[Federal Register: May 8, 2006 (Volume 71, Number 88)]
[Notices]
[Page 26790-26794]
[DOCID:fr08my06-71]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 27309; 812-12974]

Wells Fargo Funds Trust, et al.; Notice of Application

May 1, 2006.
AGENCY: Securities and Exchange Commission.

ACTION: Notice of application under section 6(c) of the Investment
Company Act of 1940 (``Act'') for an exemption from sections 18(f) and
21(b) of the Act, under section 12(d)(1)(J) of the Act for an exemption
from section 12(d)(1) of the Act, under sections 6(c) and 17(b) of the
Act for an exemption from sections 17(a)(1) and 17(a)(3) of the Act,
and under section 17(d) of the Act and rule 17d-1 under the Act to
permit certain joint arrangements.

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Summary of Application: Applicants request an order that would permit
certain registered open-end management investment companies to
participate in a joint lending and borrowing facility (``Credit
Facility'').

Applicants: Wells Fargo Funds Trust (``Funds Trust''), Wells Fargo
Variable Trust (``Variable Trust''), and Wells Fargo Master Trust
(``Master Trust'') (collectively, the ``Trusts'') and Wells Fargo Funds
Management, LLC (``Funds Management'').

Filing Dates: The application was filed on May 14, 2003 and amended on
April 27, 2006.

Hearing or Notification of Hearing: An order granting the application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Commission's Secretary
and serving applicants with a copy of the request, personally or by
mail. Hearing requests should be received by the Commission by 5:30
p.m. on May 26, 2006, and should be accompanied by proof of service on
applicants, in the form of an affidavit or, for lawyers, a certificate
of service. Hearing requests should state the nature of the writer's
interest, the reason for the request, and the issues contested. Persons
who wish to be notified of a hearing may request notification by
writing to the Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street, NE., Washington, DC 20549-1090. Applicants, 525 Market Street,
12th Floor, San Francisco, California 94105.

FOR FURTHER INFORMATION CONTACT: Jaea F. Hahn, Senior Counsel, at (202)
551-

6870, or Nadya B. Roytblat, Assistant Director, at<PHONE_NUMBER>
(Division of Investment Management, Office of Investment Company
Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained for a fee at the
Commission's Public Reference Branch, 100 F Street, NE., Washington, DC
20549-0102 (tel.<PHONE_NUMBER>).

Applicants' Representations

    1. Each Trust is registered under the Act as an open-end management
investment company and is organized as a Delaware business trust.\1\
Responsibility for the overall management of the Trusts rests with each
Trust's respective board of trustees (each, a ``Board''). Funds
Management is registered under the Investment Advisers Act of 1940.
Funds Management serves as investment adviser to the Funds. An existing
Commission order permits certain Funds that are not money market Funds
to invest uninvested cash balances in one or more money market Funds
that comply with rule 2a-7 under the Act (``Money Market Funds'').\2\
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    \1\ Applicants request that the relief apply to (i) the Trusts
and their existing and future series (``Funds''), (ii) Funds
Management and any successor entity to Funds Management, and (iii)
any other registered open-end management investment company or its
series advised by Funds Management or a person controlling,
controlled by, or under common control (within the meaning of
section 2(a)(9) of the Act) with Funds Management (included in the
term ``Funds''). The term ``successor'' is limited to entities that
result from a reorganization into another jurisdiction or a change
in the type of business organization. All existing investment
companies that currently intend to rely on the requested relief are
named as applicants. Any other existing or future Funds that
subsequently rely on the requested order will comply with the terms
and conditions in the application.
    \2\ In the Matter of Stagecoach Funds, Inc., et al., Investment
Company Act Release Nos. 23237 (June 2, 1998) (notice) and 23294
(June 30, 1998) (order).
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    2. Some Funds may lend money to banks or other entities by entering
into repurchase agreements or other short-term instruments. Other Funds
may borrow money from the same or similar banks or other entities for
temporary purposes to satisfy redemption requests, to cover
unanticipated cash shortfalls such as a trade ``fail'' in which cash
payment for a security sold by a Fund has been delayed, or for other
temporary purposes. Currently, the Funds have an overdraft provision
with their custodian bank and committed lines of credit.
    3. If the Funds were to borrow money from their custodian bank or
through their lines of credit, the Funds would pay interest on the
borrowed cash at a rate that would be higher than the rate that would
be earned by other (non-borrowing) Funds on investments in repurchase
agreements and other short-term instruments of the same maturity as the
bank loan. Applicants state that this differential represents the
profit the banks would earn for serving as a middleman between a
borrower and a lender. In addition, while bank borrowings generally
could supply needed cash to cover unanticipated redemptions and sales
fails, the borrowing Funds would incur fees, interest and/or other
charges involved in obtaining a bank loan.
    4. Applicants request an order that would permit the Funds to enter
into master interfund lending agreements (``Interfund Lending
Agreements'') that would permit each Fund to lend money directly to and
borrow directly from other Funds (``Interfund Loan''). Applicants
believe that the Credit Facility would reduce the Funds' potential
borrowing costs and enhance their ability to earn higher rates of
interest on short-term lendings. Although the Credit Facility would
reduce the Funds' need to borrow from banks, the Funds would be free to
establish and/or continue committed lines of credit or other borrowing
arrangements with banks.
    5. Applicants anticipate that the Credit Facility would provide a
borrowing Fund with cost savings when the cash position of the Fund is
insufficient to meet temporary cash requirements. This situation could
arise when redemptions exceed anticipated volumes and the Funds have
insufficient cash on hand to satisfy such redemptions. When the Funds
liquidate portfolio securities to meet redemption requests, which
normally are paid immediately, they often do not receive payment in
settlement for up to three days (or longer for certain foreign
transactions). The Credit Facility would provide a source of immediate,
short-term liquidity pending settlement of the sale of portfolio
securities.
    6. Applicants also propose using the Credit Facility when a sale of
securities fails due to circumstances beyond a Fund's control, such as
a delay in the delivery of cash to the Fund's custodian or improper
delivery instructions by the broker effecting the transaction. Sales
fails may present a cash shortfall if the Fund has undertaken to
purchase a security with the proceeds from securities sold. When the
Fund experiences a cash shortfall due to a sales fail, the custodian
typically extends temporary credit to cover the shortfall and the Fund
incurs overdraft charges. Alternatively, the Fund could fail on its
intended purchase due to lack of funds from the previous sale,
resulting in additional costs to the Fund, or sell a security on a same
day settlement basis, earning a lower return on the investment. Use of
the Credit Facility under these circumstances would enable the Fund to
have access to immediate short-term liquidity without incurring
custodian overdraft or other charges.
    7. While bank borrowings could generally supply needed cash to
cover unanticipated redemptions and sales fails, under the Credit
Facility a borrowing Fund would pay lower interest rates than those
offered by banks on short-term loans. In addition, Funds making short-
term cash loans directly to other Funds would earn interest at a rate
higher than they otherwise could obtain from investing their cash
balances in repurchase agreements or in short-term investments. Thus,
applicants believe that the Credit Facility would benefit both
borrowing and lending Funds.
    8. The interest rate charged to the Funds on any Interfund Loan
(the ``Interfund Loan Rate'') would be the average of the ``Repo Rate''
and the ``Bank Loan Rate,'' both as defined below. The Repo Rate on any
day would be the highest rate available to the Funds from investments
in overnight repurchase agreements. The Bank Loan Rate for any day
would be calculated by the Interfund Lending Committee, as defined
below, on each day an Interfund Loan is made according to a formula
approved by the Boards intended to approximate the lowest interest rate
at which bank short-term loans would be available to the Funds. The
formula would be based upon a publicly available rate (e.g., Federal
funds plus 25 basis points) and would vary with this rate so as to
reflect changing bank loan rates. Each Board periodically would review
the continuing appropriateness of using the publicly available rate
used to determine the Bank Loan Rate, as well as the relationship
between the Bank Loan Rate and current bank loan rates that would be
available to the Funds. The initial formula and any subsequent
modifications to the formula would be subject to the approval of each
Board.
    9. The Credit Facility would be administered by investment
professionals and administrative personnel from Funds Management (the
``Interfund Lending Committee''). No portfolio manager of any Fund will
serve as a member of the Interfund Lending Committee. Under the Credit
Facility, the portfolio managers for each participating Fund could
provide

standing instructions to participate daily as a borrower or lender. On
each business day, the Interfund Lending Committee would collect data
on the uninvested cash and borrowing requirements of all participating
Funds from the Funds' custodian(s). The Money Market Funds would not
participate as borrowers. Once it has determined the aggregate amount
of cash available for loans and borrowing demand, the Interfund Lending
Committee would allocate loans among borrowing Funds without any
further communication from portfolio managers. Applicants expect far
more available uninvested cash each day than borrowing demand. After
allocating cash for Interfund Loans, the Interfund Lending Committee
will invest any remaining cash in accordance with the standing
instructions of portfolio managers or return remaining amounts for
investment directly by the portfolio manager of the applicable Fund.
    10. The Interfund Lending Committee would allocate borrowing demand
and cash available for lending among the Funds on what the Interfund
Lending Committee believes to be an equitable basis, subject to certain
administrative procedures applicable to all Funds, such as the time of
filing requests to participate, minimum loan sizes, and the need to
minimize the number of transactions and associated administrative
costs. To reduce transaction costs, each Interfund Loan normally would
be allocated in a manner intended to minimize the number of
participants necessary to complete the loan transaction.
    11. The Interfund Lending Committee would (a) monitor the interest
rates charged and the other terms and conditions of the loans, (b)
limit the borrowings and loans entered into by each Fund to ensure that
they comply with the Fund's investment policies and limitations, (c)
ensure equitable treatment of each Fund, and (d) make quarterly reports
to each Board concerning any transactions by the Funds under the Credit
Facility and the interest rates charged. The method of allocation and
related administrative procedures would be approved by each Board,
including a majority of trustees who are not ``interested persons'' of
the Fund, as defined in section 2(a)(19) of the Act (``Independent
Trustees''), to ensure that both borrowing and lending Funds
participate on an equitable basis.
    12. Funds Management, through the Interfund Lending Committee,
would administer the Credit Facility as part of its duties under its
advisory contract and administrative contract with each Fund and would
receive no compensation for its services.
    13. No Fund may participate in the Credit Facility unless (a) the
Fund has obtained shareholder approval for its participation, if such
approval is required by law, (b) the Fund has fully disclosed all
material information concerning the Credit Facility in its prospectus
and/or statement of additional information (``SAI''), and (c) the
Fund's participation in the Credit Facility is consistent with its
organizational documents and its investment policies and limitations.
    14. In connection with the Credit Facility, applicants request an
order under (a) section 6(c) of the Act granting relief from sections
18(f) and 21(b) of the Act; (b) section 12(d)(1)(J) of the Act granting
relief from section 12(d)(1) of the Act; (c) sections 6(c) and 17(b) of
the Act granting relief from sections 17(a)(1) and 17(a)(3) of the Act;
and (d) section 17(d) of the Act and rule 17d-1 under the Act to permit
certain joint arrangements.

Applicants' Legal Analysis

    1. Section 17(a)(3) of the Act generally prohibits any affiliated
person, or affiliated person of an affiliated person, from borrowing
money or other property from a registered investment company. Section
21(b) generally prohibits any registered management company from
lending money or other property to any person if that person controls
or is under common control with the company. Section 2(a)(3)(C) of the
Act defines an ``affiliated person'' of another person, in part, to be
any person directly or indirectly controlling, controlled by, or under
common control with, the other person. Applicants state that the Funds
may be under common control by virtue of having Funds Management as
their common investment adviser, and\or by reason of having common
officers and/or trustees.
    2. Section 6(c) of the Act provides that an exemptive order may be
granted where an exemption is necessary or appropriate in the public
interest and consistent with the protection of investors and the
purposes fairly intended by the policy and provisions of the Act.
Section 17(b) authorizes the Commission to exempt a proposed
transaction from section 17(a) provided that the terms of the
transaction, including the consideration to be paid or received, are
fair and reasonable and do not involve overreaching on the part of any
person concerned, and the transaction is consistent with the policy of
the investment company as recited in its registration statement and
with the general purposes of the Act. Applicants believe that the
proposed arrangements satisfy these standards for the reasons discussed
below.
    3. Applicants submit that sections 17(a)(3) and 21(b) of the Act
were intended to prevent a person with strong potential adverse
interests to and some influence over the investment decisions of a
registered investment company from causing or inducing the investment
company to engage in lending transactions that unfairly inure to the
benefit of that person and that are detrimental to the best interests
of the investment company and its shareholders. Applicants assert that
the Credit Facility transactions do not raise these concerns because
(a) Funds Management, through the Interfund Lending Committee, would
administer the program as a disinterested fiduciary; (b) all Interfund
Loans would consist only of uninvested cash reserves that a Fund
otherwise would invest in short-term repurchase agreements or other
short-term instruments; (c) the Interfund Loans would not involve a
greater risk than such other investments; (d) the lending Fund would
receive interest at a rate higher than it could obtain through such
other investments; and (e) the borrowing Fund would pay interest at a
rate lower than otherwise available to it under its bank loan
agreements and avoid the up-front commitment fees associated with
committed lines of credit. Moreover, applicants believe that the other
conditions in the application would effectively preclude the
possibility of any Fund obtaining an undue advantage over any other
Fund.
    4. Section 17(a)(1) of the Act generally prohibits an affiliated
person of a registered investment company, or an affiliated person of
an affiliated person, from selling any securities or other property to
the company. Section 12(d)(1) of the Act generally makes it unlawful
for a registered investment company to purchase or otherwise acquire
any security issued by any other investment company except in
accordance with the limitations set forth in that section. Applicants
state that the obligation of a borrowing Fund to repay an Interfund
Loan may constitute a security under sections 17(a)(1) and 12(d)(1) of
the Act. Section 12(d)(1)(J) of the Act provides that the Commission
may exempt persons or transactions from any provision of section
12(d)(1) if and to the extent such exemption is consistent with the
public interest and the protection of investors. Applicants contend
that the standards under sections 6(c), 17(b), and 12(d)(1) of the Act
are satisfied for all the reasons set forth above in support of their
request for relief from sections 17(a)(3) and

21(b) of the Act and for the reasons discussed below.
    5. Applicants state that section 12(d)(1) of the Act was intended
to prevent the pyramiding of investment companies in order to avoid
duplicative costs and fees attendant upon multiple layers of
investments. Applicants submit that the Credit Facility does not
involve those abuses. Applicants note that there would be no
duplicative costs or fees to the Funds or to Fund shareholders, and
that Funds Management would receive no additional compensation for its
services in administering the Credit Facility. Applicants also note
that the purpose of the Credit Facility is to provide economic benefits
for all the participating Funds.
    6. Section 18(f)(1) of the Act prohibits open-end investment
companies from issuing any senior security except that a company is
permitted to borrow from any bank, if immediately after the borrowing,
there is an asset coverage of at least 300% for all borrowings of the
company. Under section 18(g) of the Act, the term ``senior security''
includes any bond, debenture, note, or similar obligation or instrument
constituting a security and evidencing indebtedness. Applicants request
exemptive relief from section 18(f)(1) to the limited extent necessary
to implement the Credit Facility (because the lending Funds are not
banks).
    7. Applicants believe that granting relief under section 6(c) of
the Act is appropriate because the Funds would remain subject to the
requirement of section 18(f)(1) of the Act that all borrowings of a
Fund, including combined interfund and bank borrowings, have at least
300% asset coverage. Based on the conditions and safeguards described
in the application, applicants also submit that to allow the Funds to
borrow from other Funds pursuant to the Credit Facility is consistent
with the purposes and policies of section 18(f)(1) of the Act.
    8. Section 17(d) of the Act and rule 17d-1 under the Act generally
prohibit any affiliated person of a registered investment company, or
affiliated person of an affiliated person, when acting as principal,
from effecting any joint transaction in which the company participates
unless the transaction is approved by the Commission. Rule 17d-1
provides that in passing upon applications filed under the rule, the
Commission will consider whether the participation of a registered
investment company in a joint enterprise on the basis proposed is
consistent with the provisions, policies, and purposes of the Act and
the extent to which the company's participation is on a basis different
from or less advantageous than that of other participants.
    9. Applicants submit that the purpose of section 17(d) is to avoid
overreaching by and unfair advantage to investment company insiders.
Applicants believe that the Credit Facility is consistent with the
provisions, policies and purposes of the Act in that it offers both
reduced borrowing costs and enhanced returns on loaned funds to all
participating Funds and their shareholders. Applicants note that each
Fund would have an equal opportunity to borrow and lend on equal terms
consistent with its investment policies and fundamental investment
limitations. Applicants therefore believe that each Fund's
participation in the Credit Facility would be on terms no different
from or less advantageous than that of other participating Funds.

Applicants' Conditions

    Applicants agree that any order granting the requested relief will
be subject to the following conditions:
    1. The Interfund Loan Rate to be charged to the Funds under the
Credit Facility will be the average of the Repo Rate and the Bank Loan
Rate.
    2. On each business day, the Interfund Lending Committee will
compare the Bank Loan Rate with the Repo Rate and will make cash
available for Interfund Loans only if the Interfund Loan Rate is (a)
more favorable to the lending Fund than the Repo Rate and (b) more
favorable to the borrowing Fund than the Bank Loan Rate.
    3. If a Fund has outstanding borrowings, any Interfund Loans to the
Fund (a) will be at an interest rate equal to or lower than any
outstanding bank loan, (b) will be secured at least on an equal
priority basis with at least an equivalent percentage of collateral to
loan value as any outstanding bank loan that requires collateral, (c)
will have a maturity no longer than any outstanding bank loan (and in
any event not over seven days), and (d) will provide that, if an event
of default occurs under any agreement evidencing an outstanding bank
loan to the Fund, that event of default will automatically (without
need for action or notice by the lending Fund) constitute an immediate
event of default under the Interfund Lending Agreement entitling the
lending Fund to call the Interfund Loan (and exercise all rights with
respect to any collateral) and that such call will be made if the
lending bank exercises its right to call its loan under its agreement
with the borrowing Fund.
    4. A Fund may make an unsecured borrowing through the Credit
Facility if its outstanding borrowings from all sources immediately
after the interfund borrowing total 10% or less of its total assets,
provided that if the Fund has a secured loan outstanding from any other
lender, including but not limited to another Fund, the Fund's interfund
borrowing will be secured on at least an equal priority basis with at
least an equivalent percentage of collateral to loan value as any
outstanding loan that requires collateral. If a Fund's total
outstanding borrowings immediately after an interfund borrowing would
be greater than 10% of its total assets, the Fund may borrow through
the Credit Facility on a secured basis only. A Fund may not borrow
through the Credit Facility or from any other source if its total
outstanding borrowings immediately after the interfund borrowing would
be more than 33\1/3\% of its total assets.
    5. Before any Fund that has outstanding interfund borrowings may,
through additional borrowings, cause its outstanding borrowings from
all sources to exceed 10% of its total assets, the Fund must first
secure each outstanding Interfund Loan by the pledge of segregated
collateral with a market value at least equal to 102% of the
outstanding principal value of the loan. If the total outstanding
borrowings of a Fund with outstanding Interfund Loans exceeds 10% of
its total assets for any other reason (such as a decline in net asset
value or because of shareholder redemptions), the Fund will within one
business day thereafter (a) repay all its outstanding Interfund Loans,
(b) reduce its outstanding indebtedness to 10% or less of its total
assets, or (c) secure each outstanding Interfund Loan by the pledge of
segregated collateral with a market value at least equal to 102% of the
outstanding principal value of the loan until the Fund's total
outstanding borrowings cease to exceed 10% of its total assets, at
which time the collateral called for by this condition 5 shall no
longer be required. Until each Interfund Loan that is outstanding at
any time that a Fund's total outstanding borrowings exceeds 10% is
repaid or the Fund's total outstanding borrowings cease to exceed 10%
of its total assets, the Fund will mark the value of the collateral to
market each day and will pledge such additional collateral as is
necessary to maintain the market value of the collateral that secures
each outstanding Interfund Loan at least equal to 102% of the
outstanding principal value of the loan.
    6. No Fund may lend to another Fund through the Credit Facility if
the loan would cause its aggregate outstanding loans through the Credit
Facility to

exceed 15% of its net assets at the time of the loan.
    7. A Fund's Interfund Loans to any one Fund shall not exceed 5% of
the lending Fund's net assets.
    8. The duration of Interfund Loans will be limited to the time
required to receive payment for securities sold, but in no event more
than seven days. Loans effected within seven days of each other will be
treated as separate loan transactions for purposes of this condition.
    9. A Fund's borrowings through the Credit Facility, as measured on
the day when the most recent loan was made, will not exceed the greater
of 125% of the Fund's total net cash redemptions or 102% of sales fails
for the preceding seven calendar days.
    10. Each Interfund Loan may be called on one business day's notice
by a lending Fund and may be repaid on any day by a borrowing Fund.
    11. A Fund's participation in the Credit Facility must be
consistent with its investment policies and limitations and
organizational documents.
    12. The Interfund Lending Committee will calculate total Fund
borrowing and lending demand through the Credit Facility, and allocate
loans on an equitable basis among the Funds without the intervention of
any portfolio manager of the Funds. The Interfund Lending Committee
will not solicit cash for the Credit Facility from any Fund or
prospectively publish or disseminate loan demand data to portfolio
managers. The Interfund Lending Committee will invest any amounts
remaining after satisfaction of borrowing demand in accordance with the
standing instructions from portfolio managers or return remaining
amounts to Funds for investment directly by the Funds.
    13. The Interfund Lending Committee will monitor the interest rates
charged and the other terms and conditions of the Interfund Loans and
will make a quarterly report to the Board of each Fund concerning the
participation of the Fund in the Credit Facility and the terms and
other conditions of any extensions of credit under the facility.
    14. The Boards of the Funds, including a majority of the
Independent Trustees: (a) will review no less frequently than quarterly
each Fund's participation in the Credit Facility during the preceding
quarter for compliance with the conditions of any order permitting such
transactions; (b) will establish the Bank Loan Rate formula used to
determine the interest rate on Interfund Loans, approve any
modifications thereto, and review no less frequently than annually the
continuing appropriateness of the Bank Loan Rate formula; and (c) will
review no less frequently than annually the continuing appropriateness
of the Fund's participation in the Credit Facility.
    15. In the event an Interfund Loan is not paid according to its
terms and the default is not cured within two business days from its
maturity or from the time the lending Fund makes a demand for payment
under the provisions of the Interfund Lending Agreement, the Interfund
Lending Committee will promptly refer such loan for arbitration to an
independent arbitrator selected by the Board of any Fund involved in
the loan who will serve as the arbitrator of disputes concerning
Interfund Loans.\3\ The arbitrator will resolve any problem promptly,
and the arbitrator's decision will be binding on both Funds. The
arbitrator will submit, at least annually, a written report to the
Board of each Fund setting forth a description of the nature of any
dispute and the actions taken by the Funds to resolve the dispute.
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    \3\ If the dispute involves Funds with different Boards, the
respective Board of each Fund will select an independent arbitrator
that is satisfactory to each of them.
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    16. Each Fund will maintain and preserve for a period of not less
than six years from the end of the fiscal year in which any transaction
under the Credit Facility occurred, the first two years in an easily
accessible place, written records of all such transactions setting
forth a description of the terms of the transaction, including the
amount, the maturity, and the rate of interest on the loan, the rate of
interest available at the time on short-term repurchase agreements and
bank borrowings, and such other information presented to the Fund's
Board in connection with the review required by conditions 13 and 14.
    17. The Interfund Lending Committee will prepare and submit to the
Boards for review an initial report describing the operations of the
Credit Facility and the procedures to be implemented to ensure that all
Funds are treated fairly. After the commencement of operation of the
Credit Facility, the Interfund Lending Committee will report on the
operations of the Credit Facility at the quarterly meetings of each
Fund's Board. In addition, for two years following the commencement of
the Credit Facility, the independent public accountant for each Fund
shall prepare an annual report that evaluates the Interfund Lending
Committee's assertion that it has established procedures reasonably
designed to achieve compliance with the conditions of the order. The
report shall be prepared in accordance with the Statements on Standards
for Attestation Engagements No. 10 and it shall be filed pursuant to
Item 77Q3 of Form N-SAR, as such Statements or Form may be revised,
amended, or superseded from time to time. In particular, the report
shall address procedures designed to achieve the following objectives:
(a) That the Interfund Loan Rate will be higher than the Repo Rate, but
lower than the Bank Loan Rate; (b) compliance with the collateral
requirements as set forth in the application; (c) compliance with the
percentage limitations on interfund borrowing and lending; (d)
allocation of interfund borrowing and lending demand in an equitable
manner and in accordance with procedures established by each Board; and
(e) that the interest rate on any Interfund Loan does not exceed the
interest rate on any outstanding third party borrowings of a borrowing
Fund at the time of the Interfund Loan. After the final report is
filed, the independent public accountant for the Fund in connection
with Fund audit examinations, will continue to review the operation of
the Credit Facility for compliance with the conditions of the
application and their review will form the basis, in part, of the
auditor's report on internal accounting controls in Form N-SAR.
    18. No Fund will participate in the Credit Facility unless it has
fully disclosed in its prospectus or SAI all material facts about its
intended participation.
    19. The Board of each Fund will satisfy the fund governance
standards as defined in Rule 0-1(a)(7) under the Act.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Nancy M. Morris,
Secretary.
 [FR Doc. E6-6913 Filed 5-5-06; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register: August 17, 2009 (Volume 74, Number 157)]
[Notices]
[Page 41429]
[DOCID:fr17au09-75]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. CP09-449-000]

Wyoming Interstate Company, Ltd.; Notice of Filing

August 10, 2009.
    Take notice that on July 29, 2009, Wyoming Interstate Company, Ltd.
(WIC), Post Office Box 1087, Colorado Springs, Colorado 80944, filed an
application, pursuant to section 7(c) of the Natural Gas Act (NGA) and
part 157 of the Commission's Rules and Regulations, for a certificate
of public convenience and necessity authorizing WIC to construct, own,
operate and maintain a new compressor station located in Uintah County,
Utah (the Diamond Mountain Compressor Station). WIC also requests a
pre-determination of rolled-in rate treatment for the costs associated
with the project and approval of incremental fuel charges for
transportation service provided by the proposed facilities. The
application is on file with the Commission and open for public
inspection. This filing is available for review at the Commission in
the Public Reference Room or may be viewed on the Commission's Web site
at http://www.ferc.gov using the ``eLibrary'' link. Enter the docket
number excluding the last three digits in the docket number field to
access the document. For assistance, please contact FERC Online Support
at<EMAIL_ADDRESS>or toll free at<PHONE_NUMBER>, or for
TTY, contact<PHONE_NUMBER>.
    Pursuant to the demand for additional pipeline capacity on WIC's
Kanda Lateral pipeline system from producers with gas supplies in the
geologic Uinta Basin of Utah, the proposed project will require the
installation of two Taurus 70 compressor units totaling 20,604
horsepower. The Diamond Mountain Compressor Station will create an
additional capacity of 180,000 MMcf/day on the Kanda Lateral. Bill
Barrett Corporation (Barrett) and Anadarko Energy Services Company
(Andarko) have entered into transportation precedent agreements
supporting the project for a term of 10 years. The facilities will be
constructed on a 15 acre site managed by the BLM. WIC requests a pre-
determination of rolled-in rate treatment for the project costs,
exclusive of fuel costs which will be recovered through new incremental
charges. WIC proposes a service date of October 31, 2010.
    Any questions regarding the application are to be directed to
Richard Derryberry, Director, Regulatory Affairs Department, Wyoming
Interstate Company, Ltd., P.O. Box 1087, Colorado Springs, Colorado
80904; phone number<PHONE_NUMBER>.
    Any person wishing to obtain legal status by becoming a party to
the proceedings for this project should, on or before the below listed
comment date, file with the Federal Energy Regulatory Commission, 888
First Street, NE., Washington, DC 20426, a motion to intervene in
accordance with the requirements of the Commission's Rules of Practice
and Procedure (18 CFR 385.214 or 385.211) and the Regulations under the
NGA (18 CFR 157.10). A person obtaining party status will be placed on
the service list maintained by the Secretary of the Commission and will
receive copies of all documents filed by the applicant and by all other
parties. A party must submit 14 copies of filings made with the
Commission and must mail a copy to the applicant and to every other
party in the proceeding. Only parties to the proceeding can ask for
court review of Commission orders in the proceeding.
    Motions to intervene, protests and comments may be filed
electronically via the Internet in lieu of paper, see, 18 CFR 385.2001
(a)(1)(iii) and the instructions on the Commission's Web site under the
``e-Filing'' link. The Commission strongly encourages electronic
filings.
    Comment Date: August 31, 2009.

Kimberly D. Bose,
Secretary.
[FR Doc. E9-19622 Filed 8-14-09; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 76, Number 169 (Wednesday, August 31, 2011)]
[Notices]
[Pages 54288-54289]
[FR Doc No: 2011-22318]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

Notice of Procedural Changes to the Performance and Registration
Information Systems Management (PRISM) Program

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Notice; extension of effective date.

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

SUMMARY: FMCSA extends until September 1, 2012, the effective date for
the procedural change to eliminate use

of the ``registrant-only'' USDOT Number as part of the PRISM program.
In an August 9, 2010, Federal Register notice, the Agency initially set
September 1, 2011, as the effective date of the change. The extension
will allow the Agency to provide additional implementation guidance
based on feedback and information received since the August 9, 2010,
notice of procedural change and will allow States and other
stakeholders to make necessary changes to their systems and processes
pursuant to this additional guidance.

DATES: The new effective date to eliminate use of the ``registrant-
only'' USDOT Number as part of the PRISM program is September 1, 2012.

FOR FURTHER INFORMATION CONTACT: Stephen Parker, Transportation
Specialist, Office of Enforcement and Compliance, Federal Motor Carrier
Safety Administration, 1200 New Jersey Avenue, SE., Washington, DC
20590-0001;<PHONE_NUMBER> (telephone<EMAIL_ADDRESS>(e-
mail).

Background

    On August 9, 2010, FMCSA published a Federal Register notice
announcing plans to eliminate the practice of allowing non-motor
carrier registrants to obtain registrant-only USDOT Numbers under the
PRISM program (76 FR 47883). The Agency developed the concept of a
``registrant-only'' USDOT Number in 1999 to identify registered owners
of commercial motor vehicles (CMVs) that are not motor carriers but
lease their CMVs to entities that are motor carriers. The Agency later
concluded that registrant-only USDOT Numbers were being used
differently than intended and announced the decision to eliminate the
requirement for registrant-only USDOT Numbers. The FMCSA set September
1, 2011, as the effective date for the change.
    Today's action extends the effective date until September 1, 2012,
providing adequate time for all States participating in the PRISM
program to complete process changes and for the Agency to provide
updated guidance, as needed, to PRISM member jurisdictions and other
stakeholders.

    Issued on: August 25, 2001.
Anne S. Ferro,
Administrator.
[FR Doc. 2011-22318 Filed 8-30-11; 8:45 am]
BILLING CODE 4910-EX-P


Record for the Final Metal Product and Machinery Rule Recreational and Non Use Benefits, Weighted ( Directs + 413 to 433 Upgrade Option)

Low Mid High Fishing $ 28,712,873.02 $ 53,702,587.58 $ 92,369,279.02 Boating $ 36,511,488.63 $ 64,854,230.29 $ 101,134,010.21 Viewing $ 56,583,713.44 $ 79,433,565.34 $ 102,157,781.62 Recreational $ 121,808,075.09 $ 197,990,383.22 $ 295,661,070.86 Non Use $ 60,904,037.54 $ 98,995,191.61 $ 147,830,535.43 Total $ 182,712,112.63 $ 296,985,574.83 $ 443,491,606.29 Activity Annual Benefits ( 2001$)

February 14, 2003 Page 1 of 1 exlrec. xls  Recreational


[Federal Register Volume 76, Number 71 (Wednesday, April 13, 2011)]
[Notices]
[Pages 20757-20759]
[FR Doc No: 2011-8896]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64225; File No. SR-FINRA-2011-006]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Order Granting Approval of a Proposed Rule Change
Relating To Motions in Arbitration

April 7, 2011.

I. Introduction

    On February 4, 2011, the Financial Industry Regulatory Authority,
Inc. (``FINRA'') filed with the Securities and Exchange Commission
(``SEC'' or ``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 amend FINRA Rules 12206,
12503, and 12504 of the Code of Arbitration Procedure for Customer
Disputes, and Rules 13206, 13503, and 13504 of the Code of Arbitration
Procedure for Industry Disputes (collectively, ``Codes''), to provide
moving parties with a five-day period to reply to responses to motions.
The proposed rule

change was published for comment in the Federal Register on February
22, 2011.\3\ The Commission received three comment letters on the
proposed rule change.\4\ FINRA responded to these comments in a letter
dated April 1, 2011.\5\ This order approves the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Exchange Act Release No. 63910 (February 15, 2011), 76
FR 9840 (February 22, 2010) (``Notice'').
    \4\ See letter from William A. Jacobson, Esq., Associate
Clinical Professor and Director, Cornell Securities Law Clinic, and
Negisa Balluku, Cornell Law School, dated March 15, 2011 (``Cornell
Letter''); letter from Lisa A. Catalano, Esq., Director and
Associate Professor of Clinical Legal Education, Christine Lazaro,
Esq., Supervising Attorney, Clair S. Seu, Student Intern, and
Stephen Chou, Student Intern, St. John's University School of Law
Securities Arbitration Clinic, dated March 15, 2011 (``St. John's
Letter''); and letter received by FINRA from David M. Foster, Esq.
dated March 21, 2011, which addressed issues beyond the scope of the
proposed rule change.
    \5\ See letter from Margo A. Hassan, Assistant Chief Counsel,
FINRA, to Elizabeth M. Murphy, Secretary, Commission, dated April 1,
2011 (``FINRA Response'').
---------------------------------------------------------------------------

II. Description of Proposal

    The Codes specify time periods for a party to respond to a
motion,\6\ including a motion to dismiss.\7\ They do not expressly
provide time periods for the party that made the original motion (the
``moving party'') to reply to a response, which happens on occasion.
FINRA's practice has been to forward the reply to the arbitrators, even
when staff already have sent the motion and response to the
arbitrators. Since the Codes do not prescribe a time period for
replying to responses to motions, there have been instances where
arbitrators reviewed the motion papers and even ruled on a motion
before receiving a reply, causing confusion and wasting time.
---------------------------------------------------------------------------

    \6\ Rules 12503(b) and 13503(b) (Responding to Motions) provide,
generally, that parties have 10 days from the receipt of a written
motion to respond to the motion.
    \7\ Rules 12206(b) and 13206(b) (Dismissal under Rule) provide
that parties have 30 days to respond to motions. Rules 12504(a) and
13504(a) (Motions to Dismiss Prior to Conclusion of Case in Chief)
provide that parties have 45 days to respond to motions.
---------------------------------------------------------------------------

    FINRA proposed to amend Rules 12206 and 13206 (Time Limits), Rules
12503 and 13503 (Motions), and Rules 12504 and 13504 (Motions to
Dismiss), to provide a moving party with a five-day period to reply to
a response to a motion. The proposed amendments would codify FINRA's
practice relating to replies to responses to motions and make it
transparent. The proposal would provide parties with an opportunity to
brief fully the issues in dispute, and ensure that arbitrators have all
of the motion papers before issuing a final decision on the motion.
    FINRA considered whether codifying a reply period might encourage
additional replies to responses to motions, or cause significant delays
in the arbitration proceeding. FINRA believes that a five-day period
for replies gives moving parties sufficient time to react to responses
to motions without causing significant delays to proceedings.
Currently, FINRA Rules 12512 and 13512 (Subpoenas) provide moving
parties with a 10-day period in which to reply to opposing parties'
objections to motions. FINRA has not experienced any increase in
replies related to subpoenas because of these rules and the 10-day
reply period has not caused significant delays.
    Further, on June 21, 2010, FINRA revised its practice relating to
responses to motions and published a Notice to Parties on its website
stating that moving parties have five calendar days from receipt of a
response to a motion to submit a reply to the response.\8\ After the
five-day period, FINRA forwards to the panel at the same time the
motion, any response to the motion, and any reply. If FINRA receives a
reply after the five-day period expires, staff forwards the reply to
the panel upon its receipt. However, FINRA staff does not delay sending
the motion, response to the motion, and reply to the panel after the
five-day period expires, and the panel may issue a decision upon
receipt of those documents.
---------------------------------------------------------------------------

    \8\ See http://www.finra.org/ArbitrationMediation/Parties/ArbitrationProcess/NoticesToParties/P121652.
---------------------------------------------------------------------------

    Based on FINRA's experience with the subpoena rules and its revised
practice relating to replies to responses, FINRA does not expect the
proposed five-day period to result in undue delays.

III. Discussion of Comment Letters

    One commenter asked FINRA to consider amending the subpoena rules
to provide for a five-day period to reply to responses to motions in
order to maintain consistency in the Codes' timeframes.\9\ FINRA stated
that as it is not amending the subpoena rules in the proposed rule
change, the Cornell Letter is outside the scope of the proposal.
However, FINRA did express its intention to consider the suggestion
made in the Cornell Letter for possible future rulemaking.\10\
---------------------------------------------------------------------------

    \9\ Cornell Letter.
    \10\ FINRA Response.
---------------------------------------------------------------------------

    One commenter raised a concern that the proposed five-day period
may not provide pro se claimants with adequate time to prepare their
replies.\11\ FINRA responded that pro se claimants would have enough
time to reply under the proposed rule change, noting that pro se
claimants would already be aware of the issues raised in a response,
having drafted the initial motion, and that if pro se claimants need
additional time to reply to a response, the Director may extend the
deadline for good cause pursuant to FINRA Rule 12207(c).\12\ This
commenter also suggested that pro se claimants receive additional
guidance regarding their procedural rights, including those not
expressly codified in a rule, such as the ability to file a sur-
reply.\13\ In response, FINRA indicated that sur-replies and additional
guidance regarding sur-replies are outside the scope of the current
rulemaking,\14\ noting that it did not wish to encourage additional
filings by addressing sur-replies in the Codes at this time.\15\
Finally, the commenter asked that FINRA amend the rules to include
express language limiting the scope of motion replies to those issues
and facts previously raised in the motion and response.\16\ FINRA
responded that it does not intend to amend the proposal in response to
this comment, as it believes that arbitrators are in the best position
to determine the scope of motions and replies thereto and would address
any such concerns directly with the parties.\17\
---------------------------------------------------------------------------

    \11\ St. John's Letter.
    \12\ FINRA Response.
    \13\ St. John's Letter.
    \14\ Telephone conversation with Margo Hassan of FINRA on April
6, 2011.
    \15\ FINRA Response.
    \16\ St. John's Letter.
    \17\ FINRA Response.
---------------------------------------------------------------------------

IV. Discussion and Commission Findings

    The Commission has carefully reviewed the proposed rule change, the
comments received, and FINRA's response to the comments, and finds that
the proposed rule change is consistent with the requirements of the Act
and the rules and regulations thereunder applicable to a national
securities association.\18\ In particular, the Commission finds that
the proposed rule change is consistent with Section 15A(b)(6) of the
Act,\19\ which, among other things, requires that FINRA rules be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, and, in general, to
protect investors and the public interest. More specifically, the
Commission finds that the proposed rule change codifies

existing practice and helps to promote a fair and efficient process for
the resolution of claims.
---------------------------------------------------------------------------

    \18\ 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).
    \19\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\20\ that the proposed rule change (SR-FINRA-2011-006), be, and
hereby is, approved.
---------------------------------------------------------------------------

    \20\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
---------------------------------------------------------------------------

    \21\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-8896 Filed 4-12-11; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 83, Number 216 (Wednesday, November 7, 2018)]
[Notices]
[Pages 55765-55768]
[FR Doc No: 2018-24308]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84520; File No. SR-BX-2018-050]

Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Add Definitions
to Chapter I, Section 1, Titled General Provisions and Also Amend
Chapter VI, Section 18, Titled Risk Protections

November 1, 2018.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on October 18, 2018, Nasdaq BX, Inc. (``BX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to add definitions to Chapter I, Section 1,
titled ``General Provisions'' and also amend Chapter VI, Section 18,
titled, ``Risk Protections.''
    The text of the proposed rule change is available on the Exchange's
website at http://nasdaqbx.cchwallstreet.com/, at the principal office
of the Exchange, and at the Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these

statements may be examined at the places specified in Item IV below.
The Exchange has prepared summaries, set forth in sections A, B, and C
below, of the most significant aspects of such statements.

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

1. Purpose
    The purpose of this rule change is to adopt certain definitions
within Chapter I, Section 1, titled ``General Provisions'' and also
amend Chapter VI, Section 18, titled, ``Risk Protections.'' Each change
is described in more detail below.
Definitions
    The Exchange proposes to amend Chapter I, Section 1 to add three
new definitions into its Rulebook. These definitions are utilized in
technical documents issued by the Exchange and will provide an ease of
reference for understanding these terms. Specifically, Chapter I,
Section 1(a)(70) would define an account number as a number assigned to
a Participant. Participants may have more than one account number.
Chapter I, Section 1(a)(71) would define a badge as an account number,
which may contain letters and/or numbers, assigned to BX Market Makers.
A BX Market Maker account may be associated with multiple badges.
Finally, Chapter I, Section 1(a)(72) would define a mnemonic as an
acronym comprised of letters and/or numbers assigned to Participants. A
Participant account may be associated with multiple mnemonics.
Risk Protections
Order Price Protection
    The Exchange proposes a minor amendment to Chapter VI, Section
18(1) to add punctuation and ``OPP'' at the beginning of that sentence
to conform the text to the remainder of the rule. The Exchange proposes
to remove the example within Rule Chapter VI, Section 18(1)(B)(i) which
states, ``For example, if the Reference BBO on the offer side is $1.10,
an order to buy options for more than $1.65 would be rejected.
Similarly, if the Reference BBO on the bid side is $1.10, an order to
sell options for less than $0.55 will be rejected.'' The Exchange also
proposes to remove the example within Chapter VI, Section 18(1)(B)(ii)
which states, ``For example, if the Reference BBO on the offer side is
$1.00, an order to buy options for more than $2.00 would be rejected.
However, if the Reference BBO of the bid side of an incoming order to
sell is less than or equal to $1.00, the OPP limits set forth above
will result in all incoming sell orders being accepted regardless of
their limit.'' The Exchange notes that while the examples remain
accurate, the Exchange proposes to remove the text to conform the rule
text to other risk protections. The Exchange does not believe it is
necessary to have these examples within the rule text.
Market Order Spread Protection
    The Exchange proposes to amend the Market Order Spread Protection
Rule in Chapter VI, Section 18(a)(2) to permit BX to establish
different thresholds for one or more series or classes of options
similar to Phlx.\3\ The Exchange desires, similar to Phlx, to be
permitted the flexibility to allow it to determine a threshold suitable
for each series or class of option. The Exchange's current rule
provides no discretion to permit different thresholds for one or more
series or classes of options. By adding this rule text, the Exchange
proposes to permit one or more series or classes of options to set a
different threshold, which the Exchange would announce via an Options
Trader Alert, similar to Phlx. The Exchange desires to conform this
protection to Phlx so that it could set the same threshold across
affiliated markets. The Phlx Rule Change provided that the $5 threshold
is appropriate because it seeks to ensure that the displayed bid and
offer are within reasonable ranges and do not represent erroneous
prices. Further the Exchange noted that this protection will bolster
the normal resilience and market behavior that persistently produces
robust reference prices. This feature should create a level of
protection that prevents Market Orders from entering the Order Book
outside of an acceptable range for the Market Order to execute. The
Exchange notes that those goals remain consistent with the Exchange's
goals today for this risk feature. The Exchange would establish
different thresholds for one or more series or classes of options if it
believed that the threshold should differ to retain these goals.
---------------------------------------------------------------------------

    \3\ Securities Exchange Act Release No. 83141 (May 1, 2018), 83
FR 20123 (May 7, 2018) (SR-Phlx-2018-32). Footnote 11 of this filing
provides that Exchange may establish differences other than the
referenced threshold for one or more series or classes of options.
---------------------------------------------------------------------------

Anti-Internalization
    The Exchange proposes to add a new sentence to Anti-Internalization
Rule at Chapter VI, Section 18(c)(1) to provide that Anti-
Internalization functionality shall not apply in any auction. This is
the current practice today. With respect to an auction,\4\ the Exchange
notes that Anti-Internalization functionality is difficult to apply
during auctions, and there is limited benefit in doing so. There is
limited benefit because, generally speaking, auctions do not raise the
same policy concerns for wash sales and ERISA \5\ due to the semi-
random manner in which trades are matched. Also, the Exchange notes
that with respect to entering quotes in an auction, a Market Maker
could not start an auction in symbols in which they are assigned. With
respect to orders, Market Makers can only commence a PRISM in a non-
assigned symbol.\6\ It is not common for a Market Maker to commence
such an auction. Finally, the Exchange notes that Nasdaq ISE, LLC Rule
714(b)(3)(A) contains the same constraint in that it does not apply the
Anti-Internalization protection in any auction.
---------------------------------------------------------------------------

    \4\ PRISM is the Exchange's Price Improvement Auction. See BX
Rules at Chapter VI, Section 9.
    \5\ AIQ is designed to assist market participants in complying
with certain rules and regulations of the Employee Retirement Income
Security Act (``ERISA'') that preclude and/or limit managing broker-
dealers of such accounts from trading as principal with orders
generated for those accounts. It can also assist Market Makers in
reducing trading costs from unwanted executions potentially
resulting from the interaction of executable buy and sell trading
interest from the same firm when performing the same market making
function.
    \6\ Specialists and ROTs can only quote in symbols in which they
are assigned.
---------------------------------------------------------------------------

Automated Removal of Quotes
    Finally, the Exchange proposes to amend the title of Chapter VI,
Section 18(c)(2) from ``Automated Removal of Quotes'' to ``Quotation
Adjustments'' to conform the title across Nasdaq markets.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\7\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\8\ in particular, in that it is designed to promote
just and equitable principles of trade and to protect investors and the
public interest by adding greater transparency to the Exchange's rules.
The Exchange's proposal to add definitions to Chapter I, Section 1 will
bring greater clarity to the Anti-Internalization functionality and to
the Rulebook. Amendments to remove examples from the OPP rule text will
conform the rule text to other rules. The Exchange believes that it is
unnecessary to have examples in the rule text. Adding the word
``trading'' before the word ``halt'' within the Market Order

Spread Protection rule text will bring conformity to Chapter VI,
Section 18.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange's proposal to expand the Market Order Spread
Protection permits the Exchange to establish different thresholds for
one or more series or classes of options similar to Phlx. The Exchange
desires this flexibility to allow it, similar to Phlx,\9\ to determine
a threshold suitable for each series or class of option. The Exchange
believes that expanding this capability is consistent with the Act
because it would allow the Exchange to consider thresholds for Market
Order Spread Protection at a more granular level, per series or class,
to ensure that the displayed bid and offer are within reasonable ranges
and do not represent erroneous prices. The Exchange intends that this
risk protection would bolster the normal resilience and market behavior
that persistently produces robust reference prices, while creating a
level of protection that prevents Market Orders from entering the Order
Book outside of an acceptable range for the Market Order to execute.
---------------------------------------------------------------------------

    \9\ See note 4 above.
---------------------------------------------------------------------------

    The Exchange's proposal to make clear that the Anti-Internalization
functionality will not apply in any auction will also bring greater
transparency to the rules and the limitation of this functionality.
With respect to an auction,\10\ the Exchange notes that Anti-
Internalization functionality is difficult to apply during auctions,
and there is limited benefit in doing so. There is limited benefit
because, generally speaking, auctions do not raise the same policy
concerns for wash sales and ERISA \11\ due to the semi-random manner in
which trades are matched. Also, the Exchange notes that with respect to
entering quotes in an auction, a Market Maker could not start an
auction in symbols in which they are assigned. With respect to orders,
Market Makers can only commence a PRISM in a non-assigned symbol. It is
not common for a Market Maker to commence such an auction.
---------------------------------------------------------------------------

    \10\ PIXL is the Exchange's Price Improvement XL auction. See
Phlx Rule 1087.
    \11\ See note 6 above.
---------------------------------------------------------------------------

    Finally, the Exchange's proposal to amend the title of Chapter VI,
Section 18(c)(2) from ``Automated Removal of Quotes'' to ``Quotation
Adjustments'' should better describe the rule and conform the title to
other Nasdaq affiliate markets. The proposals noted herein are
consistent with the Act because they provide more detail and
transparency to the Exchange's rules noted herein to the benefit of
market participants.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange believes that the
proposed amendments do not impose an undue burden on competition
because the definitions and amendments to conform the rule text will
provide greater clarity as to the meaning of those terms. Removing
examples from the OPP rule text does not impose an undue burden on
competition because this text is not necessary within the rule text.
Adding the word ``trading'' before the word ``halt'' within the Market
Order Spread Protection rule text will bring conformity to Chapter VI,
Section 18. The Exchange's proposal to expand the Market Order Spread
Protection to permit the Exchange to establish different thresholds for
one or more series or classes of options, similar to Phlx, would apply
uniformly to all market participants.
    The Exchange's proposal to make clear that the Anti-Internalization
functionality will not apply in any auction will also bring greater
transparency to the rules and the limitation of this functionality.
With respect to an auction, the Exchange notes that Anti-
Internalization functionality is difficult to apply during auctions,
and there is limited benefit in doing so. There is limited benefit
because, generally speaking, auctions do not raise the same policy
concerns for wash sales and ERISA \12\ due to the semi-random manner in
which trades are matched. Finally, the Exchange's proposal to amend the
title of Rule Chapter VI, Section 18(c)(2) is non-substantive.
---------------------------------------------------------------------------

    \12\ See note 6 above.
---------------------------------------------------------------------------

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

    No written comments were either solicited or received.

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

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \13\ and Rule 19b-
4(f)(6) thereunder.\14\
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \15\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \16\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has requested that the Commission waive the 30-day operative delay so
that the proposed rule change may become operative upon filing. The
Exchange believes that waiver of the operative delay would allow the
Exchange to update its rules without delay to remove inconsistent rule
language, make clarifying changes to reflect current and accurate
information, and bring greater transparency to the Exchange's risk
protections and Anti-Internalization rule. Additionally, the Commission
notes that the changes relating to the Anti-Internalization
functionality and Market Order Spread Protection are based on the
operation of similar functionality on Nasdaq ISE and Phlx,
respectively. Therefore, the Commission believes that waiver of the 30-
day operative delay is consistent with the protection of investors and
the public interest. Accordingly, the Commission hereby waives the
operative delay and designates the proposed rule change operative upon
filing.\17\
---------------------------------------------------------------------------

    \15\ 17 CFR 240.19b-4(f)(6).
    \16\ 17 CFR 240.19b-4(f)(6)(iii).
    \17\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-BX-2018-050 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-BX-2018-050. 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-BX-2018-050, and should be submitted on
or before November 28, 2018.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-24308 Filed 11-6-18; 8:45 am]
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[Federal Register Volume 85, Number 87 (Tuesday, May 5, 2020)]
[Rules and Regulations]
[Pages 26609-26611]
[FR Doc No: 2020-09485]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Docket No. FAA-2019-1041; Airspace Docket No. 19-AGL-27]
RIN 2120-AA66

Amendment of Class E Airspace; Cadiz, Caldwell, and Cambridge, OH

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: This action amends the Class E airspace extending upward from
700 feet above the surface at Harrison County Airport, Cadiz, OH; Noble
County Airport, Caldwell, OH; and Cambridge Municipal Airport,
Cambridge, OH. These actions are the result of airspace reviews caused
by the decommissioning of the Newcomerstown VHF omnidirectional range
(VOR) navigation aid, which provided navigation information for the
instrument procedures at these airports, as part of the VOR Minimum
Operational Network (MON) Program. The geographic coordinates of
Harrison County Airport and Noble County Airport are also being updated
to coincide with the FAA's aeronautical database. Airspace redesign is
necessary for the safety and management of instrument flight rules
(IFR) operations at these airports.

DATES: Effective 0901 UTC, July 16, 2020. The Director of the Federal
Register approves this incorporation by reference action under Title 1
Code of Federal Regulations part 51, subject to the annual revision of
FAA Order 7400.11 and publication of conforming amendments.

ADDRESSES: FAA Order 7400.11D, Airspace Designations and Reporting
Points, and subsequent amendments can

be viewed online at https://www.faa.gov/air_traffic/publications/. For
further information, you can contact the Airspace Policy Group, Federal
Aviation Administration, 800 Independence Avenue SW, Washington, DC
20591; telephone:<PHONE_NUMBER>. The Order is also available for
inspection at the National Archives and Records Administration (NARA).
For information on the availability of FAA Order 7400.11D at NARA,
email<EMAIL_ADDRESS>or go to https://www.archives.gov/federal-register/cfr/ibr-locations.html.

FOR FURTHER INFORMATION CONTACT: Jeffrey Claypool, Federal Aviation
Administration, Operations Support Group, Central Service Center, 10101
Hillwood Parkway, Fort Worth, TX 76177; telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Authority for This Rulemaking

    The FAA's authority to issue rules regarding aviation safety is
found in Title 49 of the United States Code. 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. This rulemaking is promulgated under the authority described
in Subtitle VII, Part A, Subpart I, Section 40103. Under that section,
the FAA is charged with prescribing regulations to assign the use of
airspace necessary to ensure the safety of aircraft and the efficient
use of airspace. This regulation is within the scope of that authority
as it amends the Class E airspace extending upward from 700 feet above
the surface at Harrison County Airport, Cadiz, OH; Noble County
Airport, Caldwell, OH; and Cambridge Municipal Airport, Cambridge, OH,
to support IFR operations at these airports.

History

    The FAA published a notice of proposed rulemaking in the Federal
Register (85 FR 5342; January 30, 2020) for Docket No. FAA-2019-1041 to
amend the Class E airspace extending upward from 700 feet above the
surface at Harrison County Airport, Cadiz, OH; Noble County Airport,
Caldwell, OH; and Cambridge Municipal Airport, Cambridge, OH.
Interested parties were invited to participate in this rulemaking
effort by submitting written comments on the proposal to the FAA. No
comments were received.
    Class E airspace designations are published in paragraph 6005 of
FAA Order 7400.11D, dated August 8, 2019, and effective September 15,
2019, which is incorporated by reference in 14 CFR 71.1. The Class E
airspace designations listed in this document will be published
subsequently in the Order.

Availability and Summary of Documents for Incorporation by Reference

    This document amends FAA Order 7400.11D, Airspace Designations and
Reporting Points, dated August 8, 2019, and effective September 15,
2019. FAA Order 7400.11D is publicly available as listed in the
ADDRESSES section of this document. FAA Order 7400.11D lists Class A,
B, C, D, and E airspace areas, air traffic service routes, and
reporting points.

The Rule

    This amendment to Title 14 Code of Federal Regulations (14 CFR)
part 71:
    Amends the Class E airspace extending upward from 700 feet above
the surface to within a 6.4-mile radius (decreased from a 7-mile
radius) of the Harrison County Airport, Cadiz, OH; removes the city
associated with the airport to comply with a change to FAA Order
7400.2M, Procedures for Handling Airspace Matters; updates the
geographic coordinates of the airport to coincide with the FAA's
aeronautical database; and removes the exclusionary language from the
airspace legal description as it is no longer required;
    Amends the Class E airspace extending upward from 700 feet above
the surface at Noble County Airport, Caldwell, OH, by updating the
geographic coordinates of the airport to coincide with the FAA's
aeronautical database; removes the city associated with the airport to
comply with a change to FAA Order 7400.2M; and removes the exclusionary
language from the airspace legal description as it is no longer
required;
    And amends the Class E airspace extending upward from 700 feet
above the surface to within a 6.4-mile radius (decreased from a 7.5-
mile radius) of Cambridge Municipal Airport, Cambridge, OH.
    These actions are the result of airspace reviews caused by the
decommissioning of the Newcomerstown VOR, which provided navigation
information for the instrument procedures at these airports, as part of
the VOR MON Program.
    FAA Order 7400.11, Airspace Designations and Reporting Points, is
published yearly and effective on September 15.

Regulatory Notices and Analyses

    The FAA has determined that this regulation only involves an
established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current, is
non-controversial and unlikely to result in adverse or negative
comments. It, therefore: (1) Is not a ``significant regulatory action''
under Executive Order 12866; (2) is not a ``significant rule'' under
DOT Regulatory Policies and Procedures (44 FR 11034; February 26,
1979); and (3) does not warrant preparation of a regulatory evaluation
as the anticipated impact is so minimal. Since this is a routine matter
that only affects air traffic procedures and air navigation, it is
certified that this rule, when promulgated, does not have a significant
economic impact on a substantial number of small entities under the
criteria of the Regulatory Flexibility Act.

Environmental Review

    The FAA has determined that this action qualifies for categorical
exclusion under the National Environmental Policy Act in accordance
with FAA Order 1050.1F, ``Environmental Impacts: Policies and
Procedures,'' paragraph 5-6.5.a. This airspace action is not expected
to cause any potentially significant environmental impacts, and no
extraordinary circumstances exist that warrant preparation of an
environmental assessment.

Lists of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (air).

Adoption of the Amendment

    In consideration of the foregoing, the Federal Aviation
Administration amends 14 CFR part 71 as follows:

PART 71--DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND REPORTING POINTS

0
1. The authority citation for part 71 continues to read as follows:

    Authority: 49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O.
10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.

Sec.  71.1  [Amended]

0
2. The incorporation by reference in 14 CFR 71.1 of FAA Order 7400.11D,
Airspace Designations and Reporting Points, dated August 8, 2019, and
effective September 15, 2019, is amended as follows:

Paragraph 6005 Class E Airspace Areas Extending Upward From 700
Feet or More Above the Surface of the Earth.

* * * * *

AGL OH E5 Cadiz, OH [Amended]

Harrison County Airport, OH
    (Lat. 40[deg]14'18'' N, long. 81[deg]00'46'' W)

    That airspace extending upward from 700 feet above the surface
within a 6.4-mile radius of the Harrison County Airport.

AGL OH E5 Caldwell, OH [Amended]

Noble County Airport, OH
    (Lat. 39[deg]48'03'' N, long. 81[deg]32'11'' W)

    That airspace extending upward from 700 feet above the surface
within a 6.3-mile radius of Noble County Airport.

AGL OH E5 Cambridge, OH [Amended]

Cambridge Municipal Airport, OH
    (Lat. 39[deg]58'30'' N, long. 81[deg]34'39'' W)

    That airspace extending upward from 700 feet above the surface
within a 6.4-mile radius of the Cambridge Municipal Airport.

    Issued in Fort Worth, Texas, on April 27, 2020.
Steven Phillips,
Acting Manager, Operations Support Group, ATO Central Service Center.
[FR Doc. 2020-09485 Filed 5-4-20; 8:45 am]
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