[Federal Register Volume 79, Number 168 (Friday, August 29, 2014)]
[Proposed Rules]
[Pages 51515-51517]
[FR Doc No: 2014-20688]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R03-OAR-2014-0475; FRL-9915-83-Region 3]

Approval and Promulgation of Air Quality Implementation Plans;
Pennsylvania; Allegheny County's Adoption of Control Techniques
Guidelines for Four Industry Categories for Control of Volatile Organic
Compound Emissions

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to
conditionally approve revisions to the Pennsylvania State
Implementation Plan (SIP) submitted by the Commonwealth of Pennsylvania
on behalf of the Allegheny County Health Department (ACHD). This SIP
revision includes amendments to the ACHD Rules and Regulations, Article
XXI, Air Pollution Control, and meets the requirement to adopt
Reasonably Available Control Technology (RACT) for sources covered by
EPA's Control Techniques Guidelines (CTG) standards for the following
categories: miscellaneous metal and/or plastic parts surface coating
processes, automobile and light-duty truck assembly coatings,
miscellaneous industrial adhesives, and fiberglass boat manufacturing
materials. Upon review of the submittal, EPA found that the average
monomer volatile organic compound (VOC) content limits were referenced
but not included in the regulation for fiberglass boat manufacturing
materials. ACHD has committed to revising the regulation and submitting
the table of VOC content limits for fiberglass boat manufacturing
materials to EPA in order to address specific RACT requirements for
Allegheny County. EPA is, therefore, proposing conditional approval of
the revisions to the Pennsylvania SIP in accordance with the
requirements of the Clean Air Act (CAA).

DATES: Written comments must be received on or before September 29,
2014.

ADDRESSES: Submit your comments, identified by Docket ID Number EPA-

R03-OAR-2014-0475 by one of the following methods:
    A. www.regulations.gov. Follow the on-line instructions for
submitting comments.
    B. Email<EMAIL_ADDRESS>    C. Mail: EPA-R03-OAR-2014-0475, Cristina Fernandez, Associate
Director, Office of Air Program Planning, Mailcode 3AP30, U.S.
Environmental Protection Agency, Region III, 1650 Arch Street,
Philadelphia, Pennsylvania 19103.
    D. Hand Delivery: At the previously-listed EPA Region III address.
Such deliveries are only accepted during the Docket's normal hours of
operation, and special arrangements should be made for deliveries of
boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-R03-OAR-
2014-0475. EPA's policy is that all comments received will be included
in the public docket without change, and may be made available online
at www.regulations.gov, including any personal information provided,
unless the comment includes information claimed to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Do not submit information that you consider to
be CBI or otherwise protected through www.regulations.gov or email. The
www.regulations.gov Web site is an ``anonymous access'' system, which
means EPA will not know your identity or contact information unless you
provide it in the body of your comment. If you send an email comment
directly to EPA without going through www.regulations.gov, your email
address will be automatically captured and included as part of the
comment that is placed in the public docket and made available on the
Internet. If you submit an electronic comment, EPA recommends that you
include your name and other contact information in the body of your
comment and with any disk or CD-ROM you submit. If EPA cannot read your
comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses.
    Docket: All documents in the electronic docket are listed in the
www.regulations.gov index. Although listed in the index, some
information is not publicly available, i.e., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available either electronically in www.regulations.gov or
in hard copy during normal business hours at the Air Protection
Division, U.S. Environmental Protection Agency, Region III, 1650 Arch
Street, Philadelphia, Pennsylvania 19103. Copies of the State submittal
are available at the Allegheny County Health Department, Bureau of
Environmental Quality, Division of Air Quality, 301 39th Street,
Pittsburgh, Pennsylvania 15201 and at the Pennsylvania Department of
Environmental Protection, Bureau of Air Quality Control, P.O. Box 8468,
400 Market Street, Harrisburg, Pennsylvania 17105.

FOR FURTHER INFORMATION CONTACT: Irene Shandruk,<PHONE_NUMBER>, or by
email at<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Background

    Section 172(c)(1) of the CAA provides that SIPs for nonattainment
areas must include reasonably available control measures (RACM),
including RACT, for sources of emissions. Section 182(b)(2)(A) provides
that for certain nonattainment areas, states must revise their SIP to
include RACT for sources of VOC emissions covered by a CTG document
issued after November 15, 1990 and prior to the area's date of
attainment. EPA defines RACT as ``the lowest emission limitation that a
particular source is capable of meeting by the application of control
technology that is reasonably available considering technological and
economic feasibility.'' 44 FR 53761 (September 17, 1979).
    CTGs are documents issued by EPA intended to provide state and
local air pollution control authorities information to assist them in
determining RACT for VOC from various sources. Section 183(e)(3)(c)
provides that EPA may issue a CTG in lieu of a national regulation as
RACT for a product category where EPA determines that the CTG will be
substantially as effective as regulations in reducing emissions of VOC
in ozone nonattainment areas. The recommendations in the CTG are based
upon available data and information and may not apply to a particular
situation based upon the circumstances. States can follow the CTG and
adopt state regulations to implement the recommendations contained
therein, or they can adopt alternative approaches. In either case,
states must submit their RACT rules to EPA for review and approval as
part of the SIP process.
    In 1977 and 1978, EPA published CTGs for miscellaneous metal and
plastic parts surface coatings, automobile and light-duty truck
assembly coatings, miscellaneous industrial adhesives, and fiberglass
boat manufacturing materials. After reviewing the 1977/1978 CTGs for
these industries, conducting a review of currently existing state and
local VOC emission reduction approaches for these industries, and
taking into account any information that has become available since
then, EPA developed new CTGs entitled Control Techniques Guidelines for
Miscellaneous Metal and Plastic Parts Coatings (Publication No. EPA
453/R-08-003; September 2008); Control Techniques Guidelines for
Automobile and Light-duty Assembly Coatings (Publication No. EPA 453/R-
08-006; September 2008); Control Techniques Guidelines for
Miscellaneous Industrial Adhesives (Publication No. EPA 453/R-08-005;
September 2008); Control Techniques Guidelines for Fiberglass Boat
Manufacturing Materials (Publication No. EPA 453/R-08-004; September
2008).

III. Summary of SIP Revision

    On November 15, 2013, Pennsylvania Department of Environmental
Protection (PADEP) submitted to EPA on behalf of ACHD a SIP revision
concerning the adoption of the EPA CTGs for miscellaneous metal and/or
plastic parts surface coating processes, automobile and light-duty
truck assembly coatings, miscellaneous industrial adhesives, and
fiberglass boat manufacturing materials in Allegheny County. Allegheny
County is adopting EPA's CTG standards for miscellaneous metal and/or
plastic parts surface coating processes, automobile and light-duty
truck assembly coatings, miscellaneous industrial adhesives, and
fiberglass boat manufacturing materials. These regulations are
contained in the Allegheny County Health Department (ACHD) Rules and
Regulations, Article XXI, Air Pollution Control sections 2105.83,
2105.84, 2105.85, and 2105.86 in order to: (1) Establish applicability
for miscellaneous metal and/or plastic parts surface coating processes,
automobile and light-duty truck assembly coatings, miscellaneous
industrial adhesives, and fiberglass boat manufacturing materials; (2)
establish exemptions; (3) establish record-keeping and work practice
requirements; and (4) establish emission limitations. Upon review of
the November 15, 2013 submittal, EPA found that a table of average
monomer VOC content limit for fiberglass boat manufacturing materials
was referenced, however, the table was

erroneously not included in the regulation. Pursuant to section
110(k)(4) of the CAA, PADEP submitted on behalf of ACHD a letter dated
July 16, 2014 committing to submit a SIP revision to EPA addressing
this error in order to satisfy the RACT requirements under the 8-hour
ozone standard for Allegheny County. More detailed information on these
provisions can be found in the technical support document located in
the docket prepared for this rulemaking action.

IV. Proposed Action

    EPA is proposing conditional approval of the Commonwealth of
Pennsylvania SIP revision submitted on November 15, 2013, which
consists of amendments to the ACHD Rules and Regulations, Article XXI,
Air Pollution Control for adopting RACT for sources covered by EPA's
CTG standards for the following categories: Miscellaneous metal and/or
plastic parts surface coating processes, automobile and light-duty
truck assembly coatings, miscellaneous industrial adhesives, and
fiberglass boat manufacturing materials. Pursuant to section 110(k)(4)
of the CAA, this conditional approval is based upon a letter from PADEP
on behalf of ACHD dated July 16, 2014 committing to submit to EPA, no
later than twelve months from EPA's final conditional approval of
ACHD's adoption of CTGs for miscellaneous metal and/or plastic parts
surface coating processes, automobile and light-duty truck assembly
coatings, miscellaneous industrial adhesives, and fiberglass boat
manufacturing materials, an additional SIP revision to address the
erroneous deficiency in the current regulation for fiberglass boat
manufacturing materials. The SIP revision, to be submitted by PADEP on
behalf of ACHD, will include a table of monomer VOC content limits for
fiberglass boat manufacturing materials. Once EPA has determined that
ACHD has satisfied this condition, EPA shall remove the conditional
nature of its approval and Allegheny County's adoption of CTGs for
miscellaneous metal and/or plastic parts surface coating processes,
automobile and light-duty truck assembly coatings, miscellaneous
industrial adhesives, and fiberglass boat manufacturing materials will,
at that time, receive a full approval status. Should ACHD fail to meet
the condition specified above, the final conditional approval of
Allegheny County's CTGs for the above listed source categories will
convert to a disapproval. EPA is soliciting public comments on the
issues discussed in this document. These comments will be considered
before taking final action.

V. Statutory and Executive Order Reviews

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

List of Subjects in 40 CFR Part 52

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

    Authority: 42 U.S.C. 7401 et seq.

    Dated: August 14, 2014.
William C. Early,
Acting Regional Administrator, Region III.
[FR Doc. 2014-20688 Filed 8-28-14; 8:45 am]
BILLING CODE 6560-50-P


UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation on June 25, 2003

NOTICE OF ACTION TAKEN -- DOCKET OST 2001-10009

________________________________________________________________________
________________________________________________________

This serves as notice to the public of the action described below, taken
by the Department official indicated (no additional confirming order
will be issued in this matter).

Application of    Alaska Airlines, Inc.  filed  6/20/03 for:

XX  Renewal of exemption for two years under 49 U.S.C. §40109 to
provide the following service:

Scheduled foreign air transportation of persons, property, and mail
between Los Angeles, California, and Cancun, Mexico.

Applicant rep:   Marshall S. Sinick<PHONE_NUMBER>    DOT Analyst:
Linda L. Lundell<PHONE_NUMBER>

D I S P O S I T I O N

XX  Granted, subject to conditions (See below).

The action above was effective when taken:    June 25, 2003 , through
June 25, 2005  .

Action taken by:   Paul L. Gretch, Director

		      Office of International Aviation

XX  Authority granted is consistent with the aviation agreement between
the United States and the Mexico.

Except to the extent exempted or waived, this authority is subject to
the terms, conditions, and limitations indicated:

XX  Holder’s certificates of public convenience and necessity

XX  Standard Exemption Conditions (attached)

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Special Conditions/Remarks:  The U.S.-Mexico exemption authority granted
is subject to the dormancy notice requirements set forth in condition 7
of Appendix A of Order 88-10-2.

We acted on this application without awaiting expiration of the 15-day
answer period with the consent of all parties served with the
application.

________________________________________________________________________
_____________________________

On the basis of data officially noticeable under Rule 24(g) of the
Department’s regulations, we found the applicant qualified to provide
the services authorized.

Under authority assigned by the Department in its regulations, 14 CFR
Part 385, we found that (1) our action was consistent with Department
policy; (2) grant of the application was consistent with the public
interest; and (3) grant of the authority would not constitute a major
regulatory action under the Energy Policy and Conservation Act of 1975.
 To the extent not granted, we denied all requests in the referenced
Docket.  We may amend, modify, or revoke the authority granted in this
Notice at any time without hearing at our discretion.

Persons entitled to petition the Department for review of the action set
forth in this Notice under the Department’s regulations, 14 CFR
§385.30, may file their petitions within ten (10) days after the date
of issuance of this Notice.  This action was effective when taken, and
the filing of a petition for review will not alter such effectiveness.

An electronic version of this document is available on the World Wide
Web at:

http://dms.dot.gov/reports_aviation.asp

APPENDIX

U.S. CARRIER

Standard Exemption Conditions

In the conduct of the operations authorized, the U.S. carrier
applicant(s) shall:

(1)  Hold at all times effective operating authority from the government
of each country served;

(2)  Comply with applicable requirements concerning oversales contained
in 14 CFR 250 (for scheduled operations, if authorized);

(3)  Comply with the requirements for reporting data contained in 14 CFR
241;

(4)  Comply with requirements for minimum insurance coverage, and for
certifying that coverage to the Department, contained in 14 CFR 205;

(5)  Except as specifically exempted or otherwise provided for in a
Department Order, comply with the requirements of 14 CFR 203, concerning
waiver of Warsaw Convention liability limits and defenses;

(6)  Comply with the applicable requirements of the Federal Aviation
Administration Regulations and with all applicable U.S. Government
requirements concerning security;1 and

(7)  Comply with such other reasonable terms, conditions, and
limitations required by the public interest as may be prescribed by the
Department of Transportation, with all applicable orders and regulations
of other U.S. agencies and courts, and with all applicable laws of the
United States.

The authority granted shall be effective only during the period when the
holder is in compliance with the conditions imposed above.

													6/2003

____________________________

1 To assure compliance with all applicable U.S. Government requirements
concerning security, the holder should, before commencing any new
service (including charter flights) to or from a foreign airport,
contact its Principal Security Inspector (PSI) to advise the PSI of its
plans and to find out whether the Transportation Security Administration
has determined that security is adequate to allow such airport(s) to be
served.


[Federal Register Volume 88, Number 160 (Monday, August 21, 2023)]
[Notices]
[Page 56821]
[FR Doc No: 2023-17943]

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ENVIRONMENTAL PROTECTION AGENCY

[CERCLA-04-2023-2526; FRL-10565-01-R4]

Mississippi Phosphates Corp. Superfund Site, Pascagoula,
Mississippi; Notice of Proposed Settlement

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed settlement agreement.

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SUMMARY: Under the Comprehensive Environmental Response, Compensation
and Liability Act (CERCLA), the United States Environmental Protection
Agency is proposing to enter into an Administrative Settlement
Agreement for Removal Action by Bona Fide Prospective Purchaser with
Seven Seas Terminals, LLC concerning the Mississippi Phosphates Corp.
Superfund Site. The settlement agreement addresses a removal action to
be performed at the site by Seven Seas Terminals, LLC, a Bona Fide
Prospective Purchaser.

DATES: The Agency will consider public comments on the proposed
settlement agreement until September 20, 2023. The Agency will consider
all comments received and may modify or withdraw its consent to the
proposed settlement agreement, if comments received disclose facts or
considerations which indicate that the proposed settlement agreement is
inappropriate, improper or inadequate.

ADDRESSES: Copies of the settlement are available from the Agency by
contacting Ms. Paula V. Painter, Program Analyst, using the contact
information provided in this notice.
    Comments may also be submitted by referencing the Site's name
through one of the following methods:

Internet: https://www.epa.gov/aboutepa/about-epa-region-4-southeast#r4-public-notices
Email: [email protected]

FOR FURTHER INFORMATION CONTACT: Paula V. Painter at<PHONE_NUMBER>.

Gregory Armstrong,
Acting Manager, Enforcement Branch, Superfund & Emergency Management
Division.
[FR Doc. 2023-17943 Filed 8-18-23; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 83, Number 92 (Friday, May 11, 2018)]
[Rules and Regulations]
[Pages 21886-21887]
[FR Doc No: 2018-10101]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[Docket Number USCG-2018-0290]
RIN 1625-AA00

Safety Zone; Cocos Lagoon, Merizo, GU

AGENCY: Coast Guard, DHS.

ACTION: Temporary final rule.

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SUMMARY: The Coast Guard is establishing a safety zone for navigable
waters within Cocos Lagoon. This safety zone will encompass the
designated swim course for the Cocos Crossing swim event in the waters
of Cocos Lagoon, Merizo, Guam. This safety zone is necessary to protect
all persons and vessels participating in this marine event from
potential safety hazards associated with vessel traffic in the area.
Race participants, chase boats, and organizers of the event will be
exempt from the safety zone. Entry of persons or vessels into the
safety zone is prohibited unless authorized by the Captain of the Port
Guam (COTP).

DATES: This rule is effective from 7 a.m. to 1 p.m. on May 27, 2018.

ADDRESSES: To view documents mentioned in this preamble as being
available in the docket, go to http://www.regulations.gov, type USCG-
2018-0290 in the ``SEARCH'' box and click ``SEARCH.'' Click on Open
Docket Folder on the line associated with this rule.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
call or email Chief Petty Officer Todd Wheeler, Sector Guam, U.S. Coast
Guard; telephone<PHONE_NUMBER>, Email [email protected].

SUPPLEMENTARY INFORMATION:

I. Table of Abbreviations

CFR Code of Federal Regulations
DHS Department of Homeland Security
FR Federal Register
NPRM Notice of proposed rulemaking
Sec.  Section
U.S.C. United States Code

II. Background Information and Regulatory History

    The Coast Guard is issuing this temporary 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 (NPRM)
with respect to this rule because doing so would be impracticable and
contrary to public interest. The specific date and time for the event
was not set with sufficient time to publish and request public comment
on the establishment of a safety zone. Thus, delaying the effective
date of this rule to allow for a comment period to run would be
impracticable because it would inhibit the Coast Guard's ability to
protect participants from hazards from vessel traffic.
    Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause
exists for making this rule effective less than 30 days after
publication in the Federal Register. Due to the date of notification
for the event and potential danger to the swim participants, delaying
the effective period of this safety zone would be contrary to public
interest.

III. Legal Authority and Need for Rule

    The Coast Guard is issuing this rule under authority in 33 U.S.C.
1231. The COTP has determined that potential hazards associated with
vessel traffic in the area of the Cocos Crossing swim event on May 27,
2018 will be a safety concern for participants and that all vessels are
to keep a 100-yard radius from event participants and support vessels.
The purpose of this rule is to ensure the safety of the participants
and the navigable waters in the safety zone before, during, and after
the scheduled event.

IV. Discussion of the Rule

    This rule establishes a safety zone for Cocos Crossing swim event
in the waters of Cocos Lagoon, Merizo, Guam. This event is scheduled to
take place from 7 a.m. to 1 p.m. on May 27, 2018. This safety zone is
necessary to protect all persons and vessels participating in this
marine event from potential safety hazards associated with vessel
traffic in the area. Race participants, chase boats and organizers of
the event will be exempt from the safety zone. Entry of persons or
vessels into this safety zone is prohibited unless authorized by the
COTP.

V. Regulatory Analyses

    We developed this rule after considering numerous statutes and
Executive orders related to rulemaking. Below we summarize our analyses
based on a number of these statutes and Executive orders, and we
discuss First Amendment rights of protestors.

A. Regulatory Planning and Review

    Executive Orders 12866 and 13563 direct agencies to assess the
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits. Executive Order 13771 directs agencies to control
regulatory costs through a budgeting process. This rule has not been
designated a ``significant regulatory action,'' under Executive Order
12866. Accordingly, this rule has not been reviewed by the Office of
Management and Budget (OMB), and pursuant to OMB guidance it is exempt
from the requirements of Executive Order 13771.
    This regulatory action determination is based the size, location,
duration, and time-of-day of the safety zone. Vessel traffic will be
able to safety transit around this safety zone which will impact a
small designated area of the Cocos Lagoon for 6 hours. Moreover, the
Coast Guard will issue Broadcast Notice to Mariners via VHF-FM marine

channel 16 about the zone and the rule allows vessels to seek
permission to enter the zone.

B. Impact on Small Entities

    The Regulatory Flexibility Act of 1980, 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.
    While some owners or operators of vessels intending to transit the
safety zone may be small entities, for the reasons stated in section
V.A above, this rule will not have a significant economic impact on any
vessel owner or operator.
    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Public Law 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.
    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.

C. Collection of Information

    This rule will not call for a new collection of information under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

D. Federalism and Indian Tribal Governments

    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 is consistent with the fundamental federalism
principles and preemption requirements described in Executive Order
13132.
    Also, 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. If
you believe this rule has implications for federalism or Indian tribes,
please contact the person listed in the FOR FURTHER INFORMATION CONTACT
section above.

E. 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.

F. Environment

    We have analyzed this rule under Department of Homeland Security
Directive 023-01 and Commandant Instruction M16475.1D, which guide the
Coast Guard in complying with the National Environmental Policy Act of
1969(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 puts in place
a safety zone lasting for 6 hours that will prohibit entry within 100-
yards of swim participants. It is categorically excluded from further
review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction
Manual 023-01-001-01, Rev. 01. A Record of Environmental Consideration
supporting this determination is available in the docket where
indicated under ADDRESSES.

G. 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.

List of Subjects in 33 CFR Part 165

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

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 165 as follows:

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS

0
1. The authority citation for part 165 continues to read as follows:

    Authority: 33 U.S.C 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1,
6.04-6, and 160.5; Department of Homeland Security Delegation No.
0170.1.

0
2. Add Sec.  165.T14-0290 to read as follows:

Sec.  165.T14-0290  Safety Zone; Cocos Lagoon, Merizo, GU.

    (a) Location. The following area, within the Guam Captain of the
Port (COTP) Zone (See 33 CFR 3.70-15) is a safety zone: All navigable
waters within a 100-yard radius of race participants in Merizo and
Cocos Lagoon. Race participants, chase boats and organizers of the
event will be exempt from the safety zone.
    (b) Effective dates. This rule is effective from 7 a.m. through 1
p.m. on May 27, 2018.
    (c) Enforcement. Any Coast Guard commissioned, warrant, or petty
officer, and any other COTP representative permitted by law, may
enforce this temporary safety zone.
    (d) Waiver. The COTP may waive any of the requirements of this rule
for any person, vessel, or class of vessel upon finding that
application of the safety zone is unnecessary or impractical for the
purpose of maritime security.
    (e) Penalties. Vessels or persons violating this rule are subject
to the penalties set forth in 33 U.S.C. 1232 and 50 U.S.C. 192.

    Dated: April 20, 2018.
Christopher M. Chase,
Captain, U.S. Coast Guard, Captain of the Port, Guam.
[FR Doc. 2018-10101 Filed 5-10-18; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 81, Number 84 (Monday, May 2, 2016)]
[Notices]
[Pages 26281-26285]
[FR Doc No: 2016-10153]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77714; File No. SR-NASDAQ-2016-028]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order
Granting Approval of Proposed Rule Change, as Modified by Amendment No.
1 Thereto, Relating to the Listing and Trading of the Shares of the
iSectors Post-MPT Growth ETF of ETFis Series Trust I

April 26, 2016.

I. Introduction

    On February 23, 2016, The NASDAQ Stock Market LLC (``Exchange'' or
``Nasdaq'') 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 iSectors Post-MPT
Growth ETF (``Fund''), a series of ETFis Series Trust I (``Trust''),
under Nasdaq Rule 5735. The proposed rule change was published for
comment in the Federal Register on March 11, 2016.\3\ On April 14,
2016, (a) the Exchange filed Amendment No. 1 to the proposed rule
change,\4\ and (b) 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\ The Commission received no comments on the proposed rule
change. This order grants approval of the proposed rule change, as
modified by Amendment No. 1 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. 77301 (Mar. 7,
2016), 81 FR 978 (``Notice'').
    \4\ In Amendment No. 1, the Exchange clarified that: (a) all
statements and representations made in the proposal regarding the
description of the portfolio, limitations on portfolio holdings or
reference assets, or the applicability of Exchange rules and
surveillance procedures shall constitute continued listing
requirements for listing the Shares on the Exchange; (b) the issuer
will advise the Exchange of any failure by the Fund to comply with
the continued listing requirements; (c) pursuant to its obligations
under Section 19(g)(1) of the Act, the Exchange will monitor for
compliance with the continued listing requirements; (d) if the Fund
is not in compliance with the applicable listing requirements, the
Exchange will commence delisting procedures under the Nasdaq 5800
Series; (e) the Fund will not invest in inverse or inverse leveraged
ETPs (as defined herein); and (f) no more than 25% of the Fund's
holdings will be invested in leveraged ETPs. Because Amendment No. 1
to the proposed rule change does not materially alter the substance
of the proposed rule change or raise novel regulatory issues,
Amendment No. 1 is not subject to notice and comment. Amendment No.
1 to the proposed rule change is available at: http://www.sec.gov/comments/sr-nasdaq-2016-028/nasdaq2016028-1.pdf.
    \5\ 15 U.S.C. 78s(b)(2).
    \6\ See Securities Exchange Act Release No. 77623 (Apr. 14,
2016), 81 FR 23333 (Apr. 20, 2016).
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II. Exchange's Description of the Proposal

    The Exchange proposes to list and trade the Shares of the Fund
under Nasdaq Rule 5735, which governs the listing and trading of
Managed Fund Shares on the Exchange. The Fund will be an actively
managed exchange-traded fund (``ETF''). The Shares will be offered by
the Trust,\7\ which is registered with the Commission as an investment
company and has filed a registration statement on Form N-1A
(``Registration Statement'') with the Commission.\8\ The Fund will be a
series of the Trust.
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    \7\ According to the Exchange, the Commission has issued an
order, upon which the Trust may rely, granting certain exemptive
relief under the Investment Company Act of 1940 (``1940 Act''). The
Exchange also states that, in compliance with Nasdaq Rule
5735(b)(5), which applies to Managed Fund Shares based on an
international or global portfolio, the Trust's application for
exemptive relief under the 1940 Act states that the Fund will comply
with the federal securities laws in accepting securities for
deposits and satisfying redemptions with redemption securities,
including that the securities accepted for deposits and the
securities used to satisfy redemption requests are sold in
transactions that would be exempt from registration under the
Securities Act of 1933. See Notice, supra note 3, 81 FR at 12990.
    \8\ See Notice, supra note 3, 81 FR at 12990. See Registration
Statement on Form N-1A for the Trust filed on December 2, 2015 (File
Nos. 333-187668 and 811-22819).
---------------------------------------------------------------------------

    Virtus ETF Advisers LLC will be the investment adviser
(``Adviser'') to the Fund. iSectors, LLC will be the investment sub-
adviser (``Sub-Adviser'') to the Fund. ETF Distributors LLC will be the
principal underwriter and distributor of the Fund's Shares. The Bank of
New York Mellon will act as the administrator, accounting agent,
custodian, and transfer agent to the Fund. The Exchange states that,
while the Adviser and Sub-Adviser are not registered as broker-
dealers,\9\ the Adviser (but not the Sub-Adviser) is affiliated with a
broker-dealer. The Exchange represents that the Adviser has implemented
a fire wall with respect to that broker-dealer regarding access to
information concerning the composition of, and changes to, the
portfolio, and personnel who make decisions on the Fund's portfolio
composition will be subject to procedures designed to prevent the use
and dissemination of material, non-public information regarding the
portfolio.\10\
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    \9\ See Notice, supra note 3, 81 FR at 12990-12991.
    \10\ The Exchange further represents that, in the event (a) the
Adviser or the Sub-Adviser registers as a broker dealer or becomes
newly affiliated with a broker-dealer, or (b) any new adviser or
sub-adviser is a registered broker-dealer or becomes affiliated with
another broker-dealer, it will implement a fire wall with respect to
its relevant personnel or broker-dealer affiliate, as applicable,
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 the portfolio. Id.
---------------------------------------------------------------------------

    The Exchange has made the following representations and statements
in describing the Fund and its investment strategy, including the
Fund's portfolio holdings and investment restrictions.\11\
---------------------------------------------------------------------------

    \11\ The Commission notes that additional information regarding
the Fund, the Trust, and the Shares, including investment
strategies, risks, creation and redemption procedures, fees,
portfolio holdings disclosure policies, calculation of net asset
value (``NAV''), distributions, and taxes, among other things, can
be found in the Notice and the Registration Statement, as
applicable. See Notice and Registration Statement, supra notes 3 and
8, respectively.
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A. Exchange's Description of the Fund's Principal Investments

    The Fund's investment objective will be to provide growth of
capital, with a secondary emphasis on capital preservation, independent
of individual market conditions. The Fund will seek to achieve its
investment objective by utilizing a long-only, tactically-managed
exposure to sectors of the U.S. equity market and U.S. fixed income
markets. To obtain this exposure, the Sub-Adviser will invest, under
normal market conditions,\12\ the Fund's assets in: (1) ETFs,\13\
exchange-traded notes (``ETNs''),\14\ and exchange-traded trusts that
hold commodities (``ETTs'') (ETFs, ETNs, and ETTs, collectively,
``ETPs''); \15\ (2) individually selected U.S. exchange-traded common
stocks (when the Sub-Adviser determines that investing in them would be
more efficient or otherwise advantageous to do so); (3) money market
funds; (4) U.S. treasuries; \16\ or (5) money market

instruments. To the extent that the Fund invests in ETPs or money
market funds to gain domestic exposure, the Fund is considered, in
part, a ``fund of funds.'' \17\
---------------------------------------------------------------------------

    \12\ The term ``under normal market conditions'' as used herein
includes, but is not limited to, the absence of adverse market,
economic, political or other conditions, including extreme
volatility or trading halts in the equity and fixed income markets
or the financial markets generally; operational issues causing
dissemination of inaccurate market information; or force majeure
type events such as systems failure, natural or man-made disaster,
act of God, armed conflict, act of terrorism, riot or labor
disruption, or any similar intervening circumstance. See Notice,
supra note 3, 81 FR at 12991.
    \13\ According to the Exchange, ETFs included in the Fund will
be listed and traded in the U.S. on registered exchanges. The Fund
may invest in the securities of ETFs in excess of the limits imposed
under the 1940 Act pursuant to exemptive orders obtained by other
ETFs and their sponsors from the Commission. The ETFs in which the
Fund may invest include Index Fund Shares (as described in Nasdaq
Rule 5705), Portfolio Depositary Receipts (as described in Nasdaq
Rule 5705), and Managed Fund Shares (as described in Nasdaq Rule
5735). The shares of ETFs in which a Fund may invest will be limited
to securities that trade in markets that are members of the
Intermarket Surveillance Group (``ISG''), which includes all U.S.
national securities exchanges, or are parties to a comprehensive
surveillance sharing agreement with the Exchange. See infra note 15.
    \14\ The ETNs are limited to those described in Nasdaq Rule
5710.
    \15\ The Fund may invest in the following ETPs: Trust
Certificates, Commodity-Based Trust Shares, Currency Trust Shares,
Commodity Index Trust Shares, Commodity Futures Trust Shares,
Partnership Units, Trust Units, and Managed Trust Securities (each
as described in Nasdaq Rule 5711); Paired Class Shares (as described
in Nasdaq Rule 5713); Trust Issued Receipts (as described in Nasdaq
Rule 5720); and Exchange-Traded Managed Fund Shares (as described in
Nasdaq Rule 5745). See Notice, supra note 3, at 12991. The Fund may
invest in leveraged ETPs (e.g., 2X or 3X), but will not invest in
inverse or inverse leveraged ETPs (e.g., -1X or -2X). In addition,
no more than 25% of the Fund's holdings will be invested in
leveraged ETPs. See Amendment No. 1, supra note 4.
    \16\ These securities will include securities that are issued or
guaranteed by the U.S. Treasury, by various agencies of the U.S.
government, or by various instrumentalities, which have been
established or sponsored by the U.S. government. U.S. Treasury
obligations are backed by the ``full faith and credit'' of the U.S.
government. Securities issued or guaranteed by federal agencies and
U.S. government-sponsored instrumentalities may or may not be backed
by the full faith and credit of the U.S. government. See Notice,
supra note 3, 81 FR at 12991.
    \17\ See id.
---------------------------------------------------------------------------

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

    In order to seek its investment objective, the Fund will not employ
other strategies outside of the above-described ``Principal
Investments.'' \18\
---------------------------------------------------------------------------

    \18\ See id.
---------------------------------------------------------------------------

C. Exchange's Description of the Fund's Investment Restrictions

    According to the Exchange, under normal market conditions, the Fund
anticipates investing its total assets in shares of ETPs, individually
selected U.S. exchange-traded common stocks, money market funds, U.S.
treasuries, or money market instruments.\19\ The Fund will not purchase
securities of open-end investment companies except in compliance with
the 1940 Act. The Fund will not use derivative instruments, including
options, swaps, forwards, and futures contracts.
---------------------------------------------------------------------------

    \19\ According to the Exchange, for temporary defensive
purposes, during the initial invest-up period, and during periods of
high cash inflows or outflows, the Fund may depart from its
principal investment strategies. For example, it may hold a higher
than normal proportion of its assets in cash. During these periods,
the Fund may not be able to achieve its investment objective. The
Fund may adopt a defensive strategy when the Adviser believes
securities in which the Fund normally invests have elevated risks
due to political or economic factors and in other extraordinary
circumstances.
---------------------------------------------------------------------------

    The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid securities and other illiquid assets (calculated at
the time of investment). 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 securities or other illiquid assets. Illiquid securities and
other 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 Exchange states that the Fund intends to qualify for and to
elect to be treated as a separate regulated investment company under
Subchapter M of the Internal Revenue Code. In addition, under the 1940
Act, the Fund's investment in investment companies will be limited to,
subject to certain exceptions: (i) 3% Of the total outstanding voting
stock of any one investment company; (ii) 5% of the Fund's total assets
with respect to any one investment company; and (iii) 10% of the Fund's
total assets with respect to investment companies in the aggregate.\20\
---------------------------------------------------------------------------

    \20\ See Notice, supra note 3, 81 FR at 12991.
---------------------------------------------------------------------------

    The Fund's investments will be consistent with its investment
objective. The Fund does not presently intend to engage in any form of
borrowing for investment purposes, and it will not be operated as a
``leveraged ETF,'' i.e., it will not be operated in a manner designed
to seek a multiple of the performance of an underlying reference
index.\21\
---------------------------------------------------------------------------

    \21\ Id. at 12991-12992.
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    After careful review, the Commission finds that the Exchange's
proposal is consistent with the Exchange Act and the rules and
regulations thereunder applicable to a national securities
exchange.\22\ In particular, the Commission finds that the proposed
rule change, as modified by Amendment No. 1 thereto, is consistent with
Section 6(b)(5) of the Exchange Act,\23\ which requires, among other
things, that the Exchange's rules 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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    The Commission also finds that the proposal is consistent with
Section 11A(a)(1)(C)(iii) of the Exchange Act,\24\ which sets forth the
finding of Congress 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 any
underlying ETPs will be available via Nasdaq proprietary quote and
trade services, as well as in accordance with the Unlisted Trading
Privileges and the Consolidated Tape Association plans for the
Shares.\25\ On each business day, before commencement of trading in
Shares in the Regular Market Session \26\ on the Exchange, the Fund
will disclose on its Web site the identities and quantities of the
portfolio of securities and other assets (``Disclosed Portfolio,'' as
defined in Nasdaq Rule 5735(c)(2)) held by the Fund that will form the
basis for the Fund's calculation of NAV at the end of the business
day.\27\ In addition, the Intraday Indicative Value, available on the
NASDAQ OMX Information LLC proprietary index data service \28\ will be
based upon the current value for the components of the Disclosed
Portfolio and will be updated and widely disseminated by one or more
major market data vendors and broadly displayed at least every 15
seconds during the Regular Market Session.\29\ The Fund's NAV will be
determined as of the close of trading on the New York Stock Exchange
(ordinarily 4:00 p.m. E.T.) on each day that the New York Stock
Exchange is

open.\30\ The Web site for the Fund will include a form of the
prospectus for the Fund and additional data relating to NAV and other
applicable quantitative information.\31\ Information regarding market
price and volume of the Shares will be continually available on a real-
time basis throughout the day on brokers' computer screens and other
electronic services. The previous day's closing price and trading
volume information for the Shares will be published daily in the
financial section of newspapers.\32\ Price information regarding the
ETPs, equity securities, U.S. treasuries, money market instruments, and
money market funds held by the Fund will be available through the U.S.
exchanges trading these assets, in the case of exchange-traded
securities, as well as automated quotation systems, or published or
other public sources. Intra-day price information for all assets held
by the Fund will also be available through subscription services, such
as Bloomberg, Markit, and Thomson Reuters, which can be accessed by
authorized participants and other investors.
---------------------------------------------------------------------------

    \24\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
    \25\ See Notice, supra note 3, 81 FR at 12993.
    \26\ See Nasdaq Rule 4120(b)(4) (describing the three trading
sessions on the Exchange: (1) Pre-Market Session from 4:00 a.m. to
9:30 a.m. E.T.; (2) Regular Market Session from 9:30 a.m. to 4:00
p.m. or 4:15 p.m. E.T.; and (3) Post-Market Session from 4:00 p.m.
or 4:15 p.m. to 8:00 p.m. E.T.).
    \27\ 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'').
Notwithstanding the foregoing, portfolio trades that are executed
prior to the opening of the Exchange on any business day may be
booked and reflected in NAV on that business day. 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. See Notice, supra note 3, 81 FR at
12993. The daily disclosure will include for each portfolio security
and other asset of the Fund the following information on the Fund's
Web site (if applicable): Ticker symbol, CUSIP number or other
identifier, if any; a description of the holding (including the type
of holding); the identity of the security, commodity, index, or
other asset or instrument underlying the holding, if any; maturity
date, if any; coupon rate, if any; effective date, if any; market
value of the holding; and the percentage weighting of the holdings
in the Fund's portfolio. The Web site information will be publicly
available at no charge. See id.
    \28\ Currently, the Nasdaq Global Index Data Service (``GIDS'')
is the Nasdaq global index data feed service, offering real-time
updates, daily summary messages, and access to widely followed
indexes and Intraday Indicative Values for ETFs. The Exchange
represents that GIDS provides investment professionals with the
daily information needed to track or trade NASDAQ OMX indexes,
listed ETFs, or third-party partner indexes and ETFs. See id.
    \29\ See id.
    \30\ According to the Exchange, the Fund's investments will be
valued at market value (i.e., the price at which a security is
trading and could presumably be purchased or sold) or, in the
absence of market value with respect to any investment, at fair
value in accordance with valuation procedures adopted by the Trust's
Board (``Board'') and in accordance with the 1940 Act. Common stocks
and equity securities (including shares of ETPs) will be valued at
the last sales price on that exchange. Portfolio securities traded
on more than one securities exchange will be valued at the last sale
price or, if so disseminated by an exchange, the official closing
price, as applicable, at the close of the exchange representing the
principal exchange or market for these securities on the business
day as of which the value is being determined. U.S. treasuries are
valued using quoted market prices, and money market funds are valued
at the net asset value reported by the funds. Money market
instruments will typically be valued using information provided by a
third-party pricing service. For all security types in which the
Fund may invest, the Fund's primary pricing source is Interactive
Data Corp.; its secondary source is Reuters; and its tertiary source
is Bloomberg. Certain securities may not be able to be priced by
pre-established pricing methods. These securities may be valued by
the Board or its delegate at fair value. The use of fair value
pricing by the Fund will be governed by valuation procedures adopted
by the Board and in accordance with the provisions of the 1940 Act.
All valuations will be subject to review by the Board or its
delegate. See id. at 12992.
    \31\ See id. at 12993.
    \32\ See id.
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    The Commission also 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 states that it 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.\33\ Nasdaq will
halt trading in the Shares under the conditions specified in Nasdaq
Rules 4120 and 4121, including the trading pauses under Nasdaq Rules
4120(a)(11) and (12). In addition, trading may be halted because of
market conditions or for reasons that, in the view of the Exchange,
make trading in the Shares inadvisable.\34\ Trading in the Shares also
will be subject to Nasdaq Rule 5735(d)(2)(D), which sets forth
additional circumstances under which Shares of the Fund may be
halted.\35\ The Exchange states that it has a general policy
prohibiting the distribution of material, non-public information by its
employees.\36\ In addition, the Exchange states that, while the Adviser
and Sub-Adviser are not registered as broker-dealers, the Adviser (but
not the Sub-Adviser) is affiliated with a broker-dealer and has
implemented a fire wall with respect to that broker-dealer regarding
access to information concerning the composition of, and changes to,
the portfolio.\37\ Further, the Commission notes that the Reporting
Authority \38\ 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.\39\ The Exchange represents that trading
in the Shares will be subject to the existing trading surveillances,
administered by both Nasdaq and 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.\40\
---------------------------------------------------------------------------

    \33\ See id. at 12994.
    \34\ The Exchange may consider all relevant factors in
exercising its discretion to halt or suspend trading in the Shares
of the Fund. These may include: (1) The extent to which trading is
not occurring in the securities and other assets constituting 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. See id.
    \35\ See id.
    \36\ See id.
    \37\ See id. at 12990; see also supra note 10 and accompanying
text. The Exchange further represents 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,
the Sub-Adviser, and their 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. See Notice, supra note 3, 81 FR at 12990-
12991.
    \38\ Nasdaq Rule 5730(c)(4) defines ``Reporting Authority.''
    \39\ See Nasdaq Rule 5735(d)(2)(B)(ii).
    \40\ According to the Exchange, FINRA surveils trading on the
Exchange pursuant to a regulatory services agreement, and the
Exchange is responsible for FINRA's performance under this
regulatory services agreement. See Notice, supra note 3, 81 FR at
12994.
---------------------------------------------------------------------------

    Nasdaq deems the Shares to be equity securities, thus rendering
trading in the Shares subject to Nasdaq's existing rules governing the
trading of equity securities. In support of this proposal, the Exchange
has represented that:
    (1) The Shares will be subject to Nasdaq Rule 5735, which sets
forth the initial and continued listing criteria applicable to Managed
Fund Shares.
    (2) Nasdaq's surveillance procedures are adequate to properly
monitor Exchange trading of the Shares in all trading sessions and to
detect and help deter violations of Exchange rules and applicable
federal securities laws.
    (3) FINRA, on behalf of the Exchange, will communicate as needed
regarding trading in the Shares and other exchange-traded securities
and instruments, including the common stock and shares held by the Fund
with other markets and other entities that are members of the ISG,\41\
and FINRA may obtain trading information regarding trading in the
Shares and the exchange-traded securities and instruments held by the
Fund from those markets and other entities. In addition, the Exchange
may obtain information regarding trading in the Shares and the
exchange-traded securities and instruments held by the Fund from
markets and other entities that are members of ISG,\42\ or with which
the Exchange has in place a comprehensive surveillance sharing
agreement. 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.
---------------------------------------------------------------------------

    \41\ For a list of the current members of ISG, see
www.isgportal.org.
    \42\ Id.
---------------------------------------------------------------------------

    (4) The Exchange has appropriate rules to facilitate transactions
in the Shares during all trading sessions.
    (5) Prior to commencement of trading, the Exchange will inform its
members in an Information Circular of the special characteristics and
risks associated with trading the Shares. Specifically, the Information
Circular will discuss the following: (a) The procedures for purchases
and redemptions of Shares in Creation Units (and that Shares are not
individually redeemable); (b) Nasdaq Rule 2111A, which imposes
suitability obligations on Nasdaq members with respect to recommending
transactions in the Shares to customers; (c) how information regarding
the Intraday Indicative Value and Disclosed Portfolio is disseminated;
(d) the risks involved in trading the Shares during the Pre-Market and
Post-Market Sessions when an updated Intraday Indicative Value will not
be calculated or publicly disseminated; (e) the requirement that
members deliver a prospectus to investors purchasing newly issued
Shares prior to or concurrently with the confirmation of a transaction;
and (f) trading information.
    (6) For initial and continued listing, the Fund must be in
compliance with Rule 10A-3 under the Act.\43\
---------------------------------------------------------------------------

    \43\ See 17 CFR 240.10A-3.
---------------------------------------------------------------------------

    (7) The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets.
    (8) The Fund may invest in leveraged ETPs (e.g., 2X or 3X), but
will not invest in inverse or inverse leveraged ETPs (e.g., -1X or -
2X). In addition, no more than 25% of the Fund's holdings will be
invested in leveraged ETPs.
    (9) The Fund will not use derivative instruments, including
options, swaps, forwards, and futures contracts.
    (10) A minimum of 100,000 Shares will be outstanding at the
commencement of trading on the exchange.
    The Exchange represents that all statements and representations
made in the 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 on the
Exchange. In addition, 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.\44\ If the Fund is
not in compliance with the applicable listing requirements, the
Exchange will commence delisting procedures under the Nasdaq 5800
Series.
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    \44\ 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.
77499 (April 1, 2016), 81 FR 20428 (April 7, 2016) (SR-BATS-2016-04)
(approving a proposed rule change to list and trade shares of the
SPDR DoubleLine Short Duration Total Return Tactical ETF), available
at: http://www.sec.gov/rules/sro/bats/2016/34-77499.pdf. In the
context of this representation, it is the Commission's view that
``monitor'' and ``surveil'' both mean ongoing oversight of the
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.
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    This approval order is based on all of the Exchange's
representations, including those set forth above, in the Notice, and in
Amendment No. 1 to the proposed rule change. The Commission notes that
the Fund and the Shares must comply with the requirements of Nasdaq
Rule 5735, including those set forth in this proposed rule change, as
modified by Amendment No. 1 thereto, to be listed and traded on the
Exchange on an initial and continuing basis.
    For the foregoing reasons, the Commission finds that the proposed
rule change, as modified by Amendment No. 1 thereto, is consistent with
Section 6(b)(5) of the Act \45\ and the rules and regulations
thereunder applicable to a national securities exchange.
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    \45\ 15 U.S.C. 78f(b)(5).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act,\46\ that the proposed rule change (SR-NASDAQ-2016-028),
as modified by Amendment No. 1 thereto, be, and it hereby is, approved.
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    \46\ 15 U.S.C. 78s(b)(2).
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    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\47\
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    \47\ 17 CFR 200.30-3(a)(12).

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-10153 Filed 4-29-16; 8:45 am]
BILLING CODE 8011-01-P