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      UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                            WASHINGTON, D.C.  20460

                                                                      OFFICE OF
                                                            CHEMICAL SAFETY AND
	                                                                               POLLUTION PREVENTION
MEMORANDUM

Date:		04-AUG-2011

Subject:	Saflufenacil in/on Imported Coffee, Banana, and Mango.  Summary of Analytical Chemistry and Residue Data.

PC Code:  118203
DP Barcode:  D390922
Decision No.:  442242
Registration No:  NA
Petition No.:  0E7806
Regulatory Action:  Tolerances With No U.S. Registration
Risk Assessment Type:  NA
Case No.:  NA
TXR No.:  NA
CAS No.:  372137-35-4
MRID Nos.:  482398-01 thru -07
40 CFR:  §180.649

From:		George F. Kramer, Ph.D., Senior Chemist
		Risk Assessment Branch 1 (RAB1)
		Health Effects Division (HED) (7509P)

Through:		Dana M. Vogel, Branch Chief
		RAB1/HED (7509P)

To:	       Kathryn Montague/Susan Stanton, PM Team 23
    Registration Division (RD; 7505P)

Executive Summary

Saflufenacil (BAS 800 H) is a broad-spectrum herbicide developed by BASF.  It belongs to the herbicide mode-of-action Group 14 (cell membrane disruptors).  Saflufenacil acts through the inhibition of protoporphyrinogen oxidase (PPO), resulting in cell membrane damage and subsequent plant death.  Sharpen[(TM)] Powered by Kixor Herbicide (EPA Reg. No. 7969-278), a 2.85 lb ai/gal suspension-concentrate (SC) formulation, is currently registered for use on legume vegetables (Crop Group 06), the foliage of legume vegetables (Crop Group 07), cereal grains (Crop Group 15), the forage, fodder, and straw of cereal grains (Crop Group 16), cotton, and sunflower.

BASF has submitted a proposal to establish tolerances for saflufenacil in/on imported coffee, banana, and mango (PP#0E7806).  The tolerance petition on these crops is the result of the use of Heat[(R)], a 70% water-dispersible granule (WDG) formulation, in Central and South America.

Heat[(R)] is proposed for up to three foliar spray applications directed to the base of the plants with a total maximum application rate of 0.131 lb ai/A, and use of an adjuvant is required.  Preharvest intervals (PHIs) of 7-30 days are proposed.

BASF has petitioned for the establishment of permanent tolerances for "saflufenacil, including its metabolites and degradates, in or on the imported agricultural commodities listed below.  Compliance with the tolerance levels specified below is to be determined by measuring only the sum of saflufenacil, 2-chloro-5-[3,6-dihydro-3-methyl-2,6-dioxo-4-(trifluoromethyl)-1(2H)-pyrimidinyl]-4-fluoro-N-[[methyl(1-methylethyl)amino]sulfonyl]benzamide, and its metabolites N-[2-chloro-5-(2,6-dioxo-4-(trifluoromethyl)-3,6-dihydro-1(2H)-pyrimidinyl)-4-fluorobenzoyl]-N'-isopropylsulfamide and N-[4-chloro-2-fluoro-5-({[(isopropylamino)sulfonyl]amino}carbonyl)phenyl]urea, calculated as the stoichiometric equivalent of saflufenacil" in/on the following raw agricultural commodities (RACs):

Coffee, green bean
0.03 ppm
Banana, whole fruit
0.03 ppm
Mango, fruit
0.03 ppm

The previously-submitted metabolism data for corn, soybean, and tomato were adequate to elucidate the nature of the residue in plants resulting from pre-plant/pre-emergence application.  The HED Residues of Concern Knowledgebase Subcommittee (ROCKS) determined that residues of concern for the tolerance expression and risk assessment consist of saflufenacil, M800H11, and M800H35 (Memo, B. Daiss, 1/6/09; D359645).  This conclusion was translated to perennial crops (i.e., tree fruits and tree nuts) where saflufenacil application is directed to the weeds on the orchard floor (Memo, G. Kramer, 7/22/09; D349938).  As the proposed use on coffee, banana, and mango is also directed to weeds at the base of the plants, HED concludes that the residues of concern for the tolerance expression and risk assessment also consist of saflufenacil, M800H11, and M800H35 for these crops.

The nature of the residue in livestock is adequately understood based on acceptable metabolism studies conducted on lactating goats and laying hens.  There are no livestock feedstuffs associated with the proposed uses; therefore, no changes in the existing tolerances for livestock commodities are needed.

The petitioner has submitted two liquid chromatography/mass spectroscopy/mass spectroscopy (LC-MS/MS) analytical methods for the determination of residues of the parent and its metabolites in/on plant and livestock commodities.  BASF Method D0603/02 was developed for determination of residues of saflufenacil and its metabolites M800H11 and M800H35 in different plant matrices using LC-MS/MS.  The limit of quantitation (LOQ) was 0.01 ppm for each analyte in food matrices (human consumption) and 0.025 ppm for each analyte in feed matrices (livestock consumption).  This method was used as the data-collection method in the analysis of samples for residues of concern from the various studies associated with the current petition.  HED has determined that Method D0603/02 is a suitable enforcement method for plant commodities as defined in Standard Operating Procedure (SOP) No. ACB-019 (9/15/08).

The submitted magnitude of the residue data for coffee, banana, and mango are adequate.  There are also adequate storage stability data to validate the storage conditions and intervals of samples collected from the field trials.  Quantifiable residues were not found in coffee RAC samples (green beans) even after application of saflufenacil at exaggerated rates (~3X); therefore, analysis of coffee processed fractions (roasted beans, instant coffee) was not necessary and separate tolerances for processed fractions are not required.

Regulatory Recommendations and Residue Chemistry Deficiencies

Pending submission of a revised Section F (see requirements under Proposed Tolerances), there are no residue chemistry issues that would preclude granting permanent tolerances for residues of saflufenacil on the requested crops.  The submitted data support:  "Tolerances are established for residues of the herbicide saflufenacil, including its metabolites and degradates, in or on the commodities in the table below.  Compliance with the tolerance levels specified below is to be determined by measuring only the sum of saflufenacil (2-chloro-5-[3,6-dihydro-3-methyl-2,6-dioxo-4-(trifluoromethyl)-1(2H)-pyrimidinyl]-4-fluoro-N-[[methyl(1-methylethyl)amino]sulfonyl]benzamide) and its metabolites N-[2-chloro-5-(2,6-dioxo-4-(trifluoromethyl)-3,6-dihydro-1(2H)-pyrimidinyl)-4-fluorobenzoyl]-N'-isopropylsulfamide and N-[4-chloro-2-fluoro-5-({[(isopropylamino)sulfonyl]amino}carbonyl)phenyl]urea, calculated as the stoichiometric equivalent of saflufenacil, in or on the following commodities."

Coffee, green bean
                                   0.03 ppm
Banana
                                   0.03 ppm
Mango
                                   0.03 ppm

Note to RD:  These tolerances should include a footnote stating "No U.S. registrations as of [date of FR notice]."

860.1550 Proposed Tolerances

   * The petitioner is requested to submit a revised Section F specifying the revised definitions summarized above.

A human-health risk assessment is forthcoming in a separate document (DP# 384602).

Background

Saflufenacil is a broad-spectrum herbicide developed by BASF.  It belongs to the herbicide mode-of-action Group 14 (cell membrane disruptors).  Saflufenacil acts through the inhibition of PPO, resulting in cell membrane damage and subsequent plant death.  Susceptible weeds develop symptoms within hours of application under active growing conditions.  Plant death occurs within 3-5 days depending upon growing conditions.  The chemical structure and nomenclature of saflufenacil and its metabolites M800H11 and M800H35, and the physicochemical properties of the technical grade of saflufenacil, are presented in Tables 1 and 2.

Table 1.  Saflufenacil and Metabolite Nomenclature.
Chemical Structure

Common name
Saflufenacil
Company experimental name
BAS 800 H (synonyms:  AC 433 379, BASF Reg. No. 4054449)
IUPAC name
N'-[2-chloro-4-fluoro-5-(3-methyl-2,6-dioxo-4-(trifluoromethyl)-3,6-dihydro-1(2H)-pyrimidinyl)benzoyl]-N-isopropyl-N-methylsulfamide
CAS name
2-chloro-5-[3,6-dihydro-3-methyl-2,6-dioxo-4-(trifluoromethyl)-1(2H)-pyrimidinyl]-4-fluoro-N-[[methyl(1-methylethyl)amino]sulfonyl]benzamide
CAS registry number
372137-35-4
End-use product (EP)
Sharpen[(TM)] Powered by Kixor Herbicide (EPA Reg. No. 7969-278) (2.85 lb ai/gal SC formulation)
Chemical Structure

Common name
M800H11
Chemical name
N-[2-chloro-5-(2,6-dioxo-4-(trifluoromethyl)-3,6-dihydro-1(2H)-pyrimidinyl)-4-fluorobenzoyl]-N'-isopropylsulfamide
Chemical Structure

Common name
M800H35
Chemical name
N-[4-chloro-2-fluoro-5-({[(isopropylamino)sulfonyl]amino}carbonyl)phenyl]urea

Table 2.  Physicochemical Properties of Technical Grade Saflufenacil.
Parameter
Value
Melting point
Average = 189.9 °C, peak max = 193.4 °C
pH
4.43 of 1% solution at 25 °C
Bulk Density (ambient temp.)
0.661 kg/L (free fall), 0.736 kg/L (packed)
Water solubility (20°C)
in g/100 mL:
0.0025 in water (pH = 5); 0.0014 in pH 4 buffer; 0.21 in pH 7 buffer; not determined due to degradation in pH 9 buffer
Solvent solubility (20°C)
in g/100 mL:
19.4 acetonitrile; 24.4 dichloromethane; 55.4 N,N-dimethylformamide; 27.5 acetone; 6.55 ethyl acetate; 36.2 tetrahydrofuran; 35.0 butyrolactone; 2.98 methanol; 0.25 isopropyl alcohol;
0.23 toluene; <0.01 1-octanol; <0.005 n-heptane
Vapor pressure at 20/25°C
20° C = 4.5 x 10-15 Pa
25° C = 2.0 x 10-15 Pa
Dissociation constant (pKa)
4.41
Octanol/water partition coefficient
Mean Log Pow = 2.6 (Pow = 368.3)
UV/visible absorption spectrum
wavelength maximum:  λmax = 271.6 nm
extinction coefficient:  ε = 9709 L/mol-cm
Reference:  BASF Registration Document Number (DocID) 2005/1026464.

860.1200 Directions for Use

BASF has submitted a draft Brazilian label for the 70% WDG formulation (Heat[(R)]), which is representative of the Central and South American labels.  Information pertaining to the proposed end-use product is listed in Table 3.  A summary of the proposed use patterns is detailed in Table 4.
Table 3.  Summary of Proposed End-Use Product.
Trade Name
                                   Reg. No.
                             ai (% of formulation)
                               Formulation Type
                                 Target Crops
                                 Target Pests
                                  Label Date
Heat[(R)]
                                      NA
                                      70
                                      WDG
                           coffee, banana, and mango
                                Broadleaf weeds
                          Draft label submitted 11/10

Table 4.  Summary of Directions for Use of Saflufenacil.
                       Applic. Timing, Type, and Equip.
                                  Formulation
                                   App. rate
                                 (lb ai/acre)
                           Max. No. App. per Season
                            Max. Seasonal App. Rate
                                 (lb ai/acre)
                                      PHI
                                    (days)
                        Use Directions and Limitations
                           Coffee, Banana, and Mango
                           Ground directed to weeds
                                   Heat[(R)]
                                  0.022-0.044
                                       3
                                     0.131
                                  7 (coffee)
                            15 (mango) 30 (banana)
Applications are to be made in 16-43 gal/acre
Note:  A non-ionic adjuvant system is required for optimum activity.

Conclusions:  The submitted use directions for Heat[(R)] are adequate to allow evaluation of the residue data relative to the proposed uses.

860.1300 Nature of the Residue - Plants

The previously-submitted metabolism data for corn, soybean, and tomato were adequate to elucidate the nature of the residue in plants resulting from pre-plant/pre-emergence application.  The main reactions involved in the metabolic pathway of saflufenacil were N-demethylation at the uracil ring, stepwise degradation (N-dealkylation) of the N-methyl-N-isopropyl group, hydrolytic cleavage of the uracil ring generating a urea side chain, and hydroxylation of the phenyl ring.  The HED ROCKS determined that residues of concern for the tolerance expression and risk assessment consist of saflufenacil, M800H11, and M800H35 (Memo, B. Daiss, 1/6/09; D359645).  This conclusion was translated to perennial crops (i.e., tree fruits and tree nuts) where saflufenacil application is directed to the weeds on the orchard floor (Memo, G. Kramer, 7/22/09; D349938).  As the proposed use on coffee, banana, and mango is also directed to weeds at the base of the plants, HED concludes that the residues of concern for the tolerance expression and risk assessment also consist of saflufenacil, M800H11, and M800H35 for these crops.

860.1300 Nature of the Residue - Livestock/
860.1480 Meat, Milk, Poultry, and Eggs

The nature of the residue in livestock is adequately understood based on acceptable metabolism studies conducted on lactating goats and laying hens.  There are no livestock feedstuffs associated with the proposed uses; therefore, no changes in the existing tolerances for livestock commodities are needed.

860.1340 Residue Analytical Methods

BASF Method D0603/02 is the current enforcement method for determination of residues of saflufenacil and its metabolites M800H11 and M800H35 in different plant matrices.  Residues of saflufenacil and its metabolites M800H11 and M800H35 were extracted with methanol:water (70:30; v:v).  The methanol extract was evaporated and reconstituted in methanol:water (50:50; v:v) for LC-MS/MS analysis.  Two transitions per analyte were monitored for the quantitation and confirmation of saflufenacil, M800H11 and M800H35.  The residues of each analyte were expressed as parent equivalents using a molecular weight conversion factor (1.0 for saflufenacil, 1.06 for M800H11, and 1.42 for M800H35).  The LOQ was 0.01 ppm for each analyte.  The limit of detection (LOD) was reported to be 3X the standard deviation (SD) at the LOQ for each analyte (0.002-0.003 ppm).

Recovery samples, prepared at levels of LOQ and 10X LOQ in each matrix, were generally within the acceptable range of 70-120%.

860.1360 Multiresidue Methods (MRM)

Saflufenacil and its metabolites M800H11 and M800H35 were screened through the MRM described in the United States Food and Drug Administration (FDA) Pesticide Analytical Manual, Vol. I (PAM I).  Saflufenacil and the metabolites were tested using procedures outlined in Protocols B, C, D, E, and F of the MRM.  All Protocols B, C, D, E, and F were found to be unsuitable for determination of residues of saflufenacil and its metabolites M800H11 and M800H35.  Since the analytes are not N-methyl-carbamates, naturally fluorescent or substituted urea derivatives, the tests using Protocol A and G were not performed.

860.1380 Storage Stability

Storage stability data have been submitted for residues of saflufenacil and its metabolites M800H11 and M800H35 in/on various crop commodities [corn (grain, forage, stover); soybean (seed, forage, hay); orange (fruit, pulp, juice, oil); radish (root); grape (raisin); and garbanzo bean (seed)] indicating that residues of saflufenacil, M800H11, and M800H35 are stable in/on all tested commodities during frozen storage for up to 548 days (MRID No. 47523801).  There are no unresolved storage stability issues, and no corrections need to be applied to the various magnitude of the residue studies.

860.1500 Crop Field Trials

Banana

DER Reference List	48239801.der.doc
			48239802.der.doc
			48239803.der.doc

MRID No. 48239801:  BASF Corporation has submitted field trial data for saflufenacil on banana.  Two banana field trials were conducted during the 2008 growing season in Brazil.  Each trial location consisted of one untreated and one treated plot.  Each treated plot received three applications of the 70% WDG formulation of saflufenacil at 0.044 lb ai/A (1X) directed to the base of the plants, with a 30-day retreatment interval (RTI), for a total application rate of 0.131 lb ai/A (1X).  The applications were made using ground equipment with 21 gallons per acre (GPA) spray volumes.  An adjuvant (surfactant, Dash[(R)]) was included in the spray mixture.  Samples of mature bananas were harvested at a 30-day PHI.

The results from these trials on banana show that after three applications of saflufenacil at 0.044 lb ai/A (0.049kg ai/ha), residues of saflufenacil, M800H11, and M800H35 were below the LOQ (<0.01 ppm each) in banana samples harvested at a 30-day PHI.  Therefore, the maximum combined residues of saflufenacil and its metabolites was <0.03 ppm.

MRID No. 48239802:  BASF Corporation has submitted field trial data for saflufenacil on banana.  Two banana field trials were conducted during the 2010 growing season in Brazil.  Each trial location consisted of one untreated and one treated plot.  Each treated plot received five applications of the 70% WDG formulation of saflufenacil at 0.0667 lb ai/A (1.5X) directed to the base of the plants, with a 3-week RTI, for a total application rate of 0.333 lb ai/A (2.5X).  The applications were made using ground equipment with 21 GPA spray volumes.  An adjuvant (surfactant, Dash[(R)]) was included in the spray mixture.  Samples of mature bananas were harvested at 0- and 1-day PHIs.

The results from these trials on banana show that after five applications of saflufenacil at 0.0667 lb ai/A (0.0749 kg ai/ha), residues of saflufenacil, M800H11, and M800H35 were below the LOQ (<0.01 ppm each) in banana samples harvested at 0- and 1-day PHIs.  Therefore, the maximum combined residues of saflufenacil and its metabolites was <0.03 ppm.

MRID No. 48239803:  BASF Corporation has submitted field trial data for saflufenacil on banana.  A total of 10 field trials were conducted on bananas during the 2008 growing season in Costa Rica (2 trials), Colombia (1 trial), Ecuador (3 trials), Guatemala, (1 trial), Honduras (2 trials), and Panama (1 trial).

Each trial location consisted of one untreated and one treated plot.  Each treated plot received five applications of the 70% WDG formulation of saflufenacil directed to the base of the plants at 0.064-0.071 lb ai/A (1.5X-1.6X), with 11- to 28-day retreatment intervals (RTIs), for a total application rate of 0.33-0.35 lb ai/A/season (2.8X-3.0X).  The applications were made using ground equipment with approximately 20-23 GPA spray volumes.  An adjuvant [crop-oil concentrate (COC)] was included in the spray mixture, together with ammonium sulfate (AMS) fertilizer.  Duplicate samples of commercially mature banana were harvested at a 0- or 1-day PHI.

The results from these trials on banana show that after five applications of saflufenacil directed to the base of the plants at 0.067 lb ai/A/application (0.075 kg ai/ha/application), for a total seasonal rate of 0.33 lb ai/A (0.375 kg ai/ha), maximum saflufenacil, M800H11, and M800H35 residues were <LOQ (<0.01 ppm each) in/on banana whole fruit samples harvested at a 0-day PHI (n=20) or 1-day PHI (n=20).  Therefore, the maximum combined residues of saflufenacil and its metabolites was <0.03 ppm at the 0- and 1-day PHIs.

TABLE 5.  Summary of Residue Data from Crop Field Trials with Banana (MRID#s 48239801 thru -03).
Commodity
                         Total Applic. Rate (lb ai/A)
                                  [kg ai/ha]
                                  PHI (days)
                                    Analyte
                            Residue Levels (ppm)[1]

                                       n
                                     Min.
                                     Max.
                                    HAFT[2]
                                    Median
                                     Mean
                                   Std. Dev.
      Proposed Use = 0.131 lb ai/acre Max. Seasonal App. Rate, 30-Day PHI
Banana
                                   0.33-0.35
                                 [0.372-0.392]
                                       0
                                 Saflufenacil
                                      22
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                       -

                                    M800H11

                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                       -

                                    M800H35

                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                       -

                                  Combined[3]

                                   <0.03
                                   <0.03
                                   <0.03
                                   <0.03
                                   <0.03
                                       -
Banana
                                   0.33-0.35
                                 [0.372-0.392]
                                       1
                                 Saflufenacil
                                      22
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                       -

                                    M800H11

                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                       -

                                    M800H35

                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                       -

                                  Combined[3]

                                   <0.03
                                   <0.03
                                   <0.03
                                   <0.03
                                   <0.03
                                       -
Banana
                                     0.131
                                    [0.147]
                                      30
                                 Saflufenacil
                                       2
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                       -

                                    M800H11

                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                       -

                                    M800H35

                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                       -

                                  Combined[3]

                                   <0.03
                                   <0.03
                                   <0.03
                                   <0.03
                                   <0.03
                                       -
[1]  For calculation of the HAFT, median, mean, and standard deviation, residue values of <0.01 ppm (<LOQ) were considered to be 0.01 ppm (LOQ).
[2]  HAFT = highest-average field trial.
[3]  Combined residues of saflufenacil (parent + M800H11 + M800H35).

Conclusions:  The submitted residue data are adequate to fulfill data requirements for bananas imported from Central/South America.  Even though all major exporting countries were not represented (Table 6), HED will not require additional data as all residues were <LOQ, even at ~3X exaggerated use rate.  Also, HED generally requires residue data for both bagged and unbagged bananas.  The fruit in these trials were "grown and maintained according to typical agricultural practices for each region," which HED interprets to mean bagged.  As saflufenacil is not applied directly to the plants and there is no evidence of systemic activity in fruit/tree crops, additional data on un-bagged bananas will not be required.  The available data will thus support the proposed use pattern.

TABLE 6.  Trial Numbers and Geographical Locations.
Country
                                    Banana

                                   Submitted
                                 Requested[1]

                                     U.S.
Brazil
                                       4

Columbia
                                       1
                                       2
Costa Rica
                                       2
                                       3
Ecuador
                                       3
                                       3
Guatemala
                                       1
                                       0
Honduras
                                       2
                                       2
Mexico
                                       0
                                       2
Panama
                                       1
                                       0
Total
                                      14
                                      12
[1]  The requested number and geographic distribution of field trials for bananas, according to the NAFTA Guidance Document on Data Requirements for Tolerances on Imported Commodities in the United States and Canada, 12/05.

The residue data for bananas were not entered into the OECD MRL Calculator as all of the residues were <LOQ.  The recommended tolerance for the combined residues of saflufenacil and its metabolites M800H11 and M800H35, expressed as parent equivalents, is 0.03 ppm for banana.

Coffee

DER Reference List	48239804.der.doc
			48239805.der.doc

MRID No. 48239804:  BASF Corporation has submitted field trial data for saflufenacil on coffee.  Three coffee field trials were conducted during the 2008 growing season in Brazil.  Each trial location consisted of one untreated and one treated plot.  Each treated plot received three applications of the 70% WDG formulation of saflufenacil at 0.044 lb ai/A (1X) directed to the base of the plants, with a 4-week RTI, for a total application rate of 0.131 lb ai/A (1X).  The applications were made using ground equipment with 21 GPA spray volumes.  An adjuvant (surfactant, Dash[(R)]) was included in the spray mixture.  Samples of mature coffee beans were harvested at a 7-day PHI.

The results from these trials on coffee show that after three applications of saflufenacil at 0.044 lb ai/A (0.049 kg ai/ha), residues of saflufenacil, M800H11, and M800H35 were below the LOQ (<0.01 ppm each) in coffee samples harvested at a 7-day PHI.  Therefore, the maximum combined residues of saflufenacil and its metabolites was <0.03 ppm.

MRID No. 48239805:  BASF Corporation has submitted field trial data for saflufenacil on coffee.  Five coffee field trials were conducted during the 2008 growing season in Costa Rica (2 trials), Colombia (2 trials), and Mexico (1 trial).  Each trial location consisted of one untreated and one treated plot.  Each treated plot received four applications of the 70% WDG formulation of saflufenacil at 0.087-0.092 lb ai/A (2.0-2.1X) directed to the base of the plants, with 8- to 35-day RTIs, for a total application rate of 0.35-0.36 lb ai/A (2.7X).  The applications were made using ground equipment with 21-22 GPA spray volumes.  An adjuvant (COC) was included in the spray mixture.  Samples of mature coffee beans were harvested at 0-day or 1-day PHIs.

The results from these trials on coffee show that after four applications of saflufenacil (70% WDG) directed to the base of the plants targeting 0.087 lb ai/A/application (0.098 kg ai/ha/application), for a total seasonal rate of 0.35 lb ai/A (0.392 kg ai/ha), maximum saflufenacil, M800H11, and M800H35 residues were <LOQ (<0.01 ppm each) in/on coffee green bean samples harvested at a 0-day PHI (n=10) or 1-day PHI (n=10).  Therefore, the maximum combined residues of saflufenacil and its metabolites was <0.03 ppm at the 0- or 1-day PHI.

TABLE 7.  Summary of Residue Data from Crop Field Trials with Coffee (MRID#s 48239804 and -05).
Commodity
                             Total Rate (lb ai/A)
                                   [g ai/ha]
                                  PHI (days)
                                    Analyte
                            Residue Levels (ppm)[1]

                                       n
                                     Min.
                                     Max.
                                    HAFT[2]
                                    Median
                                     Mean
                                   Std. Dev.
      Proposed Use = 0.131 lb ai/acre Max. Seasonal App. Rate, 7-Day PHI
Coffee, green bean
                                   0.35-0.36
                                   [392-400]
                                       0
                                 Saflufenacil
                                      10
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                       -

                                    M800H11

                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                       -

                                    M800H35

                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                       -

                                  Combined[3]

                                   <0.03
                                   <0.03
                                   <0.03
                                   <0.03
                                   <0.03
                                       -

                                   0.35-0.36
                                   [392-400]
                                       1
                                 Saflufenacil
                                      10
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                       -

                                    M800H11

                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                       -

                                    M800H35

                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                       -

                                  Combined[3]

                                   <0.03
                                   <0.03
                                   <0.03
                                   <0.03
                                   <0.03
                                       -
Coffee, green bean
                                     0.131
                                    [0.147]
                                       7
                                 Saflufenacil
                                       3
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                       -

                                    M800H11

                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                       -

                                    M800H35

                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                       -

                                  Combined[3]

                                   <0.03
                                   <0.03
                                   <0.03
                                   <0.03
                                   <0.03
                                       -
[1]  For calculation of the HAFT, median, mean, and standard deviation, residue values of <0.01 ppm (<LOQ) were considered to be 0.01 ppm (LOQ).
[2]  HAFT = highest-average field trial.
[3]  Combined residues of saflufenacil (parent + M800H11 + M800H35).

Conclusions:  The submitted residue data are adequate to fulfill data requirements for coffee imported from Central/South America.  Even though all major exporting countries were not represented (Table 8), HED will not require additional data as all residues were <LOQ, even at ~3X exaggerated use rate.  The available data will thus support the proposed use pattern.

TABLE 8.  Trial Numbers and Geographical Locations.
Country
                                    Coffee

                                   Submitted
                                 Requested[1]

                                     U.S.
Brazil
                                       3
                                       1
Columbia
                                       2
                                       1
Costa Rica
                                       2
                                       1
Guatemala
                                       0
                                       1
Indonesia
                                       0
                                       1
Mexico
                                       1
                                       1
Vietnam
                                       0
                                       1
Total
                                       8
                                       7
[1]  The requested number and geographic distribution of field trials for coffee, according to the NAFTA Guidance Document on Data Requirements for Tolerances on Imported Commodities in the United States and Canada, 12/05 and import data (http://www.ers.usda.gov/Data/FoodImports/Data/2011/CoffeeT1.xls and http://www.nationmaster.com/graph/eco_tra_wit_us_us_imp_of_gre_cof-trade-us-imports-green-coffee).  All countries (in which the pesticide is marketed or intended to be marketed) must be represented if the amount that they export to North America represents 5% or more of imports of the subject crop into any of the country in which a tolerance is being sought.

The residue data for coffee were not entered into the OECD MRL Calculator as all of the residues were <LOQ.  The recommended tolerance for the combined residues of saflufenacil and its metabolites M800H11 and M800H35, expressed as parent equivalents, is 0.03 ppm for coffee, green bean.

Mango

DER Reference List	48239806.der.doc
			48239807.der.doc

MRID No. 48239806:  BASF Corporation has submitted field trial data for saflufenacil on mango.  Two mango field trials were conducted during the 2008 growing season in Brazil.  Each trial location consisted of one untreated and one treated plot.  Each treated plot received three applications of the 70% WDG formulation of saflufenacil at 0.044 lb ai/A (1X) directed to the base of the trees, with a 10-day RTI, for a total application rate of 0.131 lb ai/A (1X).  The applications were made using ground equipment with 21 GPA spray volumes.  An adjuvant (surfactant, Dash[(R)]) was included in the spray mixture.  Samples of mature mango were harvested at a 14- or 15-day PHI.

The results from these trials on mango show that after three applications of saflufenacil at 0.044 lb ai/A (0.049kg ai/ ha), residues of saflufenacil, M800H11, and M800H35 were below the LOQ (<0.01 ppm each) in mango samples harvested at a 14- or 15-day PHI.  Therefore, the maximum combined residues of saflufenacil and its metabolites was <0.03 ppm.

MRID No. 48239807:  BASF Corporation has submitted field trial data for saflufenacil on mango.  Two mango field trials were conducted during the 2008-2009 growing season in Brazil.  Each trial location consisted of one untreated and one treated plot.  Each treated plot received three applications of the 70% WDG formulation of saflufenacil at 0.044 lb ai/A (1X) directed to the base of the trees, with a 10-day RTI, for a total application rate of 0.131 lb ai/A (1X).  The applications were made using ground equipment with 21 GPA spray volumes.  An adjuvant (surfactant, Dash[(R)]) was included in the spray mixture.  Samples of mature mango were harvested at a 15-day PHI.

The results from these trials on mango show that after three applications of saflufenacil at 0.044 lb ai/A/application (0.049kg ai/ha), residues of saflufenacil, M800H11, and M800H35 were below the LOQ (<0.01 ppm each) in mango samples harvested at a 15-day PHI.  Therefore, the maximum combined residues of saflufenacil and its metabolites was <0.03 ppm.

TABLE 9.  Summary of Residue Data from Crop Field Trials with Mango.
Commodity
                         Total Applic. Rate (lb ai/A)
                                  [kg ai/ha]
                                  PHI (days)
                                    Analyte
                            Residue Levels (ppm)[1]

                                       n
                                     Min.
                                     Max.
                                    HAFT[2]
                                    Median
                                     Mean
                                   Std. Dev.
      Proposed Use = 0.131 lb ai/acre Max. Seasonal App. Rate, 15-Day PHI
Mango
                                     0.131
                                    [0.147]
                                     14-15
                                 Saflufenacil
                                       4
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                       -

                                    M800H11

                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                       -

                                    M800H35

                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                   <0.01
                                       -

                                  Combined[3]

                                   <0.03
                                   <0.03
                                   <0.03
                                   <0.03
                                   <0.03
                                       -
[1]  For calculation of the HAFT, median, mean, and standard deviation, residue values of <0.01 ppm (<LOQ) were considered to be 0.01 ppm (LOQ).
[2]  HAFT = highest-average field trial.
[3]  Combined residues of saflufenacil (parent + M800H11 + M800H35).

Conclusions:  The submitted residue data are adequate to fulfill data requirements for mango imported from Central/South America.  Even though all major exporting countries were not represented (Table 10), HED will not require additional data as all residues were <LOQ.  The available data will thus support the proposed use pattern.

TABLE 10.  Trial Numbers and Geographical Locations.
Country
                                     Mango

                                   Submitted
                                 Requested[1]

                                     U.S.
Brazil
                                       4
                                       1
Ecuador
                                       0
                                       1
Mexico
                                       0
                                       1
Peru
                                       0
                                       1
Total
                                       4
                                       4
[1]  The requested number and geographic distribution of field trials for mango, according to the NAFTA Guidance Document on Data Requirements for Tolerances on Imported Commodities in the United States and Canada, 12/05 and import data (Fruit and Tree Nuts Situation and Outlook Yearbook (USDA, 2008)).  All countries (in which the pesticide is marketed or intended to be marketed) must be represented if the amount that they export to North America represents 5% or more of imports of the subject crop into any of the country in which a tolerance is being sought.

The residue data for mango were not entered into the OECD MRL Calculator as all of the residues were <LOQ.  The recommended tolerance for the combined residues of saflufenacil and its metabolites M800H11 and M800H35, expressed as parent equivalents, is 0.03 ppm for mango.

860.1520 Processed Food and Feed

Coffee

BASF requested a waiver for residue data for saflufenacil in/on coffee processed fractions.  HED has previously reviewed processing studies for saflufenacil when applied postemergence-directed under the leaf canopy at the base of fruit tree crops:  apple (MRID 47128229), orange (MRID 47128228), plum (MRID 47128230), and grape (MRID 47128232).  In all of these studies, the individual residues of saflufenacil and its metabolites M800H11 and M800H35 were <LOQ (i.e., 0.01 ppm for each analyte) in/on unwashed RAC samples of apple, orange, plum and grape after application of saflufenacil at exaggerated rates of 2-5X.  Since quantifiable residues were not found in the whole fruit RAC samples, analysis of the processed commodities were not necessary (except for orange- residues in citrus oil were also <LOQ).  A similar conclusion can be reasonably expected for coffee when saflufenacil is applied postemergence-directed beneath the leaf canopy of coffee plants.  Quantifiable residues were not found in coffee RAC samples (green beans) even after application of saflufenacil at exaggerated rates (~3X); therefore, analysis of coffee processed fractions (roasted beans, instant coffee) is not necessary and separate tolerances for processed fractions are not required.

860.1650 Submittal of Analytical Reference Standards

Analytical standards of saflufenacil (expiration date:  2/1/13), M800H11 (expiration date:  7/1/14), and M800H35 (expiration date:  7/1/14) are currently available in the National Pesticide Standards Repository [source:  personal communication with T. Cole of ACL/BEAD, 6/20/11].

860.1850/860.1900 Confined/Field Accumulation in Rotational Crops

Rotational crop studies are not germane to this petition as coffee, banana, and mango are not rotated with other crops.

860.1550 Proposed Tolerances

A summary of the recommended tolerances for the current petition are listed in Table 11.  The petitioner should submit a revised section F reflecting the corrected commodity definitions.

There are no Canadian or Codex maximum residue limits (MRLs) established for residues of saflufenacil and its metabolites in coffee, banana, and mango commodities.  Harmonization is thus not an issue for this petition.

Table 11.  Tolerance Summary for Saflufenacil.

Commodity
                           Proposed Tolerance (ppm)
                        HED-Recommended Tolerance (ppm)
Correct Commodity Definition/Comments
Coffee, green bean
                                     0.03
                                     0.03

Banana, whole fruit
                                     0.03
                                     0.03
Banana
Mango, fruit
                                     0.03
                                     0.03
Mango

Note to RD:  These tolerances should include a footnote stating "No U.S. registrations as of [date of FR notice]."

Attachments:
International Residue Limit Status (IRLS) sheet.

cc:  G. Kramer (RAB1)
RDI:  RAB1 Chemists (7/13/11)
G.F. Kramer:S10957:PY-S:(703)305-5079:7509P:RAB1IRLS Sheet.

              Saflufenacil (118203; Date of Request: 06/20/2011)
Summary of U.S. and International Tolerances and Maximum Residue Limits
Residue Definition:
U.S.
Canada
Mexico[2]
Codex
40 CFR 180.649:
Plant:  saflufenacil, including its metabolites and degradates, sum of saflufenacil, 2-chloro-5-[3,6-dihydro-3-methyl-2,6-dioxo-4-(trifluoromethyl)-1(2H)-pyrimidinyl]-4-fluoro-N-[[methyl(1-methylethyl)amino]sulfonyl]benzamide, and its metabolites N-[2-chloro-5-(2,6-dioxo-4-(trifluoromethyl)-3,6-dihydro-1(2H)-pyrimidinyl)-4-fluorobenzoyl]-N'-isopropylsulfamide and N-[4-chloro-2-fluoro-5-({[(isopropylamino)sulfonyl]amino}carbonyl)phenyl]urea, calculated as the stoichiometric equivalent of saflufenacil
Livestock:  saflufenacil
2-chloro-5-[3,6-dihydro-3-methyl-2,6-dioxo-4-(trifluoromethyl)-1(2H)-pyrimidinyl]-4-fluoro-N-[[methyl(1-methylethyl)amino]sulfonyl]benzamide, including the metabolites N'-{2-chloro-4-fluoro-5-[1,2,3,6-tetrahydro-2,6-dioxo-4-(trifluoromethyl)pyrimidin-1-yl]benzoyl}-N-isopropyl sulfamide and N-[4-chloro-2-fluoro-5-({[(isopropylamino)sulfonyl] amino}carbonyl)phenyl]urea

Livestock: 2-chloro-5-[3,6-dihydro-3-methyl-2,6-dioxo-4-(trifluoromethyl)-1(2H)-pyrimidinyl]-4-fluoro-N-[[methyl(1-methylethyl)amino]sulfonyl]benzamide

None
Commodity[1]
Tolerance (ppm)/Maximum Residue Limit (mg/kg)

                                     U.S.
                                    Canada
                                   Mexico[2]
                                     Codex
Coffee, green bean
                                     0.03

Banana, whole fruit
                                     0.03

Mango, fruit
                                     0.03

Completed:  M. Negussie; 06/21/2011
[1] Includes only commodities of interest for this action.  Tolerance values should be the HED recommendations and not those proposed by the applicant.
2 Mexico adopts U.S. tolerances and/or Codex MRLs for its export purposes.


[Federal Register: January 9, 2006 (Volume 71, Number 5)]
[Notices]
[Page 1418-1419]
[DOCID:fr09ja06-23]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. EL06-27-000]

The Goldman Sachs Group, Inc.; Notice of Filing

December 20, 2005.
    Take notice that on December 12, 2005, The Goldman Sachs Group,
Inc. (GS Group) tendered for filing a Petition

for Declaratory Order stating that section 203 of the Federal Power
Act, as amended, will not apply to certain acquisitions of utility and
holding company securities. GS Group further states that accompanying
this filing is an Application for Blanket Authorization to Acquire
Utility and/or Holding Company Securities, pursuant to, amended section
203(a)(2) of the Federal Power Act, but that the Commission need not
act on this latter Application if the Commission grants the declaratory
relief.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211, 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed on or before the comment date.
Anyone filing a motion to intervene or protest must serve a copy of
that document on the Applicant and all the parties in this proceeding.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://www.ferc.gov.
 Persons unable to file electronically should submit an

original and 14 copies of the protest or intervention to the Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, DC
20426.
    This filing is accessible on-line at http://www.ferc.gov, using the

``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive e-mail
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For

TTY, call<PHONE_NUMBER>.
    Comment Date: 5 pm Eastern Time on January 11, 2006.

Magalie R. Salas,
Secretary.
 [FR Doc. E6-49 Filed 1-6-06; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 84, Number 159 (Friday, August 16, 2019)]
[Notices]
[Pages 42030-42035]
[FR Doc No: 2019-17593]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86636; File No. SR-NYSEArca-2018-98]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Amendment No. 4 and Order Granting Accelerated Approval of a
Proposed Rule Change, as Modified by Amendment No. 4, To List and Trade
Shares of the iShares Commodity Multi-Strategy ETF Under NYSE Arca Rule
8.600-E

August 12, 2019.

I. Introduction

    On December 21, 2018, NYSE Arca, Inc. (``Exchange'' or ``NYSE
Arca'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to list and trade shares (``Shares'') of the
iShares Commodity Multi-Strategy ETF (``Fund'') under NYSE Arca Rule
8.600-E. On February 1, 2019, pursuant to Section 19(b)(1) of the
Act,\3\ the Commission noticed the proposed rule change and, pursuant
to Section 19(b)(2) of the Act,\4\ designated a longer period within
which to approve the proposed rule change, disapprove the proposed rule
change, or institute proceedings to determine whether to approve or
disapprove the proposed rule change.\5\ On March 6, 2019, the Exchange
filed Amendment No. 1 to the proposed rule change, which replaced and
superseded the proposed rule change as originally filed, and on March
14, 2019, the Exchange filed Amendment No. 2 to the proposed rule
change, which replaced and superseded the proposed rule change, as
modified by Amendment No. 1. On March 20, 2019, the Commission noticed
the proposed rule change, as modified by Amendment No. 2, and
instituted proceedings under Section 19(b)(2)(B) of the Act \6\ to
determine whether to approve or disapprove the proposed rule change, as
modified by Amendment No. 2.\7\ On March 29, 2019, the Exchange filed
Amendment No. 3 to the proposed rule change, which replaced and
superseded the proposed rule change, as modified by Amendment No. 2. On
June 13, 2019, the Commission designated a longer period for Commission
action on the proceedings to determine whether to approve or disapprove
the proposed rule change.\8\ On August 8, 2019, the Exchange filed
Amendment No. 4 to the proposed rule change, which replaced and
superseded the proposed rule change, as modified by Amendment No. 3.\9\
The Commission has received no comment letters on the proposal.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(1).
    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 85033, 84 FR 2618
(February 7, 2019). The Commission designated March 21, 2019, as the
date by which the Commission would approve the proposed rule change,
disapprove the proposed rule change, or institute proceedings to
determine whether to approve or disapprove the proposed rule change.
    \6\ 15 U.S.C. 78s(b)(2)(B).
    \7\ See Securities Exchange Act Release No. 85375, 84 FR 11375
(March 26, 2019) (``Order Instituting Proceedings'').
    \8\ See Securities Exchange Act Release No. 86104, 84 FR 28602
(June 19, 2019). The Commission extended the date by which the
Commission shall approve or disapprove the proposed rule change to
August 18, 2019.
    \9\ In Amendment No. 4, the Exchange: (1) Modified the
description of the commodity futures included in the Reference
Benchmark (as defined below); (2) modified the types of reference
assets for the derivative instruments in which the Fund may invest;
(3) clarified that the Fund may invest in Short-Term Fixed Income
Securities (as defined below) other than cash equivalents on an
ongoing basis for cash management purposes only; (4) modified the
instruments included in the Short-Term Fixed Income Securities that
the Fund may invest in for cash management purposes (and which would
be excluded from the requirements of Commentary .01(b)(1)-(4) to
NYSE Arca Rule 8.600-E); (5) represented that the Fund's holdings in
non-convertible corporate debt securities will not exceed 30% of the
weight of Fund's holdings in cash equivalents and Short-Term Fixed
Income Securities, collectively; (6) specified that all exchange-
traded notes (``ETNs'') which the Fund may hold will be listed and
traded in the U.S. on a national securities exchange and the Fund
will not invest in inverse or leveraged ETNs; (7) amended
representations relating to the Fund's holdings in OTC Derivatives
(as defined below) to, among other things, (a) add a representation
that the Fund's holdings in OTC Derivatives will comply with the
requirements of Commentary .01(f) to NYSE Arca Rule 8.600-E; and (b)
remove a representation that the aggregate gross notional value of
OTC Derivatives based on any five or fewer underlying reference
assets will not exceed 65% of the weight of the portfolio (including
gross notional exposures), and the aggregate gross notional value of
OTC Derivatives based on any single underlying reference asset will
not exceed 30% of the weight of the portfolio (including gross
notional exposures); (8) added a representation by the Adviser that
futures on all commodities in the Reference Benchmark are traded on
futures exchanges that are members of the Intermarket Surveillance
Group (``ISG'') or with which the Exchange has in place a
comprehensive surveillance sharing agreement (``CSSA''); (9)
specified that quotation and last sale information for exchange-
traded funds (``ETFs'') and ETNs that the Fund may hold will be
available via the Consolidated Tape Association (``CTA'') high-speed
line; and (10) made other technical and conforming changes.
Amendment No. 4 is available at: https://www.sec.gov/comments/sr-nysearca-2018-98/srnysearca201898-5945207-189091.pdf.
---------------------------------------------------------------------------

    The Commission is publishing this notice and order to solicit
comments on the proposed rule change, as modified by Amendment No. 4,
from interested persons and is approving the proposed rule change, as
modified by Amendment No. 4, on an accelerated basis.

II. Summary of the Exchange's Description of the Proposal, as Modified
by Amendment No. 4 10
---------------------------------------------------------------------------

    \10\ For a complete description of the Exchange's proposal, as
amended, see Amendment No. 4, supra note 9.
---------------------------------------------------------------------------

    The Exchange proposes to list and trade Shares of the Fund under
NYSE Arca Rule 8.600-E, which governs the listing and trading of
Managed Fund Shares on the Exchange. The Shares will be offered by
iShares U.S. ETF Trust (``Trust''), which is registered with the
Commission as an open-end management investment company.\11\ The Fund
is a series of the Trust.
---------------------------------------------------------------------------

    \11\ According to the Exchange, on December 3, 2018, the Trust
filed with the Commission its registration statement on Form N-1A
under the Securities Act of 1933 and under the Investment Company
Act of 1940 (``1940 Act'') relating to the Fund (File Nos. 333-
179904 and 811-22649) (``Registration Statement''). In addition, the
Exchange states that the Commission has issued an order upon which
the Trust may rely, granting certain exemptive relief under the 1940
Act. See Investment Company Act Release No. 29571 (January 24, 2011)
(File No. 812-13601).
---------------------------------------------------------------------------

    BlackRock Fund Advisors (``Adviser'') will be the investment
adviser for the Fund.\12\ BlackRock Investments, LLC will be the
distributor for the Fund's Shares. State Street Bank and Trust Company
will serve as the administrator, custodian and transfer agent for the
Fund.
---------------------------------------------------------------------------

    \12\ According to the Exchange, the Adviser is not registered as
a broker-dealer but is affiliated with a broker-dealer and has
implemented and will maintain a fire wall with respect to its
broker-dealer affiliate regarding access to information concerning
the composition and/or changes to the portfolio. In the event (a)
the Adviser becomes registered as a broker-dealer or newly
affiliated with a broker-dealer, or (b) any new adviser or sub-
adviser is a registered broker-dealer or becomes affiliated with a
broker-dealer, it will implement and maintain a fire wall with
respect to its relevant personnel or its broker-dealer affiliate
regarding access to information concerning the composition and/or
changes to the portfolio, and will be subject to procedures designed
to prevent the use and dissemination of material non-public
information regarding such portfolio. The Exchange also represents
that the Adviser and its related personnel are subject to the
provisions of Rule 204A-1 under the Investment Advisers Act of 1940
relating to codes of ethics.
---------------------------------------------------------------------------

A. Fund Investments

    According to the Exchange, the investment objective of the Fund
will be to seek to provide exposure, on a total

return basis, to a group of commodities with characteristics of carry,
momentum, and value. The Fund is actively managed and seeks to achieve
its investment objective in part \13\ by, under normal market
conditions,\14\ investing in listed and over-the-counter (``OTC'')
total return swaps referencing the ICE BofAML Commodity Multi-Factor
Total Return Index (``Reference Benchmark'').\15\ In connection with
investments in swaps on the Reference Benchmark, the Fund is expected
to establish new swaps contracts on an ongoing basis and replace
expiring contracts.\16\ Swaps subsequently entered into by the Fund may
have terms that differ from the swaps the Fund previously held. The
Fund expects generally to pay a fixed payment rate and certain swap
related fees to the swap counterparty and receive the total return of
the Reference Benchmark, including, in the event of negative
performance by the Reference Benchmark, negative return (i.e., a
payment from the Fund to the swap counterparty). In seeking total
return, the Fund additionally aims to generate interest income and
capital appreciation through a cash management strategy consisting
primarily of cash, cash equivalents,\17\ and fixed income securities
other than cash equivalents, as described below.
---------------------------------------------------------------------------

    \13\ The Fund's investment objective is also achieved by
investing in cash, cash equivalents, Commodity Investments, Fixed
Income Securities and Short-Term Fixed Income Securities (each as
defined or described below).
    \14\ The term ``normal market conditions'' is defined in NYSE
Arca Rule 8.600-E(c)(5).
    \15\ Although the Fund may hold swaps on the Reference
Benchmark, or direct investments in the same futures contracts as
those included in the Reference Benchmark, the Fund is not obligated
to invest in any futures contracts included in, and does not seek to
replicate the performance of, the Reference Benchmark.
    \16\ Swaps on the Reference Benchmark are included in
``Commodity Investments'' as defined below.
    \17\ Cash equivalents are the short-term instruments enumerated
in Commentary .01(c) to NYSE Arca Rule 8.600-E.
---------------------------------------------------------------------------

    The Fund intends to follow a multifactor strategy reflected by the
Reference Benchmark, which Reference Benchmark equally weights three
sub-indices designed to provide exposure to carry, momentum, and value
factors. The Fund will invest in financial instruments described below
that provide exposure to commodities and not in the physical
commodities themselves. The ``carry'' sub-index emphasizes commodities
and contract months with the greatest degree of backwardation or lowest
degree of contango.\18\ Second, the ``momentum'' sub-index underweights
or overweights commodities based on the strength of performance
patterns over multiple time periods. Third, the ``value'' sub-index
measures value for each commodity by the ratio of its 3-month average
spot price to its 5-year average. Sector weights are held constant
versus a broad non-factor weighted commodity index, but within each
sector, weights of individual commodities are tilted to favor those
with the lowest valuation ratio. Within each sub-index, contract months
are selected to maximize backwardation and minimize contango.
---------------------------------------------------------------------------

    \18\ According to the Exchange, in order to maintain exposure to
a futures contract on a particular commodity, an investor must sell
the position in the expiring contract and buy a new position in a
contract with a later delivery month, which is referred to as
``rolling.'' If the price for the new futures contract is less than
the price of the expiring contract, then the market for the
commodity is said to be in ``backwardation.'' In these markets, roll
returns are positive, which is referred to as ``positive carry.''
The term ``contango'' is used to describe a market in which the
price for a new futures contract is more than the price of the
expiring contract. In these markets, roll returns are negative,
which is referred to as ``negative carry.'' The ``carry'' sub-index
seeks to employ a positive carry strategy that emphasizes
commodities and futures contract months with the greatest degree of
backwardation and lowest degree of contango, resulting in net gains
through positive roll returns.
---------------------------------------------------------------------------

    The Fund expects to obtain a substantial amount of its exposure to
the carry, momentum, and value strategies by entering into total return
swaps that pay the returns of the commodity futures contracts
referenced in the Reference Benchmark. The Reference Benchmark includes
20 futures contracts on physical agricultural, energy, livestock,
precious metals, and industrial metals listed on U.S. regulated futures
exchanges or non-U.S. futures exchanges with which the Exchange has in
place a CSSA.\19\
---------------------------------------------------------------------------

    \19\ The commodity futures included in the Reference Benchmark
are traded on the CME Group, ICE U.S., ICE Europe, Inc. and the
London Metal Exchange (``LME''). ICE U.S., ICE Europe, Inc., and CME
are members of the ISG. The Exchange represents that it has in place
a CSSA with the LME.
---------------------------------------------------------------------------

    The Fund (through its Subsidiary (as defined below)) may hold the
following listed derivative instruments: Futures, options, and swaps on
the Reference Benchmark or commodities (which commodities are from the
same sectors as those included in the Reference Benchmark); currencies;
U.S. and non-U.S. equity securities; fixed income securities (as
defined in Commentary .01(b) to NYSE Arca Rule 8.600-E, but excluding
Short-Term Fixed Income Securities (as defined below)); and interest
rates; or a basket or index of any of the foregoing (collectively,
``Listed Derivatives'').\20\ Listed Derivatives will comply with the
criteria in Commentary .01(d) of NYSE Arca Rule 8.600-E.
---------------------------------------------------------------------------

    \20\ Examples of Listed Derivatives the Fund may invest in
include: Exchange traded futures contracts similar to those found in
the Reference Benchmark, exchange traded futures contracts on the
Reference Benchmark, swaps on commodity futures contracts similar to
those found in the Reference Benchmark, and futures and options that
correlate to the investment returns of commodities without investing
directly in physical commodities.
---------------------------------------------------------------------------

    The Fund (through its Subsidiary) may hold the following OTC
derivative instruments: Forwards, options, and swaps on the Reference
Benchmark or commodities (which commodities are from the same sectors
as those included in the Reference Benchmark); currencies; U.S. and
non-U.S. equity securities; fixed income securities (as defined in
Commentary .01(b) to NYSE Arca Rule 8.600-E, but excluding Short-Term
Fixed Income Securities); and interest rates; or a basket or index of
any of the foregoing (collectively, ``OTC Derivatives,'' \21\ and
together with Listed Derivatives, ``Commodity Investments'').\22\
---------------------------------------------------------------------------

    \21\ As discussed below under ``Application of Generic Listing
Requirements,'' the Fund's and the Subsidiary's holdings in OTC
Derivatives will not comply with the criteria in Commentary .01(e)
of NYSE Arca Rule 8.600-E.
    \22\ Examples of OTC Derivatives the Fund may invest in include
swaps on commodity futures contracts similar to those found in the
Reference Benchmark and options that correlate to the investment
returns of commodities without investing directly in physical
commodities.
---------------------------------------------------------------------------

    The Fund may hold cash, cash equivalents, and fixed income
securities other than cash equivalents, as described further below.
    Specifically, the Fund may invest in Short-Term Fixed Income
Securities (as defined below) other than cash equivalents on an ongoing
basis for cash management purposes.\23\ Short-Term Fixed Income
Securities will have a maturity of no longer than 397 days and include
only the following: (i) Money market instruments; (ii) obligations
issued or guaranteed by the U.S. government, its agencies or
instrumentalities (including government-sponsored enterprises); (iii)
negotiable certificates of deposit, bankers' acceptances, fixed-time
deposits and other obligations of U.S. and non-U.S. banks (including
non-U.S. branches) and similar institutions; (iv) commercial paper; (v)
non-convertible corporate debt securities (e.g., bonds and debentures);
(vi) repurchase agreements; and (vii) sovereign debt obligations of
non-U.S. countries excluding emerging market countries \24\

(``Non-U.S. Sovereign Debt'') (collectively, ``Short-Term Fixed Income
Securities''). Any of these securities may be purchased on a current or
forward-settled basis.\25\
---------------------------------------------------------------------------

    \23\ As discussed under ``Application of Generic Listing
Requirements'' below, investments in Short-Term Fixed Income
Securities will not comply with the requirements of Commentary
.01(b)(1)-(4) to NYSE Arca Rule 8.600-E.
    \24\ According to the Exchange, an ``emerging market country''
is a country that, at the time the Fund invests in the related fixed
income instruments, is classified as an emerging or developing
economy by any supranational organization such as the International
Bank of Reconstruction and Development or any affiliate thereof (the
``World Bank'') or the United Nations, or related entities, or is
considered an emerging market country for purposes of constructing a
major emerging market securities index.
    \25\ To the extent that the Fund and the Subsidiary invest in
cash and Short-Term Fixed Income Securities that are cash
equivalents (i.e., that have maturities of less than 3 months) as
specified in Commentary .01(c) to NYSE Arca Rule 8.600-E, such
investments will comply with Commentary .01(c) and may be held
without limitation. Non-convertible corporate debt securities and
Non-U.S. Sovereign Debt are not included as cash equivalents in
Commentary .01(c).
---------------------------------------------------------------------------

    The Fund also may invest in fixed income securities as defined in
Commentary .01(b) to NYSE Arca Rule 8.600-E,\26\ other than cash
equivalents and Short-Term Fixed Income Securities, with remaining
maturities longer than 397 days (``Fixed Income Securities''). Such
Fixed Income Securities will comply with requirements of Commentary
.01(b) to NYSE Arca Rule 8.600-E.\27\
---------------------------------------------------------------------------

    \26\ Commentary .01(b) to NYSE Arca Rule 8.600-E defines fixed
income securities as debt securities that are notes, bonds,
debentures or evidence of indebtedness that include, but are not
limited to, U.S. Department of Treasury securities (``Treasury
Securities''), government-sponsored entity securities (``GSEs''),
municipal securities, trust preferred securities, supranational debt
and debt of a foreign country or a subdivision thereof, investment
grade and high yield corporate debt, bank loans, mortgage and asset
backed securities, and commercial paper.
    \27\ Among the Fixed Income Securities in which the Fund may
invest are commodity-linked notes.
---------------------------------------------------------------------------

    The Fund may also hold ETNs \28\ and ETFs.\29\
---------------------------------------------------------------------------

    \28\ ETNs are securities as described in NYSE Arca Rule 5.2-
E(j)(6) (Equity Index-Linked Securities, Commodity-Linked
Securities, Currency-Linked Securities, Fixed Income Index-Linked
Securities, Futures-Linked Securities and Multifactor Index-Linked
Securities). All ETNs will be listed and traded in the U.S. on a
national securities exchange. The Fund will not invest in inverse or
leveraged (e.g., 2X, -2X, 3X or -3X) ETNs.
    \29\ For purposes of the filing, the term ``ETFs'' includes
Investment Company Units (as described in NYSE Arca Rule 5.2-
E(j)(3)); Portfolio Depositary Receipts (as described in NYSE Arca
Rule 8.100-E); and Managed Fund Shares (as described in NYSE Arca
Rule 8.600-E). All ETFs will be listed and traded in the U.S. on a
national securities exchange. The Fund will not invest in inverse or
leveraged (e.g., 2X, -2X, 3X or -3X) ETFs.
---------------------------------------------------------------------------

    The Fund's exposure to Commodity Investments is obtained by
investing through a wholly-owned subsidiary organized in the Cayman
Islands (``Subsidiary'').\30\ The Fund controls the Subsidiary, and the
Subsidiary is advised by the Adviser and has the same investment
objective as the Fund. In compliance with the requirements of Sub-
Chapter M of the Internal Revenue Code of 1986, the Fund may invest up
to 25% of its total assets in the Subsidiary. The Subsidiary is not an
investment company registered under the 1940 Act and is a company
organized under the laws of the Cayman Islands. The Trust's Board of
Trustees (``Board'') has oversight responsibility for the investment
activities of the Fund, including its investment in the Subsidiary, and
the Fund's role as sole shareholder of the Subsidiary.
---------------------------------------------------------------------------

    \30\ The Exchange represents that all statements related to the
Fund's investments and restrictions are applicable to the Fund and
Subsidiary collectively.
---------------------------------------------------------------------------

    The Fund's Commodity Investments held in the Subsidiary are
intended to provide the Fund with exposure to broad commodities. The
Subsidiary may hold cash and cash equivalents.

B. Investment Restrictions

    The Fund and the Subsidiary will not invest in securities or other
financial instruments that have not been described in the proposed rule
change.
    The Fund's holdings in non-convertible corporate debt securities
shall not exceed 30% of the weight of Fund's holdings in cash
equivalents and Short-Term Fixed Income Securities, collectively.
    The Fund's investments, including derivatives, will be consistent
with the Fund's investment objective and will not be used to enhance
leverage (although certain derivatives and other investments may result
in leverage). That is, the Fund's investments will not be used to seek
performance that is the multiple or inverse multiple (e.g., 2X or -3X)
of the Fund's Reference Benchmark.

C. Use of Derivatives by the Fund

    Investments in derivative instruments will be made in accordance
with the Fund's investment objective and policies. To limit the
potential risk associated with such transactions, the Fund will enter
into offsetting transactions or segregate or ``earmark'' assets
determined to be liquid by the Adviser in accordance with procedures
established by the Board). In addition, the Fund has included
appropriate risk disclosure in its offering documents, including
leveraging risk. Leveraging risk is the risk that certain transactions
of the Fund, including the Fund's use of derivatives, may give rise to
leverage, causing the Fund to be more volatile than if it had not been
leveraged.
    The Adviser believes there will be minimal, if any, impact to the
arbitrage mechanism as a result of the Fund's use of derivatives. The
Adviser understands that market makers and participants should be able
to value derivatives as long as the positions are disclosed with
relevant information. The Adviser believes that the price at which
Shares of the Fund trade will continue to be disciplined by arbitrage
opportunities created by the ability to purchase or redeem Shares of
the Fund at their net asset value (``NAV''), which should ensure that
Shares of the Fund will not trade at a material discount or premium in
relation to their NAV.
    The Exchange states that the Adviser does not believe there will be
any significant impacts to the settlement or operational aspects of the
Fund's arbitrage mechanism due to the use of derivatives.

D. Application of Generic Listing Requirements

    The Exchange represents that the portfolio for the Fund will not
meet all of the ``generic'' listing requirements of Commentary .01 to
NYSE Arca Rule 8.600-E applicable to the listing of Managed Fund
Shares. The Exchange represents that, other than Commentary .01(b)(1)-
(4) (with respect to Short-Term Fixed Income Securities) and .01(e)
(with respect to OTC Derivatives) to NYSE Arca Rule 8.600-E, as
described below, the Fund's portfolio will meet all other requirements
of NYSE Arca Rule 8.600-E.\31\
---------------------------------------------------------------------------

    \31\ The Exchange states that the Adviser represents, in
particular, that the Fund's holdings in OTC Derivatives will comply
with the requirements of Commentary .01(f) to NYSE Arca Rule 8.600-
E, which provides, in part, that to the extent that OTC derivatives
are used to gain exposure to individual equities and/or fixed income
securities, or to indexes of equities and/or indexes of fixed income
securities, the aggregate gross notional value of such exposure will
meet the generic listing criteria applicable to equities and fixed
income securities (including gross notional exposures) set forth in
Commentary .01(a) and .01(b) to NYSE Arca Rule 8.600-E,
respectively.
---------------------------------------------------------------------------

    According to the Exchange, the Fund's investments in Short-Term
Fixed Income Securities will not comply with the requirements set forth
in Commentary .01(b)(1)-(4) to NYSE Arca Rule 8.600-E.\32\ The Exchange
states

that while the requirements set forth in Commentary .01(b)(1)-(4)
include rules intended to ensure that the fixed income securities
included in a fund's portfolio are sufficiently large and diverse, and
have sufficient publicly available information regarding the issuances,
the Exchange believes that any concerns, regarding non-compliance are
mitigated by the types of instruments that the Fund would hold. The
Exchange represents that the Fund's Short-Term Fixed Income Securities
primarily would include those instruments that are included in the
definition of cash and cash equivalents,\33\ but are not considered
cash and cash equivalents because they have maturities of three months
or longer. The Exchange believes, however, that, all Short-Term Fixed
Income Securities, including non-convertible corporate debt securities
\34\ and Non-U.S. Sovereign Debt (which are not cash equivalents as
enumerated in Commentary .01(c) to NYSE Arca Rule 8.600-E), are less
susceptible than other types of fixed income instruments both to price
manipulation and volatility and that the holdings as proposed are
generally consistent with the policy concerns which Commentary
.01(b)(1)-(4) is intended to address. Because the Short-Term Fixed
Income Securities will consist of high-quality fixed income securities
described above, the Exchange believes that the policy concerns that
Commentary .01(b)(1)-(4) are intended to address are otherwise
mitigated and that the Fund should be permitted to hold these
securities in a manner that may not comply with Commentary .01(b)(1)-
(4).
---------------------------------------------------------------------------

    \32\ Commentary .01(b)(1)-(4) to NYSE Arca Rule 8.600-E requires
that the components of the fixed income portion of a portfolio meet
the following criteria initially and on a continuing basis: (1)
Components that in the aggregate account for at least 75% of the
fixed income weight of the portfolio each shall have a minimum
original principal amount outstanding of $100 million or more; (2)
no component fixed-income security (excluding Treasury Securities
and GSEs) shall represent more than 30% of the fixed income weight
of the portfolio, and the five most heavily weighted component fixed
income securities in the portfolio (excluding Treasury Securities
and GSEs) shall not in the aggregate account for more than 65% of
the fixed income weight of the portfolio; (3) an underlying
portfolio (excluding exempted securities) that includes fixed income
securities shall include a minimum of 13 non-affiliated issuers,
provided, however, that there shall be no minimum number of non-
affiliated issuers required for fixed income securities if at least
70% of the weight of the portfolio consists of equity securities as
described in Commentary .01(a); and (4) component securities that in
aggregate account for at least 90% of the fixed income weight of the
portfolio must be either (a) from issuers that are required to file
reports pursuant to Sections 13 and 15(d) of the Act; (b) from
issuers that have a worldwide market value of its outstanding common
equity held by non-affiliates of $700 million or more; (c) from
issuers that have outstanding securities that are notes, bonds
debentures, or evidence of indebtedness having a total remaining
principal amount of at least $1 billion; (d) exempted securities as
defined in Section 3(a)(12) of the Act; or (e) from issuers that are
a government of a foreign country or a political subdivision of a
foreign country.
    \33\ See supra note 17.
    \34\ The Exchange notes that the Fund's holdings in non-
convertible corporate debt securities will not exceed 30% of the
weight of the Fund's holdings in cash equivalents and Short-Term
Fixed Income Securities, collectively.
---------------------------------------------------------------------------

    The Exchange represents that the Fund's portfolio with respect to
OTC Derivatives will not comply with the requirements set forth in
Commentary .01(e) to NYSE Arca Rule 8.600-E.\35\ Specifically, the
Exchange states that up to 60% of the Fund's assets (calculated as the
aggregate gross notional value) may be invested in OTC Derivatives. The
Exchange states that the Adviser believes that it is important to
provide the Fund with additional flexibility to manage risk associated
with its investments and, depending on market conditions, it may be
critical that the Fund be able to utilize available OTC Derivatives to
efficiently gain exposure to the multiple commodities that underlie the
Reference Benchmark, as well as commodity futures contracts similar to
those found in the Reference Benchmark. The Exchange states that OTC
Derivatives can be tailored to provide specific exposure to the Fund's
Reference Benchmark, as well as commodity futures contracts similar to
those found in the Reference Benchmark, allowing the Fund to more
efficiently meet its investment objective.\36\ The Exchange further
states that if the Fund were to gain commodity exposure exclusively
through the use of listed futures, the Fund's holdings in Listed
Derivatives would be subject to position limits and accountability
levels established by an exchange, and such limitations would restrict
the Fund's ability to gain efficient exposure to the commodities in the
Reference Benchmark, or futures contracts similar to those found in the
Reference Benchmark, thereby impeding the Fund's ability to satisfy its
investment objective.
---------------------------------------------------------------------------

    \35\ Commentary .01(e) to NYSE Arca Rule 8.600-E provides that,
on an initial and continuing basis, no more than 20% of the assets
in the portfolio may be invested in OTC derivatives (calculated as
the aggregate gross notional value of the OTC derivatives).
    \36\ As an example, the Exchange states that the Reference
Benchmark is composed of 20 futures contracts across 20 physical
commodities, which may not be sufficiently liquid and would not
provide the commodity exposure the Fund requires to meet its
investment objective if the Fund were to invest in the futures
directly. The Exchange states that a total return swap can be
structured to provide exposure to the same futures contracts as
exist in the Reference Benchmark, as well as commodity futures
contracts similar to those found in the Reference Benchmark, while
providing sufficient efficiency to allow the Fund to more easily
meet its investment objective.
---------------------------------------------------------------------------

    The Exchange represents that the Adviser and its affiliates
actively monitor counterparty credit risk exposure (including for OTC
derivatives) and evaluate counterparty credit quality on a continuous
basis. With respect to the Fund's (and the Subsidiary's) investments in
derivatives on the Reference Benchmark or commodities (which
commodities are from the same sectors as those included in the
Reference Benchmark), the Exchange states that the Reference Benchmark
provides broad-based exposure to commodities as an asset class, as it
includes at least 20 futures contracts on physical agricultural,
energy, livestock, precious metals, and industrial metals. In addition,
the Exchange states that the Adviser represents that futures on all
commodities in the Reference Benchmark are traded on futures exchanges
that are members of the ISG or with which the Exchange has in place a
CSSA.

III. Discussion and Commission's Findings

    After careful review, the Commission finds that the proposed rule
change, as modified by Amendment No. 4, is consistent with the Act and
the rules and regulations thereunder applicable to a national
securities exchange.\37\ In particular, the Commission finds that the
proposed rule change, as modified by Amendment No. 4, is consistent
with Section 6(b)(5) of the Act,\38\ which requires, among other
things, that the Exchange's rules be designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to remove impediments to and perfect the mechanism
of a free and open market and a national market system, and, in
general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \37\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \38\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    According to the Exchange, other than Commentary .01(b)(1)-(4) with
respect to Short-Term Fixed Income Securities and Commentary .01(e),
the Fund's portfolio will meet all other requirements of Commentary .01
to NYSE Arca Rule 8.600-E, and the Shares of the Fund will conform to
the initial and continued listing criteria under NYSE Arca Rule 8.600-
E.
    The Fund's investments in Short-Term Fixed Income Securities will
not meet the requirements for fixed income securities set forth in
Commentary .01(b)(1)-(4) to NYSE Arca Rule 8.600-E.\39\ The Commission,
however, believes that the limited nature of the Fund's investment in,
and certain restrictions on, the Short Term Fixed Income Securities
helps to mitigate concerns regarding the Shares being susceptible to
manipulation because of the Fund's investment in the Short Term Fixed

Income Securities.\40\ Specifically, the Exchange states that Short-
Term Fixed Income Securities primarily will include instruments that
are included in the definition of cash equivalents,\41\ but are not
considered cash equivalents because they have maturities of three
months or longer. As proposed, the Fund's investments in Short-Term
Fixed Income Securities will also include non-convertible corporate
debt securities, but such holdings would be limited to 30% of the
weight of Fund's holdings in cash equivalents and Short-Term Fixed
Income Securities, collectively. In addition, the Fund's investments in
Short-Term Fixed Income Securities would include sovereign debt, but
they exclude sovereign debt obligations of emerging market countries.
Further, the Fund will invest in Short Term Fixed Income Securities for
cash management purposes only, and the Short Term Fixed Income
Securities in which the Fund may invest will have maturities of no
longer than 397 days.\42\
---------------------------------------------------------------------------

    \39\ See supra note 32.
    \40\ The Commission notes that all the fixed income securities
the Fund may invest in other than those included in Short-Term Fixed
Income Securities and cash equivalents will comply with the
requirements of Commentary .01(b) to NYSE Arca Rule 8.600-E, and the
cash equivalents the Fund may invest in will comply with the
requirements of Commentary .01(c). See supra Section II.A.
    \41\ See supra note 17.
    \42\ See supra Section II.A.
---------------------------------------------------------------------------

    In addition, the Fund's investments in OTC Derivatives will not
comply with Commentary .01(e) to NYSE Arca Rule 8.600-E, which requires
that no more than 20% of the assets of the Fund be invested in OTC
derivatives (calculated as the aggregate gross notional value of such
OTC derivatives). In the alternative, the Exchange proposes that up to
60% of the Fund's assets (calculated as the aggregate gross notional
value) may be invested in OTC Derivatives.\43\ The Exchange states that
it may be necessary for the Fund to utilize OTC Derivatives in order to
more efficiently hedge its portfolio or to meet its investment
objective.\44\
---------------------------------------------------------------------------

    \43\ The Exchange represents that the Adviser and its affiliates
actively monitor counterparty credit risk exposure for OTC
derivatives and evaluate counterparty credit quality on a continuous
basis. See supra Section II.D. Moreover, the Exchange states that
investments in derivative instruments will be made in accordance
with the Fund's investment objective and policies. To limit the
potential risk associated with such transactions, the Fund will
enter into offsetting transactions or segregate or ``earmark''
assets determined to be liquid by the Adviser in accordance with
procedures established by the Trust's Board of Trustees. In
addition, the Fund has included appropriate risk disclosure in its
offering documents, including leveraging risk. See supra Section II.
C.
    \44\ See supra Section II.D.
---------------------------------------------------------------------------

    The Commission, however, believes that certain factors help to
mitigate concerns that the Fund's investment in OTC Derivatives will
make the Shares more susceptible to manipulation. Specifically, with
respect to OTC Derivatives on the Reference Benchmark (or on the
commodities underlying the futures contracts included in the Reference
Benchmark), the Exchange represents that the Reference Benchmark
includes at least 20 futures contracts on physical agricultural,
energy, livestock, precious metals, and industrial metals, and that
futures on all of the commodities in the Reference Benchmark are traded
on futures exchanges that are members of the ISG or with which the
Exchange has in place a CSSA. Moreover, on a daily basis, the Fund will
be required to disclose on its website the information regarding the
Disclosed Portfolio required under NYSE Arca Rule 8.600-E(c)(2), to the
extent applicable,\45\ and the website information will be publicly
available at no charge.\46\
---------------------------------------------------------------------------

    \45\ NYSE Arca Rule 8.600-E(c)(2) requires that the website for
each series of Managed Fund Shares disclose the following
information regarding the Disclosed Portfolio, to the extent
applicable: (A) Ticker symbol; (B) CUSIP or other identifier; (C)
description of the holding; (D) with respect to holdings in
derivatives, the identity of the security, commodity, index or other
asset upon which the derivative is based; (E) the strike price for
any options; (F) the quantity of each security or other asset held
as measured by (i) par value, (ii) notional value, (iii) number of
shares, (iv) number of contracts, and (v) number of units; (G)
maturity date; (H) coupon rate; (I) effective date; (J) market
value; and (K) percentage weighting of the holding in the portfolio.
    \46\ See Amendment No. 4, supra note 9, at 17.
---------------------------------------------------------------------------

    The Exchange represents that all statements and representations
made in the filing regarding: (1) The description of the portfolio
holdings or reference assets; (2) limitations on portfolio holdings or
reference assets; or (3) the applicability of Exchange listing rules
specified in the rule filing constitute continued listing requirements
for listing the Shares on the Exchange. In addition, the Exchange
represents that the issuer must notify the Exchange of any failure by
the Fund to comply with the continued listing requirements and,
pursuant to its obligations under Section 19(g)(1) of the Act, the
Exchange will monitor \47\ for compliance with the continued listing
requirements. If the Fund is not in compliance with the applicable
listing requirements, the Exchange will commence delisting procedures
under NYSE Arca Rule 5.5-E(m).
---------------------------------------------------------------------------

    \47\ The Commission notes that certain proposals for the listing
and trading of exchange-traded products include a representation
that the exchange will ``surveil'' for compliance with the continued
listing requirements. See, e.g., Securities Exchange Act Release No.
77499 (April 1, 2016), 81 FR 20428, 20432 (April 7, 2016) (SR-BATS-
2016-04). In the context of this representation, it is the
Commission's view that ``monitor'' and ``surveil'' both mean ongoing
oversight of compliance with the continued listing requirements.
Therefore, the Commission does not view ``monitor'' as a more or
less stringent obligation than ``surveil'' with respect to the
continued listing requirements.
---------------------------------------------------------------------------

    For the foregoing reasons, the Commission finds that the proposed
rule change, as modified by Amendment No. 4, is consistent with Section
6(b)(5) of the Act \48\ and the rules and regulations thereunder
applicable to a national securities exchange.
---------------------------------------------------------------------------

    \48\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

IV. Solicitation of Comments on Amendment No. 4 to the Proposed Rule
Change

    Interested persons are invited to submit written views, data, and
arguments concerning whether Amendment No. 4 is consistent with the
Act. Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSEArca-2018-98 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2018-98. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change.

Persons submitting comments are cautioned that we do not redact or edit
personal identifying information from comment submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEArca-2018-98 and should
be submitted on or before September 6, 2019.

V. Accelerated Approval of the Proposed Rule Change, as Modified by
Amendment No. 4

    The Commission finds good cause to approve the proposed rule
change, as modified by Amendment No. 4, prior to the thirtieth day
after the date of publication of notice of the filing of Amendment No.
4 in the Federal Register. The Commission notes that Amendment No. 4
clarified the permitted investments of the Fund and the application of
NYSE Arca Rule 8.600-E, Commentary .01 to the Fund's investments.
Amendment No. 4 also provided other clarifications and additional
information to the proposed rule change. The changes and additional
information in Amendment No. 4 assist the Commission in evaluating the
Exchange's proposal and in determining that the listing and trading of
the Shares is consistent with the Act. Accordingly, the Commission
finds good cause, pursuant to Section 19(b)(2) of the Act,\49\ to
approve the proposed rule change, as modified by Amendment No. 4, on an
accelerated basis.
---------------------------------------------------------------------------

    \49\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\50\ that the proposed rule change (SR-NYSEArca-2018-98), as
modified by Amendment No. 4 thereto, be, and it hereby is, approved on
an accelerated basis.
---------------------------------------------------------------------------

    \50\ Id.
    \51\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\51\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-17593 Filed 8-15-19; 8:45 am]
 BILLING CODE 8011-01-P