[Federal Register Volume 85, Number 203 (Tuesday, October 20, 2020)]
[Notices]
[Pages 66590-66592]
[FR Doc No: 2020-23150]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90179; File No. SR-CBOE-2020-074]

Self-Regulatory Organizations; Cboe Exchange, Inc.; Order
Granting Approval of a Proposed Rule Change To Adopt Position
Compression Cross (``PCC'') Orders for SPX

October 14, 2020.

I. Introduction

    On August 19, 2020, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe
Options'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to adopt Position Compression Cross (``PCC'')
orders for S&P 500 Index (``SPX'') options. The proposed rule change
was published for comment in the Federal Register on September 3,
2020.\3\ The Commission received four comments in support of the
proposed rule change.\4\ This order approves the proposed rule change.
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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. 89707 (August 28,
2020), 85 FR 55040 (``Notice'').
    \4\ See Letter to Vanessa Countryman, Secretary, Commission,
dated September 17, 2020, from Steve Crutchfield, Head of Market
Structure, CTC, LLC, available at https://www.sec.gov/comments/sr-cboe-2020-074/srcboe2020074-7794086-223555.pdf; Letter to Vanessa
Countryman, Secretary, Commission, dated September 18, 2020, from
Joanna Mallers, Secretary, FIA Principal Traders Group, available at
https://www.sec.gov/comments/sr-cboe-2020-074/srcboe2020074-7793926-223553.pdf; Letter to Vanessa Countryman, Secretary, Commission,
dated September 18, 2020, from Michael Golding, Head of Trading,
Optiver US LLC, and Rutger Brinkhuis, Head of Trading, AMS
Derivatives B.V., available at https://www.sec.gov/comments/sr-cboe-2020-074/srcboe2020074-7793838-223548.pdf; and Comment from Erik
Swanson, CEO, Simplex Trading, LLC, dated September 18, 2020,
available at https://www.sec.gov/comments/sr-cboe-2020-074/srcboe2020074-7793878-223549.htm.

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II. Summary of the Proposal

    As described in more detail in the Notice,\5\ the Exchange proposes
to adopt PCC orders to assist Trading Permit Holders (``TPHs'') in
reducing their open positions in series of SPX options to reduce the
required capital associated with their open SPX positions. The Exchange
currently facilitates compression forums on the trading floor at the
end of each calendar week, month, and quarter, where TPHs can seek to
reduce their open positions in SPX.\6\ These SPX compression forums
allow TPHs and their clearing firms to reduce open interest in
offsetting SPX positions, which can help clearing brokers that are
affiliates of bank holding companies comply with the unique regulatory
capital requirements that apply to them. In turn, compression forums
may help some firms, particularly market makers, mitigate the effects
of capital constraints and provide them with continued access to the
capital they need through their clearing brokers to provide liquidity
during periods of volatility.
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    \5\ See Notice, supra note 3.
    \6\ See id. at 55040. See also Cboe Rule 5.88.
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    From March 16 to June 12, 2020, the Exchange closed its trading
floor in response to the coronavirus pandemic, and as a result, the
Exchange operated in an all-electronic configuration.\7\ Because the
trading floor was closed during this time, market participants could
not participate in open outcry compression forums. To enable TPHs to
reduce open interest in SPX options in electronic compression forums
when the floor was closed, the Exchange adopted Rule 5.24(e)(1)(E) as
part of its Disaster Recovery rule.\8\
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    \7\ See id. at 55041.
    \8\ See Securities Exchange Act Release No. 88490 (March 26,
2020), 85 FR 18318 (April 1, 2020) (File No. SR-CBOE-2020-026).
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    Under Rule 5.24(e)(1)(E), when the Exchange's trading floor becomes
inoperable, it can conduct electronic compression forums as frequently
as daily.\9\ Those electronic compression forums permit an order in SPX
option contracts to be coupled with a contra-side order(s) and be
executed automatically on entry without exposure.\10\ In order to
obtain a clean cross, the orders are required to execute in accordance
with the same priority principles that apply to complex orders on the
Exchange.\11\ Specifically: (i) Each option leg may only execute at a
price that complies with Rule 5.33(f)(2), provided that no option leg
executes at the same price as a Priority Customer Order in the Simple
Book; (ii) each option leg may only execute at a price at or between
the national best bid or offer (``NBBO'') for the applicable series;
and (iii) the execution price must be better than the price of any
complex order resting in the complex order book, unless the submitted
complex order was a Priority Customer Order and the resting complex
order is a non-Priority Customer Order, in which case the execution
price may be the same as or better than the price of the resting
complex order.\12\ If a compression order could not execute in
accordance with these requirements, it would be cancelled.\13\
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    \9\ See id. at 18319-20.
    \10\ See id. at 18320.
    \11\ See id.
    \12\ See id.
    \13\ See id.
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    When the Cboe Options trading floor reopened on June 15, 2020,
electronic compression forums were no longer available because the
Exchange does not offer electronic compression forums when its trading
floor is operable.\14\
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    \14\ See Notice, supra note 3, at 55041.
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    In light of its recent experience with electronic compression
forums, and the interest among certain TPHs that they continue, the
Exchange proposes to adopt PCC orders for SPX on a permanent basis and
delete its floor-based compression forum rule.\15\ The proposed rule
explicitly provides that PCC orders, which may be submitted for
automatic electronic execution or for manual handling on the trading
floor, may only be used to reduce the required capital associated with
open SPX positions.\16\
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    \15\ See id. at 55041-46 for a more detailed description of the
proposal.
    \16\ See Rule 5.6(c). The Exchange explains that electronic PCC
orders are uniquely relevant to SPX options because of the large
notational value of SPX contracts and the significant open interest
in them. See Notice, supra note 3, at 55040.
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    To facilitate this proposed rule change, the Exchange first
proposes to delete Rule 5.24(e)(1)(E) and reserve Rule 5.88. Second,
the Exchange proposes to add PCC orders to its list of orders types
under Rule 5.6(c). The procedures for submitting PCC orders will be
similar to the procedures that currently apply to open outcry
compression forums under Rule 5.88,\17\ except that they will allow a
clean cross for SPX without exposure either on the floor or
electronically. PCC orders will be available during regular trading
hours and global trading hours.\18\ The same execution and priority
protection principles that apply under Rule 5.24(e)(1)(E) will apply to
PCC orders,\19\ and if a PCC order cannot be executed in accordance
with these provisions, it will be cancelled. The PCC order type will
also be available for SPX FLEX options.\20\ Finally, the Exchange
proposes to make PCC orders available for PAR routing for manual
handling.\21\
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    \17\ The PCC order procedures for electronic and open outcry
will differ slightly from the open outcry compression forum
currently available under Rule 5.88. In particular, the Exchange may
make PCC orders available more often than current compression
forums, which take place only at the end of the week, month, and
quarter. The Exchange will determine the times to permit PCC orders
and will provide TPHs with reasonable and sufficient notice before
doing so. Additionally, the Exchange will no longer post the
compression-list position file on the Exchange's website because it
does not believe those lists are used by TPHs or useful to the
public. The new procedure also eliminates the step of initially
providing individual position files on an anonymous basis and then
requiring TPHs to consent to having their identities disclosed since
most TPHs submit the compression-list positions with the goal of
identifying other TPHs with offsetting positions to enable them to
engage in the compression transactions. Lastly, the Exchange will
provide two additional types of information in the compression-list
positions sent to TPHs: Series positions within a strike range
determined by the Exchange and combos (i.e., purchase (sale) of a
call and a sale (purchase) of a put with the same expiration date
and the strike price) in addition to the currently provided multi-
leg positions of vertical call spreads, vertical put spreads, and
box spreads. See id. at 55042.
    \18\ See id. at 55045, n.38. See also Rules 5.32(g) and 5.33(n).
    \19\ See supra note 12 and accompanying text.
    \20\ See Notice, supra note 3, at 55045, n.38. See also Rule
5.70(a)(2).
    \21\ See id. at 55045-46. See also Rule 5.83(a) and (b); Rule
5.85.
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III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
exchange.\22\ In particular, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act,\23\ which
requires, among other things, that the rules of a national securities
exchange be designed to promote just and equitable principles of trade,
to remove impediments to and perfect the mechanism of a free and open
market and a national market system and, in general, to protect
investors and the public interest, and not be designed to permit unfair
discrimination between customers, issuers, brokers, or dealers.
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    \22\ 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).
    \23\ 15 U.S.C. 78f(b)(5).
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    The Exchange seeks to make the electronic PCC order type permanent,
even when the trading floor of the Exchange is operable, and also offer
the ability to submit a PCC order for manual handling on the trading
floor. This order type will allow TPHs to execute clean

crosses of SPX compression forum orders without exposure and they will
be available at any point during a month designated by the Exchange
rather than just at the end of each calendar week, month, and quarter,
as is the case under the current compression forum process.
    The affiliation of clearing brokers with bank holding companies has
introduced the need for liquidity providers and their clearing firms to
more conservatively manage holdings to comply with applicable bank
regulatory capital requirements, which particularly affects SPX options
given the large notional exposure associated with holdings of SPX by
liquidity providers in SPX across a large number of strikes and series.
While these positions may be hedged, the applicable bank capital rules
currently disregard offsets when calculating the notional value of
short positions. As a result, the ability to close and ``compress''
positions in an efficient, cost-effective manner can help liquidity
providers and their clearing firms reduce risk weighted assets and
alleviate associated bank capital constraints.
    The current floor-based compression forums are labor-intensive and
can be inefficient as a result. The Exchange asserts that this proposal
will increase the efficiency of SPX compression activity without
causing any significant negative effect on price discovery or the
ability of a TPH to access liquidity.\24\ The commenters on the
proposal similarly believe the proposal will increase efficiency by
providing an electronic risk management tool to reduce SPX risk
weighted assets, which will support the ability of SPX liquidity
providers to provide displayed quotes in SPX options.\25\ Accordingly,
PCC orders can help assure the continued availability of capital to
liquidity providers so that they can quote competitively with size,
particularly during periods of heightened volatility, which removes
impediments and supports fair and orderly markets to the benefit of
investors.
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    \24\ See Notice, supra note 3, at 55041.
    \25\ See supra note 4 (citing to the comment letters on the
proposal).
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    The proposed PCC order type contains the same priority protections
that apply under Rule 5.24(e)(1)(E) when the Exchange permits
electronic compression orders as clean crosses when its trading floor
is inoperable.\26\ Likewise, PCC orders handled by floor brokers will
be covered by the same protections.\27\ Additionally, under the
proposal, TPHs will be permitted to enter PCC orders in the same
increment that is currently available for closing transactions in open
outcry compression forums, which are increments of $0.01.\28\
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    \26\ See Notice, supra note 3, at 55045. The Commission also
notes that the proposal only allows a TPH to use PCC orders to
reduce the required capital associated with the TPH's open SPX
positions and the Exchange represents that the Exchange's Regulatory
Division will incorporate PCC orders into its surveillance. See id.
at 55049.
    \27\ See id.
    \28\ See id. at 55043.
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    The Exchange states that the benefits of permitting PCC orders to
execute as clean crosses greatly outweigh any detriments that may
result from not exposing these orders for potential break up.\29\ The
Exchange notes that the benefits of requiring a TPH to expose an order
or a proposed cross generally flow to that order, which benefits
include the potential for price improvement and, for single orders, to
locate contra-side liquidity.\30\ In the case of an SPX transaction to
reduce risk weighted capital for which a TPH could use the PCC order
type, the representing TPH has already located the necessary liquidity
prior to submitting the matches for execution, and the ability to
execute the single or complex order in full to reduce risk weighted
capital is the primary concern.\31\ Any likelihood of another TPH
breaking up the PCC order could deter the order-originating TPH from
entering its compression order, which would fail to achieve the aims of
the compression order and thus fail to mitigate the associated capital
constraints that could impact the liquidity provider's continued
ability to quote SPX series.\32\
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    \29\ See id. at 55048.
    \30\ See id.
    \31\ See id. at 55049. See also supra note 27.
    \32\ See Notice, supra note 3, at 55049.
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    Based on the foregoing and for the above reasons, the Commission
finds that the proposed rule change is consistent with the requirements
of the Act in that it is designed to promote just and equitable
principles of trade, to remove impediments to and perfect the mechanism
of a free and open market and a national market system, and, in
general, to protect investors and the public interest.

IV. Conclusion

    It is therefore ordered that, pursuant to Section 19(b)(2) of the
Act,\33\ the proposed rule change (SR-CBOE-2020-074) be, and hereby is,
is approved.
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    \33\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\34\
J. Matthew DeLesDernier,
Assistant Secretary.

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    \34\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2020-23150 Filed 10-19-20; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 82, Number 91 (Friday, May 12, 2017)]
[Notices]
[Pages 22165-22170]
[FR Doc No: 2017-09643]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 32630; 812-14699]

New Mountain Finance Corporation, et al.

May 8, 2017.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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    Notice of application for an order under sections 17(d) and 57(i)
of the Investment Company Act of 1940 (the ``Act'') and rule 17d-1
under the Act permitting certain joint transactions otherwise
prohibited by sections 17(d) and 57(a)(4) of the Act and under rule
17d-1 under the Act.

Summary of Application:  Applicants request an order to permit one or
more business development companies (each, a ``BDC'') and certain other
closed-end management investment companies to co-invest in portfolio
companies with each other and with affiliated investment funds.

Applicants:  New Mountain Finance Corporation (``NMFC''); NMF Ancora
Holdings, Inc., NMF QID NGL Holdings, Inc., and NMF YP Holdings, Inc.
(collectively, the ``NMFC Subsidiaries''); New Mountain Finance SBIC,
L.P. (``SBIC LP''); New Mountain Guardian Partners II, L.P. (``Guardian
II''); New Mountain Guardian II Master Fund-A, L.P. (``Guardian II
Master A''); New Mountain Guardian II Master Fund-B, L.P. (``Guardian
II Master B,'' and together with Guardian II and Guardian

II Master-A, the ``Guardian II Funds''); and New Mountain Finance
Advisers BDC, L.L.C. (the ``BDC Adviser'') on behalf of itself and its
successors.\1\
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    \1\ The term ``successor,'' as applied to an Adviser, means an
entity that results from a reorganization into another jurisdiction
or change in the type of business organization.

Filing Dates:  The application was filed on September 12, 2016, and
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amended on February 1, 2017 and April 7, 2017.

Hearing or Notification of Hearing:  An order granting the requested
relief 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 June 2, 2017, and should be accompanied by proof of
service on applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Pursuant to rule 0-5 under the Act, hearing
requests should state the nature of the writer's interest, any facts
bearing upon the desirability of a hearing on the matter, the reason
for the request, and the issues contested. Persons who wish to be
notified of a hearing may request notification by writing to the
Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
St. NE., Washington, DC 20549-1090. Applicants: Robert A. Hamwee, Chief
Executive Officer, 787 Seventh Avenue, 48th Floor, New York, NY 10019.

FOR FURTHER INFORMATION CONTACT: Rochelle Kauffman Plesset, Senior
Counsel, or David Marcinkus, Branch Chief, at<PHONE_NUMBER> (Division
of Investment Management, Chief Counsel's Office).

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/search.htm or by calling<PHONE_NUMBER>.

Applicants' Representations

    1. NMFC, a Delaware corporation, is organized as a closed-end
management investment company that has elected to be regulated as a BDC
under section 54(a) of the Act.\2\ Applicants state that NMFC seeks to
generate both current income and capital appreciation through the
sourcing and origination of debt securities at all levels of the
capital structure. The board of directors (``Board'') of NMFC is
comprised of seven directors, four of whom are not ``interested
directors'' as defined in section 2(a)(19) of the Act (``Non-Interested
Directors'').
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    \2\ Section 2(a)(48) defines a BDC to be any closed-end
investment company that operates for the purpose of making
investments in securities described in sections 55(a)(1) through
55(a)(3) of the Act and makes available significant managerial
assistance with respect to the issuers of such securities.
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    2. The NMFC Subsidiaries are wholly-owned subsidiaries of NMFC,
each structured as a Delaware corporation to hold equity or equity-like
investments in portfolio companies organized as limited liability
companies or other forms of pass-through entities. The NMFC
Subsidiaries are not registered under the Act in reliance on the
exclusion from the definition of ``investment company'' in section
3(c)(7) of the Act.
    3. SBIC LP, a Delaware limited partnership, received a license from
the Small Business Administration to operate as a small business
investment company. SBIC LP is a consolidated wholly-owned subsidiary
of NMFC.
    4. Guardian II is a private fund organized in Delaware on August
25, 2016. Both Guardian II Master A and Guardian II Master B are
private funds organized as Cayman Islands exempted limited partnerships
on January 3, 2017. The Guardian II Funds have not yet formally
commenced principal operations. Applicants state that the investment
objective of each of these funds is to generate both current income and
capital appreciation by investing primarily in first lien and second
lien secured loans as well as subordinated debt. None of the Guardian
II Funds is registered under the Act in reliance on the exclusion from
the definition of ``investment company'' in section 3(c)(7) of the Act.
    5. BDC Adviser, a Delaware limited liability company, is registered
with the Commission as an investment adviser under the Investment
Advisers Act of 1940 (the ``Advisers Act''). BDC Adviser serves as
investment adviser to NMFC and will serve as investment adviser to the
Guardian II Funds.
    6. Applicants seek an order (``Order'') to permit one or more
Regulated Funds \3\ and/or one or more Affiliated Funds \4\ to
participate in the same investment opportunities through a proposed co-
investment program (the ``Co-Investment Program'') where such
participation would otherwise be prohibited under section 57(a)(4) and
rule 17d-1 by (a) co-investing with each other in securities issued by
issuers in private placement transactions in which an Adviser
negotiates terms in addition to price; \5\ and (b) making additional
investments in securities of such issuers, including through the
exercise of warrants, conversion privileges, and other rights to
purchase securities of the issuers (``Follow-On Investments''). ``Co-
Investment Transaction'' means any transaction in which a Regulated
Fund (or its Wholly-Owned Investment Sub, as defined below)
participated together with one or more other Regulated Funds and/or one
or more Affiliated Funds in reliance on the requested Order.
``Potential Co-Investment Transaction'' means any investment
opportunity in which a Regulated Fund (or its Wholly-Owned Investment
Sub) could not participate together with one or more Affiliated Funds
and/or one or more other Regulated Funds without obtaining and relying
on the Order.\6\
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    \3\ ``Regulated Fund'' means NMFC and any Future Regulated Fund.
``Future Regulated Fund'' means any closed-end management investment
company (a) that is registered under the Act or has elected to be
regulated as a BDC, (b) whose investment adviser is an Adviser, and
(c) that intends to participate in the Co-Investment Program. The
term ``Adviser'' means (a) the BDC Adviser and (b) any future
investment adviser that controls, is controlled by, or is under
common control with the BDC Adviser and is registered as an
investment adviser under the Advisers Act.
    \4\ ``Affiliated Fund'' means the Guardian II Funds and any
Future Affiliated Funds. ``Future Affiliated Fund'' means any entity
(a) whose investment adviser is an Adviser, (b) that would be an
investment company but for section 3(c)(1) or 3(c)(7) of the Act,
and (c) that intends to participate in the Co-Investment Program.
    \5\ The term ``private placement transactions'' means
transactions in which the offer and sale of securities by the issuer
are exempt from registration under the Securities Act of 1933 (the
``Securities Act'').
    \6\ All existing entities that currently intend to rely upon the
requested Order have been named as applicants. Any other existing or
future entity that subsequently relies on the Order will comply with
the terms and conditions of the application.
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    7. Applicants state any of the Regulated Funds may, from time to
time, form one or more Wholly-Owned Investment Subs.\7\ A Wholly-Owned
Investment Sub would be prohibited from investing in a Co-Investment
Transaction with any Affiliated Fund or

Regulated Fund because it would be a company controlled by its parent
Regulated Fund for purposes of section 57(a)(4) and rule 17d-1.
Applicants request that each Wholly-Owned Investment Sub be permitted
to participate in Co-Investment Transactions in lieu of its parent
Regulated Fund and that the Wholly-Owned Investment Sub's participation
in any such transaction be treated, for purposes of the requested
order, as though the parent Regulated Fund were participating directly.
Applicants represent that this treatment is justified because a Wholly-
Owned Investment Sub would have no purpose other than serving as a
holding vehicle for the Regulated Fund's investments and, therefore, no
conflicts of interest could arise between the Regulated Fund and the
Wholly-Owned Investment Sub. The Regulated Fund's Board would make all
relevant determinations under the conditions with regard to a Wholly-
Owned Investment Sub's participation in a Co-Investment Transaction,
and the Regulated Fund's Board would be informed of, and take into
consideration, any proposed use of a Wholly-Owned Investment Sub in the
Regulated Fund's place. If the Regulated Fund proposes to participate
in the same Co-Investment Transaction with any of its Wholly-Owned
Investment Subs, the Board will also be informed of, and take into
consideration, the relative participation of the Regulated Fund and the
Wholly-Owned Investment Sub.
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    \7\ The term ``Wholly-Owned Investment Sub'' means an entity (i)
that is wholly-owned by a Regulated Fund (with the Regulated Fund at
all times holding, beneficially and of record, 100% of the voting
and economic interests); (ii) whose sole business purpose is to hold
one or more investments on behalf of the Regulated Fund (and, in the
case of an SBIC Subsidiary, maintain a license under the Small
Business Investment Act of 1958 and issue debentures guaranteed by
the SBA; (iii) with respect to which the Regulated Fund's Board has
the sole authority to make all determinations with respect to the
entity's participation under the conditions of the application; and
(iv) that would be an investment company but for section 3(c)(1) or
3(c)(7) of the Act. Each of the NMFC Subsidiaries and SBIC LP is a
Wholly-Owned Investment Sub of NMFC and any future subsidiaries of
the Regulated Funds that participate in Co-Investment Transactions
will be Wholly-Owned Investment Subs.
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    8. When considering Potential Co-Investment Transactions for any
Regulated Fund, the applicable Adviser will consider only the
Objectives and Strategies, investment policies, investment positions,
capital available for investment as described in the application
(``Available Capital''), and other pertinent factors applicable to that
Regulated Fund.\8\ The Board of each Regulated Fund, including the Non-
Interested Directors, has (or will have prior to relying on the
requested Order) determined that it is in the best interests of the
Regulated Fund to participate in Co-Investment Transactions.\9\
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    \8\ ``Objectives and Strategies'' means a Regulated Fund's
investment objectives and strategies, as described in the Regulated
Fund's registration statement on Form N-2 or Form 10, as applicable,
other filings the Regulated Fund has made with the Commission under
the Securities Act, or under the Securities Exchange Act of 1934,
and the Regulated Fund's reports to shareholders.
    \9\ The Regulated Funds, however, will not be obligated to
invest, or co-invest, when investment opportunities are referred to
them.
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    9. Other than pro rata dispositions and Follow-On Investments as
provided in conditions 7 and 8, and after making the determinations
required in conditions 1 and 2(a), the Adviser will present each
Potential Co-Investment Transaction and the proposed allocation to the
directors of the Board eligible to vote under section 57(o) of the Act
(``Eligible Directors''), and the ``required majority,'' as defined in
section 57(o) of the Act (``Required Majority'') \10\ will approve each
Co-Investment Transaction prior to any investment by the participating
Regulated Fund.
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    \10\ In the case of a Regulated Fund that is a registered
closed-end fund, the Board members that make up the Required
Majority will be determined as if the Regulated Fund were a BDC
subject to section 57(o).
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    10. With respect to the pro rata dispositions and Follow-On
Investments provided in conditions 7 and 8, a Regulated Fund may
participate in a pro rata disposition or Follow-On Investment without
obtaining prior approval of the Required Majority if, among other
things: (i) the proposed participation of each Regulated Fund and
Affiliated Fund in such disposition is proportionate to its outstanding
investments in the issuer immediately preceding the disposition or
Follow-On Investment, as the case may be; and (ii) the Board of the
Regulated Fund has approved that Regulated Fund's participation in pro
rata dispositions and Follow-On Investments as being in the best
interests of the Regulated Fund. If the Board does not so approve, any
such disposition or Follow-On Investment will be submitted to the
Regulated Fund's Eligible Directors. The Board of any Regulated Fund
may at any time rescind, suspend or qualify its approval of pro rata
dispositions and Follow-On Investments with the result that all
dispositions and/or Follow-On Investments must be submitted to the
Eligible Directors.
    11. No Non-Interested Director of a Regulated Fund will have a
financial interest in any Co-Investment Transaction, other than through
share ownership in one of the Regulated Funds.
    12. If an Adviser or its principal owners (the ``Principals''), or
any person controlling, controlled by, or under common control with an
Adviser or the Principals, and any Affiliated Fund (collectively, the
``Holders'') own in the aggregate more than 25 per cent of the
outstanding voting shares of a Regulated Fund (the ``Shares''), then
the Holders will vote such Shares as required under condition 14.
Applicants believe that this condition will ensure that the Non-
Interested Directors will act independently in evaluating the Co-
Investment Program, because the ability of an Adviser or the Principals
to influence the Non-Interested Directors by a suggestion, explicit or
implied, that the Non-Interested Directors can be removed will be
limited significantly. The Non-Interested Directors shall evaluate and
approve any such independent third party, taking into account its
qualifications, reputation for independence, cost to the shareholders,
and other factors that they deem relevant.

Applicants' Legal Analysis

    1. Section 57(a)(4) of the Act prohibits certain affiliated persons
of a BDC from participating in joint transactions with the BDC or a
company controlled by a BDC in contravention of rules as prescribed by
the Commission. Under section 57(b)(2) of the Act, any person who is
directly or indirectly controlling, controlled by, or under common
control with a BDC is subject to section 57(a)(4). Applicants submit
that each of the Regulated Funds and Affiliated Funds could be deemed
to be a person related to each Regulated Fund in a manner described by
section 57(b) by virtue of being under common control. Section 57(i) of
the Act provides that, until the Commission prescribes rules under
section 57(a)(4), the Commission's rules under section 17(d) of the Act
applicable to registered closed-end investment companies will be deemed
to apply to transactions subject to section 57(a)(4). Because the
Commission has not adopted any rules under section 57(a)(4), rule 17d-1
also applies to joint transactions with Regulated Funds that are BDCs.
Section 17(d) of the Act and rule 17d-1 under the Act are applicable to
Regulated Funds that are registered closed-end investment companies.
    2. Section 17(d) of the Act and rule 17d-1 under the Act prohibit
affiliated persons of a registered investment company from
participating in joint transactions with the company unless the
Commission has granted an order permitting such transactions. In
passing upon applications under rule 17d-1, the Commission considers
whether the company's participation in the joint transaction is
consistent with the provisions, policies, and purposes of the Act and
the extent to which such participation is on a basis different from or
less advantageous than that of other participants.
    3. Applicants state that in the absence of the requested relief,
the Regulated Funds would be, in some circumstances, limited in their
ability to participate in attractive and appropriate investment
opportunities. Applicants believe that the proposed terms and
conditions will ensure that the Co-

Investment Transactions are consistent with the protection of each
Regulated Fund's shareholders and with the purposes intended by the
policies and provisions of the Act. Applicants state that the Regulated
Funds' participation in the Co-Investment Transactions will be
consistent with the provisions, policies, and purposes of the Act and
on a basis that is not different from or less advantageous than that of
other participants.

Applicants' Conditions

    Applicants agree that the Order will be subject to the following
conditions:
    1. Each time an Adviser considers a Potential Co-Investment
Transaction for an Affiliated Fund or another Regulated Fund that falls
within a Regulated Fund's then-current Objectives and Strategies, the
Regulated Fund's Adviser will make an independent determination of the
appropriateness of the investment for such Regulated Fund in light of
the Regulated Fund's then-current circumstances.
    2. (a) If the Adviser deems a Regulated Fund's participation in any
Potential Co-Investment Transaction to be appropriate for the Regulated
Fund, it will then determine an appropriate level of investment for the
Regulated Fund.
    (b) If the aggregate amount recommended by the applicable Adviser
to be invested by the applicable Regulated Fund in the Potential Co-
Investment Transaction, together with the amount proposed to be
invested by the other participating Regulated Funds and Affiliated
Funds, collectively, in the same transaction, exceeds the amount of the
investment opportunity, the investment opportunity will be allocated
among them pro rata based on each participant's Available Capital, up
to the amount proposed to be invested by each. The applicable Adviser
will provide the Eligible Directors of each participating Regulated
Fund with information concerning each participating party's Available
Capital to assist the Eligible Directors with their review of the
Regulated Fund's investments for compliance with these allocation
procedures.
    (c) After making the determinations required in conditions 1 and
2(a), the applicable Adviser will distribute written information
concerning the Potential Co-Investment Transaction (including the
amount proposed to be invested by each participating Regulated Fund and
Affiliated Fund) to the Eligible Directors of each participating
Regulated Fund for their consideration. A Regulated Fund will co-invest
with one or more other Regulated Funds and/or one or more Affiliated
Funds only if, prior to the Regulated Fund's participation in the
Potential Co-Investment Transaction, a Required Majority concludes
that:
    (i) The terms of the Potential Co-Investment Transaction, including
the consideration to be paid, are reasonable and fair to the Regulated
Fund and its shareholders and do not involve overreaching in respect of
the Regulated Fund or its shareholders on the part of any person
concerned;
    (ii) the Potential Co-Investment Transaction is consistent with:
    (A) The interests of the shareholders of the Regulated Fund; and
    (B) the Regulated Fund's then-current Objectives and Strategies;
    (iii) the investment by any other Regulated Funds or Affiliated
Funds would not disadvantage the Regulated Fund, and participation by
the Regulated Fund would not be on a basis different from or less
advantageous than that of other Regulated Funds or Affiliated Funds;
provided that, if any other Regulated Fund or Affiliated Fund, but not
the Regulated Fund itself, gains the right to nominate a director for
election to a portfolio company's board of directors or the right to
have a board observer or any similar right to participate in the
governance or management of the portfolio company, such event shall not
be interpreted to prohibit the Required Majority from reaching the
conclusions required by this condition (2)(c)(iii), if:
    (A) The Eligible Directors will have the right to ratify the
selection of such director or board observer, if any;
    (B) the applicable Adviser agrees to, and does, provide periodic
reports to the Regulated Fund's Board with respect to the actions of
such director or the information received by such board observer or
obtained through the exercise of any similar right to participate in
the governance or management of the portfolio company; and
    (C) any fees or other compensation that any Affiliated Fund or any
Regulated Fund or any affiliated person of any Affiliated Fund or any
Regulated Fund receives in connection with the right of the Affiliated
Fund or a Regulated Fund to nominate a director or appoint a board
observer or otherwise to participate in the governance or management of
the portfolio company will be shared proportionately among the
participating Affiliated Funds (who each may, in turn, share its
portion with its affiliated persons) and the participating Regulated
Funds in accordance with the amount of each party's investment; and
    (iv) the proposed investment by the Regulated Fund will not benefit
the Advisers, the Affiliated Funds or the other Regulated Funds or any
affiliated person of any of them (other than the parties to the Co-
Investment Transaction), except (A) to the extent permitted by
condition 13, (B) to the extent permitted by section 17(e) or 57(k) of
the Act, as applicable, (C) indirectly, as a result of an interest in
the securities issued by one of the parties to the Co-Investment
Transaction, or (D) in the case of fees or other compensation described
in condition 2(c)(iii)(C).
    3. Each Regulated Fund has the right to decline to participate in
any Potential Co-Investment Transaction or to invest less than the
amount proposed.
    4. The applicable Adviser will present to the Board of each
Regulated Fund, on a quarterly basis, a record of all investments in
Potential Co-Investment Transactions made by any of the other Regulated
Funds or Affiliated Funds during the preceding quarter that fell within
the Regulated Fund's then-current Objectives and Strategies that were
not made available to the Regulated Fund, and an explanation of why the
investment opportunities were not offered to the Regulated Fund. All
information presented to the Board pursuant to this condition will be
kept for the life of the Regulated Fund and at least two years
thereafter, and will be subject to examination by the Commission and
its staff.
    5. Except for Follow-On Investments made in accordance with
condition 8,\11\ a Regulated Fund will not invest in reliance on the
Order in any issuer in which another Regulated Fund, Affiliated Fund,
or any affiliated person of another Regulated Fund or Affiliated Fund
is an existing investor.
---------------------------------------------------------------------------

    \11\ This exception applies only to Follow-On Investments by a
Regulated Fund in issuers in which that Regulated Fund already holds
investments.
---------------------------------------------------------------------------

    6. A Regulated Fund will not participate in any Potential Co-
Investment Transaction unless the terms, conditions, price, class of
securities to be purchased, settlement date, and registration rights
will be the same for each participating Regulated Fund and Affiliated
Fund. The grant to an Affiliated Fund or another Regulated Fund, but
not the Regulated Fund, of the right to nominate a director for
election to a portfolio company's board of directors, the right to have
an observer on the board of directors or similar rights to participate
in the governance or management of the portfolio company will not be

interpreted so as to violate this condition 6, if conditions
2(c)(iii)(A), (B) and (C) are met.
    7. (a) If any Affiliated Fund or any Regulated Fund elects to sell,
exchange or otherwise dispose of an interest in a security that was
acquired in a Co-Investment Transaction, the applicable Advisers will:
    (i) Notify each Regulated Fund that participated in the Co-
Investment Transaction of the proposed disposition at the earliest
practical time; and
    (ii) formulate a recommendation as to participation by each
Regulated Fund in the disposition.
    (b) Each Regulated Fund will have the right to participate in such
disposition on a proportionate basis, at the same price and on the same
terms and conditions as those applicable to the participating
Affiliated Funds and Regulated Funds.
    (c) A Regulated Fund may participate in such disposition without
obtaining prior approval of the Required Majority if: (i) The proposed
participation of each Regulated Fund and each Affiliated Fund in such
disposition is proportionate to its outstanding investments in the
issuer immediately preceding the disposition; (ii) the Board of the
Regulated Fund has approved as being in the best interests of the
Regulated Fund the ability to participate in such dispositions on a pro
rata basis (as described in greater detail in the application); and
(iii) the Board of the Regulated Fund is provided on a quarterly basis
with a list of all dispositions made in accordance with this condition.
In all other cases, the Adviser will provide its written recommendation
as to the Regulated Fund's participation to the Eligible Directors, and
the Regulated Fund will participate in such disposition solely to the
extent that a Required Majority determines that it is in the Regulated
Fund's best interests.
    (d) Each Affiliated Fund and each Regulated Fund will bear its own
expenses in connection with any such disposition.
    8. (a) If any Affiliated Fund or any Regulated Fund desires to make
a Follow-On Investment in a portfolio company whose securities were
acquired in a Co-Investment Transaction, the applicable Advisers will:
    (i) Notify each Regulated Fund that participated in the Co-
Investment Transaction of the proposed transaction at the earliest
practical time; and
    (ii) formulate a recommendation as to the proposed participation,
including the amount of the proposed Follow-On Investment, by each
Regulated Fund.
    (b) A Regulated Fund may participate in such Follow-On Investment
without obtaining prior approval of the Required Majority if: (i) The
proposed participation of each Regulated Fund and each Affiliated Fund
in such investment is proportionate to its outstanding investments in
the issuer immediately preceding the Follow-On Investment; and (ii) the
Board of the Regulated Fund has approved as being in the best interests
of the Regulated Fund the ability to participate in Follow-On
Investments on a pro rata basis (as described in greater detail in the
application). In all other cases, the Adviser will provide its written
recommendation as to the Regulated Fund's participation to the Eligible
Directors, and the Regulated Fund will participate in such Follow-On
Investment solely to the extent that a Required Majority determines
that it is in the Regulated Fund's best interests.
    (c) If, with respect to any Follow-On Investment:
    (i) The amount of the opportunity is not based on the Regulated
Funds' and the Affiliated Funds' outstanding investments immediately
preceding the Follow-On Investment; and
    (ii) the aggregate amount recommended by the applicable Adviser to
be invested by the applicable Regulated Fund in the Follow-On
Investment, together with the amount proposed to be invested by the
other participating Regulated Funds and Affiliated Funds, collectively,
in the same transaction, exceeds the amount of the investment
opportunity; then the investment opportunity will be allocated among
them pro rata based on each participant's Available Capital, up to the
maximum amount proposed to be invested by each.
    (d) The acquisition of Follow-On Investments as permitted by this
condition will be considered a Co-Investment Transaction for all
purposes and subject to the other conditions set forth in this
application.
    9. The Non-Interested Directors of each Regulated Fund will be
provided quarterly for review all information concerning Potential Co-
Investment Transactions and Co-Investment Transactions, including
investments made by other Regulated Funds or Affiliated Funds that the
Regulated Fund considered but declined to participate in, so that the
Non-Interested Directors may determine whether all investments made
during the preceding quarter, including those investments that the
Regulated Fund considered but declined to participate in, comply with
the conditions of the Order. In addition, the Non-Interested Directors
will consider at least annually the continued appropriateness for the
Regulated Fund of participating in new and existing Co-Investment
Transactions.
    10. Each Regulated Fund will maintain the records required by
section 57(f)(3) of the Act as if each of the Regulated Funds were a
BDC and each of the investments permitted under these conditions were
approved by the Required Majority under section 57(f) of the Act.
    11. No Non-Interested Director of a Regulated Fund will also be a
director, general partner, managing member or principal, or otherwise
an ``affiliated person'' (as defined in the Act) of an Affiliated Fund.
    12. The expenses, if any, associated with acquiring, holding or
disposing of any securities acquired in a Co-Investment Transaction
(including, without limitation, the expenses of the distribution of any
such securities registered for sale under the Securities Act) will, to
the extent not payable by the Advisers under their respective
investment advisory agreements with Affiliated Funds and the Regulated
Funds, be shared by the Regulated Funds and the Affiliated Funds in
proportion to the relative amounts of the securities held or to be
acquired or disposed of, as the case may be.
    13. Any transaction fee \12\ (including break-up or commitment fees
but excluding broker's fees contemplated by section 17(e) or 57(k) of
the Act, as applicable), received in connection with a Co-Investment
Transaction will be distributed to the participating Regulated Funds
and Affiliated Funds on a pro rata basis based on the amounts they
invested or committed, as the case may be, in such Co-Investment
Transaction. If any transaction fee is to be held by an Adviser pending
consummation of the transaction, the fee will be deposited into an
account maintained by such Adviser at a bank or banks having the
qualifications prescribed in section 26(a)(1) of the Act, and the
account will earn a competitive rate of interest that will also be
divided pro rata among the participating Regulated Funds and Affiliated
Funds based on the amounts they invest in such Co-Investment
Transaction. None of the Affiliated Funds, the Advisers, the other
Regulated Funds or any affiliated person of the Regulated Funds or
Affiliated Funds will receive additional compensation or remuneration
of any kind as a result of

or in connection with a Co-Investment Transaction (other than (a) in
the case of the Regulated Funds and the Affiliated Funds, the pro rata
transaction fees described above and fees or other compensation
described in condition 2(c)(iii)(C); and (b) in the case of an Adviser,
investment advisory fees paid in accordance with the agreement between
the Adviser and the Regulated Fund or Affiliated Fund.
---------------------------------------------------------------------------

    \12\ Applicants are not requesting and the staff is not
providing any relief for transaction fees received in connection
with any Co-Investment Transaction.
---------------------------------------------------------------------------

    14. If the Holders own in the aggregate more than 25 percent of the
Shares of a Regulated Fund, then the Holders will vote such Shares as
directed by an independent third party when voting on (1) the election
of directors; (2) the removal of one or more directors; or (3) any
other matter under either the 1940 Act or applicable state law
affecting the Board's composition, size or manner of election.
    15. Each Regulated Fund's chief compliance officer, as defined in
rule 38a-1(a)(4), will prepare an annual report for its Board each year
that evaluates (and documents the basis of that evaluation) the
Regulated Fund's compliance with the terms and conditions of the
application and the procedures established to achieve such compliance.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-09643 Filed 5-11-17; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 118 (Friday, June 19, 2015)]
[Rules and Regulations]
[Pages 35239-35241]
[FR Doc No: 2015-15186]

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

DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 100

[Docket Number USCG-2015-0340]
RIN 1625-AA08

Special Local Regulations; Grand National Drag Boat Races,
Atlantic Intracoastal Waterway; Bucksport, SC

AGENCY: Coast Guard, DHS.

ACTION: Temporary final rule.

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

SUMMARY: The Coast Guard is establishing a special local regulation on
the Atlantic Intracoastal Waterway in Bucksport, South Carolina during
the Grand National Drag Boat Races, a series of high-speed boat races.
The event will take place on Saturday, June 20, 2015 and Sunday, June
21, 2015. Approximately 30 high-speed race boats are anticipated to
participate in the races. This special local regulation is necessary to
provide for the safety of life and property on navigable waters of the
United States during the event. This special local regulation will
temporarily restrict vessel traffic in a portion of the Atlantic
Intracoastal Waterway. Persons and vessels that are not participating
in the races will be prohibited from entering, transiting through,
anchoring in, or remaining within the regulated area unless authorized
by the Captain of the Port Charleston or a designated representative.

DATES: This rule is effective on June 20 and June 21, 2015. This rule
will be enforced daily from 9 a.m. until 7 p.m.

ADDRESSES: Documents mentioned in this preamble are part of docket
USCG-2014-0340. To view documents mentioned in this preamble as being
available in the docket, go to http://www.regulations.gov, type the
docket number in the ``SEARCH'' box and click ``SEARCH.'' Click on Open
Docket Folder on the line associated with this rulemaking. You may also
visit the Docket Management Facility in Room W12-140 on the ground
floor of the Department of Transportation West Building, 1200 New
Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
call or email Chief Warrant Officer Christopher Ruleman, Sector
Charleston Waterways Management, U.S. Coast Guard; telephone (843) 740-
3184, email<EMAIL_ADDRESS>If you have questions on
viewing the docket, call Barbara Hairston, Program Manager, Docket
Operations, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Table of Acronyms

DHS Department of Homeland Security
FR Federal Register

A. Regulatory History and Information

    The Coast Guard is issuing this temporary final rule without prior
notice and opportunity to comment pursuant to authority under section
4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This
provision authorizes an agency to issue a rule without prior notice and
opportunity to comment when the agency for good cause finds that those
procedures are ``impracticable, unnecessary, or contrary to the public
interest.'' Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good
cause exists for not publishing a notice of proposed rulemaking with
respect to this rule because the Coast Guard did not receive necessary
information about the event until April 23, 2015. As a result, the
Coast Guard did not have sufficient time to publish a notice of
proposed rulemaking and to receive public comments prior to the event.
Any delay in the effective date of this rule would be contrary to the
public interest because immediate action is needed to minimize
potential danger to the race participants, spectators and the general
public.

B. Basis and Purpose

    The legal basis for the rule is the Coast Guard's authority to
establish special local regulations: 33 U.S.C. 1233. The purpose of the
rule is to ensure safety of life and property on navigable waters of
the United States during the Grand National Drag Boat Races.

C. Discussion of Rule

    On Saturday, June 20, 2015, and Sunday, June 21, 2015, the
Bucksport Marina will host Grand National Drag Boat Races, a series of
high-speed boat races. The event will be held on a portion of the
Atlantic Intracoastal Waterway in Bucksport, South Carolina.
Approximately 30 high-speed race boats are anticipated to participate
in the races.
    The special local regulation encompasses certain waters of the
Atlantic Intracoastal Waterway in Bucksport, South Carolina. The
special local regulation will be enforced daily from 9 a.m. until 7
p.m. on June 20, 2015 and June 21, 2015. The special local regulation
consists of a regulated area around vessels participating in the event.
Persons and vessels that are not participating in the event are
prohibited from entering, transiting through, anchoring in, or
remaining within the regulated area unless specifically authorized by
the Captain of the Port Charleston or a designated representative.
Persons and vessels may request authorization to enter, transit
through, anchor in, or remain within the

regulated area by contacting the Captain of the Port Charleston by
telephone at<PHONE_NUMBER>, or a designated representative via VHF
radio on channel 16 to seek authorization. If authorization to enter,
transit through, anchor in, or remain within the regulated area is
granted by the Captain of the Port Charleston or a designated
representative, all persons and vessels receiving such permission must
comply with the instructions of the Captain of the Port Charleston or a
designated representative. The Coast Guard will provide notice of the
regulated areas by Local Notice to Mariners, Broadcast Notice to
Mariners, and on-scene designated representatives.

D. Regulatory Analyses

    We developed this rule after considering numerous statutes and
executive orders related to rulemaking. Below we summarize our analyses
based on these statutes and executive orders.

1. Regulatory Planning and Review

    This rule is not a significant regulatory action under section 3(f)
of Executive Order 12866, Regulatory Planning and Review, as
supplemented by Executive Order 13563, Improving Regulation and
Regulatory Review, and does not require an assessment of potential
costs and benefits under section 6(a)(3) of Executive Order 12866 or
under section 1 of Executive Order 13563. The Office of Management and
Budget has not reviewed it under those Orders.
    The economic impact of this rule is not anticipated to be
significant for the following reasons: (1) Although persons and vessels
will not be able to enter, transit through, anchor in, or remain within
the race area without authorization from the Captain of the Port
Charleston or a designated representative, they may operate in the
surrounding area during the effective period; (2) persons and vessels
may still enter, transit through, anchor in, or remain within the race
area if authorized by the Captain of the Port Charleston or a
designated representative; and (3) advance notification will be made to
the local maritime community via broadcast notice to mariners.

2. Impact on Small Entities

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as
amended, requires federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule
will not have a significant economic impact on a substantial number of
small entities.
    This rule may affect the following entities, some of which may be
small entities: the owners or operators of vessels intending to enter,
transit through, anchor in, or remain within that portion that portion
of the Atlantic Intracoastal Waterway encompassed within the regulated
area from 9:00 a.m. until 7:00 p.m. on June 20, 2015 and June 21, 2015.
For the reasons discussed in the Regulatory Planning and Review section
above, this rule will not have a significant economic impact on a
substantial number of small entities.

3. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this rule. If the rule would affect your
small business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
contact the person listed in the FOR FURTHER INFORMATION CONTACT
section above.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

4. Collection of Information

    This rule calls for no new collection of information under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

5. Federalism

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has 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. We have analyzed this rule under that Order and have
determined that it does not have implications for federalism.

6. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters.
Protesters are asked to contact the person listed in the FOR FURTHER
INFORMATION CONTACT section to coordinate protest activities so that
your message can be received without jeopardizing the safety or
security of people, places or vessels.

7. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this rule will not result in
such an expenditure, we do discuss the effects of this rule elsewhere
in this preamble.

8. Taking of Private Property

    This rule will not affect a taking of private property or otherwise
have taking implications under Executive Order 12630, Governmental
Actions and Interference with Constitutionally Protected Property
Rights.

9. Civil Justice Reform

    This rule meets applicable standards in sections 3(a) and 3(b)(2)
of Executive Order 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce burden.

10. Protection of Children

    We have analyzed this rule under Executive Order 13045, Protection
of Children from Environmental Health Risks and Safety Risks. This rule
is not an economically significant rule and does not create an
environmental risk to health or risk to safety that may
disproportionately affect children.

11. Indian Tribal Governments

    This rule does not have tribal implications under Executive Order
13175, Consultation and Coordination with Indian Tribal Governments,
because it does not have a substantial direct effect on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.

12. Energy Effects

    This action is not a ``significant energy action'' under Executive
Order 13211, Actions Concerning Regulations That Significantly Affect
Energy Supply, Distribution, or Use.

13. Technical Standards

    This rule does not use technical standards. Therefore, we did not
consider the use of voluntary consensus standards.

14. Environment

    We have analyzed this rule under Department of Homeland Security
Management Directive 023-01 and Commandant Instruction M16475.lD, which
guide the Coast Guard in complying with the National Environmental
Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have determined
that this action is one of a category of actions that do not
individually or cumulatively have a significant effect on the human
environment. This rule involves a special local regulation issued in
conjunction with a regatta or marine parade. This rule is categorically
excluded from further review under paragraph 34(h) of Figure 2-1 of the
Commandant Instruction. We seek any comments or information that may
lead to the discovery of a significant environmental impact from this
rule.

List of Subjects in 33 CFR Part 100

    Marine safety, Navigation (water), Reporting and recordkeeping
requirements, Waterways.

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 100 as follows:

PART 100--SAFETY OF LIFE ON NAVIGABLE WATERS

0
1. The authority citation for part 100 continues to read as follows:

    Authority: 33 U.S.C. 1233.

0
2. Add a temporary Sec.  100.T07-0340 to read as follows:

Sec.  100.T07-0340  Special Local Regulations; Grand National Drag Boat
Races, Atlantic Intracoastal Waterway, Bucksport, SC.

    (a) Regulated area. The following regulated area is established as
a special local regulation: All waters of the Atlantic Intracoastal
Waterway encompassed within the following points; starting at point 1
in position 33[deg] 39' 11.46'' N, 079[deg] 05' 36.78'' W; thence west
to point 2 in position 33[deg] 39' 12.18'' N, 079[deg] 05' 47.76'' W;
thence south to point 3 in position 33[deg] 38' 39.48'' N 079[deg]
05'37.44'' W; thence east to point 4 in position 33[deg] 38' 42.3'' N
079[deg] 05' 30.6'' W; thence north back to origin. All coordinates are
North American Datum 1983.
    (b) Definition. The term ``designated representative'' means Coast
Guard Patrol Commanders, including Coast Guard coxswains, petty
officers, and other officers operating Coast Guard vessels, and
Federal, state, and local officers designated by or assisting the
Captain of the Port Charleston in the enforcement of the regulated
areas.
    (c) Regulations. (1) All persons and vessels, except those persons
and vessels participating in the event, are prohibited from entering,
transiting through, anchoring in, or remaining within the regulated
area unless authorized by the Captain of the Port Charleston or a
designated representative.
    (2) Nonparticipant persons and vessels desiring to enter, transit
through, anchor in, or remain within the regulated area may contact the
Captain of the Port Charleston by telephone at<PHONE_NUMBER>, or a
designated representative via VHF radio on channel 16 to seek
authorization. If authorization to enter, transit through, anchor in,
or remain within the regulated area is granted by the Captain of the
Port Charleston or a designated representative, all persons and vessels
receiving such permission must comply with the instructions of the
Captain of the Port Charleston or a designated representative.(3) The
Coast Guard will provide notice of the regulated area by Broadcast
Notice to Mariners, Local Notice to Mariners, and on-scene designated
representatives.
    (d) Enforcement date. This rule will be enforced daily from 9 a.m.
until 7 p.m. on June 20 and June 21, 2015.

    Dated: May 29, 2015.
G.L. Tomasulo,
Captain, U.S. Coast Guard, Captain of the Port Charleston.
[FR Doc. 2015-15186 Filed 6-18-15; 8:45 am]
 BILLING CODE 9110-04-P


[Federal Register Volume 77, Number 104 (Wednesday, May 30, 2012)]
[Notices]
[Page 31843]
[FR Doc No: 2012-13026]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. EL12-62-000]

PPL Montana, LLC; Notice of Meeting

    a. Date and Time of Meeting: Thursday, June 7, 2012 at 1:00 p.m.
EDT.
    b. Place: Federal Energy Regulatory Commission, 888 First St. NE.,
Washington, DC 20426, Room 3M-1.
    c. FERC Contact: Gary Cohen,<PHONE_NUMBER> or<EMAIL_ADDRESS>    d. Purpose of Meeting: Commission staff will meet with PPL Montana,
LLC (PPL Montana) and the Confederated Salish and Kootenai Tribes to
discuss issues related to PPL Montana's petition for a declaratory
order concerning provisions of the license for Kerr Hydroelectric
Project No. 5.
    e. All interested parties are hereby invited to attend.

    Dated: May 23, 2012.
Kimberly D. Bose,
Secretary.
[FR Doc. 2012-13026 Filed 5-29-12; 8:45 am]
BILLING CODE 6717-01-P