, the ``Section 17 Applicants'').\1\
---------------------------------------------------------------------------

    \1\ For purposes of this Notice, Separate Account 65 is also a
``Separate Account'' and collectively with Separate Account 70,
Separate Account A, Separate Account FP and MONY America Separate
Account K, the ``Separate Accounts.''

SUMMARY OF APPLICATION: The Section 26 Applicants seek an order
pursuant to section 26(c) of the Act, approving the substitution of
shares issued by certain investment portfolios of registered investment
companies (the ``Removed Portfolios'') for shares of certain investment
portfolios of the EQ Trust (the ``Replacement Portfolios''), held by
the Separate Accounts (except for Separate Account 65) to support
certain variable annuity contracts and/or variable life insurance
contracts (the ``Contracts''). The Section 17 Applicants seek an order
pursuant to section 17(b) of the Act exempting them from section 17(a)
of the Act to the extent necessary to permit them to engage in certain
---------------------------------------------------------------------------
in-kind transactions.

FILING DATE: The application was filed on October 4, 2017 and was
amended on February 8, 2018 and August 10, 2018.

HEARING OR NOTIFICATION OF HEARING: An order granting the requested
relief will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Secretary of
the Commission and serving the Applicants with a copy of the request,
personally or by mail. Hearing requests should be received by the
Commission by 5:30 p.m. on September 10, 2018 and should be accompanied
by proof of service on the Applicants in the form of an affidavit or,
for lawyers, a certificate of service. Pursuant to rule 0-5 under the
Act, hearing requests should state the nature of the writer's interest,
any facts bearing upon the desirability of a hearing on the matter, the
reason for the request, and the issues contested. Persons who wish to
be notified of a hearing may request notification by writing to the
Commission's Secretary.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street
NE, Washington, DC 20549-1090. Applicants: Steven M. Joenk, Managing
Director and Chief Investment Officer, AXA Equitable Life Insurance
Company, 1290 Avenue of the Americas, New York, New York 10104;
Patricia Louie, Esq., Managing Director and Associate General Counsel,
AXA Equitable Life Insurance Company, 1290 Avenue of the Americas, New
York, New York 10104; and Mark C. Amorosi, Esq., K&L Gates LLP, 1601 K
Street NW, Washington, DC 20006.

FOR FURTHER INFORMATION CONTACT: Jennifer O. Palmer, Senior Counsel, at
(202) 551-5786, or David J. Marcinkus, Branch Chief at<PHONE_NUMBER>
(Division of Investment Management, Chief Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's website by searching for the file number, or for an
Applicant using the Company name box, at http://www.sec.gov.search/search.htm, or by calling<PHONE_NUMBER>.

Applicants' Representations

    1. AXA Equitable is a New York stock life insurance company
licensed to conduct insurance business in all fifty states of the
United States, the District of Columbia, Puerto Rico and the Virgin
Islands. AXA Equitable is wholly-owned by AXA Financial, Inc. (``AXA
Financial''), a holding company.
    2. MONY America is an Arizona stock life insurance company licensed
to

conduct insurance business in all fifty states of the United States,
the District of Columbia, Puerto Rico and the Virgin Islands. MONY
America is an indirect wholly-owned subsidiary of AXA Financial.
    3. Each Separate Account meets the definition of ``separate
account,'' as defined in section 2(a)(37) of the Act and rule 0-1(e)
thereunder. With the exception of Separate Account 65, the Separate
Accounts are registered under the Act as unit investment trusts.
Separate Account 65 is excluded from registration under the Act
pursuant to section 3(c)(11) of the Act and is not a Section 26
Applicant. The assets of the Separate Accounts support the Contracts
and interests in the Separate Accounts offered through such Contracts.
AXA Equitable and MONY America are the legal owners of the assets in
their respective Separate Accounts. The Separate Accounts are segmented
into subaccounts, and each subaccount invests in an underlying
registered open-end management investment company or series thereof.
    4. The Contracts are each registered under the Securities Act of
1933, as amended (the ``1933 Act'') on Form N-4 or Form N-6, as
applicable. Each Contract has particular fees, charges, and investment
options, as described in the Contracts' respective prospectuses.
    5. The Contracts include individual and group variable annuity
contracts or flexible premium, scheduled premium and single premium
individual, second to die and corporate variable life policies. As set
forth in the prospectuses for the Contracts, each Contract provides
that AXA Equitable or MONY America, as applicable, reserves the right
to substitute shares of the underlying investment options in which the
Separate Accounts invest for shares of any underlying investment
options already held or to be held in the future by the Separate
Accounts.
    6. AXA Equitable and MONY America, on behalf of themselves and
their respective Separate Accounts, propose to exercise their
contractual rights to substitute shares of the Removed Portfolios for
shares of the Replacement Portfolios (``Substitutions''), as shown in
the table below:

------------------------------------------------------------------------
  Substitution No.        Removed portfolio       Replacement portfolio
------------------------------------------------------------------------
1...................  American Century VP Mid   EQ/American Century Mid
                       Cap Value Fund (Class     Cap Value Portfolio
                       II).                      (Class IB).
2...................  Fidelity[supreg] VIP      EQ/Fidelity
                       Contrafund[supreg]        Institutional AM\SM\
                       (Initial Class, Service   Large Cap Portfolio
                       Class 2).                 (Class K, Class IB).
3...................  Franklin Rising           EQ/Franklin Rising
                       Dividends VIP Fund        Dividends Portfolio
                       (Class 2).                (Class IB).
4...................  Franklin Strategic        EQ/Franklin Strategic
                       Income VIP Fund (Class    Income Portfolio (Class
                       2).                       IB).
5...................  Goldman Sachs VIT Mid     EQ/Goldman Sachs Mid Cap
                       Cap Value Fund (Service   Value Portfolio (Class
                       Class).                   IB).
6...................  Invesco V.I. Global Real  EQ/Invesco Global Real
                       Estate Fund (Series II    Estate Portfolio (Class
                       Class).                   IB).
7...................  Invesco V.I.              EQ/Invesco International
                       International Growth      Growth Portfolio (Class
                       Fund (Series II Class).   IB).
8...................  Ivy VIP Energy (Class     EQ/Ivy Energy Portfolio
                       II).                      (Class IB).
9...................  Ivy VIP Mid Cap Growth    EQ/Ivy Mid Cap Growth
                       (Class II).               Portfolio (Class IB).
10..................  Ivy VIP Science and       EQ/Ivy Science and
                       Technology (Class II).    Technology Portfolio
                                                 (Class IB).
11..................  Lazard Retirement         EQ/Lazard Emerging
                       Emerging Markets Equity   Markets Equity
                       Portfolio (Service        Portfolio (Class IB).
                       Class).
12..................  MFS International Value   EQ/MFS International
                       Portfolio (Service        Value Portfolio (Class
                       Class).                   IB).
13..................  MFS Technology Portfolio  EQ/MFS Technology
                       (Service Class).          Portfolio (Class IB).
14..................  MFS Utilities Series      EQ/MFS Utilities Series
                       (Initial Class, Service   Portfolio (Class K,
                       Class).                   Class IB).
15..................  PIMCO Real Return         EQ/PIMCO Real Return
                       Portfolio (Advisor        Portfolio (Class IB).
                       Class).
16..................  PIMCO Total Return        EQ/PIMCO Total Return
                       Portfolio (Advisor        Portfolio (Class IB).
                       Class).
17..................  T. Rowe Price Health      EQ/T. Rowe Price Health
                       Sciences Portfolio (II    Sciences Portfolio
                       Class).                   (Class IB).
------------------------------------------------------------------------

    7. The Replacement Portfolios are series of the EQ Trust, a
Delaware statutory trust registered as an open-end management
investment company under the Act (File No. 811-07953) and whose shares
are registered under the 1933 Act (File No. 333-17217). The Replacement
Portfolios are currently available only as investment allocation
options under variable insurance contracts issued by AXA Equitable and
MONY America.
    8. AXA Equitable Funds Management Group, LLC (``FMG''), a wholly-
owned subsidiary of AXA Equitable and an affiliate of MONY America,
serves as the investment adviser of each Replacement Portfolio. FMG is
a Delaware limited liability company that is registered as an
investment adviser under the Investment Advisers Act of 1940. Each
Replacement Portfolio is sub-advised by a registered investment adviser
that is unaffiliated with the Section 26 Applicants, the Section 17
Applicants or FMG.
    9. Applicants state that the proposed Substitutions are part of an
ongoing effort by AXA Equitable and MONY America to make their
Contracts more attractive to existing and prospective Contract owners.
Applicants note that the proposed Substitutions are intended to improve
portfolio manager selection \2\ and simplify fund lineups while
reducing costs and maintaining a menu of investment options that would
offer a similar diversity of investment options after the proposed
Substitutions as is currently available under the Contracts. Applicants
believe that the Replacement Portfolios have investment objectives, as
described in their prospectuses, which are identical, and principal
investment strategies and principal risks, as described in their
prospectuses, which are identical or substantially similar to the
corresponding Removed Portfolios, making those Replacement Portfolios
appropriate candidates as substitutes. Information for each Removed
Portfolio

and Replacement Portfolio, including investment objectives, principal
investment strategies, principal risks, and comparative performance
history, can be found in the application.
---------------------------------------------------------------------------

    \2\ The EQ Trust and FMG may rely on an order from the
Commission that permits FMG, subject to certain conditions,
including approval of the EQ Trust's board of trustees but without
the approval of shareholders, to select certain wholly-owned and
non-affiliated investment sub-advisers to manage all or a portion of
the assets of each portfolio of the EQ Trust pursuant to an
investment sub-advisory agreement with FMG, and to materially amend
sub-advisory agreements with FMG. See EQ Advisors Trust and EQ
Financial Consultants, Inc., Investment Company Act Release Nos.
23093 (Mar. 30, 1998) (notice) and 23128 (April 24, 1998) (the
``Manager of Managers Order''). After the Substitution Date (defined
below), FMG will not change a Replacement Portfolio's sub-adviser,
add a new sub-adviser, or otherwise rely on the Manager of Managers
Order or any replacement order from the Commission with respect to
any Replacement Portfolio without first obtaining shareholder
approval of the change in sub-adviser, the new sub-adviser, or the
Replacement Portfolio's ability to rely on the Manager of Managers
Order or any replacement order from the Commission, at a shareholder
meeting, the record date for which will be after the proposed
Substitution has been effected.
---------------------------------------------------------------------------

    10. The Section 26 Applicants agree that, for a period of two years
following the implementation of the proposed Substitution (the
``Substitution Date''), and for those Contracts with assets allocated
to the Removed Portfolio on the Substitution Date, AXA Equitable, MONY
America or an affiliate thereof (other than the EQ Trust) will
reimburse, on the last business day of each fiscal quarter, the
Contract owners whose subaccounts invest in the applicable Replacement
Portfolio to the extent that the Replacement Portfolio's net annual
operating expenses (taking into account fee waivers and expense
reimbursements) for such period exceeds, on an annualized basis, the
net annual operating expenses of the Removed Portfolio for the most
recent fiscal year preceding the date of the most recently filed
application. Neither AXA Equitable nor MONY America will increase the
Contract fees and charges that would otherwise be assessed under the
terms of the Contracts for a period of at least two years following the
Substitution Date. Importantly, for each Substitution, the combined
current management fee and rule 12b-1 fee of the Replacement Portfolio
at all asset levels will be no higher than that of the corresponding
Removed Portfolio at corresponding asset levels.
    11. Applicants represent that as of the Substitution Date, the
Separate Accounts will redeem shares of the Removed Portfolios for cash
or in-kind. Redemption requests and purchase orders will be placed
simultaneously so that Contract values will remain fully invested at
all times.
    12. Each Substitution will be effected at the relative net asset
values of the respective shares of the Replacement Portfolios in
conformity with section 22(c) of the Act and rule 22c-1 thereunder
without the imposition of any transfer or similar charges by the
Section 26 Applicants. The Substitutions will be effected without
change in the amount or value of any Contracts held by affected
Contract owners.\3\
---------------------------------------------------------------------------

    \3\ The Section 26 Applicants state that, because the
Substitutions will occur at relative net asset value, and the fees
and charges under the Contracts will not change as a result of the
Substitutions, the benefits offered by the guarantees under the
Contracts will be the same immediately before and after the
Substitutions. The Section 26 Applicants also state that what effect
the Substitutions may have on the value of the benefits offered by
the Contract guarantees would depend, among other things, on the
relative future performance of the Removed Portfolios and
Replacement Portfolios, which the Section 26 Applicants cannot
predict. Nevertheless, the Section 26 Applicants note that at the
time of the Substitutions, the Contracts will offer a comparable
variety of investment options with as broad a range of risk/return
characteristics.
---------------------------------------------------------------------------

    13. Contract owners will not incur any fees or charges as a result
of the proposed Substitutions. The obligations of the Section 26
Applicants and the rights of the affected Contract owners, under the
Contracts of affected Contract owners will not be altered in any way.
AXA Equitable, MONY America and/or their affiliates (other than the EQ
Trust) will pay all expenses and transaction costs of the
Substitutions, including legal and accounting expenses, any applicable
brokerage expenses and other fees and expenses. No fees or charges will
be assessed to the affected Contract owners to effect the
Substitutions. The proposed Substitutions will not cause the Contract
fees and charges currently being paid by Contract owners to be greater
after the proposed Substitution than before the proposed Substitution.
In addition, the Substitutions will in no way alter the tax treatment
of affected Contract owners in connection with their Contracts, and no
tax liability will arise for Contract owners as a result of the
Substitutions.
    14. From the date of the Pre-Substitution Notice (defined below)
through 30 days following the Substitution Date, Contract owners may
make at least one transfer of Contract value from the subaccount
investing in a Removed Portfolio (before the Substitution) or the
Replacement Portfolio (after the Substitution) to any other available
subaccount under the Contract without charge and without imposing any
transfer limitations. Further, on the Substitution Date, Contract
values attributable to investments in each Removed Portfolio will be
transferred to the corresponding Replacement Portfolio without charge
and without being subject to any transfer limitations. Moreover, except
as described in the disruptive transfer or market timing provisions of
the relevant prospectus, AXA Equitable and MONY America will not
exercise any rights reserved under the Contracts to impose restrictions
on transfers between the subaccounts under the Contracts, including
limitations on the future number of transfers, for a period beginning
at least 30 days before the Substitution Date through at least 30 days
following the Substitution Date.
    15. At least 30 days prior to the Substitution Date, Contract
owners will be notified via prospectus supplements that the Section 26
Applicants received or expect to receive Commission approval of the
applicable proposed Substitutions and of the anticipated Substitution
Date (the ``Pre-Substitution Notice''). Pre-Substitution Notices sent
to Contract owners will be filed with the Commission pursuant to rule
497 under the 1933 Act. The Pre-Substitution Notice will advise
Contract owners that from the date of the Pre-Substitution Notice
through the date 30 days after the Substitutions, Contract owners may
make at least one transfer of Contract value from the subaccounts
investing in the Removed Portfolios (before the Substitutions) or the
Replacement Portfolios (after the Substitutions) to any other available
subaccount without charge and without imposing any transfer
limitations. Among other information, the Pre-Substitution Notice will
inform affected Contract owners that, except as described in the
disruptive transfers or market timing provisions of the relevant
prospectus, AXA Equitable and MONY America will not exercise any rights
reserved under the Contracts to impose additional restrictions on
transfers out of a Replacement Portfolio subaccount from the date of
the Pre-Substitution Notice, including limitations on the future number
of transfers, until at least 30 days after the Substitution Date.
Additionally, all affected Contract owners will be sent prospectuses of
the applicable Replacement Portfolios at least 30 days before the
Substitution Date.
    16. In addition to the Supplements distributed to the Contract
owners, within five business days after the Substitution Date, Contract
owners whose assets are allocated to a Replacement Portfolio as part of
the proposed Substitutions will be sent a written notice (each, a
``Confirmation'') informing them that the Substitutions were carried
out as previously notified. The Confirmation also will restate the
information set forth in the Pre-Substitution Notice. The Confirmation
will also reflect the values of the Contract owner's positions in the
Removed Portfolio before the Substitution and the Replacement Portfolio
after the Substitution.

Legal Analysis

    1. The Section 26 Applicants request that the Commission issue an
order pursuant to section 26(c) of the Act approving the proposed
Substitutions. Section 26(c) prohibits any depositor or trustee of a
unit investment trust that invests exclusively in the securities of a
single issuer from substituting the securities of another issuer
without the approval of the Commission. Section 26(c) provides that
such approval shall

be granted by order from the Commission if the evidence establishes
that the substitution is consistent with the protection of investors
and the purposes of the Act.
    2. The Section 26 Applicants submit that the Substitutions meet the
standards set forth in section 26(c) and that, if implemented, the
Substitutions would not raise any of the concerns that Congress
intended to address when the Act was amended to include this provision.
Applicants state that each Substitution protects the Contract owners
who have Contract value allocated to a Removed Portfolio by providing
Replacement Portfolios with identical investment objectives and
identical or substantially similar strategies and risks, and providing
Contract owners with investment options that have net annual operating
expense ratios that are lower than, or equal to, their corresponding
investment options before the Substitutions.
    3. AXA Equitable and MONY America have reserved the right under the
Contracts to substitute shares of another underlying portfolio for one
of the current portfolios offered as an investment option under the
Contracts. The Contracts and the Contracts' prospectuses disclose this
right.
    4. The Section 26 Applicants submit that the ultimate effect of the
proposed Substitutions will be to simplify the investment line-ups that
are available to Contract owners while reducing expenses and continuing
to provide Contract owners with a wide array of investment options. The
Section 26 Applicants state that the proposed Substitutions will not
reduce in any manner the nature or quality of the available investment
options and the proposed Substitutions also will permit AXA Equitable
and MONY America to present information to their Contract owners in a
simpler and more concise manner. The Section 26 Applicants also state
it is anticipated that after the proposed Substitutions, Contract
owners will be provided with disclosure documents that contain a
simpler presentation of the available investment options under the
Contracts. The Section 26 Applicants also assert that the proposed
Substitutions are not of the type that section 26 was designed to
prevent because they will not result in costly forced redemption, nor
will they affect other aspects of the Contracts. In addition, the
proposed Substitutions will not adversely affect any features or riders
under the Contracts because none of the features or riders will change
as a result of the Substitutions. Accordingly, no Contract owner will
involuntarily lose his or her features or riders as a result of any
proposed Substitution. Moreover, the Section 26 Applicants will offer
Contract owners the opportunity to transfer amounts out of the affected
subaccounts without any cost or other penalty (other than those
necessary to implement policies and procedures designed to detect and
deter disruptive transfers and other ``market timing'' activities) that
may otherwise have been imposed for a period beginning on the date of
the Pre-Substitution Notice (which supplement will be delivered to the
Contract owners at least 30 days before the Substitution Date) and
ending no earlier than 30 days after the Substitution Date. The
proposed Substitutions are also unlike the type of substitution that
section 26(c) was designed to prevent in that the Substitutions have no
impact on other aspects of the Contracts.
    5. The Section 17 Applicants request an order under section 17(b)
exempting them from the provisions of section 17(a) to the extent
necessary to permit the Section 17 Applicants to carry out some or all
of the proposed Substitutions. The Section 17 Applicants state that
because the proposed Substitutions may be effected, in whole or in
part, by means of in-kind redemptions and purchases, the proposed
Substitutions may be deemed to involve one or more purchases or sales
of securities or property between affiliated persons.
    6. Section 17(a)(1) of the Act, in relevant part, prohibits any
affiliated person of a registered investment company, or any affiliated
person of such person, acting as principal, from knowingly selling any
security or other property to that company. Section 17(a)(2) of the Act
generally prohibits the persons described above, acting as principals,
from knowingly purchasing any security or other property from the
registered investment company.
    7. The Section 17 Applicants state that the proposed transactions
may involve a transfer of portfolio securities by the Removed
Portfolios to the Separate Accounts. Immediately thereafter, the
Separate Accounts would purchase shares of the Replacement Portfolios
with the portfolio securities received from the Removed Portfolios.
Accordingly, the Section 17 Applicants provide that to the extent AXA
Equitable, MONY America and the Removed Portfolios, and AXA Equitable,
MONY America and the Replacement Portfolios, are deemed to be
affiliated persons of one another under section 2(a)(3) or section
2(a)(9) of the Act, it is conceivable that this aspect of the proposed
Substitutions could be viewed as being prohibited by section 17(a).
Accordingly, the Section 17 Applicants have determined to seek relief
from section 17(a).
    8. The Section 17 Applicants submit that the terms of the proposed
in-kind purchases of shares of the Replacement Portfolios by the
Separate Accounts, including the consideration to be paid and received,
as described in the application, are reasonable and fair and do not
involve overreaching on the part of any person concerned. The Section
17 Applicants submit that the terms of the proposed in-kind
transactions, including those considered to be paid to each Removed
Portfolio and received by each Replacement Portfolio involved, are
reasonable, fair and do not involve overreaching principally because
the transactions will conform with all but one of the conditions
enumerated in rule 17a-7 under the Act. The proposed transactions will
take place at relative net asset value in conformity with the
requirements of section 22(c) of the Act and rule 22c-1 thereunder
without the imposition of any transfer or similar charges by the
Section 26 Applicants. The Substitutions will be effected without
change in the amount or value of any Contract held by the affected
Contract owners. The Substitutions will in no way alter the tax
treatment of affected Contract owners in connection with their
Contracts, and no tax liability will arise for Contract owners as a
result of the Substitutions. The fees and charges under the Contracts
will not increase because of the Substitutions. Even though the
Separate Accounts, AXA Equitable, MONY America and the EQ Trust may not
rely on rule 17a-7, the Section 17 Applicants believe that the rule's
conditions outline the type of safeguards that result in transactions
that are fair and reasonable to registered investment company
participants and preclude overreaching in connection with an investment
company by its affiliated persons.
    9. The Section 17 Applicants also submit that the proposed in-kind
purchases by the Separate Accounts are consistent with the policies of
the EQ Trust and the Replacement Portfolios, as provided in the EQ
Trust's registration statement and reports filed under the Act.
Finally, the Section 17 Applicants submit that the proposed
Substitutions are consistent with the general purposes of the Act.

Applicants' Conditions

    Applicants agree that any order granting the requested relief will
be subject to the following conditions:
    1. The Substitutions will not be effected unless AXA Equitable or
MONY America determines that: (i) The

Contracts allow the substitution of shares of registered open-end
investment companies in the manner contemplated by the application;
(ii) the Substitutions can be consummated as described in the
application under applicable insurance laws; and (iii) any regulatory
requirements in each jurisdiction where the Contracts are qualified for
sale have been complied with to the extent necessary to complete the
Substitutions.
    2. After the Substitution Date, FMG will not change a sub-adviser,
add a new sub-adviser, or otherwise rely on the Multi-Manager Order, or
any replacement order from the Commission, with respect to any
Replacement Portfolio without first obtaining shareholder approval of
the change in sub-adviser, the new sub-adviser, or the Replacement
Portfolio's ability to rely on the Multi-Manager Order, or any
replacement order from the Commission, at a shareholder meeting, the
record date for which shall be after the proposed Substitution has been
affected.
    3. AXA Equitable, MONY America or an affiliate thereof (other than
the EQ Trust) will pay all expenses and transaction costs of the
Substitutions, including legal and accounting expenses, any applicable
brokerage expenses and other fees and expenses. No fees or charges will
be assessed to the affected Contract owners to effect the
Substitutions. The proposed Substitutions will not cause the Contract
fees and charges currently being paid by Contract owners to be greater
after the proposed Substitution than before the proposed Substitution.
    4. The Substitutions will be effected at the relative net asset
values of the respective shares of the Replacement Portfolios in
conformity with section 22(c) of the Act and rule 22c-1 thereunder
without the imposition of any transfer or similar charges by the
Section 26 Applicants. The Substitutions will be effected without
change in the amount or value of any Contracts held by affected
Contract owners.
    5. The Substitutions will in no way alter the tax treatment of
affected Contract owners in connection with their Contracts, and no tax
liability will arise for Contract owners as a result of the
Substitutions.
    6. The obligations of the Section 26 Applicants, and the rights of
the affected Contract owners, under the Contracts of affected Contract
owners will not be altered in any way.
    7. Affected Contract owners will be permitted to make at least one
transfer of Contract value from the subaccount investing in the Removed
Portfolio (before the Substitution Date) or the Replacement Portfolio
(after the Substitution Date) to any other available investment option
under the Contract without charge for a period beginning at least 30
days before the Substitution Date through at least 30 days following
the Substitution Date. Except as described in any market timing/short-
term trading provisions of the relevant prospectus, the Section 26
Applicants will not exercise any rights reserved under the Contracts to
impose restrictions on transfers between the subaccounts under the
Contracts, including limitations on the future number of transfers, for
a period beginning at least 30 days before the Substitution Date
through at least 30 days following the Substitution Date.
    8. All affected Contract owners will be notified, at least 30 days
before the Substitution Date about: (i) The intended Substitution of
Removed Portfolios with the Replacement Portfolios; (ii) the intended
Substitution Date; and (iii) information with respect to transfers as
set forth in Condition 7 above. In addition, the Section 26 Applicants
will also deliver to affected Contract owners, at least 30 days before
the Substitution Date, a prospectus for each applicable Replacement
Portfolio.
    9. The Section 26 Applicants will deliver to each affected Contract
owner within five business days of the Substitution Date a written
confirmation which will include: (i) A confirmation that the
Substitutions were carried out as previously notified; (ii) a
restatement of the information set forth in the Pre-Substitution
Notice; and (iii) values of the Contract owner's positions in the
Removed Portfolio before the Substitution and the Replacement Portfolio
after the Substitution.
    10. For a period of two years following the Substitution Date, for
Contract owners who were Contract owners as of the Substitution Date,
AXA Equitable, MONY America or an affiliate thereof (other than the EQ
Trust) will reimburse, on the last business day of each fiscal quarter,
the Contract owners whose subaccounts invest in the applicable
Replacement Portfolio to the extent that the Replacement Portfolio's
net annual operating expenses (taking into account fee waivers and
expense reimbursements) for such period exceed, on an annualized basis,
the net annual operating expenses of the Removed Portfolio for the most
recent fiscal year preceding the date of this application. In addition,
the Section 26 Applicants will not increase the Contract fees and
charges that would otherwise be assessed under the terms of the
Contracts for affected Contract owners for a period of at least two
years following the Substitution Date.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-17936 Filed 8-20-18; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 238 (Tuesday, December 11, 2012)]
[Notices]
[Pages 73637-73638]
[FR Doc No: 2012-29801]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. CP13-21-000]

Alliance Pipeline L.P.; Notice of Application

    Take notice that on November 26, 2012, Alliance Pipeline L.P.
(Alliance), 800, 605-5 Ave. SW., Calgary, Alberta, Canada T2P 3H5,
filed an application in the above referenced docket pursuant to section
7(c) of the Natural Gas Act (NGA) to amend their certificate issued in
Docket No. CP12-50-000. Alliance proposes to increase the certificated
horsepower (HP) on the Tioga Lateral from 6,000 HP to 7,950 HP.
Alliance states that this proposal will also increase the design
capacity of the Tioga Lateral facilities from 106.5 million

cubic feet per day (MMcf/d) to 126.4 MMcf/d, all as more fully set
forth in the application which is on file with the Commission and open
to public inspection. The filing is available for review at the
Commission in the Public Reference Room or may be viewed on the
Commission's Web site web at http://www.ferc.gov using the ``eLibrary''
link. Enter the docket number excluding the last three digits in the
docket number field to access the document. For assistance, contact
FERC at<EMAIL_ADDRESS>or call toll-free,<PHONE_NUMBER> or
TYY,<PHONE_NUMBER>.
    Any questions concerning this application may be directed to Brian
Troicuk, Manager, Regulatory Affairs, Alliance Pipeline Ltd. on behalf
of Alliance Pipeline L.P., 800, 605-5 Ave. SW., Calgary, Alberta,
Canada T2P 3H5, by telephone at<PHONE_NUMBER> or by email at
<EMAIL_ADDRESS>    There are two ways to become involved in the Commission's review of
this project. First, any person wishing to obtain legal status by
becoming a party to the proceedings for this project should, on or
before the comment date stated below file with the Federal Energy
Regulatory Commission, 888 First Street NE., Washington, DC 20426, a
motion to intervene in accordance with the requirements of the
Commission's Rules of Practice and Procedure (18 CFR 385.214 or
385.211) and the Regulations under the NGA (18 CFR 157.10). A person
obtaining party status will be placed on the service list maintained by
the Secretary of the Commission and will receive copies of all
documents filed by the applicant and by all other parties. A party must
submit 7 copies of filings made in the proceeding with the Commission
and must mail a copy to the applicant and to every other party. Only
parties to the proceeding can ask for court review of Commission orders
in the proceeding.
    However, a person does not have to intervene in order to have
comments considered. The second way to participate is by filing with
the Secretary of the Commission, as soon as possible, an original and
two copies of comments in support of or in opposition to this project.
The Commission will consider these comments in determining the
appropriate action to be taken, but the filing of a comment alone will
not serve to make the filer a party to the proceeding. The Commission's
rules require that persons filing comments in opposition to the project
provide copies of their protests only to the party or parties directly
involved in the protest.
    Persons who wish to comment only on the environmental review of
this project should submit an original and two copies of their comments
to the Secretary of the Commission. Environmental commentors will be
placed on the Commission's environmental mailing list, will receive
copies of the environmental documents, and will be notified of meetings
associated with the Commission's environmental review process.
Environmental commentors will not be required to serve copies of filed
documents on all other parties. However, the non-party commentors will
not receive copies of all documents filed by other parties or issued by
the Commission (except for the mailing of environmental documents
issued by the Commission) and will not have the right to seek court
review of the Commission's final order.
    The Commission strongly encourages electronic filings of comments,
protests and interventions in lieu of paper using the ``eFiling'' link
at http://www.ferc.gov. Persons unable to file electronically should
submit an original and seven copies of the protest or intervention to
the Federal Energy Regulatory Commission, 888 First Street NE.,
Washington, DC 20426.
    This filing is accessible on-line at http://www.ferc.gov, using the
``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive email
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please email
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For
TTY, call<PHONE_NUMBER>.
    Comment Date: December 24, 2012.

    Dated: December 3, 2012.
Kimberly D. Bose,
Secretary.
[FR Doc. 2012-29801 Filed 12-10-12; 8:45 am]
BILLING CODE 6717-01-P