[Federal Register Volume 81, Number 102 (Thursday, May 26, 2016)]
[Notices]
[Pages 33498-33499]
[FR Doc No: 2016-12413]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. CP15-549-000]

Columbia Gas Transmission, LLC; Notice of Availability of the
Environmental Assessment for the Proposed SM-80 MAOP Restoration
Project

    The staff of the Federal Energy Regulatory Commission (FERC or
Commission) has prepared an environmental assessment (EA) for the SM-80
MAOP Restoration Project, proposed by Columbia Gas Transmission, LLC
(Columbia) in the above-referenced docket. Columbia requests
authorization to abandon, construct, and operate certain natural gas
pipeline facilities in Wayne County, West Virginia. The proposed
project would restore the maximum allowable operating pressure of part
of the SM-80 system.
    The EA assesses the potential environmental effects of the
construction and operation of the SM-80 MAOP Restoration Project in
accordance with the requirements of the National Environmental Policy
Act (NEPA). The FERC staff concludes that approval of the proposed
project, with appropriate mitigating measures, would not constitute a
major federal action significantly affecting the quality of the human
environment.
    The proposed SM-80 MAOP Restoration Project includes the following:

 Abandonment of 3.3 miles of 30-inch-diameter pipeline and
associated above ground appurtenances
 Construction of 3.9 miles of 30-inch-diameter pipe to replace
the abandoned pipeline
 Minor modifications to support facilities

    The FERC staff mailed copies of the EA to federal, state, and local
government representatives and agencies; elected officials;
environmental and public interest groups; Native American tribes;
potentially affected landowners and other interested individuals and
groups; newspapers and libraries in the project area; and parties to
this proceeding. In addition, the EA is available for public viewing on
the FERC's Web site (www.ferc.gov) using the eLibrary link. A limited
number of copies of the EA are available for distribution and public
inspection at: Federal Energy Regulatory Commission, Public Reference
Room, 888 First Street NE., Room 2A, Washington, DC 20426, (202) 502-
8371.
    Any person wishing to comment on the EA may do so. Your comments
should focus on the potential environmental effects, reasonable
alternatives, and measures to avoid or lessen environmental impacts.
The more specific your comments, the more useful they will be. To
ensure that the Commission has the opportunity to consider your
comments prior to making its decision on this project, it is important
that we receive your comments in Washington, DC on or before June 17,
2016.
    For your convenience, there are three methods you can use to file
your comments to the Commission. In all instances, please reference the
project docket number (CP15-549-000) with your submission. The
Commission encourages electronic filing of comments and has expert
staff available to assist you at<PHONE_NUMBER> or<EMAIL_ADDRESS>    (1) You can file your comments electronically using the eComment
feature on the Commission's Web site (www.ferc.gov) under the link to
Documents and Filings. This is an easy method for submitting brief,
text-only comments on a project;
    (2) You can also file your comments electronically using the
eFiling feature on the Commission's Web site (www.ferc.gov) under the
link to Documents and Filings. With eFiling, you can provide comments
in a variety of formats by attaching them as a file

with your submission. New eFiling users must first create an account by
clicking on ``eRegister.'' You must select the type of filing you are
making. If you are filing a comment on a particular project, please
select ``Comment on a Filing''; or
    (3) You can file a paper copy of your comments by mailing them to
the following address: Kimberly D. Bose, Secretary, Federal Energy
Regulatory Commission, 888 First Street NE., Room 1A, Washington, DC
20426.
    Any person seeking to become a party to the proceeding must file a
motion to intervene pursuant to Rule 214 of the Commission's Rules of
Practice and Procedures (18 CFR 385.214).\1\ Only intervenors have the
right to seek rehearing of the Commission's decision. The Commission
grants affected landowners and others with environmental concerns
intervenor status upon showing good cause by stating that they have a
clear and direct interest in this proceeding which no other party can
adequately represent. Simply filing environmental comments will not
give you intervenor status, but you do not need intervenor status to
have your comments considered.
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    \1\ See the previous discussion on the methods for filing
comments.
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    Additional information about the project is available from the
Commission's Office of External Affairs, at (866) 208-FERC, or on the
FERC Web site (www.ferc.gov) using the eLibrary link. Click on the
eLibrary link, click on ``General Search,'' and enter the docket number
excluding the last three digits in the Docket Number field (i.e., CP15-
549). Be sure you have selected an appropriate date range. For
assistance, please contact FERC Online Support at
<EMAIL_ADDRESS>or toll free at<PHONE_NUMBER>, or for TTY,
contact<PHONE_NUMBER>. The eLibrary link also provides access to the
texts of formal documents issued by the Commission, such as orders,
notices, and rulemakings.
    In addition, the Commission offers a free service called
eSubscription which allows you to keep track of all formal issuances
and submittals in specific dockets. This can reduce the amount of time
you spend researching proceedings by automatically providing you with
notification of these filings, document summaries, and direct links to
the documents. Go to www.ferc.gov/docs-filing/esubscription.asp.

    Dated: May 19, 2016.
Kimberly D. Bose,
Secretary.
[FR Doc. 2016-12413 Filed 5-25-16; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register Volume 80, Number 125 (Tuesday, June 30, 2015)]
[Notices]
[Pages 37246-37247]
[FR Doc No: 2015-16037]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OECA-2014-0104; FRL-9929-79-OEI]

Information Collection Request Submitted to OMB for Review and
Approval; Comment Request; NESHAP for Polyvinyl Chloride and Copolymer
Production Area Sources (Renewal)

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: The Environmental Protection Agency has submitted an
information collection request (ICR), ``NESHAP for Polyvinyl Chloride
and Copolymer Production Area Sources (40 CFR part 63, subpart DDDDDD)
(Renewal)'' (EPA ICR No. 2454.02, OMB Control No. 2060-0684) to the
Office of Management and Budget (OMB) for review and approval in
accordance with the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).
This is a proposed extension of the ICR, which is currently approved
through June 30, 2015. Public comments were previously requested via
the Federal Register (79 FR 30117) on May 27, 2014 during a 60-day
comment period. This notice allows for an additional 30 days for public
comments. A fuller description of the ICR is given below, including its
estimated burden and cost to the public. An Agency may not conduct or
sponsor and a person is not required to respond to a collection of
information unless it displays a currently valid OMB control number.

DATES: Additional comments may be submitted on or before July 30, 2015.

ADDRESSES: Submit your comments, referencing Docket ID Number EPA-HQ-
OECA-2014-0104, to (1) EPA online using www.regulations.gov (our
preferred method), by email to<EMAIL_ADDRESS>or by mail to: EPA
Docket Center, Environmental Protection Agency, Mail Code 28221T, 1200
Pennsylvania Ave. NW., Washington, DC 20460, and (2) OMB via email to
<EMAIL_ADDRESS>Address comments to OMB Desk Officer for
EPA.
    EPA's policy is that all comments received will be included in the
public docket without change including any personal information
provided, unless the comment includes profanity, threats, information
claimed to be Confidential Business Information (CBI) or other
information whose disclosure is restricted by statute.

FOR FURTHER INFORMATION CONTACT: Patrick Yellin, Monitoring,
Assistance, and Media Programs Division, Office of Compliance, Mail
Code 2227A, Environmental Protection Agency, 1200 Pennsylvania Ave.
NW., Washington, DC 20460; telephone number:<PHONE_NUMBER>; fax
number:<PHONE_NUMBER>; email address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Supporting documents which explain in detail
the information that the EPA will be collecting are available in the
public docket for this ICR. The docket can be viewed online at
www.regulations.gov or in person at the EPA Docket Center, EPA West,
Room 3334, 1301 Constitution Ave. NW., Washington, DC. The telephone
number for the Docket Center is<PHONE_NUMBER>. For additional
information about EPA's public docket, visit http://www.epa.gov/dockets.
    Abstract: The affected entities are subject to the General
Provisions of the NESHAP at 40 CFR part 63, subpart A, and any changes,
or additions to the General Provisions specified at 40 CFR part 63,
subpart DDDDDD. Owners or operators of the affected facilities must
submit a one-time-only of any physical or operational changes, initial
performance tests, and periodic reports and results. Owners or
operators are also required to maintain records of the occurrence and
duration of any startup, shutdown, or malfunction in the operation of
an affected facility, or any period during which the monitoring system
is inoperative. Reports are also required semiannually.

    Form Numbers: None.
    Respondents/affected entities: Polyvinyl chloride and copolymer
production area source facilities.
    Respondent's obligation to respond: Mandatory (40 CFR part 63,
subpart DDDDDD).
    Estimated number of respondents: 3 (total).
    Frequency of response: Initially, semiannually and annually.
    Total estimated burden: 69,200 hours (per year). Burden is defined
at 5 CFR 1320.3(b).
    Total estimated cost: $7,770,000 (per year), includes $806,000
annualized capital or operation & maintenance costs.
    Changes in the Estimates: There is an adjustment increase in the
estimated burden as currently identified in the OMB Inventory of
Approved Burdens. In consulting with the Vinyl Institute during the
renewal of this ICR, EPA received comprehensive comments on the burden
associated with specific reporting and recordkeeping requirements,
including, but not limited to, performance test, monitor installation,
resin and wastewater sampling, equipment leak and process vent
monitoring. We have updated the burden items to more accurately reflect
the costs incurred by the industry. The update results in a substantial
increase in the respondent labor hours, labor costs, and capital/O&M
costs. There is also a small increase in the number of responses as we
have updated the number of subject area sources from two to three based
on data provided by the Vinyl Institute.

Courtney Kerwin,
Acting Director, Collection Strategies Division.
[FR Doc. 2015-16037 Filed 6-29-15; 8:45 am]
 BILLING CODE 6560-50-P


[Federal Register: October 15, 2009 (Volume 74, Number 198)]
[Proposed Rules]
[Page 53114-53121]
[DOCID:fr15oc09-28]

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 220

[Release Nos. 33-9071; 34-60798; IC-28943; File No. S7-21-09]
RIN 3235-AK45

Concept Release on Possible Rescission of Rule 436(g) Under The
Securities Act of 1933

AGENCY: Securities and Exchange Commission.

ACTION: Concept release; request for comments.

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SUMMARY: As part of the Commission's review of the role of credit
rating agencies in the operation of the securities markets, and in
light of disclosure regarding credit ratings that is being proposed in
a companion release, the Commission is seeking comment on whether Rule
436(g) under the Securities Act of 1933 should be rescinded. In
particular, we would like to understand whether there continues to be a
sufficient basis to exempt nationally recognized statistical rating
organizations from Section 7 and 11 of the Securities Act.

DATES: Comments should be received on or before December 14, 2009.

ADDRESSES: Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/concept.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number S7-21-09 on the subject line; or
     Use the Federal eRulemaking Portal (http://
www.regulations.gov). Follow the instructions for submitting comments.

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 S7-21-09. This file number
should be included on the subject line if e-mail is used. To help us
process and review your comments more efficiently, please use only one
method. The Commission will post all comments on the Commission's Web
site (http://www.sec.gov/rules/concept.shtml). Comments are also
available for public inspection and copying in the Commission's Public
Reference Room, 100 F Street, NE., Washington, DC 20549, on official
business days between the hours of 10 a.m. and 3 p.m.. All comments
received will be posted without change; we do not edit personal
identifying information from submissions. You should submit only
information that you wish to make available publicly.

FOR FURTHER INFORMATION CONTACT: Blair F. Petrillo, Special Counsel in
the Office of Rulemaking, Division of Corporation Finance, at (202)
551-3430, 100 F Street, NE., Washington, DC 20549.

SUPPLEMENTARY INFORMATION: In a companion release,\1\ the Commission is
proposing amendments to rules under the Securities Exchange Act of 1934
\2\ and Regulation S-K,\3\ and forms under the Securities Act of
1933,\4\ the Exchange Act and the Investment Company Act of 1940 \5\ to
require disclosure by registrants regarding credit ratings in their
registration statements under the Securities Act and the Exchange Act,
and by closed-end management investment companies in registration
statements under the Securities Act and the Investment Company Act, if
the registrant uses the rating in connection with a registered
offering. In connection with the proposed amendments, we are soliciting
comment on whether the Commission should rescind Rule 436(g) under the
Securities Act.\6\
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    \1\ See the proposing release considered by the Commission on
September 17, 2009 regarding proposed disclosure regarding credit
ratings in registration statements.
    \2\ 15 U.S.C. 78a et seq.
    \3\ 17 CFR 229.10 through 1123.
    \4\ 15 U.S.C. 77a et seq.
    \5\ 15 U.S.C. 80a-1 et seq.
    \6\ 17 CFR 220.436(g).
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I. Introduction

    We are considering whether we should propose rescinding Rule 436(g)
under the Securities Act. Rule 436(g) provides an exemption for credit
ratings provided by nationally recognized statistical rating
organizations (``NRSROs'') from being considered a part of the
registration statement prepared or certified by a person within the
meaning of Sections 7 \7\ and 11 \8\ of the Securities Act. The
exemption currently does not apply to credit rating agencies that are
not NRSROs. We are concerned that there is no longer a sufficient basis
to exempt NRSROs and to distinguish between NRSROs and credit rating
agencies that are not NRSROs for purposes of liability under Section 11
of the Securities Act. Rescinding the exemption would cause NRSROs to
be included in the liability scheme for experts set forth in Section
11, as is currently the case for credit rating agencies that are not
NRSROs.
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    \7\ 15 U.S.C. 77g.
    \8\ 15 U.S.C. 77k.
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    We solicit comment on what impact removing the rule would have on
markets and their participants. Scrutiny of credit ratings and the
process of obtaining a credit rating appears to have increased as a
result of the turmoil in the credit markets over the past few years. As
discussed below and in the companion release proposing to require
disclosure regarding credit ratings, as credit ratings have become more
significant, we have sought to protect investors while recognizing the
role credit ratings play in the offer and sale of securities. In that
regard, we are now exploring whether Rule 436(g) is still appropriate
in light of the growth and development of the credit rating industry
and investors' use of credit ratings. We are mindful of the potential
significant impact that rescinding Rule 436(g) could have on
registrants,

NRSROs and other credit rating agencies, investors and the financial
markets in general, and we seek comment on any burdens or benefits that
may result. Therefore, we are requesting input on the possible
elimination of Rule 436(g) from all market participants and other
members of the public.

A. Section 7 and Section 11 of the Securities Act

    Section 7 of the Securities Act provides that ``[i]f any
accountant, engineer, or appraiser, or any person whose profession
gives authority to a statement made by him, is named as having prepared
or certified any part of the registration statement, or is named as
having prepared or certified a report or valuation for use in
connection with the registration statement, the written consent of such
person shall be filed with the registration statement.'' \9\ These
persons are referred to as experts for purposes of the securities laws.
Registrants are required to file the consents of experts as exhibits to
their registration statements.
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    \9\ See Section 7 of the Securities Act in note 7 above.
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    Section 11 of the Securities Act imposes liability on various
parties who are involved in the preparation of registration statements
filed under the Securities Act. Section 11 was enacted so that those
persons with a direct role in a registered offering would be subject to
a rigorous standard of liability to assure that disclosure regarding
securities is accurate.\10\ It was also designed to give investors
additional protection not available under common law due to the
barriers to recovery presented by the common law fraud requirements of
scienter, reliance and causation. Liability under Section 11 extends to
the issuer, officers and directors who sign the registration statement,
underwriters, and persons who prepare or certify any part of the
registration statement or who are named as having prepared or certified
a report or valuation for use in connection with the registration
statement.\11\ Section 11 provides that an expert may be held liable
if, when the registration statement became effective, the part of the
registration statement purporting to be made on his or her authority
contained an untrue statement of material fact or omitted to state a
material fact necessary to make the statements therein not misleading,
unless he can establish that he had, after reasonable investigation,
reasonable grounds to believe and did believe at the time such part of
the registration statement became effective, that the statements in the
registration statement were true and that there was no omission to
state a material fact necessary to make the statements therein not
misleading.\12\ Under Section 11, persons other than the issuer may be
able to assert as a defense to Section 11 liability that they relied
upon an expert that consented to be named in the registration statement
(the ``experts' defense'').\13\
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    \10\ See William O. Douglas and George E. Bates, The Federal
Securities Act of 1933, 43 Yale L.J. 171 (1933); Herman & Maclean v.
Huddleston, 459 U.S. 375 (1983).
    \11\ See Section 11 of the Securities Act in note 8 above.
    \12\ See Section 11(b) of the Securities Act [15 U.S.C. 77k(b)].
    \13\ See Section 11(b)(3)(C) of the Securities Act [15 U.S.C.
77k(b)(3)(C)].
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B. Background of Rule 436(g)

    Securities Act Rule 436(g) provides that a credit rating assigned
by an NRSRO to a class of debt securities, a class of convertible debt
securities, or a class of preferred stock is not a part of a
registration statement prepared or certified by a person within the
meaning of Sections 7 and 11 of the Securities Act. With one limited
exception arising in connection with our Multijurisdictional Disclosure
System with Canada, there is no similar provision for credit rating
agencies that are not NRSROs.\14\ As a result, disclosure of credit
ratings in a registration statement currently results in different
treatment for NRSROs and for credit rating agencies that are not
NRSROs. By virtue of Rule 436(g), an NRSRO is not subject to liability
under Section 11 even if its rating is disclosed in a registration
statement. A registrant is not required to file consent of an NRSRO
with its registration statement, and the experts' defense is not
available to other persons involved in the registration statement,
regardless of whether they relied on the expertized portion of the
registration statement. By contrast, if a credit rating assigned by a
credit rating agency that is not an NRSRO is disclosed in a
registration statement, the credit rating agency would be subject to
potential liability under Section 11. The registrant is required to
file the credit rating agency's consent with its registration
statement, and the experts' defense may be available.
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    \14\ Rule 436(g) applies to ratings disclosed in Form F-9 [17
CFR 239.39.] registration statements by ratings organizations
specified in the Instruction to paragraph (a)(2) of General
Instruction I of that form. Form F-9 is the Multijurisdictional
Disclosure System (``MJDS'') form used to register investment grade
debt or preferred securities under the Securities Act by eligible
Canadian issuers. Under Form F-9, securities are deemed to be
investment grade if, at the time of sale, at least one NRSRO or
Approved Rating Organization, as specified in the above-referenced
Instruction, has rated the securities in a category signifying
investment grade.
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    In 1977, the Commission published a concept release announcing that
it was considering a change in policy to permit disclosure of credit
ratings in documents filed with the Commission.\15\ In that release the
Commission solicited comment on whether an NRSRO is the type of person
from whom a consent would be required under Section 7 of the Securities
Act (thereby also subjecting it to liability under Section 11). That
release contained a list of questions regarding the Commission's then-
current policy of discouraging the disclosure of credit ratings and
whether the Commission should change that policy or retain it.\16\
According to the 1981 release ultimately announcing the Commission's
change in position, commenters on the 1977 release generally were
opposed to subjecting NRSROs to liability under Section 11 and argued,
among other things, that it would interfere with the substance and
timing of the registration process, that it would result in changes to
the way credit ratings were issued, and that it would result in
increased costs and uncertainty over the scope of liability.\17\ The
NRSROs in existence in 1977 indicated that they would not provide
consents to be named in the registration statement.\18\ The 1981
release also indicated that commenters were concerned that requiring
consent and subjecting NRSROs to Section 11 liability would affect
their independence if they were ``participants'' in the offering and
would lessen the quality of ratings because NRSROs likely would rely
only on

objective, quantifiable information.\19\ The commenters in favor of
subjecting NRSROs to liability under Section 11 cited the incentive
that NRSROs would take more care in determining ratings.\20\
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    \15\ See Disclosure of Security Ratings, Release No. 33-5882
(Nov. 9, 1977) [42 FR 58414].
    \16\ The Commission sought comment on two questions regarding
NRSROs and liability under Section 11 of the Securities Act:
    A. (5) Is an entity issuing a security rating the type of person
referred to in Section 7 of the Securities Act of 1933 whose consent
is required to be filed by the issuer of the security? If so, what
costs or other burdens may be associated with the issuer obtaining a
consent from the rating agency or, in the case of multiple ratings,
from all the rating agencies involved? Assuming, arguendo, that such
consents may be waived by the Commission under Section 7, should
waivers be granted and, if so, under what circumstances?
    A. (6) What impact may result, directly or indirectly, from a
rating entity being subject to Section 11 under the Securities Act
of 1933, with respect to its rating being disclosed in a prospectus?
    See the 1977 Release in note 15 above.
    \17\ See Disclosure of Ratings in Registration Statements,
Release No. 33-6336 (Aug. 6, 1981) [46 FR 42024].
    \18\ Id.
    \19\ Id.
    \20\ Id.
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    As noted above, in 1981, the Commission announced the shift in
policy to permit, but not require, disclosure of credit ratings in
registration statements. In addition, the Commission proposed
Securities Act Rule 436(g) to provide that a security rating assigned
to a class of debt securities, a class of convertible debt securities,
or a class of preferred stock by an NRSRO would not be considered a
part of the registration statement prepared or certified by a person
within the meaning of Section 7 and Section 11 of the Securities
Act.\21\ In proposing Rule 436(g), the Commission noted that if NRSROs
refused to provide consents, then disclosure of credit ratings would
not be provided even if permitted by the Commission. As a result, the
Commission proposed Rule 436(g) in order to make its new policy
position on the disclosure of credit ratings meaningful.\22\ The
Commission also cited the fact that NRSROs already were subject to
substantial liability under the antifraud provisions of the securities
laws and to regulation by the Commission under the Investment Advisers
Act of 1940.\23\ The Commission then expected that, because of
antifraud liability, NRSROs would be required ``to adhere to the
highest professional standards in determining security ratings.'' \24\
When Rule 436(g) was adopted in 1982, the Commission stated its belief
that exempting NRSROs from liability under Section 11 of the Securities
Act was appropriate and cited the rationale provided in the proposing
release that practical problems would arise in obtaining the consents
and that NRSROs were subject to the antifraud provisions of the
securities laws.\25\
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    \21\ Id.
    \22\ Id.
    \23\ 15 U.S.C. 80b-1 et seq. At the time Rule 436(g) was
proposed, NRSROs generally were required to register as investment
advisers. Congress provided an exclusion from the Advisers Act for
NRSROs when it passed the Credit Rating Agency Reform Act of 2006,
Public Law. 109-291, 120 Stat. 1327 (Sept. 29, 2006). See Section
202(a)(11)(F) of the Advisers Act [15 U.S.C. 80b-202(a)(11)(F)].
    \24\ See Disclosure of Ratings in Registration Statements in
note 17 above.
    \25\ See Adoption of Integrated Disclosure System, Release No.
33-6383 (Mar. 3, 1982) [47 FR 11380].
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    In 1986, the Commission proposed to expand the Rule 436(g)
exemption to include ratings assigned by NRSROs to money market
funds.\26\ In proposing the rule, the Commission stated ``because money
market fund shares are equity securities, a money market fund which has
received an NRSRO rating must obtain the consent of the NRSRO or seek a
waiver of consent under Rule 437 [17 CFR 230.437] before using the
rating in its registration statement.'' \27\ The Commission did not act
on this proposal, and Rule 436(g) was not amended.
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    \26\ See Disclosure of Security Ratings by Money Market Funds,
Release No. 33-6630 (March 21, 1986) [51 FR 9838].
    \27\ Id.
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    In 1994, the Commission proposed to require disclosure about credit
ratings in registration statements.\28\ In the 1994 release, the
Commission noted that the policy announced in 1981 created a
distinction between NRSROs and credit rating agencies that were not
NRSROs. The Commission noted that the distinction was most significant
in the context of Rule 436(g). While an NRSRO would not be required to
provide a consent if its rating was disclosed in a registration
statement pursuant to Rule 436(g), ``[a]ny non-NRSRO rating
organization must furnish a consent and take on expert liability under
the Securities Act if its rating is included in the registration
statement and prospectus.'' \29\
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    \28\ See Disclosure of Security Ratings, Release No. 33-7086
(Aug. 31, 1994) [59 FR 46304].
    \29\ Id.
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    The 1994 release did not propose any change to Rule 436(g), but it
did solicit comment on whether there should continue to be a
distinction between NRSROs and credit rating agencies that are not
NRSROs for purposes of Rule 436(g). The release also sought comment on
whether Rule 436(g) should be expanded to include credit rating
agencies that are not NRSROs or whether the rule should be rescinded.
Commenters generally were opposed to subjecting NRSROs and other credit
rating agencies to liability under Section 11 of the Securities Act. In
particular, one commenter provided several arguments as to why Section
11 liability was not appropriate for NRSROs.\30\ Among other things,
the commenter argued that: Ratings published by NRSROs ``are
expressions of opinion about risk, not statements,'' and even if the
security defaults in an individual case, it would not necessarily be an
indication that the opinion was wrong; \31\ Section 11 liability would
violate the NRSROs' First Amendment rights; \32\ and Section 11
liability could eliminate the disclosure of security ratings in
prospectuses.\33\ The Commission did not act on the proposals in the
1994 release.
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    \30\ See letter regarding File No. S7-24-94 of Moody's Investor
Service, Inc. (Dec. 5, 1994). See also letter regarding File No. S7-
24-94 of Fitch Investors Service Inc. (Dec. 6, 1994).
    \31\ Id.
    \32\ NRSROs have taken the position that they ``publish'' their
ratings and that their ratings are protected under the First
Amendment. Cases in which NRSROs have asserted this position
include: Compuware Corp. v. Moody's Inv. Servs., Inc., 499 F.3d 520
(6th Cir. 2007); Jefferson County Sch. Dist. No. R-1 v. Moody's Inv.
Servs., Inc., 175 F.3d 848 (10th Cir. 1999); First Equity Corp. v.
Standard & Poor's Corp., 690 F.Supp. 256 (S.D.N.Y. 1988); and Abu
Dhabi Commer. Bank v. Morgan Stanley & Co. et al., 2009 U.S. Dist.
Lexis 79607 (S.D.N.Y. 2009).
    \33\ See note 30 above.
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    In July 2008, the Commission proposed to amend Rule 436(g) to
extend the exemption to ratings provided by any ``credit rating
agency,'' as defined in 15 U.S.C. 78c(a)(61),\34\ rather than only to
ratings provided by NRSROs. The Commission cited its belief that, among
other things, amending Rule 436(g) would foster competition between
credit rating agencies. Only three commenters addressed the proposed
amendment to Rule 436(g). One commenter opposed it because credit
rating agencies that are not NRSROs are not subject to Commission
oversight.\35\ Another commenter supported extending the exemption in
Rule 436(g) to credit rating agencies that are not NRSROs.\36\ That
commenter did not believe references to ratings should be considered
``expertized.'' The commenter also cited the costs that registrants
have to incur absent the amendment of Rule 436(g) to obtain a consent
from a credit rating agency that was not an NRSRO. In addition, the
commenter discussed the possibility that a rating obtained from a
credit rating agency that was not an NRSRO would be omitted, thus
offering investors an incomplete view of the ratings for a particular
security. A third commenter objected to requiring disclosure of credit
rating agency information without the consent of the relevant credit
rating agency but did not cite any concerns about liability.\37\ The
Commission did not adopt the proposal.
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    \34\ See Security Ratings Release No. 33-8940 (July 1, 2008) [73
FR 40106].
    \35\ See letter regarding File No. S7-17-08 of American
Securitization Forum (Sept. 5, 2008), at http://www.sec.gov/
comments/s7-18-08/s71808.shtml.
    \36\ See letter regarding File No. S7-17-08 of the American Bar
Association (Oct. 10, 2008), at http://www.sec.gov/comments/s7-18-
08/s71808.shtml.
    \37\ See letter regarding File No. S7-17-08 of Realpoint LLC
(Sept. 8, 2008), at http://www.sec.gov/comments/s7-18-08/
s71808.shtml. The commenter appears to be concerned with the
potential negative ramifications for subscriber-paid credit rating
agencies whose ratings are disclosed publicly in a registration
statement.

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    In April 2009, the Commission hosted a roundtable regarding the
oversight of credit rating agencies. In connection with the roundtable,
the Commission also solicited comment on the topics to be covered at
the roundtable, including the appropriate oversight and liability for
NRSROs and credit rating agencies that are not NRSROs.\38\ One
commenter suggested that the Commission reconsider the exemption from
liability for NRSROs.\39\ That commenter also expressed skepticism
regarding the First Amendment arguments asserted by NRSROs against
being held liable for their credit ratings because credit rating
agencies have become involved in the structuring of complex securities
and no longer rate most or all securities, regardless of whether or not
they have been hired to do so.\40\ In addition, another commenter
commissioned a white paper in connection with the roundtable
discussion.\41\ The paper argues that in order to make NRSROs more
accountable, they must be subject to a credible threat of liability.
Some commenters expressed concern regarding any liability that would
allow for second-guessing of judgments made by credit rating
agencies.\42\
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    \38\ See Roundtable on Oversight of Credit Rating Agencies,
Release No. 34-59753 (Apr. 13, 2009) [74 FR 17698].
    \39\ See Statement regarding File No. S7-04-09 of Investment
Company Institute (Apr. 15, 2009), at http://www.sec.gov/comments/4-
579/4-579.shtml.
    \40\ Id.
    \41\ See Frank Partnoy, Rethinking Regulation of Credit Rating
Agencies: An Institutional Investor Perspective, April 2009, at
http://www.cii.org/UserFiles/file/CRAWhitePaper04-14-09.pdf (white
paper commissioned by Council of Institutional Investors).
    \42\ See e.g. statement regarding File No. S7-04-09 of Standard
& Poor's (Apr. 15, 2009) at http://www.sec.gov/comments/4-579/4-
579.shtml (noting that some percentage of securities will default
and that such a default does not automatically mean the credit
rating was inappropriate).
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II. Solicitation of Comment on Rescinding Rule 436(g)

    In light of market developments and our proposal to require
disclosure of credit ratings and information about credit ratings, we
are considering proposing to rescind Rule 436(g) under the Securities
Act, and we solicit comment on what impact removing the rule would have
on market participants. If we were to rescind Rule 436(g), then NRSROs
and credit rating agencies that are not NRSROs would be treated in the
same manner for purposes of liability under Section 11 of the
Securities Act if their credit ratings are disclosed in registration
statements. If we adopt the amendments to require certain disclosure
regarding credit ratings in registration statements, and if we were to
rescind Rule 436(g), then a registrant who uses a credit rating
assigned by an NRSRO or a credit rating agency that is not an NRSRO in
connection with a registered offering would be required to file the
consent of the rating agency as an exhibit to its registration
statement. As a result, both NRSROs and credit rating agencies that are
not NRSROs would be subject to potential liability under Section 11 of
the Securities Act.
    We believe that it may be appropriate to rescind Rule 436(g) for
four primary reasons. First, we believe that the original reasons
supporting adoption of Rule 436(g) may no longer provide a sufficient
basis to continue to provide the exemption to NRSROs. If this is the
case, then we believe it is appropriate to reconsider whether NRSROs
should continue to be insulated from liability under Section 11. In the
nearly 30 years that Rule 436(g) has been in place, the credit ratings
industry has grown dramatically in terms of the number of ratings
issued and the types of securities being rated.\43\ We believe that it
is now appropriate to revisit the purposes underlying the adoption of
Rule 436(g), particularly in light of the disclosure regarding credit
ratings that we are proposing in a companion release. The Commission,
in proposing Rule 436(g), stated that the rule was necessary to make
its policy of permitting voluntary disclosure about security ratings
meaningful. Without the exemption provided by Rule 436(g), the
Commission was concerned that registrants would not voluntarily
disclose security ratings in their registration statements because of
the liability concerns of the NRSROs who provided the ratings. If we
adopt the proposal to require disclosure regarding credit ratings if
they are used in connection with a registered offering of securities,
then we believe the rationale cited by the Commission in 1981 is no
longer applicable because we would no longer need to provide a means to
encourage disclosure about credit ratings. Registrants would be
required to provide such disclosure if they use a credit rating in
connection with a registered offering. In addition, when Rule 436(g)
was adopted, the Commission believed that the liability that was
already applicable to NRSROs was sufficient for the protection of
investors.\44\ At the time, the Commission noted that NRSROs were
subject to liability under both Section 10(b) of the Exchange Act and
the Investment Advisers Act.\45\ As noted above, NRSROs are no longer
required to register under the Investment Advisers Act.\46\ NRSROs
remain subject to liability under Section 10(b) of the Exchange Act,
but they are held liable infrequently.\47\ In addition, questions could
be raised about whether NRSROs' performance has ``adhere[d] to the
highest professional standards in determining security ratings'' that
the Commission expected when Rule 436(g) was adopted.\48\
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    \43\ See Roger Lowenstein, Triple-A Failure, N.Y. Times
Magazine, Apr. 27, 2008 (discussing the dramatic growth in revenues
of NRSROs). See also Summary Report of Issues Identified in the
Commission Staff's Examinations of Select Credit Rating Agencies
(July 2008), at http://www.sec.gov/news/studies/2008/
craexamination070808.pdf (noting that some rating agencies struggled
with the substantial growth of the number of deals to be rated
beginning in 2002); Marco Pagano and Paolo Volpin, Credit Ratings
Failures: Causes and Policy Options, Working Paper (Feb. 9, 2009),
at http://www.italianacademy.columbia.edu/publications/working_
papers/2008_2009/pagano_volpin_seminar_IA.pdf (discussing the
role of credit rating agencies in the growth of the market for
structured products).
    \44\ See note 17 above.
    \45\ See note 23 above.
    \46\ Id.
    \47\ See e.g. Partnoy in note 41 above (noting that credit
rating agencies ``have been sued relatively infrequently, and rarely
have been held liable'').
    \48\ See note 24 above and the related discussion.
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    Second, we believe that when credit ratings are used to sell
securities, investors rely on NRSROs and other credit rating agencies
as experts and that it may be appropriate for our liability scheme for
experts to apply to them. In our view, NRSROs represent themselves to
registrants and investors as experts at analyzing credit and risk.\49\
Investors rely on the information provided by credit rating agencies
for a key part of their investment decision. NRSROs describe the credit
ratings that they provide as opinions with respect to the registrant or
security of the registrant, and the Commission notes that other
professionals provide opinions upon which investors rely, such as legal
opinions, valuation opinions, fairness opinions and audit reports, and
we treat these opinions as subject to the Securities Act's provisions
for experts, including our requirements that registrants include the
consents of such professionals if their reports are referenced in
registration statements. It appears to us that NRSROs and other credit
rating agencies are experts similar to other parties subject to
liability under Section 11 and that it may no longer be

consistent with investor protection to exempt NRSROs from the
provisions of the Securities Act applicable to experts.\50\
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    \49\ We are aware that NRSROs generally do not consider
themselves as experts because they believe they are providing
opinions on risk. See letter of Moody's Investor Service, Inc. in
note 30 above. We do not at this time believe, however, that the
nature of the credit rating provided by a credit rating agency,
including an NRSRO, is in and of itself so distinct from the parts
of registration statements provided by other experts that they
should be subject to a different standard of liability.
    \50\ In the merger context, for example, if the fairness opinion
provided by the investment banker is disclosed in the registration
statement, then the party preparing the opinion must consent to be
named as an expert in the registration statement. We note that
fairness opinions generally include language that the financial
advisor relied upon information provided by the parties to the
business combination. In this regard, see In re Global Crossing,
Ltd. Sec. Litig., 313 F.Supp. 2d 189 (S.D.N.Y. 2003) and In re AOL
Time Warner, Inc. Sec. and ERISA Litig., 381 F.Supp 2d 192 (S.D.N.Y.
2004). See also Virginia Bankshares, Inc. v. Sandberg, 501 U.S. 1083
(1991).
---------------------------------------------------------------------------

    Third, we believe that rescinding Rule 436(g), and therefore
potentially increasing the risk of liability under the federal
securities laws, could significantly improve investor protection.
Enhancing the accountability of NRSROs may help to address concerns
about the quality of credit ratings. In light of the proposal to
require mandatory disclosure of information about credit ratings,
rescinding Rule 436(g) could encourage both NRSROs and credit rating
agencies that are not NRSROs to improve the quality of their ratings
and analysis in order to reduce the risk of liability under Section 11.
An improvement in the quality of credit ratings should, consistent with
the goals of the federal securities laws, better protect investors. Of
course, we are mindful of the possibility that a risk of greater NRSRO
liability as a result of subjecting NRSROs to Section 11 may undermine
competition if credit rating agencies decide that they are unable to
bear the risk of liability and thus exit the ratings business.
Similarly, firms considering entering the ratings business may
reconsider in the face of an increased risk of legal liability. The
threat of liability may particularly affect smaller, less-established
rating agencies that may find it more difficult to negotiate for
indemnification or bear the risk of additional liability. It also is
possible that, in response to the rescission of Rule 436(g),
registrants would begin to take greater advantage of private placements
instead of public offerings.
    Finally, we believe that the distinction in Rule 436(g) between
NRSROs and credit rating agencies that are not NRSROs may contribute to
competitive disadvantages. We understand that investors rely on credit
ratings issued by NRSROs as much as, if not more than, credit ratings
issued by credit rating agencies that are not NRSROs, particularly
because the NRSROs dominate the credit rating market.\51\
Distinguishing between NRSROs and credit rating agencies that are not
NRSROs may create a competitive barrier for those credit rating
agencies because they are subject to a higher standard of liability
under the securities laws than NRSROs. For credit ratings disclosed in
registration statements, it may be more time consuming or costly for a
credit rating agency that is not an NRSRO to provide a credit rating to
a registrant than it would be for an NRSRO to provide a credit rating
because of the potential for liability under Section 11 for the credit
rating agency that is not an NRSRO. As discussed above, in 2008 we
proposed to amend Rule 436(g) to extend the exemption to cover ratings
issued by credit rating agencies that are not NRSROs in order to foster
competition in the credit rating agency industry. We did not at that
time, however, propose to require disclosure regarding credit ratings.
In light of the proposal to require disclosure regarding credit ratings
used in connection with registered offerings, we believe that the
rationale for extending the exemption to credit rating agencies that
are not NRSROs may be achieved by eliminating Rule 436(g) and
subjecting both NRSROs and credit rating agencies that are not NRSROs
to potential liability under Section 11 of the Securities Act. We now
believe this approach to fostering competition may be preferable in
order to protect investors by including the proposed disclosure of the
credit rating within the liability scheme of Section 11 of the
Securities Act to which similar disclosure is subject. At the same
time, we are mindful that the increased risk of legal liability could
undercut competition if certain NRSROs are unable to bear the risk of
increased liability.
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    \51\ For ``corporate issuers'' in 2007, for example, Standard
and Poor's, Moody's, and Fitch issued 39%, 33%, and 21% of
outstanding credit ratings, respectively, for a total of 93% of
outstanding credit ratings. See Annual Report on Nationally
Recognized Statistical Rating Organizations (2008), at http://
www.sec.gov/divisions/marketreg/ratingagency/nrsroannrep0608.pdf.
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    We are aware that rescinding Rule 436(g) may have significant
impact on the market and on market participants. We want to be
cognizant of all the implications of our proposed amendments to require
disclosure regarding credit ratings as well as a possible future
proposal to rescind Rule 436(g). Therefore we are soliciting comments
on all of the potential implications that a rescission of Rule 436(g)
might have.
    We solicit comment below on whether rescinding Rule 436(g) might
increase reliance on credit ratings. Preliminarily, we do not believe
that requiring registrants to obtain consents from NRSROs and treating
NRSROs as experts under the federal securities laws should increase
reliance on credit ratings. Rescinding Rule 436(g) would not change the
fundamental nature of what a credit rating is. The information credit
rating agencies provide is already being relied upon by investors.
Rescinding Rule 436(g) would require that, before such information can
be used in connection with a registered offering, the registrant would
have to obtain the NRSROs' consent to take responsibility for it (in
addition to any liability that would be applicable pursuant to Section
10(b) of the Exchange Act).\52\
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    \52\ In the companion release proposing to require disclosure
regarding credit ratings, we are proposing to require disclosure of
preliminary ratings under certain circumstances. At this stage, we
preliminarily believe we should not require consents regarding
disclosure of preliminary ratings or unused final ratings. The
preliminary rating may be based on preliminary information and may
not have been subject to all of the credit rating agency's internal
processes for determining credit ratings.
---------------------------------------------------------------------------

    While we believe that elimination of Rule 436(g) may have important
benefits, as discussed above, we also recognize that NRSROs have in the
past expressed an unwillingness to be subject to Section 11 liability.
However, we are also aware that providing credit ratings for
registrants is the key component of revenues for NRSROs. As a result,
we seek comment on how NRSROs would adapt if Rule 436(g) were rescinded
and whether they would, in fact, stop issuing credit ratings
permanently.
    If we were to propose the elimination of Rule 436(g) and require
disclosure regarding credit ratings as proposed, we recognize that
obtaining and filing consents of all credit rating agencies may raise
some practical and timing concerns. Assuming NRSROs are willing to
grant consents, we do not wish to create a process that is unduly
costly and burdensome or that unnecessarily delays completion of
offerings. We have outlined below a potential approach to the question
of when consents would be required to be filed and when a new consent
would be required to be obtained. We solicit comment on whether this
approach would be workable, whether there is a better approach and what
other changes to our rules may have to be made in order for this
process to work.\53\
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    \53\ As noted in the companion release proposing to require
disclosure regarding credit ratings, the proposed disclosure
requirement regarding credit ratings would not be triggered if the
only disclosure of a credit rating in a filing with the Commission
is related to changes to a credit rating, the liquidity of the
registrant, the cost of funds for a registrant or the terms of
agreements that refer to credit ratings, and the credit rating is
not otherwise used in connection with a registered offering. We
preliminarily believe that a consent would not be required for such
disclosure.

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

    The question of when consents need to be filed may turn, in part,
on what the credit rating relates to and what form is being used to
register the offering. We believe an offering registered on Form S-1,
for example, would require a consent for the offering, and the consent
would need to be filed prior to the effectiveness of the registration
statement. In the context of registered offerings made on a delayed or
continuous basis in reliance on Rule 415 under the Securities Act,\54\
prospectus supplements are used rather than stand-alone registration
statements. As a result, the following different types of ratings may
result in different consent filing requirements: (1) A credit rating
that is applicable to the issuer and does not necessarily change with
each offering; (2) a credit rating that applies to a specific program
or type of security, such as a credit rating assigned to a medium-term
note program or one for long-term debt and one for short-term debt; and
(3) credit ratings that are specific to each issuance of a security. In
the first instance, we believe the rating would be disclosed in the
prospectus that is part of a registration statement, and the consent
would need to be filed prior to the time the registration statement is
declared effective.
---------------------------------------------------------------------------

    \54\ 17 CFR 230.415.
---------------------------------------------------------------------------

    Rule 430B \55\ and Rule 430C \56\ under the Securities Act deem
information contained in prospectus supplements to be part of and
included in the registration statement. The prospectus supplement
filing does not create a new effective date for experts, and we believe
it would not require the filing of a consent, unless the prospectus
supplement (including incorporated Exchange Act reports such as current
reports on Form 8-K) includes a new report or opinion of an expert.
Thus, in the case of an issuer rating or a rating on a class of
securities such as a medium-term note facility, we believe only a new
or changed rating issued after the date of the last consent by the
rating agency or change in any other information as to which the rating
agency is an expert would require a new consent. We believe a new
consent would always be required in the case of a credit rating that is
specific to each issuance of a security.\57\
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    \55\ 17 CFR 230.430B.
    \56\ 17 CFR 230.430C.
    \57\ In the event a new consent is required, we anticipate that
the consent could be filed by a post-effective amendment to the
registration statement or by filing an Exchange Act report, such as
an annual report on Form 10-K or a report on Form 8-K or Form 6-K,
which is incorporated by reference into the registration statement.
The consent would need to be filed prior to the filing of a
prospectus under Rule 424 of the Securities Act. Rule 424 requires a
prospectus to be filed not later than the second business day
following the earlier of the date of the determination of the
offering price or the date the prospectus is first used after
effectiveness in connection with a public offering or sale of
securities. We also anticipate that a new consent would be required
for an update pursuant to Section 10(a)(3) of the Securities Act.
See 15 U.S.C. 77j(a)(3).
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Request for Comments

    We request comment below on specific aspects of a possible proposal
to rescind Rule 436(g). While we have grouped comments by how any such
proposal might affect a group of market participants, we encourage all
market participants to comment on all aspects of this concept release.

Impact on Registrants and Access to Capital

     If we were to subject all credit rating agencies to
Sections 7 and 11 of the Securities Act by rescinding Rule 436(g),
would registrants be able to obtain the consent required to use ratings
in connection with registered offerings of rated securities? What
effects would rescinding Rule 436(g) have on the practice of offering
securities? In particular, would doing so affect the use of credit
ratings in registered offerings, affect investor reliance on credit
ratings, affect the cost of obtaining a credit rating, or affect the
decisions of registrants and investors regarding whether to raise
capital in registered or unregistered offerings?
     Would access to capital be disrupted if Rule 436(g) were
rescinded, or would market participants adjust their practices to
accommodate the change? How long would it take market participants to
adjust their practices? Would a long phase-in period help to mitigate
any disruptions in access to capital? Why or why not? Would a phase-in
period of 12 months be sufficient? How long would the phase-in period
need to be?
     Would registrants be able to obtain the consent if the
rating is not available until after the registration statement goes
effective? Are there circumstances where the rating would be available
prior to effectiveness?
     Would smaller companies be able to afford any increased
costs to obtain a credit rating? What alternatives would these
companies have for raising capital? What could we do to help limit any
such impact?
     If we propose to rescind Rule 436(g), should we
distinguish among issuers of corporate debt, issuers of structured
products and closed-end management investment company securities? Are
there differences among the markets for corporate debt, structured
products and closed-end management investment companies that justify
treating the same NRSRO as an expert for purposes of Sections 7 and 11
of the Securities Act for ratings issued on some kinds of securities
but not others?
     If the proposal to require disclosure regarding credit
ratings is adopted, and we do not eliminate Rule 436(g), officers,
directors and underwriters will not be able to rely on NRSROs as
experts with respect to the disclosure of credit ratings. Is this
appropriate? Why or why not?
     Are there circumstances where a credit rating agency
issuing a preliminary rating should be treated as an expert?
     Practically speaking, how would the filing of a consent
work in the context of a shelf offering if we propose to rescind Rule
436(g)? Would the approach outlined above work? What other changes to
our rules would be necessary?
     Do rating agencies view the issuance of each security
issued by a company they rate, including each issuance within a class
of securities, as the issuance of a new rating? Do investors or
registrants view the issuance of each security by a company as the
issuance of a new rating by the rating agency? For instance, does each
issuance under a medium-term note facility constitute the issuance of a
new rating that should require a consent?
     In the context of an issuer rating, are there concerns for
the rating agencies with not having to provide a consent each time the
registrant issues a new security?
     We believe investors would view a credit rating as current
when it is used in connection with an offering of securities off a
shelf registration statement. If that is the case, should we require a
new consent for each take-down regardless of the type of rating or type
of security? If issuing a new consent each time would be too
burdensome, should we propose a rule that would deem the consent filed
each time a take-down is made?
     Should a new consent be required if the company has been
put on a watch list or the company has been given a positive outlook or
negative outlook

designation, or there has been some change other than an actual change
in the rating?
     If the proposal to require disclosure regarding credit
ratings is adopted, regardless of whether we rescind Rule 436(g), would
market practices develop in the context of a take-down from a shelf
registration statement where underwriters or other parties would
require the credit rating agency to re-affirm its rating?
     In the context of asset-backed securities, if Rule 436(g)
is eliminated, should we retain our requirement to disclose whether an
issuance is conditioned on the assignment of that rating and the
minimum rating that must be assigned? Should we require a consent
related to the expected rating \58\ and then require a subsequent
consent for the final rating only if that rating changes? Should we
instead treat the consent similar to pricing information under 430A
\59\ so that it may be filed as part of a pricing supplement but would
relate back to the effective date?
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    \58\ See Item 1120 of Regulation AB.
    \59\ 17 CFR 220.430A.
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     Form F-9 is the MJDS form used by eligible Canadian
issuers to register investment grade debt or preferred securities.
Under the MJDS, Canadian MJDS filers are largely permitted to use their
Canadian provincial disclosure documents when registering their
securities with the Commission, although the liability provisions under
the Securities Act apply whether or not the registration statement is
filed under the MJDS. If we eliminate Rule 436(g) in its entirety, a
Form F-9 filer would need to obtain the consent of an NRSRO or Approved
Rating Organization in the same circumstances as a similarly situated
U.S. issuer, notwithstanding that the Canadian filer may not be
required to do so under Canadian provincial law or regulation. How
would the elimination of Rule 436(g) affect Form F-9 filers, and why?
Should the Rule 436(g) exemption be retained in connection with an
NRSRO or Approved Rating Organization rating disclosed in a Form F-9 to
maintain consistency of consent requirements with Canadian provincial
law or regulation? Should the exemption be retained for an Approved
Rating Organization rating only, and eliminated for an NRSRO rating,
disclosed in a Form F-9 registration statement? Or, insofar as Rule
436(g) concerns the allocation of liability for portions of a
registrations statement, and liability under the Securities Act applies
without regard to whether a registration statement is filed pursuant to
the MJDS, should we eliminate completely the Rule 436(g) exemption for
ratings disclosed in a Form F-9?

Impact on NRSROs and Credit Rating Agencies

     Are there reasons to continue to distinguish between
NRSROs and credit rating agencies that are not NRSROs for purposes of
Section 11 liability? Is the fact that NRSROs are subject to Commission
oversight, a reasonable basis upon which to distinguish between NRSROs
and credit rating agencies that are not NRSROs for this purpose?
     How would the financial markets be affected if NRSROs and
other credit rating agencies temporarily or permanently stopped issuing
credit ratings in registered offerings?
     As noted above, NRSROs have previously indicated that they
would not provide consent. However, because we are proposing to require
disclosure regarding credit ratings in registration statements, we are
seeking to understand the practical implications that requiring a
consent would have on NRSROs. Would NRSROs and other credit rating
agencies initially or permanently refuse to provide consent? Would they
initially or permanently stop issuing credit ratings in registered
offerings? How would NRSROs adapt if Rule 436(g) were rescinded? How
long is it likely such adaptation would take? Are NRSROs likely to
adapt in different ways?
     Would rescinding Rule 436(g) reduce or eliminate the
incentive for a credit rating agency to become an NRSRO?
     How would rescission of Rule 436(g) affect the process of
issuing a credit rating? Would the process take longer? Would the
NRSROs and credit rating agencies that are not NRSROs change their
procedures? If so, how? Would credit rating agencies seek more, less or
different information from registrants in order to provide a credit
rating? How would requiring consents from both NRSROs and credit rating
agencies that are not NRSROs affect their interactions with registrants
and underwriters? Would there be any inflation or deflation of ratings?
Why or why not?
     Would rescinding Rule 436(g) affect the types of products
that credit rating agencies are willing to rate? How? Would they be
less likely to rate lower grade products or products issued by smaller
or less well-established registrants?
     Would any additional disclosure be necessary in order for
the rating and other statements regarding the rating not to contain an
untrue statement of a material fact or fail to state a material fact
required to be stated in order to make the statements therein not
misleading? What other information would be necessary to make the
disclosure not misleading? Should we revise the proposed disclosure in
the companion release to include additional items?
     What costs would potential liability under Section 11
impose on NRSROs and other credit rating agencies? Would those costs be
passed on to registrants or, ultimately, to investors? What steps would
NRSROs and other credit rating agencies take to protect themselves from
potential liability under Section 11?
     If we propose to rescind Rule 436(g), should we specify
that the credit rating itself would be considered prepared or certified
by a person, or a report or valuation prepared or certified by a person
within the meaning of Sections 7 and 11 of the Securities Act? Should
it include more than just the actual rating? Are there other parts of
the registration statement that would be considered prepared or
certified by the credit rating agency? How would determining which
portions of the registration statement would be considered prepared or
certified by a person, or a report or valuation prepared or certified
by a person impact other potential defendants who might rely on that
portion as a defense to liability?
     Are there issues related to the liability of other
experts, such as lawyers, investment bankers and accountants, that we
should consider in deciding whether to rescind Rule 436(g)? Are credit
rating agencies different from other types of experts from whom we
require consent? If so, how? What steps could we take to account for
those differences? How would the elimination of Rule 436(g) change the
standard of liability to which NRSROs are currently subject for the use
of credit ratings in connection with a registered offering? Is there
any reason to believe the liability standards applicable to other
experts may be applied differently to NRSROs and credit rating agencies
that are not NRSROs?
     Is Section 11 liability appropriate for NRSROs and credit
rating agencies that are not NRSROs? What is the expected standard of
liability for a credit rating to be actionable under Section 11, and
how does it compare to the standard of liability under Section 10(b) of
the Exchange Act? If Section 11 were applicable, what is the practical
impact of the different pleading standards under Section 10(b) of the
Exchange Act and Section 11 of the

Securities Act? How would any claims of First Amendment protection
applicable to NRSROs be impacted by potential Section 11 liability?
     To reduce the risk of legal liability, would NRSROs issue
more ``defensive'' ratings than are warranted? If so, how would this
affect the cost of capital for registrants?

Impact on Investors

     Would eliminating the exemption in Rule 436(g) so that
NRSROs are subject to potential liability under Section 11 be
beneficial to investors? What effects would there be for investors if
we eliminate the exemption for NRSROs in Rule 436(g)? Would the
protections afforded by potential Section 11 liability for NRSROs be
offset by any changes in the credit rating process, such as possible
increases in the use of unregistered offerings or potential disruptions
to registrants' access to capital?
     To what extent do the concerns expressed regarding
possible undue reliance by investors on credit ratings suggest that
investors actually do consider NRSROs to be persons whose profession
gives authority to statements they make, as contemplated by Sections 7
and 11 of the Securities Act?
     How would the elimination of Rule 436(g) affect the
quality of credit ratings? Would potential liability under Section 11
provide an incentive for NRSROs to provide higher-quality ratings?
Would quality decline? Why?
     If credit rating agencies, including NRSROs, initially
refuse to provide consent or stop issuing credit ratings, how would
investors be affected? \60\ Would investors with guidelines that
require them to invest in rated securities be able to continue to
invest? Would such investors change their investing guidelines? How
long would it take for any such changes to be implemented?
---------------------------------------------------------------------------

    \60\ Should NRSROs refuse to issue ratings, money market funds
subject to Rule 2a-7 [17 CFR 270.2a-7] under the Investment Company
Act may, for example, be affected to the extent the rule requires
certain securities in which they invest to be rated by an NRSRO. See
Rule 2a-7(a)(10)(ii)(A) (long-term security with a remaining
maturity of less than 397 days that does not have a short-term
rating is not an ``eligible security'' unless it has at least one
long-term rating from an NRSRO); Rule 2a-7(a)(10)(ii) (asset backed
security must be rated by an NRSRO to be an ``eligible security'');
and Rules 2a-7(c)(3)(iii) and (a)(10)(iii)(A) (together permitting
funds to substitute the credit quality of a guarantor for the credit
quality of the issuer only if the guarantee (or guarantor) is rated
by an NRSRO). The Commission has requested comment on whether use of
these ratings requirements ought to be removed from Rule 2a-7. See
Money Market Fund Reform, Release No. IC-28807 (June 30, 2009) [74
FR 32688].
---------------------------------------------------------------------------

     What effect would rescinding Rule 436(g) have on
investors' reliance on credit ratings? Would any investors rely more or
less on credit ratings? Would investors view credit ratings as more
reliable?

Impact on Competition

     How would rescinding Rule 436(g) affect competition among
credit rating agencies? Would treating NRSROs and credit rating
agencies that are not NRSROs the same for purposes of liability under
Section 11 of the Securities Act lower competitive barriers for credit
rating agencies that are not NRSROs? Would it have any impact on the
number of companies seeking to be an NRSRO?
     If NRSROs are unable to absorb the litigation costs and
risks of Section 11 liability, and competition is reduced as a result,
what impact, if any, would that reduced competition have on investor
protection?
     Would rescinding Rule 436(g) have negative consequences
for smaller NRSROs? Would it increase their costs of doing business?
Would it make registrants more likely to seek ratings from the larger
NRSROs? Would it make smaller NRSROs unable to issue ratings in
connection with registered offerings? Would smaller NRSROs be able to
adapt to the changes that might occur? Are there ways to mitigate
negative competitive consequences if Rule 436(g) were eliminated?

III. General Request for Comments

    We request and encourage any interested person to submit comments
regarding:
     The concepts that are the subject of this release;
     additional or different changes; or
     other matters that may have an effect on the concepts
contained in this release.
    We request comment from the point of view of companies, investors,
and other market participants, including NRSROs and other credit rating
agencies. With regard to any comments, we note that such comments are
of greater assistance to us if accompanied by supporting data and
analysis of the issues addressed in those comments.

    By the Commission.

    Dated: October 7, 2009.
Elizabeth M. Murphy,
Secretary.
[FR Doc. E9-24547 Filed 10-14-09; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register Volume 88, Number 36 (Thursday, February 23, 2023)]
[Notices]
[Pages 11428-11429]
[FR Doc No: 2023-03722]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 5867-054]

Alice Falls Hydro, LLC; Notice of Application Ready for
Environmental Analysis and Soliciting Comments, Recommendations, Terms
and Conditions, and Prescriptions

    Take notice that the following hydroelectric application has been
filed with the Commission and is available for public inspection.
    a. Type of Application: New Major License.
    b. Project No.: 5867-054.
    c. Date filed: September 29, 2021.
    d. Applicant: Alice Falls Hydro, LLC (Alice Falls Hydro).
    e. Name of Project: Alice Falls Hydroelectric Project.
    f. Location: The existing project is located on the Ausable River
in the Town of Chesterfield, Clinton and Essex counties, New York. The
project does not occupy federal land.
    g. Filed Pursuant to: Federal Power Act 16 U.S.C. 791 (a)-825(r).
    h. Applicant Contact: Jody Smet, Vice President, Regulatory
Affairs, Eagle Creek Renewable Energy, LLC, 7315 Wisconsin Avenue,
Suite 1100W, Bethesda, Maryland 20814;<PHONE_NUMBER> or
[email protected].
    i. FERC Contact: Chris Millard at<PHONE_NUMBER>, or email at
[email protected].
    j. Deadline for filing comments, recommendations, terms and
conditions, and prescriptions: 60 days from the issuance date of this
notice; reply comments are due 105 days from the issuance date of this
notice.
    The Commission strongly encourages electronic filing. Please file
comments, recommendations, terms and conditions, and prescriptions
using the Commission's eFiling system at https://ferconline.ferc.gov/FERCOnline.asp. Commenters can submit brief comments up to 6,000
characters, without prior registration, using the eComment system at
https://ferconline.ferc.gov/QuickComment.asp. You must include your
name and contact information at the end of your comments. For
assistance, please contact FERC Online Support at
[email protected]">FERCOnline[email protected],<PHONE_NUMBER> (toll free), or (202) 502-
8659 (TTY). In lieu of electronic filing, you may submit a paper copy.
Submissions sent via the U.S. Postal Service must be addressed to:
Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 888
First Street NE, Room 1A, Washington, DC 20426. Submissions sent via
any other carrier must be addressed to: Kimberly D. Bose, Secretary,
Federal Energy Regulatory Commission, 12225 Wilkins Avenue, Rockville,
Maryland 20852. All filings must clearly identify the project name and
docket number on the first page: Alice Falls Hydroelectric Project P-
5867-054.
    The Commission's Rules of Practice require all intervenors filing
documents with the Commission to serve a copy of that document on each
person on the official service list for the project. Further, if an
intervenor files comments or documents with the Commission relating to
the merits of an issue that may affect the responsibilities of a
particular resource agency, they must also serve a copy of the document
on that resource agency.
    k. This application has been accepted and is now ready for
environmental analysis.
    The Council on Environmental Quality (CEQ) issued a final rule on
April 20, 2022, revising the regulations under 40 CFR parts 1502, 1507,
and 1508 that federal agencies use to implement the National
Environmental Policy Act (NEPA) (see National Environmental Policy Act
Implementing Regulations Revisions, 87 FR 23,453-70). The final rule
became effective on May 20, 2022. Commission staff intends to conduct
its NEPA review in accordance with CEQ's new regulations.
    l. The project consists of: (1) a stone masonry dam, 88 feet long
and 63 feet high; (2) a 110-foot-long section of rock ledge adjacent to
the dam with 2.5-foot-high pipe-supported flashboards; (3) a reservoir
with a surface area of 4.8 acres at the normal water surface elevation
of 350 feet; \1\ (4) a 110-foot-wide, 150-foot-long intake structure
with a 41-foot-wide by 14-foot-high trash rack opening and fitted with
a trash rack with 1-inch clear bar spacing; (5) a divided, 45-foot-
long, reinforced concrete penstock, where the Unit 1 penstock is 18
feet wide by 12 feet high and the Unit 2 penstock is 10 feet wide by 12
feet high; (6) a powerhouse, approximately 34 feet wide and 26 feet
long, containing two turbine-generator units of 1.5 megawatts (Unit 1)
and 0.6 megawatt (Unit 2); (7) a substation, 51 feet wide and 88 feet
long; (8) a 745-foot-long, 5-kilovolt (kV) buried generator lead and a
700-foot-long, 46-kV buried transmission line; and (9) appurtenant
facilities.
---------------------------------------------------------------------------

    \1\ Elevation data are presented using the National Geodetic
Vertical Datum of 1929.
---------------------------------------------------------------------------

    Alice Falls Hydro currently operates the project in a run-of-river
mode and releases a year-round minimum flow over the spillway of 25
cubic feet per second (cfs) for the protection of aquatic resources and
a 125-cfs minimum flow from May 20 to September 8 for the enhancement
of aesthetic resources. A 20-cfs conveyance flow is released through
the fish bypass facility from April 1 through November 30.
    Alice Falls Hydro proposes to continue to operate the project in a
run-of-river mode and provide a year-round, continuous minimum flow of
25 cfs; however, it would discontinue providing a 125-cfs aesthetic
flow. Alice Falls Hydro would also shorten the duration of the
operation of the fish bypass facility and temporarily increase
conveyance flows, providing 42 cfs, or inflow, whichever is less, from
April 15 through May 31 and 20 cfs or inflow, whichever is less, from
June 1 through November 15.
    m. A copy of the application can be viewed on the Commission's
website 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 Online
Support. At this time, the Commission has suspended access to the
Commission's Public Reference Room, due to the proclamation declaring a
National Emergency concerning the Novel Coronavirus Disease (COVID-19),
issued by the President on March 13, 2020. For assistance, contact FERC
at [email protected]">FERCOnline[email protected] or call toll-free,<PHONE_NUMBER> or
TTY,<PHONE_NUMBER>.
    All filings must (1) bear in all capital letters the title
``COMMENTS,'' ``REPLY COMMENTS,'' ``RECOMMENDATIONS,'' ``TERMS AND
CONDITIONS,'' or

``PRESCRIPTIONS;'' (2) set forth in the heading the name of the
applicant and the project number of the application to which the filing
responds; (3) furnish the name, address, and telephone number of the
person submitting the filing; and (4) otherwise comply with the
requirements of 18 CFR 385.2001 through 385.2005. All comments,
recommendations, terms and conditions or prescriptions must set forth
their evidentiary basis and otherwise comply with the requirements of
18 CFR 4.34(b). Agencies may obtain copies of the application directly
from the applicant. Each filing must be accompanied by proof of service
on all persons listed on the service list prepared by the Commission in
this proceeding, in accordance with 18 CFR 4.34(b) and 385.2010.
    You may also register online at http://www.ferc.gov/docs-filing/esubscription.asp to be notified via email of new filings and issuances
related to this or other pending projects. For assistance, contact FERC
Online Support.
    n. The applicant must file no later than 60 days following the date
of issuance of this notice: (1) a copy of the water quality
certification; (2) a copy of the request for certification, including
proof of the date on which the certifying agency received the request;
or (3) evidence of waiver of water quality certification. Please note
that the certification request must comply with 40 CFR 121.5(b),
including documentation that a pre-filing meeting request was submitted
to the certifying authority at least 30 days prior to submitting the
certification request. Please also note that the certification request
must be sent to the certifying authority and to the Commission
concurrently.
    o. Procedural schedule: The application will be processed according
to the following schedule. Revisions to the schedule will be made as
appropriate.

------------------------------------------------------------------------
              Milestone                           Target date
------------------------------------------------------------------------
Filing of Comments, Recommendations,   April 2023.
 Terms and Conditions, and Fishway
 Prescriptions.
Filing of Reply Comments.............  June 2023.
------------------------------------------------------------------------

    Dated: February 16, 2023.
Kimberly D. Bose,
Secretary.
[FR Doc. 2023-03722 Filed 2-22-23; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 80, Number 164 (Tuesday, August 25, 2015)]
[Notices]
[Pages 51557-51558]
[FR Doc No: 2015-21016]

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ENVIRONMENTAL PROTECTION AGENCY

[FRL-9933-07-OARM]

Good Neighbor Environmental Board; Notification of Public
Advisory Committee Meeting

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of Public Advisory Committee meeting.

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SUMMARY: Pursuant to the Federal Advisory Committee Act, Public Law 92-
463, notice is hereby given that the Good Neighbor Environmental Board
will hold a public meeting on Thursday, September 17 and Friday,
September 18, 2015 in San Diego, CA. The meeting is open to the public.

DATES: The Good Neighbor Environmental Board will hold an open meeting
on Thursday, September 17 from 9:00 a.m. (registration at 8:30 a.m.) to
5:45 p.m. The following day, Friday, September 18 the Board will meet
from 8:30 a.m. (registration at 8:00 a.m.) until 4:00 p.m.

SUPPLEMENTARY INFORMATION:
    Background: The Good Neighbor Environmental Board (Board) is a
federal advisory committee chartered under the Federal Advisory
Committee Act, PL 92463. By statute, the Board is required to submit an
annual report to the President and Congress on environmental and
infrastructure issues along the U.S. border with Mexico.
    Purpose of Meeting: The purpose of this open meeting is to discuss
the Good Neighbor Environmental Board's upcoming advice letter and
Seventeenth Report. Both the advice letter and the report will focus on
climate change resiliency in the U.S.-Mexico border region.

ADDRESSES: The meeting will be held at the Wyndham San Diego Bayside,
1355 North Harbor Drive, San Diego, CA, 92101. The phone number is 1-
619-232-3861. The meeting is open to the public, with limited seating
on a first-come, first-serve basis.

    General Information: The agenda will be available at http://www2.epa.gov/faca/gneb. General information about the Board can be
found on its Web site at http://www2.epa.gov/faca/gneb. If you wish to
make oral comments or submit written comments to the Board, please
contact Ann-Marie Gantner at least five days prior to the meeting.
Written comments should be submitted Ann-Marie Gantner at<EMAIL_ADDRESS>    Meeting Access: For information on access or services for
individuals with disabilities, please contact Ann-Marie Gantner at
(202) 564-4330 or email at<EMAIL_ADDRESS>To request
accommodation of a disability, please contact Ann-Marie Gantner at
least 10 days prior to the meeting to give EPA as much time as possible
to process your request.

    Dated: August 18, 2015.
Ann-Marie Gantner,
Acting Designated Federal Officer.
[FR Doc. 2015-21016 Filed 8-24-15; 8:45 am]
 BILLING CODE 6560-50-P


[Federal Register Volume 85, Number 222 (Tuesday, November 17, 2020)]
[Notices]
[Pages 73321-73322]
[FR Doc No: 2020-25329]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 34092; File No. 812-15146]

AdvisorShares Trust, et al.

November 12, 2020.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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

    Notice of an application for an order under section 6(c) of the
Investment Company Act of 1940 (``Act'') for an exemption from sections
2(a)(32), 5(a)(1), and 22(d) of the Act and rule 22c-1 under the Act,
and under sections 6(c) and 17(b) of the Act for an exemption from
sections 17(a)(1) and 17(a)(2) of the Act.

Applicants: AdvisorShares Trust (the ``Trust''), AdvisorShares
Investments, LLC (the ``Initial Adviser''), and Foreside Fund Services,
LLC (the ``Distributor'').

Summary of Application: Applicants request an order (``Order'') that
permits: (a) ActiveShares ETFs (as described in the Reference Order (as
defined below)) to issue shares (``Shares'') redeemable in large
aggregations only (``creation units''); (b) secondary market
transactions in Shares to occur at negotiated market prices rather than
at net asset value; and (c) certain affiliated persons of an
ActiveShares ETF to deposit securities into, and receive securities
from, the ActiveShares ETF in connection with the purchase and
redemption of creation units. The relief in the Order would incorporate
by reference terms and conditions of the same relief of a previous
order granting the same relief sought by applicants, as that order may
be amended from time to time (``Reference Order'').\1\
---------------------------------------------------------------------------

    \1\ Precidian ETFs Trust, et al., Investment Company Act Release
Nos. 33440 (April 8, 2019) (notice) and 33477 (May 20, 2019)
(order). Applicants are not seeking relief under section 12(d)(1)(J)
of the Act for an exemption from sections 12(d)(1)(A) and
12(d)(1)(B) of the Act (the ``Section 12(d)(1) Relief''), and relief
under sections 6(c) and 17(b) of the Act for an exemption from
sections 17(a)(1) and 17(a)(2) of the Act relating to the Section
12(d)(1) Relief, as granted in the Reference Order. Accordingly, to
the extent the terms and conditions of the Reference Order relate to
such relief, they are not incorporated by reference into the Order.

Filing Date: The application was filed on July 31, 2020 and amended on
---------------------------------------------------------------------------
November 3, 2020.

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 emailing the Commission's
Secretary at<EMAIL_ADDRESS>and serving applicants with a
copy of the request by email. Hearing requests should be received by
the Commission by 5:30 p.m. on December 7, 2020, and should be
accompanied by proof of service on 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 emailing the Commission's Secretary at<EMAIL_ADDRESS>
ADDRESSES: The Commission<EMAIL_ADDRESS>Applicants:
<EMAIL_ADDRESS>
FOR FURTHER INFORMATION CONTACT: Jill Ehrlich, Senior Counsel, at (202)
551-6819 or Trace W. Rakestraw, 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

    1. The Trust is a statutory trust established under the laws of
Delaware and will consist of one or more series operating as
ActiveShares ETFs. The Trust is registered as an open-end management
investment company under the Act. Applicants seek relief with respect
to Funds (as defined below), including two initial Funds (``Initial
Funds''). The Funds will operate as ActiveShares ETFs as described in
the Reference Order.\2\
---------------------------------------------------------------------------

    \2\ To facilitate arbitrage, an ActiveShares ETF disseminates a
``verified intraday indicative value'' or ``VIIV,'' reflecting the
value of its portfolio holdings, calculated every second during the
trading day. To protect the identity and weightings of its portfolio
holdings, an ActiveShares ETF sells and redeems its Shares in
creation units to authorized participants only through an
unaffiliated broker-dealer acting on an agency basis.
---------------------------------------------------------------------------

    2. The Initial Adviser, a Delaware limited liability company, will
be the investment adviser to the Initial Funds. An Adviser (as defined
below) will serve as investment adviser to each Fund. The Initial
Adviser is, and any other Adviser will be, registered as an investment
adviser under the Investment Advisers Act of 1940 (``Advisers Act'').
The Adviser may enter into sub-advisory agreements with other
investment advisers to act as sub-advisers with respect to the Funds
(each a ``Sub-Adviser''). Any Sub-Adviser will be registered under the
Advisers Act.
    3. The Distributor is a Delaware limited liability company and a
broker-dealer registered under the Securities Exchange Act of 1934, as
amended, and will act as the principal underwriter of Shares of the
Funds. Applicants request that the requested relief apply to any
distributor of Shares, whether affiliated or unaffiliated with the
Adviser and/or Sub-Adviser (included in the term ``Distributor''). Any
Distributor will comply with the terms and conditions of the Order.

Applicants' Requested Exemptive Relief

    4. Applicants seek the requested Order under section 6(c) of the
Act for an exemption from sections 2(a)(32), 5(a)(1), and 22(d) of the
Act and rule 22c-1 under the Act, and under sections 6(c) and 17(b) of
the Act for an exemption from sections 17(a)(1) and 17(a)(2) of the
Act. The requested Order would permit applicants to offer ActiveShares
ETFs. Because the relief requested is the same as certain of the relief
granted by the Commission under the Reference Order and because the
Initial Adviser has entered into a license agreement with Precidian
Investments LLC, or an affiliate thereof, in order to offer
ActiveShares ETFs,\3\ the Order would incorporate by reference the
terms and conditions of the same relief of the Reference Order.
---------------------------------------------------------------------------

    \3\ Aspects of the Funds are covered by intellectual property
rights, including but not limited to those which are described in
one or more patent applications.
---------------------------------------------------------------------------

    5. Applicants request that the Order apply to the Initial Funds and
to any other existing or future registered open-end management
investment company or series thereof that: (a) Is advised by

the Initial Adviser or any entity controlling, controlled by, or under
common control with the Initial Adviser (any such entity, along with
the Initial Adviser, included in the term ``Adviser''); (b) operates as
an ActiveShares ETF as described in the Reference Order; and (c)
complies with the terms and conditions of the Order and the terms and
conditions of the Reference Order that are incorporated by reference
into the Order (each such company or series and each Initial Fund, a
``Fund'').\4\
---------------------------------------------------------------------------

    \4\ All entities that currently intend to rely on the Order are
named as applicants. Any other entity that relies on the Order in
the future will comply with the terms and conditions of the Order
and the terms and conditions of the Reference Order that are
incorporated by reference into the Order.
---------------------------------------------------------------------------

    6. Section 6(c) of the Act provides that the Commission may exempt
any person, security or transaction, or any class of persons,
securities or transactions, from any provisions of the Act, if and to
the extent that such exemption is necessary or appropriate in the
public interest and consistent with the protection of investors and the
purposes fairly intended by the policy and provisions of the Act.
Section 17(b) of the Act authorizes the Commission to exempt a proposed
transaction from section 17(a) of the Act if evidence establishes that
the terms of the transaction, including the consideration to be paid or
received, are reasonable and fair and do not involve overreaching on
the part of any person concerned, and the transaction is consistent
with the policies of the registered investment company and the general
purposes of the Act. Applicants submit that for the reasons stated in
the Reference Order the requested relief meets the exemptive standards
under sections 6(c) and 17(b) of the Act.

    For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-25329 Filed 11-16-20; 8:45 am]
BILLING CODE 8011-01-P