 [Federal Register: August 26, 2008 (Volume 73, Number 166)] [ Rules and Regulations]                [Page 50222-50226] [DOCID:fr26au08-11]

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

49 CFR Part 40

[Docket OST-2003-15245]

RIN 2105-AD55

  Procedures for Transportation Workplace Drug Testing Programs

AGENCY: Office of the Secretary, DOT.

ACTION: Change in effective date; request for comments.

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SUMMARY: In response to petitions from certain transportation industry

and labor groups, the Department of Transportation is changing the

effective date of 49 CFR 40.67(b) from August 25, 2008, to November 1,

2008. The Department is also requesting comments concerning the content

of Sec.  40.67(b) for 30 days. This section of the Department's drug

testing procedural rule requires employers to ensure that all follow-up

and return-to-duty drug tests are directly observed.

DATES: The effective date of the revision of 49 CFR 40.67(b) published

June 25, 2008 (73 FR 35970) is delayed from August 25, 2008, to

November 1, 2008. Comments should be submitted by September 25, 2008.

ADDRESSES: You may submit comments identified by the docket number

(OST-2003-15245) by any of the following methods:

     Federal eRulemaking Portal: Go to http://

www.regulations.gov. Follow the online instructions for submitting

comments.

     Fax: 1-202-493-2251.

     Mail: Docket Operations, U.S. Department of

Transportation, West Building, Ground Floor, Room W12-140, Routing

Symbol M-30, 1200 New Jersey Avenue, SE., Washington, DC 20590.

     Hand Delivery: To Docket Operations, Room W12-140 on the

ground floor of the West Building, 1200 New Jersey Avenue, SE.,

Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday,

except Federal Holidays.

    Instructions: Identify the agency and docket number (OST-2003-

15245) at the beginning of your submission. Except for comments that

receive confidential treatment, all comments received will be posted

without change to the Federal Docket Management System (FDMS),

including any personal information provided. Detailed instructions for

requesting confidential treatment are provided below, under the Privacy

Act heading.

    Docket: For access to the dockets to read background documents or

comments received, go to http://www.regulations.gov or DOT's Docket

Operations Office (see ADDRESSES).

    Privacy Act: Anyone is able to search the electronic form of any

written communications and comments received into any of our dockets by

the name of the individual submitting the document (or signing the

document, if submitted on behalf of an association, business, labor

union, etc.). You may review DOT's complete Privacy Act Statement in

the Federal Register published on April 11, 2000 (Volume 65, Number 70;

Pages 19477-78), which may also be found at http://www.regulations.gov.

    You may request confidential treatment of comments or portions of

comments under the procedures set forth in 49 CFR part 105. While all

comments should be sent to the FDMS, OST will consider separately and

not place in the public docket those comments or portions of comments

OST determines to include trade secrets, other confidential commercial

information, or sensitive security information (SSI). In accordance

with 49 CFR 105.30, you may ask OST to keep information confidential

using the following procedures: (1) Mark ``confidential'' on each page

of the original document you would like to keep confidential; (2) send

FDMS both the original document and a second copy of the original

document with the confidential information redacted; and (3) explain

why the information is confidential (as a trade secret, other

confidential commercial information, or SSI). In your explanation, you

should provide enough information to enable OST to determine whether

the information provided is protected by law and must be handled

separately.

FOR FURTHER INFORMATION CONTACT: For program issues, Jim Swart,

Director, Office of Drug and Alcohol Policy and Compliance, 1200 New

Jersey Avenue, SE., Washington, DC 20590;<PHONE_NUMBER> (voice), (202)

366-3897 (fax), or<EMAIL_ADDRESS>(e-mail). For legal issues, Robert

C. Ashby, Deputy Assistant General Counsel for Regulations and

Enforcement, 1200 New Jersey Avenue, SE., Washington, DC 20590; (202)

366-9310 (voice);<PHONE_NUMBER> (fax); or<EMAIL_ADDRESS>(e-mail).

SUPPLEMENTARY INFORMATION: This document responds to petitions and

letters from several parties seeking to postpone the effective date of

portions of the Department's June 25, 2008, final rule amending 49 CFR

part 40 (73 FR 35961) and/or reconsider these provisions. The petitions

concern the new section 40.67(b) and (i), described in more detail

below. Petitioners include the Association of American Railroads (AAR),

joined by the American Short Line and Regional Railroad Association;

the Transportation Trades Department (TTD) of the AFCL-CIO; the

International Brotherhood of Teamsters; and the Air Transport

Association (ATA), joined by the Regional Airline Association (RAA).

Background

    On October 31, 2005, the Department of Transportation issued a

notice of proposed rulemaking (NPRM) to amend 49 CFR part 40, the

Department's drug and alcohol testing procedures rule (70 FR 62276).

The primary purpose of the NPRM was to propose making specimen validity

testing (SVT) mandatory. Mandatory SVT is an important step in

combating the safety problem of cheating on drug tests. The two

provisions that are the subject of the petitions concern direct

observation (DO), another significant tool the Department uses to

combat cheating.

    The history of DO testing under part 40 goes back to the beginnings

of the Department's drug testing program. The principle that animates

this history is that DO, because it is intrusive, is appropriate to

use, not in the great mass of testing situations (e.g., all pre-

employment and random tests), but only in those situations in which

there is a heightened incentive to cheat or circumstances demonstrating

the likelihood of cheating. In this way, the Department has maintained

the proper balance between the legitimate privacy expectations of

employees and the safety and program integrity interests of the

Department. As a result, DO tests constitute only a tiny percentage of

the drug tests conducted each year under DOT drug testing rules.

    In the December 1, 1989, preamble to part 40 (54 FR 49854), we said

that the limitations on using observed collections in only four

circumstances would be maintained despite the fact that some comments

requested that the Department allow greater discretion for observed

collections. The Department decided that ``existing safeguards in part

40 are adequate to prevent tampering and that direct observation,

because of its increased intrusiveness, should be strictly limited.''

The Department considered that limiting the circumstances that would

result in a DO is ``one factor in the balance between privacy and

safety necessity considered by the courts.''

    The preamble went on to say that some comments specifically opposed

direct observation ``as part of follow-up (i.e., post-positive)

testing, while other commenters favored this practice.'' We said that

the Department ``believes that direct observation may be a useful tool

in follow-up testing.'' There was concern expressed about drug use

relapses, especially for cocaine. We went on to say, ``An individual

who has returned to work after rehabilitation but has suffered such a

relapse may have a greater incentive to attempt to beat a

follow-up test, because the employer may not provide a second

opportunity for rehabilitation.'' Regarding directly observed follow-up

testing, the preamble concludes, ``If the employer or EAP counselor

believes that this may be the case, the opportunity for direct

observation should exist.''

    Currently, section 40.67(a) requires that employers direct an

immediate collection under direct observations in three circumstances:

(1) When the laboratory reported an invalid specimen and the MRO

reported that there was not an adequate medical explanation for the

result; (2) when the MRO reports to the employer that the original non-

negative result had to be cancelled because there was not a split

specimen available for testing; and (3) when the MRO reports a

negative-dilute specimen with a creatinine concentration greater than

or equal to 2 mg/L or less than or equal to 5 mg/L. We added the third

provision in 2003 in an interim final rule (68 FR 31624, May 28, 2003)

and revised it in an interim final rule (69 FR 64865). Direct

observation is also mandated at collection sites if the collector finds

materials brought to the collection site to tamper with a specimen

(section 40.61(f)(5)(i)), determines that a specimen is out of

temperature range (section 40.65(b)(5)) or detects other evidence

indicating an attempt to tamper with a specimen (section 40.65 (c)(1)).

In addition, employers are currently allowed, but not required, to

order a directly observed test under section 40.67(b) for return-to-

duty and follow-up tests.

    We acknowledge that DO collections are, and always have been,

controversial. In the December 19, 2000 preamble to a major update to

part 40 (65 FR 79462), about observed collections we said, ``Directly

observed specimens are controversial because of their greater impact on

employee privacy. They can be useful because they reduce the

opportunity for tampering. On privacy grounds, some commenters,

including unions and some service agents, would prefer not to conduct

directly observed collections at all.'' (65 FR at 79489) These

commenters opposed adding any situations in which direct observation

was authorized or required.

    The 2000 preamble went on to say, ``Other commenters said that the

benefit of greater protection against specimen tampering warranted

direct observation in situations that suggested a heightened risk of

tampering.'' (65 FR at 79489) The Department agreed with these

commenters and increased the number of circumstances for which an

observed collection was required or authorized. In circumstances that

pose a higher risk or greater risk for tampering, ``the interests of

the integrity of the testing process, with its safety implications,

outweigh the additional privacy impact of the direct observation

process.'' (65 FR at 79489-79490)

    More recently, there has been a sharply increased emphasis, at the

level of national policy, on the problem of cheating and how to deal

with it. The Department has been aware for several years of the

increasing proliferation of products designed and sold to help workers

who use drugs defeat drug tests. Not only was the Department working on

the specimen validity testing rulemaking between 2005 and 2008, but the

United States Congress was conducting its own inquiries on the issues.

    During a May 17, 2005 hearing before the Investigations Committee

on Energy and Commerce, the Department of Health and Human Services

provided the following testimony regarding prosthetic devices

delivering synthetic or drug-free human urine:

    The most cumbersome, yet highly effective, way to beat a urine

drug test is to use a physical belt-like device hidden under the

clothing which contains a reservoir to unobtrusively hold real human

urine from another person that is free from drugs, and deliver that

bogus specimen into the collection container through a straw-like

tube, or through a prosthetic device that looks like real human

anatomy, color-matched. This last described device is heavily

marketed for workplace drug testing and criminal justice urine

collection situations that require directly observed urine specimens

to be provided. Synthetic urine can be used in place of real human

drug free urine. [Testimony before the Subcommittee on Oversight and

Investigations Committee on Energy and Commerce United States House

of Representatives Products Used to Thwart Detection in Drug Testing

Programs, Statement of Robert L. Stephenson II, M.P.H. Director,

Division of Workplace Programs Center for Substance Abuse

Prevention, Substance Abuse and Mental Health Services

Administration, U.S. Department of Health and Human Services at

pages 4-5].

    Also at the 2005 hearing, the GAO testified that

    In summary, we found that products to defraud drug tests are

easily obtained. They are brazenly marketed on Web sites by vendors

who boast of periodically reformulating their products so that they

will not be detected in the drug test process. In addition to an

array of products designed to dilute, cleanse, or substitute urine

specimens submitted to testers by drug users, approximately 400

different products are available to adulterate urine samples. The

sheer number of these products, and the ease with which they are

marketed and distributed through the Internet, present formidable

obstacles to the integrity of the drug testing process. [Testimony

Statement of Robert J. Cramer, Managing Director, Office of Special

Investigations, the United States Government Accountability Office

(GAO), before the Chairman, Subcommittee on Oversight and

Investigations, Committee on Energy and Commerce, House of

Representatives, GAO-05-653T, May 1, 2005].

    On November 1, 2007, following media coverage regarding compromised

collection integrity and security issues, the Congressional

Subcommittee on Transportation and Infrastructure held a hearing on the

problem of cheating on DOT-required tests. At the hearing, the GAO

testified at the hearing about the threat to the integrity of the

testing program posed by the devices being used to substitute urine in

DO collections. In the final report the GAO issued in May of 2008, the

GAO noted that the ease of subverting the testing process was a factor

contributing to failures to detect drug use. Specifically, GAO noted

that transportation employees ``are successfully adulterating or

substituting their urine specimens with products that are widely

available and marketed as * * * [ways to beat a test.]'' [GAO Report

No. GAO-08-600, Motor Carrier Safety: Improvements to Drug Testing

Programs Could Better Identify Illegal Drug Users and Keep them off the

Road, May 2008 at pages 2-3.] The GAO further found that ``Several

hundred products designed to dilute, cleanse, or substitute urine

specimens can be easily obtained.'' [GAO Report No. GAO-08-600 at page

20.]

    In light of the by-now well-recognized availability of substances

and devices for substituting or adulterating specimens, the

Department's premise for the changes it made to section 40.67 was that

taking additional steps to combat cheating on drug tests was

appropriate. Such steps are needed to avoid damage to the safety

purposes of the program. Given the greater availability of means to

cheat on tests, compared to the late 1980s, the Department took the

position in the June 25 final rule that it is appropriate to strike the

balance between the Department's interests in safety and program

integrity and employees' interest in privacy at a different point than

it did two decades ago.

    In the Omnibus Transportation Employee Testing Act of 1991,

Congress recognized that, while privacy is a very important value in

the drug testing process, it is not an absolute value. The Act directs

the Department to ``promote, to the maximum extent practicable,

individual privacy in the collection of specimens'' (49 U.S.C.

20140(c)(1), emphasis added). In issuing the June 25

final rule, the Department, in effect, took the position that it is no

longer ``practicable'' to operate a drug testing program without adding

countermeasures to well-publicized cheating techniques and devices.

New Procedure To Check for Prosthetic Cheating Devices

    Based on what the Department viewed as the need for additional

safeguards against prosthetic devices used to cheat on DO tests, the

Department explicitly sought comment in its October 2005 NPRM (70 FR

62281), on whether collectors should check to make sure that employees

providing a specimen under DO are not using a prosthetic device to

cheat on the test (e.g., by having an employee lower his pants and

underwear so that the collector or observer could determine whether the

employee was using such a device).

    In the preamble to the Department's final rule based on this NPRM

(73 FR 35968), the Department responded to comments on this proposal.

This response set forth the Department's rationale for adopting a new

provision, found in section 40.67(i), requiring employees to raise and

lower their clothing to show the collector or observer that the

employee is not using a prosthetic device. The Department reaffirms

this rationale, and the Department does not believe that any delay in

the effective date of this provision is appropriate. The Department

believes that there would be nothing to be gained by delaying this

significant anti-cheating, pro-safety initiative.

    Consequently, this provision will go into effect, as scheduled, on

August 25, 2008. The Department is not soliciting further comment on

section 40.67(i). The effect of this decision is that, beginning August

25, 2008, observers in all DO collections will be required to carry out

the anti-prosthetic device procedure of section 40.67(i) in all

directly observed collections, including FU and RTD tests where

employers choose to use DO. There is no requirement to use the section

40.67(i) procedure except in circumstances where DO tests otherwise are

taking place.

    We do not believe that petitioners have made a persuasive case that

a delay is necessary to train collectors in this new procedure, which

is simple to carry out and easy to understand. Moreover, it is

observers--who need not be trained collectors--who are to carry out the

task of having employees raise and lower clothing to determine whether

prosthetic cheating devices are present. Any individual of the

appropriate gender should be able to perform this function with minimal

instruction. In addition, having waited until mid-August to file their

petitions saying they had insufficient time to train personnel,

railroad and aviation employers appear to have missed the opportunity

to begin training personnel during the several weeks since the June

publication of the final rule, if they believed additional time to be

necessary.

    It is important for employers to keep in mind, in view of the

Department's decision to postpone the effective date of section

40.67(b), that for the period between August 25 and October 31, 2008,

there will be no need to recruit or train additional observers, because

there will be no additional direct observation tests required beyond

those the Department's rules required before August 25. All that will

be required during this period is that employers and collection

contractors instruct observers to follow the additional procedure to

guard against the use of prosthetic devices.

    We also note that it is common for DOT operating administrations'

enforcement personnel, in the initial months of a new requirement, to

focus on information and education rather than the imposition of

penalties. Employers who are making good faith efforts to comply with

the provision should benefit from this typical enforcement practice.

Mandatory Use of Direct Observation in Return-to-Duty and Follow-up

Testing

    At the end of the discussion of this provision on page 35968 of the

final rule preamble, the Department said, in the context of taking

additional steps to address the problem of cheating on drug tests, that

DO would be required for all FU and RTD tests. The new requirement was

included as section 40.67(b). Under part 40 as it existed before this

amendment, employers had the discretion to require direct observation

in FU and RTD tests, but were not mandated to do so.

    In the Department's view, this new requirement was a logical

outgrowth of the development of the Department's increasing efforts to

deal with the problem of cheating in drug tests. Even though we did not

foresee [and few did] in 1989 the degree to which products designed to

beat the drug test would be available, the Department was concerned

about specimen tampering and about the heightened motivation of those

employees returning to safety sensitive positions after positive tests

to tamper with their specimens. That concern has increased in recent

years as information about the widespread availability of cheating

products has become available.

    As a consequence, the Department believed, in adding this

provision, that it was important for us to be consistent with the other

DO provisions, which make DO testing mandatory in circumstances

involving heightened motivation for or evidence suggesting attempts to

cheat (see sections 40.61(f)(5)(i); 40.65 (b)(5) and (c)(1); 40.67(a)).

In all these cases, use of DO is mandatory. If safety necessitates a DO

in one of these circumstances, then, the Department believed, safety

likewise necessitates DO as part of FU and RTD tests. The Department

was mindful that everyone who has to take an RTD or FU test had already

violated the rule (e.g., by testing positive or refusing to test),

showing that he or she has behaved in a way that presents an increased

risk to transportation safety. Such employees will be acutely aware

that that they must test negative on all RTD and FU tests in order to

regain or retain their ability to perform safety-sensitive functions.

These circumstances, the Department believed, present just the sort of

heightened incentive for cheating on a test that DO testing is intended

to combat.

    It was but a modest, incremental step from the current regulation's

authorization of DO in FU and RTD situations to the June 25 final

rule's requirement for DO in these situations. Consequently, the

Department believed that taking this step was timely and appropriate.

Postponement of Effective Date of Section 40.67(b) and Request for

Comment

    Petitioners pointed out that the Department's 2005 NPRM did not

specifically raise for comment a proposal to make DO testing mandatory,

rather than discretionary, in FU and RTD testing. While the Department

believes, as discussed above, that section 40.67(b) is justified as a

logical outgrowth of Part 40 rulemaking, even in the absence of a

specific request for comment, the Department will seek comment on

section 40.67(b) for 30 days.

    In order to accommodate this comment period, as well as to allow

time for the Department to review and respond to any comments we

receive, the Department will change the effective date of section

40.67(b) to November 1, 2008, the date suggested by petitioners. We

want all interested parties to realize that this change in the

effective date affects ONLY section 40.67(b). The rest

of the June 25, 2008, final rule goes into effect on August 25, 2008,

as scheduled.

    We will place the petitions we have received into the docket, and

we will consider the arguments made in these petitions about the

content of section 40.67(b) along with other comments that we receive.

On the basis of the comments we receive and any other information

available to the Department, the Department will reconsider section

40.67(b) and may retain, eliminate, or modify it.

    Because this action and the decision not to take similar action

with respect to section 40.67(i) also completely respond to the

parallel petitions to the Federal Railroad Administration (FRA) by some

of the same parties, which raise the same issues about the same

provisions of part 40, FRA is not taking any separate action on the

petitions concerning the implementation of the amendments to 40.67 in

the railroad industry.

    Issued this 21st day of August, 2008, at Washington, DC.

Jim Swart,

Director, Office of Drug and Alcohol Policy and Compliance.

[FR Doc. E8-19816 Filed 8-22-08; 11:15 am]

BILLING CODE 4910-9X-P


[Federal Register: February 25, 2010 (Volume 75, Number 37)]
[Notices]
[Page 8788]
[DOCID:fr25fe10-150]

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DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

[Docket No. FRA-2000-7257; Notice No. 60]

Railroad Safety Advisory Committee; Notice of Meeting

AGENCY: Federal Railroad Administration (FRA), Department of
Transportation (DOT).

ACTION: Announcement of Railroad Safety Advisory Committee (RSAC)
Meeting.

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SUMMARY: FRA announces the forty-first meeting of the RSAC, a Federal
Advisory Committee that develops railroad safety regulations through a
consensus process. This meeting has been rescheduled from the weather-
postponed February 11, 2010, meeting (75 FR 3959). The RSAC meeting
topics will include opening remarks from the FRA Associate
Administrator for Railroad Safety, and status reports will be provided
by representatives from the following Working Groups: Conductor
Certification, Passenger Safety, Track Safety Standards, and Medical
Standards Working Groups. Status updates will be provided on the
following tasks arising out of the Rail Safety Improvement Act of 2008
(RSIA): Positive Train Control, Passenger Hours of Service, and
Railroad Bridge Safety Management. A new task regarding minimum
training standards may be offered to the Committee for consideration.
FRA may request the Committee's agreement to consider one or more items
of business by mail ballot, including proposed requirements for
passenger system safety programs. This agenda is subject to change,
including the possible addition of further proposed tasks under the
RSIA.

DATES: The meeting of the RSAC is scheduled to commence at 9:30 a.m. on
Thursday, March 18, 2010, and will adjourn by 4:30 p.m.

ADDRESSES: The RSAC meeting will be held at the Marriott Washington,
Wardman Park Hotel, located at 2660 Woodley Road, NW., Washington, DC.
The meeting is open to the public on a first-come, first-served basis,
and is accessible to individuals with disabilities. Sign and oral
interpretation can be made available if requested 10 calendar days
before the meeting.

FOR FURTHER INFORMATION CONTACT: Larry Woolverton, RSAC Administrative
Officer/Coordinator, FRA, 1200 New Jersey Avenue, SE., Mailstop 25,
Washington, DC 20590,<PHONE_NUMBER>; or Grady Cothen, Deputy Associate
Administrator for Safety, FRA, 1200 New Jersey Avenue, SE., Mailstop
25, Washington, DC 20590,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: Pursuant to Section 10(a)(2) of the Federal
Advisory Committee Act (Pub. L. 92-463), FRA is giving notice of a
meeting of the RSAC. The RSAC was established to provide advice and
recommendations to FRA on railroad safety matters. The RSAC is composed
of 54 voting representatives from 31 member organizations, representing
various rail industry perspectives. In addition, there are non-voting
advisory representatives from the National Transportation Safety Board,
the Federal Transit Administration, and from the agencies with railroad
safety regulatory responsibility in Canada and Mexico. The diversity of
the Committee ensures the requisite range of views and expertise
necessary to discharge its responsibilities. See the RSAC Web site for
details on pending tasks at: http://rsac.fra.dot.gov. Please refer to
the notice published in the Federal Register on March 11, 1996, (61 FR
9740) for additional information about the RSAC.

    Issued in Washington, DC on February 22, 2010.
Grady C. Cothen, Jr.,
Deputy Associate Administrator for Safety Standards and Program
Development.
[FR Doc. 2010-3863 Filed 2-24-10; 8:45 am]
BILLING CODE 4910-06-P


[Federal Register: April 14, 2009 (Volume 74, Number 70)]
[Rules and Regulations]
[Page 17075-17077]
[DOCID:fr14ap09-1]

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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2009-0302; Directorate Identifier 2009-NE-09-AD;
Amendment 39-15881; AD 2009-08-08]
RIN 2120-AA64

Airworthiness Directives; Turbomeca Arriel 1B, 1D, 1D1, 2B, and
2B1 Turboshaft Engines

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule; request for comments.

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SUMMARY: We are adopting a new airworthiness directive (AD) for the
products listed above. This AD results from mandatory continuing
airworthiness information (MCAI) issued by an aviation authority of
another country to identify and correct an unsafe condition on an
aviation product. The MCAI describes the unsafe condition as:

    During production of Arriel 1 and Arriel 2 power turbine (PT)
wheels, geometric non-conformances on blade fir tree roots have been
detected by Turbomeca. Potentially non-conforming PT blades have
been traced as having been installed on Module M04 (PT) listed in
Alert Mandatory Service Bulletin (MSB) A292 72 0827 for Arriel 1
engines and A292 72 2833 for Arriel 2 engines. The geometric non-
conformities of the blades may potentially lead to a reduction in
the fatigue resistance of PT blades to a lower level than their
authorized in service use limit. This reduction of fatigue
resistance can potentially result in blade release, which could
cause an uncommanded in-flight shutdown.

Uncommanded in-flight shutdown could result in an emergency
autorotation landing. We are issuing this AD to prevent release of PT
blades, which could result in uncommanded in-flight shutdown and
emergency autorotation landing.

DATES: This AD becomes effective April 29, 2009.
    We must receive comments on this AD by May 14, 2009.
    The Director of the Federal Register approved the incorporation by
reference of Turbomeca Alert Mandatory Service Bulletin (MSB) No. A292
72 0827, Version A, dated March 20, 2009, and Turbomeca Alert MSB No.
A292 72 0827, Version A, dated March 20, 2009, listed in the AD as of
April 29, 2009.

ADDRESSES: You may send comments by any of the following methods:
     Federal eRulemaking Portal: Go to http://
www.regulations.gov and follow the instructions for sending your
comments electronically.
     Mail: U.S. Department of Transportation, 1200 New Jersey
Avenue, SE., West Building Ground Floor, Room W12-140, Washington, DC
20590-0001.
     Hand Delivery: Deliver to Mail address above between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
     Fax:<PHONE_NUMBER>.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://
www.regulations.gov; or in person at the Docket Operations office
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains this AD, the regulatory evaluation,
any comments received, and other information. The street address for
the Docket Operations office (telephone<PHONE_NUMBER>) is the same as
the Mail address provided in the ADDRESSES section. Comments will be
available in the AD docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT: James Lawrence, Aerospace Engineer,
Engine Certification Office, FAA, Engine and Propeller Directorate, 12
New England Executive Park, Burlington, MA 01803; e-mail:
<EMAIL_ADDRESS>telephone<PHONE_NUMBER>, fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Discussion

    The European Aviation Safety Agency (EASA), which is the Technical
Agent for the Member States of the European Community, has issued EASA
Airworthiness Directive 2009-0068-E, dated March 25, 2009 (referred to
after this as ``the MCAI''), to correct an unsafe condition for the
specified products. The MCAI states:

    During production of Arriel 1 and Arriel 2 power turbine (PT)
wheels, geometric non-conformances on blade fir tree roots have been
detected by Turbomeca. Potentially non-conforming PT blades have
been traced as having been installed on Module M04 (PT) listed in
Alert MSB A292 72 0827 for Arriel 1 engines and A292 72 2833 for
Arriel 2 engines. The geometric non-conformities of the blades may
potentially lead to a reduction in the fatigue resistance of PT
blades to a lower level than their authorized in service use limit.
This reduction of fatigue resistance can potentially result in blade
release, which could cause an uncommanded in-flight shutdown.

Uncommanded in-flight shutdown could result in an emergency
autorotation landing. You may obtain further information by examining
the MCAI in the AD docket.

Relevant Service Information

    Turbomeca has issued Alert MSB No. A292 72 0827, Version A, dated
March 20, 2009, for Arriel 1 series turboshaft engines, and issued
Alert MSB No. A292 72 2833, Version A, dated March 20, 2009, for Arriel
2 series turboshaft engines. The power turbine modules M04 having the
affected PT blades, are listed by serial number (SN) in Figure 1 of
these MSBs, as applicable. We have incorporated by reference these MSBs
to identify the affected parts.

Differences Between This AD and the MCAI or Service Information

    We have reviewed the MCAI and related service information and, in
general, agree with their substance. But we required different actions
in this AD from those in the MCAI in order to follow FAA policies. Any
such differences are described in a separate paragraph of the AD. These
requirements take precedence over the actions copied from the MCAI.

FAA's Determination and Requirements of This AD

    This product has been approved by the aviation authority of France
and is approved for operation in the United States. Pursuant to our
bilateral agreement with France, they have notified us of the unsafe
condition described in the MCAI and service information referenced
above. We are issuing this AD because we evaluated all information
provided by EASA and determined the unsafe condition exists

and is likely to exist or develop on other products of the same type
design. This AD requires removing the affected PT blades from service.

FAA's Determination of the Effective Date

    An unsafe condition exists that requires the immediate adoption of
this AD. The FAA has found that the risk to the flying public justifies
waiving notice and comment prior to adoption of this rule because
depending on the number of cycles already accumulated on some engines,
the actions specified in this AD might require immediate incorporation
before further flight. Therefore, we determined that notice and
opportunity for public comment before issuing this AD are impracticable
and that good cause exists for making this amendment effective in fewer
than 30 days.

Comments Invited

    This AD is a final rule that involves requirements affecting flight
safety, and we did not precede it by notice and opportunity for public
comment. We invite you to send any written relevant data, views, or
arguments about this AD. Send your comments to an address listed under
the ADDRESSES section. Include ``Docket No. FAA-2009-0302; Directorate
Identifier 2009-NE-09-AD'' at the beginning of your comments. We
specifically invite comments on the overall regulatory, economic,
environmental, and energy aspects of this AD. We will consider all
comments received by the closing date and may amend this AD because of
those comments.
    We will post all comments we receive, without change, to http://
www.regulations.gov, including any personal information you provide. We
will also post a report summarizing each substantive verbal contact
with FAA personnel concerning this AD. Using the search function of the
Web site, anyone can find and read the comments in any of our dockets,
including, if provided, the name of the individual who sent the comment
(or signed the comment on behalf of an association, business, labor
union, etc.). You may review the DOT's complete Privacy Act Statement
in the Federal Register published on April 11, 2000 (65 FR 19477-78).

Authority for This Rulemaking

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

Regulatory Findings

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

List of Subjects in 14 CFR Part 39

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

Adoption of the Amendment

0
Accordingly, under the authority delegated to me by the Administrator,
the FAA amends 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new AD:

2009-08-08 Turbomeca: Amendment 39-15881; Docket No. FAA-2009-0302;
Directorate Identifier 2009-NE-09-AD.

Effective Date

    (a) This airworthiness directive (AD) becomes effective April
29, 2009.

Affected ADs

    (b) None.

Applicability

    (c) This AD applies to:
    (1) Turbomeca Arriel 1B, 1D, and 1D1 turboshaft engines with the
power turbine modules M04 installed, as listed by serial number (SN)
in Figure 1 of Turbomeca Alert Mandatory Service Bulletin (MSB) No.
A292 72 0827, Version A, dated March 20, 2009; and
    (2) Turbomeca Arriel 2B, and 2B1 turboshaft engines with the
power turbine modules M04 installed, as listed by SN in Figure 1 of
Turbomeca Alert MSB No. A292 72 2833, Version A, dated March 20,
2009.
    (3) These engines are installed on, but not limited to,
Eurocopter AS 350 B, AS 350 BA, AS 350 B1, AS 350 B2, AS 350 B3, and
EC 130 B4 helicopters.

Reason

    (d) European Aviation Safety Agency (EASA) AD No. 2009-0068-E,
dated March 25, 2009, states:

    During production of Arriel 1 and Arriel 2 power turbine (PT)
wheels, geometric non-conformances on blade fir tree roots have been
detected by Turbomeca. Potentially non-conforming PT blades have
been traced as having been installed on Module M04 (PT) listed in
Alert MSB A292 72 0827 for Arriel 1 engines and A292 72 2833 for
Arriel 2 engines. The geometric non-conformities of the blades may
potentially lead to a reduction in the fatigue resistance of PT
blades to a lower level than their authorized in service use limit.
This reduction of fatigue resistance can potentially result in blade
release, which could cause an uncommanded in-flight shutdown.

Uncommanded in-flight shutdown could result in an emergency
autorotation landing. We are issuing this AD to prevent release of
PT blades, which could result in uncommanded in-flight shutdown and
emergency autorotation landing.

Actions and Compliance

    (e) Unless already done, do the following actions.
    (1) For engines with an affected Module M04 (PT module) which
has accumulated 1,000 total PT cycles or more on the effective date
of this AD, remove the PT blades from service before further flight.
    (2) For engines with an affected Module M04 (PT module) which
has accumulated fewer than 1,000 total PT cycles on the effective
date of this AD, remove the PT blades from service before
accumulating 1,000 total PT cycles.
    (3) After the effective date of this AD, do not install any PT
blades removed as specified in paragraph (e)(1) or (e)(2) of this
AD, into any engine.

FAA AD Differences

    (f) Although the compliance section of EASA AD No. 2009-0068-E,
dated March 25, 2009, states to replace the Module M04, or PT wheel
assembly, or PT blades, this AD states to remove the PT blades from
service.
    (g) Although EASA AD No. 2009-0068-E, dated March 25, 2009,
applies to the Arriel

2B1A engine, this AD does not apply to that model because it has no
U.S. type certificate.

Alternative Methods of Compliance (AMOCs)

    (h) The Manager, Engine Certification Office, FAA, has the
authority to approve AMOCs for this AD, if requested using the
procedures found in 14 CFR 39.19.

Related Information

    (i) Refer to MCAI EASA Airworthiness Directive 2009-0068-E,
dated March 25, 2009, for related information.
    (j) Contact James Lawrence, Aerospace Engineer, Engine
Certification Office, FAA, Engine and Propeller Directorate, 12 New
England Executive Park, Burlington, MA 01803; e-mail:
<EMAIL_ADDRESS>telephone<PHONE_NUMBER>, fax (781) 238-
7199, for more information about this AD.

Material Incorporated by Reference

    (k) You must use the service information specified in Table 1 of
this AD to do the actions required by this AD, unless the AD
specifies otherwise.
    (1) The Director of the Federal Register approved the
incorporation by reference of this service information under 5
U.S.C. 552(a) and 1 CFR part 51.
    (2) For service information identified in this AD, contact
Turbomeca, 40220 Tarnos, France; telephone 33 05 59 74 40 00, fax 33
05 59 74 45 15.
    (3) You may review copies at the FAA, New England Region, 12 New
England Executive Park, Burlington, MA; or at the National Archives
and Records Administration (NARA). For information on the
availability of this material at NARA, call<PHONE_NUMBER>, or go
to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

                                   Table 1--Material Incorporated by Reference
----------------------------------------------------------------------------------------------------------------
Turbomeca Alert Mandatory Service
           Bulletin No.                     Page                 Version                       Date
----------------------------------------------------------------------------------------------------------------
A292 72 0827.....................  All..................  A....................  March 20, 2009.
    Total pages: 17
A292 72 2833.....................  All..................  A....................  March 20, 2009.
    Total Pages: 17
----------------------------------------------------------------------------------------------------------------

    Issued in Burlington, Massachusetts, on April 6, 2009.
Peter A. White,
Assistant Manager, Engine and Propeller Directorate, Aircraft
Certification Service.
 [FR Doc. E9-8329 Filed 4-13-09; 8:45 am]

BILLING CODE 4910-13-P


[Federal Register Volume 80, Number 147 (Friday, July 31, 2015)]
[Notices]
[Page 45693]
[FR Doc No: 2015-18766]

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SECURITIES AND EXCHANGE COMMISSION

Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, 100 F Street NE., Washington, DC
20549-2736.

    Extension:
     Form N-Q SEC, File No. 270-519, OMB Control No. 3235-0578.

    Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.) (``Paperwork Reduction Act''), the
Securities and Exchange Commission (the ``Commission'') has submitted
to the Office of Management and Budget a request for extension of the
previously approved collection of information discussed below.
    Form N-Q (17 CFR 249.332 and 274.130) is a reporting form used by
registered management investment companies, other than small business
investment companies registered on Form N-5 (``funds''), under Section
30(b) of the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.)
(``Investment Company Act'') and Sections 13(a) or 15(d) of the
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.). Pursuant to
Rule 30b1-5 under the Investment Company Act, funds are required to
file quarterly reports with the Commission on Form N-Q not more than 60
days after the close of the first and third quarters of each fiscal
year containing their complete portfolio holdings. Additionally, fund
management is required to evaluate the effectiveness of the fund's
disclosure controls and procedures within the 90-day period prior to
the filing of a report on Form N-Q, and such report must also be signed
and certified by the fund's principal executive and financial officers.
    We estimate that there are 11,348 funds required to file reports on
Form N-Q. Based on staff experience and conversations with industry
representatives, we estimate that it takes approximately 26 hours per
fund to prepare reports on Form N-Q annually. Accordingly, we estimate
that the total annual burden associated with Form N-Q is 295,048 hours
(26 hours per fund x 11,348 funds) per year.
    The estimates of average burden hours are made solely for the
purposes of the Paperwork Reduction Act and are not derived from a
comprehensive or even representative survey or study of the cost of
Commission rules and forms. The collection of information under Form N-
Q is mandatory. The information provided by the form is not kept
confidential. An agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless it displays
a currently valid control number.
    The public may view the background documentation for this
information collection at the following Web site, www.reginfo.gov.
Comments should be directed to: (i) Desk Officer for the Securities and
Exchange Commission, Office of Information and Regulatory Affairs,
Office of Management and Budget, Room 10102, New Executive Office
Building, Washington, DC 20503, or by sending an email to:
<EMAIL_ADDRESS>and (ii) Pamela Dyson, Director/Chief
Information Officer, Securities and Exchange Commission, c/o Remi
Pavlik-Simon, 100 F Street NE., Washington, DC 20549 or send an email
to<EMAIL_ADDRESS>Comments must be submitted to OMB within 30
days of this notice.

    Dated: July 27, 2015.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-18766 Filed 7-30-15; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 76, Number 192 (Tuesday, October 4, 2011)]
[Notices]
[Page 61375]
[FR Doc No: 2011-25573]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Internal Agency Docket No. FEMA-4022-DR; Docket ID FEMA-2011-0001]

Vermont; Major Disaster and Related Determinations

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

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SUMMARY: This is a notice of the Presidential declaration of a major
disaster for the State of Vermont (FEMA-4022-DR), dated September 1,
2011, and related determinations.

DATES: Effective Date: September 1, 2011.

FOR FURTHER INFORMATION CONTACT: Peggy Miller, Recovery Directorate,
Federal Emergency Management Agency, 500 C Street, SW., Washington, DC
20472,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: Notice is hereby given that, in a letter
dated September 1, 2011, the President declared a major disaster under
the authority of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act, 42 U.S.C. 5121-5207 (the Stafford Act), as follows:

    I have declared a major disaster under the Robert T. Stafford
Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121 et seq.
(the ``Stafford Act''), for the State of Vermont due to damage
resulting from Tropical Storm Irene beginning on August 29, 2011,
and continuing. I have authorized Federal relief and recovery
assistance in the affected area.
    Individual Assistance, Public Assistance, and Hazard Mitigation
will be provided. Consistent with the requirement that Federal
assistance is supplemental, any Federal funds provided under the
Stafford Act for Public Assistance, Hazard Mitigation, and Other
Needs Assistance under Section 408 will be limited to 75 percent of
the total eligible costs in the designated areas.
    The Department of Homeland Security, Federal Emergency
Management Agency (FEMA), will coordinate Federal assistance efforts
and designate specific areas eligible for such assistance. The
Federal Coordinating Officer will be Mr. Craig A. Gilbert of FEMA.
He will consult with you and assist in the execution of the FEMA-
State Agreement for disaster assistance governing the expenditure of
Federal funds.

    The time period prescribed for the implementation of section
310(a), Priority to Certain Applications for Public Facility and Public
Housing Assistance, 42 U.S.C. 5153, shall be for a period not to exceed
six months after the date of this declaration.
    The Federal Emergency Management Agency (FEMA) hereby gives notice
that pursuant to the authority vested in the Administrator, under
Executive Order 12148, as amended, Craig A. Gilbert, of FEMA is
appointed to act as the Federal Coordinating Officer for this declared
disaster.
    The following areas of the State of Vermont have been designated as
adversely affected by this declared major disaster:

    Chittenden, Rutland, Washington, and Windsor Counties for
Individual Assistance.
    Addison, Bennington, Caledonia, Chittenden, Essex, Franklin,
Lamoille, Orange, Orleans, Rutland, Washington, Windham, and Windsor
Counties for Public Assistance. Direct federal assistance is
authorized for Public Assistance.
    All counties within the State of Vermont are eligible to apply
for assistance under the Hazard Mitigation Grant Program.

(The following Catalog of Federal Domestic Assistance Numbers (CFDA)
are to be used for reporting and drawing funds: 97.030, Community
Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis Counseling;
97.033, Disaster Legal Services; 97.034, Disaster Unemployment
Assistance (DUA); 97.046, Fire Management Assistance Grant; 97.048,
Disaster Housing Assistance to Individuals and Households in
Presidentially Declared Disaster Areas; 97.049, Presidentially
Declared Disaster Assistance--Disaster Housing Operations for
Individuals and Households; 97.050, Presidentially Declared Disaster
Assistance to Individuals and Households--Other Needs; 97.036,
Disaster Grants--Public Assistance (Presidentially Declared
Disasters); 97.039, Hazard Mitigation Grant.

W. Craig Fugate,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2011-25573 Filed 10-3-11; 8:45 am]
BILLING CODE 9110-23-P


[Federal Register Volume 79, Number 32 (Tuesday, February 18, 2014)]
[Notices]
[Pages 9298-9302]
[FR Doc No: 2014-03383]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71521; File No. SR-NASDAQ-2013-155]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing of Amendment Nos. 1 and 2 and Order Granting
Accelerated Approval of Proposed Rule Change, as Modified by Amendment
Nos. 1 and 2, To List and Trade Shares of the AdvisorShares YieldPro
ETF of AdvisorShares Trust

February 11, 2014.

I. Introduction

    On December 13, 2013, The NASDAQ Stock Market LLC (``Nasdaq'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'' or ``Exchange Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to list and trade the shares
(``Shares'') of the AdvisorShares YieldPro ETF (the ``Fund'') under
Nasdaq Rule 5735. The proposed rule change was published for comment in
the Federal Register on January 2, 2014.\3\ The Commission received no
comments on the proposal. On January 3, 2014, Nasdaq filed Amendment
No. 1 to the proposal.\4\ On January 31, 2014, Nasdaq filed Amendment
No. 2 to the proposal.\5\ The Commission is publishing this notice to
solicit comments on Amendment Nos. 1 and 2 from interested persons and
is approving the proposed rule change, as modified by Amendment Nos. 1
and 2, on an accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C.78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 71193 (Dec. 26,
2013), 79 FR 0173 (Jan. 2, 2014) (``Notice'').
    \4\ In Amendment No. 1, Nasdaq amended the proposed rule change
to clarify that certain requirements, discussed in note 7 and
accompanying text, infra, are applicable to the Sub-Adviser as well
as the Adviser, and to clarify through the deletion of certain text
that the Fund does not intend to invest in non-listed American
Depositary Receipts (``ADRs''), swaps, or over-the-counter equity
securities.
    \5\ In Amendment No. 2, Nasdaq amended the proposed rule change
to remove inapplicable information regarding general limitations on
investments in shares of investment companies.
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

    The Exchange proposes to list and trade Shares of the Fund under
Nasdaq Rule 5735, which governs the listing and trading of Managed Fund
Shares on the Exchange. The Shares will be offered by AdviserShares
Trust (``Trust''). The Trust is registered with the Commission as an
investment company.\6\ The Fund is a series of the Trust.
---------------------------------------------------------------------------

    \6\ The Trust has filed a registration statement on Form N-1A
(``Registration Statement'') with the Commission. See Registration
Statement on Form N-1A for the Trust, dated August 7, 2013 (File
Nos. 333-157876 and 811-22110). In addition, the Commission has
issued an order granting certain exemptive relief to the Trust under
the Investment Company Act of 1940 (``1940 Act''). See Investment
Company Act Release No. 28822 (July 20, 2009) (File No. 812-13677).
---------------------------------------------------------------------------

    AdvisorShares Investments, LLC will be the investment adviser
(``Adviser'') to the Fund. The Elements Financial Group, LLC will be
the investment sub-adviser (``Sub-Adviser'') to the Fund. Foreside Fund
Services, LLC (``Distributor'') will be the principal underwriter and
distributor of the Fund's Shares. The Bank of New York Mellon will act
as the administrator, accounting agent, custodian and transfer agent to
the Fund.
    The Exchange represents that the Adviser and Sub-Adviser are
neither a broker-dealer nor affiliated with a broker-dealer.\7\ The
Exchange also represents that the Shares will be subject to Nasdaq Rule
5735, which sets forth the initial and continued listing criteria
applicable to Managed Fund Shares \8\ and that for initial and
continued listing, the Fund must be in compliance with Rule 10A-3 under
the Act.\9\ The Exchange has made the following additional
representations and statements in describing the Fund and its
investment strategy, including portfolio holdings and investment
restrictions.
---------------------------------------------------------------------------

    \7\ See Notice supra note 3, 79 FR at 0174, and Amendment No. 1,
supra note 4. The Exchange states in the event (a) the Adviser or
Sub-Adviser becomes, or becomes newly affiliated with a broker-
dealer, or registers as 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 a fire wall with respect to its
relevant personnel and/or such broker-dealer affiliate, if
applicable, regarding access to information concerning the
composition and 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. See id.
    \8\ See Notice supra note 3 at 0177.
    \9\ See 17 CFR 240.10A-3. See also Notice, supra note 3 at 0177.
---------------------------------------------------------------------------

Principal Investments

    According to the Exchange, the Fund's investment objective will be
to provide current income and capital appreciation. The Fund will be an
actively managed exchange traded fund (``ETF'') that is a ``fund of
funds'' seeking to achieve its investment objective by primarily
investing in both long and short positions in other

affiliated and unaffiliated ETFs \10\ that offer diversified exposure
to fixed income and other income producing securities. The Fund's
investments may, at various times, include bonds and instruments issued
by the U.S. government,\11\ U.S. investment grade corporate debt, high
yield bonds, municipal bonds, and mortgage-backed securities. The Fund
will not invest in residential-mortgage backed securities or other
asset-backed securities. The Fund may also invest in equity, inverse or
other types of ETFs to supplement its fixed income ETF positions. The
Fund intends to invest the majority of its assets in investments that
provide a competitive yield on a risk-adjusted basis. The Fund will
also allocate its investments to instruments which provide little or no
yield for diversification or risk management purposes.
---------------------------------------------------------------------------

    \10\ As described in the Registration Statement, an ETF is an
investment company registered under the 1940 Act that holds a
portfolio of securities. Many ETFs are designed to track the
performance of a securities index, including industry, sector,
country and region indexes. ETFs included in the Fund will be listed
and traded in the U.S. on registered exchanges. The Fund may invest
in the securities of ETFs in excess of the limits imposed under the
1940 Act pursuant to exemptive orders obtained by other ETFs and
their sponsors from the Commission. The ETFs in which the Fund may
invest include Index Fund Shares (as described in Nasdaq Rule 5705),
Portfolio Depositary Receipts (as described in Nasdaq Rule 5705),
and Managed Fund Shares (as described in Nasdaq Rule 5735). While
the Fund may invest in inverse ETFs, the Fund will not invest in
leveraged or inverse leveraged (e.g., 2X or -3X) ETFs.
    \11\ Such securities will include securities that are issued or
guaranteed by the U.S. Treasury, by various agencies of the U.S.
government, or by various instrumentalities, which have been
established or sponsored by the U.S. government. U.S. Treasury
obligations are backed by the ``full faith and credit'' of the U.S.
government. Securities issued or guaranteed by federal agencies and
U.S. government-sponsored instrumentalities may or may not be backed
by the full faith and credit of the U.S. government.
---------------------------------------------------------------------------

    In seeking to achieve its investment objective, the Fund may also
invest directly in U.S.-traded fixed income and equity securities,
certain derivatives described below, namely options, futures, and
structured notes; and other exchange-traded products (``ETPs'').
    The Fund may trade put and call options on securities, securities
indices and currencies. The Fund may purchase put and call options on
securities to protect against a decline in the market value of the
securities in its portfolio or to anticipate an increase in the market
value of securities that the Fund may seek to purchase in the future.
The Fund may write covered call options on securities as a means of
increasing the yield on its assets and as a means of providing limited
protection against decreases in its market value. The Fund may purchase
and write options on an exchange or over-the-counter.
    The Fund may buy and sell futures contracts. The Fund will only
enter into futures contracts that are traded on a national futures
exchange regulated by the Commodities Futures Trading Commission
(``CFTC'').\12\ The Fund may use futures contracts and related options
for bona fide hedging; attempting to offset changes in the value of
securities held or expected to be acquired or be disposed of;
attempting to gain exposure to a particular market, index or
instrument; or other risk management purposes. The Fund may buy and
sell index futures contracts with respect to any index that is traded
on a recognized exchange or board of trade.
---------------------------------------------------------------------------

    \12\ To the extent the Fund invests in futures, options on
futures or other instruments subject to regulation by the CFTC, it
will do so in reliance on and in compliance with CFTC regulations in
effect from time to time and in accordance with the Fund's policies.
The Trust, on behalf of certain of its series, has filed a notice of
eligibility for exclusion from the definition of the term
``commodity pool operator'' in accordance with CFTC Regulation 4.5.
Therefore, neither the Trust nor the Fund is deemed to be a
``commodity pool'' or ``commodity pool operator'' with respect to
the Fund under the Commodity Exchange Act (``CEA''), and they are
not subject to registration or regulation as such under the CEA. In
addition, as of the date of this filing, the Adviser is not deemed
to be a ``commodity pool operator'' or ``commodity trading adviser''
with respect to the advisory services it provides to the Fund. The
CFTC recently adopted amendments to CFTC Regulation 4.5 and has
proposed additional regulatory requirements that may affect the
extent to which the Fund invests in instruments that are subject to
regulation by the CFTC and impose additional regulatory obligations
on the Fund and the Adviser. The Fund reserves the right to engage
in transactions involving futures and options thereon to the extent
allowed by CFTC regulations in effect from time to time and in
accordance with the Fund's policies.
---------------------------------------------------------------------------

    The Fund may invest in structured notes, which are debt obligations
that also contain an embedded derivative component with characteristics
that adjust the obligation's risk/return profile. Generally, the
performance of a structured note will track that of the underlying debt
obligation and the derivative embedded within it. The Fund has the
right to receive periodic interest payments from the issuer of the
structured notes at an agreed-upon interest rate and a return of the
principal at the maturity date.
    On a day-to-day basis, the Fund may hold money market
instruments,\13\ cash, other cash equivalents, and ETPs that invest in
these and other highly liquid instruments to collateralize its
derivative or short positions.
---------------------------------------------------------------------------

    \13\ For the Fund's purposes, money market instruments will
include: Short-term, high-quality securities issued or guaranteed by
U.S. governments, agencies and instrumentalities; non-convertible
corporate debt securities with remaining maturities of not more than
397 days that satisfy ratings requirements under Rule 2a-7 of the
1940 Act; money market mutual funds; and deposits and other
obligations of U.S. and non-U.S. banks and financial institutions.
As a related matter, according to the Registration Statement, the
Fund may invest in shares of money market mutual funds to the extent
permitted by the 1940 Act.
---------------------------------------------------------------------------

Other Investments

    The Fund may invest in certificates of deposit issued against funds
deposited in a bank or savings and loan association. In addition, the
Fund may invest in bankers' acceptances, which are short-term credit
instruments used to finance commercial transactions.
    The Fund also may invest in fixed time deposits, which are bank
obligations payable at a stated maturity date and bearing interest at a
fixed rate. Additionally, the Fund may invest in commercial paper,
which are short-term unsecured promissory notes. The Fund may invest in
commercial paper rated A-1 or A-2 by Standard and Poor's Rating
Services or Prime-1 or Prime-2 by Moody's Investors Service, Inc. or,
if unrated, judged by the Adviser to be of comparable quality.
Together, these Other Investments will make up less than 20% of the
Fund assets under normal circumstances.

Investment Restrictions

    The Fund may not invest more than 25% of the value of its total
assets in securities of issuers in any one industry or group of
industries. This restriction will not apply to obligations issued or
guaranteed by the U.S. government, its agencies or instrumentalities,
or securities of other investment companies.
    The Fund will not purchase securities of open-end or closed-end
investment companies except in compliance with the 1940 Act.
    The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets (calculated at the time of investment). The
Fund will monitor its portfolio liquidity on an ongoing basis to
determine whether, in light of current circumstances, an adequate level
of liquidity is being maintained, and will consider taking appropriate
steps in order to maintain adequate liquidity if, through a change in
values, net assets, or other circumstances, more than 15% of the Fund's
net assets are held in illiquid assets. Illiquid assets include
securities subject to contractual or other restrictions on resale and
other instruments that lack readily available markets as determined in
accordance with Commission staff guidance.
    Additional information regarding the Trust, Fund, and Shares,
including

investment strategies, risks, creation and redemption procedures, fees,
portfolio holdings, disclosure policies, distributions and taxes,
calculation of net asset value per share (``NAV''), availability of
information, trading rules and halts, and surveillance procedures,
among other things, can be found in the Notice or the Registration
Statement, as applicable.\14\
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    \14\ See Notice and Registration Statement, supra notes 3 and 6,
respectively.
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III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule
change, as modified by Amendment Nos. 1 and 2, is consistent with the
requirements of Section 6 of the Act \15\ and the rules and regulations
thereunder applicable to a national securities exchange.\16\ In
particular, the Commission finds that the proposed rule change is
consistent with the requirements of Section 6(b)(5) of the Act,\17\
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 foster cooperation
and coordination with persons engaged in facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest. The Commission notes that
the Fund and the Shares must comply with the requirements of Nasdaq
Rule 5735 to be listed and traded on the Exchange.
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    \15\ 15 U.S.C. 78(f).
    \16\ In approving this proposed rule change, the Commission
notes that it has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
    \17\ 15 U.S.C. 78f(b)(5).
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    The Commission finds that the proposal to list and trade the Shares
on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the
Act,\18\ which sets forth Congress' finding that it is in the public
interest and appropriate for the protection of investors and the
maintenance of fair and orderly markets to assure the availability to
brokers, dealers, and investors of information with respect to
quotations for, and transactions in, securities. Quotation and last-
sale information for the Shares will be available via Nasdaq
proprietary quote and trade services, as well as in accordance with the
Unlisted Trading Privileges and the Consolidated Tape Association plans
for the Shares and any underlying exchange-traded products.\19\ In
addition, the Intraday Indicative Value (as defined in Nasdaq Rule
5735(c)(3)) will be based upon the current value of the components of
the Disclosed Portfolio (as defined in Nasdaq Rule 5735(c)(2)), will be
available on the NASDAQ OMX Information LLC proprietary index data
service,\20\ and will be updated and widely disseminated and broadly
displayed at least every 15 seconds during the Regular Market
Session.\21\ On each business day, before commencement of trading in
Shares in the Regular Market Session on the Exchange, the Fund will
disclose on its Web site the Disclosed Portfolio, which will form the
basis for the Fund's calculation of NAV at the end of the business
day.\22\ The NAV of the Fund will be determined once each business day,
normally as of the close of trading on the New York Stock Exchange
(normally 4:00 p.m. Eastern time).\23\ Information regarding market
price and volume of the Shares will be continually available on a real-
time basis throughout the day on brokers' computer screens and other
electronic services.\24\ Information regarding the previous day's
closing price and trading volume information for the Shares will be
published daily in the financial section of newspapers.\25\ Intra-day,
executable price quotations for the securities and other assets held by
the Fund will be available from major broker-dealer firms or on the
exchange on which they are traded, as applicable.\26\ Intra-day price
information will also be available through subscription services, such
as Bloomberg, Markit, and Thomson Reuters, which can be accessed by
authorized participants and other investors.\27\ The Fund's Web site
will include a form of the prospectus for the Fund and additional data
relating to NAV and other applicable quantitative information.\28\
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
    \19\ See Notice, supra note 3, 79 FR at 0177.
    \20\ According to the Exchange, the NASDAQ OMX Global Index Data
Service is the NASDAQ OMX global index data feed service, offering
real-time updates, daily summary messages, and access to widely
followed indexes and Intraday Indicative Values for exchange-traded
funds. See id.
    \21\ See id.
    \22\ The Web site information will be publicly available at no
charge. See id.
    \23\ See id. at 0175.
    \24\ See id. at 0177.
    \25\ See id.
    \26\ See id.
    \27\ See id.
    \28\ See id. at 0179.
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    The Commission further believes that the proposal to list and trade
the Shares is reasonably designed to promote fair disclosure of
information that may be necessary to price the Shares appropriately and
to prevent trading when a reasonable degree of transparency cannot be
assured. The Commission notes that the Exchange will obtain a
representation from the issuer of the Shares that the NAV will be
calculated daily and that the NAV and the Disclosed Portfolio will be
made available to all market participants at the same time.\29\
Further, trading in the Shares will be subject to Nasdaq 5735(d)(2)(D),
which sets forth circumstances under which trading in the Shares may be
halted.\30\ The Exchange may halt trading in the Shares if trading is
not occurring in the securities or the financial instruments
constituting the Disclosed Portfolio or if other unusual conditions or
circumstances detrimental to the maintenance of a fair and orderly
market are present.\31\ Further, the Commission notes that the
Reporting Authority that provides the Disclosed Portfolio must
implement and maintain, or be subject to, procedures designed to
prevent the use and dissemination of material, non-public information
regarding the actual components of the portfolio.\32\ The Exchange
states that it has a general policy prohibiting the distribution of
material, non-public information by its employees.\33\ The Exchange
also states that neither the Adviser nor Sub-Adviser is a broker-dealer
and that in the event (a) the Adviser or Sub-Adviser becomes, or
becomes newly affiliated with a broker-dealer or registers as 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 a
fire wall with respect to its relevant personnel and/or such broker-
dealer affiliate regarding access to information concerning the
composition of or changes to the portfolio and will be subject to
procedures designed to prevent the use and dissemination of material,
non-public information regarding the portfolio.\34\
---------------------------------------------------------------------------

    \29\ See id. at 0177.
    \30\ See id. at 0177.
    \31\ See id. See also 5735(d)(2)(C) (providing additional
considerations for the suspension of trading in or removal from
listing of Managed Fund Shares on the Exchange). With respect to
trading halts, the Exchange may consider all relevant factors in
exercising its discretion to halt or suspend trading in the Shares
of the Fund. Nasdaq will halt or pause trading in the Shares under
the conditions specified in Nasdaq Rules 4120 and 4121, including
the trading pauses under Nasdaq Rules 4120(a)(11) and (12). Trading
also may be halted because of market conditions or for reasons that,
in the view of the Exchange, make trading in the Shares inadvisable.
See Notice, supra note 3, 79 FR at 0177.
    \32\ See Nasdaq Rule 5735(d)(2)(B)(ii).
    \33\ See Notice, supra note 3, 79 FR at 0178.
    \34\ See supra note 7 and accompanying text.

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    In support of this proposal, the Exchange has made representations,
including:
    (1) The Exchange deems the Shares to be equity securities, thus
rendering trading in the Shares subject to the Exchange's existing
rules governing the trading of equity securities.
    (2) The Shares will be subject to Rule 5735, which sets forth the
initial and continued listing criteria applicable to Managed Fund
Shares.
    (3) The Exchange has appropriate rules to facilitate transactions
in the Shares during all trading sessions.
    (4) Prior to the commencement of trading, the Exchange will inform
its members in an Information Circular of the special characteristics
and risks associated with trading the Shares. Specifically, the
Information Circular will discuss the following: (a) The procedures for
purchases and redemptions of Shares in Creation Units (and that Shares
are not individually redeemable); (b) Nasdaq Rule 2111A, which imposes
suitability obligations on Nasdaq members with respect to recommending
transactions in the Shares to customers; (c) how information regarding
the Intraday Indicative Value is disseminated; (d) the risks involved
in trading the Shares during the Pre-Market and Post-Market Sessions
when an updated Intraday Indicative Value will not be calculated or
publicly disseminated; (e) the requirement that members deliver a
prospectus to investors purchasing newly issued Shares prior to or
concurrently with the confirmation of a transaction; and (f) trading
information.
    (5) Trading in the Shares will be subject to the existing trading
surveillances, administered by both Nasdaq and the Financial Industry
Regulatory Authority (``FINRA'') on behalf of the Exchange, which are
designed to detect violations of Exchange rules and applicable federal
securities laws, and these procedures are adequate to properly monitor
Exchange trading of the Shares in all trading sessions and to deter and
detect violations of Exchange rules and applicable federal securities
laws.
    (6) FINRA, on behalf of the Exchange, will communicate as needed
regarding trading in the Shares and other exchange-traded securities
and instruments held by the Fund with other markets and other entities
that are members of the Intermarket Surveillance Group (``ISG'') \35\
and FINRA may obtain trading information regarding trading in the
Shares and exchange-traded securities and instruments held by the Fund
from such markets and other entities. In addition, the Exchange may
obtain information regarding trading in the Shares and exchange-traded
securities and instruments held by the Fund from markets and other
entities that are members of ISG, which includes securities and futures
exchanges, or with which the Exchange has in place a comprehensive
surveillance sharing agreement. Such securities and instruments will
compose at least 90% of the Fund's assets at all times.
---------------------------------------------------------------------------

    \35\ For a list of the current members of ISG, see
www.isgportal.org. The Exchange notes that not all components of the
Disclosed Portfolio may trade on markets that are members of ISG or
with which the Exchange has in place a comprehensive surveillance
sharing agreement.
---------------------------------------------------------------------------

    (7) For initial and continued listing, the Fund must be in
compliance with Rule 10A-3 under the Exchange Act.\36\
---------------------------------------------------------------------------

    \36\ 17 CFR 240.10A-3.
---------------------------------------------------------------------------

    (8) A minimum of 100,000 Shares will be outstanding at the
commencement of trading on the Exchange.
    (9) The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets (calculated at the time of investment); will
monitor its portfolio liquidity on an ongoing basis to determine
whether, in light of current circumstances, an adequate level of
liquidity is being maintained; and will consider taking appropriate
steps in order to maintain adequate liquidity if, through a change in
values, net assets, or other circumstances, more than 15% of the Fund's
net assets are held in illiquid assets.
    (10) The Fund will not invest in swaps.
    (11) The Fund will not invest in leveraged or inverse leveraged
ETFs.
    (12) The Fund's investments will be consistent with the Fund's
investment objective.

This approval order is based on all of the Exchange's representations
and description of the Fund, including those set forth above and in the
Notice.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning whether Amendment Nos. 1 and 2 are 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-NASDAQ-2013-155 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2013-155. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NASDAQ-2013-155, and should
be submitted on or before March 11, 2014.

V. Accelerated Approval of Proposed Rule Change, as Modified by
Amendment Nos. 1 and 2

    The Commission finds good cause to approve the proposed rule
change, as modified by Amendment Nos. 1 and 2, prior to the thirtieth
day after the date of publication of notice in the Federal Register.
The proposed Amendments state that certain responsibilities are
applicable to the Sub-Adviser as well as the Adviser, and clarify that
the fund will not invest in ADRs, swaps, or over-the-counter equity
securities, and remove references to general limitations on investments
in registered investment companies that are inapplicable to the Fund.
The Amendments supplement the proposed rule change by adding
protections (with respect to the additional obligations of the Sub-
Adviser) and greater clarity regarding

the intended investments of the Fund. Accordingly, the Commission finds
good cause, pursuant to Section 19(b)(2) of the Act,\37\ to approve the
proposed rule change, as modified by Amendment Nos. 1 and 2, on an
accelerated basis.
---------------------------------------------------------------------------

    \37\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\38\ that the proposed rule change (SR-NASDAQ-2013-155), as
modified by Amendment Nos. 1 and 2, be, and it hereby is, approved on
an accelerated basis.
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    \38\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\39\
---------------------------------------------------------------------------

    \39\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-03383 Filed 2-14-14; 8:45 am]
BILLING CODE 8011-01-P