[Federal Register Volume 76, Number 233 (Monday, December 5, 2011)]
[Notices]
[Pages 75926-75932]
[FR Doc No: 2011-31045]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65847; File No. SR-NYSEArca-2011-81]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change Relating to the Listing and Trading of the
Guggenheim Enhanced Short Duration High Yield Bond ETF Under NYSE Arca
Equities Rule 8.600

November 29, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that, on November 14, 2011, NYSE Arca, Inc.
(``Exchange'' or ``NYSE Arca'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I and II 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 list and trade the following under NYSE
Arca Equities Rule 8.600 (``Managed Fund Shares''): Guggenheim Enhanced
Short Duration High Yield Bond ETF. The text of the proposed rule
change is available at the Exchange, the Commission's Public Reference
Room, and http://www.nyse.com.

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

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

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

1. Purpose
    The Exchange proposes to list and trade the following Managed Fund
Shares \3\ (``Shares'') under NYSE Arca Equities Rule 8.600: Guggenheim
Enhanced Short Duration High Yield Bond ETF (``Fund'').\4\ The Shares
will be offered by the Claymore Exchange-Traded Fund 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.\5\
---------------------------------------------------------------------------

    \3\ A Managed Fund Share is a security that represents an
interest in an investment company registered under the Investment
Company Act of 1940 (15 U.S.C. 80a) (``1940 Act'') organized as an
open-end investment company or similar entity that invests in a
portfolio of securities selected by its investment adviser
consistent with its investment objectives and policies. In contrast,
an open-end investment company that issues Investment Company Units,
listed and traded on the Exchange under NYSE Arca Equities Rule
5.2(j)(3), seeks to provide investment results that correspond
generally to the price and yield performance of a specific foreign
or domestic stock index, fixed income securities index or
combination thereof.
    \4\ The Commission has previously approved listing and trading
on the Exchange of actively managed funds under Rule 8.600. See
Securities Exchange Act Release Nos. 57801 (May 8, 2008), 73 FR
27878 (May 14, 2008) (SR-NYSEArca-2008-31) (order approving Exchange
listing and trading of twelve actively-managed funds of the
WisdomTree Trust); 61365 (January 15, 2010), 75 FR 4124 (January 26,
2010) (SR-NYSEArca-2009-114) (order approving listing and trading of
Grail McDonnell Fixed Income ETFs); 60981 (November 10, 2009), 74 FR
59594 (November 18, 2009) (SR-NYSEArca-2009-79) (order approving
listing of five fixed income funds of the PIMCO ETF Trust); 63329
(November 17, 2010), 75 FR 71760 (November 24, 2010) (SR-NYSEArca-
2010-86) (order approving listing of Peritus High Yield ETF).
    \5\ The Trust is registered under the 1940 Act. On December 8,
2010, the Trust filed with the Commission Form N-1A under the
Securities Act of 1933 (15 U.S.C. 77a) relating to the Fund (File
Nos. 333-134551 and 811-21906) (``Registration Statement''). The
description of the operation of the Trust and the Fund herein is
based, in part, on the Registration Statement. In addition, the
Commission has issued an order granting certain exemptive relief to
the Trust under the 1940 Act. See Investment Company Act Release No.
29271 (May 18, 2010) (File No. 812-13534) (``Exemptive Order'').

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

    The investment adviser for the Fund is Guggenheim Funds Investment
Advisors, LLC (``Adviser''). The Bank of New York Mellon is the
custodian and transfer agent for the Fund. Guggenheim Funds
Distributors, Inc. is the distributor for the Fund.
    Commentary .06 to Rule 8.600 provides that, if the investment
adviser to the investment company issuing Managed Fund Shares is
affiliated with a broker-dealer, such investment adviser shall erect a
``fire wall'' between the investment adviser and the broker-dealer with
respect to access to information concerning the composition and/or
changes to such investment company portfolio.\6\ In addition,
Commentary .06 further requires that personnel who make decisions on
the open-end fund's portfolio composition must be subject to procedures
designed to prevent the use and dissemination of material nonpublic
information regarding the open-end fund's portfolio. The Adviser is
affiliated with a broker-dealer and has represented that it has
implemented a fire wall with respect to its broker-dealer affiliate
regarding access to information concerning the composition and/or
changes to the portfolio. In the event (a) The Adviser or any sub-
adviser becomes newly affiliated with a broker-dealer, or (b) any new
adviser or sub-adviser becomes affiliated with a broker-dealer, it 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.
---------------------------------------------------------------------------

    \6\ 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 its 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.
---------------------------------------------------------------------------

    According to the Registration Statement, the investment objective
of the Fund is to seek to maximize total return, through monthly income
and capital appreciation, consistent with capital preservation.
    The Fund will use an actively managed strategy that seeks to
maximize total return, comprised of income and capital appreciation,
and risk-adjusted returns in excess of the 3-month LIBOR while
maintaining a low risk profile relative to below investment grade
rated, longer-term, fixed income investments. The Fund will primarily
invest in below investment grade rated bonds while opportunistically
allocating to investment grade bonds and other select securities. The
Fund's portfolio will maintain an effective duration of one year or
less.
Primary Investments
    As a principal investment strategy, under normal market
circumstances,\7\ the Fund will invest at least 80% of its net assets
in debt securities which are below investment grade (``high yield''
bonds or ``junk bonds'').\8\ Bonds are considered to be below
investment grade if they have a Standard & Poor's or Fitch credit
rating of ``BB+'' or lower or a Moody's credit rating of ``Ba1'' or
lower (collectively or individually, ``Below Investment Grade'') or
bonds that are unrated and deemed to be of below investment grade
quality as determined by the Adviser.\9\ The Fund's primary investments
also may include floating rate or adjustable rate bonds,\10\ callable
bonds with, as determined by the Adviser, a high probability of being
redeemed prior to maturity,\11\ ``putable'' bonds (bonds that give the
holder the right to sell the bond to the issuer prior to the bond's
maturity) when the put date is within a 24 month period, ``busted''
convertible securities (a convertible security that is trading well
below its conversion value minimizing the likelihood that it will ever
reach its convertible price prior to maturity), and other types of
securities, all of which may be rated at or below investment grade. The
Fund will not invest in securities in default at the time of
investment. According to the Registration Statement, the management
process is intended to be highly flexible and responsive to market
opportunities. For example, when interest rates are low and credit
markets are healthy, the Fund may be overweight in callable bonds,
which generally have a lower yield-to-call than yield-to-maturity, as
well as bonds that are subject to company repurchases and tender
offers. In weaker credit markets, the Fund may be overweight in bonds
that are at maturity or have putable features. The Adviser anticipates
that under normal market circumstances the Fund will invest
approximately 20% of its assets in securities that will be called,
tendered, or mature within 60 to 90 days.
---------------------------------------------------------------------------

    \7\ The term ``under normal market circumstances'' includes, but
is not limited to, the absence of extreme volatility or trading
halts in the fixed income markets or the financial markets
generally; operational issues causing dissemination of inaccurate
market information; or force majeure type events such as systems
failure, natural or man-made disaster, act of God, armed conflict,
act of terrorism, riot or labor disruption or any similar
intervening circumstance. Email from Timothy J. Malinowski, Senior
Director, NYSE Euronext, to Edward Y. Cho, Special Counsel, Division
of Trading and Markets, Commission, dated November 22, 2011.
    \8\ As of August 30, 2011, the Adviser represents that there
were approximately 1,100 high yield bond issues that mature on or
before December 2016, representing $420 billion or approximately 40%
of the total amount of high yield bonds outstanding. (Source:
Barclays Capital). As of August 1, 2011, floating rate bank loans
outstanding were $637 billion. (Source regarding floating rate bank
loans: Credit Suisse Leveraged Finance Strategy Update, August 1,
2011).
    \9\ The Fund's investments will be subject to credit risk.
According to the Registration Statement, credit risk is the risk
that issuers or guarantors of debt instruments or the counterparty
to a derivatives contract, repurchase agreement or loan of portfolio
securities is unable or unwilling to make timely interest and/or
principal payments or otherwise honor its obligations. Debt
instruments are subject to varying degrees of credit risk, which may
be reflected in credit ratings. Credit rating downgrades and
defaults (failure to make interest or principal payment) may
potentially reduce the Fund's income and Share price.
    \10\ The Fund may invest in debt securities that have variable
or floating interest rates which are readjusted on set dates (such
as the last day of the month or calendar quarter) in the case of
variable rates or whenever a specified interest rate change occurs
in the case of a floating rate instrument. Variable or floating
interest rates generally reduce changes in the market price of
securities from their original purchase price because, upon
readjustment, such rates approximate market rates. Accordingly, as
interest rates decrease or increase, the potential for capital
appreciation or depreciation is less for variable or floating rate
securities than for fixed rate obligations.
    \11\ During periods of falling interest rates, an issuer of a
callable bond may exercise its right to pay principal on an
obligation earlier than expected, which may result in the Fund
reinvesting proceeds at lower interest rates, resulting in a decline
in the Fund's income.
---------------------------------------------------------------------------

    The Adviser will commence the investment review process with a top-
down, macroeconomic outlook to determine both investment themes and
relative value within each market sector and industry. Within these
parameters, the Adviser will then apply detailed bottom-up security
selection to select individual portfolio securities that the Adviser
believes can add value from income and/or the potential for capital

appreciation. Credit research may include an assessment of an issuer's
profitability, its competitive positioning and management strength, as
well as industry characteristics, liquidity, growth and other factors.
The Adviser may sell a portfolio security due to changes in credit
characteristics or outlook, as well as changes in portfolio strategy or
cash flow needs. A portfolio security may also be sold and replaced
with one that presents a better value or risk/reward profile. Except
during periods of temporary defensive positioning, the Adviser
generally expects to be fully-invested.
    The Adviser aims to manage the Fund so as to provide investors with
a higher degree of principal stability than is typically available in a
portfolio of lower-rated longer-term, fixed income investments. The
Adviser intends to invest the Fund's assets in the securities of
issuers in many different industries and intends to invest a maximum of
2-3% of the Fund's assets in the securities of any one issuer, though
the Fund is not restricted from maintaining positions of greater weight
based upon the outlook for an issuer or during periods of relatively
small asset levels of the Fund.
    The Fund may invest a portion of its assets in various types of
U.S. Government obligations. The Fund also may invest in convertible
securities, including bonds, debentures, notes, preferred stocks and
other securities that may be converted into a prescribed amount of
common stock or other equity securities at a specified price and time.
The Fund may invest in municipal securities, and certificates of
deposit.
    While the Adviser anticipates that the Fund will invest primarily
in the debt securities of U.S.-registered companies, it may also invest
in those of foreign companies in developed countries.\12\ The Fund may
invest in U.S.-registered, dollar-denominated bonds of foreign
corporations, governments, agencies and supra-national agencies.\13\
---------------------------------------------------------------------------

    \12\ The Adviser considers developed countries to include
Australia, Austria, Belgium, Canada, Denmark, Finland, France,
Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan,
Netherlands, New Zealand, Norway, Portugal, Singapore, Spain,
Sweden, Switzerland, the United Kingdom and the United States.
    \13\ According to the Registration Statement, such bonds have
different risks than investing in U.S. companies. These include
differences in accounting, auditing and financial reporting
standards, the possibility of expropriation or confiscatory
taxation, adverse changes in investment or exchange control
regulations, political instability which could affect U.S.
investments in foreign countries, and potential restrictions of the
flow of international capital. Foreign companies may be subject to
less governmental regulation than U.S. issuers. Moreover, individual
foreign economies may differ favorably or unfavorably from the U.S.
economy in such respects as growth of gross domestic product, rate
of inflation, capital investment, resource self-sufficiency and
balance of payment options.
---------------------------------------------------------------------------

    The Fund will be managed in accordance with the principal
investment strategies stated above, subject to the following investment
restrictions: The Fund will not employ any leverage in order to meet
its investment objective, and, consistent with the Exemptive Order, the
Fund will not invest in derivatives including options, swaps or
futures.
Other Investments
    As non-principal investment strategies, the Fund may invest its
remaining assets in money market instruments (including other funds
which invest exclusively in money market instruments), preferred
securities, insurance-linked securities and structured notes (notes on
which the amount of principal repayment and interest payments are based
on the movement of one or more specified factors, such as the movement
of a particular security or security index). The Fund may, from time to
time, invest in money market instruments or other cash equivalents as
part of a temporary defensive strategy to protect against temporary
market declines. When the Fund takes a temporary defensive position
that is inconsistent with its principal investment strategies, the Fund
may not achieve its investment objective. The Fund may also invest, to
a limited extent, in other pooled investment vehicles which are not
registered investment companies under the 1940 Act; however, the Fund
will not invest in hedge funds or commodity pools.
    The Fund may invest in commercial interests, including commercial
paper and other short-term corporate instruments. Commercial paper
consists of short-term promissory notes issued by corporations and may
be traded in the secondary market after its issuance.
    The Fund may invest in zero-coupon or pay-in-kind securities. These
securities are debt securities that do not make regular cash interest
payments. Zero-coupon securities are sold at a deep discount to their
face value. Pay-in-kind securities pay interest through the issuance of
additional securities. Because zero-coupon and pay-in-kind securities
do not pay current cash income, the price of these securities can be
volatile when interest rates fluctuate.
    The Fund may invest up to 10% of its net assets in asset-backed
securities issued or guaranteed by private issuers.
    The Fund may invest in the aggregate up to 15% of its net assets
(taken at the time of investment) in: (1) Illiquid securities \14\ and
(2) Rule 144A securities. Illiquid securities include securities
subject to contractual or other restrictions on resale and other
instruments that lack readily available markets.\15\ Rule 144A
securities are securities which, while privately placed, are eligible
for purchase and

resale pursuant to Rule 144A under the Securities Act of 1933
(``Securities Act''). Rule 144A permits certain qualified institutional
buyers, such as the Fund, to trade in privately placed securities even
though such securities are not registered under the Securities Act.
---------------------------------------------------------------------------

    \14\ The Fund may invest in master notes, which are demand notes
that permit the investment of fluctuating amounts of money at
varying rates of interest pursuant to arrangements with issuers who
meet the quality criteria of the Fund. The interest rate on a master
note may fluctuate based upon changes in specified interest rates,
be reset periodically according to a prescribed formula or be a set
rate. Although there is no secondary market in master demand notes,
if such notes have a demand future, the payee may demand payment of
the principal amount of the note upon relatively short notice.
Master notes are generally illiquid and therefore subject to the
Fund's percentage limitations for investments in illiquid
securities. The Fund may invest up to 15% of its net assets in bank
loans, which include participation interests (as described below).
Any bank loans will be broadly syndicated and may be first or second
liens; the Fund will not invest in third lien or mezzanine loans.
The interest rate on bank loans and other adjustable rate securities
typically resets every 90 days based upon then current interest
rates. The Fund may purchase participations in corporate loans.
Participation interests generally will be acquired from a commercial
bank or other financial institution (``Lender'') or from other
holders of a participation interest (``Participant''). The purchase
of a participation interest either from a Lender or a Participant
will not result in any direct contractual relationship with the
borrowing company (``Borrower''). The Fund generally will have no
right directly to enforce compliance by the Borrower with the terms
of the credit agreement. Instead, the Fund will be required to rely
on the Lender or the Participant that sold the participation
interest, both for the enforcement of the Fund's rights against the
Borrower and for the receipt and processing of payments due to the
Fund under the loans. Under the terms of a participation interest,
the Fund may be regarded as a member of the Participant, and thus
the Fund is subject to the credit risk of both the Borrower and a
Participant. Participation interests are generally subject to
restrictions on resale. Generally, the Fund considers participation
interests to be illiquid and therefore subject to the Fund's
percentage limitations for investments in illiquid securities.
    \15\ The Commission has stated that long-standing Commission
guidelines have required open-end funds to hold no more than 15% of
their net assets in illiquid securities and other illiquid assets.
See Investment Company Act Release No. 28193 (March 11, 2008), 73 FR
14617 (March 18, 2008), footnote 34. See also Investment Company Act
Release No. 5847 (October 21, 1969), 35 FR 19989 (December 31, 1970)
(Statement Regarding ``Restricted Securities''); Investment Company
Act Release No. 18612 (March 12, 1992), 57 FR 9828 (March 20, 1992)
(Revisions of Guidelines to Form N-1A). A fund's portfolio security
is illiquid if it cannot be disposed of in the ordinary course of
business within seven days at approximately the value ascribed to it
by the ETF. See Investment Company Act Release No. 14983 (March 12,
1986), 51 FR 9773 (March 21, 1986) (adopting amendments to Rule 2a-7
under the 1940 Act); Investment Company Act Release No. 17452 (April
23, 1990), 55 FR 17933 (April 30, 1990) (adopting Rule 144A under
the Securities Act of 1933).
---------------------------------------------------------------------------

    The Fund may invest in the securities of other investment companies
(including money market funds). Under Section 12(d) of the 1940 Act, or
as otherwise permitted by the Commission, the Fund's investment in
investment companies is limited to, subject to certain exceptions, (i)
3% of the total outstanding voting stock of any one investment company,
(ii) 5% of the Fund's total assets with respect to any one investment
company and (iii) 10% of the Fund's total assets of [sic] investment
companies in the aggregate.\16\
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 80a-12(d).
---------------------------------------------------------------------------

    The Fund may enter into repurchase \17\ and reverse repurchase
agreements.\18\ The Fund also may invest in the securities of real
estate investment trusts to the extent allowed by law, which pool
investors' funds for investments primarily in commercial real estate
properties.
---------------------------------------------------------------------------

    \17\ Repurchase agreements are agreements pursuant to which
securities are acquired by the Fund from a third party with the
understanding that they will be repurchased by the seller at a fixed
price on an agreed date. These agreements may be made with respect
to any of the portfolio securities in which the Fund is authorized
to invest. Repurchase agreements may be characterized as loans
secured by the underlying securities. The Fund may enter into
repurchase agreements with (i) Member banks of the Federal Reserve
System having total assets in excess of $500 million and (ii)
securities dealers (``Qualified Institutions''). The Adviser will
monitor the continued creditworthiness of Qualified Institutions.
    \18\ Reverse repurchase agreements involve the sale of
securities with an agreement to repurchase the securities at an
agreed-upon price, date and interest payment and have the
characteristics of borrowing. The securities purchased with the
funds obtained from the agreement and securities collateralizing the
agreement will have maturity dates no later than the repayment date.
Generally the effect of such transactions is that the Fund can
recover all or most of the cash invested in the portfolio securities
involved during the term of the reverse repurchase agreement, while
in many cases the Fund is able to keep some of the interest income
associated with those securities.
---------------------------------------------------------------------------

    The Fund may not invest 25% or more of the value of its total
assets in securities of issuers in any one industry or group of
industries. This restriction does not apply to obligations issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities.\19\
---------------------------------------------------------------------------

    \19\ See Form N-1A, Item 9. The Commission has taken the
position that a fund is concentrated if it invests more than 25% of
the value of its total assets in any one industry. See, e.g.,
Investment Company Act Release No. 9011 (October 30, 1975), 40 FR
54241 (November 21, 1975).
---------------------------------------------------------------------------

    The Fund's portfolio holdings will be disclosed on its Web site
(http://www.guggenheimfunds.com) daily after the close of trading on
the Exchange and prior to the opening of trading on the Exchange the
following day.
    The Fund intends to maintain the level of diversification necessary
to qualify as a regulated investment company (``RIC'') under Subchapter
M of the Internal Revenue Code of 1986, as amended.\20\
---------------------------------------------------------------------------

    \20\ 26 U.S.C. 851. As a RIC, the Fund will not be subject to
U.S. federal income tax on the portion of its taxable investment
income and capital gains that it distributes to its shareholders. To
qualify for treatment as a RIC, a company must annually distribute
at least 90% of its net investment company taxable income (which
includes dividends, interest and net short-term capital gains) and
meet several other requirements relating to the nature of its income
and the diversification of its assets. If the Fund fails to qualify
for any taxable year as a RIC, all of its taxable income will be
subject to tax at regular corporate income tax rates without any
deduction for distributions to shareholders, and such distributions
generally will be taxable to shareholders as ordinary dividends to
the extent of the Fund's current and accumulated earnings and
profits. In addition, in order to requalify for taxation as a RIC,
the Fund may be required to recognize unrealized gains, pay
substantial taxes and interest and make certain distributions. One
of several requirements for RIC qualification is that the Fund must
receive at least 90% of the Fund's gross income each year from
dividends, interest, [sic] payments with respect to securities
loans, gains from the sale or other disposition of stock, securities
or foreign currencies, or other income derived with respect to the
Fund's investments in stock, securities, foreign currencies and net
income from an interest in a qualified publicly traded partnership
(``90% Test''). A second requirement for qualification as a RIC is
that the Fund must diversify its holdings so that, at the end of
each fiscal quarter of the Fund's taxable year: (a) at least 50% of
the market value of the Fund's total assets is represented by cash
and cash items, U.S. Government securities, securities of other
RICs, and other securities, with these other securities limited, in
respect to any one issuer, to an amount not greater than 5% of the
value of the Fund's total assets or 10% of the outstanding voting
securities of such issuer; and (b) not more than 25% of the value of
its total assets are invested in the securities (other than U.S.
Government securities or securities of other RICs) of any one issuer
or two or more issuers which the Fund controls and which are engaged
in the same, similar, or related trades or businesses, or the
securities of one or more qualified publicly traded partnership
[sic] (``Asset Test'').
---------------------------------------------------------------------------

    The Fund represents that the portfolio will include a minimum of 13
non-affiliated issuers.
    The Fund will only purchase performing securities, not distressed
debt. Distressed debt is debt that is currently in default and is not
expected to pay the current coupon.
    The Shares will conform to the initial and continued listing
criteria under NYSE Arca Equities Rule 8.600. The Exchange represents
that, for initial and/or continued listing, the Fund will be in
compliance with Rule 10A-3 under the Exchange Act,\21\ as provided by
NYSE Arca Equities Rule 5.3. A minimum of 100,000 Shares of the Fund
will be outstanding at the commencement of trading on the Exchange. The
Exchange will obtain a representation from the issuer of the Shares
that the net asset value (``NAV'') per Share will be calculated daily
and that the NAV and the Disclosed Portfolio will be made available to
all market participants at the same time.
---------------------------------------------------------------------------

    \21\ 17 CFR 240.10A-3.
---------------------------------------------------------------------------

    The Fund will not invest in non-U.S.-registered equity securities.
Creations and Redemptions of Shares
    Investors may create or redeem in Creation Unit size of 100,000
Shares or aggregations thereof (``Creation Unit Aggregation'') through
an Authorized Participant, as described in the Registration Statement.
In order to purchase Creation Units of a Fund, an investor must
generally deposit a designated portfolio of securities (``Deposit
Securities'') (and/or an amount in cash in lieu of some or all of the
Deposit Securities) per each Creation Unit Aggregation constituting a
substantial replication, or representation, of the securities included
in the Fund's portfolio as selected by the Adviser (``Fund
Securities'') and generally make a cash payment referred to as the
``Cash Component.'' The list of the names and the amounts of the
Deposit Securities will be made available by the Fund's custodian
through the facilities of the National Securities Clearing Corporation
(``NSCC'') immediately prior to the opening of business each day of the
NYSE Arca. The Cash Component represents the difference between the net
asset value of a Creation Unit and the market value of the Deposit
Securities.
    Shares may be redeemed only in Creation Unit size at their NAV on a
day the NYSE Arca is open for business. The Fund's custodian will make
available immediately prior to the opening of business each day of the
NYSE Arca, through the facilities of NSCC, the list of the names and
the amounts of the Fund's portfolio securities that will be applicable
that day to redemption requests in proper form. Fund Securities
received on redemption may not be identical to Deposit Securities which
are applicable to purchases of Creation Units.
Net Asset Value
    The NAV per Share of the Fund will be determined once daily as of
the close of the New York Stock Exchange (``NYSE''), usually 4 p.m.
Eastern time (``E.T.''), each day the NYSE is open for trading,
provided that any assets or

liabilities denominated in currencies other than the U.S. dollar shall
be translated into U.S. dollars at the prevailing market rates on the
date of valuation as quoted by one or more major banks or dealers that
makes a two-way market in such currencies (or a data service provider
based on quotations received from such banks or dealers); and U.S.
fixed income instruments may be valued as of the announced closing time
for trading in fixed income instruments on any day that the Securities
Industry and Financial Markets Association announces an early closing
time.
    NAV per Share will be determined by dividing the value of the
Fund's portfolio securities, cash and other assets (including accrued
interest), less all liabilities (including accrued expenses), by the
total number of Shares outstanding. Debt securities will be valued at
the mean between the last available bid and ask prices for such
securities or, if such prices are not available, at prices for
securities of comparable maturity, quality, and type. The Fund's debt
securities may also be valued based on price quotations or other
equivalent indications of value provided by a third-party pricing
service.
    Short-term securities for which market quotations are not readily
available will be valued at amortized cost, which approximates market
value. To the extent the Fund invests in bank loans, the loans will
generally be fair valued using evaluated quotes provided by an
independent pricing service. Prices provided by the pricing services
may be determined without exclusive reliance on quoted prices, and may
reflect appropriate factors such as, among others, market quotes,
ratings, tranche type, industry, company performance, spread,
individual trading characteristics and other market data. Equity
securities will be valued at the last reported sale price on the
principal exchange or on the principal OTC market on which such
securities are traded, as of the close of regular trading on the NYSE
on the day the securities are being valued or, if there are no sales,
at the mean of the most recent bid and ask prices. Equity securities
that are traded primarily on the NASDAQ Stock Market will be valued at
the NASDAQ Official Closing Price.
    Securities for which market quotations are not readily available,
including restricted securities, will be valued by the Adviser by a
method that the Adviser believes accurately reflects fair value,
pursuant to policies adopted by the Board of Trustees. Securities will
be valued at fair value when market quotations are not readily
available or are deemed unreliable, such as when a security's value or
meaningful portion of the Fund's portfolio is believed to have been
materially affected by a significant event. Such events may include a
natural disaster, an economic event like a bankruptcy filing, a trading
halt in a security, an unscheduled early market close or a substantial
fluctuation in domestic and foreign markets that has occurred between
the close of the principal exchange and the NYSE Arca.
Availability of Information
    The Fund's Web site, which will be publicly available prior to the
public offering of Shares, will include a form of the prospectus for
the Fund that may be downloaded. The Fund's Web site will include
additional quantitative information updated on a daily basis,
including, for the Fund, (1) Daily trading volume, the prior business
day's reported closing price, NAV and mid-point of the bid/ask spread
at the time of calculation of such NAV (the ``Bid/Ask Price''),\22\ and
a calculation of the premium and discount of the Bid/Ask Price against
the NAV, and (2) data in chart format displaying the frequency
distribution of discounts and premiums of the daily Bid/Ask Price
against the NAV, within appropriate ranges, for each of the four
previous calendar quarters. On each business day, before commencement
of trading in Shares in the Core Trading Session on the Exchange, the
Fund will disclose on its 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 NAV at the end of the business day.\23\
---------------------------------------------------------------------------

    \22\ The Bid/Ask Price of the Fund will be determined using the
midpoint of the highest bid and the lowest offer on the Exchange as
of the time of calculation of the Fund's NAV. The records relating
to Bid/Ask Prices will be retained by the Fund and its service
providers.
    \23\ Under accounting procedures followed by the Fund, trades
made on the prior business day (``T'') will be booked and reflected
in NAV on the current business day (``T+1''). Accordingly, the Fund
will be able to disclose at the beginning of the business day the
portfolio that will form the basis for the NAV calculation at the
end of the business day.
---------------------------------------------------------------------------

    On a daily basis, the Adviser will disclose on the Fund's Web site
for each portfolio security or other financial instrument of the Fund
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 Web site
information will be publicly available at no charge. In addition, price
information for the debt securities held by the Fund will be available
through major market data vendors.
    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
NSCC. The basket represents one Creation Unit of the Fund.
    Investors can also obtain the Trust's Statement of Additional
Information (``SAI''), the Fund's Shareholder Reports, and Form N-CSR
and Form N-SAR, filed twice a year. The Trust's SAI and Shareholder
Reports are available free upon request from the Trust, and those
documents and the Form N-CSR and Form N-SAR may be viewed on-screen or
downloaded from the Commission's Web site at http://www.sec.gov.
Information regarding market price and trading volume for the Shares
will be continually available on a real-time basis throughout the day
on brokers' computer screens and other electronic services. Information
regarding the previous day's closing price and trading volume
information for the Shares will be published daily in the financial
section of newspapers. Quotation and last sale information for the
Shares will be available via the Consolidated Tape Association
(``CTA'') high-speed line. In addition, the Portfolio Indicative Value,
as defined in NYSE Arca Equities Rule 8.600(c)(3), will be widely
disseminated by one or more major market data vendors at least every 15
seconds during the Core Trading Session.\24\ The dissemination of the
Portfolio Indicative Value, together with the Disclosed Portfolio, will
allow investors to determine the value of the underlying portfolio of
the Fund on a daily basis and to provide a close estimate of that value
throughout the trading day.
---------------------------------------------------------------------------

    \24\ Currently, it is the Exchange's understanding that several
major market data vendors display and/or make widely available
Portfolio Indicative Values published on CTA or other data feeds.
---------------------------------------------------------------------------

    Additional information regarding the Trust and the Shares,
including investment strategies, risks, creation and redemption
procedures, fees, portfolio holdings disclosure policies, distributions
and taxes is included in the Registration Statement.
Trading Halts
    With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares of

the Fund.\25\ Trading in Shares of the Fund 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. These may include: (1) The extent to which trading is not
occurring in the securities and/or the financial instruments comprising
the Disclosed Portfolio of the Fund; or (2) whether other unusual
conditions or circumstances detrimental to the maintenance of a fair
and orderly market are present. Trading in the Shares will be subject
to NYSE Arca Equities Rule 8.600(d)(2)(D), which sets forth
circumstances under which Shares of the Fund may be halted.
---------------------------------------------------------------------------

    \25\ See NYSE Arca Equities Rule 7.12, Commentary .04.
---------------------------------------------------------------------------

Trading Rules
    The Exchange deems the Shares to be equity securities, thus
rendering trading in the Shares subject to the Exchange's existing
rules governing the trading of equity securities. Shares will trade on
the NYSE Arca Marketplace from 4 a.m. to 8 p.m. E.T. in accordance with
NYSE Arca Equities Rule 7.34 (Opening, Core, and Late Trading
Sessions). The Exchange has appropriate rules to facilitate
transactions in the Shares during all trading sessions. As provided in
NYSE Arca Equities Rule 7.6, Commentary .03, the minimum price
variation (``MPV'') for quoting and entry of orders in equity
securities traded on the NYSE Arca Marketplace is $0.01, with the
exception of securities that are priced less than $1.00 for which the
MPV for order entry is $0.0001.
Surveillance
    The Exchange intends to utilize its existing surveillance
procedures applicable to derivative products (which include Managed
Fund Shares) to monitor trading in the Shares. The Exchange represents
that these procedures are adequate to properly monitor Exchange trading
of the Shares in all trading sessions and to deter and detect
violations of Exchange rules and applicable federal securities laws.
    The Exchange's current trading surveillance focuses on detecting
securities trading outside their normal patterns. When such situations
are detected, surveillance analysis follows and investigations are
opened, where appropriate, to review the behavior of all relevant
parties for all relevant trading violations.
    The Exchange may obtain information via the Intermarket
Surveillance Group (``ISG'') from other exchanges that are members of
ISG or with which the Exchange has entered into a comprehensive
surveillance sharing agreement.\26\
---------------------------------------------------------------------------

    \26\ For a list of the current members of ISG, see http://www.isgportal.org. The Exchange notes that not all components of the
Disclosed Portfolio for the Fund may trade on markets that are
members of ISG or with which the Exchange has in place a
comprehensive surveillance sharing agreement.
---------------------------------------------------------------------------

    In addition, the Exchange also has a general policy prohibiting the
distribution of material, non-public information by its employees.
Information Bulletin
    Prior to the commencement of trading, the Exchange will inform its
Equity Trading Permit (``ETP'') Holders in an Information Bulletin
(``Bulletin'') of the special characteristics and risks associated with
trading the Shares. Specifically, the Bulletin will discuss the
following: (1) The procedures for purchases and redemptions of Shares
in Creation Unit Aggregations (and that Shares are not individually
redeemable); (2) NYSE Arca Equities Rule 9.2(a), which imposes a duty
of due diligence on its ETP Holders to learn the essential facts
relating to every customer prior to trading the Shares; (3) 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; (4) how information regarding the
Portfolio Indicative Value is disseminated; (5) 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 (6) trading information.
    In addition, the Bulletin will reference that the Fund is subject
to various fees and expenses described in the Registration Statement.
The Bulletin will discuss any exemptive, no-action, and interpretive
relief granted by the Commission from any rules under the Exchange Act.
The Bulletin will also disclose that the NAV for the Shares will be
calculated after 4 p.m. E.T. each trading day.
2. Statutory Basis
    The basis under the Exchange Act for this proposed rule change is
the requirement under Section 6(b)(5) \27\ that an exchange have rules
that are designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to remove
impediments to, and perfect the mechanism of a free and open market
and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \27\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices in that the
Shares will be listed and traded on the Exchange pursuant to the
initial and continued listing criteria in NYSE Arca Equities Rule
8.600. The Exchange has in place surveillance procedures that are
adequate to properly monitor trading in the Shares in all trading
sessions and to deter and detect violations of Exchange rules and
applicable federal securities laws. The Exchange may obtain information
via ISG from other exchanges that are members of ISG or with which the
Exchange has entered into a comprehensive surveillance sharing
agreement. According to the Registration Statement, the Fund will not
employ any leverage in order to meet its investment objective; and the
Fund will not invest in derivative securities including options, swaps
or futures. The Fund will not invest in securities in default at the
time of investment.
    The proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
that the Adviser is affiliated with a broker-dealer and has represented
that it has implemented a fire wall with respect to its broker-dealer
affiliate regarding access to information concerning the composition
and/or changes to the portfolio. The Exchange will obtain a
representation from the issuer of the Shares that the NAV per Share
will be calculated daily and that the NAV and the Disclosed Portfolio
will be made available to all market participants at the same time. In
addition, a large amount of information is publicly available regarding
the Fund and the Shares, thereby promoting market transparency. The
Fund's portfolio holdings will be disclosed on its Web site daily after
the close of trading on the Exchange and prior to the opening of
trading on the Exchange the following day. Moreover, the Portfolio
Indicative Value will be widely disseminated by one or more major
market data vendors at least every 15 seconds during the Exchange's
Core Trading Session. On each business day, before commencement of
trading in Shares in the Core Trading Session on the Exchange, the Fund
will disclose on its Web site the Disclosed Portfolio that will form
the basis for the Fund's calculation of NAV at the end of the business
day. 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
quotation and last sale information will be available via the CTA high-
speed line. The Web site for the Fund will include a form of the
prospectus for the Fund and additional data relating to NAV and other
applicable quantitative information. Moreover, prior to the
commencement of trading, the Exchange will inform its ETP Holders in an
Information Bulletin of the special characteristics and risks
associated with trading the Shares. Trading in Shares of the Fund will
be halted if the circuit breaker parameters in NYSE Arca Equities Rule
7.12 have been reached or because of market conditions or for reasons
that, in the view of the Exchange, make trading in the Shares
inadvisable, and trading in the Shares will be subject to NYSE Arca
Equities Rule 8.600(d)(2)(D), which sets forth circumstances under
which Shares of the Fund may be halted. In addition, as noted above,
investors will have ready access to information regarding the Fund's
holdings, the Portfolio Indicative Value, the Disclosed Portfolio, and
quotation and last sale information for the Shares.
    The proposed rule change is designed to perfect the mechanism of a
free and open market and, in general, to protect investors and the
public interest in that it will facilitate the listing and trading of
an additional type of actively-managed exchange-traded product that
will enhance competition among market participants, to the benefit of
investors and the marketplace. As noted above, the Exchange has in
place surveillance procedures relating to trading in the Shares and may
obtain information via ISG from other exchanges that are members of ISG
or with which the Exchange has entered into a comprehensive
surveillance sharing agreement. In addition, as noted above, investors
will have ready access to information regarding the Fund's holdings,
the Portfolio Indicative Value, the Disclosed Portfolio, and quotation
and last sale information for the Shares.

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

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

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

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

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule
change should be disapproved.

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 email to<EMAIL_ADDRESS>Please include
File Number SR-NYSEArca-2011-81 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-NYSEArca-2011-81. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of 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-NYSEArca-2011-81 and should
be submitted on or before December 27, 2011.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\28\
Kevin M. O'Neill,
Deputy Secretary.
---------------------------------------------------------------------------

    \28\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

[FR Doc. 2011-31045 Filed 12-2-11; 8:45 am]
BILLING CODE 8011-01-P


<COMPANY FEDERAL REGISTER DOCUMENT SUBMISSION TEMPLATE  (1/1/2006)>

<EPA Registration Division contact: [Janet Whitehurst,<PHONE_NUMBER>]>

<INSTRUCTIONS:  Please utilize this outline in preparing tolerance
petition documents.  In cases where the outline element does not apply
please insert “NA-Remove” and maintain the outline.  The comment
notes that appear on the left margin represent hidden typesetting codes
designed to expedite the processing of the Federal Register document.
Please do not remove or alter these comment notes or change the margins,
font, or format in your document. Simply replace the instructions that
appear in italics and brackets, i.e., “[insert company name],” with
the information specific to your action.]>

<TEMPLATE:>

<[Bayer CropScience]>

<[7F7171]>

<	EPA has received a pesticide petition ([insert petition number]) from
[Bayer CropScience], [P.O. Box 12014, 2 T.W. Alexander Drive, Research
Triangle Park, NC 27709] proposing, pursuant to section 408(d) of the
Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a(d), to
amend 40 CFR part 180.>

<(Options (pick one)>

<	1. by establishing a tolerance for residues of>

<

<	[the fungicide trifloxystrobin and the free form of its acid
metabolite

(CGA–32113)] in or on the raw agricultural commodity [strawberry] at
[1.1] parts per million (ppm).  EPA has determined that the petition
contains data or information regarding the elements set forth in section
408 (d)(2) of the FDDCA; however, EPA has not fully evaluated the
sufficiency of the submitted data at this time or whether the data
supports granting of the petition. Additional data may be needed before
EPA rules on the petition.>

<A. Residue Chemistry>

<	1. Plant metabolism [The metabolism of trifloxystrobin in plants
(cucumbers, apples, wheat, sugar beets and peanuts) is well understood.
Identified metabolic pathways are substantially similar in plants and
animals (goat, rat and hen). EPA has determined that trifloxystrobin
parent and its metabolite CGA-321113 are the residue of concern for
tolerance setting purposes.]>

<	2. Analytical method. [A practical analytical methodology for
detecting and measuring levels of trifloxystrobin in or on raw
agricultural commodities has been submitted. The limit of detection
(LOD) for each analyte of this method is 0.08 ng injected, and the limit
of quantitation (LOQ) is 0.02 ppm. The method is based on crop specific
cleanup procedures and determination by gas chromatography with
nitrogen-phosphorus detection.]>

<	3. Magnitude of residues. [A total of eight field trials were
conducted to measure the magnitude of the total trifloxystrobin [Methyl
(αE)-α-(methoxyimino)-2-[[[(E)-[1-[3-(trifluoromethyl)
phenyl]ethylidene]amino]oxy] methyl] benzeneacetate] residue in
strawberry with a target rate of 0.1 lb ai/A following 0-day pre-harvest
interval. In one of the trails samples were collected at PHIs of 3-, 5-,
7-, and 10-days.

The residues of trifloxystrobin and trifloxystrobin acid were
quantitated by liquid chromatography/mass spectrometry-mass spectrometry
(LC/MS-MS) with an electrospray interface, operated in the positive ion
mode, using deuterated internal standards. The limit of quantitation
(LOQ) was 0.01 ppm. The highest average field trial (HAFT) total
trifloxystrobin residue was 0.562 ppm. Total trifloxystrobin residue was
found to decrease with time and upon washing and cooking.]>

<B. Toxicological Profile>

<	1. Acute toxicity.  [  SEQ CHAPTER \h \r 1 Studies conducted with the
technical material of trifloxystrobin:

rat acute oral toxicity study with a LD50 >5000 mg/kg

mouse acute oral toxicity study with a LD50 >5000 mg/kg

rabbit acute dermal toxicity study with  a LD50 >2000 mg/kg

rat acute dermal toxicity study with  a LD50 >2000 mg/kg

rat acute inhalation toxicity study with a LC50 >4.65 mg/L

rabbit eye irritation study showing slight irritation (Category III)

rabbit dermal irritation study showing slight irritation (Category IV)

Guinea pig dermal sensitization study with the Buehler’s method
showing negative findings

Guinea pig dermal sensitization study with the Maximization method
showing some positive findings.]>

g/ml) of cytotoxic and precipitating concentrations (compound
solubility in water was reported to be 0.61 g/ml; precipitate was
visually noted in culture medium at 150 g/ml).  The chemical was
found to be non-mutagenic in the in vivo system or all other in vitro
systems. Consequently, the limited gene mutation activity in the V79
cell line is considered a nonspecific effect under non-physiological in
vitro conditions and not indicative of a real mutagenic hazard.]>

<	3. Reproductive and developmental toxicity. [  SEQ CHAPTER \h \r 1
FFDCA section 408 provides that EPA may apply an additional safety
factor for infants and children in the case of threshold effects to
account for pre- and post-natal toxicity and the completeness of the
database. Based on the current toxicological data requirements, the
database on trifloxystrobin relative to pre- and post-natal effects for
children is complete.

	In assessing the potential for additional sensitivity of infants and
children to residues of trifloxystrobin, data were considered from
teratogenicity studies in the rat and the rabbit and a 2-generation
reproduction studies in the rat. The teratogenicity studies are designed
to evaluate adverse effects on the developing embryo as a result of
chemical exposure during the period of organogenesis. Reproduction
studies provide information on effects from chemical exposure on the
reproductive capability of mating animals and systemic and developmental
toxicity from in-utero exposure.

100 mg/kg. No teratogenic effects or any other effects were seen on
pregnancy or fetal parameters except for the increased incidence of
enlarged thymus, which is a type of variation, at 1000 mg/kg. The
developmental NOEL was 100 mg/kg.

	In the rabbit teratology study, body weight loss and dramatically
reduced food consumption were observed in the dam at 250 mg/kg. No
teratogenic effects or any other effects were seen on pregnancy or fetal
parameters except for the increase in skeletal anomaly of fused
sternebrae-3 and -4 at the top dose level of 500 mg/kg. This finding is
regarded as a marginal effect on skeletal development that could have
resulted from the 40-65% lower food intake during treatment at this dose
level. The developmental NOEL was 250 mg/kg.

750 ppm, especially in females during lactation. Consequently, the
reduced pup weight gain during lactation (750 ppm) and the slight
delay in eye opening (1500 ppm) are judged to be a secondary effect of
maternal toxicity. No other fetal effects or any reproductive changes
were noted.  The low developmental NOEL, 50 ppm (5 mg/kg), seen in this
study was probably due to the lack of intermediate dose levels between
50 and 750 ppm. Based on an evaluation of the dose-response relationship
for pup weight at 750 ppm and 1500 ppm, the NOEL should have been nearly
ten-fold higher if such a dose was available.

	Based on all these teratology and reproduction studies, the lowest NOEL
for developmental toxicity is 5 mg/kg while the lowest NOEL in the
subchronic and chronic studies is 2.5 mg/kg/day (from the rat chronic
study). Therefore, no additional sensitivity for infants and children to
trifloxystrobin is suggested by the data base.]>

<	4. Subchronic toxicity. [  SEQ CHAPTER \h \r 1 In subchronic studies,
several mortality related changes were reported for the top dose in dogs
(500 mg/kg) and rats (800 mg/kg). At these dose levels, excessive
toxicity has resulted in body weight loss and mortality with the
associated and nonspecific changes in several organs (such as atrophy in
the thymus, pancreas, bone marrow, lymph node, and spleen) which are not
considered specific target organs for the test compound. In the dog,
specific effects were limited to hepatocellular hypertrophy at 150
mg/kg and  hyperplasia of the epithelium of the gall bladder at 500
mg/kg. Target organ effects in the rat were noted as hepatocellular
hypertrophy (200 mg/kg) and the related liver weight increase (50
mg/kg). In the mouse, target organ effects included single cell necrosis
(300 mg/kg) and hypertrophy (1050 mg/kg) in the liver and
extramedullary hematopoiesis (300 mg/kg) and hemosiderosis in the
spleen (1050 mg/kg).

	In general, definitive target organ toxicity, mostly in the liver, was
seen at high feeding levels of over 100 mg/kg for an extended treatment
period. At LOEL, no serious toxicity was observed other than mostly
non-specific effects including a reduction in body weight and food
consumption or liver hypertrophy.]>

<	5. Chronic toxicity. [  SEQ CHAPTER \h \r 1 The liver appears to be
the major primary target organ based on the chronic studies conducted in
mice, rats, and dogs. It was identified as a target organ in both the
mouse and the dog studies with trifloxystrobin. However, no liver effect
was seen in the chronic rat study which produced the lowest NOEL of 2.5
mg/kg based on reduced body weight gain and food consumption seen at
higher dose levels.

	The compound did not cause any treatment-related increase in general
tumor incidence, any elevated incidence of rare tumors, or shortened
time to the development of palpable or rapidly lethal tumors in the
18-month mouse and the 24-month rat studies. Dosages in both studies
were sufficient for identifying a cancer risk.  In the absence of
carcinogenicity, a Reference Dose approach is appropriate for
quantitation of human risks.]>

<	6. Animal metabolism. [  SEQ CHAPTER \h \r 1 Trifloxystrobin is
moderately absorbed from the gastrointestinal tract of rats and is
rapidly distributed. Subsequent to a single oral dose, the half life of
elimination is about 2 days and excretion is primarily via bile.
Trifloxystrobin is extensively metabolized by the rat into about 35
metabolites, but the primary actions are on the methyl ester (hydrolysis
into an acid), the methoxyimino group (O-demethylation), and the methyl
side chain (oxidation to a primary alcohol). Metabolism is dose
dependent as it was almost complete at low doses but only about 60%
complete at high doses.

	In the goat, elimination of orally administered trifloxystrobin is
primarily via the feces. The major residues were the parent compound and
the acid metabolite (CGA-321113) plus its conjugates. In the hen,
trifloxystrobin is found as the major compound in tissues and in the
excreta, but hydroxylation of the trifluormethyl-phenyl moiety and other
transformations, including methyl ester hydrolysis and demethylation of
the methoxyimino group, are also seen. In conclusion, the major pathways
of metabolism in the rat, goat, and hen are the same.]>

<	7. Metabolite toxicology. [  SEQ CHAPTER \h \r 1 Metabolism of
trifloxystrobin has been well characterized in plants, soil, and
animals. In plants and soil, photolytically induced isomerization
results in a few minor metabolites not seen in the rat; however, most of
the applied materials remained as parent compound as shown in the apple
and cucumber studies. All quantitatively major plant and/or soil
metabolites were also seen in the rat. The toxicity of the major acid
metabolite, CGA-321113 (formed by hydrolysis of the methyl ester), has
been evaluated in cultured rat hepatocytes and found to be 20-times less
cytotoxic than the parent compound. Additional toxicity studies were
conducted for several minor metabolites seen uniquely in plants and/or
soil. The studies indicate that these metabolites, including CGA-357261,
CGA-373466, and NOA-414412, are not mutagenic to bacteria and are of low
acute toxicity (LD50 >2000 mg/kg). In conclusion, the metabolism and
toxicity profiles support the use of an analytical enforcement method
that accounts for parent trifloxystrobin.]>

<	8. Endocrine disruption. [  SEQ CHAPTER \h \r 1 Trifloxystrobin does
not belong to a class of chemicals known for having adverse effects on
the endocrine system. Developmental toxicity studies in rats and rabbits
and reproduction study in rats gave no indication that trifloxystrobin
might have any effects on endocrine function related to development and
reproduction. The subchronic and chronic studies also showed no evidence
of a long-term effect related to the endocrine system.]>

<C. Aggregate Exposure>

<	1. Dietary exposure. [  SEQ CHAPTER \h \r 1 Assessments, using the
DEEM FCID Version 2.0, 1994-1996,98 CSFII software,  were conducted to
evaluate potential risks due to chronic and acute dietary (food and
water) exposure of the U.S. population and selected population subgroups
to residues of trifloxystrobin.  These analyses cover all registered
crops; the pending uses on asparagus, radish, the tropical crops papaya,
black sapote, canistel, mamey sapote, mango, sapodilla, star apple,
citrus (reduce PHI); plus this proposal to establish tolerances on
strawberries.

"

#

$

&

'

%

&

2

3

I

J

U

V

'

0

1

3

4

5

F

G

H

J

K

L

R

S

T

U

V

W

~

˜

ž

Ÿ

°

´

ü

ý

B*

B*

B*

B*

B*

옍)

B*

B*

B*

B*

B*

B*

B*

B*

B*

B*

B*

currently registered uses plus pending uses.]>

<	i. Food. [  SEQ CHAPTER \h \r 1 For food, a Tier 1 acute and a Tier 2
chronic dietary exposure assessments were performed. Acute exposure,
expressed at the 95th percentile of exposure, was 0.66% of the aPAD for
females 13-49 years old (only population subgroup of concern). The
chronic exposure  was 10.3% cPAD for the total US population and 31.1%
cPAD for the most sensitive population, all infants (< 1 yr).]>

<	ii. Drinking Food. [Acute and chronic exposure estimates from water
are included in the exposure values given above for food. These exposure
estimates for water are based on EPA’s surface water estimated
environmental concentrations (EECs) of trifloxystrobin and CGA-321113
for acute exposure at 92 parts per billion (ppb) and for chronic
exposures at 140 ppb. These values are listed in the Federal Register
(71 FR 55313).]>

<	2. Non-dietary exposure. [  SEQ CHAPTER \h \r 1 As published in the
Federal Register (71 FR 55313), the EPA considered chronic, short term
and intermediate term risk from residential uses of trifloxystrobin. The
EPA determined that the risk did not exceed the Agency’s level of
concern.]>

<D. Cumulative Effects>

<	[  SEQ CHAPTER \h \r 1 EPA has determined, as published in the Federal
Register (71 FR 55313), that unlike other pesticides for which EPA has
followed a cumulative risk approach based on a common mechanism of
toxicity, trifloxystrobin does not appear to produce a toxic metabolite
produced by other substances. Therefore EPA has not assumed that
trifloxystrobin has a common mechanism of toxicity with other
substances.]>

<E. Safety Determination>

<	1. U.S. population. [  SEQ CHAPTER \h \r 1 Based on the information
supplied under Aggregate Exposure describe above, there is reasonable
certainty that exposure from trifloxystrobin will not result in harm to
the adult U.S. population.]>

<	2. Infants and children. [  SEQ CHAPTER \h \r 1 Based on the
information supplied under Aggregate Exposure describe above, there is
reasonable certainty that exposure from trifloxystrobin will not result
in harm to infants and children.]>

<F. International Tolerances>

<	[A Codex MRL has been established for trifloxystrobin on strawberry at
0.2 ppm. MRLs have been established for strawberry in the following
countries: Australia, European Union, France, Germany Japan, Spain and
Switzerland.]>


[Federal Register Volume 78, Number 54 (Wednesday, March 20, 2013)]
[Notices]
[Pages 17196-17197]
[FR Doc No: 2013-06335]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket Nos. EL13-51-000, QF11-204-001, QF11-205-001]

Interconnect Solar Development LLC; Notice of Supplemental Filing

    Take notice that on March 13, 2013, Interconnect Solar Development
LLC filed a Firm Energy Sales Agreement to supplement the March 4, 2013
filed Petition for Enforcement of the Public Utility Regulatory
Policies Act of 1978 (PURPA).
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211, 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed on or before the comment date. On or
before the comment date, it is not necessary to serve motions to
intervene or protests on persons other than the Applicant.
    The Commission encourages electronic submission of 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 14 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: 5:00 p.m. Eastern Time on April 3, 2013.

    Dated: March 13, 2013.
Kimberly D. Bose,
Secretary.
[FR Doc. 2013-06335 Filed 3-19-13; 8:45 am]
BILLING CODE 6717-01-P