[Federal Register Volume 77, Number 234 (Wednesday, December 5, 2012)]
[Notices]
[Pages 72413-72416]
[FR Doc No: 2012-29318]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 30285; 812-13871]

William Blair & Company, L.L.C. and William Blair Funds.; Notice
of Application

November 29, 2012.
AGENCY: Securities and Exchange Commission (``Commission'' or ``SEC'').

ACTION: Notice of application for an order under sections 6(c) and
17(b) of the Investment Company Act of 1940 (``Act'') for exemptions
from section 17(a) of the Act, and under section 17(d) of the Act and
rule 17d-1 thereunder to permit certain joint transactions.

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Summary of Application: Applicants requests an order to permit certain
registered open-end management investment companies or series thereof
that are advised by William Blair & Company, L.L.C. (``William Blair'')
to invest in a private investment vehicle established by William Blair
to invest in China A shares.

Applicants: William Blair and William Blair Funds (the ``Trust'').

Filing Dates: The application was filed on February 22, 2011, and
amended on August 26, 2011, June 15, 2012, and November 19, 2012.
Applicants have agreed to file an amendment during the notice period,
the substance of which is reflected in this notice.

Hearing or Notification of Hearing: An order granting the application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Commission's Secretary
and serving applicants with a copy of the request, personally or by
mail. Hearing requests should be received by the Commission by 5:30
p.m. on December 20, 2012, and should be accompanied by proof of
service on applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.

ADDRESSES: Elizabeth M. Murphy, Secretary, U.S. Securities and Exchange
Commission, 100 F Street NE., Washington, DC 20549-1090. Applicants:
Richard W. Smirl, William Blair & Company, L.L.C., 222 West Adams
Street, Chicago, IL 60606.

FOR FURTHER INFORMATION CONTACT: Jaea F. Hahn, Senior Counsel, at (202)
942-0614, or Jennifer L. Sawin, Branch Chief, at<PHONE_NUMBER>
(Division of Investment Management, Office of Investment Company
Regulation).

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

Applicants' Representations

    1. The Trust, a Delaware statutory trust, is registered under Act
as an open-end management investment company. One existing series of
the Trust, the Emerging Markets Growth Fund (the ``Initial Fund)'' \1\
currently desires to purchase and redeem interests (``Interests'') of
separately identified series of the William Blair China A-Share Fund,
which will rely on the exemptions from registration under the Act
provided by section 3(c)(1) and/or 3(c)(7) of the Act (the ``A Share
Fund,'' and each separate series of the A Share Fund an ``A Share Fund
Series'').\2\
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    \1\ The Initial Fund currently anticipates investing in the A
Share Fund Series, although final investment decisions will be made
in light of the amount of quota available, account eligibility and
then-current market conditions at the time of investment.
    \2\ Each entity that currently intends to rely on the requested
relief has been named as an applicant. Any current or future series
of the Trust and any other existing or future registered open-end
management investment company or series thereof for which William
Blair, or any person controlling, controlled by, or under common
control with William Blair, or its or their successors (a ``William
Blair Affiliate'') acts as an investment adviser that may rely on
the requested relief in the future is a ``Future Fund'' (together
with the Initial Fund, the ``Funds''). For purposes of the requested
order, ``successor'' is limited to an entity that results from
reorganization into another jurisdiction or a change in the type of
business organization. Each Fund or other entity that may rely on
the requested relief in the future will do so only in accordance
with the terms and conditions of the requested order.
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    2. William Blair is registered as an investment adviser under the
Investment Advisers Act of 1940 (``Advisers Act''). William Blair
serves as investment adviser to the Initial Fund pursuant to an
investment advisory agreement between William Blair and the Trust, on
behalf of the Initial Fund (the ``Advisory Agreement''). As the Initial
Fund's investment adviser, William Blair is responsible for making
investment decisions for the Initial Fund and administering the
business and affairs of the Initial Fund, subject to the oversight of
the Board of Trustees of the Trust (``Board''), at least a majority of
whose members are not considered ``interested persons'' of the Initial
Fund

as defined in Section 2(a)(19) (``Independent Trustees''). Under the
terms of the Advisory Agreement, William Blair is entitled to receive
monthly management fees from the Initial Fund at a specified annual
rate. William Blair also manages or will manage separate accounts,
collective investment trusts and funds registered in other
jurisdictions, and may organize private pooled investment vehicles in
the future (together, ``Other Accounts''). These Other Accounts may
have similar investment objectives and strategies as the Funds, and may
invest in A Share Fund Series along with one or more Funds.
    3. Applicants state that a significant majority of publicly traded
Chinese companies list their shares on one or more of three stock
exchanges--the Shanghai, Shenzhen and Hong Kong Stock Exchanges. The
Shanghai and Shenzhen exchanges are located in mainland China and there
are two categories of stock that are listed on these exchanges: China
``A Shares'' which trade in the currency of China, the renminbi, and
``B Shares'' which trade in foreign currencies. ``H Shares'' and ``red
chip'' shares are listed and traded on the Hong Kong Stock Exchange.\3\
Applicants state that far fewer Chinese companies have listed their
shares as H Shares or red chips.
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    \3\ H Shares are shares of companies incorporated in mainland
China, listed on the Hong Kong Stock Exchange and traded in Hong
Kong dollars. ``Red chip'' shares are listed and traded on the Hong
Kong Stock Exchange, issued by companies based in mainland China but
incorporated outside of mainland China.
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    4. The Initial Fund currently invests in China through ``H Shares''
or ``red chip'' stocks. Applicants state that for a variety of reasons,
China A Shares are a more attractive means to invest in Chinese
companies, than H Shares red chip stocks or China B Shares. Applicants
state that, while it is not practical or economical for Funds or Other
Accounts to invest directly in China A Shares, a pooled investment
vehicle would allow the Funds and Other Accounts to gain focused
exposure to China A Shares.\4\ Applicants represent that the A Share
Fund will be the entity that invests in and holds China A Shares; the A
Share Fund was named as the investing vehicle in William Blair's
application to obtain a license to invest in China. Interests in the A
Share Fund will be sold only to the Funds and the Other Accounts.
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    \4\ Applicants state that until 2002, the Chinese government
restricted investment in China A Shares to domestic (i.e., Chinese)
investors. Since 2002, the Chinese Government has permitted certain
non-Chinese investors to invest in China A Shares, but to do so, a
foreign investor must apply for, and receive a license as a
Qualified Foreign Institutional Investor or ``QFII'' and be allotted
a quota, representing the amount in renminbi of China A Shares that
the investor may purchase. William Blair has received a QFII license
and was granted a quota of US$100 million so that it can invest in
China A Shares on behalf of the Funds and Other Accounts. As
described more fully in the application, individual applications on
behalf of each Fund or Other Account would generally not be
practical or feasible.
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    5. The A Share Fund has filed a Certificate of Formation, to be
effective as of December 17, 2012, and will be organized as a Delaware
limited liability company, with William Blair, or a William Blair
Affiliate, as its managing member. The A Share Fund will not have a
board of directors or trustees. The A Share Fund may establish one or
more separately identified A Share Fund Series, and a Fund or Other
Account may invest in some or all of the different A Share Fund
Series.\5\ Each A Share Fund Series will have its own portfolio manager
or portfolio management team at William Blair who will be responsible
for selecting particular China A Shares for investment by that A Share
Fund Series. Each Fund or Other Account investing in an A Share Fund
Series will hold Interests which will represent a proportionate share
of the A Share Fund Series' net assets and a proportionate claim on the
A Share Fund Series' net income. Interests in an A Share Fund Series
used by the Funds will be valued daily in accordance with the Funds'
valuation procedures and in accordance with section 2(a)(41) of the
Act. Each Interest would have the same rights as any other Interest,
and the A Share Fund Series would not issue preferred interests.
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    \5\ Applicants state that initially, one A Share Fund Series is
contemplated but in the future, additional A Share Fund Series may
be established for different types of investors or to invest in
different companies based generally on the particular
characteristics of those companies.
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    6. William Blair will not charge advisory fees to A Share Fund
Series used by the Funds. William Blair will, however be entitled to
receive applicable advisory fees from the Funds or Other Accounts.
Expenses of the A Share Fund Series will be charged to the A Share Fund
Series as a whole and accrue on a daily basis.\6\ The A Share Fund's
books and those of the A Share Fund Series will be accounted for under
standard accounting principles and in accordance with U.S. Generally
Accepted Accounting Principles (``GAAP''), and they will be audited
annually by a nationally recognized and PCAOB-registered audit firm in
accordance with U.S. Generally Accepted Auditing Standards
(``GAAS'').\7\ The A Share Fund Series used by the Funds will not lever
themselves through borrowing, but A Share Fund Series used exclusively
by Other Accounts may use leverage.
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    \6\ Expenses of the A Share Fund Series will include basic fees
and expenses of service providers, such as the administrator,
accountant, local custodian and legal counsel.
    \7\ Applicants state that the GAAS standards applicable to the
audit of the A Share Fund would be the same standards as those
applicable to a registered investment company. Further, applicants
state that GAAP would apply to both the A Share Fund audit and a
registered investment company audit. Thus, applicants assert that
critical accounting policies governing security valuation,
accounting for investment transactions, recognition of investment
income and of expenses, and accrual of expenses, which are often the
critical policies applicable to investment companies, would apply in
substantially the same manner for the audit of the A Share Fund.
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    7. A Fund's decision to invest in an A Share Fund Series will be
made by a Fund's portfolio manager(s). Because of the repatriation
restrictions, investments in China A Shares would be deemed illiquid
investments. Each Fund will, at all times, limit its holdings in the A
Share Fund to no more than 15% of its net assets. Applicants state that
access by the Funds and Other Accounts to the quota (i.e., to China A
Shares) through the A Share Fund Series is a limited opportunity and
will be allocated in accordance with William Blair's Trade Allocation
Policy. Under William Blair's Trade Allocation Policy, if fewer
Interests are available than requested by the portfolio managers of the
Funds and Other Accounts, Interests will generally be allocated across
participating accounts on a pro rata basis according to requested order
size. Similarly, if more than one Fund or Other Account seeks to
repatriate proceeds at or about the same time, and Chinese regulations
limit the aggregate amount of proceeds that may be repatriated at any
given time to a level below the aggregate amount sought to be
repatriated, the requests by the applicable portfolio manager(s) will
be aggregated, if received at or about the same time, and proceeds
available for repatriation will be allocated pro rata among requesting
Funds and Other Accounts.\8\ William Blair will not consider the
potential impact on the A Shares quota when making investment decisions
for the Funds or Other Accounts.\9\
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    \8\ Applicants are not seeking comfort nor is the Commission
providing any opinion on whether the Trade Allocation Policy meets
the standards applicable under the Act or the Advisers Act.
    \9\ Applicants state that the Chinese authorities may reduce or
revoke a QFII's quota if the QFII does not invest the full amount of
its quota over a phase-in period, or, in certain cases, if it
repatriates its investments below the quota amount.

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    8. Applicants request an order pursuant to sections 6(c) and 17(b)
of the Act and pursuant to section 17(d) of the Act and rule 17d-1
under the Act solely to the extent necessary to permit: (a) The Funds
to purchase Interests of the A Share Fund Series; (b) the A Share Fund
to sell Interests in its Series to the Funds, and to redeem such shares
held by the Funds upon the demand of the Funds; and (c) William Blair
(or an William Blair Affiliate) to provide investment management
services to the Funds and A Share Fund.

Applicants' Legal Analysis

    1. Section 17(a) generally provides, in part, that it is unlawful
for any affiliated person of a registered investment company (``first-
tier affiliate''), or any affiliated person of such person (``second
tier affiliate''), acting as principal, to sell or purchase any
security or other property to or from such investment company. Section
2(a)(3) of the Act defines an ``affiliated person'' of another person
to include (a) any person directly or indirectly owning, controlling,
or holding with power to vote, 5% or more of the outstanding voting
securities of the other person; (b) any person 5% or more of whose
outstanding voting securities are directly or indirectly owned,
controlled, or held with the power to vote by the other person; and (c)
any person directly or indirectly controlling, controlled by, or under
common control with the other person. Section 2(a)(9) defines
``control'' to mean ``the power to exercise a controlling influence
over the management or policies of a company, unless such power is
solely the result of an official position with such company.''
    2. Applicants state that the Funds and the A Share Fund are
expected to be affiliated persons under section 2(a)(3) of the Act,
because it is expected that one or more Funds and Other Accounts will
own at least 5%, and potentially, more than 25% of the Interests of the
A Share Fund or an A Share Fund Series. While Interests of the A Share
Fund (and A Share Fund Series) will be non-voting interests, a Fund or
Other Account could have power to exercise a controlling influence over
the management or policies of the A Share Fund or Series and be deemed
an affiliated person of the A Share Fund or A Share Fund Series under
section 2(a)(3)(C). In addition, William Blair is the investment
adviser to the Initial Fund (and William Blair or a William Blair
Affiliate will be the investment adviser to any Future Funds), and
William Blair or a William Blair Affiliate will be the managing member
of the A Share Fund. As a result, the A Share Fund or A Share Fund
Series may be deemed to be under William Blair's control under section
2(a)(3)(C), such that the A Share Fund may be deemed an affiliated
person of an affiliated person of the Funds. If a Fund and the A Share
Fund are deemed affiliates of each other, or even second-tier
affiliates, the sale of Interests of the A Share Fund to the Fund, and
the redemption of such Interests by the Fund, would be prohibited under
section 17(a) of the Act.
    3. Section 17(b) of the Act authorizes the Commission to grant an
order permitting a transaction otherwise prohibited by section 17(a) if
the terms of the proposed transaction, including the consideration to
be paid or received, are fair and reasonable and do not involve
overreaching on the part of any person concerned, and the proposed
transaction is consistent with the policies of each registered
investment company involved and with the general purposes of the Act.
Section 6(c) of the Act permits the Commission to exempt any person or
transactions from any provisions of the Act if 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.
    4. Applicants submit that the proposed arrangement satisfies the
standards for relief under sections 17(b) and 6(c) of the Act. For the
reasons discussed below, Applicants submit that the terms of the
arrangement, including the consideration to be paid, are fair and
reasonable and do not involve overreaching on the part of any person
concerned, and that the proposed transactions are consistent with the
policy of each registered investment company concerned and with the
general purposes of the Act. Applicants further submit that the Funds'
participation in the A Share Fund Series will be necessary or
appropriate in the public interest and consistent with the protection
of investors and the purposes fairly intended by the policies and
provisions of the Act.
    5. Applicants state that each Fund and Other Account will be
treated identically as a holder of Interest in the A Share Fund Series,
and each Fund and Other Account will purchase and sell Interests of a
China A Share Fund Series on the same terms and on the same basis as
each other Fund and Other Account that invests in that A Share Fund
Series. Applicants note that neither William Blair, nor a William Blair
Affiliate, will receive a fee for advising any A Share Fund Series used
by a Fund. The Funds, as holders of Interests of the A Share Fund, will
not be subject to any sales load, redemption fee, distribution fee or
service fee. Moreover, administrative fees will be paid by the A Share
Fund Series used by the Funds to William Blair only upon the
determination by each Fund's Board, including a majority of Independent
Trustees, that the fees are (i) for services in addition to, rather
than duplicative of, services rendered to the Funds directly and (ii)
fair and reasonable in light of the usual and customary charges imposed
by others for services of the same nature and quality. Applicants argue
that the fees payable to the A Share Fund's service providers will be
for distinct services, and the costs of such fees will be outweighed by
opportunity to invest in China A Shares.
    6. Applicants propose that the Funds be permitted to continue to
engage in certain purchase and sale cross transactions in securities
(``Cross Transactions'') between a Fund or Other Account seeking to
implement a portfolio strategy and another Fund or Account seeking to
raise or invest cash. The Funds currently rely on rule 17a-7 to engage
in such Cross Transactions; however, if one or more Funds or Other
Accounts were deemed to be second-tier affiliates of each other by
virtue of their ownership or control affiliations with the A Share Fund
or an A Share Fund Series, the Funds may not be entitled to rely on
rule 17a-7 because they would no longer be affiliated solely for the
reasons permitted by the Rule.
    7. Applicants assert that the potential affiliations created by the
A Share Fund Series structure do not affect the other protections
provided by the rule, including the integrity of the pricing mechanism
employed, and oversight by each Fund's Board. Applicants represent that
the Funds and Other Accounts will comply with the requirements set
forth in rule 17a-(7)(a) through (g). Applicants thus believe that
Cross Transactions will be reasonable and fair, and will not involve
overreaching, and will be consistent with the purposes of the Act and
the investment policy of each Fund.
    8. Section 17(d) of the Act and rule 17d-1 under the Act generally
prohibit joint transactions involving registered investment companies
and their affiliates unless the Commission has approved the
transaction. In considering whether to approve a joint transaction
under rule 17d-1, the Commission considers whether the proposed
transaction is consistent with the provisions, policies, and purposes
of the Act, and the extent to which the

participation of the investment companies is on a basis different from
or less advantageous than that of the other participants. Applicant
states that the Funds and the Other Accounts (by purchasing Interests
of the A Share Funds), William Blair (by managing the portfolio
securities of the A Share Fund and the Funds at the same time that the
Funds are invested in Interests of the A Share Fund), and the A Share
Fund (by selling its Interests to, and redeeming its Interests from,
the Funds), could be deemed to be participants in a joint enterprise or
arrangement within the meaning of section 17(d) and rule 17d-1.
    9. Applicants request an order pursuant to section 17(d) and rule
17d-1 to permit the proposed transactions with the A Share Fund.
Applicants submit that the investment by the Funds in the A Share Fund
on the basis proposed is consistent with the provisions, policies and
purposes of the Act, and that each Fund will invest in Interests of the
A Share Fund on the same basis as any other shareholder (i.e., the
other Funds and Other Accounts). Applicants further state that William
Blair will take reasonable steps to make sure that allocations among
the Funds and Other Accounts are fair and equitable. Allocations of
China A Shares to different A Share Fund Series, and allocations of
opportunities to invest in the A Share Fund Series, by Funds and Other
Accounts, will be subject to William Blair's Trade Allocation Policy,
under the supervision of William Blair's and the Funds' CCO, and
compliance with William Blair's Trade Allocation Policy will be
overseen by the Funds' Board.

Applicants' Conditions

    Applicants agree that any order granting the requested relief shall
be subject to the following conditions:
    1. The Funds' investment in Interests of the A Share Fund will be
undertaken only in accordance with the Funds' stated investment
restrictions and will be consistent with their stated investment
policies.
    2. William Blair and its affiliated persons will receive no
advisory fee from the A Share Fund in connection with the Funds'
investment in the A Share Fund. William Blair and its affiliated
persons will receive no commissions, fees, or other compensation from a
Fund or the A Share Fund in connection with the purchase or redemption
by the Funds of shares in the A Share Fund. Interests of the A Share
Fund will not be subject to a sales load, redemption fee, distribution
fee or service fee.
    3. Administrative fees will be paid by the A Share Fund Series used
by the Funds to William Blair or a William Blair Affiliate only upon a
determination by each Fund's Board, including a majority of its
Independent Trustees, that the fees are (i) for services in addition
to, rather than duplicative of, services rendered to the Funds
directly, and (ii) fair and reasonable in light of the usual and
customary charges imposed by others for services of the same nature and
quality. If such determination is not made by a Fund's Board, William
Blair will reimburse to that Fund the amount of any administrative fee
borne by that Fund as an investor in the A Share Fund.
    4. Each Fund will, at all times, limit its holdings in the A Share
Fund to no more than 15% of its assets.
    5. Each Fund's Board, including a majority of the Independent
Trustees, will determine initially and no less frequently than annually
that the Fund's investments in the A Share Fund are, and continue to
be, in the best interests of the Fund and the Fund's shareholders.
    6. William Blair will make the accounts, books and other records of
the A Share Fund available for inspection by the Commission staff and,
if requested, to furnish copies of those records to the Commission
staff.
    7. The A Share Fund will comply with the requirements of the
following sections of the Act, except as noted below: Sections 9, 12,
13, 17(a) (except insofar as relief is provided by the Order), 17(d)
(except insofar as relief is provided by the Order), 17(e), 17(f),
17(h), 18, 21 and 36-53 of the Act and rule 22c-1 under the Act as if
the A Share Fund were an open-end management investment company
registered under the Act. In addition, the A Share Fund will comply
with the requirements of the rules under section 17(f) and 17(g) of the
Act. This condition 7 will apply only to A Share Fund Series in which a
Fund has invested; this condition 7 will not apply to A Share Fund
Series invested in exclusively by Other Accounts except insofar as
necessary for the A Share Fund Series invested in by a Fund to comply
with this condition. William Blair will adopt procedures designed to
ensure that the A Share Fund complies with the aforementioned sections
of the Act and rules under the Act. William Blair will periodically
review and periodically update as appropriate such procedures and will
maintain books and records describing such procedures, and maintain the
records required by rules 31a-1(b)(1), 31a-1(b)(2)(ii) and 31a-1(b)(9)
under the Act. In addition, in connection with the review required by
condition 5 above, William Blair will provide annually to each Fund's
Board a written report about William Blair's and the A Share Fund's
compliance with this condition. All books and records required to be
made pursuant to this condition will be maintained and preserved for a
period of not less than six years from the end of the fiscal year in
which any transaction occurred, the first two years in an easily
accessible place, and will be subject to examination by the SEC and its
staff.
    8. To engage in Cross Transactions, the Funds will comply with rule
17a-7 under the Act in all respects other than the requirement that the
parties to the transaction be affiliated persons (or affiliated persons
of affiliated persons) of each other solely by reason of having a
common investment adviser or investment advisers which are affiliated
persons of each other, common officers, and/or common directors, solely
because a Fund and Other Account might become affiliated persons within
the meaning of section 2(a)(3)(A), (B) or (C) of the Act because of
their investments in the A Share Fund.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-29318 Filed 12-4-12; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 82, Number 69 (Wednesday, April 12, 2017)]
[Notices]
[Pages 17708-17710]
[FR Doc No: 2017-07305]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80385; File No. SR-CBOE-2017-014]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Order Approving Proposed Rule Change Related to Rule
24.9(e)

April 6, 2017.

I. Introduction

    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ Chicago Board Options
Exchange, Incorporated (the ``Exchange'' or ``CBOE'') filed with the
Securities and Exchange Commission (``Commission'') a proposed rule
change to amend the operation of its nonstandard expirations pilot
program on February 13, 2017. The proposed rule change was published
for comment in the Federal Register on February 21, 2017.\3\ No comment
letters were received in response to this proposal. This order approves
the proposed rule changes.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 80037 (Feb. 14,
2017), 82 FR 11290 (SR-CBOE-2017-014) (``Notice'').
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II. Description of the Proposed Rule Change

    The proposed rule change amended the nonstandard expirations pilot

program set forth in CBOE Rule 24.9(e) (the ``Pilot Program'') to
permit the Exchange to list weekly and monthly expirations non-
consecutively.
    In its filing, the Exchange explained that the Pilot Program
initially permitted CBOE to list P.M.-settled ``end-of-week'' options
on broad-based indexes that expire on any Friday of the month, other
than the third Friday of the month (``EOWs''), and ``end of month''
options that expire on the last trading day of the month (``EOMs'').\4\
The Pilot Program was later expanded to allow CBOE to list P.M.-settled
options on broad-based indexes that expire on any Wednesday of the
month (``WEDs'') and any Monday of the month (``MONs'').\5\ The Pilot
Program permits the Exchange to list, for any given class, the maximum
number of expirations permitted by CBOE Rule 24.9(a)(2) for standard
options on the same broad-based index.\6\ For example, the Exchange
stated that MONs, WEDs, EOWs and EOMS in the S&P 500 Index options
class (``SPX'') may each have up to twelve expirations under the Pilot
Program (i.e., a total of 48 expirations),\7\ although the Exchange
represented that it does not currently choose to list all such
expirations.\8\ Rather, the Exchange explained that it introduces
expirations as customer demand dictates and typically lists four MONs,
six WEDs, and seven EOWs in SPX options at a time.\9\
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    \4\ See Notice, supra note 3, at 11290; see also Securities
Exchange Act Release No. 62911 (Sept. 14, 2010), 75 FR 57539 (Sept.
21, 2010) (SR-CBOE-2009-075) (order approving the establishment of
the nonstandard expirations pilot program).
    \5\ See Notice, supra note 3, at 11290-91. See also Securities
Exchange Act Release No. 76909 (Jan. 14, 2016), 81 FR 3512 (Jan. 21,
2016) (SR-CBOE-2015-106) (order approving the inclusion of WEDs in
the Pilot Program); Securities Exchange Act Release No. 78531 (Aug.
10, 2016), 81 FR 54643 (Aug. 16, 2016) (SR-CBOE-2016-046) (order
approving the inclusion of MONs in the Pilot Program).
    \6\ See Notice, supra note 3, at 11291; CBOE Rule 24.9(e)(1)-
(2).
    \7\ See Notice, supra note 3, at 11291; see also CBOE Rule
24.9(a)(2) (specifying that the Exchange may list up to twelve
standard monthly expirations at any one time for any class--like
SPX--that the Exchange uses to calculate a volatility index).
    \8\ See Notice, supra note 3, at 11291.
    \9\ See id.
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    The Exchange noted, however, that MONs, WEDs, and EOWs
(collectively, ``Weekly Expirations'') currently must be listed for
consecutive Monday, Wednesday, or Friday expirations, as
applicable.\10\ Similarly, EOM expirations currently must be listed for
consecutive month-end dates.\11\ The Exchange indicated that it had
received repeated customer interest to list Weekly Expirations and EOMs
that expire in the mid-term--as opposed to the short-term expirations
set forth in the Exchange's current listing schedule \12\--in order to
provide a potential financial hedge for impactful economic events.\13\
The Exchange therefore proposed to amend its Pilot Program to eliminate
the consecutive expiration restriction for the listing of Weekly
Expirations and EOMs.\14\
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    \10\ See id.; see also CBOE Rule 24.9(e)(1).
    \11\ See Notice, supra note 3, at 11291; see also CBOE Rule
24.9(e)(2).
    \12\ See supra note 9 and accompanying text. The Exchange
pointed out that it separately provides long-term expirations
through its Long-Term Index Option Series program (``LEAPS''). See
Notice, supra note 3, at 11291; CBOE Rule 24.9(b)(1) (providing that
LEAPS may expire twelve to 180 months from the date of issuance).
    \13\ See Notice, supra note 3, at 11291.
    \14\ See id.
---------------------------------------------------------------------------

    While CBOE could currently add more consecutive expirations to its
listing schedule in order to provide some amount of mid-term coverage,
the Exchange represented that customer demand is for expirations near a
certain future economically impactful event (e.g., a national
election)--not for every expiration between the current date and that
particular event.\15\ For that reason, the Exchange believed the
marketplace would be better served by allowing CBOE to list Weekly
Expirations or EOMs non-consecutively, instead of listing all Weekly
Expirations or EOMs consecutively in order to reach a certain date.\16\
The Exchange indicated that this approach would allow CBOE to list
fewer expirations because it could exclude those with less customer
demand, which it believed would limit potential burdens on liquidity
providers to quote in the relevant option classes.\17\ The Exchange
also asserted that non-consecutive expirations would expand the hedging
tools available to market participants, allowing them to tailor their
investment or hedging needs more effectively.\18\
---------------------------------------------------------------------------

    \15\ Id.
    \16\ Id.
    \17\ Id.
    \18\ Id.
---------------------------------------------------------------------------

    The Exchange highlighted the limited scope of the proposed rule
change. It pointed out that CBOE currently only lists nonstandard
expirations in three classes: S&P 500 Index options under symbol SPXW,
CBOE Mini S&P 500 Index options under symbol XSP, and Russell 2000
Index options under symbol RUTW.\19\ Furthermore, the Exchange noted
that CBOE only lists MONs and WEDs in SPXW; EOWs in SPXW, RUTW, and
XSP; and EOMs in SPXW and RUTW.\20\ The Exchange therefore believed the
proposed rule change would not affect most options classes.\21\
Moreover, the Exchange anticipated that the proposed rule change would
have a limited effect on the three classes that are listed under the
Pilot Program. The Exchange expressed its belief that the vast majority
of expirations would continue to be listed consecutively because the
majority of trading interest is in the short-term weeks.\22\ The
Exchange also explained that even non-consecutively listed expirations
would eventually fall in line with CBOE's regular listing schedule as
consecutive weekly or monthly expirations are added.\23\
---------------------------------------------------------------------------

    \19\ Id.
    \20\ Id.
    \21\ Id.
    \22\ Id.
    \23\ Id.
---------------------------------------------------------------------------

    The Exchange further noted that the proposed rule change would not
affect the number of expirations permitted under the Pilot Program, as
it would still limit the maximum number of expirations that may be
listed for each Weekly Expiration and EOMs in a given class to the
maximum number of expirations permitted by CBOE Rule 24.9(a)(2) for
standard options on the same broad-based index.\24\ Similarly, the
Exchange clarified that the proposed rule change would not affect the
maximum duration (i.e., the maximum time from listing to expiration) of
Weekly Expirations or EOMs, and it proposed to specify in CBOE Rule
24.9(e)(1) and (2) that the expiration date of a non-consecutive
expiration may not be beyond what would be considered the last
expiration date if the maximum number of expirations were listed
consecutively.\25\ By way of example, the Exchange explained that
listing all twelve WEDs consecutively in SPXW would result in the
twelfth WED expiration occurring 11 weeks from the nearest-term
expiration.\26\ Assuming that the nearest-term WED expiration occurred
on February 8, 2017, the Exchange stated that the twelfth expiration
would occur on April 26, 2017.\27\ It then explained that, under the
proposed rule, a non-consecutively listed WED could not have an
expiration date later than April 26, 2017 in that example.\28\ Thus,
the only difference identified by the Exchange between the current rule
and the proposed rule is that the current rule would require CBOE to
list all twelve expirations in order to list the April 26, 2017
expiration; under the proposed rule,

CBOE could list the April 26, 2017 expiration without listing any or
only some of the other WEDs expirations.\29\
---------------------------------------------------------------------------

    \24\ Id.; see CBOE Rule 24.9(e)(1)-(2).
    \25\ See Notice, supra note 3, at 11291-92.
    \26\ The Exchange noted that its example assumes that there are
no EOMs that coincide with the WEDs in SPXW, in which case CBOE
would list an EOM instead of a WED. See id.
    \27\ See Notice, supra note 3, at 11292.
    \28\ Id.
    \29\ Id.
---------------------------------------------------------------------------

    Finally, the Exchange assured the Commission that its annual Pilot
Program report will include any Weekly Expirations and EOMs, regardless
of whether the expirations are listed consecutively or non-
consecutively.\30\
---------------------------------------------------------------------------

    \30\ Id.
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of Section 6 of the Act \31\
and rules and regulations thereunder applicable to a national
securities exchange.\32\ In particular, the Commission finds that the
proposed rule change is consistent with the requirements of Section
6(b)(5) of the Act, which requires, among other things, that a national
securities exchange have rules 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 regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to and perfect the mechanisms of a
free and open market and a national market system, and, in general, to
protect investors and the public interest.\33\
---------------------------------------------------------------------------

    \31\ 15 U.S.C. 78f(b).
    \32\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \33\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    As an initial matter, the Commission notes that the proposed rule
change does not expand the scope of P.M. settlement under the Pilot
Program; the Exchange has confirmed that the maximum number of
expirations permitted and the maximum duration of Weekly Expirations
and EOMs under the Pilot Program would remain the same. The Exchange
further explained that its proposal to eliminate the requirement to
list Weekly Expirations and EOMs consecutively is consistent with
Section 6(b)(5) of the Act for a number of reasons. First, the proposal
helps protect investors and the public interest because it will expand
the ability of investors to hedge risks against market movements that
may arise from future economic events.\34\ Similarly, the Exchange
noted the proposal will create greater trading and hedging
opportunities and flexibility and will provide customers with the
ability to more closely tailor their investment objectives.\35\
Finally, the Exchange noted that this proposal will allow the Exchange
to provide these enhanced hedging opportunities in manner that also
limits the potential burden on liquidity providers quoting the affected
classes, which helps remove impediments to and perfect the mechanism of
a free and open market and a national market system.\36\
---------------------------------------------------------------------------

    \34\ See Notice, supra note 3, at 11292.
    \35\ Id.
    \36\ Id.
---------------------------------------------------------------------------

    The Commission notes that CBOE will continue to provide the
Commission with the Annual Report analyzing volume and open interest of
EOMs and Weekly Expirations (including any non-consecutively listed
expirations), which will also contain information and analysis of EOMs
and Weekly Expiration trading patterns and index price volatility and
share trading activity for series that exceed minimum parameters. This
information should be useful to the Commission as it evaluates whether
allowing P.M. settlement for EOMs and Weekly Expirations has resulted
in increased market and price volatility in the underlying component
stocks, particularly at expiration. This information should help the
Commission and CBOE assess the impact on the markets and determine
whether changes to the Pilot Program are necessary or appropriate.
Furthermore, the Exchange's ongoing analysis of the Pilot Program
should help it monitor any potential risks from large P.M.-settled
positions and take appropriate action if warranted.
    For the foregoing reasons, the Commission finds that the proposed
rule changes are consistent with the requirements of Section 6 of the
Act including Section 6(b)(5) and rules and regulations thereunder
applicable to a national securities exchange.

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\37\ that the proposed rule change (SR-CBOE-2017-014) be, and
hereby is,  approved.
---------------------------------------------------------------------------

    \37\ 15 U.S.C. 78s(b)(2).
    \38\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\38\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-07305 Filed 4-11-17; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 82, Number 135 (Monday, July 17, 2017)]
[Rules and Regulations]
[Pages 32626-32629]
[FR Doc No: 2017-14706]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2017-0021; Directorate Identifier 2017-NE-01-AD;
Amendment 39-18951; AD 2017-14-07]
RIN 2120-AA64

Airworthiness Directives; International Aero Engines AG Turbofan
Engines

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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

SUMMARY: We are adopting a new airworthiness directive (AD) for certain
International Aero Engines AG (IAE) V2522-A5, V2524-A5, V2527-A5,
V2527E-A5, V2527M-A5, V2530-A5, V2533-A5, V2525-D5, V2528-D5, and
V2531-E5 turbofan engines. This AD was prompted following a self-
disclosure by IAE regarding manufacturing quality escapes. This AD
requires replacing the affected and suspect parts within the time
limits specified in the compliance section. We are issuing this AD to
address the unsafe condition on these products.

DATES: This AD is effective August 21, 2017.
    The Director of the Federal Register approved the incorporation by
reference of certain publications listed in this AD as of August 21,
2017.

ADDRESSES: For service information identified in this final rule,
contact International Aero Engines AG, 400 Main Street, East Hartford,
CT 06118; phone:<PHONE_NUMBER>; email<EMAIL_ADDRESS>Internet:
http://fleetcare.pw.utc.com. You may view this service information at
the FAA, Engine & Propeller Directorate, 1200 District Avenue,
Burlington, MA. 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-2017-0021.

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-2017-
0021; or in person at the Docket Management Facility 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 the Docket Office
(phone:<PHONE_NUMBER>) is

Document Management Facility, 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: Brian Kierstead, Aerospace Engineer,
Engine Certification Office, FAA, Engine & Propeller Directorate, 1200
District Avenue, Burlington, MA 01803; phone:<PHONE_NUMBER>; fax: 781-
238-7199; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR
part 39 by adding an AD that would apply to certain IAE V2522-A5,
V2524-A5, V2527-A5, V2527E-A5, V2527M-A5, V2530-A5, V2533-A5, V2525-D5,
V2528-D5, and V2531-E5 turbofan engines. The NPRM published in the
Federal Register on March 14, 2017 (82 FR 13570). The NPRM was prompted
following a self-disclosure by IAE regarding manufacturing quality
escapes. The NPRM proposed to require replacing the affected and
suspect parts within the time limits specified in the compliance
section. We are issuing this AD to prevent failure of high-energy,
rotating hardware, uncontained part release, damage to the engine, and
damage to the airplane.

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 to each comment.

Request To Change Service Information

    MTU and United Airlines (UAL) requested that we revise the service
information citations in the Applicability and Compliance paragraphs of
this AD to reference the ``latest approved revision'' or ``latest
issue'' of the service bulletin (SB). Citing future issues/revisions
would avoid Alternative Method of Compliance (AMOC) requests if the SBs
are updated.
    We disagree. We are only authorized to mandate use of SBs that we
have reviewed and which are published. Since future revisions of SBs
are not yet published, we are not authorized to mandate their use. We
did not change this AD.

Request To Change Compliance Time

    MTU and UAL requested that we revise the removal interval
referenced in Compliance paragraph (g)(2) of this AD from ``when the
high-pressure turbine (HPT) module is disassembled and access to the
part is available''. UAL feels that the proposed compliance period may
not prevent part failure and requests the compliance be revised to
``anytime the HPT module is removed from the engine''. MTU believes
that the word ``access'' is unclear and requests alignment with the IAE
NewsFlash NF-048, which recommends replacing at ``next piece part
exposure.''
    We disagree. Changing compliance to ``next piece part exposure''
would allow parts to remain in service longer, resulting in an
unacceptable level of risk. We also disagree with mandating removal of
the hardware upon separation of the HPT module from the engine because
this would require an earlier compliance than is required. Neither MTU
nor UAL submitted data to support a change to the compliance period. We
did not change this AD.

Request To Change Part Eligibility

    UAL requests that the AD elaborate that a part eligible for
installation includes ``any approved original equipment manufacturer
(OEM) part number, be it new, or previously operated, provided that it
is not affected by this AD.'' UAL states that the referenced SB(s)
require the owner/operator to ``install a new part of a specific part
number.''
    We disagree. The installation of specific hardware is not mandated
by this AD. Any part eligible for installation, new or previously
installed, may be installed in place of the affected part. We did not
change this AD.

Request To Change Disposition of Affected Hardware

    UAL requests that this AD not include the sections of the SBs that
refer to how the affected hardware is dispositioned upon removal.
United highlights concerns with the reporting requirements listed in
the SB and does not want this AD to incorporate by reference (IBR)
those sections of the SB(s).
    We agree. The disposition of this hardware is not mandated by this
AD. We did not change this AD.

Request To Change Applicability

    MTU requested that we remove the V2531-E5 from the Summary and
Applicability sections of this AD. MTU stated that the V2531-E5 is not
listed as an affected engine in the associated SBs.
    We disagree. We have determined that the IAE V2531-E5 turbofan
engine might have an affected part installed. The IAE V2531-E5 turbofan
engine is included in the Applicability paragraph of this AD to ensure
those engines comply with this AD in the event that an affected part is
installed on a V2531-E5 engine. We did not change this AD.

Request To Change Costs of Compliance

    MTU requested that we align the ``Cost per product'' and ``Cost on
U.S. operators'' with the latest SB information. MTU cites that the
``Cost per product'' and ``Cost on U.S. operators'' as listed in the AD
are lower than the numbers given in the associated SBs.
    We disagree. The cost estimate listed in the AD is pro-rated based
on the part cycles accrued and the cycles at which the affected
hardware will be removed from service, versus the certified life. The
SB only lists new part cost. We did not change this AD.

Conclusion

    We reviewed the relevant data, considered the comments received,
and determined that air safety and the public interest require adopting
this final rule as proposed. We have determined that these minor
changes:
     Are consistent with the intent that was proposed in the
NPRM for correcting the unsafe condition; and
     Do not add any additional burden upon the public than was
already proposed in the NPRM.

Related Service Information Under 1 CFR Part 51

    IAE Non-Modification Service Bulletin (NMSB) V2500-ENG-72-0676,
dated October 14, 2016; IAE NMSB V2500-ENG-72-0677, Revision 1, dated
January 11, 2017; IAE NMSB V2500-ENG-72-0682, dated December 2, 2016;
IAE NMSB V2500-ENG-72-0681, Revision 2, dated January 9, 2017; and IAE
NMSB V2500-ENG-72-0678, Revision 1, dated January 5, 2017. Each of the
NMSBs describes procedures for replacing a different affected part.
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 70 engines installed on airplanes
of U.S. registry.
    We estimate the following costs to comply with this AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per       Cost on  U.S.
                    Action                       Labor cost      Parts cost        product         operators
----------------------------------------------------------------------------------------------------------------
Removal of HPT stage 2 air seal (cycle                     $0     $154,119.00     $154,119.00        $308,238.00
 limited)....................................
Removal of HPT 1st stage air seal (cycle                    0       87,503.00       87,503.00         175,006.00
 limited)....................................
Removal of HPT stage 2 ring plate (cycle                    0       56,207.00       56,207.00         112,414.00
 limited)....................................
Removal of HPT stage 2 ring plate (upon                     0       31,403.00       31,403.00       2,041,195.00
 access).....................................
----------------------------------------------------------------------------------------------------------------

    According to the manufacturer, some 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 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, and Section 44701: ``General
requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce. This regulation is within
the scope of that authority because it addresses an unsafe condition
that is likely to exist or develop on products identified in this
rulemaking action.

Regulatory Findings

    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 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 adding the following new airworthiness
directive (AD):

2017-14-07 International Aero Engines AG: Amendment 39-18951; Docket
No. FAA-2017-0021; Directorate Identifier 2017-NE-01-AD.

(a) Effective Date

    This AD is effective August 21, 2017.

(b) Affected ADs

    None.

(c) Applicability

    (1) This AD applies to International Aero Engines AG (IAE)
V2522-A5, V2524-A5, V2527-A5, V2527E-A5, V2527M-A5, V2530-A5, V2533-
A5, V2525-D5, V2528-D5, and V2531-E5 turbofan engines, with one or
more of the following installed:
    (i) High-pressure turbine (HPT) stage 2 air seal, part number
(P/N) 2A4157, with a serial number (S/N) listed in Table 1 of IAE
Non-Modification Service Bulletin (NMSB) V2500-ENG-72-0676, dated
October 14, 2016.
    (ii) HPT 1st stage air seal, P/N 2A3423, with an S/N listed in
Table 1 of IAE NMSB V2500-ENG-72-0677, Revision 1, dated January 11,
2017; or IAE NMSB V2500-ENG-72-0678, Revision 1, dated January 5,
2017.
    (iii) HPT stage 2 ring plate, P/N 2A3437, with an S/N listed in
Table 1 of IAE NMSB V2500-ENG-72-0682, dated December 2, 2016; or
IAE NMSB V2500-ENG-72-0681, Revision 2, dated January 9, 2017.
    (2) Reserved.

(d) Subject

    Joint Aircraft System Component (JASC) Code 7250, Turbine
Engine.

(e) Unsafe Condition

    This AD was prompted by several reports by IAE of quality
escapes during manufacture of HPT stage 2 air seals, HPT 1st stage
air seals, and/or HPT stage 2 ring plates, at the Pratt and Whitney
Chengdu facility. We are issuing this AD to prevent failure of high-
energy, rotating hardware, uncontained part release, damage to the
engine, and damage to the airplane.

(f) Compliance

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

(g) Required Actions

    (1) Remove the following hardware from service before reaching
the specified part cycles since new listed in the service
instructions in paragraphs (g)(1)(i) through (iii) of this AD, or
within 50 cycles in service after the effective date of this AD,
whichever occurs later, and replace with a part eligible for
installation:
    (i) HPT stage 2 air seal, P/N 2A4157, identified in Table 1 of
IAE NMSB V2500-ENG-72-0676, dated October 14, 2016.
    (ii) HPT 1st stage air seal, P/N 2A3423, identified in Table 1
of IAE NMSB V2500-ENG-72-0677, Revision 1, dated January 11, 2017.
    (iii) HPT stage 2 ring plate, P/N 2A3437, identified in Table 1
of IAE NMSB V2500-ENG-72-0682, dated December 2, 2016.
    (2) After the effective date of this AD, remove the following
hardware from service when the HPT module is disassembled and access
to the part is available and replace with a part eligible for
installation:
    (i) HPT 1st stage air seal, P/N 2A3423, identified in
Accomplishment Instructions, Table 1, of IAE NMSB V2500-ENG-72-0678,
Revision 1, dated January 5, 2017.
    (ii) HPT stage 2 ring plate, P/N 2A3437, identified in
Accomplishment Instructions, Table 1, of IAE NMSB V2500-ENG-72-0681,
Revision 2, dated January 9, 2017.

(h) Alternative Methods of Compliance (AMOCs)

    The Manager, Engine Certification Office, FAA, may approve AMOCs
for this AD. Use the procedures found in 14 CFR 39.19 to make your
request. You may email your request to<EMAIL_ADDRESS>
(i) Related Information

    For more information about this AD, contact Brian Kierstead,
Aerospace Engineer, Engine Certification Office, FAA, Engine &
Propeller Directorate, 1200 District Avenue, Burlington, MA 01803;
phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>

(j) 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 the AD specifies otherwise.
    (i) International Aero Engines (IAE) Non-Modification Service
Bulletin (NMSB) V2500-ENG-72-0676, dated October 14, 2016.
    (ii) IAE NMSB V2500-ENG-72-0677, Revision 1, dated January 11,
2017.
    (iii) IAE NMSB V2500-ENG-72-0678, Revision 1, dated January 5,
2017.
    (iv) IAE NMSB V2500-ENG-72-0681, Revision 2, dated January 9,
2017.
    (v) IAE NMSB V2500-ENG-72-0682, dated December 2, 2016.
    (3) For International Aero Engines service information
identified in this AD, contact International Aero Engines AG, 400
Main Street, East Hartford, CT 06118; phone:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>Internet: http://fleetcare.pw.utc.com.
    (4) You may view this service information at FAA, Engine &
Propeller Directorate, 1200 District Avenue, Burlington, MA. For
information on the availability of this material at the FAA, call
781-238-7125.
    (5) 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 Burlington, Massachusetts, on July 3, 2017.
Kevin Dickert,
Acting Manager, Engine & Propeller Directorate, Aircraft Certification
Service.
[FR Doc. 2017-14706 Filed 7-14-17; 8:45 am]
BILLING CODE 4910-13-P