[Federal Register Volume 79, Number 59 (Thursday, March 27, 2014)]
[Notices]
[Pages 17206-17212]
[FR Doc No: 2014-06760]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71767; File No. SR-NYSEArca-2014-11]

Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting
Approval of Proposed Rule Change To List and Trade Shares of the SPDR
SSgA Risk Aware ETF; SPDR SSgA Large Cap Risk Aware ETF; and SPDR SSgA
Small Cap Risk Aware ETF Under NYSE Arca Equities Rule 8.600

March 21, 2014.

I. Introduction

    On January 24, 2014, NYSE Arca, Inc. (``Exchange'' or ``NYSE
Arca'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to list and trade shares (``Shares'') of SPDR SSgA
Risk Aware ETF; SPDR SSgA Large Cap Risk Aware ETF; and SPDR SSgA Small
Cap Risk Aware ETF (each, a ``Fund'' and, collectively, ``Funds'')
under NYSE Arca Equities Rule 8.600. The proposed rule change was
published for comment in the Federal Register on February 7, 2014.\3\
The Commission received no comments on the proposed rule change. This
order grants approval of the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 71468 (Feb. 3,
2014), 79 FR 7487 (``Notice'').
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II. Description of Proposed Rule Change

    The Exchange proposes to list and trade Shares of the Funds
pursuant to NYSE Arca Equities Rule 8.600, which governs the listing
and trading of Managed Fund Shares on the Exchange. The Shares will be
offered by SSgA Active ETF Trust (``Trust''), which is organized as a
Massachusetts business trust and is registered with the Securities and
Exchange Commission (``Commission'') as an open-end management
investment company.\4\ SSgA Funds Management, Inc. (``Adviser'') will
serve as the investment adviser to the Funds.\5\ State Street Global
Markets, LLC (``Distributor'' or ``Principal Underwriter'') will be the
principal underwriter and distributor of the Funds' Shares. State
Street Bank and Trust Company (``Administrator,'' ``Custodian'' or
``Transfer Agent'') will serve as administrator, custodian and transfer
agent for the Funds.
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    \4\ The Trust is registered under the Investment Company Act of
1940 (``1940 Act''). The Exchange states that on December 14, 2012,
the Trust filed with the Commission an amendment 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
Funds (File Nos. 333-173276 and 811-22542) (``Registration
Statement''). In addition, the Exchange states that the Commission
has issued an order granting certain exemptive relief to the Trust
under the1940 Act. See Investment Company Act Release No. 29524
(December 13, 2010) (File No. 812-13487) (``Exemptive Order'').
    \5\ The Exchange states that Adviser is not registered as a
broker-dealer but 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 Funds' portfolios. The Exchange states that in the
event (a) the Adviser or any sub-adviser becomes, or becomes newly
affiliated with, a broker-dealer, or (b) any new adviser or sub-
adviser is, or becomes affiliated with, a broker-dealer, it will
implement a fire wall with respect to its relevant personnel or
broker-dealer affiliate regarding access to information concerning
the composition and/or changes to a portfolio, and will be subject
to procedures designed to prevent the use and dissemination of
material non-public information regarding such portfolio.
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    The Exchange has made the following representations and statements
in describing the Funds and their respective investment strategies,
including other portfolio holdings and investment restrictions.\6\
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    \6\ The Commission notes that additional information regarding
the Trust, the Funds, and the Shares, including investment
strategies, risks, net asset value (``NAV'') calculation, creation
and redemption procedures, fees, portfolio holdings disclosure
policies, distributions, and taxes, among other information, is
included in the Notice and the Registration Statements, as
applicable. See Notice and Registration Statement, supra notes 3 and
4, respectively.
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General

    The Funds are intended to be managed in a ``master-feeder''
structure, under which each Fund will invest substantially all of its
assets in a corresponding portfolio (each, a ``Portfolio'') (i.e. a
``master fund''), which is a separate mutual fund registered under the
1940 Act that has an identical investment objective. As a result, each
Fund (i.e., a ``feeder fund'') will have an indirect interest in all of
the securities and other assets owned by each corresponding Portfolio.
Because of this indirect interest, each Fund's investment returns
should be the same as those of the corresponding Portfolio, adjusted
for the expenses of the Fund. In extraordinary instances, each Fund
reserves the right to make direct investments in securities.
    The Adviser will manage the investments of each respective
Portfolio. Under the master-feeder arrangement, investment advisory
fees charged at the master-fund level are deducted from the advisory
fees charged at the feeder-fund level. This arrangement avoids a
``layering'' of fees, e.g., a Fund's total annual operating expenses
would be no higher as a result of investing in a master-feeder
arrangement than they would be if the Fund pursued its investment
objectives directly. Each Fund may discontinue investing through the
master-feeder arrangement and pursue its investment objectives directly
if the Fund's Board of Trustees determines that doing so would be in
the best interests of shareholders.
    The Funds will not be index Funds. The Funds will be actively
managed and will not seek to replicate the performance of a specified
index.

SPDR SSgA Risk Aware ETF

    The SPDR SSgA Risk Aware ETF will seek to provide competitive
returns compared to the broad U.S. equity market and capital
appreciation.
    Under normal circumstances,\7\ the Fund will invest all of its
assets in the SSgA Risk Aware Portfolio (``Risk

Aware Portfolio''), a separate series of the SSgA Master Trust with an
identical investment objective as the Fund. As a result, the Fund will
invest indirectly through the Risk Aware Portfolio.
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    \7\ The term ``under normal circumstances'' includes, but is not
limited to, 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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    In seeking its objective, the Risk Aware Portfolio will invest in a
diversified selection of equity securities included in the Russell 3000
Index that the Adviser believes are aligned with predicted investor
risk preferences.\8\ The Russell 3000 Index measures the performance of
the largest 3,000 U.S. companies, including business development
companies, representing approximately 98% of the investable U.S. equity
market. The Russell 3000 Index is constructed to provide a
comprehensive, unbiased, and stable barometer of the broad market and
is completely reconstituted annually to ensure new and growing equities
are reflected. As of September 30, 2013, the Russell 3000 Index was
comprised of 2,965 stocks.
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    \8\ The Portfolios will invest only in equity securities that
trade in markets that are members of the Intermarket Surveillance
Group (``ISG'') or are parties to a comprehensive surveillance
sharing agreement with the Exchange.
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    In selecting securities for the Risk Aware Portfolio, the Adviser
will utilize a proprietary quantitative investment process to measure
and predict investor risk preferences. This investment process
recognizes that the attributes that render a particular security
``risky'' or ``safe'' from an investor's perspective will change over
time. The process therefore will begin with a broad set of plausible
dimensions of risk, or factors that may be viewed by investors as
contributing to a security's risk level at any given time. This set
will include, among many other items, market beta, liquidity, and
exposure to certain commodities, leading economic indicators, currency,
credit risk, and performance differences between cyclical and defensive
sectors. The Adviser will then use a sequence of procedures to develop
a subset of attributes representing those it believes to be relevant to
investors at a given time. This subset will help form the Adviser's
forecast for aggregate risk appetite and assist the Adviser in
generating the groups of securities likely to benefit the most and
least in light of that forecast. Different predictions of risk appetite
may result in portfolios that are more defensive or risk-seeking, based
on what the market considers safe and/or risky at a given time. For
example, during periods of anticipated investor preference for low
risk, the Adviser will adjust the Risk Aware Portfolio's composition to
be defensive and may increase exposure to large cap companies. On the
other hand, during periods of anticipated investor preference for high
risk, the Adviser will adjust the Risk Aware Portfolio's composition to
be risk-seeking and may increase exposure to small cap companies.
Similarly, exposures to value, growth, quality and other themes will
vary depending on how they align with investor risk appetite at a given
time. In periods of anticipated investor preference for moderate risk,
the Risk Aware Portfolio's composition will more closely reflect the
weighted composition of the Russell 3000 Index. The Adviser believes
the ebbing and flowing of risk preferences give this strategy the
potential to provide competitive returns relative to the Russell 3000
Index over the long term. The Risk Aware Portfolio will be non-
diversified for purposes of the 1940 Act, and as a result may invest a
greater percentage of its assets in a particular issuer than a
diversified fund. However, it is expected that the Risk Aware Portfolio
will have exposure to a diversified mix of equity securities.

SPDR SSgA Large Cap Risk Aware ETF

    The SPDR SSgA Large Cap Risk Aware ETF will seek to provide
competitive returns compared to the large cap U.S. equity market and
capital appreciation.
    Under normal circumstances,\9\ the Fund will invest all of its
assets in the SSgA Large Cap Risk Aware Portfolio (``Large Cap
Portfolio''), a separate series of the SSgA Master Trust with an
identical investment objective as the Fund. As a result, the Fund will
invest indirectly through the Large Cap Portfolio.
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    \9\ See supra note 7.
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    In seeking its objective, the Large Cap Portfolio will invest in a
diversified selection of equity securities included in the Russell 1000
Index that the Adviser believes are aligned with predicted investor
risk preferences.\10\ The Russell 1000 Index measures the performance
of the large-cap segment of the U.S. equity universe. It is a subset of
the Russell 3000[supreg] Index and includes approximately 1,000 of the
largest securities, which may include business development companies,
based on a combination of their market cap and current index
membership. The Russell 1000 Index represents approximately 92% of the
U.S. market. The Russell 1000 Index is constructed to provide a
comprehensive and unbiased barometer for the large-cap segment and is
completely reconstituted annually to ensure new and growing equities
are reflected. As of September 30, 2013, the Russell 1000 Index was
comprised of 1,003 stocks.
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    \10\ See supra note 8.
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    Under normal circumstances, the Large Cap Portfolio will invest at
least 80% of its net assets (plus the amount of borrowings for
investment purposes) in securities of large-cap companies. The Large
Cap Portfolio considers large-cap companies to be companies with market
capitalizations falling within the range of the Russell 1000 Index at
the time of initial purchase. In selecting securities for the Large Cap
Portfolio, the Adviser will utilize a proprietary quantitative
investment process to measure and predict investor risk preferences.
This investment process recognizes that the attributes that render a
particular security ``risky'' or ``safe'' from an investor's
perspective will change over time. The process therefore will begin
with a broad set of plausible dimensions of risk, or factors that may
be viewed by investors as contributing to a security's risk level at
any given time. This set includes, among many other items, market beta,
liquidity, and exposure to certain commodities, leading economic
indicators, currency, credit risk, and performance differences between
cyclical and defensive sectors. The Adviser then will use a sequence of
procedures to develop a subset of attributes representing those it
believes to be relevant to investors at a given time. This subset will
help form the Adviser's forecast for aggregate risk appetite and assist
the Adviser in generating the groups of securities likely to benefit
the most and least in light of that forecast. Different predictions of
risk appetite may result in portfolios that are more defensive or risk-
seeking, based on what the market considers safe and/or risky at a
given time. For example, during periods of anticipated investor
preference for low risk, the Adviser will adjust the Large Cap
Portfolio's composition to be defensive. On the other hand, during
periods of anticipated investor preference for high risk, the Adviser
will adjust the Large Cap Portfolio's composition to be risk-seeking.
Similarly, exposures to value, growth, quality and other themes will
vary depending on how they align with investor risk appetite at a given
time. In periods of anticipated investor preference for moderate risk,
the Large Cap Portfolio's composition will more closely reflect the
weighted composition of the Russell 1000 Index. The Adviser believes
the ebbing and flowing of risk preferences give this strategy the
potential to provide competitive returns relative to the Russell 1000
Index over the long term. The Large Cap Portfolio

will be non-diversified for purposes of the 1940 Act, and as a result
may invest a greater percentage of its assets in a particular issuer
than a diversified fund. However, it is expected that the Large Cap
Portfolio will have exposure to a diversified mix of equity securities.

SPDR SSgA Small Cap Risk Aware ETF

    The SPDR SSgA Small Cap Risk Aware ETF will seek to provide
competitive returns compared to the small cap U.S. equity market and
capital appreciation.
    Under normal circumstances,\11\ the Fund will invest all of its
assets in the SSgA Small Cap Risk Aware Portfolio (``Small Cap
Portfolio''), a separate series of the SSgA Master Trust with an
identical investment objective as the Fund. As a result, the Fund will
invest indirectly through the Small Cap Portfolio.
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    \11\ See supra note 7.
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    In seeking its objective, the Small Cap Portfolio will invest in a
diversified selection of equity securities included in the Russell 2000
Index that the Adviser believes are aligned with predicted investor
risk preferences.\12\ The Russell 2000 Index measures the performance
of the small-cap segment of the U.S. equity market. The Russell 2000
Index is a subset of the Russell 3000[supreg] Index representing
approximately 10% of the total market capitalization of the Russell
3000[supreg] Index. The Russell 2000 Index includes approximately 2000
of the smallest securities, including business development companies,
based on a combination of their market cap and current index
membership. The Russell 2000 Index is constructed to provide a
comprehensive and unbiased small-cap barometer and is completely
reconstituted annually to ensure larger stocks do not distort the
performance and characteristics of the true small-cap opportunity set.
As of September 30, 2013, the Russell 2000 Index was comprised of 1,962
securities.
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    \12\ See supra note 8.
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    Under normal circumstances, the Small Cap Portfolio will invest at
least 80% of its net assets (plus the amount of borrowings for
investment purposes) in securities of small-cap companies. The Small
Cap Portfolio considers small-cap companies to be companies with market
capitalizations falling within the range of the Russell 2000 Index at
the time of initial purchase. In selecting securities for the Small Cap
Portfolio, the Adviser will utilize a proprietary quantitative
investment process to measure and predict investor risk preferences.
This investment process recognizes that the attributes that render a
particular security ``risky'' or ``safe'' from an investor's
perspective will change over time. The process therefore will begin
with a broad set of plausible dimensions of risk, or factors that may
be viewed by investors as contributing to a security's risk level at
any given time. This set will include, among many other items, market
beta, liquidity, and exposure to certain commodities, leading economic
indicators, currency, credit risk, and performance differences between
cyclical and defensive sectors. The Adviser then will use a sequence of
procedures to develop a subset of attributes representing those it
believes to be relevant to investors at a given time. This subset will
help form the Adviser's forecast for aggregate risk appetite and assist
the Adviser in generating the groups of securities likely to benefit
the most and least in light of that forecast. Different predictions of
risk appetite may result in portfolios that are more defensive or risk-
seeking, based on what the market considers safe and/or risky at a
given time. For example, during periods of anticipated investor
preference for low risk, the Adviser will adjust the Small Cap
Portfolio's composition to be defensive. On the other hand, during
periods of anticipated investor preference for high risk, the Adviser
will adjust the Small Cap Portfolio's composition to be risk-seeking.
Similarly, exposures to value, growth, quality and other themes will
vary depending on how they align with investor risk appetite at a given
time. In periods of anticipated investor preference for moderate risk,
the Small Cap Portfolio's composition will more closely reflect the
weighted composition of the Russell 2000 Index. The Adviser believes
the ebbing and flowing of risk preferences give this strategy the
potential to provide competitive returns relative to the Russell 2000
Index over the long term. The Small Cap Portfolio will be non-
diversified for purposes of the 1940 Act, and as a result may invest a
greater percentage of its assets in a particular issuer than a
diversified fund. However, it is expected that the Small Cap Portfolio
will have exposure to a diversified mix of equity securities.

Other Investments

    While, under normal circumstances, the Adviser, with respect to
each Portfolio, will invest at least 80% of such Portfolio's net assets
in equity securities, as described above, the Adviser may invest up to
20% of a Portfolio's net assets in other securities and financial
instruments, as described below.
    Each Fund may (either indirectly through its investments in the
corresponding Portfolio or, in the absence of normal circumstances,\13\
directly) invest in the following types of investments. The investment
practices of the Portfolios are the same in all material respects to
those of the Funds.
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    \13\ See supra note 7.
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    In the absence of normal circumstances, a Fund may (either directly
or through the corresponding Portfolio) temporarily depart from its
normal investment policies and strategies provided that the alternative
is consistent with the Fund's investment objective and is in the best
interest of the Fund. For example, a Fund may hold a higher than normal
proportion of its assets in cash in times of extreme market stress.
    Each Portfolio may invest in short term instruments, including
money market instruments (including money market funds advised by the
Adviser), cash and cash equivalents on an ongoing basis to provide
liquidity or for other reasons. Money market instruments are generally
short-term investments that may include but are not limited to: (i)
Shares of money market funds (including those advised by the Adviser);
(ii) obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities (including government-sponsored
enterprises); (iii) negotiable certificates of deposit (``CDs''),
bankers' acceptances, fixed time deposits and other obligations of U.S.
and foreign banks (including foreign branches) and similar
institutions; (iv) commercial paper rated at the date of purchase
``Prime-1'' by Moody's Investor's Service or ``A-1'' by Standard &
Poor's, or if unrated, of comparable quality as determined by the
Adviser; (v) non-convertible corporate debt securities (e.g., bonds and
debentures) with remaining maturities at the date of purchase of not
more than 397 days and that satisfy the rating requirements set forth
in Rule 2a-7 under the 1940 Act; and (vi) short-term U.S. dollar-
denominated obligations of foreign banks (including U.S. branches)
that, in the opinion of the Adviser, are of comparable quality to
obligations of U.S. banks which may be purchased by a Portfolio.
Commercial paper consists of short-term, promissory notes issued by
banks, corporations and other entities to finance short-term credit
needs. Any of these instruments may be purchased on a current or a
forward-settled basis.
    Each Portfolio may invest in repurchase agreements with commercial

banks, brokers or dealers to generate income from its excess cash
balances and to invest securities lending cash collateral. The Exchange
states that a repurchase agreement is an agreement under which a fund
acquires a financial instrument (e.g., a security issued by the U.S.
Government or an agency thereof, a banker's acceptance or a certificate
of deposit) from a seller, subject to resale to the seller at an agreed
upon price and date (normally, the next business day).
    Each Portfolio may invest in convertible securities. Convertible
securities are bonds, debentures, notes, preferred stocks or other
securities that may be converted or exchanged (by the holder or by the
issuer) into shares of the underlying common stock (or cash or
securities of equivalent value) at a stated exchange ratio. A
convertible security may also be called for redemption or conversion by
the issuer after a particular date and under certain circumstances
(including a specified price) established upon issue.
    Each Portfolio may invest in U.S. Government obligations. U.S.
Government obligations are a type of bond. U.S. Government obligations
include securities issued or guaranteed as to principal and interest by
the U.S. Government, its agencies or instrumentalities.
    Each Portfolio may invest in U.S. agency mortgage pass-through
securities. The Exchange states that the term ``U.S. agency mortgage
pass-through security'' refers to a category of pass-through securities
backed by pools of mortgages and issued by one of several U.S.
Government-sponsored enterprises: The Government National Mortgage
Association (``Ginnie Mae''), Federal National Mortgage Association
(``Fannie Mae''), or Federal Home Loan Mortgage Corporation (``Freddie
Mac'').
    The Portfolios will seek to obtain exposure to U.S. agency mortgage
pass-through securities primarily through the use of ``to-be-
announced'' or ``TBA transactions.'' The Exchange states that ``TBA''
refers to a commonly used mechanism for the forward settlement of U.S.
agency mortgage pass-through securities, and not to a separate type of
mortgage-backed security, and that most transactions in mortgage pass-
through securities occur through the use of TBA transactions.\14\
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    \14\ To minimize the risk of default by a counterparty, a
Portfolio will enter into TBA transactions only with established
counterparties (such as major broker-dealers) and the Adviser will
monitor the creditworthiness of such counterparties.
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    Each Portfolio may purchase U.S. exchange-listed common stocks and
U.S. exchange-listed preferred securities of foreign corporations.
Investments in common stock of foreign corporations may also be in the
form of American Depositary Receipts (``ADRs''), Global Depositary
Receipts (``GDRs'') and European Depositary Receipts (``EDRs'')
(collectively ``Depositary Receipts''). A Portfolio may invest in
unsponsored Depositary Receipts.
    Each Portfolio may invest in bonds, including corporate bonds as
well as U.S. registered, dollar-denominated bonds of foreign
corporations, governments, agencies and supra-national entities. Each
Portfolio may invest up to 10% of its net assets in high yield debt
securities.
    The Portfolios may invest in inflation-protected public
obligations, commonly known as ``TIPS,'' of the U.S. Treasury, as well
as TIPS of major governments and emerging market countries, excluding
the United States. The Exchange states that TIPS are a type of security
issued by a government that are designed to provide inflation
protection to investors.
    Each Portfolio may invest in variable and floating rate
securities.\15\ The Exchange states that variable rate securities are
instruments issued or guaranteed by entities such as (1) the U.S.
government or an agency or instrumentality thereof, (2) corporations,
(3) financial institutions, (4) insurance companies, or (5) trusts that
have a rate of interest subject to adjustment at regular intervals but
less frequently than annually.
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    \15\ A variable rate security provides for the automatic
establishment of a new interest rate on set dates. A floating rate
security provides for the automatic adjustment of its interest rate
whenever a specified interest rate changes. Interest rates on these
securities are ordinarily tied to, and are a percentage of, a widely
recognized interest rate, such as the yield on 90-day U.S. Treasury
bills or the prime rate of a specified bank.
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    Each Portfolio may invest in Variable Rate Demand Obligations
(``VRDOs''). The Exchange states that VRDOs are short-term tax exempt
fixed income instruments whose yield is reset on a periodic basis and
that VRDO securities tend to be issued with long maturities of up to 30
or 40 years; however, they are considered short-term instruments
because they include a put feature which coincides with the periodic
yield reset.
    Each Portfolio may invest in restricted securities. The Exchange
states that restricted securities are securities that are not
registered under the Securities Act, but which can be offered and sold
to ``qualified institutional buyers'' under Rule 144A under the
Securities Act.\16\
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    \16\ When Rule 144A restricted securities present an attractive
investment opportunity and meet other selection criteria, a
Portfolio may make such investments whether or not such securities
are ``illiquid'' depending on the market that exists for the
particular security. The Board has delegated the responsibility for
determining the liquidity of Rule 144A restricted securities that a
Portfolio may invest in to the Adviser. See infra note 20.
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    Each Portfolio may conduct foreign currency transactions on a spot
(i.e., cash) or forward basis (i.e., by entering into forward contracts
to purchase or sell foreign currencies). At the discretion of the
Adviser, the Portfolios may enter into forward currency exchange
contracts for hedging purposes to help reduce the risks and volatility
caused by changes in foreign currency exchange rates, or to gain
exposure to certain currencies.
    Each Portfolio may invest in the securities of other investment
companies, including affiliated funds, money market funds and closed-
end funds, subject to applicable limitations under Section 12(d)(1) of
the 1940 Act. Each Portfolio may invest in exchange-traded products
(``ETPs'').\17\ ETPs include exchange-traded funds registered under the
1940 Act; exchange traded commodity trusts; and exchange traded notes
(``ETNs'').\18\
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    \17\ For each of the Portfolios, ETPs include Investment Company
Units (as described in NYSE Arca Equities Rule 5.2(j)(3)); Index-
Linked Securities (as described in NYSE Arca Equities Rule
5.2(j)(6)); Portfolio Depositary Receipts (as described in NYSE Arca
Equities Rule 8.100); Trust Issued Receipts (as described in NYSE
Arca Equities Rule 8.200); Commodity-Based Trust Shares (as
described in NYSE Arca Equities Rule 8.201); Currency Trust Shares
(as described in NYSE Arca Equities Rule 8.202); Commodity Index
Trust Shares (as described in NYSE Arca Equities Rule 8.203); Trust
Units (as described in NYSE Arca Equities Rule 8.500); Managed Fund
Shares (as described in NYSE Arca Equities Rule 8.600), and closed-
end funds. The ETPs all will be listed and traded in the U.S. on
registered exchanges. While a Fund may invest in inverse ETPs, a
Fund will not invest in leveraged or inverse leveraged ETPs (e.g.,
2X or 3X).
    \18\ ETNs are debt obligations of investment banks which are
traded on exchanges and the returns of which are linked to the
performance of market indexes. In addition to trading ETNs on
exchanges, investors may redeem ETNs directly with the issuer on a
weekly basis, typically in a minimum amount of 50,000 units, or hold
the ETNs until maturity.
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    The Adviser may invest up to 20% of its total assets in one or more
ETPs that are qualified publicly traded partnerships (``QPTPs'') and
whose principal activities are the buying and selling of commodities or
options, futures, or forwards with respect to commodities.\19\ The
Exchange states that a QPTP is an entity that is treated as a
partnership for federal income tax

purposes, subject to certain requirements, and that income from QPTPs
is generally qualifying income for purposes of Subchapter M of the
Internal Revenue Code.
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    \19\ The Exchange states that examples of such entities are the
PowerShares DB Energy Fund, PowerShares DB Oil Fund, PowerShares DB
Precious Metals Fund, PowerShares DB Gold Fund, PowerShares DB
Silver Fund, PowerShares DB Base Metals Fund, and PowerShares DB
Agriculture Fund, which are listed and traded on the Exchange
pursuant to NYSE Arca Equities Rule 8.200.
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    The Portfolios may invest in real estate investment trusts
(``REITs'').
    Each Portfolio may enter into reverse repurchase agreements.
    Neither the Funds nor the Portfolios will invest in options
contracts, futures contracts, or swap agreements.
    The Funds' investments will be consistent with the Funds'
investment objectives and will not be used to enhance leverage.
    Each Fund is classified as ``non-diversified.'' Each Fund will be
``non-diversified'' under the 1940 Act and may invest more of its
assets in fewer issuers than ``diversified'' funds.
    The Funds do not intend to concentrate their investments in any
particular industry.
    The Funds intend to qualify for and to elect treatment as a
separate regulated investment company under Subchapter M of the
Internal Revenue Code.
    Each Portfolio may hold up to an aggregate amount of 15% of its net
assets in illiquid securities (calculated at the time of investment),
including Rule 144A securities deemed illiquid by the Adviser.\20\ Each
Portfolio 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 a Fund's
net assets are held in illiquid securities. Illiquid securities 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.
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    \20\ In reaching liquidity decisions, the Adviser may consider
the following factors: The frequency of trades and quotes for the
security; the number of dealers wishing to purchase or sell the
security and the number of other potential purchasers; dealer
undertakings to make a market in the security; and the nature of the
security and the nature of the marketplace in which it trades (e.g.,
the time needed to dispose of the security, the method of soliciting
offers, and the mechanics of transfer).
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III. Discussion and Commission's Findings

    After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of Section 6 of the Act \21\
and the rules and regulations thereunder applicable to a national
securities exchange.\22\ In particular, the Commission finds that the
proposal is consistent with Section 6(b)(5) of the Act,\23\ which
requires, among other things, that the Exchange's rules be designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general, to protect investors and the public
interest. The Commission notes that the Funds and the Shares must
comply with the initial and continued listing criteria in NYSE Arca
Equities Rule 8.600 for the Shares to be listed and traded on the
Exchange.
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    \21\ 15 U.S.C. 78f.
    \22\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \23\ 15 U.S.C. 78f(b)(5).
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    The Commission finds that the proposal to list and trade the Shares
on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the
Act,\24\ which sets forth Congress' finding that it is in the public
interest and appropriate for the protection of investors and the
maintenance of fair and orderly markets to assure the availability to
brokers, dealers, and investors of information with respect to
quotations for, and transactions in, securities. Quotation and last-
sale information for the Shares of each Fund will be available via the
Consolidated Tape Association (``CTA'') highspeed line. In addition,
the IOPV,\25\ which is the Portfolio Indicative Value as defined in
NYSE Arca Equities Rule 8.600(c)(3), will be widely disseminated at
least every 15 seconds during the Core Trading Session by one or more
major market data vendors.\26\ On each business day, before
commencement of trading in Shares in the Core Trading Session on the
Exchange, the Funds will disclose on their Web site the Disclosed
Portfolio, as defined in NYSE Arca Equities Rule 8.600(c)(2), that will
form the basis for the Funds' calculation of NAV at the end of the
business day.\27\ In addition, a basket composition file, which
includes the security names and share quantities required to be
delivered in exchange for each Fund's Shares, together with estimates
and actual cash components, will be publicly disseminated daily prior
to the opening of the New York Stock Exchange, LLC (``NYSE'') via the
National Securities Clearing Corporation. The basket will represent one
creation unit of a Fund. The NAV of each Fund will be determined once
each business day, normally as of the close of normal trading on the
NYSE (normally, 4:00 p.m., Eastern Time).\28\ 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.
The intra-day, closing, and settlement prices of the Portfolio
securities and other assets held by the Funds and Portfolios are
readily available from the national securities exchanges trading such
securities, automated quotation systems, published or other public
sources, or online information services such as Bloomberg or Reuters.
Quotation and last sale information for the underlying U.S. exchange-
traded equities, including exchange-traded ETPs, will be available via
the CTA high-speed line and from the national securities exchange on
which they are listed. Pricing information regarding each asset class
in which the Funds or Portfolios will invest is generally available
through nationally recognized data service providers through
subscription arrangements. Quotation information from brokers and
dealers or pricing services will be available for fixed income
securities, including U.S. Government obligations, other money market
instruments, repurchase and reverse repurchase agreements,

convertible securities, U.S. agency mortgage pass-through securities,
unsponsored Depositary Receipts, corporate bonds, TIPS, variable
floating rate securities (including VRDOs), and spot and forward
currency transactions held by the Funds and Portfolios. The Funds' Web
site will include a form of the prospectus for the Funds and additional
data relating to NAV and other applicable quantitative information.
---------------------------------------------------------------------------

    \24\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
    \25\ According to the Exchange, the IOPV calculations are
estimates of the value of the Funds' NAV per Share using market data
converted into U.S. dollars at the current currency rates. The IOPV
price will be based on quotes and closing prices from the
securities' local market and may not reflect events that occur
subsequent to the local market's close. Premiums and discounts
between the IOPV and the market price may occur. The IOPV should not
be viewed as a ``real-time'' update of the NAV per Share of a Fund,
which is calculated only once a day.
    \26\ According to the Exchange, several major market data
vendors display and/or make widely available IOPVs taken from CTA or
other data feeds.
    \27\ On a daily basis, the Adviser will disclose for each
portfolio security and other financial instrument of the Funds and
of the Portfolios the following information on the Funds' Web site:
ticker symbol (if applicable), name of security and financial
instrument, number of shares or dollar value of financial
instruments held in the portfolio, and percentage weighting of the
security and financial instrument in the portfolio. The Web site
information will be publicly available at no charge.
    \28\ Each Fund will calculate NAV using the NAV of the
respective Portfolio. The NAV of a Portfolio will be calculated by
the Custodian and determined at the close of the regular trading
session on the NYSE (ordinarily 4:00 p.m. Eastern time) on each day
that the NYSE is open, provided that assets (and, accordingly, a
Portfolio's NAV) may be valued as of the announced closing time for
trading in instruments on any day that the applicable exchange or
market on which a Portfolio's investments are traded announces an
early closing time.
---------------------------------------------------------------------------

    The Commission further believes that the proposal to list and trade
the Shares is reasonably designed to promote fair disclosure of
information that may be necessary to price the Shares appropriately and
to prevent trading when a reasonable degree of transparency cannot be
assured. The Exchange will obtain a representation from the issuer of
the Shares that the NAV per Share of each Fund will be calculated
daily, and that the NAV and the Disclosed Portfolio for each Fund will
be made available to all market participants at the same time. Trading
in Shares of a 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,\29\ and trading in the Shares will
be subject to NYSE Arca Equities Rule 8.600(d)(2)(D), which sets forth
additional circumstances under which trading in the Shares of a Fund
may be halted. The Exchange states that it has a general policy
prohibiting the distribution of material, non-public information by its
employees. Consistent with NYSE Arca Equities Rule 8.600(d)(2)(B)(ii),
the Reporting Authority must implement and maintain, or be subject to,
procedures designed to prevent the use and dissemination of material,
non-public information regarding the actual components of the Funds'
portfolios. In addition, the Exchange states that the Adviser has
implemented a ``fire wall'' with respect to its affiliated broker-
dealer regarding access to information concerning the composition or
changes to the Funds' portfolios.\30\ 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.\31\ The Exchange further 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 applicable federal securities laws. Moreover, prior to the
commencement of trading, the Exchange states that it will inform its
Equity Trading Permit Holders in an Information Bulletin of the special
characteristics and risks associated with trading the Shares.
---------------------------------------------------------------------------

    \29\ These reasons may include: (1) The extent to which trading
is not occurring in the securities or the financial instruments
composing the Disclosed Portfolio of a Fund; or (2) whether other
unusual conditions or circumstances detrimental to the maintenance
of a fair and orderly market are present. With respect to trading
halts, the Exchange may consider all relevant factors in exercising
its discretion to halt or suspend trading in the Shares of the
Funds.
    \30\ See supra note 5. The Exchange states that an investment
adviser to an open-end fund is required to be registered under the
Investment Advisers Act of 1940 (``Advisers Act''). As a result, the
Adviser and its related personnel are subject to the provisions of
Rule 204A-1 under the Advisers Act relating to codes of ethics. This
Rule requires investment advisers to adopt a code of ethics that
reflects the fiduciary nature of the relationship to clients as well
as compliance with other applicable securities laws. Accordingly,
procedures designed to prevent the communication and misuse of non-
public information by an investment adviser must be consistent with
Rule 204A-1 under the Advisers Act. In addition, Rule 206(4)-7 under
the Advisers Act makes it unlawful for an investment adviser to
provide investment advice to clients unless such investment adviser
has (i) adopted and implemented written policies and procedures
reasonably designed to prevent violation, by the investment adviser
and its supervised persons, of the Advisers Act and the Commission
rules adopted thereunder; (ii) implemented, at a minimum, an annual
review regarding the adequacy of the policies and procedures
established pursuant to subparagraph (i) above and the effectiveness
of their implementation; and (iii) designated an individual (who is
a supervised person) responsible for administering the policies and
procedures adopted under subparagraph (i) above.
    \31\ The Exchange states that FINRA surveils trading on the
Exchange pursuant to a regulatory services agreement and that the
Exchange is responsible for FINRA's performance under this
regulatory services agreement.
---------------------------------------------------------------------------

    The Exchange represents that the Shares are deemed to be equity
securities, thus rendering trading in the Shares subject to the
Exchange's existing rules governing the trading of equity securities.
In support of this proposal, the Exchange has made representations,
including the following:
    (1) The Shares will conform to the initial and continued listing
criteria under NYSE Arca Equities Rule 8.600.
    (2) The Exchange has appropriate rules to facilitate transactions
in the Shares during all trading sessions.
    (3) FINRA, on behalf of the Exchange, will communicate as needed
regarding trading in the Shares and underlying equity securities
(including, without limitation, sponsored ADRs and ETPs) and other
exchange-traded securities 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
equity securities (including, without limitation, sponsored ADRs and
ETPs) and other exchange-traded securities from such markets and other
entities. In addition, the Exchange may obtain information regarding
trading in the Shares and underlying equity securities (including,
without limitation, sponsored ADRs and ETPs) and other exchange-traded
securities from markets and other entities that are members of ISG or
with which the Exchange has in place a comprehensive surveillance
sharing agreement.
    (4) The Portfolios will invest only in equity securities that trade
in markets that are members of the ISG or are parties to a
comprehensive surveillance sharing agreement with the Exchange.
    (5) 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.
Specifically, the Information Bulletin will discuss the following: (a)
The procedures for purchases and redemptions of Shares in creation
units (and that Shares are not individually redeemable); (b) NYSE Arca
Equities Rule 9.2(a), which imposes a duty of due diligence on its
Equity Trading Permit Holders to learn the essential facts relating to
every customer prior to trading the Shares; (c) the risks involved in
trading the Shares during the Opening and Late Trading Sessions when an
updated IOPV will not be calculated or publicly disseminated; (d) how
information regarding the IOPV is disseminated; (e) the requirement
that Equity Trading Permit Holders deliver a prospectus to investors
purchasing newly issued Shares prior to or concurrently with the
confirmation of a transaction; and (f) trading information.
    (6) For initial and continued listing, the Funds will be in
compliance with Rule 10A-3 under the Act,\32\ as provided by NYSE Arca
Equities Rule 5.3.
---------------------------------------------------------------------------

    \32\ 17 CFR 240.10A-3.
---------------------------------------------------------------------------

    (7) Each Portfolio may hold up to an aggregate amount of 15% of its
net assets in illiquid securities (calculated at the time of
investment), including Rule 144A securities deemed illiquid by the
Adviser, consistent with Commission guidance.
    (8) Under normal circumstances, each Fund will invest all of its
assets in its corresponding Portfolio. Furthermore, under normal
circumstances, the Adviser, with respect to each Portfolio,

will invest at least 80% of such Portfolio's net assets in equity
securities.
    (9) Neither the Funds nor the Portfolios will invest in options
contracts, futures contracts, or swap agreements.
    (10) A Portfolio will enter into TBA transactions only with
established counterparties (such as major broker-dealers) and the
Adviser will monitor the creditworthiness of such counterparties.
    (11) Each Fund's investments will be consistent with its investment
objective and will not be used to enhance leverage. While the Funds may
invest in inverse ETFs, the Funds will not invest in leveraged or
inverse leveraged ETFs (e.g., 2X or 3X).
    (12) A minimum of 100,000 Shares for each Fund will be outstanding
at the commencement of trading on the Exchange.
    This approval order is based on all of the Exchange's
representations, including those set forth above and in the Notice, and
the Exchange's description of the Funds.
    For the foregoing reasons, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act \33\ and the
rules and regulations thereunder applicable to a national securities
exchange.
---------------------------------------------------------------------------

    \33\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\34\ that the proposed rule change (SR-NYSEArca-2014-11) be, and it
hereby is, approved.
---------------------------------------------------------------------------

    \34\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\35\
---------------------------------------------------------------------------

    \35\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-06760 Filed 3-26-14; 8:45 am]
BILLING CODE 8011-01-P


9-14-06 Summary of plans devised by Dennehy and Tabashnik

Plans for DNA Screening of Pink Bollworm in Arizona 2006

Goal:  Screen 500 field-sampled insects (50 or more per site from 10
sites) in Arizona for the three known cadherin resistance alleles (r1,
r2, and r3) using the PCR method described by Tabashnik et al. (2006).

Low numbers may limit the number of insects that can be collected and
screened from the eradication zone.  If possible, at least 300
field-sampled insects from at least 6 sites in the eradication zone will
be screened.  Special effort will be made to collect insects for DNA
screening from any areas in which trapping data show unexpectedly high
numbers of native moths in the eradication zone.

Sampling methods:  As described by Tabashnik et al. (2006), insects for
DNA screening will be sampled from bolls and from traps baited with sex
pheromone:

“Cotton bolls were sampled from 19 cotton fields (18 in Arizona and 1
in California) from 2001 to 2005 as described by Dennehy et al. (2004).
At each site, 300 to 2,000 bolls were collected from non-Bt cotton
fields near Bt cotton fields. Bolls were taken to the University of
Arizona Extension Arthropod Resistance Management Laboratory in Tucson.
We obtained pink bollworm by collecting fourth instars that exited bolls
and by opening bolls and removing larvae found inside.”

“Pink bollworm males were collected in sticky traps baited with female
sex pheromone (Tabashnik et al. 1999) in 40 cotton fields (36 in
Arizona, 3 in California, and 1 in Texas) from 2003 to 2005.  At each
site, several traps were placed around the perimeter of a cotton field,
collected after 1 to 2 days, and brought to the laboratory.  Live males
that showed normal movement of appendages were removed from traps using
wooden toothpicks.  A new toothpick was used for each male to avoid
cross-contamination.”

Progress and sampling plans:

1. Males (ca. 80) caught in July 2006 in one group of fields with
relatively high native moth counts in traps will be screened with PCR.

2. To produce strains for bioassay testing, bolls have been sampled from
four sites (two in the eradication zone, two outside the eradication
zone).  If numbers are sufficient, subsamples of 50 insects per site
collected directly from bolls will be screened for r alleles.

3. Trapping at 10 sites in the eradication zone will be done to obtain
males for PCR screening in late September.  If this sampling does not
yield enough males, trapping will be repeated in mid- to late October.


[Federal Register Volume 80, Number 49 (Friday, March 13, 2015)]
[Notices]
[Pages 13460-13461]
[FR Doc No: 2015-05634]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No. FMCSA-2013-0386]

Parts and Accessories Necessary for Safe Operation; Grant of
Temporary Exemption for Volvo/Prevost LLC

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

ACTION: Notice of final disposition.

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SUMMARY: The Federal Motor Carrier Safety Administration (FMCSA)
announces its decision to grant Volvo/Prevost, LLC's (Volvo/Prevost)
application for a limited two-year exemption from 49 CFR 393.60(e)(1)
on behalf of motor carriers that will be operating commercial motor
vehicles (CMV) manufactured by the company to use lane departure
warning (LDW) systems mounted in the windshield area at a height lower
than what is currently allowed by the regulation. The LDW system alerts
drivers who unintentionally drift out of their lane of travel, thus
promoting improved safety performance. The Agency has determined that
the placement of the LDW system camera in the windshield area would not
have an adverse impact on safety and that the terms and conditions of
the exemption would achieve a level of safety equivalent to or greater
than the level of safety provided by the regulation.

DATES: This exemption is effective from March 13, 2015 through March
13, 2017.

FOR FURTHER INFORMATION CONTACT: Mr. Mike Huntley, Vehicle and Roadside
Operations Division, Office of Carrier, Driver, and Vehicle Safety, MC-
PSV,<PHONE_NUMBER>, Federal Motor Carrier Safety Administration, 1200
New Jersey Avenue SE., Washington, DC 20590-0001.
    Docket: For access to the docket to read background documents or
comments submitted to the notice requesting public comments on the
exemption application, go to www.regulations.gov at any time or visit
Room W12-140 on the ground level of the West Building, 1200 New Jersey
Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., ET, Monday
through Friday, except Federal holidays. The on-line Federal document
management system is available 24 hours each day, 365 days each year.
The docket number is listed at the beginning of this notice.

SUPPLEMENTARY INFORMATION:

Background

    FMCSA has authority under 49 U.S.C. 31136(e) and 31315 to grant
exemptions from certain parts of the Federal Motor Carrier Safety
Regulations (FMCSR). FMCSA must publish a notice of each exemption
request in the Federal Register (49 CFR 381.315(a)). The Agency must
provide the public an opportunity to inspect the information relevant
to the application, including any safety analyses that have been
conducted. The Agency must also provide an opportunity for public
comment on the request.
    The Agency reviews safety analyses and public comments submitted,
and determines whether granting the exemption would likely achieve a
level of safety equivalent to, or greater than, the level that would be
achieved by the current regulation (49 CFR 381.305). The decision of
the Agency must be published in the Federal Register (49 CFR
381.315(b)) with the reasons for denying or granting the application
and, if granted, the name of the person or class of persons receiving
the exemption, and the regulatory provision from which the exemption is
granted. The notice must also specify the effective period and explain
the terms and conditions of the exemption. The exemption may be renewed
(49 CFR 381.300(b)).

Volvo/Prevost's Application for Exemption

    Volvo/Prevost applied for an exemption from 49 CFR 393.60(e)(1) to
allow the installation of an LDW system on motorcoaches purchased by
its customers. A copy of the application is included in the docket
referenced at the beginning of this notice.
    Section 393.60(e)(1) of the FMCSRs prohibits the obstruction of the
driver's field of view by devices mounted at the top of the windshield.
Antennas, transponders and similar devices must not be mounted more
than 152 mm (6 inches) below the upper edge of the windshield. These
devices must be located outside the area swept by the windshield wipers
and outside the driver's sight lines to the road and highway signs and
signals.
    The application stated:

    Volvo/Prevost is making this request so it is possible to
introduce a Lane Departure Warning system in line with [the] NHTSA
Bus Safety plan as it already did for several other safety features.
The camera must be installed in the wiper swept area of [the]
windshield for the system to perform correctly because it must have
a clear forward facing view of the road. On a today's typical coach
the lower part of the windshield is outside the driver's sight lines
to the road and highway signs and signals which is different from a
truck. Therefore, we request the installation of the camera on the
lower part of the windshield within the bottom 7 inches of the wiper
swept area.

    In addition, Volvo/Prevost noted that without the proposed
temporary exemption, it would not be able to deploy the LDW system in
motorcoaches because (1) its customers would be fined for violating the
current regulation, (2) the LDW system would not perform adequately and
would not bring the safety benefits expected, and (3) the camera would
be more in the field of view of the driver. Volvo/

Prevost states that if the exemption is granted, it ``will be able to
install the LDW camera system in a location which will offer the best
opportunity to optimize the data and evaluate the benefits of such a
system.''

Comments

    FMCSA published a notice of the application in the Federal Register
on December 18, 2013, and asked for public comment (78 FR 76702).
    The Agency received one comment, from Greyhound Lines, Inc.
(Greyhound). Greyhound stated that it ``has a substantial number of
motorcoaches manufactured by Prevost in its fleet and has been an
industry leader in adding innovative safety equipment to its
motorcoaches.'' Greyhound strongly supports the granting of the
exemption, stating that it ``believes that the lane departure warning
(LDW) system that Prevost plans to install on its motorcoaches can be a
useful tool for enhancing motorcoach safety if properly installed,''
and agreed with Volvo/Prevost's assertion that ``the camera must be
installed in the wiper swept area of [the] windshield for the system to
perform correctly because it must have a clear forward facing view of
the road.'' Greyhound agreed that installation of the LDW camera within
the bottom 7 inches of the wiper swept area ``will maximize its
effectiveness as a safety tool while not impeding the driver's sight
lines.''

FMCSA Decision

    The FMCSA has evaluated the Volvo/Prevost exemption application.
The Agency believes that granting the temporary exemption to allow the
placement of LDW systems lower in the windshield than is currently
permitted by the Agency's regulations will provide a level of safety
that is equivalent to, or greater than, the level of safety achieved
without the exemption because (1) based on the technical information
available, there is no indication that the LDW systems would obstruct
drivers' views of the roadway, highway signs and surrounding traffic;
(2) generally, buses have an elevated seating position that greatly
improves the forward visual field of the driver, and any impairment of
available sight lines would be minimal; and (3) the location within the
bottom seven inches of the area swept by the windshield wiper and out
of the driver's normal sightline will be reasonable and enforceable at
roadside. In addition, the Agency believes that the use of LDW systems
by fleets is likely to improve the overall level of safety to the
motoring public.
    This action is consistent with previous Agency actions permitting
the placement of LDW systems on CMVs within the swept area of the
windshield wipers. In November 2011, FMCSA granted temporary exemptions
to Con-way, Takata, and Iteris enabling the mounting of LDW system
sensors not more than 2 inches below the upper edge of the area swept
by the windshield wipers and outside the driver's sight lines to the
road and highway signs and signals. The Agency recently renewed these
exemptions for a second 2-year period, as FMCSA is not aware of any
evidence showing that the installation of the devices has resulted in
any degradation in safety. Further, while the original exemption
granted relief to motor carriers using only the Takata and Iteris LDW
systems, the Agency determined that it was appropriate to extend the
scope of the exemption to motor carriers using any LDW system, given
that FMCSA is unaware of any reduction in the level of safety
associated with the use of those systems.
    However, the provisions of that exemption cannot apply to the
Volvo/Prevost application, as the requested mounting location for the
Volvo/Prevost LDW system is at the lower portion of the windshield,
within the bottom 7 inches of the wiper swept area, as opposed to the
mounting location permitted by the other exemption, which is not more
than 2 inches below the upper edge of the area swept by the windshield
wipers. Notwithstanding the different mounting location, and for the
reasons discussed above, FMCSA believes that allowing the placement of
LDW systems in the lower portion of the windshield, within the swept
area of the wipers, will provide a level of safety that is equivalent
to, or greater than the level of safety achieved without the exemption.
FMCSA continues to believe that the potential safety gains from the use
of LDW systems to improve driver performance will improve the overall
level of safety to the motoring public.

Terms and Conditions for the Exemption

    The Agency hereby grants the exemption for a two-year period,
beginning March 13, 2015 and ending March 13, 2017. During the
temporary exemption period, motor carriers operating motorcoaches
manufactured by Volvo/Prevost must ensure that the LDW systems are
mounted not more than 7 inches above the lower edge of the area swept
by the windshield wipers, and outside the driver's sight lines to the
road and highway signs and signals. The exemption will be valid for two
years unless rescinded earlier by FMCSA. The exemption will be
rescinded if: (1) Motor carriers operating motorcoaches manufactured by
Volvo/Prevost fail to comply with the terms and conditions of the
exemption; (2) the exemption has resulted in a lower level of safety
than was maintained before it was granted; or (3) continuation of the
exemption would not be consistent with the goals and objectives of 49
U.S.C. 31136(e) and 31315(b).
    Interested parties possessing information that would demonstrate
that motor carriers operating motorcoaches manufactured by Volvo/
Prevost are not achieving the requisite statutory level of safety
should immediately notify FMCSA. The Agency will evaluate any such
information and, if safety is being compromised or if the continuation
of the exemption is not consistent with 49 U.S.C. 31136(e) and
31315(b), will take immediate steps to revoke the exemption.

Preemption

    During the period the exemption is in effect, no State shall
enforce any law or regulation that conflicts with or is inconsistent
with this exemption with respect to a person operating under the
exemption.

    Issued on: March 2, 2015.
T. F. Scott Darling, III,
Acting Administrator.
[FR Doc. 2015-05634 Filed 3-12-15; 8:45 am]
BILLING CODE 4910-EX-P