[Federal Register Volume 82, Number 13 (Monday, January 23, 2017)]
[Notices]
[Pages 7864-7866]
[FR Doc No: 2017-01408]

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DEPARTMENT OF LABOR

Occupational Safety and Health Administration

[Docket No. OSHA-2007-0039]

Intertek Testing Services NA, Inc.: Grant of Expansion of
Recognition

AGENCY: Occupational Safety and Health Administration (OSHA), Labor.

ACTION: Notice.

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SUMMARY: In this notice, OSHA announces its final decision to expand
the scope of recognition for Intertek Testing Service NA, Inc., as a
Nationally Recognized Testing Laboratory (NRTL).

DATES: The expansion of the scope of recognition becomes effective on
January 23, 2017.

FOR FURTHER INFORMATION CONTACT: Information regarding this notice is
available from the following sources:
    Press inquiries: Contact Mr. Frank Meilinger, Director, OSHA Office
of Communications, U.S. Department of Labor, 200 Constitution Avenue
NW., Room N-3508, Washington, DC 20210; telephone:<PHONE_NUMBER>;
email<EMAIL_ADDRESS>    General and technical information: Contact Mr. Kevin Robinson,
Director, Office of Technical Programs and Coordination Activities,
Directorate of Technical Support and Emergency Management, Occupational
Safety and Health Administration, U.S. Department of Labor, 200
Constitution Avenue NW., Room N-3655, Washington, DC 20210; telephone:
(202) 693-2110; email<EMAIL_ADDRESS>OSHA's Web page includes
information about the NRTL Program (see http://www.osha.gov/dts/otpca/nrtl/index.html).

SUPPLEMENTARY INFORMATION:

I. Notice of Final Decision

    OSHA hereby gives notice of the expansion of the scope of
recognition of Intertek Testing Services NA, Inc. (ITSNA), as an NRTL.
ITSNA's expansion covers the addition of twenty-three (23) test
standards to its scope of recognition.
    OSHA recognition of an NRTL signifies that the organization meets
the requirements specified by 29 CFR

1910.7. Recognition is an acknowledgment that the organization can
perform independent safety testing and certification of the specific
products covered within its scope of recognition, and is not a
delegation or grant of government authority. As a result of
recognition, employers may use products properly approved by the NRTL
to meet OSHA standards that require testing and certification of the
products.
    The Agency processes applications by an NRTL for initial
recognition, or for expansion or renewal of this recognition, following
requirements in Appendix A to 29 CFR 1910.7. This appendix requires
that the Agency publish two notices in the Federal Register in
processing an application. In the first notice, OSHA announces the
application and provides its preliminary finding and, in the second
notice, the Agency provides its final decision on the application.
These notices set forth the NRTL's scope of recognition or
modifications of that scope. OSHA maintains an informational Web page
for each NRTL that details its scope of recognition. These pages are
available from the Agency's Web site at http://www.osha.gov/dts/otpca/nrtl/index.html.
    ITSNA submitted an application, dated April 21, 2015, (OSHA-2007-
0039-0022) to expand its recognition to include 23 additional test
standards. OSHA staff performed a detailed analysis of the application
packet and reviewed other pertinent information. OSHA did not perform
any on-site reviews in relation to this application.
    OSHA published the preliminary notice announcing ITSNA's expansion
application in the Federal Register on October 31, 2016 (81 FR 75442).
The Agency requested comments by November 15, 2016, but it received no
comments in response to this notice. OSHA now is proceeding with this
final notice to grant expansion of ITSNA's scope of recognition.
    To obtain or review copies of all public documents pertaining to
ITSNA's application, go to www.regulations.gov or contact the Docket
Office, Occupational Safety and Health Administration, U.S. Department
of Labor, 200 Constitution Avenue NW., Room N-3508, Washington, DC
20210. Docket No. OSHA-2007-0039 contains all materials in the record
concerning ITSNA's recognition.

II. Final Decision and Order

    OSHA staff examined ITSNA's expansion application, its capability
to meet the requirements of the test standards, and other pertinent
information. Based on its review of this evidence, OSHA finds that
ITSNA meets the requirements of 29 CFR 1910.7 for expansion of its
recognition, subject to the limitation and conditions listed below.
OSHA, therefore, is proceeding with this final notice to grant ITSNA's
scope of recognition. OSHA limits the expansion of ITSNA's recognition
to testing and certification of products for demonstration of
conformance to the test standards listed in Table 1 below.

  Table 1--List of Appropriate Test Standards for Inclusion in ITSNA's
                        NRTL Scope of Recognition
------------------------------------------------------------------------
          Test standard                     Test standard title
------------------------------------------------------------------------
UL 5C............................  Standard for Surface Raceways and
                                    Fittings for Use with Data, Signal,
                                    and Control Circuits.
UL 50E...........................  Enclosures for Electrical Equipment,
                                    Environmental Considerations.
UL 565...........................  Standard for Liquid-Level Gauges for
                                    Anhydrous Ammonia and LP-Gas.
UL 60745-2-1.....................  Hand-Held Motor-Operated Electric
                                    Tools--Safety--Part 2-1: Particular
                                    Requirements for Drills and Impact
                                    Drills.
UL 60745-2-14....................  Hand-Held Motor-Operated Electric
                                    Tools--Safety--Part 2-14: Particular
                                    Requirements for Planers.
UL 60745-2-17....................  Hand-Held Motor-Operated Electric
                                    Tools--Safety--Part 2-17: Particular
                                    Requirements for Routers and
                                    Trimmers.
UL 60745-2-3.....................  Hand-Held Motor-Operated Electric
                                    Tools--Safety--Part 2-3: Particular
                                    Requirements for Grinders, Polishers
                                    and Disk-Type Sanders.
UL 962A..........................  Standard for Furniture Power
                                    Distribution Units.
UL 1769..........................  Standard for Cylinder Valves.
UL 2061..........................  Standard for Adapters and Cylinder
                                    Connection Devices for Portable LP-
                                    Gas Cylinder Assemblies.
UL 2108..........................  Standard for Low Voltage Lighting
                                    Systems.
UL 2238..........................  Standard for Cable Assemblies and
                                    Fittings for Industrial Control and
                                    Signal Distribution.
UL 2305..........................  Standard for Exhibition Display
                                    Units, Fabrication and Installation.
UL 2438..........................  Standard for Outdoor Seasonal-Use
                                    Cord-Connected Wiring Devices.
UL 5085-2........................  Low Voltage Transformers--Part 2:
                                    General Purpose Transformers.
UL 61010-2-031...................  Safety Requirements for Electrical
                                    Equipment for Measurement, Control
                                    and Laboratory Use--Part 031: Safety
                                    requirements for hand-held probe
                                    assemblies for electrical
                                    measurement and test.
UL 61010-2-030...................  Safety requirements for electrical
                                    equipment for measurement, control,
                                    and laboratory use--Part 2-030:
                                    Particular requirements for testing
                                    and measuring circuits.
UL 60730-2-2.....................  Standard for Automatic Electrical
                                    Controls for Household and Similar
                                    Use; Part 2: Particular Requirements
                                    for Thermal Motor Protectors.
UL 60745-2-5.....................  Hand-Held Motor-Operated Electric
                                    Tools--Safety--Part 2-5: Particular
                                    Requirements for Circular Saws.
UL 60745-2-21....................  Hand-Held Motor-Operated Electric
                                    Tools--Safety--Part 2-21: Particular
                                    Requirements for Drain Cleaners.
UL 60950-23......................  Information Technology Equipment--
                                    Safety--Part 23: Large Data Storage
                                    Equipment.
UL 62368-1.......................  Audio/video, information and
                                    communication technology equipment--
                                    Part 1: Safety requirements.
UL 1691..........................  Single Pole Locking-Type Separable
                                    Connectors.
------------------------------------------------------------------------

    OSHA's recognition of any NRTL for a particular test standard is
limited to equipment or materials for which OSHA standards require
third-party testing and certification before using them in the
workplace. Consequently, if a test standard also covers any products
for which OSHA does not require such testing and certification, an
NRTL's scope of recognition does not include these products.
    The American National Standards Institute (ANSI) may approve the
test standards listed above as American National Standards. However,
for convenience, we may use the designation of the standards-developing
organization for the standard as opposed to the ANSI designation. Under
the NRTL Program's policy (see OSHA Instruction CPL 1-0.3, Appendix C,
paragraph XIV), any NRTL recognized for a particular test standard may
use either the proprietary version of the test standard or the ANSI
version of that standard. Contact ANSI to determine whether a test
standard is currently ANSI-approved.

A. Conditions

    In addition to those conditions already required by 29 CFR 1910.7,
ITSNA must abide by the following conditions of the recognition:
    1. ITSNA must inform OSHA as soon as possible, in writing, of any
change of ownership, facilities, or key personnel, and of any major
change in its operations as an NRTL, and provide details of the
change(s);
    2. ITSNA must meet all the terms of its recognition and comply with
all OSHA policies pertaining to this recognition; and
    3. ITSNA must continue to meet the requirements for recognition,
including all previously published conditions on ITSNA's scope of
recognition, in all areas for which it has recognition.
    Pursuant to the authority in 29 CFR 1910.7, OSHA hereby expands the
scope of recognition of ITSNA, subject to the limitation and conditions
specified above.

III. Authority and Signature

    Jordan Barab, Acting Assistant Secretary of Labor for Occupational
Safety and Health, 200 Constitution Avenue NW., Washington, DC 20210,
authorized the preparation of this notice. Accordingly, the Agency is
issuing this notice pursuant to 29 U.S.C. 657(g)(2), Secretary of
Labor's Order No. 1-2012 (77 FR 3912, Jan. 25, 2012), and 29 CFR
1910.7.

    Dated: January 17, 2017.
Jordan Barab,
Acting Assistant Secretary of Labor for Occupational Safety and Health.
[FR Doc. 2017-01408 Filed 1-19-17; 8:45 am]
 BILLING CODE 4510-26-P


[Federal Register Volume 80, Number 73 (Thursday, April 16, 2015)]
[Notices]
[Pages 20522-20525]
[FR Doc No: 2015-08700]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74706; File No. SR-ISE-2015-11]

Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change To Amend the Schedule of Fees

April 10, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on March 26, 2015, the International Securities Exchange, LLC (the
``Exchange'' or the ``ISE'') filed with the Securities and Exchange
Commission the proposed rule change, as described in Items I, II, and
III below, which items have been prepared by the self-regulatory

organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

    The ISE proposes to amend the Schedule of Fees to introduce a
Member Order Routing Program. The text of the proposed rule change is
available on the Exchange's Web site (http://www.ise.com), at the
principal office of the Exchange, and at the Commission's Public
Reference Room.

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

    In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
has prepared summaries, set forth in sections A, B and C below, of the
most significant aspects of such statements.

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

1. Purpose
    The purpose of the proposed rule change is to amend the Schedule of
Fees to introduce a Member Order Routing Program (``MORP'') that will
provide enhanced rebates to order routing firms that select the
Exchange as the default routing destination (as described below) for
unsolicited Crossing Orders.\3\ The MORP is intended to compete with
similar programs offered by competitor options exchanges. The Exchange
designates this filing to become effective on April 1, 2015.\4\
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    \3\ A `` Crossing Order'' is an order executed in the Exchange's
Facilitation Mechanism, Solicited Order Mechanism, Price Improvement
Mechanism (``PIM'') or submitted as a Qualified Contingent Cross
(``QCC'') order. For purposes of the fee schedule, orders executed
in the Block Order Mechanism are also considered Crossing Orders.
    Solicited Crossing Orders will not qualify for MORP as they are
already eligible for the QCC and Solicitation Rebate. See Schedule
of Fees, Section IV.A.
    \4\ The Exchange notes that members must opt in to MORP by March
31, 2015 to be eligible to participate in the program on April 1,
2015. See note 7 infra.
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MORP Qualifications
    To be eligible to participate in MORP, an Electronic Access Member
(``EAM'') must: (1) Provide to its clients, systems that enable the
electronic routing of option orders to all of the U.S. options
exchanges, including ISE; (2) interface with ISE to access the
Exchange's electronic options trading platform; (3) offer to its
clients a customized interface and routing functionality such that ISE
will be the default destination for all unsolicited Crossing Orders
entered by the EAM,\5\ provided that market conditions allow the
Crossing Order to be executed on ISE; (4) configure its own option
order routing functionality such that ISE will be the default
destination for all unsolicited Crossing Orders, provided that market
conditions allow the Crossing Order to be executed on ISE, with respect
to all option orders as to which the EAM has routing discretion; and
(5) ensure that the default routing functionality permits users
submitting option orders through such system to manually override the
ISE as the default destination on an order-by-order basis.\6\
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    \5\ An unsolicited Crossing Order is a Crossing Order entered by
a member that has not solicited the contra side of the trade.
    \6\ The Exchange notes that these requirements are based, in
part, on similar programs offered by other options exchanges. See
notes 15 and 19 infra and accompanying text.
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    EAMs that wish to participate in the program must certify that they
meet the above MORP requirements, in writing, on a monthly basis and in
a form to be determined by the Exchange. The relevant notice must be
provided by the last business day of the month for members to be
eligible to participate in the MORP effective the first business day of
the following month.\7\
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    \7\ Members must provide this notice by March 31, 2015 to be
eligible to participate in MORP when the program becomes effective
on April 1, 2015.
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Rebate for Unsolicited Crossing Orders
    An EAM that is MORP eligible will receive a rebate for all
unsolicited Crossing Orders of $0.05 per originating contract side,
provided that the member executes a minimum average daily volume
(``ADV'') in unsolicited Crossing Orders of at least 30,000 originating
contract sides. This rebate is increased to $0.07 per originating
contract side, provided that the member executes a higher ADV in
unsolicited Crossing Orders of 100,000 originating contract sides. The
rebate for the highest tier achieved will be applied retroactively to
all eligible contracts traded in a given month. As is ISE's current
practice with respect to ADV calculations, any day that the Exchange is
not open for the entire trading day may be excluded from such
calculation; provided that the Exchange will only remove the day for
members that would have a lower ADV with the day included. The Exchange
will provide a notice, and post it on the Exchange's Web site, to
inform members of any day that is to be excluded from its ADV
calculations in connection with this proposed rule change.
Facilitation and Solicitation Break-Up Rebate
    In addition, any EAM that qualifies for the MORP rebate by
executing an ADV of 30,000 originating contract sides or more will also
be eligible for increased Facilitation and Solicitation break-up
rebates. Currently, the Exchange provides a Facilitation and
Solicitation break-up rebate of $0.15 per contract for regular and
complex orders in Select Symbols. This rebate applies to all Non-ISE
Market Maker,\8\ Firm Proprietary \9\/Broker-Dealer,\10\ Professional
Customer,\11\ and Priority Customer \12\ orders submitted to the
Facilitation and Solicited Order Mechanisms that do not trade with
their contra order, except when those orders trade against pre-existing
orders and quotes on the Exchange's order books. For MORP eligible
members that execute a qualifying ADV in unsolicited Crossing Orders of
at least 30,000 originating contract sides, the Exchange now proposes
to increase this Facilitation and Solicitation break-up rebate to $0.35
per contract for regular and complex orders in Select Symbols. In
addition, the Exchange proposes to adopt a Facilitation and
Solicitation break-up rebate in Non-Select Symbols and FX option
classes specifically for members that meet the MORP qualifications
described above. The rebate in Non-Select Symbols will be $0.15 per
contract for regular orders and $0.80 per contract for complex orders.
For FX option classes, the rebate will be $0.15 per contract for both
regular and complex orders. With this proposed

change, the Exchange notes that eligible members will receive the same
break-up rebates for their Facilitation and Solicitation orders as they
currently do for orders submitted to the PIM.
2. Statutory Basis
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    \8\ A ``Non-ISE Market Maker'' is a market maker as defined in
Section 3(a)(38) of the Securities Exchange Act of 1934, as amended,
registered in the same options class on another options exchange.
    \9\ A ``Firm Proprietary'' order is an order submitted by a
member for its own proprietary account.
    \10\ A ``Broker-Dealer'' order is an order submitted by a member
for a broker-dealer account that is not its own proprietary account.
    \11\ A ``Professional Customer'' is a person or entity that is
not a broker/dealer and is not a Priority Customer.
    \12\ A ``Priority Customer'' is a person or entity that is not a
broker/dealer in securities, and does not place more than 390 orders
in listed options per day on average during a calendar month for its
own beneficial account(s), as defined in Rule 100(a)(37A).
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    The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\13\ in general, and
Section 6(b)(4) of the Act,\14\ in particular, in that it is designed
to provide for the equitable allocation of reasonable dues, fees, and
other charges among its members and other persons using its facilities.
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    \13\ 15 U.S.C. 78f.
    \14\ 15 U.S.C. 78f(b)(4).
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    The Exchange proposes to provide the MORP rebate and higher break-
up rebates to EAMs that connect directly to the Exchange and provide
their clients with order routing functionality that includes all U.S.
options exchanges, including ISE. Order routing firms are already
provided enhanced rebates by some of the Exchange's competitors,
including, for example, NYSE Amex Options (``Amex''), which provides
volume based rebates to members that provide access and connectivity to
their market.\15\ The Exchange believes that it is appropriate at this
time to offer a similar rebate to order routing firms on ISE in order
to compete with these programs on other options markets.
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    \15\ See Securities Exchange Act Release No. 71532 (February 12,
2014), 79 FR 9563 (February 19, 2014) (SR-NYSEMKT-2014-12).
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    The Exchange believes the proposed fee program is reasonable and
equitable because it is designed to encourage order routing firms to
execute additional unsolicited Crossing Order volume on the ISE. The
Exchange notes that it currently offers other incentive programs to
promote and encourage growth in specific business areas, including, for
example, rebates for Market Makers that routinely quote at the national
best bid or offer,\16\ and volume-based Priority Customer complex order
rebates.\17\ The proposed rule change is targeted towards Crossing
Orders, and, in particular, unsolicited Crossing Orders, which is yet
another segment of order flow that the Exchange seeks to encourage
members to execute on ISE. The Exchange believes that it is reasonable
and equitable to tailor the proposed rule change to unsolicited
Crossing Orders. ISE already charges fees and provides rebates for non-
Crossing Orders that are effective in attracting that order flow to the
Exchange. In addition, solicited Crossing Orders already benefit from
the QCC and Solicitation Rebate, which applies to all QCC and/or other
solicited Crossing Orders, including solicited orders executed in the
Solicitation, Facilitation or Price Improvement Mechanisms. The
Exchange believes that the QCC and Solicitation Rebate has proven to be
an effective incentive for members to send solicited crosses to the
ISE. The proposed rule change would supplement this incentive by
encouraging eligible firms to send unsolicited Crossing Orders to the
Exchange as well, which will benefit all market participants on ISE by
creating additional liquidity and increased opportunity to trade on the
Exchange.
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    \16\ See Schedule of Fees, Section I, Regular Order Fees and
Rebates, Market Maker Plus.
    \17\ See Schedule of Fees, Section II, Complex Order Fees and
Rebates.
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    The Exchange notes that the proposed MORP rebate levels are within
the range of rebates currently offered by Amex, whose market access and
connectivity subsidy ranges from $0.04 per contract to $0.08 per
contract based on a member's volume tier.\18\ In addition, the Exchange
notes that the proposed Facilitation and Solicitation break-up rebates
are equivalent to break-up rebates already provided for PIM orders
traded on ISE.
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    \18\ See supra note 15.
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    As a condition for participating in MORP, an EAM must configure its
option order routing functionality so that ISE will be the default
destination for all unsolicited Crossing Orders, and must offer to its
clients a customized interface and routing functionality that similarly
defaults such orders to ISE. Defaulting to ISE will not be required if
market conditions do not allow the Crossing Order to be executed on the
Exchange. In addition, MORP eligible firms must allow users to manually
override ISE as the default order routing destination on an order-by-
order basis. The Exchange believes that these proposed requirements are
reasonable and equitable as they protect investors, while allowing
member firms to qualify for enhanced rebates that reduce their trading
costs on ISE. Furthermore, the Exchange notes that members that set ISE
as their default routing destination will not be relieved of complying
with their best execution obligations. If, based on its regular best
execution analysis, a MORP eligible member determines that the routing
functionality described above would conflict with its duty of best
execution, such member may discontinue participation in the program.
The Exchange believes that the safeguards described above will ensure
that client orders are appropriately protected under MORP. In this
regard, the Exchange notes that the proposed protections mirror
protections previously adopted by NASDAQ OMX PHLX, LLC (``Phlx''),
where a similar program was introduced in 2007.\19\
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    \19\ See Securities Exchange Act Release No. 56274 (August 16,
2007), 72 FR 48720 (August 24, 2007) (SR-Phlx-2007-54).
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    Finally, the Exchange believes that the proposed program is both
equitable and not unfairly discriminatory because any qualifying EAM
that offers market access and connectivity to the Exchange will be able
to participate in the program on an equal and non-discriminatory basis.
While there will be two tiers of MORP rebates, the sole basis for
differentiation among the tiers will be participant volume in
unsolicited Crossing Orders.\20\ The Exchange believes that it is
equitable and not unfairly discriminatory to provide higher rebates to
members that execute a higher volume of order flow on ISE. With respect
to break-up rebates, the Exchange notes that all members that qualify
for a MORP rebate will also receive enhanced break-up rebates.
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    \20\As explained above, the proposed rule change is targeted
towards unsolicited Crossing Orders as this is the segment of order
flow that the Exchange is seeking to encourage members to execute on
ISE. The Exchange does not believe that this is unfairly
discriminatory as all MORP eligible members can achieve the
applicable rebates by executing unsolicited Crossing Orders on the
ISE.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\21\ the Exchange
does not believe that the proposed rule change will impose any burden
on intermarket or intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. To the contrary,
the Exchange believes that the proposed rule change evidences the
strength of competition in the options industry. Specifically, the
Exchange believes that the proposed fee change will enhance the
competiveness of the ISE relative to other options exchanges, such as
Amex, that offer similar programs under their respective fee schedules.
In doing so, eligible order routing firms will benefit from an
innovative program that reduces trading costs by providing a valuable
rebate for their unsolicited Crossing Orders. The Exchange operates in
a highly competitive market in which market participants can readily
direct their order flow to competing venues. In such an environment,
the Exchange must continually review, and consider adjusting, its fees
and rebates to remain competitive with other exchanges. For the reasons
described above, the

Exchange believes that the proposed fee changes reflect this
competitive environment.
---------------------------------------------------------------------------

    \21\15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

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

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from members or other interested
parties.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act \22\ and subparagraph (f)(2) of Rule 19b-4
thereunder,\23\ because it establishes a due, fee, or other charge
imposed by ISE.
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    \22\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \23\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-ISE-2015-11 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-ISE-2015-11. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-ISE-2015-11, and should be
submitted on or before May 7, 2015.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
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    \24\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-08700 Filed 4-15-15; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 81, Number 251 (Friday, December 30, 2016)]
[Notices]
[Pages 96539-96545]
[FR Doc No: 2016-31683]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79683; File No. SR-NYSEArca-2016-82]

Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting
Approval of a Proposed Rule Change, as Modified by Amendment Nos. 1, 2,
and 3 Thereto, To List and Trade Shares of the JPMorgan Diversified
Event Driven ETF Under NYSE Arca Equities Rule 8.600

December 23, 2016.

I. Introduction

    On June 20, 2016, NYSE Arca, Inc. (``Exchange'') filed with the
Securities and Exchange Commission (``Commission''), pursuant to
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'' or
``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule
change to list and trade shares (``Shares'') of the JPMorgan
Diversified Event Driven ETF (``Fund'') under NYSE Arca Equities Rule
8.600. The proposed rule change was published for comment in the
Federal Register on July 7, 2016.\3\ On August 18, 2016, the Exchange
filed Amendment No. 1 to the proposed rule change.\4\ On the same day,
pursuant to Section 19(b)(2) of the Act,\5\ the Commission designated a
longer period within which to approve the proposed rule change,
disapprove the proposed rule change, or institute proceedings to
determine whether to disapprove the proposed rule change.\6\ On
September 1, 2016, the Exchange filed Amendment No. 2 to the proposed
rule change.\7\ On

September 2, 2016, the Exchange filed Amendment No. 3 to the proposed
rule change.\8\ On October 5, 2016, the Commission instituted
proceedings under Section 19(b)(2)(B) of the Act \9\ to determine
whether to approve or disapprove the proposed rule change, as modified
by Amendment Nos. 1, 2, and 3 thereto.\10\ The Commission has received
no comments on the proposal. This order grants approval of the proposed
rule change, as modified by Amendment Nos. 1, 2, and 3 thereto.
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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. 78218 (Jul. 1,
2016), 81 FR 44339 (``Notice'').
    \4\ In Amendment No. 1, which amended and replaced the proposed
rule change in its entirety, the Exchange clarified: (a) Certain
aspects relating to the Fund's investment strategy, including
descriptions of (i) certain return factors that the Fund seeks to
utilize to achieve its investment objective, (ii) the Fund's total
net long market exposure, (iii) the Fund's use of derivative
instruments and its market exposure to such instruments, and (iv)
the Fund's investments in mutual funds; (b) that the common stock
into which convertible securities held by the Fund can be converted
will be exchange-traded; (c) that the Fund may invest no more than
5% of its assets, in the aggregate, in over-the-counter (``OTC'')
common stocks, preferred stocks, warrants, rights, and contingent
value rights (``CVRs'') of U.S. and foreign corporations (including
emerging market securities); (d) the redemption order submission
cut-off time; (e) that no more than 10% of the net assets of the
Fund will be invested in Depositary Receipts (as defined herein)
that are not exchange-listed; and (f) the use of certain defined
terms. Amendment No. 1 to the proposed rule change is available at:
https://www.sec.gov/comments/sr-nysearca-2016-82/nysearca201682-1.pdf. Because Amendment No. 1 to the proposed rule change does not
materially alter the substance of the proposed rule change or raise
unique or novel regulatory issues, Amendment No. 1 is not subject to
notice and comment.
    \5\ 15 U.S.C. 78s(b)(2).
    \6\ See Securities Exchange Act Release No. 78610, 81 FR 57960
(Aug. 24, 2016). The Commission designated October 5, 2016, as the
date by which the Commission shall either approve or disapprove, or
institute proceedings to determine whether to disapprove, the
proposed rule change.
    \7\ In Amendment No. 2, which partially amended the proposed
rule change, as modified by Amendment No. 1 thereto, the Exchange
clarified (a) the Fund's holdings in mutual fund shares as the only
non-exchange-traded investment company securities the Fund may hold,
and (b) that Depositary Receipts (as defined herein) are included as
equity securities subject to the 10% limitation on equity securities
whose principal market is not a member of the Intermarket
Surveillance Group (``ISG'') or is a market with which the Exchange
does not have a comprehensive surveillance sharing agreement.
Amendment No. 2 to the proposed rule change is available at: https://www.sec.gov/comments/sr-nysearca-2016-82/nysearca201682-2.pdf.
Because Amendment No. 2 to the proposed rule change does not
materially alter the substance of the proposed rule change or raise
unique or novel regulatory issues, Amendment No. 2 is not subject to
notice and comment.
    \8\ In Amendment No. 3, which partially amended the proposed
rule change, as modified by Amendment Nos. 1 and 2 thereto, the
Exchange (a) made conforming changes to the Statutory Basis section
of the filing to reflect the same changes made by Amendment No. 2 to
the proposed rule change, and (b) clarified a reference to the term
``advisor'' to mean ``Adviser.'' Amendment No. 3 to the proposed
rule change is available at: https://www.sec.gov/comments/sr-nysearca-2016-82/nysearca201682-3.pdf. Because Amendment No. 3 to
the proposed rule change does not materially alter the substance of
the proposed rule change or raise unique or novel regulatory issues,
Amendment No. 3 is not subject to notice and comment.
    \9\ 15 U.S.C. 78s(b)(2)(B).
    \10\ See Securities Exchange Act Release No. 79052, 81 FR 70455
(Oct. 12, 2016). Specifically, the Commission instituted proceedings
to allow for additional analysis of the proposed rule change's
consistency with Section 6(b)(5) of the Act, which requires, among
other things, that the rules of a national securities exchange be
``designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade,'' and
``to protect investors and the public interest.'' See id., 81 FR at
70459.
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II. Exchange's Description of the Proposal

    The Exchange proposes to list and trade Shares of the Fund under
NYSE Arca Equities Rule 8.600, which governs the listing and trading of
Managed Fund Shares. The Fund is a series of J.P. Morgan Exchange-
Traded Fund Trust (``Trust''), a Delaware statutory trust.\11\ J.P.
Morgan Investment Management Inc. (``Adviser'') will be the investment
adviser to the Fund. The Adviser will also provide administrative
services for, and will oversee the other service providers of, the
Fund. SEI Investments Distribution Co. will be the distributor of the
Fund's Shares. The Exchange represents that the Adviser is not
registered as a broker-dealer, but is affiliated with a broker-dealer
and has implemented and will maintain a fire wall with respect to such
broker-dealer affiliate regarding access to information concerning the
composition of, and changes to, the portfolio.\12\
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    \11\ The Trust is registered under the Investment Company Act of
1940 (``1940 Act''). The Exchange states that, on April 22, 2016,
the Trust filed with the Commission an amendment to its registration
statement on Form N-1A under the Securities Act of 1933
(``Securities Act'') and the 1940 Act relating to the Fund (File
Nos. 333-191837 and 811-22903) (``Registration Statement''). The
Exchange also notes that an exemptive order (``Exemptive Order'')
was issued under the 1940 Act on February 19, 2016. The Exchange
represents that investments made by the Fund will comply with the
conditions set forth in the Exemptive Order.
    \12\ The Exchange further represents that, in the event (a) the
Adviser becomes registered as a broker-dealer or newly affiliated
with one or more broker-dealers, or (b) any new adviser or sub-
adviser is a registered broker-dealer or becomes affiliated with a
broker-dealer, it will implement and maintain a fire wall with
respect to its relevant personnel or its broker-dealer affiliate
regarding access to information concerning the composition of, and
changes to, the portfolio, and will be subject to procedures
designed to prevent the use and dissemination of material, non-
public information regarding such portfolio.
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    The Fund will seek to provide long-term total return and will seek
to achieve its investment objective by employing an event-driven
investment strategy, primarily investing in companies that the Adviser
believes will be impacted by pending or anticipated corporate or
special situation events. Under normal market conditions,\13\ the Fund
will seek to achieve its investment objective by employing its
investment strategy to access certain ``return factors.'' The Fund will
invest its assets globally to gain exposure to equity securities
(across market capitalizations) in developed markets. The Fund may use
both long and short positions (achieved primarily through the use of
derivative instruments as described below). The Fund generally will
maintain a total net long market exposure, meaning that the Fund's
aggregate exposure will be greater to instruments that the Adviser
expects to outperform. However, the Fund may have net long or net short
exposure to one or more industry sectors, individual markets, and/or
currencies based on the return factors.
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    \13\ The term ``under normal market conditions'' includes, but
is not limited to, the absence of extreme volatility or trading
halts in the securities markets or the financial markets generally;
circumstances under which the Fund's investments are made for
temporary defensive purposes; operational issues (e.g., systems
failure) causing dissemination of inaccurate market information; or
force majeure type events such as cyber-attacks, natural or man-made
disaster, act of God, armed conflict, act of terrorism, riot or
labor disruption, or any similar intervening circumstance.
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    The Adviser will make use of derivatives (as described below) in
implementing its strategies. Under normal market conditions, the
Adviser currently expects that a significant portion of the Fund's
exposure will be attained through the use of derivatives in addition to
its exposure through direct investments. Derivatives will primarily be
used as an efficient means of implementing a particular strategy in
order to gain exposure to a desired return factor. For example, the
Fund may use a total return swap to establish both long and short
positions in order to gain the desired exposure rather than physically
purchasing and selling short each instrument. Derivatives may also be
used to increase gain, to effectively gain targeted exposure from its
cash positions, to hedge various investments, and/or for risk
management. As a result of the Fund's use of derivatives and to serve
as collateral, the Fund may hold significant amounts of U.S. Treasury
obligations, including Treasury bills, bonds and notes and other
obligations issued or guaranteed by the U.S. Treasury, other short-term
investments, including money market funds, and foreign currencies, in
which certain derivatives are denominated.
    The amount that may be invested in any one instrument will vary and
generally depend on the return factors employed by the Adviser at that
time. However, with the exception of specified investment limitations
for certain assets described below, there are no stated percentage
limitations on the amount that can be invested in any one type of
instrument, and the Adviser may, at times, focus on a smaller number of
instruments. Moreover, the Fund will generally be unconstrained by any
particular capitalization, style, or sector, and may invest in any
developed region or country. The Adviser will make use of quantitative
models and information and data supplied by third parties to, among
other things, help determine the portfolio's weightings among various
investments and construct sets of transactions and investments.
    In addition to its main return factors, the Fund may utilize return
factors that use debt securities. The Fund may invest, either directly
or through financial derivative instruments, debt securities that are
subject to a downgrade from investment grade to non-investment grade
(also known as high yield/junk bond) status. For example, the Fund may
invest in the bonds that have been downgraded while hedging credit risk
more broadly by using credit default swaps indices in order to attempt
to keep the Fund's exposure market neutral.
    The Exchange has made the following representations and statements
in describing the Fund.\14\
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    \14\ The Commission notes that additional information regarding
the Trust, the Fund, and the Shares, including investment
strategies, risks, creation and redemption procedures, calculation
of net asset value (``NAV''), fees, distributions, and taxes, among
other things, can be found in the Notice, Amendment Nos. 1, 2, and
3, and the Registration Statement, as applicable. See supra notes 3,
4, 7, 8, and 11, respectively, and accompanying text.

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A. Exchange's Description of the Fund's Principal Investments

    Under normal market conditions, the Fund will invest principally
(i.e., more than 50% of the Fund's assets) in the securities and
financial instruments described below, which may be represented by
derivatives, as discussed below.
    The Fund may invest in exchange-listed and traded common stocks,
preferred stocks, warrants and rights of U.S. and foreign corporations
(including emerging market securities), and U.S. and non-U.S. real
estate investment trusts (``REITs''). Exchange-listed and traded common
stocks, preferred stocks, warrants and rights of U.S. corporations, and
U.S. REITs will be traded on U.S. national securities exchanges.
    The Fund may invest in exchange-listed and OTC ``Depositary
Receipts'' \15\ as described below.
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    \15\ Depositary Receipts include American Depositary Receipts
(``ADRs''), Global Depositary Receipts (``GDRs'') and European
Depositary Receipts (``EDRs''). No more than 10% of the net assets
of the Fund will be invested in Depositary Receipts that are not
exchange-listed.
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    The Fund may invest in the following cash and cash equivalents:
Investments in money market funds (for which the Adviser and/or its
affiliates serve as investment adviser or administrator), bank
obligations,\16\ commercial paper, repurchase agreements, and short-
term funding agreements.\17\
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    \16\ Bank obligations include the following: Bankers'
acceptances, certificates of deposit, and time deposits.
    \17\ Short-term funding agreements are agreements issued by
banks and highly rated U.S. insurance companies such as Guaranteed
Investment Contracts and Bank Investment Contracts.
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    The Fund may invest in corporate debt.\18\
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    \18\ The Adviser expects that, under normal market conditions,
the Fund will invest at least 75% of its corporate debt securities
in issuances that have at least $100,000,000 par amount outstanding
in developed countries, or at least $200,000,000 par amount
outstanding in emerging market countries.
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    In addition to money market funds referenced above, the Fund may
invest in shares of non-exchange-traded investment company securities,
that is, mutual fund shares, including mutual fund shares for which the
Adviser and/or its affiliates may serve as investment adviser or
administrator, to the extent permitted by Section 12(d)(1)\19\ of the
1940 Act and the rules thereunder.
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    \19\ 15 U.S.C. 80a-12(d)(1).
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    In addition, the Fund may invest in exchange traded funds
(``ETFs''),\20\ purchase and sell futures contracts on indexes of
securities, invest in swaps (credit default swaps (``CDSs''), CDS
indices, and total return swaps on equity securities, equity indexes,
fixed income securities, and fixed income futures), invest in forward
and spot currency transactions \21\ (such investments consist of non-
deliverable forwards (``NDFs''), foreign forward currency contracts,
and spot currency transactions), and invest in OTC and exchange-traded
call and put options on equities, fixed income securities, and
currencies or options on indexes of equities, fixed income securities,
and currencies.
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    \20\ The ETFs in which the Fund may invest will be registered
under the 1940 Act and include Investment Company Units (as
described in NYSE Arca Equities Rule 5.2(j)(3)); Portfolio
Depositary Receipts (as described in NYSE Arca Equities Rule 8.100);
and Managed Fund Shares (as described in NYSE Arca Equities Rule
8.600). Such ETFs all will be listed and traded in the U.S. on
registered exchanges. While the Fund may invest in inverse ETFs, the
Fund will not invest in leveraged or inverse leveraged (e.g., 2X, -
2X, 3X, or -3X) ETFs.
    \21\ The Fund will limit its investments in currencies to those
currencies with a minimum average daily foreign exchange turnover of
USD $1 billion as determined by the Bank for International
Settlements (``BIS'') Triennial Central Bank Survey.
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    The Fund may invest in U.S. Government obligations, which may
include direct obligations of the U.S. Treasury, including Treasury
bills, notes and bonds, all of which are backed as to principal and
interest payments by the full faith and credit of the United States,
and separately traded principal and interest component parts of such
obligations that are transferable through the Federal book-entry system
known as Separate Trading of Registered Interest and Principal of
Securities and Coupons Under Book Entry Safekeeping.

B. Exchange's Description of the Fund's Other Investments

    While the Fund, under normal market conditions, will invest at
least fifty percent (50%) of its assets in the securities and financial
instruments described above, the Fund may invest its remaining assets
in other assets and financial instruments, as described below.
    The Fund may invest in U.S. and non-U.S. convertible securities,
which are bonds or preferred stock that can convert to common stock.
The common stock into which convertible securities can be converted
will be exchange-traded.
    The Fund may invest in reverse repurchase agreements.
    The Fund may invest in sovereign obligations, which are investments
in debt obligations issued or guaranteed by a foreign sovereign
government or its agencies, authorities, or political subdivisions.
    The Fund may invest no more than 5% of its assets in equity and
debt securities that are restricted securities (Rule 144A securities),
in addition to Rule 144A securities deemed illiquid by the Adviser, as
referenced below.
    Under normal market conditions, the Fund may invest no more than 5%
of its assets, in the aggregate, in OTC common stocks, preferred
stocks, warrants, rights, and CVRs of U.S. and foreign corporations
(including emerging market securities).\22\
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    \22\ The Exchange further represents that not more than 10% of
the net assets of the Fund, in the aggregate, invested in equity
securities (other than mutual fund shares) shall consist of equity
securities, including common stock into which convertible securities
can be converted and Depositary Receipts, whose principal market is
not a member of the ISG or is a market with which the Exchange does
not have a comprehensive surveillance sharing agreement. See
Amendment No. 2 to the proposed rule change, supra note 7.
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C. Exchange's Description of the Fund's Investment Restrictions

    The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets (calculated at the time of investment),
including Rule 144A securities deemed illiquid by the Adviser,
consistent with Commission guidance. The Fund will monitor its
portfolio liquidity on an ongoing basis to determine whether, in light
of current circumstances, an adequate level of liquidity is being
maintained, and will consider taking appropriate steps in order to
maintain adequate liquidity if, through a change in values, net assets,
or other circumstances, more than 15% of the Fund's net assets are held
in illiquid assets. Illiquid assets include securities subject to
contractual or other restrictions on resale and other instruments that
lack readily available markets as determined in accordance with
Commission staff guidance.
    The Fund may invest in other investment companies to the extent
permitted by Section 12(d)(1) of the 1940 Act and rules thereunder and/
or any applicable exemption or exemptive order under the 1940 Act with
respect to such investments.
    The Fund may invest in securities denominated in U.S. dollars,
major reserve currencies, and currencies of other countries in which
the Fund may invest.
    The Fund may invest in both investment grade and high yield debt
securities.
    The Fund intends to qualify for and to elect treatment as a
separate regulated investment company under Subchapter M of the
Internal Revenue Code. Furthermore, the Fund may not concentrate
investments in a particular industry or group of industries, as
concentration is defined under the 1940 Act, the rules or regulations
thereunder,

or any exemption therefrom, as such statute, rules, or regulations may
be amended or interpreted from time to time.
    The Fund is a diversified series of the Trust. The Fund intends to
meet the diversification requirements of the 1940 Act.
    The Fund's investments, including derivatives, will be consistent
with the Fund's investment objective and will not be used to enhance
leverage (although certain derivatives may result in leverage). That
is, while the Fund will be permitted to borrow as permitted under the
1940 Act, the Fund's investments will not be used to seek performance
that is the multiple or inverse multiple (i.e., 2Xs and 3Xs) of the
Fund's primary broad-based securities benchmark index (as defined in
Form N-1A).\23\
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    \23\ The Fund's broad-based securities benchmark index will be
identified in a future amendment to the Registration Statement
following the Fund's first full calendar year of performance.
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D. Exchange's Description of the Fund's Use of Derivatives

    The Fund proposes to seek certain exposures through transactions in
the specific derivative instruments described above. The derivatives to
be used are futures, swaps, NDFs, foreign forward currency contracts,
and call and put options. Derivatives, which are instruments that have
a value based on another instrument, exchange rate, or index, may also
be used as substitutes for securities in which the Fund can invest. The
Fund may use these derivative instruments to increase gain, to
effectively gain targeted exposure from its cash positions, to hedge
various investments, and/or for risk management.
    Investments in derivative instruments will be made in accordance
with the 1940 Act and consistent with the Fund's investment objective
and policies. To limit the potential risk associated with such
transactions, the Fund will segregate or ``earmark'' assets determined
to be liquid by the Adviser in accordance with procedures established
by the Trust's Board of Trustees and in accordance with the 1940 Act
(or, as permitted by applicable regulation, enter into certain
offsetting positions) to cover its obligations under derivative
instruments. These procedures have been adopted consistent with Section
18 of the 1940 Act and related Commission guidance. In addition, the
Fund will include appropriate risk disclosure in its offering
documents, including leveraging risk. Leveraging risk is the risk that
certain transactions of the Fund, including the Fund's use of
derivatives, may give rise to leverage, causing the Fund to be more
volatile than if it had not been leveraged.\24\ Because the markets for
certain assets, or the assets themselves, may be unavailable or cost
prohibitive as compared to derivative instruments, suitable derivative
transactions may be an efficient alternative for the Fund to obtain the
desired asset exposure.
---------------------------------------------------------------------------

    \24\ To mitigate leveraging risk, the Adviser will segregate or
``earmark'' liquid assets or otherwise cover the transactions that
may give rise to such risk.
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E. Exchange's Description of the Impact on the Arbitrage Mechanism

    The Exchange states that, according to the Adviser, there will be
minimal impact to the arbitrage mechanism as a result of the use of
derivatives. Market makers and participants should be able to value
derivatives as long as the positions are disclosed with relevant
information. The price at which Shares trade will continue to be
disciplined by arbitrage opportunities created by the ability to
purchase or redeem creation Shares at their NAV, which should ensure
that Shares will not trade at a material discount or premium in
relation to their NAV.
    In addition, the Exchange states that, according to the Adviser,
there will not be any significant impacts to the settlement or
operational aspects of the Fund's arbitrage mechanism due to the use of
derivatives. Because derivatives generally are not eligible for in-kind
transfer, they will typically be substituted with a ``cash in lieu''
amount when the Fund processes purchases or redemptions of creation
units in-kind.

III. Discussion and Commission Findings

    After careful review, the Commission finds that the Exchange's
proposal to list and trade the Shares is consistent with the Act and
the rules and regulations thereunder applicable to a national
securities exchange.\25\ In particular, the Commission finds that the
proposed rule change is consistent with Section 6(b)(5) of the Act,\26\
which requires, among other things, that the Exchange's rules be
designed to prevent fraudulent and manipulative acts and practices,
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.
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    \25\ 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).
    \26\ 15 U.S.C. 78f(b)(5).
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    The Commission also finds that the proposal to list and trade the
Shares on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of
the Act,\27\ which sets forth Congress' finding that it is in the
public interest and appropriate for the protection of investors and the
maintenance of fair and orderly markets to assure the availability to
brokers, dealers, and investors of information with respect to
quotations for, and transactions in, securities. Quotation and last-
sale information for the Shares and for portfolio holdings of the Fund
that are U.S. exchange listed, including common stocks, preferred
stocks, warrants, rights, ETFs, REITs, and U.S. exchange-traded ADRs
will be available via the Consolidated Tape Association (``CTA'') high
speed line. Quotation and last-sale information for such U.S. exchange-
listed securities, as well as futures, also will be available from the
exchange on which they are listed. Quotation and last-sale information
for exchange-listed options cleared via the Options Clearing
Corporation will be available via the Options Price Reporting
Authority, and quotation and last-sale information for non-U.S. equity
securities (including GDRs and EDRs) will be available from the
exchanges on which they trade and from major market data vendors, as
applicable.
---------------------------------------------------------------------------

    \27\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
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    In addition, the Intra-day Indicative Value (``IIV''), which is the
Portfolio Indicative Value, as defined in NYSE Arca Equities Rule
8.600(c)(3), will be widely disseminated by one or more major market
data vendors at least every 15 seconds during the Core Trading
Session.\28\ According to the Exchange, a third party market data
provider will calculate the IIV for the Fund. The third party market
data provider may use market quotes if available or may fair value
securities against proxies (such as swap or yield curves).
---------------------------------------------------------------------------

    \28\ According to the Exchange, several major market data
vendors display and/or make widely available IIVs taken from the CTA
or other data feeds.
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    With respect to specific derivatives:
     NDFs and foreign forward currency contracts may be valued
intraday using market quotes, or another proxy as determined to be
appropriate by the third party market data provider.
     Futures may be valued intraday using the relevant futures
exchange data, or another proxy as determined to be appropriate by the
third party market data provider.
     CDS and CDS indices swaps may be valued using intraday
data from market

vendors, or based on underlying asset price, or another proxy as
determined to be appropriate by the third party market data provider.
     Total return swaps may be valued intraday using the
underlying asset price, or another proxy as determined to be
appropriate by the third party market data provider.
     Exchange-listed options may be valued intraday using the
relevant exchange data, or another proxy as determined to be
appropriate by the third party market data provider.
     OTC options may be valued intraday through option
valuation models (e.g., Black-Scholes) or using exchange traded options
as a proxy, or another proxy as determined to be appropriate by the
third party market data provider.
    On each business day, before commencement of trading in Shares in
the Core Trading Session (normally, 9:30 a.m. to 4:00 p.m., Eastern
Time or ``E.T.'') on the Exchange, the Adviser will disclose on the
Fund's Web site the Disclosed Portfolio for the Fund as defined in NYSE
Arca Equities Rule 8.600(c)(2) that will form the basis for the Fund's
calculation of NAV at the end of the business day.\29\ According to the
Exchange, the Fund's disclosure of derivative positions in the
Disclosed Portfolio will include information that market participants
can use to value these positions intraday. On a daily basis, the
Adviser will disclose on the Fund's Web site the following information
regarding each portfolio holding, as applicable to the type of holding:
Ticker symbol, CUSIP number or other identifier, if any; a description
of the holding (including the type of holding, such as the type of
swap); the identity of the security, index, or other asset or
instrument underlying the holding, if any; for options, the option
strike price; quantity held (as measured by, for example, par value,
notional value, or number of shares, contracts, or units); maturity
date, if any; coupon rate, if any; effective date, if any; market value
of the holding; and the percentage weighting of the holding in the
Fund's portfolio. The Web site information will be publicly available
at no charge.
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    \29\ Under accounting procedures to be followed by the Fund,
trades made on the prior business day (``T'') will be booked and
reflected in NAV on the current business day (``T+1''). Accordingly,
the Fund will be able to disclose at the beginning of the business
day the portfolio that will form the basis for the NAV calculation
at the end of the business day.
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    The NAV of Shares, under normal market conditions, will be
calculated each business day as of the close of the Exchange, which is
typically 4:00 p.m. E.T. On occasion, the Exchange will close before
4:00 p.m. E.T. When that happens, NAV will be calculated as of the time
the Exchange closes.\30\
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    \30\ Securities for which market quotations are readily
available will generally be valued at their current market value.
Other securities and assets, including securities for which market
quotations are not readily available or market quotations are
determined not to be reliable; or, if their value has been
materially affected by events occurring after the close of trading
on the exchange or market on which the security is principally
traded but before the Fund's NAV is calculated, may be valued at
fair value in accordance with policies and procedures adopted by the
Trust's Board of Trustees. Fair value represents a good faith
determination of the value of a security or other asset based upon
specifically applied procedures. Fair valuation may require
subjective determinations. See Notice, supra note 3, 81 FR at 44344
(describing additional details with respect to the Fund's NAV
valuation methodology).
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    Price information for OTC common stocks (including certain OTC
ADRs), preferred stocks, warrants, rights, and CVRs will be available
from one or more major market data vendors or broker-dealers in the
securities. Quotation information for OTC options, cash equivalents,
swaps, money market funds, non-exchange-listed investment company
securities (other than money market funds), Rule 144A securities, U.S.
Government obligations, U.S. Government agency obligations, sovereign
obligations, corporate debt, and reverse repurchase agreements may be
obtained from brokers and dealers who make markets in such securities
or through nationally recognized pricing services through subscription
agreements. The U.S. dollar value of foreign securities, instruments,
and currencies can be derived by using foreign currency exchange rate
quotations obtained from nationally recognized pricing services.
Forwards and spot currency price information will be available from
major market data vendors. The Fund's Web site will include a form of
the prospectus for the Fund and additional data relating to NAV and
other applicable quantitative information.
    The Commission believes that the proposal to list and trade the
Shares is reasonably designed to promote fair disclosure of information
that may be necessary to price the Shares appropriately and to prevent
trading when a reasonable degree of transparency cannot be assured. The
Exchange will obtain a representation from the issuer of the Shares
that the NAV per Share will be calculated daily and that the NAV and
the Disclosed Portfolio will be made available to all market
participants at the same time. Trading in Shares of the Fund will be
halted if the circuit breaker parameters in NYSE Arca Equities Rule
7.12 have been reached or because of market conditions or for reasons
that, in the view of the Exchange, make trading in the Shares
inadvisable,\31\ and trading in the Shares will be subject to NYSE Arca
Equities Rule 8.600(d)(2)(D), which sets forth additional circumstances
under which Shares of the Fund may be halted.
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    \31\ These reasons may include: (1) The extent to which trading
is not occurring in the securities or financial instruments
comprising the Disclosed Portfolio of the Fund; or (2) whether other
unusual conditions or circumstances detrimental to the maintenance
of a fair and orderly market are present. With Respect to trading
halts, the Exchange may consider all relevant factors in exercising
its discretion to halt or suspend trading in the Shares of the Fund.
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    The Exchange represents that it has a general policy prohibiting
the distribution of material, non-public information by its employees.
In addition, Commentary .06 to NYSE Arca Equities Rule 8.600 further
requires that personnel who make decisions on the open-end fund's
portfolio composition must be subject to procedures designed to prevent
the use and dissemination of material, non-public information regarding
the open-end fund's portfolio. The Exchange represents that the Adviser
is not registered as a broker-dealer, but is affiliated with a broker-
dealer and has implemented and will maintain a fire wall with respect
to such broker-dealer affiliate regarding access to information
concerning the composition of, and changes to, the portfolio.\32\ The
Commission also notes that, pursuant to NYSE Arca Equities Rule
8.600(d)(2)(B)(ii), the ``Reporting Authority'' that provides the
Disclosed Portfolio must implement and maintain, or be subject to,
procedures designed to

prevent the use and dissemination of material, non-public information
regarding the actual components of the portfolio.\33\
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    \32\ See supra note 12. The Exchange further notes that an
investment adviser to an open-end fund is required to be registered
under the Investment Advisers Act of 1940 (``Advisers Act''). As a
result, the Adviser and its related personnel are subject to the
provisions of Rule 204A-1 under the Advisers Act relating to codes
of ethics. This Rule requires investment advisers to adopt a code of
ethics that reflects the fiduciary nature of the relationship to
clients as well as compliance with other applicable securities laws.
Accordingly, procedures designed to prevent the communication and
misuse of non-public information by an investment adviser must be
consistent with Rule 204A-1 under the Advisers Act. In addition,
Rule 206(4)-7 under the Advisers Act makes it unlawful for an
investment adviser to provide investment advice to clients unless
such investment adviser has (i) adopted and implemented written
policies and procedures reasonably designed to prevent violation, by
the investment adviser and its supervised persons, of the Advisers
Act and the Commission rules adopted thereunder; (ii) implemented,
at a minimum, an annual review regarding the adequacy of the
policies and procedures established pursuant to subparagraph (i)
above and the effectiveness of their implementation; and (iii)
designated an individual (who is a supervised person) responsible
for administering the policies and procedures adopted under
subparagraph (i) above.
    \33\ ``Reporting Authority'' is defined in NYSE Arca Equites
Rule (c)(4).
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    Prior to the commencement of trading, the Exchange will inform its
Equity Trading Permit Holders in an Information Bulletin (``Bulletin'')
of the special characteristics and risks associated with trading the
Shares. The Exchange represents that that trading in the Shares will be
subject to the existing trading surveillances administered by the
Exchange as well as cross-market surveillances administered by the
Financial Industry Regulatory Authority (``FINRA'') on behalf of the
Exchange, which are designed to detect violations of Exchange rules and
applicable federal securities laws.\34\
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    \34\ The Exchange represents that FINRA conducts cross-market
surveillances on behalf of the Exchange pursuant to a regulatory
services agreement, and the Exchange is responsible for FINRA's
performance under this regulatory services agreement.
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    The Exchange represents that it deems the Shares to be equity
securities, thus rendering the trading of the Shares subject to the
Exchange's existing rules governing the trading of equity securities.
    In support of this proposal, the Exchange has made the following
additional representations:
    (1) The Shares will conform to the initial and continued listing
criteria under NYSE Arca Equities Rule 8.600.
    (2) The Exchange has appropriate rules to facilitate transactions
in the Shares during all trading sessions.
    (3) The Exchange's surveillance procedures are adequate to properly
monitor Exchange trading of the Shares in all trading sessions and to
deter and detect violations of Exchange rules and applicable federal
securities laws.
    (4) The Exchange, or FINRA, on behalf of the Exchange, or both,
will communicate as needed regarding trading in the Shares, certain
exchange-listed equity securities (including Depositary Receipts, ETFs,
REITs, common and preferred stocks, common stock into which convertible
securities can be converted, warrants, rights, certain futures, and
certain exchange-traded options with other markets and other entities
that are members of the ISG, and the Exchange or FINRA, on behalf of
the Exchange, or both, may obtain trading information regarding trading
such securities and financial instruments from such markets and other
entities. In addition, the Exchange may obtain information regarding
trading in such securities and financial instruments from markets and
other entities that are members of ISG or with which the Exchange has
in place a comprehensive surveillance sharing agreement.\35\ FINRA, on
behalf of the Exchange, is able to access, as needed, trade information
for certain fixed income securities held by the Fund reported to
FINRA's Trade Reporting and Compliance Engine.
---------------------------------------------------------------------------

    \35\ For a list of the current members of ISG, see
www.isgportal.org. The Exchange notes that not all components of the
Disclosed Portfolio for the Fund may trade on markets that are
members of ISG or with which the Exchange has in place a
comprehensive surveillance sharing agreement.
---------------------------------------------------------------------------

    (5) Not more than 10% of the net assets of the Fund, in the
aggregate, invested in equity securities (other than mutual fund
shares) shall consist of equity securities, including common stock into
which convertible securities can be converted and Depositary Receipts,
whose principal market is not a member of the ISG or is a market with
which the Exchange does not have a comprehensive surveillance sharing
agreement. In addition, not more than 10% of the net assets of the Fund
in the aggregate invested in futures contracts or exchange-traded
options shall consist of futures contracts or options whose principal
market is not a member of ISG or is a market with which the Exchange
does not have a comprehensive surveillance sharing agreement.
    (6) Prior to the commencement of trading, the Exchange will inform
its Equity Trading Permit Holders in a Bulletin of the special
characteristics and risks associated with trading the Shares.
Specifically, the Bulletin will discuss the following: (a) the
procedures for purchases and redemptions of Shares in Creation Unit
aggregations (and that Shares are not individually redeemable); (b)
NYSE Arca Equities Rule 9.2(a), which imposes a duty of due diligence
on its Equity Trading Permit Holders to learn the essential facts
relating to every customer prior to trading the Shares; (c) the risks
involved in trading the Shares during the Opening and Late Trading
Sessions when an updated IIV will not be calculated or publicly
disseminated; (d) how information regarding the IIV and the Disclosed
Portfolio is disseminated; (e) the requirement that Equity Trading
Permit Holders deliver a prospectus to investors purchasing newly
issued Shares prior to or concurrently with the confirmation of a
transaction; and (f) trading information. The Bulletin will also
discuss any exemptive, no-action, and interpretive relief granted by
the Commission from any rules under the Act.
    (7) For initial and continued listing, the Fund must be in
compliance with Rule 10A-3 under the Act.\36\
---------------------------------------------------------------------------

    \36\ See 17 CFR 240.10A-3.
---------------------------------------------------------------------------

    (8) Exchange-listed and traded common stocks, preferred stocks,
warrants and rights of U.S. corporations, and U.S. REITs will be traded
on U.S. national securities exchanges. In addition, no more than 10% of
the net assets of the Fund will be invested in Depositary Receipts that
are not exchange-listed, and the common stock into which convertible
securities holdings can be converted will be exchange-traded.
    (9) The ETFs in which the Fund may invest will be registered under
the 1940 Act and include Investment Company Units (as described in NYSE
Arca Equities Rule 5.2(j)(3)); Portfolio Depositary Receipts (as
described in NYSE Arca Equities Rule 8.100); and Managed Fund Shares
(as described in NYSE Arca Equities Rule 8.600). Such ETFs all will be
listed and traded in the U.S. on registered exchanges. While the Fund
may invest in inverse ETFs, the Fund will not invest in leveraged or
inverse leveraged (e.g., 2X, -2X, 3X, or -3X) ETFs.
    (10) The Adviser expects that, under normal market conditions, the
Fund will invest at least 75% of its corporate debt securities in
issuances that have at least $100,000,000 par amount outstanding in
developed countries, or at least $200,000,000 par amount outstanding in
emerging market countries.
    (11) The Fund will limit its investments in currencies to those
currencies with a minimum average daily foreign exchange turnover of
USD $1 billion as determined by the BIS Triennial Central Bank Survey.
    (12) The Fund may invest no more than 5% of its assets in equity
and debt securities that are restricted securities (Rule 144A
securities), in addition to Rule 144A securities deemed illiquid by the
Adviser. In addition, under normal market conditions, the Fund may
invest no more than 5% of its assets, in the aggregate, in OTC common
stocks, preferred stocks, warrants, rights, and CVRs of U.S. and
foreign corporations (including emerging market securities).
    (13) The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets (calculated at the time of investment),
including Rule 144A securities deemed illiquid by the Adviser,
consistent with Commission guidance. The Fund will monitor its
portfolio liquidity on an ongoing basis to determine whether, in light
of current circumstances, an adequate level of

liquidity is being maintained, and will consider taking appropriate
steps in order to maintain adequate liquidity if, through a change in
values, net assets, or other circumstances, more than 15% of the Fund's
net assets are held in illiquid assets. Illiquid assets include
securities subject to contractual or other restrictions on resale and
other instruments that lack readily available markets as determined in
accordance with Commission staff guidance.
    (14) The Fund's investments, including derivatives, will be
consistent with the Fund's investment objective and will not be used to
enhance leverage (although certain derivatives may result in leverage).
That is, while the Fund will be permitted to borrow as permitted under
the 1940 Act, the Fund's investments will not be used to seek
performance that is the multiple or inverse multiple (i.e., 2Xs and
3Xs) of the Fund's primary broad-based securities benchmark index (as
defined in Form N-1A).
    (15) Investments in derivative instruments will be made in
accordance with the 1940 Act and consistent with the Fund's investment
objective and policies. To limit the potential risk associated with
such transactions, the Fund will segregate or ``earmark'' assets
determined to be liquid by the Adviser in accordance with procedures
established by the Trust's Board of Trustees and in accordance with the
1940 Act (or, as permitted by applicable regulation, enter into certain
offsetting positions) to cover its obligations under derivative
instruments. These procedures have been adopted consistent with Section
18 of the 1940 Act and related Commission guidance. In addition, the
Fund will include appropriate risk disclosure in its offering
documents, including leveraging risk. Leveraging risk is the risk that
certain transactions of the Fund, including the Fund's use of
derivatives, may give rise to leverage, causing the Fund to be more
volatile than if it had not been leveraged.\37\
---------------------------------------------------------------------------

    \37\ To mitigate leveraging risk, the Adviser will segregate or
``earmark'' liquid assets or otherwise cover the transactions that
may give rise to such risk.
---------------------------------------------------------------------------

    The Exchange also represents that all statements and
representations made in this filing regarding (a) the description of
the portfolio, (b) limitations on portfolio holdings or reference
assets, or (c) the applicability of Exchange rules and surveillance
procedures shall constitute continued listing requirements for listing
the Shares of the Fund on the Exchange.
    The issuer has represented to the Exchange that it will advise the
Exchange of any failure by the Fund to comply with the continued
listing requirements, and, pursuant to its obligations under Section
19(g)(1) of the Act, the Exchange will monitor for compliance with the
continued listing requirements.\38\ If the Fund is not in compliance
with the applicable listing requirements, the Exchange will commence
delisting procedures under NYSE Arca Equities Rule 5.5(m).
---------------------------------------------------------------------------

    \38\ The Commission notes that certain other proposals for the
listing and trading of Managed Fund Shares include a representation
that the exchange will ``surveil'' for compliance with the continued
listing requirements. See, e.g., Securities Exchange Act Release No.
78005 (Jun. 7, 2016), 81 FR 38247 (Jun. 13, 2016) (SR-BATS-2015-
100). In the context of this representation, it is the Commission's
view that ``monitor'' and ``surveil'' both mean ongoing oversight of
a fund's compliance with the continued listing requirements.
Therefore, the Commission does not view ``monitor'' as a more or
less stringent obligation than ``surveil'' with respect to the
continued listing requirements.
---------------------------------------------------------------------------

    This approval order is based on all of the Exchange's
representations, including those set forth above and in the Notice,\39\
Amendment Nos. 1, 2 and 3 to the proposed rule change,\40\ and the
Exchange's description of the Fund. The Commission notes that the Fund
and the Shares must comply with the requirements of NYSE Arca Equities
Rule 8.600 to be listed and traded on the Exchange on an initial and
continued basis.
---------------------------------------------------------------------------

    \39\ See supra note 3.
    \40\ See supra notes 4, 7, and 8.
---------------------------------------------------------------------------

    For the foregoing reasons, the Commission finds that the proposed
rule change, as modified by Amendment Nos. 1, 2, and 3 thereto, is
consistent with Section 6(b)(5) of the Act \41\ and the rules and
regulations thereunder applicable to a national securities exchange.
---------------------------------------------------------------------------

    \41\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\42\ that the proposed rule change (SR-NYSEArca-2016-82), as
modified by Amendment Nos. 1, 2, and 3 thereto, be, and it hereby is,
approved.
---------------------------------------------------------------------------

    \42\ Id.
    \43\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\43\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-31683 Filed 12-29-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 69 (Wednesday, April 10, 2019)]
[Notices]
[Pages 14444-14445]
[FR Doc No: 2019-07088]

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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

[Docket No. PHMSA-2018-0100; Notice No. 2019-03]

Hazardous Materials: Emergency Waiver No. 13

AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA),
DOT.

ACTION: Notice of emergency waiver order.

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SUMMARY: PHMSA is issuing an emergency waiver order to persons

conducting operations under the direction of Environmental Protection
Agency (EPA) Region 7 or United States Coast Guard (USCG) Eighth
District within the Nebraska and Iowa disaster area. The Waiver is
granted to support the EPA and USCG in taking appropriate actions to
prepare for, respond to, and recover from a threat to public health,
welfare, or the environment caused by actual or potential oil and
hazardous materials incidents resulting from the Nebraska and Iowa
disasters. This Waiver Order is effective immediately and shall remain
in effect for 60 days from the date of issuance.

FOR FURTHER INFORMATION CONTACT: Adam Horsley, Deputy Assistant Chief
Counsel for Hazardous Materials Safety, Pipeline and Hazardous
Materials Safety Administration, telephone:<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: In accordance with the provisions of 49
U.S.C. 5103(c), the Administrator for PHMSA hereby declares that an
emergency exists that warrants issuance of a Waiver of the Hazardous
Materials Regulations (HMR, 49 CFR parts 171-180) to persons conducting
operations under the direction of EPA Region 7 or USCG Eighth District
within the Nebraska and Iowa disaster areas. The Waiver is granted to
support the EPA and USCG in taking appropriate actions to prepare for,
respond to, and recover from a threat to public health, welfare, or the
environment caused by actual or potential oil and hazardous materials
incidents resulting from the Nebraska and Iowa disasters.
    On March 21, 2019, the President issued an Emergency Declaration
for the Nebraska Severe Winter Storm, Straight-line Winds, And Flooding
(DR-4420) for the counties of Banner, Box Butte, Butler, Cass, Cuming,
Dodge, Douglas, Fillmore, Gage, Jefferson, Morrill, Polk, Sarpy,
Saunders, Sheridan, Sioux, Thurston, and Wayne. On March 23, 2019, the
President issued an Emergency Declaration for Iowa Severe Storms and
Flooding (DR-4421) for the counties of Adair, Allamakee, Audubon,
Boone, Bremer, Buena Vista, Butler, Calhoun, Carroll, Cass, Cherokee,
Clay, Crawford, Dallas, Decatur, Dickinson, Emmet, Fayette, Franklin,
Fremont, Greene, Guthrie, Hamilton, Hancock, Hardin, Harrison, Howard,
Humboldt, Ida, Iowa, Jasper, Kossuth, Lyon, Madison, Mahaska, Marshall,
Mills, Monona, Montgomery, O'Brien, Osceola, Page, Plymouth,
Pocahontas, Polk, Pottawattamie, Sac, Shelby, Sioux, Tama, Union,
Webster, Winnebago, Winneshiek, Woodbury, and Wright. This Waiver Order
covers all areas identified in the declaration, as amended. Pursuant to
49 U.S.C. 5103(c), PHMSA has authority delegated by the Secretary (49
CFR 1.97(b)(3)) to waive compliance with any part of the HMR provided
that the grant of the waiver is: (1) In the public interest; (2) not
inconsistent with the safety of transporting hazardous materials; and
(3) necessary to facilitate the safe movement of hazardous materials
into, from, and within an area of a major disaster or emergency that
has been declared under the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C. 5121 et seq.).
    Given the continuing impacts caused by the Nebraska and Iowa
disasters, PHMSA's Administrator has determined that regulatory relief
is in the public interest and necessary to ensure the safe
transportation in commerce of hazardous materials while the EPA and
USCG execute their recovery and cleanup efforts in the disaster areas.
Specifically, PHMSA's Administrator finds that issuing this Waiver
Order will allow the EPA and USCG to conduct their Emergency Support
Function #10 response activities under the National Response Framework
to safely remove, transport, and dispose of hazardous materials. By
execution of this Waiver Order, persons conducting operations under the
direction of EPA Region 7 or USCG Eighth District within the Nebraska
and Iowa disaster areas are authorized to offer and transport non-
radioactive hazardous materials under alternative safety requirements
imposed by EPA Region 7 or USCG Eighth District when compliance with
the HMR is not practicable. Under this Waiver Order, non-radioactive
hazardous materials may be transported to staging areas within 50 miles
of the point of origin. Further transportation of the hazardous
materials from staging areas must be in full compliance with the HMR.
    This Waiver Order is effective immediately and shall remain in
effect for 60 days from the date of issuance.

    Issued in Washington, DC, on March 29, 2019.
Howard R. Elliott,
Administrator, Pipeline and Hazardous Materials Safety Administration.
[FR Doc. 2019-07088 Filed 4-9-19; 8:45 am]
 BILLING CODE 4919-60-P