[Federal Register Volume 84, Number 90 (Thursday, May 9, 2019)]
[Rules and Regulations]
[Pages 20252-20256]
[FR Doc No: 2019-09523]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2018-1005; Product Identifier 2018-NM-109-AD; Amendment
39-19627; AD 2019-08-06]
RIN 2120-AA64

Airworthiness Directives; Airbus SAS Airplanes

AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).

ACTION: Final rule.

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SUMMARY: We are superseding Airworthiness Directive (AD) 2016-16-01,
which applied to certain Airbus SAS Model A330-200 Freighter, -200, and
-300 series airplanes. AD 2016-16-01 required an inspection of affected
structural parts in the cargo and cabin compartments to determine if
proper heat treatment has been done, and replacement or repair if
necessary. This AD retains the requirements of AD 2016-16-01 and
requires inspection of additional locations of the cabin compartment
structure. This AD was prompted by a report of a manufacturing defect
(i.e., improperly heat-treated materials) that affects the durability
of affected parts in the cargo and cabin compartments. We are issuing
this AD to address the unsafe condition on these products.

DATES: This AD is effective June 13, 2019.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in this AD as of June 13,
2019.

ADDRESSES: For service information identified in this final rule,
contact Airbus SAS, Airworthiness Office--EAL, Rond-Point Emile
Dewoitine No: 2, 31700 Blagnac Cedex, France; telephone +33 5 61 93 36
96; fax +33 5 61 93 45 80; email<EMAIL_ADDRESS>
internet http://www.airbus.com. You may view this referenced service
information at the FAA, Transport Standards Branch, 2200 South 216th
St., Des Moines, WA. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>. It is also available on the
internet at http://www.regulations.gov by searching for and locating
Docket No. FAA-2018-1005.

Examining the AD Docket

    You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-
1005; or in person at Docket Operations between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays. The AD docket contains
this final rule, the regulatory evaluation, any comments received, and
other information. The address for Docket Operations (phone: 800-647-
5527) is U.S. Department of Transportation, Docket Operations, M-30,
West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE,
Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Vladimir Ulyanov, Aerospace Engineer,
International Section, Transport Standards Branch, FAA, 2200 South
216th St., Des Moines, WA 98198; telephone and fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR
part 39 to supersede AD 2016-16-01, Amendment 39-18599 (81 FR 51325,
August 4, 2016; corrected September 1, 2016 (81 FR 60246)) (``AD 2016-
16-01''). AD 2016-16-01 applied to certain Airbus SAS Model A300-200
Freighter, -200, and -300 series airplanes. The NPRM published in the
Federal Register on December 10, 2018 (83 FR 63444). The NPRM was
prompted by a report of a manufacturing defect (i.e., improperly heat-
treated materials) that affects the durability of affected parts in the
cargo and cabin compartments. The NPRM proposed to continue to require
an inspection of affected structural parts in the cargo and cabin
compartments to determine if proper heat treatment has been done, and
replacement or repair if necessary. The NPRM also proposed to require
inspection of additional locations of the cabin compartment structure.
We are issuing this AD to address crack initiation and propagation in
affected parts in the cargo and cabin compartments, which could result
in reduced structural integrity of the fuselage.
    The European Aviation Safety Agency (EASA), which is the Technical
Agent for the Member States of the European Union, issued EASA AD 2018-
0147, dated July 13, 2018 (referred to after this as the Mandatory
Continuing Airworthiness Information, or ``the MCAI''), to correct an
unsafe condition for certain Airbus SAS Model A330-200 Freighter, -200,
and -300 series airplanes. The MCAI states:

    It was determined that several structural parts, intended for
cargo or cabin compartment installation, were manufactured from
improperly heat-treated materials. A subsequent review identified
that some of those parts were installed on aeroplanes manufactured
between November 2011 and February 2013. Consequently, Airbus
implemented measures into manufacturing processes to ensure
detection and to prevent further installation of such non-conforming
parts. A detailed safety assessment was accomplished to identify the
possible impact of these parts on the aeroplane structure. The
result of this structural analysis demonstrated the capability of
the affected structure to sustain static limit loads, but failed to
confirm that the affected structures meet the certified fatigue
life.
    This condition, if not detected and corrected, could lead to
crack initiation and propagation, possibly resulting in reduced
structural integrity of the fuselage.
    To address this unsafe condition, Airbus published the
applicable SBs [service bulletins] to provide inspection
instructions for affected structural cargo and cabin parts,
respectively. Consequently, EASA issued AD 2015-0212 [which
corresponds to FAA AD 2016-16-01] to require a one-time special
detailed inspection (SDI) [eddy current inspection] to measure the
electrical conductivity of affected parts, to identify the presence
or absence of heat treatment, and, depending on findings, applicable
corrective action(s) [replacement or repair].
    Since that [EASA] AD was issued, Airbus identified that some
additional affected parts, located in the cabin compartment
structure, have been missed and need to be inspected. Consequently,
Airbus issued SB A330-53-3228 Revision 01 to introduce the locations
of those missed structural parts to be inspected.
    For the reasons described above, this [EASA] AD retains the
requirements of EASA AD 2015-0212, which is superseded, and expands
the number and locations of structural parts to be inspected.

    You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-
1005.

Comments

    We gave the public the opportunity to participate in developing
this final rule. The following presents the comments received on the
NPRM and the FAA's response.

Request To Delay Issuance of AD

    American Airlines (American) stated its support for the NPRM, but
noted that Airbus Service Bulletin A330-53-3228, Revision 01, dated
April 11, 2018,

included several errors, including mislabeled parts, parts depicted in
the wrong locations, and incorrect figure references. American reported
that Airbus has verified the errors, which Airbus indicated would be
addressed in a revised service bulletin. To avoid the need for requests
for alternative methods of compliance (AMOCs), American requested that
we delay issuance of the AD until revised service information has been
released.
    We acknowledge the commenter's concerns. The amount of
clarification needed would be too complex to include in this AD. We
expect to work with Airbus and EASA to issue a global AMOC that
addresses any known errors. In addition, we have added paragraph (n) in
this AD, ``Exception to Service Information Specifications,'' to
provide operators with information on how to address any other issues,
if needed. We have redesignated subsequent paragraphs accordingly. We
have also revised paragraphs (j), (k), (l)(2), and (m) of this AD to
refer to this exception.
    In light of the critical nature of the identified unsafe condition,
we do not consider it warranted to delay the issuance of this final
rule. If Airbus provides a revision to Airbus Service Bulletin A330-53-
3228, Revision 01, dated April 11, 2018, we will review it in
consideration of an AMOC for this AD, or we may consider future
rulemaking action.

Conclusion

    We reviewed the relevant data, considered the comments received,
and determined that air safety and the public interest require adopting
this final rule with the changes described previously and minor
editorial changes. We have determined that these minor changes:
     Are consistent with the intent that was proposed in the
NPRM for addressing the unsafe condition; and
     Do not add any additional burden upon the public than was
already proposed in the NPRM.
    We also determined that these changes will not increase the
economic burden on any operator or increase the scope of this final
rule.

Related Service Information Under 1 CFR Part 51

    Airbus has issued Service Bulletin A330-53-3227, Revision 02, dated
July 25, 2018, which describes procedures for inspecting affected
structural parts in the cargo compartment to determine if proper heat
treatment has been done, and replacing discrepant parts.
    Airbus has also issued Service Bulletin A330-53-3228, Revision 01,
dated April 11, 2018, which describes procedures for inspecting
affected structural parts in the cabin compartment to determine if
proper heat treatment has been done, doing additional work (inspecting
additional locations of the cabin compartment structure), and doing
related investigative and corrective actions. Related investigative
actions include an eddy current inspection to verify the measurement
from the inspection to determine if proper heat treatment has been
done. Corrective actions include replacing discrepant parts.
    This service information is reasonably available because the
interested parties have access to it through their normal course of
business or by the means identified in the ADDRESSES section.

Costs of Compliance

    We estimate that this AD affects 20 airplanes of U.S. registry. We
estimate the following costs to comply with this AD:

                                      Estimated Costs for Required Actions
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per      Cost on  U.S.
                Actions                        Labor cost           Parts cost        product        operators
----------------------------------------------------------------------------------------------------------------
Retained actions from AD 2016-16-01...  11 work-hours x $85 per               $0            $935         $18,700
                                         hour = $935.
New additional work...................  5 work-hours x $85 per                 0             425           8,500
                                         hour = $425.
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    We estimate the following costs to do any necessary on-condition
action that would be required based on the results of any required
actions. We have no way of determining the number of aircraft that
might need this on-condition action:

                 Estimated Costs of On-Condition Action
------------------------------------------------------------------------
                                                             Cost per
              Labor cost                   Parts cost        product
------------------------------------------------------------------------
45 work-hours x $85 per hour = $3,825.          $0 \*\           $3,825
------------------------------------------------------------------------
* We have received no definitive data on the parts cost for the on-
  condition action.

    According to the manufacturer, some or all of the costs of this AD
may be covered under warranty, thereby reducing the cost impact on
affected individuals. We do not control warranty coverage for affected
individuals. As a result, we have included all known costs in our cost
estimate.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.
    We are issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: ``General
requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce. This regulation is within
the scope of that authority because it addresses an unsafe condition
that is likely to exist or develop on products identified in this
rulemaking action.
    This AD is issued in accordance with authority delegated by the
Executive Director, Aircraft Certification Service, as authorized by
FAA Order 8000.51C. In accordance with that order, issuance of ADs is
normally a function of the Compliance and Airworthiness Division, but
during this transition period, the Executive Director has delegated the
authority to issue ADs

applicable to transport category airplanes and associated appliances to
the Director of the System Oversight Division.

Regulatory Findings

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

List of Subjects in 14 CFR Part 39

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

Adoption of the Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13   [Amended]

0
2. The FAA amends Sec.  39.13 by removing Airworthiness Directive (AD)
2016-16-01, Amendment 39-18599 (81 FR 51325, August 4, 2016; corrected
September 1, 2016 (81 FR 60246)), and adding the following new AD:

2019-08-06 Airbus SAS: Amendment 39-19627; Docket No. FAA-2018-1005;
Product Identifier 2018-NM-109-AD.

(a) Effective Date

    This AD is effective June 13, 2019.

(b) Affected ADs

    This AD replaces AD 2016-16-01, Amendment 39-18599 (81 FR 51325,
August 4, 2016; corrected September 1, 2016 (81 FR 60246)) (``AD
2016-16-01'').

(c) Applicability

    This AD applies to the Airbus SAS airplanes, certificated in any
category, identified in paragraphs (c)(1), (c)(2), and (c)(3) of
this AD, manufacturer serial numbers 1175, 1180, 1287 through 1475
inclusive, 1478, 1480, 1483, and 1506.
    (1) Model A330-223F and -243F airplanes.
    (2) Model A330-201, -202, -203, -223, and -243 airplanes.
    (3) Model A330-301, -302, -303, -321, -322, -323, -341, -342,
and -343 airplanes.

(d) Subject

    Air Transport Association (ATA) of America Code 53, Fuselage.

(e) Reason

    This AD was prompted by a report of a manufacturing defect
(i.e., improperly heat-treated materials) that affects the
durability of affected parts in the cargo and cabin compartments. We
are issuing this AD to address crack initiation and propagation in
affected parts in the cargo and cabin compartments, which could
result in reduced structural integrity of the fuselage.

(f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) Retained Inspection of Affected Structure in the Cargo Compartment,
With Revised Service Information

    This paragraph restates the requirements of paragraph (g) of AD
2016-16-01, with revised service information. Within 72 months since
first flight of the airplane, do an eddy current inspection (i.e.,
conductivity measurement) of affected structural parts in the cargo
compartment to determine if proper heat treatment has been done as
identified in, and in accordance with, the Accomplishment
Instructions of Airbus Service Bulletin A330-53-3227, dated August
18, 2015; or Airbus Service Bulletin A330-53-3227, Revision 02,
dated July 25, 2018. As of the effective date of this AD, only
Airbus Service Bulletin A330-53-3227, Revision 02, dated July 25,
2018, may be used.

(h) Retained Replacement of Non-Conforming Parts in the Cargo
Compartment, With Revised Service Information

    This paragraph restates the requirements of paragraph (h) of AD
2016-16-01, with revised service information. If, during the
inspection required by paragraph (g) of this AD, an affected
structural part in the cargo compartment is identified to have a
measured value greater than 26 megasiemens per meter (MS/m), or
greater than 44.8% International Annealed Copper Standard (IACS),
before further flight, replace the affected structural part with a
serviceable part, in accordance with the Accomplishment Instructions
of Airbus Service Bulletin A330-53-3227, dated August 18, 2015; or
Airbus Service Bulletin A330-53-3227, Revision 02, dated July 25,
2018. As of the effective date of this AD, only Airbus Service
Bulletin A330-53-3227, Revision 02, dated July 25, 2018, may be
used.

(i) Retained Repair of Non-Conforming Parts in the Cargo Compartment,
With Revised Service Information

    This paragraph restates the requirements of paragraph (i) of AD
2016-16-01, with revised service information. If, during the
inspection required by paragraph (g) of this AD, an affected
structural part in the cargo compartment is identified to have a
measured value other than those specified in Figure A-GFAAA, Sheet
01, ``Inspection Flowchart,'' of Airbus Service Bulletin A330-53-
3227, dated August 18, 2015; or Airbus Service Bulletin A330-53-
3227, Revision 02, dated July 25, 2018; before further flight,
repair using a method approved by the Manager, International
Section, Transport Standards Branch, FAA; or the European Aviation
Safety Agency (EASA); or Airbus SAS's EASA Design Organization
Approval (DOA). If approved by the DOA, the approval must include
the DOA-authorized signature. As of the effective date of this AD,
only Airbus Service Bulletin A330-53-3227, Revision 02, dated July
25, 2018, may be used to identify the measured value.

(j) Retained Inspection of Affected Structure in the Cabin Compartment,
With Revised Service Information

    This paragraph restates the requirements of paragraph (j) of AD
2016-16-01, with revised service information. Within 72 months since
first flight of the airplane, do an eddy current inspection of
affected structural parts in the cabin compartment to determine if
proper heat treatment has been done as identified in, and in
accordance with, the Accomplishment Instructions of Airbus Service
Bulletin A330-53-3228, dated August 18, 2015; or Airbus Service
Bulletin A330-53-3228, Revision 01, dated April 11, 2018, except as
required by paragraph (n) of this AD. As of the effective date of
this AD, only Airbus Service Bulletin A330-53-3228, Revision 01,
dated April 11, 2018, except as required by paragraph (n) of this
AD, may be used.

(k) Retained Replacement of Non-Conforming Parts in the Cabin
Compartment, With Revised Service Information

    This paragraph restates the requirements of paragraph (k) of AD
2016-16-01, with revised service information. If, during the
inspection required by paragraph (j) of this AD, an affected
structural part in the cabin compartment is identified to have a
measured value greater than 26 MS/m or greater than 44.8% IACS,
before further flight, replace the affected structural part with a
serviceable part, in accordance with the Accomplishment Instructions
of Airbus Service Bulletin A330-53-3228, dated August 18, 2015; or
Airbus Service Bulletin A330-53-3228, Revision 01, dated April 11,
2018, except as required by paragraph (n) of this AD. As of the
effective date of this AD, only Airbus Service Bulletin A330-53-
3228, Revision 01, dated April 11, 2018, except as required by
paragraph (n) of this AD, may be used.

(l) Retained Repair of Non-Conforming Parts in the Cabin Compartment,
With Revised Service Information and New Alternative Actions

    This paragraph restates the requirements of paragraph (l) of AD
2016-16-01, with revised service information and new alternative
actions. If, during the inspection required by paragraph (j) of this
AD, an affected structural part in the cabin compartment is
identified to have a measured value other than those specified in
Figure A-GFAAA, Sheet 01, ``Inspection Flowchart,'' of Airbus
Service Bulletin A330-53-3228, dated August 18, 2015; or to have a
measured value between 22 MS/m and 26 MS/m or between 37.9 and 44.8%
IACS, as specified in Airbus Service Bulletin A330-53-3228, Revision
01, dated April 11, 2018; before further flight, do the actions
specified in paragraph (l)(1) or (l)(2) of this AD. As of the
effective date of this AD, only Airbus Service Bulletin A330-53-
3228, Revision 01, dated April 11, 2018, may be used to identify the
measured value.
    (1) Repair using a method approved by the Manager, International
Section, Transport Standards Branch, FAA; or the EASA; or Airbus
SAS's EASA DOA. If approved by the DOA, the approval must include
the DOA-authorized signature.
    (2) Do an eddy current inspection to verify the measurement, in
accordance with the Accomplishment Instructions of Airbus Service
Bulletin A330-53-3228, Revision 01, dated April 11, 2018, except as
required by paragraph (n) of this AD.
    (i) If an affected structural part in the cabin compartment is
identified to have a measured value between 22 MS/m and 26 MS/m or
between 37.9 and 44.8% IACS, before further flight, repair using a
method approved by the Manager, International Section, Transport
Standards Branch, FAA; or the EASA; or Airbus SAS's EASA DOA. If
approved by the DOA, the approval must include the DOA-authorized
signature.
    (ii) If an affected structural part in the cabin compartment is
identified to have a measured value greater than 26 MS/m or greater
than 44.8% IACS, before further flight, do the replacement specified
in paragraph (k) of this AD.

(m) New Requirement of This AD: Inspection of Additional Cabin
Locations

    For an airplane on which the cabin compartment structure was
inspected and corrective actions were done before the effective date
of this AD as specified in the Accomplishment Instructions of Airbus
Service Bulletin A330-53-3228, dated August 18, 2015: Before
exceeding 108 months since the airplane's first flight, do an eddy
current conductivity test of the forward cabin overhead compartment,
and do all applicable related investigative and corrective actions,
in accordance with the applicable ``additional work'' task in the
Accomplishment Instructions of Airbus Service Bulletin A330-53-3228,
Revision 01, dated April 11, 2018, except as required by paragraph
(n) of this AD. Do all applicable related investigative and
corrective actions before further flight. Where Airbus Service
Bulletin A330-53-3228, Revision 01, dated April 11, 2018, specifies
to contact Airbus for appropriate action: Before further flight,
accomplish corrective actions in accordance with the procedures
specified in paragraph (q)(2) of this AD.

(n) Exception to Service Information Specifications

    Any required action specified in Airbus Service Bulletin A330-
53-3228, Revision 01, dated April 11, 2018, that cannot be
accomplished as specified therein must be accomplished using a
method approved in accordance with the procedures specified in
paragraph (q)(1) of this AD.

(o) No Reporting

    Although Airbus Service Bulletin A330-53-3227, Revision 02,
dated July 25, 2018; and Airbus Service Bulletin A330-53-3228,
Revision 01, dated April 11, 2018; specify to submit certain
information to the manufacturer, and specify that action as ``RC''
(required for compliance), this AD does not include that
requirement.

(p) Credit for Previous Actions

    (1) This paragraph provides credit for the actions specified in
paragraphs (g), (h), and (i) of this AD, if those actions were
performed before the effective date of this AD using the following
service information.
    (i) Airbus Service Bulletin A330-53-3227, dated August 18, 2015,
which was incorporated by reference in AD 2016-16-01.
    (ii) Airbus Service Bulletin A330-53-3227, Revision 01, dated
July 5, 2016.
    (2) This paragraph provides credit for the actions specified in
paragraphs (j), (k), and (l) of this AD, if those actions were
performed before the effective date of this AD using Airbus Service
Bulletin A330-53-3228, dated August 18, 2015, which was incorporated
by reference in AD 2016-16-01.

(q) Other FAA AD Provisions

    (1) Alternative Methods of Compliance (AMOCs): The Manager,
International Section, Transport Standards Branch, FAA, has the
authority to approve AMOCs for this AD, if requested using the
procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19,
send your request to your principal inspector or local Flight
Standards District Office, as appropriate. If sending information
directly to the International Section, send it to the attention of
the person identified in paragraph (r)(2) of this AD. Information
may be emailed to<EMAIL_ADDRESS>    (i) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.
    (ii) AMOC letters ANM-116-17-118, dated February 2, 2017; and
AIR-676-18-369, dated September 17, 2018; approved previously for AD
2016-16-01, are approved as AMOCs for the corresponding provisions
of this AD.
    (2) Contacting the Manufacturer: As of the effective date of
this AD, for any requirement in this AD to obtain corrective actions
from a manufacturer, the action must be accomplished using a method
approved by the Manager, International Section, Transport Standards
Branch, FAA; or the EASA; or Airbus SAS's EASA DOA. If approved by
the DOA, the approval must include the DOA-authorized signature.
    (3) Required for Compliance (RC): Except as required by
paragraphs (i), (l), (m), and (p) of this AD: If any service
information contains procedures or tests that are identified as RC,
those procedures and tests must be done to comply with this AD; any
procedures or tests that are not identified as RC are recommended.
Those procedures and tests that are not identified as RC may be
deviated from using accepted methods in accordance with the
operator's maintenance or inspection program without obtaining
approval of an AMOC, provided the procedures and tests identified as
RC can be done and the airplane can be put back in an airworthy
condition. Any substitutions or changes to procedures or tests
identified as RC require approval of an AMOC.

(r) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information
(MCAI) EASA AD 2018-0147, dated July 13, 2018, for related
information. This MCAI may be found in the AD docket on the internet
at http://www.regulations.gov by searching for and locating Docket
No. FAA-2018-1005.
    (2) For more information about this AD, contact Vladimir
Ulyanov, Aerospace Engineer, International Section, Transport
Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198;
telephone and fax<PHONE_NUMBER>.
    (3) Service information identified in this AD that is not
incorporated by reference is available at the addresses specified in
paragraphs (s)(4) and (s)(5) of this AD.

(s) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless this AD specifies otherwise.
    (3) The following service information was approved for IBR on
June 13, 2019.
    (i) Airbus Service Bulletin A330-53-3227, Revision 02, dated
July 25, 2018.
    (ii) Airbus Service Bulletin A330-53-3228, Revision 01, dated
April 11, 2018.
    (4) For service information identified in this AD, contact
Airbus SAS, Airworthiness Office--EAL, Rond-Point Emile Dewoitine
No: 2, 31700 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax
+33 5 61 93 45 80; email<EMAIL_ADDRESS>
internet http://www.airbus.com.
    (5) You may view this service information at the FAA, Transport
Standards Branch, 2200 South 216th St., Des Moines, WA. For
information on the availability of this material at the FAA, call
206-231-3195.
    (6) You may view this service information that is incorporated
by reference at the National Archives and Records Administration
(NARA). For information on the availability of this material at
NARA, call<PHONE_NUMBER>, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Des Moines, Washington, on April 25, 2019.
Michael Kaszycki,
Acting Director, System Oversight Division, Aircraft Certification
Service.
[FR Doc. 2019-09523 Filed 5-8-19; 8:45 am]
 BILLING CODE 4910-13-P


[Federal Register Volume 81, Number 62 (Thursday, March 31, 2016)]
[Notices]
[Pages 18615-18616]
[FR Doc No: 2016-07262]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. ER16-1258-000]

Grande Prairie Wind, LLC; Supplemental Notice That Initial
Market-Based Rate Filing Includes Request for Blanket Section 204
Authorization

    This is a supplemental notice in the above-referenced proceeding of
Grande Prairie Wind, LLC's application for market-based rate authority,
with an accompanying rate tariff, noting that such application includes
a request for blanket authorization, under 18 CFR part 34, of future
issuances of securities and assumptions of liability.
    Any person desiring to intervene or to protest should file with the
Federal Energy Regulatory Commission, 888 First Street NE., Washington,
DC 20426,

in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a
motion to intervene or protest must serve a copy of that document on
the Applicant.
    Notice is hereby given that the deadline for filing protests with
regard to the applicant's request for blanket authorization, under 18
CFR part 34, of future issuances of securities and assumptions of
liability, is April 14, 2016.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper, using the FERC Online links at http://www.ferc.gov. To facilitate electronic service, persons with Internet
access who will eFile a document and/or be listed as a contact for an
intervenor must create and validate an eRegistration account using the
eRegistration link. Select the eFiling link to log on and submit the
intervention or protests.
    Persons unable to file electronically should submit an original and
5 copies of the intervention or protest to the Federal Energy
Regulatory Commission, 888 First Street NE., Washington, DC 20426.
    The filings in the above-referenced proceeding are accessible in
the Commission's eLibrary system by clicking on the appropriate link in
the above list. They are also available for electronic review in the
Commission's Public Reference Room in Washington, DC. There is an
eSubscription link on the Web site that enables subscribers to receive
email notification when a document is added to a subscribed docket(s).
For assistance with any FERC Online service, please email
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For
TTY, call<PHONE_NUMBER>.

    Dated: March 25, 2016.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2016-07262 Filed 3-30-16; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register Volume 78, Number 205 (Wednesday, October 23, 2013)]
[Notices]
[Pages 63255-63261]
[FR Doc No: 2013-24770]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-30745; File No. 812-14152]

Arden Investment Series Trust, et al.; Notice of Application

October 17, 2013.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application pursuant to Section 6(c) of the
Investment Company Act of 1940, as amended (the ``1940 Act'' or
``Act''), seeking exemptions from Sections 9(a), 13(a), 15(a) and 15(b)
of the 1940 Act and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder.

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Applicants: Arden Investment Series Trust (the ``Trust'') and Arden
Asset Management LLC (``Arden'') (collectively, the ``Applicants'').

Summary of Application: Applicants request an order granting exemptions
from the provisions of Sections 9(a), 13(a), 15(a), and 15(b) of the
Act and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder in cases where
a life insurance company separate account supporting variable life
insurance contracts (``VLI Accounts'') holds shares of Arden Variable
Alternative Strategies Fund, an existing portfolio of the Trust (the
``Existing Variable Fund''), or a ``Future Variable Fund,'' \1\ (any
Existing Variable Fund or Future Variable Fund is referred to herein as
a ``Fund,'' and collectively, the ``Funds''), and one or more of the
following other types of investors also hold shares of the Funds: (i)
Any life insurance company separate account supporting variable annuity
contracts (``VA Accounts''); (ii) any VLI Account; (iii) trustees of
qualified group pension or group retirement plans (``Plans'' or
``Qualified Plans'') outside the separate account context; (iv) the
investment adviser or any subadviser to a Fund or affiliated persons of
the adviser or subadviser (representing seed money investments in the
Fund) (``Advisers''); and (v) any general account of an insurance
company depositor of VA Accounts and/or VLI Accounts and affiliated
persons of such insurance company (``General Accounts'').
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    \1\ As used herein, a Future Variable Fund is any investment
company (or investment portfolio or series thereof), other than the
Existing Variable Fund, designed to be sold to VA Accounts and/or
VLI Accounts and to which Applicants or their affiliates may in the
future serve as investment advisers, investment subadvisers,
investment managers, administrators, principal underwriters or
sponsors.

Filing Date: The application was filed on May 2, 2013, and amended and
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restated on October 2, 2013.

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 Secretary of the
Commission 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 November 11, 2013, 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 may request notification of a hearing by
writing to the Secretary of the Commission.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street
NE., Washington, DC 20549-1090. Applicants, 375 Park Avenue, 32nd
Floor, New York, NY 10152.

FOR FURTHER INFORMATION CONTACT: Sonny Oh, Senior Counsel, or Joyce M.
Pickholz, Branch Chief, Insured Investments Office, Division of
Investment Management at<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or for an
applicant using the Company name box, at http://www.sec.gov/search.htm,
or by calling<PHONE_NUMBER>.

Applicants' Representations

    1. The Trust was organized as a Delaware statutory trust on April
11, 2012 and is registered under the Act as an open-end management
investment company (Reg. File No. 811-22701). The Trust is a series
investment company as defined by Rule 18f-2 under the Act and the
Existing Variable Fund is a series of the Trust. The Trust has
registered two classes of shares of the Existing Variable Fund under
the Securities Act of 1933 (the ``1933 Act'') (Reg. File No. 333-
180881) on Form N-1A. The Trust may in the future establish additional
Funds and additional classes of shares for any of the Funds. Shares of
the Funds will not be offered to the general public. The existing
series of the Trust are the Existing Variable Fund, Arden Alternative
Strategies Fund and Arden Alternative Strategies II. This Application
seeks exemptive relief only for the Existing Variable Fund and any
Future Variable Fund of the Trust as defined herein but does not seek
exemptive relief for the Arden Alternative Strategies Fund or Arden
Alternative Strategies II because they are not designed to be sold to
VA Accounts and/or VLI Accounts.
    2. Arden serves as the investment adviser to the Trust and the
Existing Variable Fund. Arden is a Delaware limited liability company
and is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended. Subject to the authority of the Board
of Trustees of the Trust, Arden is responsible for the overall
management of the business

affairs of the Trust and oversees the investment operations of the
Existing Variable Fund, including the purchase, retention and
disposition of securities in accordance with the Fund's investment
objective.
    3. The Existing Variable Fund proposes, and Future Variable Funds
will propose, to offer their shares to VLI and VA Accounts of various
life insurance companies (``Participating Insurance Companies'') to
serve as investment media to support variable life insurance contracts
and variable annuity contracts (together, ``Variable Contracts'')
issued through such accounts. Each VLI Account and VA Account is or
will be established as a segregated asset account by a Participating
Insurance Company pursuant to the insurance law of the insurance
company's state of domicile. As such, the assets of each will be the
property of the Participating Insurance Company, and that portion of
the assets of such an Account equal to the reserves and other contract
liabilities with respect to the Account will not be chargeable with
liabilities arising out of any other business that the insurance
company may conduct. The income, gains and losses, realized or
unrealized from such an Account's assets will be credited to or charged
against the Account without regard to other income, gains or losses of
the Participating Insurance Company. If a VLI Account or VA Account is
registered as an investment company, it will be a ``separate account''
as defined by Rule 0-1(e) (or any successor rule) under the Act and
will be registered as a unit investment trust. For purposes of the Act,
the Participating Insurance Company that establishes such a registered
VLI Account or VA Account is the depositor and sponsor of the Account
as those terms have been interpreted by the Commission with respect to
variable life insurance and variable annuity separate accounts.
    4. There are currently no Participating Insurance Companies.
    5. The Funds will sell their shares to VLI and VA Accounts only if
each Participating Insurance Company sponsoring such a VLI or VA
Account enters into a participation agreement with the Funds. The
participation agreements define or will define the relationship between
each Fund and each Participating Insurance Company and memorialize or
will memorialize, among other matters, the fact that, except where the
agreement specifically provides otherwise, the Participating Insurance
Company will remain responsible for establishing and maintaining any
VLI or VA Account covered by the agreement and for complying with all
applicable requirements of state and federal law pertaining to such
accounts and to the sale and distribution of Variable Contracts issued
through such Accounts. The role of the Funds under this arrangement,
with regard to the federal securities laws, will consist of offering
and selling shares of the Funds to the separate accounts and fulfilling
any conditions that the Commission may impose in granting the requested
order.
    6. The use of a common management investment company (or investment
portfolio thereof) as an investment medium for both VLI Accounts and VA
Accounts of the same Participating Insurance Company, or of two or more
insurance companies that are affiliated persons of each other, is
referred to herein as ``mixed funding.'' The use of a common management
investment company (or investment portfolio thereof) as an investment
medium for VLI Accounts and/or VA Accounts of two or more Participating
Insurance Companies that are not affiliated persons of each other is
referred to herein as ``shared funding.''
    7. Applicants propose that the Existing Variable Fund and any
Future Variable Funds may offer their shares directly to Qualified
Plans, the Fund's Advisers, and a General Account of any Participating
Insurance Companies.
    8. The use of a common management investment company (or investment
portfolio thereof) as an investment medium for VLI Accounts, VA
Accounts, Qualified Plans, Advisers and General Accounts is referred to
herein as ``extended mixed funding.''

Applicants' Legal Analysis

    1. Section 9(a) of the 1940 Act makes it unlawful for any company
to serve as an investment adviser or principal underwriter of any
investment company, including a unit investment trust, if an affiliated
person of that company is subject to disqualification enumerated in
Section 9(a)(1) or (2) of the Act. Sections 13(a), 15(a), and 15(b) of
the 1940 Act have been deemed by the Commission to require ``pass-
through'' voting with respect to an underlying investment company's
shares.
    2. Rules 6e-2(b)(15) and 6e-3(T)(b)(15) under the Act provide
partial exemptions from Sections 9(a), 13(a), 15(a), and 15(b) of the
Act to VLI Accounts supporting certain VLI Contracts and to their life
insurance company depositors under limited circumstances, as described
in the application. VLI Accounts, their depositors and their principal
underwriters may not rely on the exemptions provided by Rules 6e-
2(b)(15) and 6e-3(T)(b)(15) if shares of the Fund are held by a VLI
Account through which certain VLI Contracts are issued, a VLI Account
of an unaffiliated Participating Insurance Company, an unaffiliated
Adviser, any VA Account, a Qualified Plan or a General Account.
Accordingly, Applicants request an order of the Commission granting
exemptions from Sections 9(a), 13(a), 15(a), and 15(b) of the Act and
Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder in cases where certain
VLI Account hold shares of the Funds and one or more of the following
types of investors also hold shares of the Funds: (i) VA Accounts and
VLI Accounts (supporting scheduled premium or flexible premium VLI
Contracts) of affiliated and unaffiliated Participating Insurance
Companies; (ii) Qualified Plans; (iii) Advisers; and/or (iv) General
Accounts.
    3. Applicants maintain that there is no policy reason for the sale
of Fund shares to Qualified Plans, Advisers or General Accounts to
prohibit or otherwise limit a Participating Insurance Company from
relying on the relief provided by Rules 6e-2(b)(15) and 6e-3(T)(b)(15).
Nonetheless, Rule 6e-2 and Rule 6e-3(T) each specifically provides that
the relief granted thereunder is available only where shares of the
underlying fund are offered exclusively to insurance company separate
accounts. In this regard, Applicants request exemptive relief to the
extent necessary to permit shares of the Funds to be sold to Qualified
Plans, Advisers and General Accounts while allowing Participating
Insurance Companies and their VA Accounts and VLI Accounts to enjoy the
benefits of the relief granted under Rule 6e-2(b)(15) and Rule 6e-
3(T)(b)(15). Applicants note that if the Funds were to sell their
shares only to Qualified Plans, exemptive relief under Rule 6e-2 and
Rule 6e-3(T) would not be necessary. The relief provided for under Rule
6e-2(b)(15) and Rule 6e-3(T)(b)(15) does not relate to Qualified Plans,
Advisers or General Accounts or to a registered investment company's
ability to sell its shares to such purchasers.
    4. Applicants are not aware of any reason for excluding separate
accounts and investment companies engaged in shared funding from the
exemptive relief provided under Rules 6e-2(b)(15) and 6e-3(T)(b)(15),
or for excluding separate accounts and investment companies engaged in
mixed funding from the exemptive relief provided under Rule 6e-
2(b)(15). Similarly,

Applicants are not aware of any reason for excluding Participating
Insurance Companies from the exemptive relief requested because the
Funds may also sell their shares to Qualified Plans, Advisers and
General Accounts. Rather, Applicants submit that the proposed sale of
shares of the Funds to these purchasers may allow for the development
of larger pools of assets resulting in the potential for greater
investment and diversification opportunities, and for decreased
expenses at higher asset levels resulting in greater cost efficiencies.
    5. For the reasons explained below, Applicants have concluded that
investment by Qualified Plans, Advisers and General Accounts in the
Funds should not increase the risk of material irreconcilable conflicts
between owners of VLI Contracts and other types of investors or between
owners of VLI Contracts issued by unaffiliated Participating Insurance
Companies.
    6. Consistent with the Commission's authority under Section 6(c) of
the Act to grant exemptive orders to a class or classes of persons and
transactions, Applicants request exemptions for a class consisting of
Participating Insurance Companies and their separate accounts investing
in the Existing Variable Fund and Future Variable Funds, as well as
their principal underwriters, that currently invest or in the future
will invest in the Funds.
    7. Section 6(c) of the Act provides, in part, that the Commission,
by order upon application, may conditionally or unconditionally exempt
any person, security or transaction, or any class or classes of
persons, securities or transactions, from any provision or provisions
of the Act, or any rule or regulation thereunder, if and to the extent
that such exemption is necessary or appropriate in the public interest
and consistent with the protection of investors and the purposes fairly
intended by the policy and provisions of the Act. The Applicants submit
that the exemptions requested are 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.
    8. Section 9(a)(3) of the Act provides, among other things, that it
is unlawful for any company to serve as investment adviser or principal
underwriter of any registered open-end investment company if an
affiliated person of that company is subject to a disqualification
enumerated in Sections 9(a)(1) or (2). Rules 6e-2(b)(15)(i) and (ii)
and Rules 6e-3(T)(b)(15)(i) and (ii) under the Act provide exemptions
from Section 9(a) under certain circumstances, subject to the
limitations discussed above on mixed funding, extended mixed funding
and shared funding. These exemptions limit the application of the
eligibility restrictions to affiliated individuals or companies that
directly participate in management of the underlying investment
company.
    9. Rules 6e-2(b)(15)(iii) and 6e-3(T)(b)(15)(iii) under the Act
provide exemptions from pass-through voting requirements with respect
to several significant matters, assuming the limitations on mixed
funding, extended mixed funding and shared funding are observed. Rules
6e-2(b)(15)(iii)(A) and 6e-3(T)(b)(15)(iii)(A) provide that the
insurance company may disregard the voting instructions of its variable
life insurance contract owners with respect to the investments of an
underlying investment company, or any contract between such an
investment company and its investment adviser, when required to do so
by an insurance regulatory authority (subject to the provisions of
paragraphs (b)(5)(i) and (b)(7)(ii)(A) of Rules 6e-2 and 6e-3(T)).
    10. The Applicants represent that the sale of Fund shares to
Qualified Plans, Advisers or General Accounts will not have any impact
on the exemptions requested herein regarding the disregard of pass-
through voting rights. Shares sold to Qualified Plans will be held by
such Plans. The exercise of voting rights by Plans, whether by
trustees, participants, beneficiaries, or investment managers engaged
by the Plans, does not raise the type of issues respecting disregard of
voting rights that are raised by VLI Accounts. With respect to Plans,
which are not registered as investment companies under the Act, there
is no requirement to pass through voting rights to Plan participants.
Indeed, to the contrary, applicable law expressly reserves voting
rights associated with Plan assets to certain specified persons as
disclosed in the application.
    11. Similarly, Advisers and General Accounts are not subject to any
pass-through voting rights. Accordingly, unlike the circumstances
surrounding VLI Account and VA Account investments in shares of the
Funds, the issue of the resolution of any material irreconcilable
conflicts with respect to voting is not present with respect to
Advisers or General Accounts of Participating Insurance Companies.
    12. Applicants recognize that the prohibitions on mixed and shared
funding might reflect concern regarding possible different investment
motivations among investors. When Rule 6e-2 was first adopted, variable
annuity separate accounts could invest in mutual funds whose shares
were also offered to the general public. However, now, under the tax
code any underlying fund, including the Funds, that sells shares to VA
Accounts or VLI Accounts, would, in effect, be precluded from also
selling its shares to the public. Consequently, the Funds may not sell
their shares to the public.
    13. Applicants assert that the rights of an insurance company on
its own initiative or on instructions from a state insurance regulator
to disregard the voting instructions of owners of Variable Contracts is
not inconsistent with either mixed funding or shared funding.
Applicants state that The National Association of Insurance
Commissioners Variable Life Insurance Model Regulation (the ``NAIC
Model Regulation'') suggests that it is unlikely that insurance
regulators would find an underlying fund's investment policy,
investment adviser or principal underwriter objectionable for one type
of Variable Contract but not another type.
    14. Applicants assert that shared funding by unaffiliated insurance
companies does not present any issues that do not already exist where a
single insurance company is licensed to do business in several or all
states. A particular state insurance regulator could require action
that is inconsistent with the requirements of other states in which the
insurance company offers its contracts. However, the fact that
different insurers may be domiciled in different states does not create
a significantly different or enlarged problem. Shared funding by
unaffiliated insurers, in this respect, is no different than the use of
the same investment company as the funding vehicle for affiliated
insurers, which Rules 6e-2(b)(15) and 6e-3(T)(b)(15) permit. Affiliated
insurers may be domiciled in different states and be subject to
differing state law requirements. Affiliation does not reduce the
potential, if any exists, for differences in state regulatory
requirements. In any event, the conditions set forth below are designed
to safeguard against, and provide procedures for resolving, any adverse
effects that differences among state regulatory requirements may
produce. If a particular state insurance regulator's decision conflicts
with the majority of other state regulators, then the affected
Participating Insurance Company will be required to withdraw its
separate account investments in the relevant Fund. This requirement
will be provided for in the participation agreement that will be
entered into by Participating Insurance Companies with the relevant
Fund.

    15. Rules 6e-2(b)(15) and 6e-3(T)(b)(15) give Participating
Insurance Companies the right to disregard the voting instructions of
VLI Contract owners in certain circumstances. This right derives from
the authority of state insurance regulators over VLI Accounts and VA
Accounts. Under Rules 6e-2(b)(15) and 6e-3(T)(b)(15), a Participating
Insurance Company may disregard VLI Contract owner voting instructions
only with respect to certain specified items. Affiliation does not
eliminate the potential, if any exists, for divergent judgments as to
the advisability or legality of a change in investment policies,
principal underwriter or investment adviser initiated by such Contract
owners. The potential for disagreement is limited by the requirements
in Rules 6e-2 and 6e-3(T) that the Participating Insurance Company's
disregard of voting instructions be reasonable and based on specific
good faith determinations.
    16. A particular Participating Insurance Company's disregard of
voting instructions, nevertheless, could conflict with the voting
instructions of a majority of VLI Contract owners. The Participating
Insurance Company's action possibly could be different than the
determination of all or some of the other Participating Insurance
Companies (including affiliated insurers) that the voting instructions
of VLI Contract owners should prevail, and either could preclude a
majority vote approving the change or could represent a minority view.
If the Participating Insurance Company's judgment represents a minority
position or would preclude a majority vote, then the Participating
Insurance Company may be required, at the relevant Fund's election, to
withdraw its VLI Accounts' and VA Accounts' investments in the relevant
Fund. No charge or penalty will be imposed as a result of such
withdrawal. This requirement will be provided for in the participation
agreement entered into by the Participating Insurance Companies with
the relevant Fund.
    17. Applicants assert that there is no reason why the investment
policies of a Fund would or should be materially different from what
these policies would or should be if the Fund supported only VA
Accounts or VLI Accounts, whether flexible premium or scheduled premium
VLI Contracts. Each type of insurance contract is designed as a long-
term investment program.
    18. Each Fund will be managed to attempt to achieve its specified
investment objective, and not favor or disfavor any particular
Participating Insurance Company or type of insurance contract. There is
no reason to believe that different features of various types of
Variable Contracts will lead to different investment policies for each
or for different VLI Accounts and VA Accounts. The sale of Variable
Contracts and ultimate success of all VA Accounts and VLI Accounts
depends, at least in part, on satisfactory investment performance,
which provides an incentive for each Participating Insurance Company to
seek optimal investment performance.
    19. Furthermore, no single investment strategy can be identified as
appropriate to a particular Variable Contract. Each ``pool'' of VLI
Contract and VA Contract owners is composed of individuals of diverse
financial status, age, insurance needs and investment goals. A Fund
supporting even one type of Variable Contract must accommodate these
diverse factors in order to attract and retain purchasers. Permitting
mixed and shared funding will provide economic support for the
continuation of the Funds. Mixed and shared funding will broaden the
base of potential Variable Contract owner investors, which may
facilitate the establishment of additional Funds serving diverse goals.
    20. Applicants do not believe that the sale of the shares to Plans,
Advisers or General Accounts will increase the potential for material
irreconcilable conflicts of interest between or among different types
of investors. In particular, Applicants see very little potential for
such conflicts beyond those that would otherwise exist between owners
of VLI Contracts and VA Contracts. Applicants submit that either there
are no conflicts of interest or that there exists the ability by the
affected parties to resolve such conflicts consistent with the best
interests of VLI Contract owners, VA Contract owners and Plan
participants.
    21. Applicants considered whether there are any issues raised under
the Code, Treasury Regulations, or Revenue Rulings thereunder, if
Qualified Plans, VA Accounts, VLI Accounts, Advisers and General
Accounts all invest in the same Fund. Applicants have concluded that
neither the Code, nor the Treasury Regulations nor Revenue Rulings
thereunder present any inherent conflicts of interest if Qualified
Plans, VA Accounts, VLI Accounts, Advisers and General Accounts all
invest in the same Fund.
    22. Applicants note that, while there are differences in the manner
in which distributions from separate accounts and Qualified Plans are
taxed, these differences have no impact on the Funds. When
distributions are to be made, and a separate account or Plan is unable
to net purchase payments to make distributions, the separate account or
Plan will redeem shares of the relevant Fund at its net asset values in
conformity with Rule 22c-1 under the Act (without the imposition of any
sales charge) to provide proceeds to meet distribution needs. A
Participating Insurance Company will then make distributions in
accordance with the terms of its Variable Contracts, and a Plan will
then make distributions in accordance with the terms of the Plan.
    23. Applicants considered whether it is possible to provide an
equitable means of giving voting rights to Variable Contract owners,
Plans, Advisers and General Accounts. In connection with any meeting of
Fund shareholders, the Fund will inform each Participating Insurance
Company (with respect to its separate accounts and general account),
Adviser, and Qualified Plan of its share holdings and provide other
information necessary for such shareholders to participate in the
meeting (e.g., proxy materials). Each Participating Insurance Company
then will solicit voting instructions from owners of VLI Contracts and
VA Contracts in accordance with Rules 6e-2 or 6e-3(T), or Section
12(d)(1)(E)(iii)(aa) of the Act, as applicable, and its participation
agreement with the relevant Fund. Shares of a Fund that are held by an
Adviser or a General Account will generally be in the same proportion
as all votes cast on behalf of all Variable Contract owners having
voting rights. However, an Adviser or General Account will vote its
shares in such other manner as may be required by the Commission or its
staff. Shares held by Plans will be voted in accordance with applicable
law. The voting rights provided to Plans with respect to the shares
would be no different from the voting rights that are provided to Plans
with respect to shares of mutual funds sold to the general public.
Furthermore, if a material irreconcilable conflict arises because of a
Plan's decision to disregard Plan participant voting instructions, if
applicable, and that decision represents a minority position or would
preclude a majority vote, the Plan may be required, at the election of
the relevant Fund, to withdraw its investment in the Fund, and no
charge or penalty will be imposed as a result of such withdrawal.
    24. Applicants do not believe that the ability of a Fund to sell
its shares to a Qualified Plan, Adviser or General Account gives rise
to a senior security as defined by Section 18(g) of the Act. Regardless
of the rights and benefits of participants under Plans or owners of
Variable Contracts, VLI Accounts, VA

Accounts, Qualified Plans, Advisers and General Accounts only have, or
will only have, rights with respect to their respective shares of a
Fund. These parties can only redeem such shares at net asset value. No
shareholder of a class of the Fund has any preference over any other
shareholder of the class with respect to distribution of assets or
payment of dividends.
    25. Applicants do not believe that the veto power of state
insurance commissioners over certain potential changes to Fund
investment objectives approved by Variable Contract owners creates
conflicts between the interests of such owners and the interests of
Plan participants, Advisers or General Accounts. Applicants note that a
basic premise of corporate democracy and shareholder voting is that not
all shareholders may agree with a particular proposal. Their interests
and opinions may differ, but this does not mean that inherent conflicts
of interest exist between or among such shareholders or that occasional
conflicts of interest that do occur between or among them are likely to
be irreconcilable.
    26. Although Participating Insurance Companies may have to overcome
regulatory impediments in redeeming shares of a Fund held by their
separate accounts, Applicants state that the Plans and participants in
participant-directed Plans can make decisions quickly and redeem their
shares in a Fund and reinvest in another investment company or other
funding vehicle without impediments, or as is the case with most Plans,
hold cash pending suitable investment. As a result, conflicts between
the interests of Variable Contract owners and the interests of Plans
and Plan participants can usually be resolved quickly since the Plans
can, on their own, redeem their Fund shares. Advisers and General
Accounts can similarly redeem their shares of a Fund and make
alternative investments at any time.
    27. Finally, Applicants considered whether there is a potential for
future conflicts of interest between Participating Insurance Companies
and Qualified Plans created by future changes in the tax laws.
Applicants do not see any greater potential for material irreconcilable
conflicts arising between the interests of Variable Contract owners and
Plan participants from future changes in the federal tax laws than that
which already exists between VLI Contract owners and VA Contract
owners.
    28. Applicants recognize that the foregoing is not an all-inclusive
list, but rather is representative of issues that they believe are
relevant to this Application. Applicants believe that the sale of Fund
shares to Qualified Plans would not increase the risk of material
irreconcilable conflicts between the interests of Plan participants and
Variable Contract owners or other investors. Further, Applicants submit
that the use of the Funds with respect to Plans is not substantially
dissimilar from each Fund's current and anticipated use, in that Plans,
like separate accounts, are generally long-term investors.
    29. Applicants assert that permitting a Fund to sell its shares to
an Adviser or to the General Account of a Participating Insurance
Company for the purpose of obtaining see money will enhance management
of each Fund without raising significant concerns regarding material
irreconcilable conflicts among different types of investors.
    30. Various factors have limited the number of insurance companies
that offer Variable Contracts. These factors include the costs of
organizing and operating a funding vehicle, certain insurers' lack of
experience with respect to investment management, and the lack of name
recognition by the public of certain insurance companies as investment
experts. In particular, some smaller life insurance companies may not
find it economically feasible, or within their investment or
administrative expertise, to enter the Variable Contract business on
their own. Use of the Funds as a common investment vehicle for Variable
Contracts would reduce or eliminate these concerns. Mixed and shared
funding should also provide several benefits to owners of Variable
Contracts by eliminating a significant portion of the costs of
establishing and administering separate underlying funds.
    31. Applicants state that the Participating Insurance Companies
will benefit not only from the investment and administrative expertise
of the Funds' Adviser, but also from the potential cost efficiencies
and investment flexibility afforded by larger pools of funds.
Therefore, making the Funds available for mixed and shared funding will
encourage more insurance companies to offer Variable Contracts. This
should result in increased competition with respect to both Variable
Contract design and pricing, which can in turn be expected to result in
more product variety. Applicants also assert that sale of shares in a
Fund to Qualified Plans, in addition to VLI Accounts and VA Accounts,
will result in an increased amount of assets available for investment
in a Fund.
    32. Applicants also submit that, regardless of the type of
shareholder in a Fund, an Adviser is or would be contractually and
otherwise obligated to manage the Fund solely and exclusively in
accordance with the Fund's investment objectives, policies and
restrictions, as well as any guidelines established by the Fund's Board
of Trustees (the ``Board'').
    33. Applicants assert that sales of Fund shares, as described
above, will not have any adverse federal income tax consequences to
other investors in such a Fund.
    34. In addition, Applicants assert that granting the exemptions
requested herein is in the public interest and, as discussed above,
will not compromise the regulatory purposes of Sections 9(a), 13(a),
15(a), or 15(b) of the Act or Rules 6e-2 or 6e-3(T) thereunder.

Applicants' Conditions

    Applicants agree that the Commission order requested herein shall
be subject to the following conditions:
    1. A majority of the Board of each Fund will consist of persons who
are not ``interested persons'' of the Fund, as defined by Section
2(a)(19) of the Act, and the rules thereunder, and as modified by any
applicable orders of the Commission, except that if this condition is
not met by reason of death, disqualification or bona fide resignation
of any trustee or trustees, then the operation of this condition will
be suspended: (a) For a period of 90 days if the vacancy or vacancies
may be filled by the Board; (b) for a period of 150 days if a vote of
shareholders is required to fill the vacancy or vacancies; or (c) for
such longer period as the Commission may prescribe by order upon
application, or by future rule.
    2. The Board will monitor a Fund for the existence of any material
irreconcilable conflict between and among the interests of the owners
of all VLI Contracts and VA Contracts and participants of all Plans
investing in the Fund, and determine what action, if any, should be
taken in response to such conflicts. A material irreconcilable conflict
may arise for a variety of reasons, including: (a) An action by any
state insurance regulatory authority; (b) a change in applicable
federal or state insurance, tax, or securities laws or regulations, or
a public ruling, private letter ruling, no-action or interpretive
letter, or any similar action by insurance, tax or securities
regulatory authorities; (c) an administrative or judicial decision in
any relevant proceeding; (d) the manner in which the

investments of the Fund are being managed; (e) a difference in voting
instructions given by VA Contract owners, VLI Contract owners, and
Plans or Plan participants; (f) a decision by a Participating Insurance
Company to disregard the voting instructions of contract owners; or (g)
if applicable, a decision by a Plan to disregard the voting
instructions of Plan participants.
    3. Participating Insurance Companies (on their own behalf, as well
as by virtue of any investment of General Account assets in a Fund),
the Advisers, and any Plan that executes a participation agreement upon
its becoming an owner of 10% or more of the assets of a Fund
(collectively, ``Participants'') will report any potential or existing
conflicts to the Board. Each Participant will be responsible for
assisting the Board in carrying out the Board's responsibilities under
these conditions by providing the Board with all information reasonably
necessary for the Board to consider any issues raised. This
responsibility includes, but is not limited to, an obligation by each
Participating Insurance Company to inform the Board whenever Variable
Contract owner voting instructions are disregarded, and, if pass-
through voting is applicable, an obligation by each trustee for a Plan
to inform the Board whenever it has determined to disregard Plan
participant voting instructions. The responsibility to report such
information and conflicts, and to assist the Board, will be a
contractual obligation of all Participating Insurance Companies under
their participation agreement with a Fund, and these responsibilities
will be carried out with a view only to the interests of the Variable
Contract owners. The responsibility to report such information and
conflicts, and to assist the Board, also will be contractual
obligations of all Plans under their participation agreement with a
Fund, and such agreements will provide that these responsibilities will
be carried out with a view only to the interests of Plan participants.
    4. If it is determined by a majority of the Board, or a majority of
the disinterested trustees of the Board, that a material irreconcilable
conflict exists, then the relevant Participant will, at its expense and
to the extent reasonably practicable (as determined by a majority of
the disinterested trustees), take whatever steps are necessary to
remedy or eliminate the material irreconcilable conflict, up to and
including: (a) Withdrawing the assets allocable to some or all of their
VLI Accounts or VA Accounts from the Fund and reinvesting such assets
in a different investment vehicle, including another Fund; (b) in the
case of a Participating Insurance Company, submitting the question as
to whether such segregation should be implemented to a vote of all
affected Variable Contract owners and, as appropriate, segregating the
assets of any appropriate group (i.e., VA Contract owners or VLI
Contact owners of one or more Participating Insurance Companies) that
votes in favor of such segregation, or offering to the affected
Contract owners the option of making such a change; (c) withdrawing the
assets allocable to some or all of the Plans from the affected Fund and
reinvesting them in a different investment medium; and (d) establishing
a new registered management investment company or managed separate
account. If a material irreconcilable conflict arises because of a
decision by a Participating Insurance Company to disregard Variable
Contract owner voting instructions, and that decision represents a
minority position or would preclude a majority vote, then the
Participating Insurance Company may be required, at the election of the
Fund, to withdraw such Participating Insurance Company's VLI Account
and VA Account investments in the Fund, and no charge or penalty will
be imposed as a result of such withdrawal. If a material irreconcilable
conflict arises because of a Plan's decision to disregard Plan
participant voting instructions, if applicable, and that decision
represents a minority position or would preclude a majority vote, the
Plan may be required, at the election of the Fund, to withdraw its
investment in the Fund, and no charge or penalty will be imposed as a
result of such withdrawal. The responsibility to take remedial action
in the event of a Board determination of a material irreconcilable
conflict and to bear the cost of such remedial action will be a
contractual obligation of all Participants under their participation
agreement with a Fund, and these responsibilities will be carried out
with a view only to the interests of Variable Contract owners or, as
applicable, Plan participants.
    For purposes of this Condition 4, a majority of the disinterested
trustees of the Board of a Fund will determine whether or not any
proposed action adequately remedies any material irreconcilable
conflict, but, in no event, will the Fund or its investment adviser be
required to establish a new funding vehicle for any Variable Contract
or Plan. No Participating Insurance Company will be required by this
Condition 4 to establish a new funding vehicle for any Variable
Contract if any offer to do so has been declined by vote of a majority
of the Contract owners materially and adversely affected by the
material irreconcilable conflict. Further, no Plan will be required by
this Condition 4 to establish a new funding vehicle for the Plan if:
(a) A majority of the Plan participants materially and adversely
affected by the irreconcilable material conflict vote to decline such
offer, or (b) pursuant to documents governing the Plan, the Plan
trustee makes such decision without a Plan participant vote.
    5. The determination by the Board of the existence of a material
irreconcilable conflict and its implications will be made known in
writing promptly to all Participants.
    6. Participating Insurance Companies will provide pass-through
voting privileges to all Variable Contract owners whose Contracts are
issued through registered VLI Accounts or registered VA Accounts for as
long as the Commission continues to interpret the Act as requiring such
pass-through voting privileges. However, as to Variable Contracts
issued through VA Accounts or VLI Accounts not registered as investment
companies under the Act, pass-through voting privileges will be
extended to owners of such Contracts to the extent granted by the
Participating Insurance Company. Accordingly, such Participating
Insurance Companies, where applicable, will vote the shares of each
Fund held in their VLI Accounts and VA Accounts in a manner consistent
with voting instructions timely received from Variable Contract owners.
Participating Insurance Companies will be responsible for assuring that
each of their VLI and VA Accounts investing in a Fund calculates voting
privileges in a manner consistent with all other Participating
Insurance Companies investing in that Fund.
    The obligation to calculate voting privileges as provided in this
Application shall be a contractual obligation of all Participating
Insurance Companies under their participation agreement with the Fund.
Each Participating Insurance Company will vote shares of each Fund held
in its VLI or VA Accounts for which no timely voting instructions are
received, as well as shares held in its General Account or otherwise
attributed to it, in the same proportion as those shares for which
voting instructions are received. Each Plan will vote as required by
applicable law, governing Plan documents and as provided in this
Application.
    7. As long as the Commission continues to interpret the Act as
requiring that pass-through voting privileges be provided to Variable

Contract owners, a Fund Adviser or any General Account will vote its
respective shares of the Fund in the same proportion as all votes cast
on behalf of all Variable Contract owners having voting rights;
provided, however, that such an Adviser or General Account shall vote
its shares in such other manner as may be required by the Commission or
its staff.
    8. Each Fund will comply with all provisions of the Act requiring
voting by shareholders (which, for these purposes, shall be the persons
having a voting interest in its shares), and, in particular, the Fund
will either provide for annual meetings (except to the extent that the
Commission may interpret Section 16 of the Act not to require such
meetings) or comply with Section 16(c) of the Act (although each Fund
is not, or will not be, one of those trusts of the type described in
Section 16(c) of the Act), as well as with Section 16(a) of the Act
and, if and when applicable, Section 16(b) of the Act. Further, each
Fund will act in accordance with the Commission's interpretations of
the requirements of Section 16(a) with respect to periodic elections of
trustees and with whatever rules the Commission may promulgate
thereunder.
    9. A Fund will make its shares available to the VLI Accounts, VA
Accounts, and Plans at or about the time it accepts any seed capital
from its Adviser or from the General Account of a Participating
Insurance Company.
    10. Each Fund has notified, or will notify, all Participants that
disclosure regarding potential risks of mixed and shared funding may be
appropriate in VLI Account and VA Account prospectuses or Plan
documents. Each Fund will disclose, in its prospectus that: (a) Shares
of the Fund may be offered to both VA Accounts and VLI Accounts and, if
applicable, to Plans; (b) due to differences in tax treatment and other
considerations, the interests of various Variable Contract owners
participating in the Fund and the interests of Plan participants
investing in the Fund, if applicable, may conflict; and (c) the Fund's
Board will monitor events in order to identify the existence of any
material irreconcilable conflicts and to determine what action, if any,
should be taken in response to any such conflicts.
    11. If and to the extent Rule 6e-2 and Rule 6e-3(T) under the Act
are amended, or proposed Rule 6e-3 under the Act is adopted, to provide
exemptive relief from any provision of the Act, or the rules
thereunder, with respect to mixed or shared funding, on terms and
conditions materially different from any exemptions granted in the
order requested in this Application, then each Fund and/or
Participating Insurance Companies, as appropriate, shall take such
steps as may be necessary to comply with Rules 6e-2 or 6e-3(T), as
amended, or Rule 6e-3, to the extent such rules are applicable.
    12. Each Participant, at least annually, shall submit to the Board
of each Fund such reports, materials or data as the Board reasonably
may request so that the trustees may fully carry out the obligations
imposed upon the Board by the conditions contained in this Application.
Such reports, materials and data shall be submitted more frequently if
deemed appropriate by the Board. The obligations of the Participants to
provide these reports, materials and data to the Board, when it so
reasonably requests, shall be a contractual obligation of all
Participants under their participation agreement with the Fund.
    13. All reports of potential or existing conflicts received by a
Board, and all Board action with regard to determining the existence of
a conflict, notifying Participants of a conflict and determining
whether any proposed action adequately remedies a conflict, will be
properly recorded in the minutes of the Board or other appropriate
records, and such minutes or other records shall be made available to
the Commission upon request.
    14. Each Fund will not accept a purchase order from a Qualified
Plan if such purchase would make the Plan an owner of 10 percent or
more of the assets of the Fund unless the Plan executes an agreement
with the Fund governing participation in the Fund that includes the
conditions set forth herein to the extent applicable. A Plan will
execute an application containing an acknowledgement of this condition
at the time of its initial purchase of shares.

Conclusion

    Applicants submit, for all of the reasons explained above, that the
exemptions requested are 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.

    For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24770 Filed 10-22-13; 8:45 am]
BILLING CODE 8011-01-P