[Federal Register Volume 86, Number 157 (Wednesday, August 18, 2021)]
[Proposed Rules]
[Pages 46167-46169]
[FR Doc No: 2021-17362]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2021-0564; Project Identifier AD-2020-01350-T]
RIN 2120-AA64

Airworthiness Directives; The Boeing Company Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The FAA proposes to adopt a new airworthiness directive (AD)
for all The Boeing Company Model MD-11 and MD-11F airplanes. This
proposed AD was prompted by reports indicating incidents of wires
chafing against the inboard upper corner of the observer station
circuit breaker panel. This proposed AD would require, depending on
airplane configuration, doing a general visual inspection of the right
observer station upper main circuit breaker panel and wiring for
certain missing parts; doing an inspection of the right observer
station upper main circuit breaker panel to determine if a certain
bracket part number is installed; doing a general visual inspection of
certain wire assemblies for any damage; modifying the observer station
upper main circuit breaker panel; and applicable on-condition actions.
The FAA is proposing this AD to address the unsafe condition on these
products.

DATES: The FAA must receive comments on this proposed AD by October 4,
2021.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.
     Hand Delivery: Deliver to Mail address above between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    For service information identified in this NPRM, contact Boeing
Commercial Airplanes, Attention: Contractual & Data Services (C&DS),
2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600;
telephone<PHONE_NUMBER>; internet https://www.myboeingfleet.com. You may
view this service information at the FAA, Airworthiness Products
Section, Operational Safety Branch, 2200 South 216th St., Des Moines,
WA. For information on the availability of this material at the FAA,
call<PHONE_NUMBER>. It is also available at https://www.regulations.gov
by searching for and locating Docket No. FAA-2021-0564.

Examining the AD Docket

    You may examine the AD docket at https://www.regulations.gov by
searching for and locating Docket No. FAA-2021-0564; or in person at
Docket Operations between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays. The AD docket contains this NPRM, any comments
received, and other information. The street address for Docket
Operations is listed above.

FOR FURTHER INFORMATION CONTACT: Eric Igama, Aerospace Engineer,
Systems and Equipment Section, FAA, Los Angeles ACO Branch, 3960
Paramount Boulevard, Lakewood, CA 90712-4137; phone:<PHONE_NUMBER>; fax:
562-627-5210; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Comments Invited

    The FAA invites you to send any written relevant data, views, or
arguments about this proposal. Send your comments to an address listed
under ADDRESSES. Include ``Docket No. FAA-2021-0564; Project Identifier
AD-2020-01350-T'' at the beginning of your comments. The most helpful
comments reference a specific portion of the proposal, explain the
reason for any recommended change, and include supporting data. The FAA
will consider all comments received by the closing date and may amend
the proposal because of those comments.
    Except for Confidential Business Information (CBI) as described in
the following paragraph, and other information as described in 14 CFR
11.35, the FAA will post all comments received, without change, to
https://www.regulations.gov, including any personal information you
provide. The agency will also post a report summarizing each
substantive verbal contact received about this NPRM.

Confidential Business Information

    CBI is commercial or financial information that is both customarily
and actually treated as private by its owner. Under the Freedom of
Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public
disclosure. If your comments responsive to this NPRM contain commercial
or financial information that is customarily treated as private, that
you actually treat as private, and that is relevant or responsive to
this NPRM, it is important that you clearly designate the submitted
comments as CBI. Please mark each page of your submission containing
CBI as ``PROPIN.'' The FAA will treat such marked submissions as
confidential under the FOIA, and they will not be placed in the public
docket of this NPRM. Submissions containing CBI should be sent to Eric
Igama, Aerospace Engineer, Systems and Equipment Section, FAA, Los
Angeles ACO Branch, 3960 Paramount Boulevard, Lakewood, CA 90712-4137;
phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email<EMAIL_ADDRESS>
Any commentary that the FAA receives which is not specifically
designated as CBI will be placed in the public docket for this
rulemaking.

Background

    The FAA has received reports indicating incidents of wires chafing
against the inboard upper corner of the observer station circuit
breaker panel. It has been determined that this condition allows for
the chafed electrical wires to arc against the metal panel during the
opening and closing of the panel. This condition, if not addressed,
could result in wire chafing and arcing on the panel,

which could cause damage to equipment, and result in loss of electrical
power and a possible in-flight fire.

FAA's Determination

    The FAA is issuing this NPRM after determining that the unsafe
condition described previously is likely to exist or develop on other
products of the same type design.

Related Service Information Under 1 CFR Part 51

    The FAA reviewed Boeing Alert Service Bulletin MD11-24A204,
Revision 2, dated April 14, 2021. For certain airplanes, this service
information describes procedures for doing a general visual inspection
of the right observer station upper main circuit breaker panel and
wiring for missing installation of sleeving, grommets, and spacers;
doing an inspection of the right observer station upper main circuit
breaker panel to determine if bracket part number SR11240046-11 is
installed; and applicable on-condition actions. On-condition actions
include repairing or replacing damaged wires, installing sleeves and
routing wires, trimming and re-identifying the bracket, and replacing
any missing grommets or spacers.
    For certain other airplanes, this service information describes
procedures for doing a general visual inspection of wire assemblies
ABS9110 and ABS9115 for any damage (i.e., wire chafing, arcing),
modifying the observer station upper main circuit breaker panel, and
applicable on-condition actions. On-condition actions include repairing
or replacing damaged wires.
    This service information is reasonably available because the
interested parties have access to it through their normal course of
business or by the means identified in ADDRESSES.

Proposed AD Requirements in This NPRM

    This proposed AD would require accomplishing the actions identified
as ``RC'' (required for compliance) in the Accomplishment Instructions
of Boeing Alert Service Bulletin MD11-24A204, Revision 2, dated April
14, 2021, already described, except for any differences identified as
exceptions in the regulatory text of this proposed AD. For information
on the procedures and compliance times, see this service information at
https://www.regulations.gov by searching for and locating Docket No.
FAA-2021-0564.

Costs of Compliance

    The FAA estimates that this AD, if adopted as proposed, would
affect 118 airplanes of U.S. registry. The FAA estimates the following
costs to comply with this proposed AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost on U.S.
             Action                     Labor cost          Parts cost     Cost per product        operators
----------------------------------------------------------------------------------------------------------------
Inspections....................  Up to 17 work-hours x                $0  Up to $1,445......  Up to $170,510.
                                  $85 per hour = Up to
                                  $1,445.
----------------------------------------------------------------------------------------------------------------

    The FAA estimates the following costs to do any necessary actions
that would be required based on the results of the proposed inspection.
The FAA has no way of determining the number of aircraft that might
need these actions:

                                              On-Condition Costs *
----------------------------------------------------------------------------------------------------------------
               Action                          Labor cost             Parts cost          Cost per product
----------------------------------------------------------------------------------------------------------------
Replacement, installation and         Up to 3 work-hours x $85 per            $428  Up to $683.
 trimming.                             hour = Up to $255.
----------------------------------------------------------------------------------------------------------------
* The FAA has received no definitive data on which to base the cost estimates for the on-condition repairs
  specified in this proposed AD.

    The FAA has included all known costs in its cost estimate.
According to the manufacturer, however, some or all of the costs of
this proposed AD may be covered under warranty, thereby reducing the
cost impact on affected operators.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.
    The FAA is issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: General requirements.
Under that section, Congress charges the FAA with promoting safe flight
of civil aircraft in air commerce by prescribing regulations for
practices, methods, and procedures the Administrator finds necessary
for safety in air commerce. This regulation is within the scope of that
authority because it addresses an unsafe condition that is likely to
exist or develop on products identified in this rulemaking action.

Regulatory Findings

    The FAA determined that this proposed AD would not have federalism
implications under Executive Order 13132. This proposed AD would not
have a substantial direct effect on the States, on the relationship
between the national Government and the States, or on the distribution
of power and responsibilities among the various levels of government.
    For the reasons discussed above, I certify this proposed
regulation:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Would not affect intrastate aviation in Alaska, and
    (3) Would not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

The Proposed Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority:  49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive:

The Boeing Company: Docket No. FAA-2021-0564; Project Identifier AD-
2020-01350-T.

(a) Comments Due Date

    The FAA must receive comments on this airworthiness directive
(AD) by October 4, 2021.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to all The Boeing Company Model MD-11 and MD-11F
airplanes, certificated in any category.

(d) Subject

    Air Transport Association (ATA) of America Code 24, Electrical
power.

(e) Unsafe Condition

    This AD was prompted by reports indicating incidents of wires
chafing against the inboard upper corner of the observer station
circuit breaker panel. The FAA is issuing this AD to address wire
chafing and arcing on the panel, which could cause damage to
equipment, and result in loss of electrical power and a possible in-
flight fire.

(f) Compliance

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

(g) Required Actions

    Except as specified in paragraph (h) of this AD: At the
applicable times specified in paragraph 1.E., ``Compliance,'' of
Boeing Alert Service Bulletin MD11-24A204, Revision 2, dated April
14, 2021, do all applicable actions identified as ``RC'' (required
for compliance) in, and in accordance with, the Accomplishment
Instructions of Boeing Alert Service Bulletin MD11-24A204, Revision
2, dated April 14, 2021.

(h) Exception to Service Information Specifications

    Where Boeing Alert Service Bulletin MD11-24A204, Revision 2,
dated April 14, 2021, uses the phrase ``the Revision 2 date of this
service bulletin,'' this AD requires using ``the effective date of
this AD.''

(i) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Los Angeles ACO Branch, FAA, has the authority
to approve AMOCs for this AD, if requested using the procedures
found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your
request to your principal inspector or responsible Flight Standards
Office, as appropriate. If sending information directly to the
manager of the certification office, send it to the attention of the
person identified in Related Information. Information may be emailed
to<EMAIL_ADDRESS>    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the responsible Flight Standards Office.
    (3) An AMOC that provides an acceptable level of safety may be
used for any repair, modification, or alteration required by this AD
if it is approved by The Boeing Company Organization Designation
Authorization (ODA) that has been authorized by the Manager, Los
Angeles ACO Branch, FAA, to make those findings. To be approved, the
repair method, modification deviation, or alteration deviation must
meet the certification basis of the airplane, and the approval must
specifically refer to this AD.
    (4) For service information that contains steps that are labeled
as Required for Compliance (RC), the provisions of paragraphs
(i)(4)(i) and (ii) of this AD apply.
    (i) The steps labeled as RC, including substeps under an RC step
and any figures identified in an RC step, must be done to comply
with the AD. If a step or substep is labeled ``RC Exempt,'' then the
RC requirement is removed from that step or substep. An AMOC is
required for any deviations to RC steps, including substeps and
identified figures.
    (ii) Steps not labeled as RC may be deviated from using accepted
methods in accordance with the operator's maintenance or inspection
program without obtaining approval of an AMOC, provided the RC
steps, including substeps and identified figures, can still be done
as specified, and the airplane can be put back in an airworthy
condition.

(j) Related Information

    (1) For more information about this AD, contact Eric Igama,
Aerospace Engineer, Systems and Equipment Section, FAA, Los Angeles
ACO Branch, 3960 Paramount Boulevard, Lakewood, CA 90712-4137;
phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>    (2) For service information identified in this AD, contact
Boeing Commercial Airplanes, Attention: Contractual & Data Services
(C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-
5600; telephone<PHONE_NUMBER>; internet https://www.myboeingfleet.com. You may view this service information at the
FAA, Airworthiness Products Section, Operational Safety Branch, 2200
South 216th St., Des Moines, WA. For information on the availability
of this material at the FAA, call<PHONE_NUMBER>.

    Issued on July 9, 2021.
Lance T. Gant,
Director, Compliance & Airworthiness Division, Aircraft Certification
Service.
[FR Doc. 2021-17362 Filed 8-17-21; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 77, Number 61 (Thursday, March 29, 2012)]
[Notices]
[Pages 19011-19012]
[FR Doc No: 2012-7503]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Notice of Commission Staff Attendance

    The Federal Energy Regulatory Commission hereby gives notice that
members of the Commission's staff may attend the following meeting
related to the transmission planning activities of the PJM
Interconnection, L.L.C. (PJM):

PJM Regional Transmission Planning Task Force Subgroups--March 23,
2012, 9 a.m.-12 p.m., Local Time

    The above-referenced meeting will be held over conference call
only.
    The above-referenced meeting is open to stakeholders.
    Further information may be found at www.pjm.com.
    The discussions at the meeting described above may address matters
at issue in the following proceedings:
    Docket No. EL05-121, PJM Interconnection, L.L.C.
    Docket No. ER06-456, ER06-954, ER06-1271, ER07-424, ER06-880, EL07-
57, ER07-1186, ER08-229, ER08-1065, ER09-497, and ER10-268, PJM
Interconnection, L.L.C.
    Docket No. ER10-253 and EL10-14, Primary Power, L.L.C.
    Docket No. EL10-52, Central Transmission, LLC v. PJM
Interconnection, L.L.C.
    Docket No. ER11-4070, RITELine Indiana et al.
    Docket No. ER11-2875 and EL11-20, PJM Interconnection, L.L.C.
    Docket No. ER09-1256, Potomac-Appalachian Transmission Highline,
L.L.C.
    Docket No. ER09-1589, FirstEnergy Service Company.
    Docket No. EL11-56, FirstEnergy Service Company.

    Docket No. ER11-1844, Midwest Independent Transmission System
Operator, Inc.
    Docket No. EL12-10, PJM Interconnection, L.L.C.
    Docket No. ER12-718, New York Independent System Operator, Inc.
    Docket No. ER12-1177, PJM Interconnection, L.L.C.
    Docket No. ER12-1178, PJM Interconnection, L.L.C.
    For more information, contact Jonathan Fernandez, Office of Energy
Market Regulation, Federal Energy Regulatory Commission at (202) 502-
6604 or<EMAIL_ADDRESS>
    Dated: March 22, 2012.
Kimberly D. Bose,
Secretary.
[FR Doc. 2012-7503 Filed 3-28-12; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 80, Number 34 (Friday, February 20, 2015)]
[Notices]
[Pages 9294-9301]
[FR Doc No: 2015-03519]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74278; File No. SR-NYSEArca-2015-04]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change, as Modified by Amendment No. 1, Relating to
the Listing and Trading of Shares of the Innovator IBD[supreg] 50 Fund
Under NYSE Arca Equities Rule 8.600

February 13, 2015.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on January 30, 2015, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. On February 12, 2015, the Exchange filed Amendment No. 1
to the proposal.\4\ The Commission is publishing this notice, as
modified by Amendment No. 1, to solicit comments on the proposed rule
change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
    \4\ Amendment No. 1 replaces SR-NYSEArca-2015-004 and supersedes
such filing in its entirety.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to list and trade the shares of the following
under NYSE Arca Equities Rule 8.600 (``Managed Fund Shares''):
Innovator IBD[supreg] 50 Fund. The text of the proposed rule change is
available on the Exchange's Web site at www.nyse.com, at the principal
office of the Exchange, and at the Commission's Public Reference Room.

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

    In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those 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 parts 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 list and trade shares (``Shares'') of the
following under NYSE Arca Equities Rule 8.600, which governs the
listing and trading of Managed Fund Shares: \5\ Innovator IBD[supreg]
50 Fund (``Fund''). The Shares will be offered by Academy Funds Trust
(the ``Trust''),\6\ an open-end management investment company.\7\ The
investment adviser to the Fund will be Innovator Management LLC (the
``Adviser''). Penserra Capital Management LLC will be the Fund's sub-
adviser (``Sub-Adviser''). Quasar Distributors, LLC (the
``Distributor'') will be the principal underwriter and distributor of
the Fund's Shares. U.S. Bank, N.A. (the ``Administrator'' or
``Custodian'') will serve as the administrator, custodian and transfer
agent for the Fund.
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    \5\ A Managed Fund Share is a security that represents an
interest in an investment company registered under the Investment
Company Act of 1940 (15 U.S.C. 80a-1) (``1940 Act'') organized as an
open-end investment company or similar entity that invests in a
portfolio of securities selected by its investment adviser
consistent with its investment objectives and policies. In contrast,
an open-end investment company that issues Investment Company Units,
listed and traded on the Exchange under NYSE Arca Equities Rule
5.2(j)(3), seeks to provide investment results that correspond
generally to the price and yield performance of a specific foreign
or domestic stock index, fixed income securities index or
combination thereof.
    \6\ The Trust is registered under the 1940 Act. On October 9,
2014 and on December 19, 2014, the Trust filed with the Commission
amendments to its registration statement on Form N-1A under the
Securities Act of 1933 (15 U.S.C. 77a) (``Securities Act'') and
under the 1940 Act relating to the Fund (File Nos. 333-146827 and
811-22135) (``Registration Statement''). The description of the
operation of the Trust and the Fund herein is based, in part, on the
Registration Statement. In addition, the Commission has issued an
order granting certain exemptive relief to the Trust under the 1940
Act. See Investment Company Act Release No. 31248 (September 9,
2014) (File No. 812-14308) (``Exemptive Order'').
    \7\ The Commission has approved listing and trading on the
Exchange of a number of actively managed funds under Rule 8.600.
See, e.g., Securities Exchange Act Release Nos. 63076 (October 12,
2010), 75 FR 63874 (October 18, 2010) (SR-NYSEArca-2010-79) (order
approving Exchange listing and trading of Cambria Global Tactical
ETF); 63802 (January 31, 2011), 76 FR 6503 (February 4, 2011) (SR-
NYSEArca-2010-118) (order approving Exchange listing and trading of
the SiM Dynamic Allocation Diversified Income ETF and SiM Dynamic
Allocation Growth Income ETF); and 65468 (October 3, 2011), 76 FR
62873 (October 11, 2011) (SR-NYSEArca-2011-51) (order approving
Exchange listing and trading of TrimTabs Float Shrink ETF).
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    Commentary .06 to Rule 8.600 provides that, if the investment
adviser to the investment company issuing Managed Fund Shares is
affiliated with a broker-dealer, such investment adviser shall erect a
``fire wall'' between the investment adviser and the broker-dealer with
respect to access to information concerning the composition and/or
changes to such investment company portfolio. In addition, Commentary
.06 further requires that personnel who make decisions on the open-end
fund's portfolio composition must be subject to procedures designed to
prevent the use and dissemination of material nonpublic information
regarding the open-end fund's portfolio.\8\ Commentary .06 to Rule

8.600 is similar to Commentary .03(a)(i) and (iii) to NYSE Arca
Equities Rule 5.2(j)(3); however, Commentary .06 in connection with the
establishment of a ``fire wall'' between the investment adviser and the
broker-dealer reflects the applicable open-end fund's portfolio, not an
underlying benchmark index, as is the case with index-based funds.
Neither the Adviser nor the Sub-Adviser is registered as a broker-
dealer. The Adviser is not affiliated with a broker-dealer. The Sub-
Adviser is affiliated with a broker-dealer and has implemented a ``fire
wall'' with respect to such broker-dealer regarding access to
information concerning the composition and/or changes to the Fund's
portfolio. In the event (a) the Adviser or the Sub-Adviser becomes a
registered broker-dealer or becomes newly affiliated with a broker-
dealer, or (b) any new adviser or any sub-adviser is a registered
broker-dealer or becomes affiliated with a broker-dealer, it will
implement a fire wall with respect to its relevant personnel or its
broker-dealer affiliate regarding access to information concerning the
composition and/or changes to the Fund's portfolio, and will be subject
to procedures designed to prevent the use and dissemination of material
non-public information regarding such portfolio.
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    \8\ An investment adviser to an open-end fund is required to be
registered under the Investment Advisers Act of 1940 (the ``Advisers
Act''). As a result, the Adviser and Sub-Adviser and their related
personnel are subject to the provisions of Rule 204A-1 under the
Advisers Act relating to codes of ethics. This Rule requires
investment advisers to adopt a code of ethics that reflects the
fiduciary nature of the relationship to clients as well as
compliance with other applicable securities laws. Accordingly,
procedures designed to prevent the communication and misuse of non-
public information by an investment adviser must be consistent with
Rule 204A-1 under the Advisers Act. In addition, Rule 206(4)-7 under
the Advisers Act makes it unlawful for an investment adviser to
provide investment advice to clients unless such investment adviser
has (i) adopted and implemented written policies and procedures
reasonably designed to prevent violation, by the investment adviser
and its supervised persons, of the Advisers Act and the Commission
rules adopted thereunder; (ii) implemented, at a minimum, an annual
review regarding the adequacy of the policies and procedures
established pursuant to subparagraph (i) above and the effectiveness
of their implementation; and (iii) designated an individual (who is
a supervised person) responsible for administering the policies and
procedures adopted under subparagraph (i) above.
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Principal Investments
    According to the Registration Statement, the investment objective
of the Fund will be to seek long-term capital appreciation. Under
normal circumstances,\9\ the Fund will invest at least 80% of its net
assets in companies included in the IBD[supreg] 50 Index (``Index'')
and in other assets identified below in this ``Principal Investments''
section. The Fund will generally hold all of the companies included in
the Index other than during periods when the Fund is rebalanced due to
changes in the constitution of the Index. The Fund, however, will not
invest in the Index companies in the same proportion as reflected in
the Index. The Fund will be actively managed and will not be an index
fund. As a result, the Fund's performance will deviate from the
performance of the Index.
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    \9\ The term ``under normal circumstances'' means, without
limitation, the absence of extreme volatility or trading halts in
the equity markets or the financial markets generally; operational
issues causing dissemination of inaccurate market information; or
force majeure type events such as systems failure, natural or man-
made disaster, act of God, armed conflict, act of terrorism, riot or
labor disruption or any similar intervening circumstance.
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    The Index is a computer-generated stock index published by
Investor's Business Daily[supreg] (``IBD[supreg]''). IBD[supreg] uses
proprietary fundamental and technical ratings to compile what
IBD[supreg] considers the 50 leading growth companies that trade on
U.S. national securities exchanges. Companies included in the Index
must meet minimum earnings, sales, profit margin, volume and technical
requirements. Companies meeting these requirements are included in the
Index on a price-weighted basis. This means that stocks with higher
prices receive a greater weight in the Index. The Index is rebalanced
on the last day of each trading week after the U.S. stock market closes
and is published by IBD[supreg] on its Web site, www.investors.com, and
in its Monday print edition.
    According to the Registration Statement, unlike the Index's price-
weighted basis, the Fund will invest in the companies included in the
Index on a conviction basis. This means that the Fund's portfolio
manager will overweight the higher ranked companies in the Index and
underweight the lower ranked companies. The Fund's portfolio manager
anticipates that these higher ranked companies may each represent as
much as approximately 3.5% of the Fund's portfolio at the time of
investment while the lower ranked companies may each represent as
little as approximately 0.5% of the Fund's portfolio at the time of
investment.
    Under normal circumstances, the Fund will invest in U.S. exchange-
traded equities. Typically, the Fund will hold U.S. exchange-traded
common stocks as well as U.S. exchange-traded master limited
partnerships (``MLPs''),\10\ real estate investment trusts
(``REITs''),\11\ royalty trusts and business development companies
(``BDCs''). It will invest primarily in U.S. equity securities but may,
to a lesser extent, invest in equity securities of foreign companies in
both developed and emerging markets, generally through American
depositary receipts (``ADRs'').\12\ The Fund may invest in companies of
any size.
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    \10\ Most MLPs operate in oil and gas related businesses
including energy processing and distribution. The remaining MLPs
operate in a variety of businesses including coal, timber, other
minerals, real estate, and some miscellaneous businesses.
    \11\ According to the Registration Statement, REITs, which are
pooled investment vehicles that invest in real estate or real estate
loans or interests, generally can be classified as ``Equity REITs'',
``Mortgage REITs'' and ``Hybrid REITs''. Equity REITs invest the
majority of their assets directly in real property and derive their
income primarily from rents and capital gains from appreciation
realized through property sales. Mortgage REITs invest the majority
of their assets in real estate mortgages and derive their income
primarily from interest payments. Hybrid REITs combine the
characteristics of both Equity and Mortgage REITs.
    \12\ ADRs are certificates evidencing ownership of shares of a
foreign issuer. Depositary receipts may be sponsored or unsponsored.
These certificates are issued by depository banks and generally
trade on an established market in the United States. The underlying
shares are held in trust by a custodian bank or similar financial
institution in the issuer's home country. The depository bank may
not have physical custody of the underlying securities at all times
and may charge fees for various services, including forwarding
dividends and interest and corporate actions. ADRs are alternatives
to directly purchasing the underlying foreign securities in their
national markets and currencies. ADRs may be sponsored or
unsponsored; however, the Fund will not invest in ADRs that are not
U.S. exchange-listed. Not more than 10% of the net assets of the
Fund in the aggregate invested in exchange-traded equity securities
shall consist of equity securities whose principal market is not a
member of the Intermarket Surveillance Group ('' ISG'') or is a
market with which the Exchange does not have a comprehensive
surveillance sharing agreement.
---------------------------------------------------------------------------

Non-Principal Investments
    According to the Registration Statement, while the Fund, under
normal circumstances, will invest at least 80% of its net assets in
securities described above, the Fund may invest up to 20% of its net
assets in the following securities.
    The Fund may invest in money market securities (the types of which
are discussed below) for liquidity and cash management purposes or if
the Adviser or Sub-Adviser determines that securities meeting the
Fund's investment objective and policies are not otherwise readily
available for purchase. Money market securities include (i) short-term
U.S. government securities; (ii) commercial paper \13\ rated in the
highest short-term rating category by a nationally recognized
statistical ratings organization (``NRSRO''), such as Standard & Poor's
or Moody's, or determined by the Adviser or Sub-

Adviser to be of comparable quality at the time of purchase; (iii)
short-term bank obligations (certificates of deposit \14\ time deposits
\15\ and bankers' acceptances \16\) of U.S. domestic banks, foreign
banks and foreign branches of domestic banks, and commercial banks with
assets of at least $1 billion as of the end of their most recent fiscal
year; (iv) repurchase agreements \17\ involving such securities; and
(v) money market mutual funds.
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    \13\ The commercial paper in which the Fund may invest consists
of unsecured short-term promissory notes issued by corporations and
other entities. Maturities on these issues vary from a few to 270
days.
    \14\ Certificates of deposit are interest-bearing instruments
with a specific maturity issued by banks and savings and loan
institutions in exchange for the deposit of funds.
    \15\ Time deposits are non-negotiable receipts issued by a bank
in exchange for the deposit of funds.
    \16\ Bankers' acceptances are bills of exchange or time drafts
drawn on and accepted by a commercial bank. Corporations use
bankers' acceptances to finance the shipment and storage of goods
and to furnish dollar exchange. Maturities are generally six months
or less.
    \17\ The Fund will follow certain procedures designed to
minimize the risks inherent in such agreements. These procedures
include effecting repurchase transactions only with large, well-
capitalized and well-established financial institutions whose
condition will be continually monitored by the Adviser.
---------------------------------------------------------------------------

    The Fund may invest in securities of other investment companies
(other than BDCs), including shares of the following: (1) Exchange-
traded funds (``ETFs''),\18\ unit investment trusts, and closed-end
investment companies, each of which will be listed and traded on a U.S.
national securities exchange, and (2) non-exchange-listed open-end
investment companies.
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    \18\ For purposes of this filing, ETFs include Investment
Company Units (as described in NYSE Arca Equities Rule 5.2(j)(3));
Portfolio Depositary Receipts (as described in NYSE Arca Equities
Rule 8.100); and Managed Fund Shares (as described in NYSE Arca
Equities Rule 8.600). The ETFs all will be listed and traded in the
U.S. on national securities exchanges. While the Fund may invest in
inverse ETFs, the Fund will not invest in leveraged or inverse
leveraged ETFs (e.g., 2X or 3X).
---------------------------------------------------------------------------

Investment Restrictions
    According to the Registration Statement, the Fund will be
classified as a diversified investment company under the 1940 Act.\19\
---------------------------------------------------------------------------

    \19\ The diversification standard is set forth in Section
5(b)(1) of the 1940 Act.
---------------------------------------------------------------------------

    The Fund intends to qualify as a ``regulated investment company''
for purposes of the Internal Revenue Code of 1986.\20\
---------------------------------------------------------------------------

    \20\ 26 U.S.C. 851.
---------------------------------------------------------------------------

    According to the Registration Statement, the Fund will not invest
25% or more of the Fund's net assets in securities of issuers in any
one industry or group of industries (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities or securities of other investment companies), except
that the Fund may invest 25% or more of its net assets in securities of
issuers in the same industry to approximately the same extent that the
Index concentrates in the securities of a particular industry or group
of industries.
    The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets.\21\ The Fund will monitor its portfolio
liquidity on an ongoing basis to determine whether, in light of current
circumstances, an adequate level of liquidity is being maintained, and
will consider taking appropriate steps in order to maintain adequate
liquidity if, through a change in values, net assets, or other
circumstances, more than 15% of the Fund's net assets are held in
illiquid assets. Illiquid assets include securities subject to
contractual or other restrictions on resale and other instruments that
lack readily available markets as determined in accordance with
Commission staff guidance.\22\
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    \21\ Under the supervision of the Board, the Adviser determines
the liquidity of the Fund's investments. In determining the
liquidity of the Fund's investments, the Adviser may consider
various factors, including (1) the frequency and volume of trades
and quotations; (2) the number of dealers and prospective purchasers
in the marketplace; (3) dealer undertakings to make a market; and
(4) the nature of the security and the market in which it trades
(including any demand, put or tender features, the mechanics and
other requirements for transfer, any letters of credit or other
credit enhancement features, any ratings, the number of holders, the
method of soliciting offers, the time required to dispose of the
security, and the ability to assign or offset the rights and
obligations of the security).
    \22\ The Commission has stated that long-standing Commission
guidelines have required open-end funds to hold no more than 15% of
their net assets in illiquid securities and other illiquid assets.
See Investment Company Act Release No. 28193 (March 11, 2008), 73 FR
14618 (March 18, 2008), footnote 34. See also, Investment Company
Act Release No. 5847 (October 21, 1969), 35 FR 19989 (December 31,
1970) (Statement Regarding ``Restricted Securities''); Investment
Company Act Release No. 18612 (March 12, 1992), 57 FR 9828 (March
20, 1992) (Revisions of Guidelines to Form N-1A). A fund's portfolio
security is illiquid if it cannot be disposed of in the ordinary
course of business within seven days at approximately the value
ascribed to it by the fund. See Investment Company Act Release No.
14983 (March 12, 1986), 51 FR 9773 (March 21, 1986) (adopting
amendments to Rule 2a-7 under the 1940 Act); Investment Company Act
Release No. 17452 (April 23, 1990), 55 FR 17933 (April 30, 1990)
(adopting Rule 144A under the 1933 Act).
---------------------------------------------------------------------------

    The Fund will not invest in options, futures contracts or swaps
agreements. The Fund's investments will be consistent with its
investment objective and will not be used to enhance leverage. The Fund
will not invest in leveraged or inverse leveraged (e.g., 2X, -2X, 3X or
-3X) ETFs.
Net Asset Value
    According to the Registration Statement, the Administrator will
calculate the Fund's net asset value (``NAV'') at the close of regular
trading (ordinarily 4:00 p.m. Eastern time) every day the New York
Stock Exchange (``NYSE'') is open. The NAV for one Fund Share will be
the value of that Share's portion of all of the net assets of the Fund.
In calculating its NAV, the Fund generally will value its investment
portfolio at market price. If market prices are not readily available
or the Fund reasonably believes that they are unreliable, such as in
the case of a security value that has been materially affected by
events occurring after the relevant market closes, the Fund will price
those securities at fair value as determined using methods approved by
the Fund's Board of Trustees (``Board'').
    In computing the Fund's NAV, the Fund's securities holdings will be
valued based on their last readily available market price. Price
information on exchange-listed securities, including common stocks,
ETFs, unit investment trusts, closed-end investment companies, ADRs,
MLPs, REITs, royalty trusts and BDCs will be valued at market value,
which will generally be determined using the last reported official
closing or last trading price on the exchange or market on which the
security is primarily traded at the time of valuation or, if no sale
has occurred, at the last quoted bid price on the primary market or
exchange on which they are traded. Money market mutual funds will be
valued at NAV. Other money market securities generally will be valued
on the basis of independent pricing services or quotes obtained from
brokers and dealers.
    Other portfolio securities and assets for which market quotations
are not readily available or determined to not represent the current
fair value will be valued based on fair value as determined in good
faith in accordance with procedures adopted by the Board and in
accordance with the 1940 Act.
Creations and Redemptions of Shares
    According to the Registration Statement, the Fund will issue and
sell Shares only in ``Creation Unit'' size at the NAV next determined
after receipt, on any business day, of an order in proper form. A
Creation Unit consists of 25,000 Shares. The size of a Creation Unit is
subject to change.
    The consideration for purchase of Creation Units of the Fund
generally will consist of the in-kind deposit of a designated portfolio
of equity securities--the ``Deposit Securities''--per each Creation
Unit constituting a substantial replication, or a representation, of
the securities included in the Fund's portfolio and an

amount of cash--the ``Cash Component''--computed as described below.
Together, the Deposit Securities and the Cash Component constitute the
``Fund Deposit,'' which represents the minimum initial and subsequent
investment amount for a Creation Unit of the Fund.
    The Cash Component (also referred to as the ``Balancing Amount'')
serves the function of compensating for any differences between the NAV
per Creation Unit and the Deposit Amount (as defined below). The Cash
Component is an amount equal to the difference between the NAV of the
Fund Shares (per Creation Unit) and the ``Deposit Amount''--an amount
equal to the market value of the Deposit Securities. If the Cash
Component is a positive number (i.e., the NAV per Creation Unit exceeds
the Deposit Amount), the creator will deliver the Cash Component. If
the Cash Component is a negative number (i.e., the NAV per Creation
Unit is less than the Deposit Amount), the creator will receive the
Cash Component.
    The Custodian, through the National Securities Clearing Corporation
(``NSCC''), will make available on each business day, prior to the
opening of business on the Exchange (currently 9:30 a.m., Eastern
time), the list of the names and the required number of shares of each
Deposit Security to be included in the current Fund Deposit (based on
information at the end of the previous business day) for the Fund. Such
Fund Deposit will be applicable, subject to any adjustments as
described below, in order to effect creations of Creation Units of the
Fund until such time as the next announced composition of the Deposit
Securities is made available.
    The identity and number of shares of the Deposit Securities
required for a Fund Deposit for the Fund will change as rebalancing
adjustments and corporate action events are reflected from time to time
by the Sub-Adviser to the Fund with a view to the investment objective
of the Fund. In addition, the Trust reserves the right to permit or
require the substitution of an amount of cash--i.e., a ``cash in lieu''
amount--to be added to the Cash Component to replace any Deposit
Security which may not be available in sufficient quantity for delivery
or which may not be eligible for transfer, or which may not be eligible
for trading by an Authorized Participant (as defined below) or the
investor for which it is acting. The Trust also reserves the right to
offer an ``all cash'' option for creations of Creation Units for the
Fund.\23\
---------------------------------------------------------------------------

    \23\ The Adviser represents that, to the extent the Trust
effects the creation or redemption of Shares in cash, such
transactions will be effected in the same manner for all Authorized
Participants.
---------------------------------------------------------------------------

    In addition to the list of names and numbers of securities
constituting the current Deposit Securities of a Fund Deposit, the
Administrator, through the NSCC, also will make available on each
business day, the estimated Cash Component, effective through and
including the previous business day, per outstanding Creation Unit of
the Fund.
    To be eligible to place orders with the Distributor to create a
Creation Unit of the Fund, an entity must be (i) a ``Participating
Party,'' i.e., a broker-dealer or other participant in the clearing
process through the Continuous Net Settlement System of the NSCC (the
``Clearing Process''), a clearing agency that is registered with the
Commission; or (ii) a Depository Trust Company (``DTC'') Participant,
and, in each case, must have executed a ``Participant Agreement'' with
the Trust, the Distributor and the Administrator with respect to
creations and redemptions of Creation Units. A Participating Party and
DTC Participant are collectively referred to as an ``Authorized
Participant.''
    All orders to create Creation Units must be placed for one or more
Creation Unit size aggregations of at least 25,000 Shares. All orders
to create Creation Units must be received by the Distributor no later
than 3:00 p.m., Eastern Time, an hour earlier than the close of the
regular trading session on the Exchange (ordinarily 4:00 p.m., Eastern
Time) (``Closing Time''), in each case on the date such order is placed
in order for the creation of Creation Units to be effected based on the
NAV of Shares of the Fund as next determined on such date after receipt
of the order in proper form.
Redemption of Shares
    According to the Registration Statement, Shares may be redeemed
only in Creation Units at their NAV next determined after receipt of a
redemption request in proper form by the Fund through the Administrator
and only on a business day. Orders to redeem Creation Units must be
received by the Administrator not later than 3:00 p.m., Eastern Time.
    With respect to the Fund, the Administrator, through the NSCC, will
make available immediately prior to the opening of business on the
Exchange (currently 9:30 a.m., Eastern Time) on each business day, the
list of the names and number of shares of the Fund's portfolio
securities (``Fund Securities'') that will be applicable (subject to
possible amendment or correction) to redemption requests received in
proper form on that day. Fund Securities received on redemption may not
be identical to Deposit Securities which are applicable to creations of
Creation Units.
    Unless cash redemptions are available or specified for the Fund,
the redemption proceeds for a Creation Unit generally will consist of
Fund Securities--as announced by the Administrator on the business day
of the request for redemption received in proper form--plus cash in an
amount equal to the difference between the NAV of the Shares being
redeemed, as next determined after receipt of a request in proper form,
and the value of the Fund Securities (the ``Cash Redemption Amount''),
less a redemption transaction fee. In the event that the Fund
Securities have a value greater than the NAV of the Shares, a
compensating cash payment equal to the differential is required to be
made by or through an Authorized Participant by the redeeming
shareholder.
    If it is not possible to effect deliveries of the Fund Securities,
the Fund may in its discretion exercise its option to redeem such
shares in cash, and the redeeming beneficial owner will be required to
receive its redemption proceeds in cash. In addition, an investor may
request a redemption in cash which the Fund may, in its sole
discretion, permit. In either case, the investor will receive a cash
payment equal to the NAV of its Shares based on the NAV of Shares of
the Fund next determined after the redemption request is received in
proper form (minus a redemption transaction fee and additional charge
for requested cash redemptions to offset the Trust's brokerage and
other transaction costs associated with the disposition of Fund
Securities). The Fund may also, in its sole discretion, upon request of
a shareholder, provide such redeemer a portfolio of securities which
differs from the exact composition of the Fund Securities but does not
differ in NAV.
    Redemptions of Shares for Fund Securities will be subject to
compliance with applicable federal and state securities laws and the
Fund (whether or not it otherwise permits cash redemptions) reserves
the right to redeem Creation Units for cash to the extent that the Fund
could not lawfully deliver specific Fund Securities upon redemptions or
could not do so without first registering the Fund Securities under
such laws. An Authorized

Participant or an investor for which it is acting subject to a legal
restriction with respect to a particular stock included in the Fund
Securities applicable to the redemption of a Creation Unit may be paid
an equivalent amount of cash. The Trust also reserves the right to
offer an ``all cash'' option for redemptions of Creation Units for the
Fund.
    The right of redemption may be suspended or the date of payment
postponed with respect to the Fund (1) for any period during which the
NYSE is closed (other than customary weekend and holiday closings); (2)
for any period during which trading on the NYSE is suspended or
restricted; (3) for any period during which an emergency exists as a
result of which disposal of the Shares of the Fund or determination of
the Shares' NAV is not reasonably practicable; or (4) in such other
circumstance as is permitted by the Commission.
Availability of Information
    The Fund's Web site (www.innovatorfunds.com), which will be
publicly available prior to the public offering of Shares, will include
a form of the prospectus for the Fund that may be downloaded. The
Fund's Web site will include additional quantitative information
updated on a daily basis, including, for the Fund, (1) daily trading
volume, the prior business day's reported closing price, NAV and mid-
point of the bid/ask spread at the time of calculation of such NAV (the
``Bid/Ask Price''),\24\ and a calculation of the premium and discount
of the Bid/Ask Price against the NAV, and (2) data in chart format
displaying the frequency distribution of discounts and premiums of the
daily Bid/Ask Price against the NAV, within appropriate ranges, for
each of the four previous calendar quarters. On each business day,
before commencement of trading in Shares in the Core Trading Session on
the Exchange, the Fund will disclose on its Web site the Disclosed
Portfolio that will form the basis for the Fund's calculation of NAV at
the end of the business day.\25\
---------------------------------------------------------------------------

    \24\ The Bid/Ask Price of Shares of the Fund will be determined
using the mid-point of the highest bid and the lowest offer on the
Exchange as of the time of calculation of the Fund's NAV. The
records relating to Bid/Ask Prices will be retained by the Fund and
its service providers.
    \25\ Under accounting procedures followed by the Fund, trades
made on the prior business day (``T'') will be booked and reflected
in NAV on the current business day (``T+1''). Accordingly, the Fund
will be able to disclose at the beginning of the business day the
portfolio that will form the basis for the NAV calculation at the
end of the business day.
---------------------------------------------------------------------------

    On a daily basis, the Adviser, on behalf of the Fund, will disclose
on the Fund's Web site the following information regarding each
portfolio holding, as applicable to the type of holding: Ticker symbol,
CUSIP number or other identifier, if any; a description of the holding
(including the type of holding); the identity of the security, index,
or other asset or instrument underlying the holding, if any; maturity
date, if any; coupon rate, if any; effective date, if any; market value
of the holding; and the percentage weighting of the holding in the
Fund's portfolio. The Web site information will be publicly available
at no charge.
    In addition, a basket composition file, which includes the security
names and share quantities (as applicable) required to be delivered in
exchange for Fund Shares, together with estimates and actual cash
components, will be publicly disseminated daily prior to the opening of
the NYSE via the NSCC. The basket will represent one Creation Unit of
the Fund.
    Investors can also obtain the Fund's Statement of Additional
Information (``SAI''), the Fund's Shareholder Reports, and its Form N-
CSR and Form N-SAR, filed twice a year. The Trust's SAI and Shareholder
Reports will be available free upon request from the Trust, and those
documents and the Form N-CSR and Form N-SAR may be viewed on-screen or
downloaded from the Commission's Web site at www.sec.gov. Information
regarding market price and trading volume of the Shares will be
continually available on a real-time basis throughout the day on
brokers' computer screens and other electronic services. Information
regarding the previous day's closing price and trading volume
information for the Shares will be published daily in the financial
section of newspapers. Quotation and last sale information for the
Shares and U.S. exchange-listed equity securities, including common
stocks, ETFs, unit investment trusts, closed-end investment companies,
ADRs, MLPs, REITs, royalty trusts and BDCs will be available via the
Consolidated Tape Association (``CTA'') high-speed line, and will be
available from the national securities exchange on which they are
listed. Intra-day and closing price information relating to the
investments of the Fund will be available from major market data
vendors and from securities exchanges, as applicable. Price information
regarding money market mutual funds will be available from on-line
sources and from the Web site for the applicable fund. Price
information relating to other money market securities will be available
from major market data vendors. In addition, the Portfolio Indicative
Value, as defined in NYSE Arca Equities Rule 8.600(c)(3), based on
current information regarding the value of the securities and other
assets in the Disclosed Portfolio, will be widely disseminated at least
every 15 seconds during the Core Trading Session by one or more major
market data vendors.\26\ The dissemination of the Portfolio Indicative
Value, together with the Disclosed Portfolio, will allow investors to
determine the value of the underlying portfolio of the Fund on a daily
basis and will provide a close estimate of that value throughout the
trading day. The Portfolio Indicative Value should not be viewed as a
``real-time'' update of the NAV per Share of the Fund, which will be
calculated once per day.
---------------------------------------------------------------------------

    \26\ Currently, it is the Exchange's understanding that several
major market data vendors display and/or make widely available
Portfolio Indicative Values taken from CTA or other data feeds.
---------------------------------------------------------------------------

Trading Halts
    With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares of the Fund.\27\ Trading in Shares of the Fund
will be halted if the circuit breaker parameters in NYSE Arca Equities
Rule 7.12 have been reached. Trading also may be halted because of
market conditions or for reasons that, in the view of the Exchange,
make trading in the Shares inadvisable. These may include: (1) The
extent to which trading is not occurring in the securities and/or the
financial instruments comprising the Disclosed Portfolio of the Fund;
or (2) whether other unusual conditions or circumstances detrimental to
the maintenance of a fair and orderly market are present. Trading in
the Shares will be subject to NYSE Arca Equities Rule 8.600(d)(2)(D),
which sets forth circumstances under which Shares of the Fund may be
halted.
---------------------------------------------------------------------------

    \27\ See NYSE Arca Equities Rule 7.12.
---------------------------------------------------------------------------

Trading Rules
    The Exchange deems the Shares to be equity securities, thus
rendering trading in the Shares subject to the Exchange's existing
rules governing the trading of equity securities. Shares will trade on
the NYSE Arca Marketplace from 4 a.m. to 8 p.m. Eastern Time in
accordance with NYSE Arca Equities Rule 7.34 (Opening, Core, and Late
Trading Sessions). The Exchange has appropriate rules to facilitate
transactions in the Shares during all trading sessions. As provided in
NYSE Arca Equities Rule 7.6, Commentary .03, the minimum price
variation (``MPV'') for quoting and entry of orders in equity
securities traded on the NYSE Arca

Marketplace is $0.01, with the exception of securities that are priced
less than $1.00 for which the MPV for order entry is $0.0001.
    The Shares will conform to the initial and continued listing
criteria under NYSE Arca Equities Rule 8.600. Consistent with NYSE Arca
Equities Rule 8.600(d)(2)(B)(ii), the Adviser, as the Reporting
Authority, will implement and maintain, or be subject to, procedures
designed to prevent the use and dissemination of material non-public
information regarding the actual components of the Fund's portfolio.
The Exchange represents that, for initial and/or continued listing, the
Fund will be in compliance with Rule 10A-3 \28\ under the Act, as
provided by NYSE Arca Equities Rule 5.3. A minimum of 100,000 Shares
will be outstanding at the commencement of trading on the Exchange. The
Exchange will obtain a representation from the issuer of the Shares
that the NAV per Share will be calculated daily and that the NAV and
the Disclosed Portfolio as defined in NYSE Arca Equities Rule
8.600(c)(2) will be made available to all market participants at the
same time.
---------------------------------------------------------------------------

    \28\ 17 CFR 240.10A-3.
---------------------------------------------------------------------------

Surveillance
    The Exchange represents that trading in the Shares will be subject
to the existing trading surveillances, administered by the Financial
Industry Regulatory Authority (``FINRA'') on behalf of the Exchange,
which are designed to detect violations of Exchange rules and
applicable federal securities laws.\29\ The Exchange represents that
these procedures are adequate to properly monitor Exchange trading of
the Shares in all trading sessions and to deter and detect violations
of Exchange rules and federal securities laws applicable to trading on
the Exchange.
---------------------------------------------------------------------------

    \29\ FINRA surveils trading on the Exchange pursuant to a
regulatory services agreement. The Exchange is responsible for
FINRA's performance under this regulatory services agreement.
---------------------------------------------------------------------------

    The surveillances referred to above generally focus on detecting
securities trading outside their normal patterns, which could be
indicative of manipulative or other violative activity. When such
situations are detected, surveillance analysis follows and
investigations are opened, where appropriate, to review the behavior of
all relevant parties for all relevant trading violations.
    FINRA, on behalf of the Exchange, will communicate as needed
regarding trading in the Shares and underlying exchange-traded equity
securities (including common stocks, ETFs, unit investment trusts,
closed-end investment companies, ADRs, MLPs, REITs, royalty trusts and
BDCs) with other markets and other entities that are members of the
Intermarket Surveillance Group (``ISG''), and FINRA, on behalf of the
Exchange, may obtain trading information regarding trading in the
Shares, underlying exchange-traded equity securities, from such markets
and other entities. In addition, the Exchange may obtain information
regarding trading in the Shares and underlying exchange-traded equity
securities from markets and other entities that are members of ISG or
with which the Exchange has in place a comprehensive surveillance
sharing agreement.\30\
---------------------------------------------------------------------------

    \30\ For a list of the current members of ISG, see
www.isgportal.org. The Exchange notes that not all components of the
Disclosed Portfolio for the Fund may trade on markets that are
members of ISG or with which the Exchange has in place a
comprehensive surveillance sharing agreement.
---------------------------------------------------------------------------

    Not more than 10% of the net assets of the Fund in the aggregate
invested in exchange-traded equity securities shall consist of equity
securities whose principal market is not a member of the ISG or is a
market with which the Exchange does not have a comprehensive
surveillance sharing agreement.
    In addition, the Exchange also has a general policy prohibiting the
distribution of material, non-public information by its employees.
Information Bulletin
    Prior to the commencement of trading, the Exchange will inform its
Equity Trading Permit Holders in an Information Bulletin (``Bulletin'')
of the special characteristics and risks associated with trading the
Shares. Specifically, the Bulletin will discuss the following: (1) The
procedures for purchases and redemptions of Shares in Creation Unit
aggregations (and that Shares are not individually redeemable); (2)
NYSE Arca Equities Rule 9.2(a), which imposes a duty of due diligence
on its Equity Trading Permit Holders to learn the essential facts
relating to every customer prior to trading the Shares; (3) the risks
involved in trading the Shares during the Opening and Late Trading
Sessions when an updated Portfolio Indicative Value will not be
calculated or publicly disseminated; (4) how information regarding the
Portfolio Indicative Value is disseminated; (5) the requirement that
Equity Trading Permit Holders deliver a prospectus to investors
purchasing newly issued Shares prior to or concurrently with the
confirmation of a transaction; and (6) trading information.
    In addition, the Bulletin will reference that the Fund is subject
to various fees and expenses described in the Registration Statement.
The Bulletin will discuss any exemptive, no-action, and interpretive
relief granted by the Commission from any rules under the Act. The
Bulletin will also disclose that the NAV for the Shares will be
calculated after 4:00 p.m. Eastern Time each trading day.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) \31\ that an exchange have rules that
are designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to remove
impediments to, and perfect the mechanism of a free and open market
and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \31\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices in that the
Shares will be listed and traded on the Exchange pursuant to the
initial and continued listing criteria in NYSE Arca Equities Rule
8.600. The Exchange has in place surveillance procedures that are
adequate to properly monitor trading in the Shares in all trading
sessions and to deter and detect violations of Exchange rules and
applicable federal securities laws. FINRA, on behalf of the Exchange,
will communicate as needed regarding trading in the Shares and
underlying exchange-traded equity securities (including common stocks,
ETFs, unit investment trusts, closed-end investment companies, ADRs,
MLPs, REITs, royalty trusts and BDCs) with other markets and other
entities that are members of ISG, and FINRA, on behalf of the Exchange,
may obtain trading information regarding trading in the Shares and
underlying exchange-traded equity securities from such markets and
other entities. In addition, the Exchange may obtain information
regarding trading in the Shares and underlying exchange-traded equity
securities with other markets and other entities that are members of
ISG or with which the Exchange has in place a comprehensive
surveillance sharing agreement. Not more than 10% of the net assets of
the Fund in the aggregate invested in exchange-traded equity securities
shall consist of equity securities whose principal market is not a
member of the ISG or is a market with which the Exchange does not have
a comprehensive surveillance sharing

agreement. Neither the Adviser nor the Sub-Adviser is registered as a
broker-dealer. The Adviser is not affiliated with a broker-dealer. The
Sub-Adviser is affiliated with a broker-dealer and has implemented a
``fire wall'' with respect to such broker-dealer regarding access to
information concerning the composition and/or changes to the Fund's
portfolio. In the event (a) the Adviser or the Sub-Adviser becomes a
registered broker-dealer or becomes newly affiliated with a broker-
dealer, or (b) any new adviser or any sub-adviser is a registered
broker-dealer or becomes affiliated with a broker-dealer, it will
implement a fire wall with respect to its relevant personnel or its
broker-dealer affiliate regarding access to information concerning the
composition and/or changes to the Fund's portfolio, and will be subject
to procedures designed to prevent the use and dissemination of material
non-public information regarding such portfolio. The Fund may hold up
to an aggregate amount of 15% of its net assets in illiquid assets. The
Fund will not invest in leveraged or inverse leveraged (e.g., 2X, -2X,
3X or -3X) ETFs. The Fund's investments will be consistent with the
Fund's investment objective and will not be used to enhance leverage.
    The proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
that the Exchange will obtain a representation from the issuer of the
Shares that the NAV per Share will be calculated daily and that the NAV
and the Disclosed Portfolio will be made available to all market
participants at the same time. In addition, a large amount of
information will be publicly available regarding the Fund and the
Shares, thereby promoting market transparency. Quotation and last sale
information for the Shares will be available via the CTA high-speed
line. In addition, the Portfolio Indicative Value will be widely
disseminated by the Exchange at least every 15 seconds during the Core
Trading Session. The Fund's Web site will include a form of the
prospectus for the Fund that may be downloaded, as well as additional
quantitative information updated on a daily basis. On each business
day, before commencement of trading in Shares in the Core Trading
Session on the Exchange, the Fund will disclose on its Web site the
Disclosed Portfolio that will form the basis for the Fund's calculation
of NAV at the end of the business day. On a daily basis, the Adviser,
on behalf of the Fund, will disclose on the Fund's Web site the
following information regarding each portfolio holding, as applicable
to the type of holding: Ticker symbol, CUSIP number or other
identifier, if any; a description of the holding (including the type of
holding); the identity of the security, index, or other asset or
instrument underlying the holding, if any; maturity date, if any;
coupon rate, if any; effective date, if any; market value of the
holding; and the percentage weighting of the holding in the Fund's
portfolio. The Web site information will be publicly available at no
charge. Moreover, prior to the commencement of trading, the Exchange
will inform its Equity Trading Permit Holders in an Information
Bulletin of the special characteristics and risks associated with
trading the Shares. Trading in Shares of the Fund will be halted if the
circuit breaker parameters in NYSE Arca Equities Rule 7.12 have been
reached or because of market conditions or for reasons that, in the
view of the Exchange, make trading in the Shares inadvisable. Trading
in the Shares will be subject to NYSE Arca Equities Rule
8.600(d)(2)(D), which sets forth circumstances under which Shares of
the Fund may be halted. In addition, as noted above, investors will
have ready access to information regarding the Fund's holdings, the
Portfolio Indicative Value, the Disclosed Portfolio, and quotation and
last sale information for the Shares.
    The proposed rule change is designed to perfect the mechanism of a
free and open market and, in general, to protect investors and the
public interest in that it will facilitate the listing and trading of
an additional type of actively-managed exchange-traded product that
will enhance competition among market participants, to the benefit of
investors and the marketplace. As noted above, the Exchange has in
place surveillance procedures that are adequate to properly monitor
trading in the Shares in all trading sessions and to deter and detect
violations of Exchange rules and applicable federal securities laws. In
addition, as noted above, investors will have ready access to
information regarding the Fund's holdings, the Portfolio Indicative
Value, the Disclosed Portfolio, and quotation and last sale information
for the Shares.

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 that is not necessary or appropriate
in furtherance of the purpose of the Act. The Exchange notes that the
proposed rule change will facilitate the listing and trading of an
additional type of actively-managed exchange-traded product that
primarily holds equity securities and that will enhance competition
among market participants, to the benefit of investors and the
marketplace.

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

    No written comments were solicited or received with respect to the
proposed rule change.

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 self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the 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_ADDRESS>Please include
File Number SR-NYSEArca-2015-04 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-NYSEArca-2015-04. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written

communications relating to the proposed rule change between the
Commission and any person, other than those that may be withheld from
the public in accordance with the provisions of 5 U.S.C. 552, will be
available for Web site viewing and printing in the Commission's Public
Reference Room, 100 F Street NE., Washington, DC 20549 on official
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of
such filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NYSEArca-2015-04, and should be submitted on or before
March 13, 2015.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\32\
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    \32\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-03519 Filed 2-19-15; 8:45 am]
BILLING CODE 8011-01-P