[Federal Register: February 7, 2007 (Volume 72, Number 25)]
[Notices]
[Page 5759-5764]
[DOCID:fr07fe07-152]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 27693; 812-13343]

PowerShares Exchange-Traded Fund Trust, et al.; Notice of
Application January 31, 2007.

AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application for an order under section 12(d)(1)(J)
of the Investment Company Act of 1940 (the ``Act'') for exemption from
sections 12(d)(1)(A) and (B) of the Act and under sections 6(c) and
17(b) of the Act for an exemption from section 17(a) of the Act.

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Summary of the Application: The order would permit certain registered
management investment companies and unit investment trusts to acquire
shares of other registered open-end

management investment companies and unit investment trusts that operate
as exchange-traded funds and that are not part of the same group of
investment companies. The order would also amend a condition in a prior
order.

Applicants: PowerShares Exchange-Traded Fund Trust (the ``Trust''),
PowerShares Capital Management LLC (the ``Adviser'') and AIM
Distributors, Inc. (the ``Distributor'').

Filing Dates: The application was filed on November 15, 2006 and
amended on January 30, 2007.

Hearing or Notification of Hearing: An order granting the application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Commission's Secretary
and serving applicants with a copy of the request, personally or by
mail. Hearing requests should be received by the Commission by 5:30
p.m. on February 26, 2007, and should be accompanied by proof of
service on applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.

Addresses: Secretary, U.S. Securities and Exchange Commission, 100 F
Street, NE., Washington, DC, 20549-1090. Applicants: PowerShares
Capital Management LLC and PowerShares Exchange-Traded Fund Trust, 301
W. Roosevelt Rd., Wheaton, IL 60187; AIM Distributors, Inc., 11
Greenway Plaza, Suite 100, Houston, TX 77046-1173.

For Further Information Contact: Marilyn Mann, Senior Counsel, at (202)
551-6813, and Mary Kay Frech, Branch Chief, at<PHONE_NUMBER> (Office
of Investment Company Regulation, Division of Investment Management).

Supplementary Information: The following is a summary of the
application. The complete application may be obtained for a fee at the
Commission's Public Reference Branch, 100 F Street, NE., Washington, DC
20549-0102 (tel.<PHONE_NUMBER>).

Applicants' Representations

    1. The Trust is an open-end management investment company
registered under the Act and organized as a Massachusetts business
trust. The Trust currently offers 70 series (the ``Current Index
Funds'') in reliance on a prior exemptive order (the ``Prior
Order'').\1\ The Trust intends to establish additional series in the
future in reliance on the Prior Order (``Future Index Funds''). The
Current Index Funds and Future Index Funds are together referred to as
the ``Index Funds.'' \2\ The Adviser is a Delaware limited liability
company that is registered as an investment adviser under the
Investment Advisers Act of 1940 (``Advisers Act'') and provides
advisory services to each of the Index Funds. The Distributor is a
Delaware corporation that is registered as a broker-dealer under the
Securities Exchange Act of 1934. Each of the Adviser and the
Distributor is an indirect wholly-owned subsidiary of AMVESCAP PLC, a
public limited company organized in the United Kingdom.
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    \1\ PowerShares Exchange-Traded Fund Trust, Investment Company
Act Rel. Nos. 25961 (Mar. 4, 2003) (notice) and 25985 (Mar. 28,
2003) (order).
    \2\ All entities that currently intend to rely on the requested
order are named as applicants. Any other entity that relies on the
order in the future will comply with the terms and conditions of the
application. A Purchasing Fund, as defined below, may rely on the
requested order only to invest in the Investee Funds, as defined
below, and not in any other registered investment company.
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    2. Applicants request an exemption to permit: (i) management
investment companies or series thereof (``Purchasing Management
Companies'') and unit investment trusts or series thereof (``Purchasing
Trusts,'' and together with Purchasing Management Companies,
``Purchasing Funds'') registered under the Act that are not sponsored
or advised by the Adviser or an entity controlling, controlled by or
under common control with the Adviser and not part of the same ``group
of investment companies,'' as defined in section 12(d)(1)(G)(ii) of the
Act, as the Index Funds, to acquire shares (``Fund Shares'') of (a) an
Index Fund and (b) each open-end management investment company or
series thereof or unit investment trust or series thereof registered
under the Act that operates as an exchange-traded fund (an ``ETF''), is
currently or subsequently part of the same ``group of investment
companies'' as each Index Fund and is advised or sponsored by the
Adviser or an entity controlling, controlled by or under common control
with the Adviser (such open-end ETFs, including the Index Funds, are
referred to herein as ``Open-end Funds'' and such unit investment trust
ETFs are referred to herein as ``UIT Funds'') (collectively, the
``Investee Funds''), beyond the limitations in section 12(d)(1)(A); and
(ii) Open-end Funds, the Distributor and any broker or dealer to sell
shares to the Purchasing Funds beyond the limits of section
12(d)(1)(B). Applicants also seek an exemption from section 17(a) of
the Act to permit an Investee Fund to sell Fund Shares to, and redeem
Fund Shares from, and engage in certain in-kind transactions with, a
Purchasing Fund of which the Investee Fund is an affiliated person or
an affiliated person of an affiliated person.
    3. Each Purchasing Management Company will be advised by an
investment adviser within the meaning of section 2(a)(20)(A) of the Act
(``Purchasing Fund Adviser'') and may be sub-advised by investment
adviser(s) within the meaning of section 2(a)(20)(B) of the Act
(``Purchasing Fund Sub-Adviser''). Any investment adviser to a
Purchasing Management Company will be registered as an investment
adviser under the Advisers Act. A sponsor to a Purchasing Trust is a
``Purchasing Trust Sponsor.''
    4. Applicants state that the Investee Funds will offer the
Purchasing Funds an easy way to gain instant exposure to a variety of
markets, segments, sectors, geographic regions and groups of industries
through a single, relatively low cost transaction.

Applicants' Legal Analysis

A. Section 12(d)(1)

    1. Section 12(d)(1)(A) of the Act prohibits a registered investment
company from acquiring shares of an investment company if the
securities represent more than 3% of the total outstanding voting stock
of the acquired company, more than 5% of the total assets of the
acquiring company, or, together with the securities of any other
investment companies, more than 10% of the total assets of the
acquiring company. Section 12(d)(1)(B) of the Act prohibits a
registered open-end investment company, its principal underwriter, or
any other broker or dealer from selling its shares to another
investment company if the sale will cause the acquiring company to own
more than 3% of the acquired company's voting stock, or if the sale
will cause more than 10% of the acquired company's voting stock to be
owned by investment companies generally. Section 12(d)(1)(J) of the Act
provides that the Commission may exempt any person, security, or
transaction, or any class or classes of persons, securities or
transactions, from any provision of section 12(d)(1) if the exemption
is consistent with the public interest and the protection of investors.
    2. Applicants assert that the proposed transactions will not lead
to any of the abuses that section 12(d)(1) was designed to prevent.
Applicants submit

that the proposed conditions to the requested relief address the
concerns underlying the limits in section 12(d)(1), which include
concerns about undue influence, excessive layering of fees and overly
complex structures.
    3. Applicants state that the proposed arrangement will not result
in undue influence by a Purchasing Fund or its affiliates over an
Investee Fund. To limit the control that a Purchasing Fund may have
over an Investee Fund, applicants propose a condition prohibiting the
Purchasing Fund Adviser or Purchasing Trust Sponsor; any person
controlling, controlled by, or under common with the Purchasing Fund
Adviser or Purchasing Trust Sponsor; and any investment company or
issuer that would be an investment company but for sections 3(c)(1) or
3(c)(7) of the Act that is advised or sponsored by the Purchasing Fund
Adviser or advised or sponsored by the Purchasing Trust Sponsor, or any
person controlling, controlled by, or under common control with the
Purchasing Fund Adviser or Purchasing Trust Sponsor (``Purchasing
Fund's Advisory Group'') from controlling (individually or in the
aggregate) an Investee Fund within the meaning of section 2(a)(9) of
the Act. The same prohibition would apply to any Purchasing Fund
Subadviser; any person controlling, controlled by, or under common
control with the Purchasing Fund Subadviser; and any investment company
or issuer that would be an investment company but for section 3(c)(1)
or 3(c)(7) of the Act (or portion of such investment company or issuer)
advised or sponsored by the Purchasing Fund Subadviser or any person
controlling, controlled by, or under common control with the Purchasing
Fund Subadviser (``Purchasing Fund's Sub-Advisory Group'').
    4. To limit further the potential for undue influence by a
Purchasing Fund over an Investee Fund, applicants propose conditions 2
through 7, stated below, to preclude a Purchasing Fund and certain of
its affiliates from taking advantage of an Investee Fund and certain
Investee Fund affiliates with respect to transactions between the
entities and to ensure the transactions will be on an arm's length
basis.
    5. Applicants do not believe that the proposed arrangement will
involve excessive layering of fees. The board of directors or trustees
of each Purchasing Management Company, including a majority of the
disinterested directors or trustees, before approving any advisory
contract under section 15 of the Act, will be required to determine
that the advisory fees charged to the Purchasing Management Company are
based on services provided that will be in addition to, rather than
duplicative of, the services provided under the advisory contract(s) of
any Open-end Fund in which the Purchasing Management Company may
invest. In addition, the Purchasing Fund Adviser, trustee or Purchasing
Trust Sponsor of a Purchasing Fund, as applicable, will waive fees
otherwise payable to it by the Purchasing Fund in an amount at least
equal to any compensation received from an Investee Fund by the
Purchasing Fund Adviser, trustee or Purchasing Trust Sponsor, or an
affiliated person of the Purchasing Fund Adviser, trustee or Purchasing
Trust Sponsor (other than any advisory fees), in connection with the
investment by the Purchasing Fund in the Investee Funds. Applicants
also state that any sales charges and/or service fees charged with
respect to shares of a Purchasing Fund will not exceed the limits
applicable to a fund of funds set forth in Conduct Rule 2830 of the
NASD (``Rule 2830'').
    6. Applicants submit that the proposed arrangement will not create
an overly complex fund structure. Applicants note that an Investee Fund
will be prohibited from acquiring securities of any investment company,
or of any company relying on section 3(c)(1) or 3(c)(7) of the Act, in
excess of the limits contained in section 12(d)(1)(A) of the Act.
    7. To ensure that Purchasing Funds are aware of the terms and
conditions of the requested order, the Purchasing Funds must enter into
an agreement with the respective Investee Funds (``Purchasing Fund
Agreement''). The Purchasing Fund Agreement will include an
acknowledgement from the Purchasing Fund that it may rely on the order
only to invest in the Investee Funds and not in any other investment
company. The Purchasing Fund Agreement will further require any
Purchasing Fund that exceeds the 5% or 10% limitations in section
12(d)(1)(A)(ii) and (iii) to disclose in its prospectus that it may
invest in ETFs and disclose, in ``plain English,'' in its prospectus
the unique characteristics of the Purchasing Funds investing in
investment companies, including but not limited to the expense
structure and any additional expenses of investing in investment
companies. Each Purchasing Fund will comply with the disclosure
requirements concerning the aggregate costs of investing in the
Investee Funds set forth in Investment Company Act Release No. 27399.

B. Section 17(a)

    1. Section 17(a) of the Act generally prohibits an affiliated
person of a registered investment company or an affiliated person of
such person (``second tier affiliate''), from selling any security to
or purchasing any security from the company. Section 2(a)(3) of the Act
defines an ``affiliated person'' of another person to include any
person 5% or more of whose outstanding voting securities are directly
or indirectly owned, controlled, or held with power to vote by the
other person, and any person directly or indirectly controlling,
controlled by, or under common control with, the other person. The
Investee Funds may be deemed to be controlled by the Adviser or an
entity controlling, controlled by, or under common control with the
Adviser and hence affiliated persons of each other. In addition, the
Investee Funds may be deemed to be under common control with any other
registered investment company (or series thereof) advised by the
Adviser or an entity controlling, controlled by or under common control
with the Adviser (an ``Affiliated Fund'').\3\
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    \3\ Applicants acknowledge that the receipt of any compensation
by (a) an affiliated person or second tier affiliate of a Purchasing
Fund for the purchase by the Purchasing Fund of Fund Shares of an
Investee Fund or (b) an affiliated person or second tier affiliate
of an Investee Fund for the sale by the Investee Fund of Fund Shares
to a Purchasing Fund, is subject to section 17(e) of the Act. The
Purchasing Fund Agreement also will include this acknowledgment.
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    2. Section 17(b) of the Act authorizes the Commission to grant an
order permitting a transaction otherwise prohibited by section 17(a) if
evidence establishes that (a) the terms of the proposed transaction are
reasonable and fair and do not involve overreaching on the part of any
person concerned; (b) the proposed transaction is consistent with the
policies of each registered investment company involved; and (c) the
proposed transaction is consistent with the general purposes of the
Act. Section 6(c) of the Act permits the Commission to exempt any
person or transactions from any provision of the Act if such exemption
is necessary or appropriate in the public interest and consistent with
the protection of investors and the purposes fairly intended by the
policy and provisions of the Act.
    3. Applicants request an exemption under sections 6(c) and 17(b) of
the Act from section 17(a) of the Act in order to permit each Investee
Fund to sell Fund Shares to and redeem Fund Shares from, and engage in
the in-kind transactions that would accompany such sales and
redemptions with, any Purchasing Fund

of which it is an affiliated person or second tier affiliate because of
one or more of the following: (1) The Purchasing Fund holds 5% or more
of the Fund Shares of the Trust or one or more Investee Funds; (2) a
Purchasing Fund described in (1) is an affiliated person of the
Purchasing Fund; or (3) the Purchasing Fund holds 5% or more of the
shares of one or more Affiliated Funds.\4\
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    \4\ Although applicants believe that most Purchasing Funds will
purchase and sell Fund Shares in the secondary market, a Purchasing
Fund might seek to transact in Fund Shares directly with an Investee
Fund. When transacting directly with an Investee Fund, a Purchasing
Fund will generally be required to deposit securities into, or
receive securities from, the Investee Fund in connection with the
purchase and redemption of Fund Shares. With respect to these in-
kind transactions, applicants are requesting relief for Investee
Funds that are affiliated persons or second tier affiliates of a
Purchasing Fund solely by virtue of one or more of the reasons
described above.
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    4. Applicants submit that the proposed arrangement satisfies the
standards for relief under sections 17(b) and 6(c) of the Act.
Applicants submit that the proposed transactions are appropriate in the
public interest, consistent with the protection of investors, and do
not involve overreaching. Applicants note that the consideration paid
for the purchase or received for the redemption of Fund Shares directly
from an Investee Fund by a Purchasing Fund (or any other investor) will
be based on the net asset value of the Fund Shares. In addition, the
securities received or transferred by the Investee Fund in connection
with the purchase or redemption of Fund Shares will be valued in the
same manner as the Investee Fund's portfolio securities and thus the
transactions will not be detrimental to the Purchasing Fund. Applicants
also state that the proposed transactions will be consistent with the
policies of each Purchasing Fund and Investee Fund and with the general
purposes of the Act. Applicants state that the Purchasing Fund
Agreement will require a Purchasing Fund to represent that its
ownership of Fund Shares issued by an Investee Fund is consistent with
the investment policies set forth in the Purchasing Fund's registration
statement.

C. Prior Order

    Applicants also seek to amend a condition to the Prior Order so
that the condition is consistent with the relief requested from section
12(d)(1). Condition 2 to the Prior Order currently provides that each
Investee Fund prospectus and ``Product Description'' \5\ will clearly
disclose that, for purposes of the Act, Fund Shares are issued by the
Investee Fund and that the acquisition of Fund Shares by investment
companies is subject to the restrictions of section 12(d)(1) of the
Act. In light of the requested order to permit Purchasing Funds to
invest in Investee Funds in excess of the limits of section 12(d)(1),
applicants wish to replace this condition with condition 13, as stated
below. Under the new condition, each Investee Fund prospectus and
Product Description will disclose that Purchasing Funds may purchase
shares of the Investee Funds in excess of the limits of section
12(d)(1) to the extent that they comply with the terms and conditions
of the requested order granting relief from section 12(d)(1).\6\
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    \5\ A ``Product Description'' is a short document that
describes, in plain English, the Fund Shares and the Investee Funds.
The Product Description is delivered by broker-dealers to secondary
market purchasers of Fund Shares.
    \6\ The requested order would also amend the Prior Order to
reflect that the Trust has replaced the prior distributor, ALPS
Distributors, Inc. (``ALPS''), with the Distributor. The application
for the Prior Order stated that ALPS was not an affiliated person of
the Adviser. As described above, the Distributor is an affiliated
person of the Adviser. The Distributor agrees to comply with all
terms and conditions of the Prior Order, as amended.
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Applicants' Conditions

    Applicants agree that the order of the Commission granting the
requested relief will be subject to the following conditions:
    1. The members of a Purchasing Fund's Advisory Group will not
control (individually or in the aggregate) an Investee Fund within the
meaning of section 2(a)(9) of the Act. The members of a Purchasing
Fund's Sub-Advisory Group will not control (individually or in the
aggregate) an Investee Fund within the meaning of section 2(a)(9) of
the Act. If, as a result of a decrease in the outstanding Fund Shares
of an Investee Fund, the Purchasing Fund's Advisory Group or the
Purchasing Fund's Sub-Advisory Group, each in the aggregate, becomes a
holder of more than 25 percent of the outstanding Fund Shares of an
Investee Fund, it will vote its Fund Shares in the same proportion as
the vote of all other holders of the Investee Fund's Fund Shares. This
condition does not apply to the Purchasing Fund Sub-Advisory Group with
respect to an Investee Fund for which the Purchasing Fund Sub-Adviser
or a person controlling, controlled by, or under common control with
the Purchasing Fund Sub-Adviser acts as the investment adviser within
the meaning of section 2(a)(20)(A) of the Act (in the case of an Open-
end Fund) or as the sponsor (in the case of a UIT Fund).
    2. No Purchasing Fund or Purchasing Fund Affiliate will cause any
existing or potential investment by the Purchasing Fund in an Investee
Fund to influence the terms of any services or transactions between the
Purchasing Fund or a Purchasing Fund Affiliate and the Investee Fund or
a Fund Affiliate. A ``Purchasing Fund Affiliate'' means a Purchasing
Fund Adviser, Purchasing Fund Sub-Adviser, Purchasing Trust Sponsor, a
promoter, or a principal underwriter of a Purchasing Fund and any
person controlling, controlled by, or under common control with any of
those entities. A ``Fund Affiliate'' means an investment adviser(s),
promoter, sponsor or principal underwriter of an Investee Fund and any
person controlling, controlled by or under common control with any of
these entities.
    3. The board of directors or trustees of a Purchasing Management
Company, including a majority of the disinterested directors or
trustees, will adopt procedures reasonably designed to ensure that the
Purchasing Fund Adviser and any Purchasing Fund Sub-Adviser are
conducting the investment program of the Purchasing Management Company
without taking into account any consideration received by the
Purchasing Management Company or a Purchasing Fund Affiliate from an
Investee Fund or Fund Affiliate in connection with any services or
transactions.
    4. Once an investment by a Purchasing Fund in the securities of an
Open-end Fund exceeds the limit of section 12(d)(1)(A)(i) of the Act,
the board of directors or trustees of an Open-end Fund (``Board''),
including a majority of the disinterested Board members, will determine
that any consideration paid by the Open-end Fund to the Purchasing Fund
or a Purchasing Fund Affiliate in connection with any services or
transactions (i) is fair and reasonable in relation to the nature and
quality of the services and benefits received by the Open-end Fund;
(ii) is within the range of consideration that the Open-end Fund would
be required to pay to another unaffiliated entity in connection with
the same services or transactions; and (iii) does not involve
overreaching on the part of any person concerned. This condition does
not apply with respect to any services or transactions between an Open-
end Fund and its investment adviser(s) or any person controlling,
controlled by, or under common control with such investment adviser(s).
    5. No Purchasing Fund or Purchasing Fund Affiliate (except to the
extent it is acting in its capacity as an investment

adviser to an Open-end Fund or sponsor to a UIT Fund) will cause an
Investee Fund to purchase a security in an offering of securities
during the existence of an underwriting or selling syndicate of which a
principal underwriter is an officer, director, member of an advisory
board, Purchasing Fund Adviser, Purchasing Fund Sub-Adviser, employee,
or Purchasing Trust Sponsor of the Purchasing Fund, or a person of
which any such officer, director, member of an advisory board,
Purchasing Fund Adviser, Purchasing Fund Sub-Adviser, employee, or
Purchasing Trust Sponsor is an affiliated person (each, an
``Underwriting Affiliate,'' except any person whose relationship to the
Investee Fund is covered by section 10(f) of the Act is not an
Underwriting Affiliate). An offering of securities during the existence
of any underwriting or selling syndicate of which a principal
underwriter is an Underwriting Affiliate is an ``Affiliated
Underwriting.''
    6. The Board of an Open-end Fund, including a majority of the
disinterested Board members, will adopt procedures reasonably designed
to monitor any purchases of securities by the Open-end Fund in an
Affiliated Underwriting, once an investment by a Purchasing Fund in the
securities of the Open-end Fund exceeds the limit of section
12(d)(1)(A)(i) of the Act, including any purchases made directly from
an Underwriting Affiliate. The Board will review these purchases
periodically, but no less frequently than annually, to determine
whether the purchases were influenced by the investment by the
Purchasing Fund in the Open-end Fund. The Board will consider, among
other things: (i) whether the purchases were consistent with the
investment objectives and policies of the Open-end Fund; (ii) how the
performance of securities purchased in an Affiliated Underwriting
compares to the performance of comparable securities purchased during a
comparable period of time in underwritings other than Affiliated
Underwritings or to a benchmark such as a comparable market index; and
(iii) whether the amount of securities purchased by the Open-end Fund
in Affiliated Underwritings and the amount purchased directly from an
Underwriting Affiliate have changed significantly from prior years. The
Board will take any appropriate actions based on its review, including
the institution of procedures designed to assure that purchases of
securities in Affiliated Underwritings are in the best interest of
shareholders.
    7. The Open-end Fund will maintain and preserve permanently in an
easily accessible place a written copy of the procedures described in
the preceding condition, and any modifications to such procedures, and
will maintain and preserve for a period of not less than six years from
the end of the fiscal year in which any purchase in an Affiliated
Underwriting occurred, the first two years in an easily accessible
place, a written record of each purchase of securities in Affiliated
Underwritings once an investment by a Purchasing Fund in the shares of
the Open-end Fund exceeds the limit of section 12(d)(1)(A)(i) of the
Act, setting forth from whom the securities were acquired, the identity
of the underwriting syndicate's members, the terms of the purchase, and
the information or materials upon which the Board's determinations were
made.
    8. Before investing in an Investee Fund in excess of the limits of
section 12(d)(1)(A), the Purchasing Fund and the Investee Fund will
execute a Purchasing Fund Agreement stating, without limitation, that
their boards of directors or trustees and their investment advisers or
sponsors and trustees, as applicable, understand the terms and
conditions of the order, and agree to fulfill their responsibilities
under the order. At the time of its investment in shares of an Open-end
Fund in excess of the limit of section 12(d)(1)(A)(i), a Purchasing
Fund will notify the Open-end Fund of the investment. At such time, the
Purchasing Fund will also transmit to the Open-end Fund a list of the
names of each Purchasing Fund Affiliate and Underwriting Affiliate. The
Purchasing Fund will notify the Open-end Fund of any changes to the
list as soon as reasonably practicable after a change occurs. The
Investee Fund and the Purchasing Fund will maintain and preserve a copy
of the order, the Purchasing Fund Agreement and, in the case of an
Open-end Fund, the list with any updated information for the duration
of the investment and for a period of not less than six years
thereafter, the first two years in an easily accessible place.
    9. Before approving any advisory contract under section 15 of the
Act, the board of directors or trustees of each Purchasing Management
Company, including a majority of the disinterested directors or
trustees, will find that the advisory fees charged under such advisory
contract are based on services provided that will be in addition to,
rather than duplicative of, the services provided under the advisory
contract(s) of any Open-end Fund in which the Purchasing Management
Company may invest. These findings and their basis will be recorded
fully in the minute books of the appropriate Purchasing Management
Company.
    10. A Purchasing Fund Adviser, trustee or Purchasing Trust Sponsor,
as applicable, will waive fees otherwise payable to it by a Purchasing
Fund, in an amount at least equal to any compensation (including fees
received pursuant to any plan adopted by an Open-end Fund under rule
12b-1 under the Act) received from an Investee Fund by the Purchasing
Fund Adviser, trustee or Purchasing Trust Sponsor, or an affiliated
person of the Purchasing Fund Adviser, trustee or Purchasing Trust
Sponsor, other than any advisory fees paid to the Purchasing Fund
Adviser, trustee or Purchasing Trust Sponsor or its affiliated person
by an Open-end Fund, in connection with the investment by the
Purchasing Fund in an Investee Fund. Any Purchasing Fund Sub-Adviser
will waive fees otherwise payable to the Purchasing Fund Sub-Adviser,
directly or indirectly, by the Purchasing Management Company in an
amount at least equal to any compensation received from an Investee
Fund by the Purchasing Fund Sub-Adviser, or an affiliated person of the
Purchasing Fund Sub-Adviser, other than any advisory fees paid to the
Purchasing Fund Sub-Adviser or its affiliated person by the Open-end
Fund, in connection with the investment by the Purchasing Management
Company in an Investee Fund made at the direction of the Purchasing
Fund Sub-Adviser. In the event that the Purchasing Fund Sub-Adviser
waives fees, the benefit of the waiver will be passed through to the
Purchasing Management Company.
    11. Any sales charges and/or service fees charged with respect to
shares of a Purchasing Fund will not exceed the limits applicable to a
fund of funds as set forth in Rule 2830.
    12. No Investee Fund will acquire securities of any investment
company or company relying on section 3(c)(1) or 3(c)(7) of the Act in
excess of the limits contained in section 12(d)(1)(A) of the Act.

Amendment to Prior Order

    Applicants agree to replace condition 2 of the Prior Order with the
following condition:
    13. Each Investee Fund's prospectus and Product Description will
clearly disclose that, for purposes of the Act, the Fund Shares are
issued by a registered investment company, and the acquisition of Fund
Shares by investment companies is subject to the

restrictions of section 12(d)(1) of the Act, except as permitted by an
exemptive order that permits registered investment companies to invest
in an Investee Fund beyond the limits in section 12(d)(1), subject to
certain terms and conditions, including that the registered investment
company enter into a Purchasing Fund Agreement with the Investee Fund
regarding the terms of the investment.

    For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 07-529 Filed 2-6-07; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 83, Number 224 (Tuesday, November 20, 2018)]
[Notices]
[Pages 58682-58683]
[FR Doc No: 2018-25281]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No. FMCSA-2018-0242]

Qualification of Drivers; Exemption Applications; Implantable
Cardioverter Defibrillator (ICD)

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Notice of denials.

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

SUMMARY: FMCSA announces its decision to deny applications from four
individuals treated with Implantable Cardioverter Defibrillators (ICDs)
who requested an exemption from the Federal Motor Carrier Safety
Regulations (FMCSRs) prohibiting operation of a commercial motor
vehicle (CMV) in interstate commerce by persons with a current clinical
diagnosis of myocardial infarction, angina pectoris, coronary
insufficiency, thrombosis, or any other cardiovascular disease of a
variety known to be accompanied by syncope, dyspnea, collapse, or
congestive heart failure.

FOR FURTHER INFORMATION CONTACT: Ms. Christine A. Hydock, Chief,
Medical Programs Division,<PHONE_NUMBER>, [email protected], FMCSA,
Department of Transportation, 1200 New Jersey Avenue SE, Room W64-224,
Washington, DC 20590-0001. Office hours are from 8:30 a.m. to 5 p.m.,
ET, Monday through Friday, except Federal holidays. If you have
questions regarding viewing or submitting material to the docket,
contact Docket Services, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

I. Public Participation

A. Viewing Documents and Comments

    To view comments, as well as any documents mentioned in this notice
as being available in the docket, go to http://www.regulations.gov.
Insert the docket number, FMCSA-2018-0242, in the keyword box, and
click ``Search.'' Next, click the ``Open Docket Folder'' button and
choose the document to review. If you do not have access to the
internet, you may view the docket online by visiting the Docket
Management Facility in Room W12-140 on the ground floor of the DOT West
Building, 1200 New Jersey Avenue SE, Washington, DC 20590, between 9
a.m. and 5 p.m., ET, Monday through Friday, except Federal holidays.

B. Privacy Act

    In accordance with 5 U.S.C. 553(c), DOT solicits comments from the
public to better inform its rulemaking process. DOT posts these
comments, without edit, including any personal information the
commenter provides, to www.regulations.gov, as described in the system
of records notice (DOT/ALL-14 FDMS), which can be reviewed at
www.dot.gov/privacy.

II. Background

    On August 15, 2018, FMCSA published a Federal Register notice (83
FR 40649) announcing receipt of applications from four individuals
treated with ICDs and requested comments from the public. These four
individuals requested an exemption from 49 CFR 391.41(b)(4) which
prohibits operation of a CMV in interstate commerce by persons with a
current clinical diagnosis of myocardial infarction, angina pectoris,
coronary insufficiency, thrombosis, or any other cardiovascular disease
of a variety known to be accompanied by syncope, dyspnea, collapse, or
congestive heart failure. The public comment period closed on September
14, 2018, and no comments were received.
    FMCSA has evaluated the eligibility of these applicants and
concluded that granting these exemptions would not provide a level of
safety that would be equivalent to or greater than, the level of safety
that would be obtained by complying with the regulation 49 CFR
391.41(b)(4). A summary of each applicant's medical history related to
their ICD exemption request was discussed in the August 15, 2018,
Federal Register notice and will not be repeated in this notice.
    In reaching the decision to deny these exemption requests, the
Agency considered information from the Cardiovascular Medical Advisory
Criteria, the April 2007 Evidence Report ``Cardiovascular Disease and
Commercial Motor Vehicle Driver Safety, a December 2014 focused

research report ``Implantable Cardioverter Defibrillators and the
Impact of a Shock in a Patient When Deployed.'' Copies of the reports
are included in the docket.
    FMCSA has published advisory criteria to assist medical examiners
in determining whether drivers with certain medical conditions are
qualified to operate a CMV in interstate commerce. [Appendix A to Part
391--Medical Advisory Criteria, section D, paragraph 4]. The advisory
criteria for 49 CFR 391.41(b)(4) indicates that coronary artery bypass
surgery and pacemaker implantation are remedial procedures and thus,
not medically disqualifying. Implantable cardioverter defibrillators
are disqualifying due to risk of syncope.

III. Discussion of Comments

    FMCSA received no comments in this proceeding.

IV. Basis for Exemption Determination

    Under 49 U.S.C. 31136(e) and 31315, FMCSA may grant an exemption if
it finds such an exemption would likely achieve a level of safety that
is equivalent to, or greater then, the level that would be achieved
absent such an exemption.
    The Agency's decision regarding these exemption applications is
based on an individualized assessment of each applicant's medical
information provided by the applicant, available medical and scientific
data concerning ICD's, and public comments received.
    In the case of persons with ICDs, the underlying condition for
which the ICD was implanted places the individual at high risk for
syncope (a transient loss of consciousness) or other unpredictable
events known to result in gradual or sudden incapacitation. ICDs may
discharge, which could result in loss of ability to safely control a
CMV. See the April 2007 Evidence Report on Cardiovascular Disease and
Commercial Motor vehicle Driver Safety, April 2007.\1\ A focused
research report on Implantable Cardioverter Defibrillators and the
Impact of a Shock on a Patient When Deployed completed for the FMCSA
December 2014 indicates that the available scientific data on persons
with ICDs and CMV driving does not support that persons with ICDs who
operate CMVs are able to meet an equal or greater level of safety and
upholds the findings of the April 2007 report.
---------------------------------------------------------------------------

    \1\ Now available at http://ntl.bts.gov/lib/30000/30100/30123/Final_CVD_Evidence_Report_v2.pdf.
---------------------------------------------------------------------------

V. Conclusion

    The Agency has determined that the available medical and scientific
literature and research provides insufficient data to enable the Agency
to conclude that granting these exemptions would achieve a level of
safety equivalent to, or greater than, the level of safety maintained
without the exemption. Therefore, the following four applicants have
been denied exemptions from the physical qualification standards in 49
CFR 391.41(b)(4):

David Christiansen (IL)
Christopher G. Harville (SC)
Terry W. Meredith (TN)
Grady C. Stone (GA)

    Each applicant has, prior to this notice, received a letter of
final disposition regarding his/her exemption request. Those decision
letters fully outlined the basis for the denial and constitutes final
action by the Agency. The list published today summarizes the Agency's
recent denials as required under 49 U.S.C. 31315(b)(4).

    Issued on: November 9, 2018.
Larry W. Minor,
Associate Administrator for Policy.
[FR Doc. 2018-25281 Filed 11-19-18; 8:45 am]
 BILLING CODE 4910-EX-P


SAMPLE LETTER A REQUEST FOR SUBSTANTIATION FROM AN AFFECTED BUSINESS IN RESPONSE TO A REQUEST UNDER THE FREEDOM OF INFORMATION ACT ( date stamp)

Approved OMB 2020 0003 Approval expires 11/ 30/ 2006 BY CERTIFIED U. S. MAIL; RETURN RECEIPT REQUESTED ( Name, title, and address of the [ designated] representative of the affected business)

Re: Freedom of Information Act (" FOIA") Request XX RIN XXXXX XX Dear ( Addressee):

The U. S. Environmental Protection Agency (" EPA" or " Agency") has received a request under the FOIA for certain records that you submitted to EPA pertaining to [ description of the information that is the subject of the advance or final confidentiality determination]. You have claimed ( all or part) of this information as confidential business information (" CBI"). In accordance with applicable EPA regulations ( 40 C. F. R. Part 2, Subpart B), the request has been initially denied to afford you an opportunity to substantiate your claim before a( n) ( advance or final) confidentiality determination is made.

This letter is to notify you that the EPA ( appropriate legal office) will be making a( n) ( advance or final) confidentiality determination concerning this information. If you feel that some or all of the above information is entitled to confidential treatment, please specify which portions of the information you consider confidential. Please be specific by page, paragraph, and sentence when identifying the information subject to your claim. Any information not specifically identified as subject to a confidentiality claim will be disclosed to the requestor without further notice to you. For each item or class of information that you identify as being subject to your claim, please answer the following questions, giving as much detail as possible:

1. For what period of time do you request that the information be maintained as confidential, e. g., until a certain date, until the occurrence of a specified event, or permanently? If the occurrence of a specific event will eliminate the need for confidentiality, please specify that event.

2. Information submitted to EPA becomes stale over time. Why should the information you claim as confidential be protected for the time period specified in your answer to question # 1? 2 3. What measures have you taken to protect the information claimed as confidential? Have you disclosed the information to anyone other than a governmental body or someone who is bound by an agreement not to disclose the information further? If so, why should the information still be considered confidential?

4. Is the information contained in any publicly available material such as the Internet, publicly available databases, promotional publications, annual reports, or articles? Is there any means by which a member of the public could obtain access to the information? Is the information of a kind that you would customarily not release to the public?

5. Has any governmental body made a determination as to the confidentiality of the information? If so, please attach a copy of the determination.

6. For each category of information claimed as confidential, explain with specificity why release of the information is likely to cause substantial harm to your competitive position. Explain the specific nature of those harmful effects, why they should be viewed as substantial, and the causal relationship between disclosure and such harmful effects. How could your competitors make use of this information to your detriment?

7. Do you assert that the information is submitted on a voluntary or a mandatory basis? Please explain the reason for your assertion. If the business asserts that the information is voluntarily submitted information, whether and why disclosure of the information would tend to lessen the availability to EPA of similar information in the future.

8. Any other issue you deem relevant.

Please note that you bear the burden of substantiating your confidentiality claim. Conclusory allegations will be given little or no weight in the determination. If you wish to claim any of the information in your response as confidential, you must mark the response " CONFIDENTIAL" or with a similar designation, and must bracket all text so claimed. Information so designated will be disclosed by EPA only to the extent allowed by, and by means of the procedures set forth in, 40 C. F. R. Part 2, Subpart B. If you fail to claim the information as confidential, it may be made available to the public without further notice to you.

Your comments must be postmarked or hand delivered to this office, or e mailed to ( email address), by the 15th working day after your receipt of this letter. You may seek an extension of time to submit your comments to this office, but the request must be made before the end of the 15 day period. Except in extraordinary circumstances, no extension will be approved. Failure to submit your comments within that time will be regarded as a waiver of your 3 confidentiality claim or claims, and EPA may release the information.

Should you have any questions concerning this matter, please call me at ( telephone number).

Sincerely,

___________________________________________ ( Signature and Title and Office Name and Address)


[Federal Register Volume 85, Number 75 (Friday, April 17, 2020)]
[Notices]
[Pages 21509-21511]
[FR Doc No: 2020-08279]

=======================================================================
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UNIFIED CARRIER REGISTRATION PLAN

Sunshine Act Meeting Notice; Unified Carrier Registration Plan
Board of Directors Meeting

TIME AND DATE: April 23, 2020, from Noon to 3:00 p.m., Eastern time.

PLACE: This meeting will be accessible via conference call and screen
sharing. Any interested person may call<PHONE_NUMBER> (U.S. toll free),
888-788-0099 (U.S. toll free), +1<PHONE_NUMBER> (U.S. toll), or +1 929-
205-6099 (U.S. toll), Conference ID<PHONE_NUMBER>, to participate in the
meeting.

STATUS: Parts of this meeting will be open to the public. Parts of this
meeting will be closed to the public pursuant to Government in the
Sunshine Act Exemptions (4), (9)(B) and (10) (see agenda below for
further information).

MATTERS TO BE CONSIDERED: The Unified Carrier Registration Plan Board
of Directors (the ``Board'') will continue its work in developing and
implementing the Unified Carrier Registration Plan and Agreement. The
subject matter of the meeting will include:

Agenda

Open to the Public

I. Welcome and Call to Order--UCR Board Chair

    The UCR Board Chair will welcome attendees, call the meeting to
order, call roll for the Board, and facilitate self-introductions.

II. Verification of Meeting Notice--UCR Executive Director

    The UCR Executive Director will verify the publication of the
meeting notice on the UCR website and in the Federal Register.

III. Review and Approval of Board Agenda--UCR Board Chair

For Discussion and Possible Action
    Agenda will be reviewed and the Board will consider adoption.
Ground Rules
[rtarr8] Board action only to be taken in designated areas on agenda
[rtarr8] Please MUTE your phone
[rtarr8] Please do NOT place the call on HOLD

V. Approval of Minutes of the March 12, 2020 UCR Board Meeting--UCR
Executive Director

For Discussion and Possible Action
    Minutes of the March 12, 2020 Board meeting will be reviewed. The
Board will consider action to approve.

V. Discussion of COVID-19 Impact on UCR--UCR Board Chair

    The UCR Board Chair will lead a discussion on the impact of the
COVID-19 pandemic on industry, state operations, and UCR collections.

VI. Update on June UCR Training and Board Meeting--UCR Executive
Director

    The UCR Executive Director will update the Board on planning for
the June 8 and 9, 2020 UCR Training and Board Meeting in light of the
COVID-19 pandemic.

VII. Report of FMCSA--FMCSA Representative

    FMCSA will provide a report on any relevant activity.

VIII. Updates Concerning UCR Legislation--UCR Board Chair

    The UCR Board Chair will call for any updates regarding UCR
legislation since the last Board meeting.

IX. Recommendation to United States Department of Transportation
(USDOT) Secretary to Designate UCR Board Chairperson--UCR Executive
Director

For Discussion and Possible Action
    The UCR Executive Director will ask the Board to consider and
possibly act to adopt a recommendation to the Secretary of the USDOT
designating one member of the Board to serve as chairperson of the Boa

X. Trademark Infringement/Cease and Desist Letter Update--UCR Chief
Legal Officer

    The UCR Chief Legal Officer will provide an update to the Board on
the status of a cease and desist letter sent to a possible trademark
infringer on March 4, 2020.

XI. Proposal to Suspend Collection of UCR Fees for the 2020
Registration Year and Either Refund or Provide a Credit for the 2021
Registration Year for Registrants That Have Already Registered and Paid
for the 2020 Registration Year--Monte Wiederhold, Board Member

For Discussion and Possible Action
    Based on the economic fall-out from the COVID-19 pandemic, Board
Member Monte Wiederhold will present a proposal to suspend collection
of UCR fees for the 2020 registration year and either refund or provide
a credit for the 2021 registration year for registrants that have
already registered and paid for the 2020 registration year.

XII. Ratify Extension of Recommended 2020 Enforcement Date--UCR Chief
Legal Officer

For Discussion and Possible Action
    Depending on the Board decision regarding the previous agenda item,
the UCR Chief Legal Officer will lead a discussion on the proposed
ratification of the decision by the UCR Board Chair and the UCR
Executive Director to further extend the recommended 2020 enforcement
date to July 1, 2020. The Board may act to ratify the action of the UCR
Board Chair and the UCR Executive Director to extend the recommended
enforcement date.

XIII. SUBCOMMITTEE REPORTS

Audit Subcommittee--UCR Audit Subcommittee Chair
A. Update on 2020 State Compliance Reviews--UCR Depository Manager
    The UCR Depository Manager will provide an update on the plans for
the 2020 state compliance reviews, including contingency plans related
to the COVID-19 pandemic.
B. Update on the 2020 New Entrant and Unregistered Solicitation
Campaigns--Seikosoft
    Seikosoft will provide an updated report on new entrant motor
carrier campaigns managed by the National Registration System (NRS),
new entrant motor carrier campaigns managed by the states, unregistered
motor carrier campaigns managed by the NRS, and unregistered motor
carrier campaigns managed by the states.
C. Update on the Non-Universe Motor Carrier Solicitation Campaigns--
Seikosoft
    Seikosoft will provide an updated report on the solicitation
campaign targeting motor carriers identified through roadside
inspections to be operating in interstate commerce but identified in
MCMIS as either intrastate or inactive.
D. Update on State Carrier Audits and Recommended Extension to June 1,
2020--UCR Audit Subcommittee Chair
For Discussion and Possible Action
    The UCR Audit Subcommittee Chair will report on state audit
activity to date and emphasize the strategy of using Focused Anomalies
Review (FARs) and MCS-150 retreats. The UCR Chief Legal Officer will
recommend that the Board ratify the UCR Audit Subcommittee Chair's
action to provide states a deadline extension on their annual carrier
audits to June 1, 2020.
Finance Subcommittee--UCR Finance Subcommittee Chair
A. Status of 2020 Registration Year Fee Collections--UCR Depository
Manager
    The UCR Depository Manager will provide an update on the status of
collections for the 2020 registration year and compare to 2019
registrations for the equivalent time-period one year ago, to provide
perspective on impact from the COVID-19 crisis.
B. Daily Liquidity Account (DLA) Interest Rate Reduction--UCR
Depository Manager
    The UCR Depository Manager will provide an update on the reduction
of the interest rate to the DLA held at Truist Bank (formerly
SunTrust).
C. March 2020 Operating Costs--UCR Depository Manager
    The UCR Depository Manager will provide an update on the year-to-
date costs of operating the UCR Plan and provide insights into how
costs compare with the operating budget.
Education and Training Subcommittee--UCR Education and Training
Subcommittee Chair
A. Update on Plans to Launch Training Modules--UCR Education and
Training Subcommittee Chair
    The UCR Education and Training Subcommittee Chair will provide an
update on plans to launch an initial wave of training modules by June
2020.
XIV. Contractor Reports--UCR Executive Director
 UCR Executive Director
    The UCR Executive Director will provide a report covering recent
activity for the UCR Plan.
 DSL Transportation Services, Inc.
    DSL will report on the latest data on state collections based on
reporting from the FARs program.
 Seikosoft
    Seikosoft will provide an update on recent/new activity related to
the NRS.
 UCR Administrator (Kellen)--UCR Administrator
    The UCR Administrator will provide its management report covering
recent activity for the Depository, Operations, and Communications.

Portions Closed to the Public

    Pursuant to the Government in the Sunshine Act at 5 U.S.C.
552b(d)(1), the Board must now vote to approve closing the portions of
the meeting dealing with items XV, XVI, XVII and XVIII on the agenda.
    The UCR Chief Legal Officer has advised that the Board may, if it
votes to do so, close these portions of this meeting pursuant to
Government in the Sunshine Act Exemptions (4), (9)(B) and (10). By
approving this action, the Board determines that public participation
would likely disclose (i) confidential trade secrets, commercial and
financial information of one or more UCR contractors, (ii) information
for which premature disclosure would likely frustrate implementation of
a proposed agency action, and/or (iii) specifically concern the
discussion of information, the premature disclosure of which would
likely negatively impact the agency's participation in an ongoing civil
action or proceeding. Therefore, by approving this action, the Board is
invoking Exemptions (4), (9)(B) and (10) to close these portions of the
meeting (5 U.S.C. 552b(c)(4), (9)(B) and (10)).
    A copy of each of the votes on the closure of each of these four
portions of this meeting shall be made publicly available on the UCR
Plan website within one day of the votes taken herein (https://plan.ucr.gov).

XV. UCR Website and Email Service Addendum--UCR Executive Director

For Discussion and Possible Action
    The UCR Executive Director will review a proposed contract addendum
for providing website and email services for the UCR Plan. The Board
may take action to adopt the proposal.

XVI. UCR Administrator (Kellen) Contract--UCR Executive Director

For Discussion and Possible Action
    The UCR Executive Director will review a proposed contract renewal
with the UCR Administrator (Kellen). The Board may take action to
adopt.

XVII. Data Event Update--UCR Chief Legal Officer

    The UCR Chief Legal Officer will provide an update to the Board on
the status of certain aspects of the March 2019 data event.

XVIII. Update on Twelve Percent Logistics Litigation--UCR Chief Legal
Officer

    The UCR Chief Legal Officer will provide an update to the Board on
the status of the litigation.

Portions Open to the Public

XIX. Report of Actions Taken During Closed Portion of the Meeting--UCR
Board Chair

    The UCR Board Chair will report on actions, if any, taken during
closed portions of the meeting.

XX. Other Business--UCR Board Chair

    The UCR Board Chair will call for any business, old or new, from
the floor.

XXI. Adjournment--UCR Board Chair

    The UCR Board Chair will adjourn the meeting.

This agenda will be available no later than 5:00 p.m. Eastern time,
March 15, 2020 at: https://plan.ucr.gov.

CONTACT PERSON FOR MORE INFORMATION: Elizabeth Leaman, Chair, Unified
Carrier Registration Plan Board of Directors,<PHONE_NUMBER>,
<EMAIL_ADDRESS>
Alex B. Leath,
Chief Legal Officer,Unified Carrier Registration Plan.
[FR Doc. 2020-08279 Filed 4-15-20; 4:15 pm]
BILLING CODE 4910-YL-P


[Federal Register Volume 83, Number 159 (Thursday, August 16, 2018)]
[Notices]
[Pages 40797-40800]
[FR Doc No: 2018-17633]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83826; File No. SR-Phlx-2018-55]

Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
of Proposed Rule Change Relating to Anticipatory Hedging

August 10, 2018.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on August 3, 2018, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``Commission'')
the proposed rule change as described in Items I, II, and III, below,
which Items have been prepared by the Exchange. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend Rule 1064(d) related to Anticipatory
Hedging.
    The text of the proposed rule change is available on the Exchange's
website at http://nasdaqphlx.cchwallstreet.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 Exchange 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 Exchange 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 Exchange proposes to amend Rule 1064 entitled ``Crossing,
Facilitation and Solicited Orders.'' Specifically, the Exchange
proposes to amend 1064(d)(iii)(A) to add a specific eligibility size
when transacting options on the Nasdaq 100[supreg] Index including
options with nonstandard expiration dates \3\ (``NDX'' and ``NDXP'').
The Exchange also proposes to amend an incorrect cross-reference to
Rule 1064 and replace certain references with a defined term.
---------------------------------------------------------------------------

    \3\ NDX represents A.M.-settled options on the Nasdaq 100
[supreg] Index. NDXP represent P.M.-settled options on the Nasdaq
100 [supreg] Index.
---------------------------------------------------------------------------

    Rule 1064(d) describes rules for anticipatory hedging on Phlx. The
rule provides:

no member organization or person associated with a member or member
organization who has knowledge of the material terms and conditions
of a solicited order, an order being facilitated, or orders being
crossed, the execution of which are imminent, shall enter, based on
such knowledge, an order to buy or sell an option for the same
underlying security; an order to buy or sell the security underlying
such class; or an order to buy or sell any related instrument until
(i) or (ii) occur: (i) the terms and conditions of the order and any
changes in the terms of the order of which the member, member
organization or person associated with a member or member
organization has knowledge are disclosed to the trading crowd, or
(ii) the trade can no longer reasonably be considered imminent in
view of the passage of time since the order was received. For
purposes of this Rule, an order to buy or sell a ``related
instrument'' means, in reference to an index option, an order to buy
or sell securities comprising 10% or more of the component
securities in the index or an order to buy or sell a futures
contract on an economically equivalent index.

    Among other conditions, Rule 1064(d)(iii) provides that it does not
prohibit a member or member organization from buying or selling a
stock, security futures or futures position following receipt of an
option order, including a complex order, but prior to announcing such
order to the trading crowd, provided that the option order is in a
class designated as eligible for ``tied hedge'' transactions \4\ as
determined by the Exchange and is within the designated tied hedge
eligibility size parameters, which parameters shall be determined by
the Exchange and may not be smaller than 500 contracts per order (there
shall be no aggregation of multiple orders to satisfy the size
parameter).
---------------------------------------------------------------------------

    \4\ A tied hedge transaction is described in Rule
1064(d)(iii)(C)-(H).
---------------------------------------------------------------------------

    When Phlx originally adopted the anticipatory hedge rule in
2001,\5\ the Exchange believed that the prohibition on anticipatory
hedging was necessary to prevent members and associated persons from
using undisclosed non-public information about imminent solicited
option transactions to trade the relevant option or any closely-related
instrument in advance of persons represented in the relevant options
crowd. The Exchange notes that the tied-hedge exception was designed to
preserve the right to cross orders in advance of submitting a proposal
to the trading crowd, while at the same time assuring that orders that
are the subject of crossing are exposed to the auction market (trading
crowd) in a meaningful way by prohibiting behavior such as anticipatory
hedging.\6\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 44740 (August 23,
2001), 66 FR 45721 (August 29, 2001) (SR-Phlx-2001-61).
    \6\ See Securities Exchange Act Release No. 61066 (November 25,
2009), 74 FR 63162 (December 2, 2009) (SR-Phlx-2009-98).
---------------------------------------------------------------------------

    The Exchange notes that the primary purpose of the provision, ``not
smaller than 500 contracts'' is to limit use of the tied hedge
procedures to larger orders that might benefit from a member's or
member organization's ability to execute a facilitating hedge.\7\ When
adopting the tied hedge exception the Exchange stated that it believes
that, given the decreased amount of liquidity available at the NBBO,
the frequency with which quotes may flicker, and differing costs
associated with accessing liquidity on various markets, as well as for
ease of administration, the proposed 500 contract minimum should be
sufficient to address these considerations.\8\
---------------------------------------------------------------------------

    \7\ Id.
    \8\ Id.
---------------------------------------------------------------------------

    The Exchange is proposing to add an exception to the eligibility
size parameters for options on the Nasdaq 100[supreg] Index including
options with nonstandard expiration dates (``NDX'' and ``NDXP'') which
lowers the size eligibility for this index to not smaller than 50
contracts per order. The Exchange believes that this smaller order
eligibility size is appropriate for NDX and NDXP because the index
value for NDX and NDXP is high as compared to other securities
instruments. An index has a multiplier of 100. The Exchange believes
that lowering the eligibility size for NDX and NDXP from 500 to 50
contracts is appropriate because it would reduce the minimal notional
value of the trade.
    For example NDX, as of July 19, 2018, had an Index Level of 7,356
and factoring in the contract multiplyer of 100 provides a notional
value of $735,600 as compared to PowerShares QQQ (``QQQ'') which had an
equity value of 179.03 with a notional value of $17,903 (100 x
underlying value) as of July 19, 2018. The premium value of NDX front
month, at-the-money calls for August 17th midpoint was $130.35.
Utilizing this value with 500 contracts would equate to a total premium
for NDX of $6,517,500 and utilizing this value with 50 contracts would
equate to a total premium for NDX of $651,750. By comparison, the
premium value of QQQ front month, at-the-money calls for August 17th
midpoint was $3.43. Utilizing this value with 500 contracts would
equate to a total premium for QQQ of $171,500 and utilizing this value
with 50 contracts would equate to a total premium for QQQ of $17,150.
The example demonstrates the much larger size of NDX as compared to
QQQ, a highly liquidity equity option. This example reflects the size
comparison against a large broad based index and demonstrates the size
of NDX.
    The Exchange notes that this smaller size carve out for NDX is in
line with the original intent of the selection of the size of the
contracts, to limit use of the tied hedge procedures to larger orders
that might benefit from a member's or member organization's ability to
execute a facilitating hedge. The Exchange notes that a size of 50
contracts for NDX is still considered a large size order given the
higher notional value.
    The Exchange notes that it conducts certain surveillances in
connection with anticipatory hedging. Specifically, the Exchange
conducts an on-floor surveillance to ensure both the stock and option
component parts of the trade were exposed in open outcry and there was
a reasonable opportunity for the trading crowd to participant in the
transaction. Further, post-trade surveillance is conducted with respect

to anticipatory hedging rules. The Exchange notes that pursuant to Phlx
Rule 1064(d)(iii)(G), prior to entering tied hedge orders on behalf of
customers, the member or member organization must deliver to the
customer a written notification informing the customer that his order
may be executed using the Exchange's tied hedge procedures. The written
notification must disclose the terms and conditions contained herein
and be in a form approved by the Exchange. The Exchange notes that tied
hedge transactions does not occur with great frequency on the
Exchange's trading floor.
Amend Cross Reference and Define Term
    The Exchange proposes to amend Rule 1066(f)(4) entitled ``Tied
Hedge Order.'' Currently, the rule provides that a tied hedge order is
an option order that is tied to a hedge transaction as defined in
Commentary .04 to Rule 1064, following the receipt of an option order
in a class determined by the Exchange as eligible for ``tied hedge''
transactions. The Exchange proposes to replace Commentary .04 to Rule
1064 within Rule 1066(f)(4) to reference Rule 1064(d)(iii) to correct
the cross-reference.
    The Exchange also proposes to replace legacy references to the
Exchange's trading platform in Rule 1066, namely ``PHLX XL'' and ``PHLX
XL II'' with the term ``System'' which was recently defined by the
Exchange.\9\
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    \9\ System is defined in Phlx Rule 1000(b)(45).
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\10\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\11\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest, by changing the size requirements to assist NDX and NDXP to
meet the eligibility requirements for Rule 1064(d).
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
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    The Exchange's proposed amendment to Rule 1064(d) to permit lower
size eligibility requirements for NDX and NDXP of not smaller than 50
contracts per order is consistent with the Act and the protection of
investors and the public interest because this smaller order
eligibility size is appropriate for NDX and NDXP. NDX is a broad based
index that is designed to reflect the movement of a large segment of
the market. Each of these options represents a notional value equal to
100 units of the index. NDX is a large-cap growth index with 105
components. As with other broad based indexes, NDX has a large notional
value as compared to non-index options. The index value for NDX and
NDXP is 6400. Based on the index multiplier of 100, an index option
would equate to 640,000 in notional value, which is high. The Exchange
believes that lowering the eligibility size for NDX and NDXP from 500
to 50 contracts is appropriate because it would reduce the notional
value of one contract to 64,000 in notional value. The proposed rule
would permit an eligibility size for NDX and NDXP that takes into
account the notional value for this index. The Exchange believes that
permitting the lower eligibility size for NDX and NDXP does not
substantively amend the eligible order size, rather it provides a more
appropriate mathematical equivalent.
    The Exchange notes that this smaller size carve out for NDX is in
line with the original intent of the selection of the size of the
contracts, to limit use of the tied hedge procedures to larger orders
that might benefit from a member's or member organization's ability to
execute a facilitating hedge. The Exchange notes that a size of 50
contracts for NDX is still considered a large size order and in fact,
in the case of NDX, a larger size than 500 contracts for an option
contract.
Amend Cross Reference and Define Term
    The Exchange's proposal to replace Commentary .04 to Rule 1064 with
Rule 1064(d)(iii) to correct the cross-reference and replace ``PHLX
XL'' and ``PHLX XL II'' with the term ``System'' are consistent with
the Act because they will provide more clarity as to the Exchange's
Rules. The Exchange also proposes to replace the words ``PHLX XL'' in
the title of Phlx Rule 1066 with the newly defined term System. The
term PHLX XL is the name of the Exchange's trading platform. The term
``System'' is intended to define the electronic trading platform.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange believes that the
proposed amendment to Rule 1064(d) to permit lower size eligibility
requirements for NDX and NDXP will apply uniformly to all market
participants. The Exchange notes that this smaller size carve out for
NDX is in line with the original intent of the selection of the size of
the contracts, to limit use of the tied hedge procedures to larger
orders that might benefit from a member's or member organization's
ability to execute a facilitating hedge. The Exchange's proposal to
replace Commentary .04 to Rule 1064 with Rule 1064(d)(iii) to correct
the cross-reference and replace ``PHLX XL'' and ``PHLX XL II'' with the
term ``System'' are non-substantive rule changes. The Exchange does not
believe that this will impact inter-market competition because the
smaller eligibility size will permit NDX and NDXP to be available to
market participants for a tied hedge similar to other competing index
options.

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

    No written comments were either solicited or received.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission shall: (a) By order approve
or disapprove such proposed rule change, or (b) institute proceedings
to determine whether the proposed rule change should be 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 protected]. Please include
File Number SR-Phlx-2018-55 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-Phlx-2018-55. 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 website (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 website 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 the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-Phlx-2018-55 and should be submitted on
or before September 6, 2018.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2018-17633 Filed 8-15-18; 8:45 am]
BILLING CODE 8011-01-P


Clean Watershed Needs Survey Office of Wastewater Mangement EPA ICR Number 0318.09 OMB CONTROL NUMBER 2040 0050 February 2002 SUPPORTING STATEMENT A. JUSTIFICATION Section 1 Identification of the Information Collection Title:

Clean Watersheds Needs Survey Report to Congress ICR: Clean Watersheds Needs Survey ICR Number 0318.09 OMB Control Number: 2040 0050 ABSTRACT The Needs Survey is required by Sections 205( a) and 516( b)( 1) of the Clean Water Act. It is an inventory of publicly owned wastewater treatment works ( POTWS) in the United States as well as an estimate of how many POTWs are needed to be built. The Survey is a joint effort of the States, EPA Headquarters ( Office of Wastewater Management ( OWM)) and EPA Regions. The Survey records cost and technical data associated with all POTWS, existing and proposed, in the United States. The States provide this information to EPA. EPA achieves national consistency in the final results through the application of uniform guidelines and validation techniques.

The burden estimate for State respondents to complete the 1996 Survey was estimated as a 2 year effort for a total 13,888 hours. The burden estimated for 1998 of 3025 hours was for 6 States only to assist in modernization of the CWNS. A total burden of 21,000 hours ( for the total 2 year effort) was estimated for the 2000 Survey which reflected an increase in the burden for information collection as a result of the CWNS modernization, and an increase in the number of POTWs. The modernization included the collection of needs for nonpoint source pollution control and geographical point of record data ( i. e. facility latitude/ longitude, discharge points and watershed), as well as training on the newly modenized database. The Survey is now being conducted every four years. The annual burden estimated for the 2004 Survey is 7, 672 hours for the 56 respondents to allow for continual data updates beyond the CWNS collection period for State use and benefit.

1 2 Section 2 Need for and Use of the Collection Need for the Collection EPA provides an estimate of needed POTWS construction requirements for each State, Territory, and the District of Columbia to Congress under Section 516( b) of the Clean Water Act which says in part: " The Administrator in cooperation with the States, including water pollution control agencies and other water pollution control planning agencies, shall make ( A) a detailed estimate of the cost of carrying out the provisions of this Act; ( B) a detailed estimate, biennially revised, of the cost of construction of all needed POTWs in each of the States... The Administrator shall submit such detailed estimate and such comprehensive study of such cost to the Congress no later than February 10 of each odd numbered year."

Further, section 205( a) of this Act provides that " allotments for fiscal years which begin after the fiscal year ending June 30, 1975, shall be made only in accordance with a revised cost estimate made and submitted to Congress in accordance with Section 516( b) of this Act and only after such revised cost estimate shall be approved by law specifically enacted hereafter."

How the Data Will Be Used:

The collected data support cost estimates which are used by Congress in developing allotment formulas for the distribution of funding under the State Revolving Fund Program under Title VI of the Clean Water Act. The Agency uses the data in support of water programs, identifying costs to clean up and control pollution in watersheds of all States in the nation.

Section 3 Nonduplication, Consultations, And Other Collection Criteria Nonduplication: We avoid duplication of effort in the following ways: To begin the new Survey, EPA provides each State their exact inventory of data from the preceding survey to update and make revisions to. EPA updates only the cost data for inflation before facility data are made available to the States for review and update. States and Regions are informed of the cost inflation factor applied and updating procedures at the EPA/ State start up Survey meetings.

The States also have access to technical and cost data contained in the Needs Survey data base from previous Surveys. This eliminates the need for States to provide statistics which have already been approved and ensures national consistency. The addition of geographical data for each facility record, i. e. latitude/ longitude, city and county, further aids in nonduplication of data. 3 Public Notice Required Prior to ICR Submission to OMB Public comments to the July 27, 2001 Federal Register Announcement ( Attachment A) of this ICR: We received no response during the public comment period concerning the burden.

The information requested in the Clean Watersheds Needs Survey ( CWNS) is collected from each State using an automated online data system in a windows 95 environment. At the beginning of the data collection period, each State is provided two user manuals: 1) a technical and comprehensive system manual, and 2) a user manual with detailed policies and procedures specific to the objectives and conduct of the CWNS 2004. At the end of each CWNS, a report is written and published highlighting the national results of the survey and describing the methodology used to collect, document, and quality assure all of the State data included therein. The Report includes many tables and graphs of the various categories of needs throughout the text, as well as, percentile changes in environmental results since the 2000 CWNS. The appendices of the Report are detailed state by state and national summary tables. States are allowed continuous updating on the newly modernized database, but are issued a final date that EPA will accept State updates for inclusion in the CWNS Report to Congress. The time period, established at the startup meeting, for conducting the actual data collection and completing all survey updates is at least nine months in length from the start up. The estimated time it may take a user to collect and enter one record, including copying and mailing hard copies of the documentation is 1.55 hours.

The newly modernized data system was used first for the CWNS 2000, is very user friendly and a national system update is built into the software. The new CWNS system is designed to help States store and organize much more relative data to facilitate their ability to assess impacts to their most critically impaired watersheds as a whole. States may fully utilize the extraneous technical data fields pertaining to georeferencing data, operation and maintenance details, and funding source types and amounts, etc. Depending on the quality and quantity of data States enter, States can download into a GIS and do analyses for determining environmental benefit tradeoffs. This use could aid the efficient use of limited funding to achieve the best water quality improvements for environmental dollars spent.

Consultations OWM and an advisory workgroup composed of EPA Regional and state representatives determine the basic approach and methodology to be used in the Survey. This group has monthly conference calls and meets one time a year, as necessary. OWM will consult the workgroup in developing update criteria and procedures for the 2004 CWNS, to be 4 incorporated in the user manuals distributed to States and EPA Regional coordinators at the Survey start up meetings.

Effects Of Less Frequent Collect The Needs Survey is required to be conducted every 2 years. In 1994, a survey was mandated for the collection of drinking water needs. Therefore, after the completion of the 1992 Clean Water Needs Survey ( CWNS), the CWNS began being conducted every four years, alternating with the drinking water survey. Funding constraints and information security requirements delayed the 2000 CWNS more than one year and may delay start up and completion of the 2004 survey.

Each item in the Needs Survey is necessary to accomplish one or more goals of the Clean Water Act ( CWA). Failure to collect the information could put EPA, States and Regions in the position of being unable to respond to its Congressional mandate or, responding in an untimely manner with information that is inaccurate and incomplete. The Needs Survey data play a major part in evaluating costs for regulations such as the Total Maximum Daily Load ( TMDL) rule, the Sanitary Sewer Overflow ( SSO) rule, and Storm Water Phase I and Phase II. The CWA and state revolving fund allotment formula is overdue to be reauthorized by Congress and the needs data submitted by States will play an important role in determining a fair appropriation of funds for them.

General Guidelines The Survey follows OMB's general guidelines Confidentiality No confidentiality information is used.

Sensitive Questions The Needs Survey does not ask for information considered sensitive or which appears to fall within the types of confidential data protected from release under the Public Information Act.

Section 4 The Respondents And The Information Requested Respondents/ SIC Codes The Standard Industrial Classification for the respondents affected by this collection activity are as follows: 5 Establishment Group Number Industry Number Water Pollution Control 951 9511 Sewage Plants and Systems 495 4952 Information Requested The types of data that will be collected relate to wastewater infrastructure and the costs thereof, including publicly owned wastewater treatment and conveyance systems that need to be built or upgraded. Cost and technical data for infrastructure to control wet weather pollution are collected, including storm water, combined sewer and sanitary sewer overflows. Nonpoint source and small community needs are also captured in this survey.

Section 5 The Information Collected B Agency Activities, Collection Methodology, and Information Management Agency Activities Every four years, the data are collected, reviewed and summarized over a two year time period to give EPA sufficient time to complete review and verification and to prepare the final report. The States and Regions also review the collected data during this time. Specifically, the States are responsible for:

collecting, reviewing and updating the data on municipal wastewater treatment facilities, storm water, and Non point source projects.

submitting proper documentation where necessary.

justifying certain specified categories of need that are based on construction cost curves.

addressing questions about population anomalies.

EPA Headquarters is responsible for:

setting national documentation standards and identifying data sources.

managing the Survey and its data base to ensure national consistency.

acting as the final arbitrator in disputes.

preparing the final Report to Congress and disseminating Survey information. 6

reviewing documentation to ensure its acceptability and updating records.

performing file search of specific facilities and cataloguing the type of documentation.

assigning proper basis of estimates to all cost estimates and applying EPA Cost Curve procedures where appropriate.

reviewing and approving new facility data submitted by the States.

performing quality assurance checks on needs and population data.

deleting needs estimates for facilities that cannot be properly documented in accordance with the established list of acceptable criteria.

EPA Regions are responsible for:

assisting in the review of selected facilities.

acting as arbitrator in State/ EPA disputes.

arranging Regional briefings on conduct of the data collection and results of the survey Collection Methodology And Management EPA has consistently used current technology to complete the Survey. In 1974, the data were collected on a 35  page questionnaire ( EPA 1 Form) which was manually completed by the States. This method placed a large burden on State and EPA regional personnel and resources. In 1976, the EPA 1 Form was redesigned and considerably reduced in size and was made computer compatible. In 1983, the EPA 1 Form was reviewed and revised to two pages which were computer compatible. Subsequent Surveys were conducted in a similar manner. The 1986 Survey preprinted information for States to update on one  page fact sheets which were easier to use than the computerized EPA  1 Form.

Since 1988, the Needs Survey review and update process are computerized to further reduce the workload for the States and Regions in collecting and updating facility data, through computer screened entry and verification of data and approval by EPA Headquarters.

EPA will continue to use the computerized database approach to maintain minimal burden on States and Regions for the 2004 Survey. In addition, relationship edits have been built into the system to reduce errors and research time. States will now have the capability to maintain data year round and utilize the data with other State GIS information. 7 Small Entity Flexibility Collection of information associated with the Needs Survey does not involve small businesses. The primary respondents are the States, usually the State Water Pollution Control Agency or the Department of Environmental Protection.

Collection Schedule In years past, the Needs Survey was planned and collected in a specific 2 year timeframe, because the national needs estimates are required to be summarized in a Report to Congress on a biennial basis. However, the 2004 Survey data inventory ( approved and carried over from the 2000 Survey) may be updated by States at their convenience and on a continual basis.

The national EPA/ State meeting to kickoff the 2004 Needs Survey will be held about 2 years before the Report is planned to go to Congress ( approximately February, 2005). This encourages States to review and update their facility data, if they have not been doing so continually, and gives them a planned schedule to work toward. After this point in time, EPA reviews State supplied documentation and checks for quality assurance of the data.

Presently, the 2000 CWNS Report is being prepared by EPA Headquarters and will be submitted to Congress by August, 2002. The printed Needs Survey Report to Congress can be obtained by those in the public and private sectors on the EPA web site, through EPA's National Services Center for Environmental Publications, and for a fee through the EPA Instruction Resource Center at Ohio State University. The Needs Survey data are used by members in the public and private sectors for environmental program evaluation and studies and new technology product marketing.

Section 6 Estimating The Burden And Cost Of The Collection Estimating Respondent Burden There are 56 respondents involved and a total of 29,698 facilities currently in the Needs Survey data base. The number of facilities each State respondent has in their data inventory may range from 1 to 2,500 per State. It is estimated that an average of 1.55 hours are needed to complete each facility review and update.

Experience shows that respondent involvement varies considerably, depending on the available resources and the individual effort a respondent makes in completing the Survey. Some respondents conduct a selective review of the needs and data while others review and analyze needs and data in detail. States generally update less than half of their facilities 8 each Survey.

The total respondent burden for the 2004 Survey are estimated to be 23,016 hours [ 29,698 facilities / 2 = 14,849; x 1.55], over a 3 year period. The annual burden per respondent will average 137 hours [ 23,016/ 3 = 7,672; / 56] to complete facility update/ reviews. The major respondent activities are shown in Table l with detailed burden estimates.

Estimating Respondent Costs Experience indicates that, because participation varies from respondent to respondent, the estimated cost be based on an overall average rate. The estimated cost to the 56 respondents for the 2004 Survey is based on an average rate of $ 30.06 per hour ( including personnel, compensation and benefits, costs)( PC& B). The annual cost per respondent is estimated at $ 4,118 [ 137 x $ 30.06]. There are no O & M or start up costs anticipated. The total annualized cost for all 56 respondents is estimated at $ 230,608 [$ 4,118 x 56]. These costs are shown in detail for each activity in Table I.

Estimated Agency Burden and Costs The annualized estimate for the total cost to the Federal Government is $ 1,519,777 , to include an estimated $ 895,000 for the EPA contract cost to support the survey. It is based on the average of PC& B costs of the EPA Headquarters and the regional components and includes the costs of an EPA support contract. The EPA headquarters annual burden is approximately 4 work years and the regional component of the burden are estimated annually at 3 work years [ 10 regions X 0.30 Fte]. The total agency burden is estimated at an annualized cost of $ 624,777 [ 2080 hrs. x $ 42.91 = $ 89,253 x 7]. The activities for EPA and the CWNS support contractor are itemized in Table I. 9 TABLE 1 ACTIVITY AGENCY Labor Hrs.

/ Year Federal Labor Costs [$ 42.91/ hr.]

[$ 89,253/ yr.] CONTRACT Costs / Year TOTAL Agency Costs/ Yr. LABOR HRS.

/ Respondent / Year TOTAL Respondent Hours / Year [ Respondents = 56] TOTAL Labor Costs/ Yr.

/ Respondent [ at $ 30.06 / hr.] TOTAL Respondent Costs / Year Contract Management 0.50 FTE $ 44,627. 0 $ 44,627. 0 0 0 Regional Assistance [ 0.30 FTE x 10 Regions] 3.00 FTE $ 267,759. 0 $ 267.759. 0 0 0 Plan, Implement, & Manage Survey 1.50 FTE $ 133,880. 50,000 $ 183,880. 0 0 0 Provide Logistics Support 50,000 $ 50,000. 0 0 0 Refine Modeling Approaches 100,000 $ 100,000. 0 0 0 Provide computer support 0.25 FTE $ 22,314. 270,000 $ 292,314. 0 0 0 Provide Technical Support 0.50 FTE $ 44,627. 210,000 $ 254,627. 0 0 0 Participate in Meetings 0.25 FTE $ 22,314. 0 $ 22,314. 12 672 $ 361. $ 20,216.

Data Update/ Collection 0 107 5,992 $ 3,216. $ 180,096.

Workgroup Support 0.25 FTE $ 22,314. 45,000 $ 67,314. 0 0 0 Review, Q/ A, and Reconcile Data 0.25 FTE $ 22,314. 105,000 $ 127,314. 18 1,008 $ 541. $ 30,296.

Market and promote CWNS 0.25 FTE $ 22,314. 25,000 $ 47,314. 0 0 0 Prepare Final Report 0.25 FTE $ 22,314. 40,000 $ 62,314. 0 0 0 10 ANNUALIZED TOTALS 7 $ 624,777. 895,000 $ 1,519,777. 137 7,672 Reasons For Change In Burden Program Changes:

The approved clearance for the past two years was to begin populating the newly modernized Clean Watersheds Needs Survey Data Base and to complete the data collection for the 2000 Needs Survey. This extension request is for the maximum allowable 3 year period for States to be able to update their data inventory, contained in the CWNS data base, continually. EPA has agreed to maintain the newly modernized database for States to review and enter their data on an ongoing basis, which will alleviate crunch times. The previous ICR burden statements estimated hours and costs based on a total 2 year survey effort, and did not annualize the estimates. This was probably because the national needs estimates are required to be summarized in a Report to Congress on a biennial basis. However, as stated previously, the survey is now being done every 4 years. In addition, we are collecting data from five additional respondents ( four territories and the District of Columbia) to complete the national picture of needs for the 2004 Report to Congress.

Additional respondents burden 5 X 137 hrs./ year = 685 hrs.

This equals a total of 2055 hours over the next 3 years [ 3 x 685].

Current Approved Additional Needed Amount Requested 21,000 2,016 23,016 The 23,016 hours requested is over three years or 7,672 hours annually.

Burden Statement The average reporting burden for each review per respondent is 1.55 hours. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid 11 OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15.

Send comments on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including through the use of automated collection techniques to the Director, Collection Strategies Division, U. S. Environmental Protection Agency, ( 2822), 1200 Pennsylvania Avenue, NW, Washington, D. C. 20460; and to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW, Room 10202, Washington, DC 20503, Attention: Desk Officer for EPA. Include the EPA ICR number ( 0318.09) and OMB control number ( 2040 B 0050) in any correspondence. 12