[Federal Register Volume 81, Number 104 (Tuesday, May 31, 2016)]
[Notices]
[Pages 34407-34414]
[FR Doc No: 2016-12670]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77895; File No. SR-NASDAQ-2016-071]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing of Proposed Rule Change, as Modified by Amendment No.
1 Thereto, Relating to the Listing and Trading of the Shares of the
First Trust CEF Income Opportunity ETF and the First Trust Municipal
CEF Income Opportunity ETF of First Trust Exchange-Traded Fund VIII

May 24, 2016.
    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 May 10, 2016, The NASDAQ Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I and II below, which Items have been prepared by Nasdaq. On May
20, 2016, the Exchange submitted Amendment No. 1 to the proposed rule
change. The Commission is publishing this notice to solicit comments on
the proposed rule change, as modified by Amendment No. 1 thereto, from
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    Nasdaq proposes to list and trade the shares of the following under
Nasdaq Rule 5735 (``Managed Fund Shares''): \3\ First Trust CEF Income
Opportunity ETF (the ``CEF Income Opportunity Fund'') and First Trust
Municipal CEF Income Opportunity ETF (the ``Municipal CEF Income
Opportunity Fund''). The CEF Income Opportunity Fund and the Municipal
CEF Income Opportunity Fund are each a ``Fund'' and collectively, the
``Funds.'' Each Fund is a series of First Trust Exchange-Traded Fund
VIII (the ``Trust''). The shares of each Fund are collectively referred
to herein as the ``Shares.''
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    \3\ The Commission approved Nasdaq Rule 5735 in Securities
Exchange Act Release No. 57962 (June 13, 2008), 73 FR 35175 (June
20, 2008) (SR-NASDAQ-2008-039). There are already multiple actively
managed funds listed on the Exchange; see, e.g., Securities Exchange
Act Release Nos. 72506 (July 1, 2014), 79 FR 38631 (July 8, 2014)
(SR-NASDAQ-2014-050) (order approving listing and trading of First
Trust Strategic Income ETF); 69464 (April 26, 2013), 78 FR 25774
(May 2, 2013) (SR-NASDAQ-2013-036) (order approving listing and
trading of First Trust Senior Loan Fund); and 66489 (February 29,
2012), 77 FR 13379 (March 6, 2012) (SR-NASDAQ-2012-004) (order
approving listing and trading of WisdomTree Emerging Markets
Corporate Bond Fund). The Exchange believes the proposed rule change
raises no significant issues not previously addressed in those prior
Commission orders.
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    The text of the proposed rule change is available at http://nasdaq.cchwallstreet.com/, at Nasdaq's principal office, 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, Nasdaq included statements
concerning the purpose of, and basis for, the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. Nasdaq 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 Exchange proposes to list and trade the Shares of each Fund
under Nasdaq Rule 5735, which governs the listing and trading of
Managed Fund Shares \4\ on the Exchange. Each Fund will be an actively
managed exchange-traded fund (``ETF''). The Shares will be offered by
the Trust, which was established as a Massachusetts business trust on
February 22, 2016.\5\ The Trust is registered with the Commission as an
investment company and has filed a registration statement on Form N-1A
(``Registration Statement'') with the Commission.\6\ Each Fund will be
a series of the Trust.
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    \4\ A Managed Fund Share is a security that represents an
interest in an investment company registered under the Investment
Company Act of 1940 (15 U.S.C. 80a-1) (the ``1940 Act'') organized
as an open-end investment company or similar entity that invests in
a portfolio of securities selected by its investment adviser
consistent with its investment objectives and policies. In contrast,
an open-end investment company that issues Index Fund Shares, listed
and traded on the Exchange under Nasdaq Rule 5705, seeks to provide
investment results that correspond generally to the price and yield
performance of a specific foreign or domestic stock index, fixed
income securities index or combination thereof.
    \5\ The Commission has issued an order, upon which the Trust may
rely, granting certain exemptive relief under the 1940 Act. See
Investment Company Act Release No. 28468 (October 27, 2008) (File
No. 812-13477).
    \6\ See Registration Statement on Form N-1A for the Trust, dated
March 14, 2016 (File Nos. 333-210186 and 811-23147). The
descriptions of the Funds and the Shares contained herein are based,
in part, on information in the Registration Statement.
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    First Trust Advisors L.P. will be the investment adviser
(``Adviser'') to the Funds. The Funds do not currently intend to use a
sub-adviser. First Trust Portfolios L.P. (the ``Distributor'') will be
the principal underwriter and distributor of each Fund's Shares. The
Bank of New York Mellon Corporation (``BNY'') will act as the
administrator, accounting agent, custodian and transfer agent to the
Funds.
    Paragraph (g) of Rule 5735 provides that if the investment adviser
to the investment company issuing Managed Fund Shares is affiliated
with a broker-dealer, such investment adviser shall erect a ``fire
wall'' between the investment adviser and the broker-dealer with
respect to access to information concerning the composition and/or
changes to such investment company portfolio.\7\ In addition, paragraph
(g) further requires that personnel who make decisions on the open-end
fund's portfolio composition must be subject to procedures designed to
prevent the use and dissemination of material, non-public information
regarding the open-end fund's portfolio.
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    \7\ An investment adviser to an open-end fund is required to be
registered under the Investment Advisers Act of 1940 (the ``Advisers
Act''). As a result, the Adviser and its related personnel are
subject to the provisions of Rule 204A-1 under the Advisers Act
relating to codes of ethics. This Rule requires investment advisers
to adopt a code of ethics that reflects the fiduciary nature of the
relationship to clients as well as compliance with other applicable
securities laws. Accordingly, procedures designed to prevent the
communication and misuse of non-public information by an investment
adviser must be consistent with Rule 204A-1 under the Advisers Act.
In addition, Rule 206(4)-7 under the Advisers Act makes it unlawful
for an investment adviser to provide investment advice to clients
unless such investment adviser has (i) adopted and implemented
written policies and procedures reasonably designed to prevent
violation, by the investment adviser and its supervised persons, of
the Advisers Act and the Commission rules adopted thereunder; (ii)
implemented, at a minimum, an annual review regarding the adequacy
of the policies and procedures established pursuant to subparagraph
(i) above and the effectiveness of their implementation; and (iii)
designated an individual (who is a supervised person) responsible
for administering the policies and procedures adopted under
subparagraph (i) above.
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    Rule 5735(g) is similar to Nasdaq Rule 5705(b)(5)(A)(i); however,
paragraph (g) in connection with the establishment of a ``fire wall''
between the investment adviser and the broker-dealer reflects the
applicable open-end fund's portfolio, not an underlying benchmark
index, as is the case with index-based funds. The Adviser is not a
broker-dealer, but it is affiliated with the Distributor, a broker-
dealer, and has implemented and will maintain a fire wall with respect
to its broker-dealer affiliate regarding access to information
concerning the composition and/or changes to a portfolio.
    In addition, personnel who make decisions on each Fund's portfolio
composition will be subject to procedures designed to prevent the use
and dissemination of material non-public information regarding such
Fund's portfolio. In the event (a) the Adviser or any sub-adviser
registers as a broker-dealer, or becomes newly affiliated with a
broker-dealer, or (b) any new adviser or sub-adviser is a registered
broker-dealer or becomes affiliated with another broker-dealer, it will
implement and will maintain a fire wall with respect to its relevant
personnel and/or such broker-dealer affiliate, as applicable, regarding
access to information concerning the composition and/or changes to a
portfolio and will be subject to procedures designed to prevent the use
and dissemination of material non-public information regarding such
portfolio.
    Each Fund intends to qualify each year as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as
amended.
The Funds' Principal Investment Strategies
    The investment objective of the CEF Income Opportunity Fund will be
to seek to provide current income with a secondary emphasis on total
return. The investment objective of the Municipal CEF Income
Opportunity Fund will be to seek to provide current income. Under
normal market conditions,\8\ (a) the CEF Income Opportunity Fund will
seek to achieve its investment objective by investing at least 80% of
its net assets (including investment borrowings) in a portfolio of
closed-end funds and (b) the Municipal CEF Income Opportunity Fund will
seek to achieve its investment objective by investing at least 80% of
its net assets (including investment borrowings) in a portfolio of
municipal closed-end funds.\9\ In selecting the Closed-End Funds in
which each Fund will invest, the Adviser will utilize a range of
investment approaches and will take into account various market metrics
and economic factors, as well as market conditions.
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    \8\ The term ``under normal market conditions'' as used herein
includes, but is not limited to, the absence of adverse market,
economic, political, or other conditions, including extreme
volatility or trading halts in the securities markets or the
financial markets generally; operational issues causing
dissemination of inaccurate market information; or force majeure
type events such as systems failure, natural or man-made disaster,
act of God, armed conflict, act of terrorism, riot or labor
disruption or any similar intervening circumstance. On a temporary
basis, including for defensive purposes, during the initial invest-
up period and during periods of high cash inflows or outflows, a
Fund may depart from its principal investment strategies; for
example, it may hold a higher than normal proportion of its assets
in cash. During such periods, a Fund may not be able to achieve its
investment objective. A Fund may adopt a defensive strategy when the
Adviser believes securities in which such Fund normally invests have
elevated risks due to political or economic factors and in other
extraordinary circumstances.
    \9\ The closed-end funds in which each Fund invests (``Closed-
End Funds'') will be registered under the 1940 Act and listed and
traded in the U.S. on registered exchanges. Each Fund may invest in
the securities of Closed-End Funds (as well as certain other
investment companies) in excess of the limits imposed under the 1940
Act pursuant to an exemptive order on which the Trust may rely. See
Investment Company Act Release No. 30377 (February 5, 2013) (File
No. 812-13895) (the ``Fund of Funds Order'').
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Other Investments for the Funds
    Each Fund may invest (in the aggregate) up to 20% of its net assets
in the following securities and instruments:

    Each Fund may invest in the following exchange-traded products: (i)
ETFs; \10\ and (ii) exchange-traded notes (``ETNs'').\11\
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    \10\ 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 a Fund will be
listed and traded in the U.S. on registered exchanges. Each 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 or the Fund of Funds
Order. The ETFs in which the Fund may invest include Index Fund
Shares (as described in Nasdaq Rule 5705), Portfolio Depository
Receipts (as described in Nasdaq Rule 5705), and Managed Fund Shares
(as described in Nasdaq Rule 5735). While the Funds may invest in
inverse ETFs, the Funds will not invest in leveraged or inverse
leveraged (e.g., 2X or -3X) ETFs.
    \11\ While the Funds may invest in inverse ETNs, the Funds will
not invest in leveraged or inverse leveraged (e.g., 2X or -3X) ETNs.
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    Each Fund may invest in money market mutual funds that will be
investment companies registered under the 1940 Act.
    Each Fund may invest in short-term debt instruments (described
below) or it may hold cash. The percentage of each Fund invested in
such instruments or held in cash will vary and will depend on several
factors, including market conditions. Each Fund may invest in the
following short-term debt instruments: \12\ (1) Fixed rate and floating
rate U.S. government securities, including bills, notes and bonds
differing as to maturity and rates of interest, which are either issued
or guaranteed by the U.S. Treasury or by U.S. government agencies or
instrumentalities; (2) certificates of deposit issued against funds
deposited in a bank or savings and loan association; (3) bankers'
acceptances, which are short-term credit instruments used to finance
commercial transactions; (4) repurchase agreements,\13\ which involve
purchases of debt securities; (5) bank time deposits, which are monies
kept on deposit with banks or savings and loan associations for a
stated period of time at a fixed rate of interest; and (6) commercial
paper, which is short-term unsecured promissory notes.\14\
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    \12\ Short-term debt instruments will be issued by issuers
having a long-term debt rating of at least BBB-/Baa3 by Standard &
Poor's Ratings Services, a Division of The McGraw-Hill Companies,
Inc. (``S&P Ratings''), Moody's Investors Service, Inc.
(``Moody's'') or Fitch Ratings (``Fitch'') and will have a maturity
of one year or less.
    \13\ Each Fund intends to enter into repurchase agreements only
with financial institutions and dealers believed by the Adviser to
present minimal credit risks in accordance with criteria approved by
the Board of Trustees of the Trust (``Trust Board''). The Adviser
will review and monitor the creditworthiness of such institutions.
The Adviser will monitor the value of the collateral at the time the
transaction is entered into and at all times during the term of the
repurchase agreement.
    \14\ Each Fund may only invest in commercial paper rated A-1 or
higher by S&P Ratings, Prime-1 or higher by Moody's or F1 or higher
by Fitch.
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Investment Restrictions
    The Funds will not invest in derivative instruments.
    Each Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets (calculated at the time of investment),
deemed illiquid by the Adviser.\15\ Each 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 such 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.\16\
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    \15\ In reaching liquidity decisions, the Adviser may consider
the following factors: The frequency of trades and quotes for the
security or other instrument; the number of dealers wishing to
purchase or sell the security or other instrument and the number of
other potential purchasers; dealer undertakings to make a market in
the security or other instrument; and the nature of the security or
other instrument and the nature of the marketplace in which it
trades (e.g., the time needed to dispose of the security or other
instrument, the method of soliciting offers and the mechanics of
transfer).
    \16\ The Commission has stated that long-standing Commission
guidelines have required open-end funds to hold no more than 15% of
their net assets in illiquid securities and other illiquid assets.
See Investment Company Act Release No. 28193 (March 11, 2008), 73 FR
14618 (March 18, 2008), footnote 34. See also Investment Company Act
Release No. 5847 (October 21, 1969), 35 FR 19989 (December 31, 1970)
(Statement Regarding ``Restricted Securities''); Investment Company
Act Release No. 18612 (March 12, 1992), 57 FR 9828 (March 20, 1992)
(Revisions of Guidelines to Form N-1A). A fund's portfolio security
is illiquid if it cannot be disposed of in the ordinary course of
business within seven days at approximately the value ascribed to it
by the fund. See Investment Company Act Release No. 14983 (March 12,
1986), 51 FR 9773 (March 21, 1986) (adopting amendments to Rule 2a-7
under the 1940 Act); Investment Company Act Release No. 17452 (April
23, 1990), 55 FR 17933 (April 30, 1990) (adopting Rule 144A under
the Securities Act of 1933).
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    The Funds may not invest 25% or more of the value of their
respective total assets in securities of issuers in any one industry.
This restriction does not apply to (a) obligations issued or guaranteed
by the U.S. government, its agencies or instrumentalities or (b)
securities of other investment companies.\17\
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    \17\ See Form N-1A, Item 9. The Commission has taken the
position that a fund is concentrated if it invests more than 25% of
the value of its total assets in any one industry. See, e.g.,
Investment Company Act Release No. 9011 (October 30, 1975), 40 FR
54241 (November 21, 1975).
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Creation and Redemption of Shares
    Each Fund will issue and redeem Shares on a continuous basis at net
asset value (``NAV'') \18\ only in large blocks of Shares (``Creation
Units'') in transactions with authorized participants, generally
including broker-dealers and large institutional investors
(``Authorized Participants''). Creation Units generally will consist of
50,000 Shares, although this may change from time to time. Creation
Units, however, are not expected to consist of less than 50,000 Shares.
Each Fund will issue and redeem Creation Units in exchange for an in-
kind portfolio of instruments and/or cash in lieu of such instruments
(the ``Creation Basket'').\19\ In addition, if there is a difference
between the NAV attributable to a Creation Unit and the market value of
the Creation Basket exchanged for the Creation Unit, the party
conveying instruments (which may include cash-in-lieu amounts) with the
lower value will pay to the other an amount in cash equal to the
difference (referred to as the ``Cash Component'').
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    \18\ The NAV of each Fund's Shares generally will be calculated
once daily Monday through Friday as of the close of regular trading
on the New York Stock Exchange (``NYSE''), generally 4:00 p.m.,
Eastern Time (the ``NAV Calculation Time''). NAV per Share will be
calculated by dividing a Fund's net assets by the number of Fund
Shares outstanding.
    \19\ It is expected that each Fund will typically issue and
redeem Creation Units on a cash basis; however, a Fund may, at
times, issue and redeem Creation Units on an in-kind (or partially
in-kind) basis.
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    Creations and redemptions must be made by or through an Authorized
Participant that has executed an agreement that has been agreed to by
the Distributor and BNY with respect to creations and redemptions of
Creation Units. All standard orders to create Creation Units must be
received by the transfer agent no later than the closing time of the
regular trading session on the NYSE (ordinarily 4:00 p.m., Eastern
Time) (the ``Closing Time'') in each case on the date such order is
placed in order for the creation of Creation Units to be effected based
on the NAV of Shares as next determined on such date after receipt of
the order in proper form. Shares may be redeemed only in Creation Units
at their NAV next determined after receipt not later than the Closing
Time of a redemption request in proper form by a Fund through the
transfer agent and only on a business day.
    The Funds' custodian, through the National Securities Clearing

Corporation, will make available on each business day, prior to the
opening of business of the Exchange, the list of the names and
quantities of the instruments comprising the Creation Basket, as well
as the estimated Cash Component (if any), for that day. The published
Creation Basket will apply until a new Creation Basket is announced on
the following business day prior to commencement of trading in the
Shares.
Net Asset Value
    Each Fund's NAV will be determined as of the close of regular
trading on the NYSE on each day the NYSE is open for trading. If the
NYSE closes early on a valuation day, the NAV will be determined as of
that time. NAV per Share will be calculated for each Fund by taking the
value of such Fund's total assets, including interest or dividends
accrued but not yet collected, less all liabilities, including accrued
expenses and dividends declared but unpaid, and dividing such amount by
the total number of Shares outstanding. The result, rounded to the
nearest cent, will be the NAV per Share. All valuations will be subject
to review by the Trust Board or its delegate.
    The Funds' investments will be valued daily. As described more
specifically below, investments traded on an exchange (i.e., a
regulated market), will generally be valued at market value prices that
represent last sale or official closing prices. In addition, as
described more specifically below, non-exchange traded investments will
generally be valued using prices obtained from third-party pricing
services (each, a ``Pricing Service'').\20\
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    \20\ The Adviser may use various Pricing Services or discontinue
the use of any Pricing Services, as approved by the Trust Board from
time to time.
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    If, however, valuations for any of the Funds' investments cannot be
readily obtained as provided in the preceding manner, or the Pricing
Committee of the Adviser (the ``Pricing Committee'') \21\ questions the
accuracy or reliability of valuations that are so obtained, such
investments will be valued at fair value, as determined by the Pricing
Committee, in accordance with valuation procedures (which may be
revised from time to time) adopted by the Trust Board (the ``Valuation
Procedures''), and in accordance with provisions of the 1940 Act. The
Pricing Committee's fair value determinations may require subjective
judgments about the value of an investment. The fair valuations attempt
to estimate the value at which an investment could be sold at the time
of pricing, although actual sales could result in price differences,
which could be material.
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    \21\ The Pricing Committee will be subject to procedures
designed to prevent the use and dissemination of material non-public
information regarding each Fund's portfolio.
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    Certain securities in which a Fund may invest will not be listed on
any securities exchange or board of trade. Such securities will
typically be bought and sold by institutional investors in individually
negotiated private transactions that function in many respects like an
over-the-counter secondary market, although typically no formal market
makers will exist. Certain securities, particularly debt securities,
will have few or no trades, or trade infrequently, and information
regarding a specific security may not be widely available or may be
incomplete. Accordingly, determinations of the value of debt securities
may be based on infrequent and dated information. Because there is less
reliable, objective data available, elements of judgment may play a
greater role in valuation of debt securities than for other types of
securities.
    The information summarized below is based on the Valuation
Procedures as currently in effect; however, as noted above, the
Valuation Procedures are amended from time to time and, therefore, such
information is subject to change.
    The following investments will typically be valued using
information provided by a Pricing Service: Except as provided below,
short-term U.S. government securities, commercial paper, and bankers'
acceptances, all as set forth under ``Other Investments for the Funds''
(collectively, ``Short-Term Debt Instruments''). Debt instruments may
be valued at evaluated mean prices, as provided by Pricing Services.
Pricing Services typically value non-exchange-traded instruments
utilizing a range of market-based inputs and assumptions, including
readily available market quotations obtained from broker-dealers making
markets in such instruments, cash flows, and transactions for
comparable instruments. In pricing certain instruments, the Pricing
Services may consider information about an instrument's issuer or
market activity provided by the Adviser.
    Short-Term Debt Instruments having a remaining maturity of 60 days
or less when purchased will typically be valued at cost adjusted for
amortization of premiums and accretion of discounts, provided the
Pricing Committee has determined that the use of amortized cost is an
appropriate reflection of value given market and issuer-specific
conditions existing at the time of the determination.
    Repurchase agreements will typically be valued as follows:
    Overnight repurchase agreements will be valued at amortized cost
when it represents the best estimate of value. Term repurchase
agreements (i.e., those whose maturity exceeds seven days) will be
valued at the average of the bid quotations obtained daily from at
least two recognized dealers.
    Certificates of deposit and bank time deposits will typically be
valued at cost.
    Closed-End Funds, ETFs and ETNs that are listed on any exchange
other than the Exchange will typically be valued at the last sale price
on the exchange on which they are principally traded on the business
day as of which such value is being determined. Closed-End Funds, ETFs
and ETNs listed on the Exchange will typically be valued at the
official closing price on the business day as of which such value is
being determined. If there has been no sale on such day, or no official
closing price in the case of securities traded on the Exchange, such
securities will typically be valued using fair value pricing. Closed-
End Funds, ETFs and ETNs traded on more than one securities exchange
will be valued at the last sale price or official closing price, as
applicable, on the business day as of which such value is being
determined at the close of the exchange representing the principal
market for such securities.
    Money market mutual funds typically will be valued at their NAVs as
reported by such funds' Pricing Services.
Availability of Information
    The Funds' Web site (www.ftportfolios.com), which will be publicly
available prior to the public offering of Shares, will include a form
of the prospectus for the Funds that may be downloaded. The Web site
will include the Shares' ticker, CUSIP and exchange information along
with additional quantitative information updated on a daily basis,
including, for each Fund: (1) Daily trading volume, the prior business
day's reported NAV and closing price, mid-point of the bid/ask spread
at the time of calculation of such NAV (the ``Bid/Ask Price''),\22\ and
a calculation of the premium and discount of the Bid/Ask Price against
the NAV; and (2) data in chart format displaying the frequency
distribution of discounts and premiums of the daily

Bid/Ask Price against the NAV, within appropriate ranges, for each of
the four previous calendar quarters. On each business day, before
commencement of trading in Shares in the Regular Market Session \23\ on
the Exchange, each Fund will disclose on its Web site the identities
and quantities of the portfolio of securities and other assets (the
``Disclosed Portfolio'' as defined in Nasdaq Rule 5735(c)(2)) held by
the Fund that will form the basis for the Fund's calculation of NAV at
the end of the business day.\24\
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    \22\ The Bid/Ask Price of each Fund will be determined using the
mid-point of the highest bid and the lowest offer on the Exchange as
of the time of calculation of the Fund's NAV. The records relating
to Bid/Ask Prices will be retained by each Fund and its service
providers.
    \23\ See Nasdaq Rule 4120(b)(4) (describing the three trading
sessions on the Exchange: (1) Pre-Market Session from 4 a.m. to 9:30
a.m., Eastern Time; (2) Regular Market Session from 9:30 a.m. to 4
p.m. or 4:15 p.m., Eastern Time; and (3) Post-Market Session from 4
p.m. or 4:15 p.m. to 8 p.m., Eastern Time).
    \24\ Under accounting procedures to be followed by the Funds,
trades made on the prior business day (``T'') will be booked and
reflected in NAV on the current business day (``T+1''). Accordingly,
a Fund will be able to disclose at the beginning of the business day
the portfolio that will form the basis for the NAV calculation at
the end of the business day.
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    On a daily basis, each Fund will disclose on its Web site the
following information regarding each portfolio holding, as applicable
to the type of holding: Ticker symbol, CUSIP number or other
identifier, if any; a description of the holding (including the type of
holding); quantity held (as measured by, for example, par value or
number of shares or units); maturity date, if any; coupon rate, if any;
effective date, if any; market value of the holding; and percentage
weighting of the holding in the Fund's portfolio. The Web site
information will be publicly available at no charge.
    In addition, for each Fund, an estimated value, defined in Rule
5735(c)(3) as the ``Intraday Indicative Value,'' that reflects an
estimated intraday value of the Fund's Disclosed Portfolio, will be
disseminated. Moreover, the Intraday Indicative Value, available on the
NASDAQ OMX Information LLC proprietary index data service,\25\ will be
based upon the current value for the components of the Disclosed
Portfolio and will be updated and widely disseminated by one or more
major market data vendors and broadly displayed at least every 15
seconds during the Regular Market Session. Premiums and discounts
between the Intraday Indicative Value and the market price may occur.
This should not be viewed as a ``real time'' update of the NAV per
Share of a Fund, which is calculated only once a day.
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    \25\ Currently, the NASDAQ OMX Global Index Data Service
(``GIDS'') is the Nasdaq global index data feed service, offering
real-time updates, daily summary messages, and access to widely
followed indexes and Intraday Indicative Values for ETFs. GIDS
provides investment professionals with the daily information needed
to track or trade Nasdaq indexes, listed ETFs, or third-party
partner indexes and ETFs.
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    The dissemination of the Intraday Indicative Value, together with
the Disclosed Portfolio, will allow investors to determine the value of
the underlying portfolio of a Fund on a daily basis and will provide a
close estimate of that value throughout the trading day.
    Investors will also be able to obtain each Fund's Statement of
Additional Information (``SAI''), annual and semi-annual reports
(together, ``Shareholder Reports''), and Form N-CSR and Form N-SAR,
filed twice a year. Each Fund's SAI and Shareholder Reports will be
available free upon request from such Fund, and those documents and the
Form N-CSR and Form N-SAR may be viewed on-screen or downloaded from
the Commission's Web site at www.sec.gov.
    Information regarding market price and trading volume of the Shares
will be continually available on a real-time basis throughout the day
on brokers' computer screens and other electronic services. Information
regarding the previous day's closing price and trading volume
information for the Shares will be published daily in the financial
section of newspapers. Quotation and last sale information for the
Shares will be available via Nasdaq proprietary quote and trade
services, as well as in accordance with the Unlisted Trading Privileges
and the Consolidated Tape Association (``CTA'') plans for the Shares.
Quotation and last sale information for the Closed-End Funds, ETFs and
ETNs will be available from the exchanges on which they are traded as
well as in accordance with any applicable CTA plans.
    Pricing information for Short-Term Debt Instruments, repurchase
agreements, bank time deposits and certificates of deposit will be
available from major broker-dealer firms and/or major market data
vendors and/or Pricing Services. Pricing information for Closed-End
Funds, ETFs and ETNs will be available from the applicable listing
exchange (as indicated above) and from major market data vendors.
    Money market mutual funds are typically priced once each business
day and their prices will be available through the applicable fund's
Web site or from major market data vendors.
Initial and Continued Listing
    The Shares will be subject to Rule 5735, which sets forth the
initial and continued listing criteria applicable to Managed Fund
Shares. The Exchange represents that, for initial and continued
listing, each Fund must be in compliance with Rule 10A-3 \26\ under the
Act. A minimum of 100,000 Shares will be outstanding at the
commencement of trading on the Exchange. The Exchange will obtain a
representation from the issuer of the Shares that the NAV per Share
will be calculated daily and that the NAV and the Disclosed Portfolio
will be made available to all market participants at the same time.
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    \26\ See 17 CFR 240.10A-3.
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Trading Halts
    With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares of a Fund. Nasdaq will halt 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 may be halted because of market conditions or for reasons
that, in the view of the Exchange, make trading in the Shares
inadvisable. These may include: (1) The extent to which trading is not
occurring in the securities and/or the other assets constituting the
Disclosed Portfolio of a Fund; or (2) whether other unusual conditions
or circumstances detrimental to the maintenance of a fair and orderly
market are present. Trading in the Shares also will be subject to Rule
5735(d)(2)(D), which sets forth circumstances under which Shares of a
Fund may be halted.
Trading Rules
    Nasdaq deems the Shares to be equity securities, thus rendering
trading in the Shares subject to Nasdaq's existing rules governing the
trading of equity securities. Nasdaq will allow trading in the Shares
from 4:00 a.m. until 8:00 p.m., Eastern Time. The Exchange has
appropriate rules to facilitate transactions in the Shares during all
trading sessions. As provided in Nasdaq Rule 5735(b)(3), the minimum
price variation for quoting and entry of orders in Managed Fund Shares
traded on the Exchange is $0.01.
Surveillance
    The Exchange represents that trading in the Shares will be subject
to the existing trading surveillances, administered by both Nasdaq and
also 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.\27\ The Exchange represents that
these procedures are adequate to properly monitor Exchange trading of
the Shares in all trading sessions and to deter and detect violations
of Exchange rules and applicable federal securities laws.
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    \27\ FINRA surveils trading on the Exchange pursuant to a
regulatory services agreement. The Exchange is responsible for
FINRA's performance under this regulatory services agreement.
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    The surveillances referred to above generally focus on detecting
securities trading outside their normal patterns, which could be
indicative of manipulative or other violative activity. When such
situations are detected, surveillance analysis follows and
investigations are opened, where appropriate, to review the behavior of
all relevant parties for all relevant trading violations.
    FINRA, on behalf of the Exchange, will communicate as needed
regarding trading in the Shares and the Closed-End Funds, ETFs and ETNs
held by the Funds with other markets and other entities that are
members of the Intermarket Surveillance Group (``ISG''),\28\ and FINRA
may obtain trading information regarding trading in the Shares and such
securities held by the Funds from such markets and other entities. In
addition, the Exchange may obtain information regarding trading in the
Shares and the Closed-End Funds, ETFs and ETNs held by the Funds from
markets and other entities that are members of ISG, which includes
securities exchanges, or with which the Exchange has in place a
comprehensive surveillance sharing agreement. Moreover, FINRA, on
behalf of the Exchange, will be able to access, as needed, trade
information for certain fixed income securities held by the Funds
reported to FINRA's Trade Reporting and Compliance Engine (``TRACE'').
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    \28\ For a list of the current members of ISG, see
www.isgportal.org. The Exchange notes that not all components of the
Disclosed Portfolio for a Fund may trade on markets that are members
of ISG or with which the Exchange has in place a comprehensive
surveillance sharing agreement.
---------------------------------------------------------------------------

    For each Fund, all of such Fund's net assets that are invested in
Closed-End Funds, ETFs and ETNs will be invested in instruments that
trade in markets that are members of ISG or are parties to a
comprehensive surveillance sharing agreement with the Exchange.
    In addition, the Exchange also has a general policy prohibiting the
distribution of material, non-public information by its employees.
Information Circular
    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 for each Fund will discuss the following: (1) The procedures
for purchases and redemptions of Shares in Creation Units (and that
Shares are not individually redeemable); (2) Nasdaq Rule 2111A, which
imposes suitability obligations on Nasdaq members with respect to
recommending transactions in the Shares to customers; (3) how
information regarding the Intraday Indicative Value and the Disclosed
Portfolio is disseminated; (4) 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; (5)
the requirement that members deliver a prospectus to investors
purchasing newly issued Shares prior to or concurrently with the
confirmation of a transaction; and (6) trading information. The
Information Circular will also discuss any exemptive, no-action and
interpretive relief granted by the Commission from any rules under the
Act.
    Additionally, the Information Circular for each Fund will reference
that such Fund is subject to various fees and expenses described in the
Registration Statement. The Information Circular for each Fund will
also disclose the trading hours of the Shares of such Fund and the
applicable NAV Calculation Time for the Shares. The Information
Circular for each Fund will disclose that information about the Shares
of such Fund will be publicly available on such Fund's Web site.
Continued Listing Representations
    All statements and representations made in this filing regarding
(a) the description of the portfolios, (b) limitations on portfolio
holdings or reference assets, or (c) the applicability of Exchange
rules and surveillance procedures shall constitute continued listing
requirements for listing the Shares on the Exchange.
    In addition, the issuer has represented to the Exchange that it
will advise the Exchange of any failure by the Funds to comply with the
continued listing requirements, and, pursuant to its obligations under
Section 19(g)(1) of the Act, the Exchange will monitor for compliance
with the continued listing requirements. If a Fund is not in compliance
with the applicable listing requirements, the Exchange will commence
delisting procedures under the Nasdaq 5800 Series.
2. Statutory Basis
    Nasdaq believes that the proposal is consistent with Section 6(b)
of the Act, in general, and Section 6(b)(5) of the Act, in particular,
in that it is 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, and to remove impediments to and perfect
the mechanism of a free and open market and, in general, to protect
investors and the public interest.
    The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices in that the
Shares will be listed and traded on the Exchange pursuant to the
initial and continued listing criteria in Nasdaq Rule 5735. The
Exchange represents that trading in the Shares will be subject to the
existing trading surveillances, administered by both Nasdaq and also
FINRA on behalf of the Exchange, which are designed to detect
violations of Exchange rules and applicable federal securities laws.
    The Adviser is not a broker-dealer, but it is affiliated with a
broker-dealer, and is required to implement a ``fire wall'' with
respect to its broker-dealer affiliate regarding access to information
concerning the composition and/or changes to each Fund's portfolio. In
addition, paragraph (g) of Nasdaq Rule 5735 further requires that
personnel who make decisions on the open-end fund's portfolio
composition must be subject to procedures designed to prevent the use
and dissemination of material non-public information regarding the
open-end fund's portfolio.
    FINRA, on behalf of the Exchange, will communicate as needed
regarding trading in the Shares and the Closed-End Funds, ETFs and ETNs
held by the Funds with other markets and other entities that are
members of ISG, and FINRA may obtain trading information regarding
trading in the Shares and such securities held by the Funds from such
markets and other entities.
    In addition, the Exchange may obtain information regarding trading
in the Shares and the Closed-End Funds, ETFs and ETNs held by the Funds
from markets and other entities that are members of ISG, which includes
securities exchanges, or with which the Exchange has in place a
comprehensive surveillance sharing agreement. Moreover, FINRA, on
behalf of the Exchange, will be able to access, as needed, trade
information for certain fixed income securities held by the Funds
reported to FINRA's TRACE. For

each Fund, all of such Fund's net assets that are invested in Closed-
End Funds, ETFs and ETNs will be invested in instruments that trade in
markets that are members of ISG or are parties to a comprehensive
surveillance sharing agreement with the Exchange.
    The investment objective of the CEF Income Opportunity Fund will be
to seek to provide current income with a secondary emphasis on total
return. The investment objective of the Municipal CEF Income
Opportunity Fund will be to seek to provide current income. Under
normal market conditions, (a) the CEF Income Opportunity Fund will seek
to achieve its investment objective by investing at least 80% of its
net assets (including investment borrowings) in a portfolio of Closed-
End Funds and (b) the Municipal CEF Income Opportunity Fund will seek
to achieve its investment objective by investing at least 80% of its
net assets (including investment borrowings) in a portfolio of
municipal Closed-End Funds.
    The Funds will not invest in derivative instruments. Each Fund may
hold up to an aggregate amount of 15% of its net assets in illiquid
assets (calculated at the time of investment), deemed illiquid by the
Adviser. Each 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.
    The proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
that the Exchange will obtain a representation from the issuer of the
Shares that the NAV per Share will be calculated daily and that the NAV
and the Disclosed Portfolio will be made available to all market
participants at the same time.
    In addition, a large amount of information will be publicly
available regarding the Funds and the Shares, thereby promoting market
transparency. Moreover, the Intraday Indicative Value, available on the
NASDAQ OMX Information LLC proprietary index data service, will be
widely disseminated by one or more major market data vendors and
broadly displayed at least every 15 seconds during the Regular Market
Session. On each business day, before commencement of trading in Shares
in the Regular Market Session on the Exchange, each Fund will disclose
on its Web site the Disclosed Portfolio that will form the basis for
the Fund's calculation of NAV at the end of the business day.
    Information regarding market price and trading volume of the Shares
will be continually available on a real-time basis throughout the day
on brokers' computer screens and other electronic services, and
quotation and last sale information 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 CTA plans for
the Shares. Quotation and last sale information for the Closed-End
Funds, ETFs and ETNs will be available from the exchanges on which they
are traded as well as in accordance with any applicable CTA plans.
    Pricing information for Short-Term Debt Instruments, repurchase
agreements, bank time deposits and certificates of deposit will be
available from major broker-dealer firms and/or major market data
vendors and/or Pricing Services. Pricing information for Closed-End
Funds, ETFs and ETNs will be available from the applicable listing
exchange (as indicated above) and from major market data vendors. Money
market mutual funds are typically priced once each business day and
their prices will be available through the applicable fund's Web site
or from major market data vendors.
    Each Fund's Web site will include a form of the prospectus for such
Fund and additional data relating to NAV and other applicable
quantitative information. Trading in Shares of the Funds will be halted
under the conditions specified in Nasdaq Rules 4120 and 4121 or because
of market conditions or for reasons that, in the view of the Exchange,
make trading in the Shares inadvisable, and trading in the Shares will
be subject to Nasdaq Rule 5735(d)(2)(D), which sets forth circumstances
under which Shares of a Fund may be halted. In addition, as noted
above, investors will have ready access to information regarding each
Fund's holdings, the Intraday Indicative Value, the Disclosed
Portfolio, and quotation and last sale information for the Shares.
    Each Fund's investments will be valued daily. Investments traded on
an exchange (i.e., a regulated market), will generally be valued at
market value prices that represent last sale or official closing
prices. Non-exchange traded investments will generally be valued using
prices obtained from a Pricing Service. If, however, valuations for any
of the Funds' investments cannot be readily obtained as provided in the
preceding manner, or the Pricing Committee questions the accuracy or
reliability of valuations that are so obtained, such investments will
be valued at fair value, as determined by the Pricing Committee, in
accordance with the Valuation Procedures and in accordance with
provisions of the 1940 Act.
    The proposed rule change is designed to perfect the mechanism of a
free and open market and, in general, to protect investors and the
public interest in that it will facilitate the listing and trading of
additional types of actively managed exchange-traded products that will
enhance competition among market participants, to the benefit of
investors and the marketplace.
    As noted above, FINRA, on behalf of the Exchange, will communicate
as needed regarding trading in the Shares and the Closed-End Funds,
ETFs and ETNs held by the Funds with other markets and other entities
that are members of ISG, and FINRA may obtain trading information
regarding trading in the Shares and such securities held by the Funds
from such markets and other entities.
    In addition, the Exchange may obtain information regarding trading
in the Shares and the Closed-End Funds, ETFs and ETNs held by the Funds
from markets and other entities that are members of ISG, which includes
securities exchanges, or with which the Exchange has in place a
comprehensive surveillance sharing agreement. Moreover, FINRA, on
behalf of the Exchange, will be able to access, as needed, trade
information for certain fixed income securities held by the Funds
reported to FINRA's TRACE.
    Furthermore, as noted above, investors will have ready access to
information regarding the Funds' holdings, the Intraday Indicative
Value, the Disclosed Portfolio, and quotation and last sale information
for the Shares. For each Fund, all of such Fund's net assets that are
invested in Closed-End Funds, ETFs and ETNs will be invested in
instruments that trade in markets that are members of ISG or are
parties to a comprehensive surveillance sharing agreement with the
Exchange.
    For the above reasons, Nasdaq believes the proposed rule change is
consistent with the requirements of Section 6(b)(5) of the Act.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange believes that
the proposed rule change will facilitate the listing and trading of
additional types of actively managed exchange-traded funds that will
enhance competition among market participants, to the benefit of
investors and the marketplace.

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

    Written comments were neither solicited nor received.

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

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

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, as modified by Amendment No. 1, is consistent with the Act.
Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2016-071 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-NASDAQ-2016-071. 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 the filing also will be available
for inspection and copying at the principal office of Nasdaq. 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-2016-071 and should
be submitted on or before June 21, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\29\
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    \29\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-12670 Filed 5-27-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 78, Number 175 (Tuesday, September 10, 2013)]
[Proposed Rules]
[Pages 55234-55236]
[FR Doc No: 2013-22026]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R05-OAR-2012-0453; FRL-9900-78-Region5]

Approval and Promulgation of Implementation Plans; Indiana;
Volatile Organic Compound Emission Control Measures for Industrial
Solvent Cleaning for Northwest Indiana

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: On May 29, 2012, the Indiana Department of Environmental
Management (IDEM) submitted revisions to its volatile organic compound
(VOC) industrial solvent cleaning rule for manufacturers of coatings,
inks, adhesives, and resins for approval into its State Implementation
Plan (SIP). These revisions are approvable because they are consistent
with EPA's Industrial Solvent Cleaning Control Technique Guideline
(CTG) document and therefore satisfy the reasonably available control
technology (RACT) requirements of the Clean Air Act (Act).

DATES: Comments must be received on or before October 10, 2013.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R05-
OAR-2012-0453, by one of the following methods:
     www.regulations.gov: Follow the on-line instructions for
submitting comments.
     Email<EMAIL_ADDRESS>     Fax:<PHONE_NUMBER>.
     Mail: Douglas Aburano, Chief, Attainment Planning and
Maintenance Section (AR-18J), U.S. Environmental Protection Agency, 77
West Jackson Boulevard, Chicago, Illinois 60604.
     Hand Delivery: Douglas Aburano, Chief, Attainment Planning
and Maintenance Section (AR-18J), U.S. Environmental Protection Agency,
77 West Jackson Boulevard, 18th floor, Chicago, Illinois 60604. Such
deliveries are only accepted during the Regional Office's normal hours
of operation, and special arrangements should be made for deliveries of
boxed information. The Regional Office official hours of business are
Monday through Friday, 8:30 a.m. to 4:30 p.m., excluding Federal
holidays.
    Instructions: Direct your comments to Docket ID No. EPA-R05-OAR-
2012-0453. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
www.regulations.gov, including any personal information provided,
unless the comment includes information claimed to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Do not submit information that you consider to
be CBI or otherwise protected through www.regulations.gov or email. The
www.regulations.gov Web site is an ``anonymous access'' system, which
means EPA will not know your identity or contact information unless you
provide it in the body of your comment. If you send an email comment
directly to EPA without going

through www.regulations.gov your email address will be automatically
captured and included as part of the comment that is placed in the
public docket and made available on the Internet. If you submit an
electronic comment, EPA recommends that you include your name and other
contact information in the body of your comment and with any disk or
CD-ROM you submit. If EPA cannot read your comment due to technical
difficulties and cannot contact you for clarification, EPA may not be
able to consider your comment. Electronic files should avoid the use of
special characters, any form of encryption, and be free of any defects
or viruses. For additional instructions on submitting comments, go to
Section I of the SUPPLEMENTARY INFORMATION section of this document.
    Docket: All documents in the docket are listed in the
www.regulations.gov index. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, will be publicly available only in hard copy.
Publicly available docket materials are available either electronically
in www.regulations.gov or in hard copy at the Environmental Protection
Agency, Region 5, Air and Radiation Division, 77 West Jackson
Boulevard, Chicago, Illinois 60604. This facility is open from 8:30
a.m. to 4:30 p.m., Monday through Friday, excluding Federal holidays.
We recommend that you telephone Steven Rosenthal at<PHONE_NUMBER>
before visiting the Region 5 office.

FOR FURTHER INFORMATION CONTACT: Steven Rosenthal, Environmental
Engineer, Attainment Planning & Maintenance Section, Air Programs
Branch (AR-18J), U.S. Environmental Protection Agency, Region 5, 77
West Jackson Boulevard, Chicago, Illinois 60604,<PHONE_NUMBER>,
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,''
``us,'' or ``our'' is used, we mean EPA. This supplementary information
section is arranged as follows:

I. What should I consider as I prepare my comments for EPA?
II. What is the background for this action?
III. What are Indiana's submitted VOC rule revisions and what is
EPA's analysis of the revisions?
IV. What action is EPA taking?
V. Statutory and Executive Order Reviews

I. What should I consider as I prepare my comments for EPA?

    When submitting comments, remember to:
    1. Identify the rulemaking by docket number and other identifying
information (subject heading, Federal Register date, and page number).
    2. Follow directions--EPA may ask you to respond to specific
questions or organize comments by referencing a Code of Federal
Regulations (CFR) part or section number.
    3. Explain why you agree or disagree; suggest alternatives and
substitute language for your requested changes.
    4. Describe any assumptions and provide any technical information
and/or data that you used.
    5. If you estimate potential costs or burdens, explain how you
arrived at your estimate in sufficient detail to allow for it to be
reproduced.
    6. Provide specific examples to illustrate your concerns, and
suggest alternatives.
    7. Explain your views as clearly as possible, avoiding the use of
profanity or personal threats.
    8. Make sure to submit your comments by the comment period deadline
identified.

II. What is the background for this action?

    On February 24, 2010, EPA approved into Indiana's SIP several VOC
rules in order to satisfy Indiana's VOC RACT requirements for the Lake
and Porter County portion of the Chicago-Gary-Lake County, IL-IN, 1997
8-hour ozone nonattainment area. See 75 FR 8246. These rules included
new rule 326 IAC 8-17 for Industrial Solvent Cleaning operations that
was based on a CTG issued by EPA in 2006.
    Subsequent to the approval of Indiana's rule, EPA concluded that
low VOC content cleaning solvents were not adequate to clean process
equipment and tanks at facilities that manufacture coatings, inks,
adhesives and resins. As a result, EPA determined that RACT for these
operations was the alternative requirements in the (California) Bay
Area Air Quality Management District's rules, which are referenced in
EPA's industrial solvent cleaning CTG.
    EPA approved Wisconsin's industrial solvent cleaning rules for
coating, ink, adhesive and resin manufacturing, based on the Bay Area
rules, on August 7, 2012 (77 FR 46961). The American Coatings
Association requested that that IDEM also adopt a solvent cleaning rule
based on the Bay Area rules. In addition, IDEM realized that it had
used limits in its rule that were inconsistent with RACT and EPA's 2006
CTG.
    IDEM adopted these revisions on April 3, 2012, after public
hearings on November 2, 2011, and February 1, 2012. IDEM submitted the
revised rules to EPA on May 29, 2012.

III. What are Indiana's submitted VOC rule revisions and what is EPA's
analysis of the revisions?

    Indiana has revised its Industrial Solvent Cleaning rule, 326 IAC
8-17, for sources in Lake and Porter Counties as follows:
    326 IAC 8-17-2(c)(11)--An exemption for the cleaning of application
equipment used to apply solvent-borne fluoropolymer coatings has been
added to the list of solvent cleaning operations exempted from the VOC
content limitations in 326 IAC 8-17-4. This exemption corrects a
mistake in Indiana's adoption of RACT and is consistent with EPA's 2006
CTG. It should not result in an increase in VOC emissions, as there are
no known sources to which it will apply.
    326 IAC 8-17-4(a)--The allowable VOC content for cleaning
ultraviolet ink and electron beam application equipment, except for
screen printing, has been increased from 4.2 to 5.4 pounds VOC/gallon.
This corrects a mistake in Indiana's adoption of RACT and is consistent
with EPA's 2006 CTG. It should not result in an increase in VOC
emissions, as there are no known sources to which it will apply.
    326 IAC 8-17-4(g)--Alternative cleaning requirements have been
added for manufacturers of coatings, inks, adhesives and resins and
corresponding recordkeeping requirements have been added in 326 IAC 8-
17-7(f). These requirements are based on the Bay Area rules. These
requirements apply to cleaning mixing vats, high dispersion mills,
grinding mills, tote tanks, and roller mills, and consist of four
options: (1) The solvent or solvent solution used must either contain
less than 1.67 pounds VOC per gallon or have a VOC composite partial
vapor pressure of less than or equal to 8 millimeters of mercury; (2)
several work practices must be implemented, including storing all VOC-
containing cleaning materials in closed containers; (3) the emissions
from equipment cleaning must be collected and vented to an emission
control system with an overall control efficiency of 80 percent or more
on a mass basis; or (4) no more than 60 gallons of fresh solvent per
month may be used and all VOC-containing cleaning materials must be
stored in closed containers. The recordkeeping requirements in 326 IAC
8-17-7(f) have been added to determine whether the 60-gallon limit has
been exceeded.

    In addition, the owner or operator of a facility engaged in wipe
cleaning may not use open containers for the storage of organic
compounds to be used for cleaning, or for the storage or disposal of
any material impregnated with organic compounds used for cleaning.
    These alternative cleaning requirements are consistent with EPA's
CTG, and will not result in an increase in emissions because there are
no coating, ink, adhesive and resin manufacturers in Lake and Porter
Counties, where they apply.

IV. What action is EPA taking?

    EPA has determined that these revisions are consistent with this
CTG and applicable EPA RACT guidance at www.epa.gov/ttn/naaqs/ozone/ozonetech/#ref. Therefore, EPA is proposing to approve the revisions to
Indiana's Industrial Solvent Cleaning rules (in 326 IAC 8-17) as
meeting the RACT requirements in the Act.

V. Statutory and Executive Order Reviews

    Under the Act, the Administrator is required to approve a SIP
submission that complies with the provisions of the Act and applicable
Federal regulations. 42 U.S.C. 7410(k); 40 CFR Part 52.02(a). Thus, in
reviewing SIP submissions, EPA's role is to approve State choices,
provided that they meet the criteria of the Act. Accordingly, this
action merely approves state law as meeting Federal requirements and
does not impose additional requirements beyond those imposed by State
law. For that reason, this action:
     Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Order
12866 (58 FR 51735, October 4, 1993);
     does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
     does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the CAA; and
     does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this rule does not have tribal implications as
specified by Executive Order 13175 (65 FR 67249, November 9, 2000),
because the SIP is not approved to apply in Indian country located in
the state, and EPA notes that it will not impose substantial direct
costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by
reference, Intergovernmental relations, Ozone, Reporting and
recordkeeping requirements, Volatile organic compounds.

    Dated: August 28, 2013.
Susan Hedman,
Regional Administrator, Region 5.
[FR Doc. 2013-22026 Filed 9-9-13; 8:45 am]
BILLING CODE 6560-50-P