[Federal Register Volume 81, Number 35 (Tuesday, February 23, 2016)]
[Notices]
[Pages 9061-9063]
[FR Doc No: 2016-03660]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77152; File No. SR-NASDAQ-2016-020]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Nasdaq Rule 7014 and Nasdaq Rule 7018

February 17, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on February 10, 2016, The NASDAQ Stock Market LLC (``Nasdaq'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') a proposed rule change as described in
Items I, II and III below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4. [sic]
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

    Nasdaq is proposing changes to amend Nasdaq Rule 7014(g) concerning
the national best bid or best offer (``NBBO'') Program and Nasdaq Rule
7018(a), governing fees and credits assessed for execution and routing
of securities.
    The text of the proposed rule change is available at
nasdaq.cchwallstreet.com, at Nasdaq's principal office, 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, Nasdaq 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 purpose of the proposed rule change is to amend the NBBO
Program in Nasdaq Rule 7014(g) and to amend Nasdaq Rule 7018(a),
governing fees and credits assessed for execution and routing of
securities listed on Nasdaq,\3\ listed on the New York Stock Exchange
(``NYSE'') \4\ and listed on exchanges other than Nasdaq and NYSE \5\
(``Tape B'') (collectively, the ``Tapes'').
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    \3\ Nasdaq Rule 7018(a)(1).
    \4\ Nasdaq Rule 7018(a)(2).
    \5\ Nasdaq Rule 7018(a)(3).
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    Specifically, Nasdaq Rule 7014(g) will be amended to add a new
credit and to clarify the NBBO Program language to indicate that this
new credit will be in addition to any rebate or credit payable under
Nasdaq Rule 7018(a) or the Investor Support Program (``ISP''),
Qualified Market Maker (``QMM'') Program and NBBO Program under Nasdaq
Rule 7014. A member will qualify for the additional $0.0001 per share
executed credit for displayed quotes/orders (other than supplemental
orders or designated retail orders) that provide liquidity priced at $1
or more if the member qualifies for the (i) NBBO Program and (ii) has a
ratio of at least 25% NBBO liquidity provided \6\ to liquidity provided
during the month.
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    \6\ NBBO liquidity provided means liquidity provided from orders
(other than Designated Retail Orders, as defined in Nasdaq Rule
7018), that establish the NBBO, and displayed a quantity of at least
one round lot at the time of execution.
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    For example, if a member provided liquidity of 0.55% total
consolidated volume (``TCV'') during the month and provided NBBO
liquidity of 0.15% TCV during the month, the member's ratio would equal
27.27%. The member would meet the NBBO Program criteria (since it was
greater than 0.5% TCV threshold set forth in Nasdaq Rule 7014(g)(1))
and because the ratio is greater than the proposed 25% threshold of
NBBO liquidity provided to liquidity provided [sic] during the month.
Therefore, the member would also qualify for the additional $0.0001 per
share executed credit. This credit will be in addition to any rebate or
credit payable under Rule 7018(a) and the ISP, QMM Program, and NBBO
Program under Rule 7014.
    Nasdaq also proposes to amend across all three Tapes (Nasdaq Rules
7018(a)(1), (2) and (3)) one of the two criteria that a member must
satisfy to qualify for the $0.0030 per share executed credit for adding
displayed liquidity. The first prong of the criteria will remain the
same and requires that a member must have shares of liquidity provided
in all securities through one or more of its Nasdaq Market Center MPIDs
that represent 0.575% or more of consolidated volume (``Consolidated
Volume'') during the month. The second prong of the criteria will be
amended. Specifically, the second prong requires that 0.15% or more of
Consolidated Volume during the month must include shares of liquidity
provided with respect to securities that are listed on exchanges other
than Nasdaq or NYSE. The percentage of shares of liquidity provided
with respect to securities that are listed on exchanges other than
Nasdaq or NYSE will be reduced from 0.15% to 0.10% or more of
Consolidated Volume, thus reducing the required activity to achieve the
credit. The amended criteria will read for all three Tapes as ``member
with shares of liquidity provided in all securities through one or more
of its Nasdaq Market Center MPIDs that represent 0.575% or more of
Consolidated Volume during the month, including shares of liquidity
provided with respect to securities that are listed on exchanges other
than NASDAQ or NYSE that represent 0.10% or more of Consolidated
Volume''.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\7\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\8\ in particular, in that it provides
for the equitable allocation of reasonable dues, fees and other charges
among members and issuers and other persons using its facilities which
the Exchange operates or controls, and is not designed to permit unfair

discrimination between customers, issuers, brokers, or dealers.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4) and (5).
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    The Commission and the courts have repeatedly expressed their
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. In Regulation
NMS, while adopting a series of steps to improve the current market
model, the Commission highlighted the importance of market forces in
determining prices and SRO revenues and, also, recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its broader forms that are most
important to investors and listed companies.'' \9\ Likewise, in
NetCoalition v. Securities and Exchange Commission \10\
(``NetCoalition'') the D.C. Circuit upheld the Commission's use of a
market-based approach in evaluating the fairness of market data fees
against a challenge claiming that Congress mandated a cost-based
approach.\11\ As the court emphasized, the Commission ``intended in
Regulation NMS that `market forces, rather than regulatory
requirements' play a role in determining the market data . . . to be
made available to investors and at what cost.'' \12\
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    \9\ Securities Exchange Act Release No. 34-51808 (June 9, 2005)
(``Regulation NMS Adopting Release'').
    \10\ NetCoalition v. SEC 615 F.3d 525 (D.C. Cir. 2010).
    \11\ Id. at 534-535.
    \12\ Id. at 537.
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    Further, ``[n]o one disputes that competition for order flow is
`fierce.' . . . As the SEC explained, `[i]n the U.S. national market
system, buyers and sellers of securities, and the broker-dealers that
act as their order-routing agents, have a wide range of choices of
where to route orders for execution'; [and] `no exchange can afford to
take its market share percentages for granted' because `no exchange
possesses a monopoly, regulatory or otherwise, in the execution of
order flow from broker dealers'. . . .'' \13\
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    \13\ Id. at 539 (quoting ArcaBook Order, 73 FR at 74782-74783).
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    The NBBO Program is intended to encourage members to add liquidity
at prices that benefit all Nasdaq market participants and the Nasdaq
market itself, and to enhance price discovery, by establishing a new
NBBO.\14\ Specifically, Nasdaq believes that the proposed rule change
to Nasdaq Rule 7014(g) that provides for an additional $0.0001 per
share executed credit \15\ for displayed quotes/orders (other than
supplemental orders or designated retail orders) that provide liquidity
priced at $1 or more is reasonable because it is in line with other
credits provided on Nasdaq, as well as on other exchanges. For example,
both the QMM Program \16\ and the ISP \17\ have credits of $0.0001 per
share executed. The Exchange also believes that the proposed additional
credit will serve as an effective incentive to members to provide more
liquidity provided from orders (other than Designated Retail Orders, as
defined in Nasdaq Rule 7018), that establish the NBBO, and displayed a
quantity of at least one round lot at the time of execution. Increasing
such liquidity is reflective of the Exchange's desire to improve
liquidity and strengthen the NBBO Program.
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    \14\ See Securities Exchange Act Release No. 68209 (November 9,
2012), 77 FR 69519 (November 19, 2012) (SR-NASDAQ-2012-126).
    \15\ The member will receive this additional credit if the
member qualifies for the (i) NBBO Program and (ii) has a ratio of at
least 25% NBBO liquidity provided of the liquidity provided during
the month.
    \16\ See Nasdaq Rule 7014(e) Tier 1.
    \17\ See Nasdaq Rule 7014(c)(2).
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    The Exchange also believes that choosing the ratio of at least 25%
NBBO liquidity provided of the liquidity provided during the month will
incentivize participants to more aggressively pursue adding liquidity
at the NBBO while still offering an attainable goal. This may focus
participants on meeting the criteria in a way that relying on solely
NBBO specific rebates has not. This proposed change is similar to other
market incentive programs that require a certain level of activity in
order to be eligible to receive a particular credit. For example, to
receive an ISP credit a member is already required to provide a 40% of
their [sic] liquidity through ISP designated ports (among other
criteria).\18\
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    \18\ See Nasdaq Rule 7014(c)(2)(C).
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    Additionally, minimum standards of specific activity (e.g., non-
display activity and other performance requirements) are also sometimes
required to be eligible to receive a particular credit. One example of
this is in Nasdaq Rule 7018(a)(1), which states that a member seeking
to receive the particular available credit must provide shares of
liquidity in all securities through one or more of its Nasdaq Market
Center MPIDs of more than 0.75% of Consolidated Volume during the
month, as well as provide a daily average of at least 5 million shares
of non-displayed liquidity.
    Also, the clarifying language added to the NBBO Program under
Nasdaq Rule 7014(g) regarding the applicability of this new credit is
reasonable because it will lessen participant confusion as to how these
additional rebates/credits apply. The Exchange believes that the
proposed changes to the NBBO Program overall will improve market
quality and thus benefits all members.
    Nasdaq believes that the proposed rule change is equitable and not
unfairly discriminatory because the additional $0.0001 per share
executed credit for displayed quotes/orders that provide liquidity
priced at $1 or more under the NBBO Program is available to all members
on an equal basis and provides an additional credit for activity that
improves the Exchange's market quality through increased activity at
the NBBO. In this regard, the NBBO Program encourages higher levels of
liquidity provision into the price discovery process and is consistent
with the overall goals of enhancing market quality. Also, this new
credit will be in addition to any rebate or credit payable under Nasdaq
Rule 7018(a) or the ISP, QMM Program, and NBBO Program under Nasdaq
Rule 7014.
    Nasdaq believes that the proposed rule change to Nasdaq Rule
7018(a)(1), (2) and (3) is reasonable because it will further encourage
market participant activity and will also support liquidity provision
across all three Tapes by making it easier for members to satisfy one
of the two criteria to qualify for the $0.0030 per share executed
credit for adding displayed liquidity. Specifically, by amending one
prong of the criteria to reduce the percentage requirement from 0.15%
to 0.10% of shares of liquidity provided with respect to securities
that are listed on exchanges other than Nasdaq or NYSE [sic]. The
Exchange believes this will allow more members to receive this credit
and thereby incentivize the enhancement of liquidity with regard to
displayed quotes/orders (other than Supplemental Orders or Designated
Retail Orders) on Nasdaq. This, in turn, should positively impact
market quality and benefit other Nasdaq members.
    The Exchange also believes that the proposed rule change is an
equitable allocation and is not unfairly discriminatory because it is
reducing across all three Tapes one of the two criteria that a member
must satisfy to qualify for the $0.0030 per share executed credit for
adding displayed liquidity. Additionally, members who currently qualify
for the credit will continue to do so.

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

    Nasdaq does not believe that the proposed rule change will result
in a burden on competition that is not necessary or appropriate in
furtherance

of the purposes of the Act, as amended.\19\ In terms of inter-market
competition, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues if they deem fee levels at a particular venue to be
excessive, or credit opportunities available at other venues to be more
favorable. In such an environment, the Exchange must continually adjust
its fees and credits to remain competitive with other exchanges and
with alternative trading systems that have been exempted from
compliance with the statutory standards applicable to exchanges.
Because competitors are free to modify their own fees and credits in
response, and because market participants may readily adjust their
order routing practices, the Exchange believes that the degree to which
fee changes in this market may impose any burden on competition is
extremely limited.
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    \19\ 15 U.S.C. 78f(b)(8).
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    In this instance, the proposed additional $0.0001 per share
executed credit for displayed quotes/orders that provide liquidity
priced at $1 or more in connection with the NBBO Program under Nasdaq
Rule 7014(g), as well as the easing of the criteria under Nasdaq Rule
7018(a) to receive a $0.0030 executed rebate for displayed quotes/
orders (other than Supplemental Orders or Designated Retail Orders)
that provide liquidity, do not impose a burden on competition because
the Exchange's execution services are voluntary and subject to
extensive competition both from other exchanges and from off-exchange
venues. The Exchange believes that the competition among exchanges and
other venues will help to drive price improvement and overall execution
quality higher for investors.
    In sum, if the rule change proposed herein is unattractive to
market participants, it is likely that the Exchange will lose market
share as a result. Accordingly, the Exchange does not believe that the
proposed change will impair the ability of members or competing order
execution venues to maintain their competitive standing in the
financial markets.

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

    Written comments were neither solicited nor received.

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

    The foregoing change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\20\ At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act.
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    \20\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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-NASDAQ-2016-020 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-NASDAQ-2016-020. 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 offices 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-NASDAQ-2016-
020, and should be submitted on or before March 15, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-03660 Filed 2-22-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 82, Number 75 (Thursday, April 20, 2017)]
[Proposed Rules]
[Pages 18596-18598]
[FR Doc No: 2017-07786]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Docket No. FAA-2016-9544; Airspace Docket No. 16-ASW-22]

Proposed Amendment of Class D and E Airspace for the Following
Texas Towns; Sherman, TX; and Temple, TX, and Establishment of Class E
Airspace, Temple, TX

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: This action proposes to: amend Class D airspace at North Texas
Regional Airport/Perrin Field, Sherman, TX; amend Class E surface
airspace at Draughon-Miller Central Texas Regional Airport, Temple, TX;
amend Class E airspace extending upward from 700 feet above the surface
at North Texas Regional Airport/Perrin Field and Draughon-Miller
Central Texas Regional Airport; and establish Class E airspace
designated as an extension at Draughon-Miller Central Texas Regional
Airport. Cancellation of standard instrument approach procedures at
these airports has made this action necessary for the safety and
management of Instrument Flight Rules (IFR) operations. Additionally,
geographic coordinates, names of airports, and a navigation aid would
be adjusted to coincide with the FAA's aeronautical database.

DATES: Comments must be received on or before June 5, 2017.

ADDRESSES: Send comments on this proposal to the U.S. Department of
Transportation, Docket Operations, West Building Ground Floor, Room
W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590; telephone
(202) 366-9826, or 1-800-647-5527. You must identify FAA Docket No.
FAA-2016-9544; Airspace Docket No. 16-ASW-22, at the beginning of your
comments. You may also submit comments through the Internet at http://www.regulations.gov. You may review the public docket containing the
proposal, any comments received, and any final disposition in person in
the Dockets Office between 9:00 a.m. and 5:00 p.m., Monday through
Friday, except Federal holidays.
    FAA Order 7400.11A, Airspace Designations and Reporting Points, and
subsequent amendments can be viewed online at http://www.faa.gov/air_traffic/publications/. For further information, you can contact the
Airspace Policy Group, Federal Aviation Administration, 800
Independence Avenue SW., Washington, DC 20591; telephone:<PHONE_NUMBER>.
The Order is also available for inspection at the National Archives and
Records Administration (NARA). For information on the availability of
FAA Order 7400.11A at NARA, call<PHONE_NUMBER>, or go to http://www.archives.gov/federal_register/code_of_federal-regulations/ibr_locations.html.
    FAA Order 7400.11, Airspace Designations and Reporting Points, is
published yearly and effective on September 15.

FOR FURTHER INFORMATION CONTACT: Jeffrey Claypool, Federal Aviation
Administration, Operations Support Group, Central Service Center, 10101
Hillwood Parkway, Fort Worth, TX, 76177; telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Authority for This Rulemaking

    The FAA's authority to issue rules regarding aviation safety is
found in Title 49 of the United States Code. 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. This rulemaking is promulgated under the authority described
in Subtitle VII, Part, A, Subpart I, Section 40103. Under that section,
the FAA is charged with prescribing regulations to assign the use of
airspace necessary to ensure the safety of aircraft and the efficient
use of airspace. This regulation is within the scope of that authority
as it would amend Class D airspace at North Texas

Regional Airport/Perrin Field, Sherman, TX; Class E surface airspace at
Draughon-Miller Central Texas Regional Airport, Temple, TX; Class E
airspace extending upward from 700 feet above the surface at North
Texas Regional Airport/Perrin Field and Draughon-Miller Central Texas
Regional Airport; and establish Class E airspace designated as an
extension at Draughon-Miller Central Texas Regional Airport.

Comments Invited

    Interested parties are invited to participate in this proposed
rulemaking by submitting such written data, views, or arguments, as
they may desire. Comments that provide the factual basis supporting the
views and suggestions presented are particularly helpful in developing
reasoned regulatory decisions on the proposal. Comments are
specifically invited on the overall regulatory, aeronautical, economic,
environmental, and energy-related aspects of the proposal.
Communications should identify both docket numbers and be submitted in
triplicate to the address listed above. Commenters wishing the FAA to
acknowledge receipt of their comments on this notice must submit with
those comments a self-addressed, stamped postcard on which the
following statement is made: ``Comments to Docket No. FAA-2016-9544/
Airspace Docket No. 16-ASW-22.'' The postcard will be date/time stamped
and returned to the commenter.

Availability of NPRMs

    An electronic copy of this document may be downloaded through the
Internet at http://www.regulations.gov. Recently published rulemaking
documents can also be accessed through the FAA's Web page at http://www.faa.gov/air_traffic/publications/airspace_amendments/.
    You may review the public docket containing the proposal, any
comments received, and any final disposition in person in the Dockets
Office (see the ADDRESSES section for the address and phone number)
between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal
holidays. An informal docket may also be examined during normal
business hours at the Federal Aviation Administration, Air Traffic
Organization, Central Service Center, Operations Support Group, 10101
Hillwood Parkway, Fort Worth, TX, 76177.

Availability and Summary of Documents Proposed for Incorporation by
Reference

    This document proposes to amend FAA Order 7400.11A, Airspace
Designations and Reporting Points, dated August 3, 2016, and effective
September 15, 2016. FAA Order 7400.11A is publicly available as listed
in the ADDRESSES section of this document. FAA Order 7400.11A lists
Class A, B, C, D, and E airspace areas, air traffic service routes, and
reporting points.

The Proposal

    The FAA is proposing an amendment to Title 14 Code of Federal
Regulations (14 CFR) Part 71 by modifying:
    Class D airspace within a 4.7-mile radius (reduced from a 5.0-mile
radius) at North Texas Regional Airport/Perrin Field (formerly Grayson
County Airport), Sherman/Denison, TX, and updating the name of the
airport to coincide with the FAA's aeronautical database; Class E
surface airspace within a 4.2-mile radius (increased from a 4.1-mile
radius) at Draughon-Miller Central Texas Regional Airport (formerly
Draughon-Miller Municipal Airport), Temple, TX, eliminating the
extension southeast of the airport, and updating the name and
geographic coordinates of the airport to coincide with the FAA's
aeronautical database;
    Class E airspace extending upward from 700 feet above the surface:
    Within a 7.2-mile radius (increased from a 6.9-mile radius) of
North Texas Regional Airport/Perrin Field (formerly Grayson County
Airport), Sherman/Denison, TX, and updating the name and geographic
coordinates of the airport to coincide with the FAA's aeronautical
database;
    Within a 6.7-mile radius of Draughon-Miller Central Texas Regional
Airport (formerly Draughon-Miller Municipal Airport), Temple, TX,
eliminating the extensions north and southeast of the airport, amending
the extension northwest of the airport from the 6.7-mile radius to 14.4
miles (reduced from 19.5 miles), adding an extension south of the
airport from the 6.7-mile radius to 10.1 miles, adding an extension
southwest of the airport from the 6.7-mile radius to 9.7 miles, and
updating the name and geographic coordinates of the airport and the
name of the Draughon-Miller Central Texas Regional Localizer (formerly
Draughon-Miller Localizer) to coincide with the FAA's aeronautical
database;
    And establishing Class E airspace designated as an extension to
Class E surface airspace within a 4.2-mile radius of Draughon-Miller
Central Texas Regional Airport, Temple, TX, with an extension southeast
7.7 miles.
    Cancellation of standard instrument approach procedures at these
airports prompted the FAA to conduct a review of the airspace.
Controlled airspace is necessary for the safety and management of
standard instrument approach procedures for IFR operations at these
airports.
    Class D and E airspace designations are published in paragraph
5000, 6002, 6004, and 6005, respectively, of FAA Order 7400.11A, dated
August 3, 2016, and effective September 15, 2016, which is incorporated
by reference in 14 CFR 71.1. The Class D and E airspace designations
listed in this document will be published subsequently in the Order.

Regulatory Notices and Analyses

    The FAA has determined that this regulation only involves an
established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current, is
non-controversial and unlikely to result in adverse or negative
comments. It, therefore: (1) Is not a ``significant regulatory action''
under Executive Order 12866; (2) is not a ``significant rule'' under
DOT Regulatory Policies and Procedures (44 FR 11034; February 26,
1979); and (3) does not warrant preparation of a regulatory evaluation
as the anticipated impact is so minimal. Since this is a routine matter
that will only affect air traffic procedures and air navigation, it is
certified that this rule, when promulgated, would not have a
significant economic impact on a substantial number of small entities
under the criteria of the Regulatory Flexibility Act.

Environmental Review

    This proposal will be subject to an environmental analysis in
accordance with FAA Order 1050.1F, ``Environmental Impacts: Policies
and Procedures'' prior to any FAA final regulatory action.

List of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (air).

The Proposed Amendment

    Accordingly, pursuant to the authority delegated to me, the Federal
Aviation Administration proposes to amend 14 CFR part 71 as follows:

PART 71--DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND REPORTING POINTS

0
 1. The authority citation for 14 CFR part 71 continues to read as
follows:

    Authority: 49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O.
10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.

Sec.  71.1  [Amended]

0
2. The incorporation by reference in 14 CFR 71.1 of FAA Order 7400.11A,
Airspace Designations and Reporting Points, dated August 3, 2016, and
effective September 15, 2016, is amended as follows:

Paragraph 5000 Class D Airspace.

* * * * *

ASW TX D Sherman, TX [Amended]

Sherman/Denison, North Texas Regional Airport/Perrin Field, TX
    (Lat. 33[deg]42'51'' N., long. 96[deg]40'25'' W.)

    That airspace extending upward from the surface to and including
3,300 feet MSL within a 4.7-mile radius of North Texas Regional
Airport/Perrin Field. This Class D airspace area is effective during
the specific dates and times established in advance by a Notice to
Airmen. The effective date and time will thereafter be continuously
published in the Chart Supplement.
* * * * *

Paragraph 6002 Class E Surface Airspace.

* * * * *

ASW TX E2 Temple, TX [Amended]

Temple, Draughon-Miller Central Texas Regional Airport, TX
    (Lat. 31[deg]09'07'' N., long. 97[deg]24'28'' W.)

    Within a 4.2-mile radius of Draughon-Miller Central Texas
Regional Airport. This Class E airspace area is effective during the
specific dates and times established in advance by a Notice to
Airmen. The effective date and time will thereafter be continuously
published in the Chart Supplement.
* * * * *

Paragraph 6004 Class E Airspace Designated as an Extension to Class
E Surface Airspace.

* * * * *

ASW TX E4 Temple, TX [New]

Temple, Draughon-Miller Central Texas Regional Airport, TX
    (Lat. 31[deg]09'07'' N., long. 97[deg]24'28'' W.)
Temple VOR

    (Lat. 31[deg]12'34'' N., long. 97[deg]25'30'' W.)

    The airspace extending upward from the surface 1.4 miles either
side of the 157[deg] radial of the Temple VOR extending from the
4.2-mile radius to 7.7 miles southeast of Draughon-Miller Central
Texas Regional Airport. This Class E airspace area is effective
during the specific dates and times established in advance by a
Notice to Airmen. The effective date and time will thereafter be
continuously published in the Chart Supplement.
* * * * *

Paragraph 6005 Class E Airspace Areas Extending Upward From 700
Feet or More Above the Surface of the Earth.

* * * * *

ASW TX E5 Sherman, TX [Amended]

Sherman/Denison, North Texas Regional Airport/Perrin Field, TX
    (Lat. 33[deg]42'51'' N., long. 96[deg]40'25'' W.)

Sherman Municipal Airport, TX
    (Lat. 33[deg]37'27'' N., long. 96[deg]35'10'' W.)

    That airspace extending upward from 700 feet above the surface
within a 7.2-mile radius of North Texas Regional Airport/Perrin
Field, and within a 6.4-mile radius of Sherman Municipal Airport.
* * * * *

ASW TX E5 Temple, TX [Amended]

Temple, Draughon-Miller Central Texas Regional Airport, TX
    (Lat. 31[deg]09'07'' N., long. 97[deg]24'28'' W.)

Draughon-Miller Central Texas Regional Localizer
    (Lat. 31[deg]08'20'' N., long. 97[deg]24'16'' W.)

Temple VOR
    (Lat. 31[deg]12'34'' N., long. 97[deg]25'30'' W.)

    That airspace extending upward from 700 feet above the surface
within a 6.7-mile radius of Draughon-Miller Central Texas Regional
Airport, and within 4 miles either side of the 157[deg] radial of
the Temple VOR extending from the 6.7-mile radius to 10.1 miles
south of the airport, and within 2 miles either side of the 201[deg]
bearing from the airport from the 6.7-mile radius to 9.7 miles
southwest of the airport, and within 4 miles either side of the
336[deg] bearing of the Draughon-Miller Central Texas Regional
Localizer extending from the 6.7-mile radius to 14.4 miles northwest
of the airport.

    Issued in Fort Worth, Texas, on April 5, 2017.
Robert W. Beck,
Manager, Operations Support Group, ATO Central Service Center.
[FR Doc. 2017-07786 Filed 4-19-17; 8:45 am]
 BILLING CODE 4910-13-P


[Federal Register Volume 77, Number 236 (Friday, December 7, 2012)]
[Notices]
[Pages 73089-73096]
[FR Doc No: 2012-29569]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 30286; 812-13959]

Cambria Investment Management, L.P. and Cambria ETF Trust; Notice
of Application

November 30, 2012.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application for an order under section 6(c) of the
Investment Company Act of 1940 (``Act'') for an exemption from sections
2(a)(32), 5(a)(1), 22(d) and 22(e) of the Act and rule 22c-1 under the
Act, under sections 6(c) and 17(b) of the Act for an exemption from
sections 17(a)(1) and 17(a)(2) of the Act, and under section
12(d)(1)(J) of the Act for an exemption from sections 12(d)(1)(A) and
(B) of the Act.

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Applicants:  Cambria Investment Management, L.P. (``Cambria'') and
Cambria ETF Trust (the ``Trust'').
SUMMARY: Summary of Application: Applicants request an order that
permits: (a) Actively-managed series of certain open-end management
investment companies to issue shares (``Shares'') redeemable in large
aggregations only (``Creation Units''); (b) secondary market
transactions in Shares to occur at negotiated market prices; (c)
certain series to pay redemption proceeds, under certain circumstances,
more than seven days from the tender of Shares for redemption; (d)
certain affiliated persons of the series to deposit securities into,
and receive securities from, the series in connection with the purchase
and redemption of Creation Units; and (e) certain registered management
investment companies and unit investment trusts outside of the same
group of investment companies as the series to acquire Shares.

DATES: Filing Dates: The application was filed on September 12, 2011,
and amended on February 29, 2012, July 9, 2012, and November 13, 2012.

Hearing or Notification of Hearing: An order granting the requested
relief will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicants with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on December 26, 2012, and should be accompanied by proof of
service on applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.

ADDRESSES: Elizabeth M. Murphy, Secretary, U.S. Securities and Exchange
Commission, 100 F Street NE., Washington, DC 20549-1090. Applicants:
2321 Rosecrans Avenue, Suite 3225, El Segundo, CA 92045.

FOR FURTHER INFORMATION CONTACT: Barbara T. Heussler, Senior Counsel,
at<PHONE_NUMBER> or Jennifer L. Sawin, Branch Chief, at<PHONE_NUMBER>
(Division of Investment Management, Office of Investment Company
Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or an applicant
using the Company name box, at http://www.sec.gov/search/search.htm or
by calling<PHONE_NUMBER>.

Applicants' Representations

    1. The Trust is registered as an open-end management investment
company under the Act and is a statutory trust organized under the laws
of Delaware. The Trust will initially offer an actively-managed series,
Cambria Shareholder Yield ETF (the ``Initial Fund''). The investment
objective of the Initial Fund will be to seek to preserve and grow
capital by investing in domestic equity securities and in particular in
companies that will generate investment returns through the payment of
dividends and through the appreciation of their share price.
    2. Cambria, a California limited partnership, will be the
investment adviser to the Initial Fund. Cambria is and any other
Adviser (as defined below) is or will be registered as an ``investment
adviser'' under section 203 of the Investment Advisers Act of 1940
(``Advisers Act''). The Adviser may enter into sub-advisory agreements
with investment advisers to act as sub-advisers with respect to the
Funds (each, a ``Subadviser''). Any Subadviser will be registered under
the Advisers Act or not subject to such registration. A registered
broker-dealer under the Securities Exchange Act of 1934 (``Exchange
Act''), which may be an affiliate of the Adviser, will act as the
distributor and principal underwriter of the Funds (``Distributor'').
    3. Applicants request that the order apply to the Initial Fund and
any future series of the Trust or of other existing or future open-end
management companies that may utilize active management investment
strategies (``Future Funds''). Any Future Fund will (a) be advised by
Cambria or an entity controlling, controlled by, or under common
control with Cambria (each such entity and any successor thereto
included in the term ``Adviser''),\1\ and (b) comply with the terms and
conditions of the application.\2\ The

Initial Fund and Future Funds together are the ``Funds''. Each Fund
will operate as an exchange-traded fund (``ETF''). In addition to the
instruments described above, each Fund reserves the right to invest in
other instruments, including short sales (``Short Positions''). Each
Fund will consist of a portfolio of securities (including fixed income
securities and/or equity securities) and/or currencies traded in the
U.S. or in non-U.S. markets and other assets (``Portfolio
Instruments'').\3\ To the extent consistent with other investment
limitations, the Funds may invest in ETFs as well as shares of certain
exchange-traded products that are not registered investment
companies,\4\ cash and cash equivalents, mortgage- or asset-backed
securities, including ``to-be-announced transactions'' (``TBA
Transactions''),\5\ and may engage in forward commitment
transactions.\6\ Funds may also invest in ``Depositary Receipts''.\7\ A
Fund will not invest in any Depositary Receipts that the Adviser, or
Subadviser as applicable, deems to be illiquid or for which pricing
information is not readily available. The Funds might include one or
more ETFs which invest in other open-end and/or closed-end investment
companies and/or ETFs.\8\
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    \1\ For purposes of the requested order, a ``successor'' is
limited to an entity that results from a reorganization into another
jurisdiction or a change in the type of business organization.
    \2\ All entities that currently intend to rely on the order are
named as applicants. Any entity that relies on the order in the
future will comply with the terms and conditions of the application.
An Investing Fund (as defined below) may rely on the order only to
invest in Funds and not in any other registered investment company.
    \3\ No Fund relying on the order requested by this application
will invest in options contracts, futures contracts or swap
agreements.
    \4\ The Funds may invest in exchange-traded products that invest
primarily in commodities or currency but otherwise operate in a
manner similar to ETFs. The Funds may also invest in exchange-traded
notes.
    \5\ A TBA Transaction is a method of trading mortgage-backed
securities. In a TBA Transaction, the buyer and seller agree upon
general trade parameters such as agency, settlement date, par amount
and price. The actual pools delivered generally are determined two
days prior to the settlement date.
    \6\ In a forward commitment transaction, the buyer/seller enters
into a contract to purchase/sell, for example, specific securities
for a fixed price at a future date beyond normal settlement time.
    \7\ Depositary Receipts are typically issued by a financial
institution, a ``depositary'', and evidence ownership in a security
or pool of securities that have been deposited with the depositary.
No affiliated persons of applicants, any Adviser, Subadviser or the
Funds will serve as the depositary bank for any Depositary Receipts
held by a Fund.
    \8\ In no case, however, will such a Fund rely on the exemption
from Section 12(d)(1) being requested in the application.
---------------------------------------------------------------------------

    4. Applicants also request that any exemptions under section
12(d)(1)(J) of the Act from sections 12(d)(1)(A) and (B) apply to: (1)
Any Fund that is currently or subsequently part of the same ``group of
investment companies'' as the Initial Fund within the meaning of
section 12(d)(1)(G)(ii) of the Act as well as any principal underwriter
for the Fund and any Brokers selling Shares of a Fund to an Investing
Fund, as defined below; and (2) each management investment company or
unit investment trust registered under the Act that is not part of the
same ``group of investment companies'' as the Funds, and that enters
into a FOF Participation Agreement (as defined below) with a Fund (such
management investment companies are referred to herein as ``Investing
Management Companies,'' such unit investment trusts are referred to
herein as, ``Investing Trusts,'' and Investing Management Companies and
Investing Trusts together are referred to herein as ``Investing
Funds'').\9\ Investing Funds do not include the Funds.
---------------------------------------------------------------------------

    \9\ Applicants anticipate that there may be Investing Funds that
are not part of the same group of investment companies as the Funds,
but are subadvised by an Adviser.
---------------------------------------------------------------------------

    5. Applicants anticipate that a Creation Unit will consist of at
least 25,000 Shares and the price of a Share will range from $20 to
$200. All orders to purchase Creation Units must be placed with the
Distributor by or through a party (``Authorized Participant'') that has
entered into a participant agreement with the Distributor and the
transfer agent of the Trust with respect to the creation and redemption
of Creation Units. An Authorized Participant is either: (a) A broker or
dealer registered under the Exchange Act (``Broker'') or other
participant in the Continuous Net Settlement System of the National
Securities Clearing Corporation (``NSCC''), a clearing agency
registered with the Commission and affiliated with the Depository Trust
Company (``DTC''); or (b) a participant in the DTC (such participant,
``DTC Participant''). Shares of the Funds will be purchased and
redeemed in Creation Units and generally on an ``in-kind'' basis.
Except where the purchase or redemption will include cash under the
limited circumstances specified below, purchasers will be required to
purchase Creation Units by making an in-kind deposit of specified
instruments (``Deposit Instruments''), and shareholders redeeming their
Shares will receive an in-kind transfer of specified instruments
(``Redemption Instruments'').\10\ On any given Business Day,\11\ the
names and quantities of the instruments that constitute the Deposit
Instruments and the names and quantities of the instruments that
constitute the Redemption Instruments will be identical, and these
instruments may be referred to, in the case of either a purchase or a
redemption, as the ``In-kind Basket.'' In addition, the In-kind Basket
will correspond pro rata to the positions in the Fund's portfolio
(including cash positions),\12\ except: (a) In the case of bonds, for
minor differences when it is impossible to break up bonds beyond
certain minimum sizes needed for transfer and settlement; (b) for minor
differences when rounding is necessary to eliminate fractional shares
or lots that are not tradeable round lots; \13\ or (c) TBA
Transactions, Short Positions \14\ or other positions that cannot be
transferred in kind \15\ will be excluded from the In-kind Basket.\16\
If there is a difference between the net asset value attributable to a
Creation Unit and the aggregate market value of the In-kind Basket
exchanged for the Creation Unit, the party conveying instruments with
the lower value will pay to the other an amount in cash equal to that
difference (the ``Balancing Amount'').
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    \10\ The Funds must comply with the federal securities laws in
accepting Deposit Instruments and satisfying redemptions with
Redemption Instruments, including that the Deposit Instruments and
Redemption Instruments are sold in transactions that would be exempt
from registration under the Securities Act. In accepting Deposit
Instruments and satisfying redemptions with Redemption Instruments
that are restricted securities eligible for resale pursuant to rule
144A under the Securities Act, the Funds will comply with the
conditions of rule 144A.
    \11\ ``Business Day'' is defined to include any day that the
Trust is open for business as required by Section 22(e) of the Act.
    \12\ The portfolio used for this purpose will be the same
portfolio used to calculate the Fund's NAV for that Business Day.
    \13\ A tradeable round lot for a security will be the standard
unit of trading in that particular type of security in its primary
market.
    \14\ To the extent required by section 18(f) of the Act,
Portfolio Instruments and/or cash held in a Fund's portfolio will be
segregated to cover Short Positions in such portfolio. See,
Securities Trading Practices of Registered Investment companies,
Investment Company Act Rel. No. 10666 (Apr. 18, 1979).
    \15\ This includes instruments that can be transferred in kind
only with the consent of the original counterparty to the extent the
Fund does not intend to seek such consents.
    \16\ Because these instruments will be excluded from the In-kind
Basket, their value will be reflected in the determination of the
Balancing Amount (defined below).
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    6. Purchases and redemptions of Creation Units may be made in whole
or in part on a cash basis, rather than in kind, solely under the
following circumstances: (a) To the extent there is a Balancing Amount,
as described above; (b) if, on a given Business Day, the Fund announces
before the open of trading that all purchases, all redemptions or all
purchases and redemptions on that day will be made

entirely in cash; (c) if, upon receiving a purchase or redemption order
from an Authorized Participant, the Fund determines to require the
purchase or redemption, as applicable, to be made entirely in cash;
\17\ (d) if, on a given Business Day, the Fund requires all Authorized
Participants purchasing or redeeming Shares on that day to deposit or
receive (as applicable) cash in lieu of some or all of the Deposit
Instruments or Redemption Instruments, respectively, solely because:
(i) Such instruments are not eligible for transfer through either the
NSCC Process or DTC Process; or (ii) in the case of Funds holding non-
U.S. investments (``Global Funds''), such instruments are not eligible
for trading due to local trading restrictions, local restrictions on
securities transfers, or other similar circumstances; or (e) if the
Fund permits an Authorized Participant to deposit or receive (as
applicable) cash in lieu of some or all of the Deposit Instruments or
Redemption Instruments, respectively, solely because: (i) Such
instruments are, in the case of the purchase of a Creation Unit, not
available in sufficient quantity; (ii) such instruments are not
eligible for trading by an Authorized Participant or the investor on
whose behalf the Authorized Participant is acting; or (iii) a holder of
Shares of a Global Fund would be subject to unfavorable income tax
treatment if the holder receives redemption proceeds in kind.\18\
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    \17\ In determining whether a particular Fund will sell or
redeem Creation Units entirely on a cash or in-kind basis (whether
for a given day or a given order), the key consideration will be the
benefit that would accrue to the Fund and its investors. Purchases
of Creation Units either on an all cash basis or in-kind are
expected to be neutral to the Funds from a tax perspective. In
contrast, cash redemptions typically require selling portfolio
holdings, which may result in adverse tax consequences for the
remaining Fund shareholders that would not occur with an in-kind
redemption. As a result, tax considerations may warrant in-kind
redemptions.
    \18\ A ``custom order'' is any purchase or redemption of Shares
made in whole or in part on a cash basis in reliance on clause
(e)(i) or (e)(ii).
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    7. Each Business Day, before the open of trading on the national
securities exchange as defined in section 2(a)(26) of the Act (``Stock
Exchange'') upon which its Shares are listed and traded, the Fund will
cause to be published through the NSCC the names and quantities of the
instruments comprising the In-kind Basket, as well as the estimated
Balancing Amount (if any), for that day. The published In-kind Basket
will apply until a new In-kind Basket is announced on the following
Business Day, and there will be no intra-day changes to the In-kind
Basket, except to correct errors in the published In-kind Basket. The
Stock Exchange will disseminate every 15 seconds throughout the trading
day through the facilities of the Consolidated Tape Association an
amount representing, on a per Share basis, the sum of the current value
of the Portfolio Instruments that were publicly disclosed prior to the
commencement of trading in Shares on the Stock Exchange.
    8. An investor purchasing or redeeming a Creation Unit from a Fund
may be charged a fee (``Transaction Fee'') to protect existing
shareholders of the Funds from the dilutive costs associated with the
purchase and redemption of Creation Units.\19\ All orders to purchase
Creation Units will be placed with the Distributor by or through an
Authorized Participant and the Distributor will transmit all purchase
orders to the relevant Fund. The Distributor will be responsible for
delivering a prospectus (``Prospectus'') to those persons purchasing
Creation Units and for maintaining records of both the orders placed
with it and the confirmations of acceptance furnished by it.
---------------------------------------------------------------------------

    \19\ Where a Fund, as described in section I.E.1.a, permits an
in-kind purchaser or redeemer to deposit or receive cash in lieu of
one or more Deposit or Redemption Instruments, the purchaser or
redeemer may be assessed a higher Transaction Fee to offset the
transaction cost to the Fund of buying or selling those particular
Deposit or Redemption Instruments.
---------------------------------------------------------------------------

    9. Shares will be listed and traded at negotiated prices on the
Stock Exchange and traded in the secondary market. Applicants expect
that the Stock Exchange specialists (``Specialists'') or market makers
(``Market Makers'') will be assigned to Shares. The price of Shares
trading on the Stock Exchange will be based on a current bid/offer
market. Transactions involving the purchases and sales of Shares on the
Stock Exchange will be subject to customary brokerage commissions and
charges.
    10. Applicants expect that purchasers of Creation Units will
include arbitrageurs. Specialists or Market Makers, acting in their
unique role to provide a fair and orderly secondary market for Shares,
also may purchase Creation Units for use in their own market making
activities.\20\ Applicants expect that secondary market purchasers of
Shares will include both institutional and retail investors.\21\
Applicants expect that arbitrage opportunities created by the ability
to continually purchase or redeem Creation Units at their net asset
value per common Share (``NAV'') should ensure that the Shares will not
trade at a material discount or premium in relation to their NAV.
---------------------------------------------------------------------------

    \20\ Applicants state that unlike other Stock Exchanges where a
Specialist may oversee trading in Shares, on NASDAQ, numerous Market
Makers buy and sell Shares for their own accounts. If Shares are
listed on NASDAQ, no Specialist will be contractually obligated to
make a market in Shares. Rather, under NASDAQ's listing
requirements, two or more Market Makers will be registered in Shares
and required to make a continuous, two-sided market or face
regulatory sanctions. No Market Maker or Specialist will be an
affiliated person, or an affiliated person of an affiliated person,
of the Funds, except within Section 2(a)(3)(A) or (C) of the Act due
to ownership of Shares, as described below.
    \21\ Shares will be registered in book-entry form only. DTC or
its nominee will be the record or registered owner of all
outstanding Shares. Beneficial ownership of Shares will be shown on
the records of DTC or DTC Participants.
---------------------------------------------------------------------------

    11. Shares may be redeemed only if tendered in Creation Units.
Redemption requests must be placed by or through an Authorized
Participant. As discussed above, redemptions of Creation Units will
generally be made on an in-kind basis, subject to certain specified
exceptions under which redemptions may be made in whole or in part on a
cash basis, and will be subject to a Transaction Fee.
    12. Neither the Trust nor any Fund will be marketed or otherwise
held out as a ``mutual fund.'' Instead, each Fund will be marketed as
an ``actively-managed exchange-traded fund.'' Any advertising material
where features of obtaining, buying or selling Creation Units are
described or where there is reference to redeemability will prominently
disclose that Shares are not individually redeemable and that owners of
Shares may acquire Shares from a Fund and tender those Shares for
redemption to a Fund in Creation Units only.
    13. The Funds' Web site, which will be publicly available prior to
the public offering of Shares, will include the Prospectus and
additional quantitative information updated on a daily basis,
including, on a per Share basis for each Fund, the prior Business Day's
NAV and the market closing price or mid-point of the bid/ask spread at
the time of the calculation of such NAV (``Bid/Ask Price''), and a
calculation of the premium or discount of the market closing price or
Bid/Ask Price against such NAV. On each Business Day, before
commencement of trading in Shares on the Stock Exchange, the Fund will
disclose on its Web site the identities and quantities of the Portfolio
Instruments held by the Fund (including Short Positions) that will form
the basis for the Fund's calculation of NAV at the end of the Business
Day.\22\
---------------------------------------------------------------------------

    \22\ Applicants note that under accounting procedures followed
by the Funds, trades made on the prior Business Day will be booked
and reflected in NAV on the current Business Day. Accordingly, the
Funds 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.

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

Applicants' Legal Analysis

    1. Applicants request an order under section 6(c) of the Act for an
exemption from sections 2(a)(32), 5(a)(1), 22(d) and 22(e) of the Act
and rule 22c-1 under the Act, under sections 6(c) and 17(b) of the Act
for an exemption from sections 17(a)(1) and 17(a)(2) of the Act, and
under section 12(d)(1)(J) of the Act for an exemption from sections
12(d)(1)(A) and (B) of the Act.
    2. Section 6(c) of the Act provides that the Commission may exempt
any person, security, or transaction, or any class of persons,
securities or transactions from any provisions of the Act, if and to
the extent that such exemption is necessary or appropriate in the
public interest and consistent with the protection of investors and the
purposes fairly intended by the policy and provisions of the Act.
Section 17(b) of the Act authorizes the Commission to exempt a proposed
transaction from section 17(a) of the Act if evidence establishes that
the terms of the transaction, including the consideration to be paid or
received, are reasonable and fair and do not involve overreaching on
the part of any person concerned, and the proposed transaction is
consistent with the policies of the registered investment company and
the general provisions of the Act. Section 12(d)(1)(J) of the Act
provides that the Commission may exempt any person, security, or
transaction, or any class or classes of persons, securities or
transactions, from any provision of section 12(d)(1) if the exemption
is consistent with the public interest and the protection of investors.

Sections 5(a)(1) and 2(a)(32) of the Act

    3. Section 5(a)(1) of the Act defines an ``open-end company'' as a
management investment company that is offering for sale or has
outstanding any redeemable security of which it is the issuer. Section
2(a)(32) of the Act defines a redeemable security as any security,
other than short-term paper, under the terms of which the holder, upon
its presentation to the issuer, is entitled to receive approximately a
proportionate share of the issuer's current net assets, or the cash
equivalent. Because Shares will not be individually redeemable,
applicants request an order that would permit the Trust and any Fund to
register as an open-end management investment company and redeem Shares
in Creation Units only. Applicants state that investors may purchase
Shares in Creation Units from each Fund and redeem Creation Units from
each Fund. Applicants further state that because the market price of
Creation Units will be disciplined by arbitrage opportunities,
investors should be able to sell Shares in the secondary market at
prices that do not vary materially from their NAV.

Section 22(d) of the Act and Rule 22c-1 Under the Act

    4. Section 22(d) of the Act, among other things, prohibits a dealer
from selling a redeemable security that is currently being offered to
the public by or through a principal underwriter, except at a current
public offering price described in the prospectus. Rule 22c-1 under the
Act generally requires that a dealer selling, redeeming, or
repurchasing a redeemable security do so only at a price based on its
NAV. Applicants state that secondary market trading in Shares will take
place at negotiated prices, not at a current offering price described
in the Prospectus, and not at a price based on NAV. Thus, purchases and
sales of Shares in the secondary market will not comply with section
22(d) of the Act and rule 22c-1 under the Act. Applicants request an
exemption under section 6(c) from these provisions, to permit Shares to
trade at negotiated prices.
    5. Applicants assert that the concerns sought to be addressed by
section 22(d) of the Act and rule 22c-1 under the Act with respect to
pricing are equally satisfied by the proposed method of pricing Shares.
Applicants maintain that while there is little legislative history
regarding section 22(d), its provisions, as well as those of rule 22c-
1, appear to have been designed to (a) prevent dilution caused by
certain riskless-trading schemes by principal underwriters and contract
dealers, (b) prevent unjust discrimination or preferential treatment
among buyers resulting from sales at different prices, and (c) assure
an orderly distribution system of investment company shares by
eliminating price competition from Brokers offering shares at less than
the published sales price and repurchasing shares at more than the
published redemption price.
    6. Applicants believe that none of these purposes will be thwarted
by permitting Shares to trade in the secondary market at negotiated
prices. Applicants state that (a) secondary market trading in Shares
does not involve the Funds as parties and cannot result in dilution of
an investment in Shares, and (b) to the extent different prices exist
during a given trading day, or from day to day, such variances occur as
a result of third-party market forces, such as supply and demand.
Therefore, applicants assert that secondary market transactions in
Shares will not lead to discrimination or preferential treatment among
purchasers. Finally, applicants contend that the proposed distribution
system will be orderly because arbitrage activity should ensure that
the differences between the market price of Shares and their NAV remain
immaterial.

Section 22(e) of the Act

    7. Section 22(e) of the Act generally prohibits a registered
investment company from suspending the right of redemption or
postponing the date of payment of redemption proceeds for more than
seven days after the tender of a security for redemption. Applicants
observe that settlement of redemptions of Creation Units of Global
Funds is contingent not only on the settlement cycle of the U.S.
securities markets but also on the delivery cycles present in foreign
markets in which those Funds invest. Applicants have been advised that,
under certain circumstances, the delivery cycles for transferring
Portfolio Instruments to redeeming investors, coupled with local market
holiday schedules, will require a delivery process of up to 14 calendar
days. Applicants therefore request relief from section 22(e) in order
to provide payment or satisfaction of redemptions within the maximum
number of calendar days required for such payment or satisfaction in
the principal local markets where transactions in the Portfolio
Instruments of each Global Fund customarily clear and settle, but in
all cases no later than 14 calendar days following the tender of a
Creation Unit. With respect to Future Funds that are Global Funds,
applicants seek the same relief from section 22(e) only to the extent
that circumstances exist similar to those described in the
application.\23\
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    \23\ Applicants acknowledge that no relief obtained from the
requirements of section 22(e) will affect any obligations that they
have under rule 15c6-1 under the Exchange Act. Rule 15c6-1 requires
that most securities transactions be settled within three business
days of the trade date.
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    8. Applicants submit that Congress adopted section 22(e) to prevent
unreasonable, undisclosed or unforeseen delays in the actual payment of
redemption proceeds. Applicants state that allowing redemption payments
for Creation Units of a Fund to be made within a maximum of 14 calendar
days will not lead to unreasonable, undisclosed or unforeseen delays in
the redemption

process and would not be inconsistent with the spirit and intent of
section 22(e). Applicants state the statement of additional information
(``SAI'') will disclose those local holidays (over the period of at
least one year following the date of the SAI), if any, that are
expected to prevent the delivery of redemption proceeds in seven
calendar days and the maximum number of days, up to 14 calendar days,
needed to deliver the proceeds for each affected Global Fund. Except as
disclosed in the SAI for a Fund, deliveries of redemption proceeds for
Global Funds are expected to be made within seven days. Applicants are
not seeking relief from section 22(e) with respect to Global Funds that
do not effect creations or redemptions in-kind.

Section 12(d)(1) of the Act

    9. Section 12(d)(1)(A) of the Act prohibits a registered investment
company from acquiring securities of an investment company if the
securities represent more than 3% of the total outstanding voting stock
of the acquired company, more than 5% of the total assets of the
acquiring company, or, together with the securities of any other
investment companies, more than 10% of the total assets of the
acquiring company. Section 12(d)(1)(B) of the Act prohibits a
registered open-end investment company, its principal underwriter, or
any other broker or dealer from selling its shares to another
investment company if the sale will cause the acquiring company to own
more than 3% of the acquired company's voting stock, or if the sale
will cause more than 10% of the acquired company's voting stock to be
owned by investment companies generally.
    10. Applicants request relief to permit Investing Funds (as defined
below) to acquire Shares in excess of the limits in section 12(d)(l)(A)
of the Act and to permit the Funds, their principal underwriters and
any Brokers to sell Shares to Investing Funds in excess of the limits
in section 12(d)(l)(B) of the Act. Applicants submit that the proposed
conditions to the requested relief are designed to address the concerns
underlying the limits in section 12(d)(1), which include concerns about
undue influence, excessive layering of fees and overly complex
structures.
    11. Applicants submit that their proposed conditions address the
concerns regarding the potential for undue influence. To limit the
control that an Investing Fund may have over a Fund, applicants propose
a condition prohibiting the adviser of an Investing Management Company
(``Investing Fund Advisor''), sponsor of an Investing Trust
(``Sponsor''), any person controlling, controlled by, or under common
control with the Investing Fund Advisor or Sponsor, and any investment
company or issuer that would be an investment company but for sections
3(c)(l) or 3(c)(7) of the Act that is advised or sponsored by the
Investing Fund Advisor, the Sponsor, or any person controlling,
controlled by, or under common control with the Investing Fund Advisor
or Sponsor (``Investing Fund's Advisory Group'') from controlling
(individually or in the aggregate) a Fund within the meaning of section
2(a)(9) of the Act. The same prohibition would apply to any sub-adviser
to an Investing Management Company (``Investing Fund Subadviser''), any
person controlling, controlled by, or under common control with the
Investing Fund Subadviser, and any investment company or issuer that
would be an investment company but for sections 3(c)(l) or 3(c)(7) of
the Act (or portion of such investment company or issuer) advised or
sponsored by the Investing Fund Subadviser or any person controlling,
controlled by or under common control with the Investing Fund
Subadviser (``Investing Fund's Subadvisory Group'').
    12. Applicants propose a condition to ensure that no Investing Fund
or Investing Fund Affiliate \24\ (except to the extent it is acting in
its capacity as an investment adviser to a Fund) will cause a Fund to
purchase a security in an offering of securities during the existence
of an underwriting or selling syndicate of which a principal
underwriter is an Underwriting Affiliate (``Affiliated Underwriting'').
An ``Underwriting Affiliate'' is a principal underwriter in any
underwriting or selling syndicate that is an officer, director, member
of an advisory board, Investing Fund Advisor, Investing Fund
Subadviser, employee or Sponsor of the Investing Fund, or a person of
which any such officer, director, member of an advisory board,
Investing Fund Advisor or Investing Fund Subadviser, employee or
Sponsor is an affiliated person. An Underwriting Affiliate does not
include any person whose relationship to the Fund is covered by section
10(f) of the Act.
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    \24\ An ``Investing Fund Affiliate'' is defined as the Investing
Fund Advisor, Investing Fund Subadviser, Sponsor, promoter and
principal underwriter of an Investing Fund, and any person
controlling, controlled by or under common control with any of these
entities. A ``Fund Affiliate'' is defined as an investment adviser,
promoter or principal underwriter of a Fund and any person
controlling, controlled by or under common control with any of these
entities.
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    13. Applicants propose several conditions to address the concerns
regarding layering of fees and expenses. Applicants note that the board
of directors or trustees of any Investing Management Company, including
a majority of the directors or trustees who are not ``interested
persons'' within the meaning of section 2(a)(19) of the Act
(``disinterested directors or trustees''), will be required to find
that the advisory fees charged under the contract are based on services
provided that will be in addition to, rather than duplicative of,
services provided under the advisory contract of any Fund in which the
Investing Management Company may invest. In addition, an Investing Fund
Advisor, trustee of an Investing Trust (``Trustee'') or Sponsor, as
applicable, will waive fees otherwise payable to it by the Investing
Fund in an amount at least equal to any compensation (including fees
received pursuant to any plan adopted by a Fund under rule 12b-1 under
the Act) received from a Fund by the Investing Fund Advisor, Trustee or
Sponsor or an affiliated person of the Investing Fund Advisor, Trustee
or Sponsor, other than any advisory fees paid to the Investing Fund
Advisor, Trustee or Sponsor or its affiliated person by a Fund, in
connection with the investment by the Investing Fund in the Fund.
Applicants also propose a condition to prevent any sales charges or
service fees on shares of an Investing Fund from exceeding the limits
applicable to a fund of funds set forth in NASD Conduct Rule 2830.\25\
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    \25\ Any references to NASD Conduct Rule 2830 include any
successor or replacement rule to NASD Conduct Rule 2830 that may be
adopted by FINRA.
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    14. Applicants submit that the proposed arrangement will not create
an overly complex fund structure. Applicants note that a Fund will be
prohibited from acquiring securities of any investment company or
company relying on sections 3(c)(1) or 3(c)(7) of the Act in excess of
the limits contained in section 12(d)(1)(A) of the Act, except to the
extent permitted by exemptive relief from the Commission permitting the
Fund to purchase shares of other investment companies for short-term
cash management purposes.
    15. To ensure that the Investing Funds understand and comply with
the terms and conditions of the requested order, any Investing Fund
that intends to invest in a Fund in reliance on the requested order
will be required to enter into a participation agreement (``FOF
Participation Agreement'') with the Fund. The FOF Participation
Agreement

will include an acknowledgment from the Investing Fund that it may rely
on the order only to invest in the Funds and not in any other
investment company.

Sections 17(a)(1) and (2) of the Act

    16. Section 17(a) of the Act generally prohibits an affiliated
person of a registered investment company, or an affiliated person of
such a person (``second tier affiliate''), from selling any security to
or purchasing any security from the company. Section 2(a)(3) of the Act
defines ``affiliated person'' to include any person directly or
indirectly owning, controlling, or holding with power to vote, 5% or
more of the outstanding voting securities of the other person and any
person directly or indirectly controlling, controlled by, or under
common control with, the other person. Section 2(a)(9) of the Act
defines ``control'' as the power to exercise a controlling influence
over the management or policies of a company and provides that a
control relationship will be presumed where one person owns more than
25% of another person's voting securities. Each Fund may be deemed to
be controlled by an Adviser and hence affiliated persons of each other.
In addition, the Funds may be deemed to be under common control with
any other registered investment company (or series thereof) advised by
an Adviser (an ``Affiliated Fund'').
    17. Applicants request an exemption under sections 6(c) and 17(b)
of the Act from sections 17(a)(1) and 17(a)(2) of the Act to permit in-
kind purchases and redemptions of Creation Units by persons that are
affiliated persons or second tier affiliates of the Funds solely by
virtue of one or more of the following: (a) Holding 5% or more, or in
excess of 25% of the outstanding Shares of one or more Funds; (b)
having an affiliation with a person with an ownership interest
described in (a); or (c) holding 5% or more, or more than 25% of the
Shares of one or more Affiliated Funds.\26\ Applicants also request an
exemption in order to permit a Fund to sell its Shares to, and purchase
its Shares from, an Investing Fund and to engage in any accompanying
in-kind transactions with certain Investing Funds of which the Funds
are affiliated persons or a second-tier affiliates.\27\
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    \26\ Applicants are not seeking relief from section 17(a) for,
and the requested relief will not apply to, transactions where a
Fund could be deemed an affiliated person, or an affiliated person
of an affiliated person, of an Investing Fund because an investment
adviser to the Funds is also an investment adviser to an Investing
Fund.
    \27\ Applicants expect most Investing Funds will purchase Shares
in the secondary market and will not purchase Creation Units
directly from a Fund. To the extent that purchases and sales of
Shares occur in the secondary market and not through principal
transactions directly between an Investing Fund and a Fund, relief
from section 17(a) would not be necessary. However, the requested
relief would apply to direct sales of Shares in Creation Units by a
Fund to an Investing Fund and redemptions of those Shares. The
requested relief is also intended to cover any in-kind transactions
that may accompany such sales and redemptions.
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    18. Applicants assert that no useful purpose would be served by
prohibiting such affiliated persons from making in-kind purchases or
in-kind redemptions of Shares of a Fund in Creation Units. Both the
deposit procedures for in-kind purchases of Creation Units and the
redemption procedures for in-kind redemptions will be effected in
exactly the same manner for all purchases and redemptions, regardless
of size or number. Absent the circumstances discussed in section
I.E.1.a of the application, on each Business Day the Deposit
Instruments and Redemption Instruments available for a Fund will be the
same for all purchasers and redeemers, respectively, and will
correspond pro rata to the Fund's Portfolio Instruments. Applicants
state that the method of valuing Portfolio Instruments held by a Fund
is the same as that used for calculating the value of in-kind purchases
or redemptions and therefore, creates no opportunity for affiliated
persons or the Applicants to effect a transaction detrimental to other
holders of Shares of that Fund. Applicants note that any consideration
paid for the purchase or redemption of Shares directly from a Fund
(including for any affiliated person and including any Investing Fund)
will be based on the NAV of the Fund in accordance with policies and
procedures set forth in the Fund's registration statement.\28\
Applicants do not believe that in-kind purchases and redemptions will
result in abusive self-dealing or overreaching of the Fund.
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    \28\ Applicants acknowledge that the receipt of compensation by
(a) an affiliated person of an Investing Fund, or an affiliated
person of such person, for the purchase by the Investing Fund of
Shares of the Fund or (b) an affiliated person of a Fund, or an
affiliated person of such person, for the sale by the Fund of its
Shares to an Investing Fund, may be prohibited by section 17(e)(1)
of the Act. The FOF Participation Agreement also will include this
acknowledgment.
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    19. Applicants also submit that the sale of Shares to and
redemption of Shares from an Investing Fund meets the standards for
relief under sections 17(b) and 6(c) of the Act. Applicants also state
that the proposed transactions are consistent with the general purposes
of the Act and appropriate in the public interest.

Applicants' Conditions

    Applicants agree that any order of the Commission granting the
requested relief will be subject to the following conditions:

A. Actively-Managed Exchange-Traded Fund Relief

    1. As long as a Fund operates in reliance on the requested order,
the Shares of the Fund will be listed on a Stock Exchange.
    2. Neither the Trust nor any Fund will be advertised or marketed as
an open-end investment company or a mutual fund. Any advertising
material that describes the purchase or sale of Creation Units or
refers to redeemability will prominently disclose that the Shares are
not individually redeemable and that owners of the Shares may acquire
those Shares from the Fund and tender those Shares for redemption to
the Fund in Creation Units only.
    3. The Web site for the Funds, which is and will be publicly
accessible at no charge, will contain, on a per Share basis, for each
Fund the prior Business Day's NAV and the market closing price or Bid/
Ask Price, and a calculation of the premium or discount of the market
closing price or Bid/Ask Price against such NAV.
    4. On each Business Day, before commencement of trading in Shares
on the Stock Exchange, the Fund will disclose on its Web site the
identities and quantities of the Portfolio Instruments held by the Fund
that will form the basis for the Fund's calculation of NAV at the end
of the Business Day.
    5. The Adviser or any Subadviser, directly or indirectly, will not
cause any Authorized Participant (or any investor on whose behalf an
Authorized Participant may transact with the Fund) to acquire any
Deposit Instrument for the Fund through a transaction in which the Fund
could not engage directly.
    6. The requested relief to permit ETF operations will expire on the
effective date of any Commission rule under the Act that provides
relief permitting the operation of actively managed exchange-traded
funds.

B. Section 12(d)(1) Relief

    1. The members of the Investing Fund's Advisory Group will not
control (individually or in the aggregate) a Fund within the meaning of
section 2(a)(9) of the Act. The members of the Investing Fund's
Subadvisory Group will not control (individually or in the aggregate) a
Fund within the meaning of section 2(a)(9) of the Act. If, as a result
of a

decrease in the outstanding voting securities of a Fund, the Investing
Fund's Advisory Group or the Investing Fund's Subadvisory Group, each
in the aggregate, becomes a holder of more than 25 percent of the
outstanding voting securities of a Fund, it will vote its Shares of the
Fund in the same proportion as the vote of all other holders of the
Fund's Shares. This condition does not apply to the Investing Fund's
Subadvisory Group with respect to a Fund for which the Investing Fund
Subadviser or a person controlling, controlled by or under common
control with the Investing Fund Subadviser acts as the investment
adviser within the meaning of section 2(a)(20)(A) of the Act.
    2. No Investing Fund or Investing Fund Affiliate will cause any
existing or potential investment by the Investing Fund in a Fund to
influence the terms of any services or transactions between the
Investing Fund or an Investing Fund Affiliate and the Fund or a Fund
Affiliate.
    3. The board of directors or trustees of an Investing Management
Company, including a majority of the disinterested directors or
trustees, will adopt procedures reasonably designed to assure that the
Investing Fund Advisor and any Investing Fund Subadviser are conducting
the investment program of the Investing Management Company without
taking into account any consideration received by the Investing
Management Company or an Investing Fund Affiliate from a Fund or a Fund
Affiliate in connection with any services or transactions.
    4. Once an investment by an Investing Fund in Shares of a Fund
exceeds the limit in section 12(d)(1)(A)(i) of the Act, the board of
the Fund (``Board''), including a majority of the disinterested Board
members, will determine that any consideration paid by the Fund to the
Investing Fund or an Investing Fund Affiliate in connection with any
services or transactions: (i) Is fair and reasonable in relation to the
nature and quality of the services and benefits received by the Fund;
(ii) is within the range of consideration that the Fund would be
required to pay to another unaffiliated entity in connection with the
same services or transactions; and (iii) does not involve overreaching
on the part of any person concerned. This condition does not apply with
respect to any services or transactions between a Fund and its
investment adviser(s), or any person controlling, controlled by or
under common control with such investment adviser(s).
    5. The Investing Fund Advisor, or Trustee or Sponsor, as
applicable, will waive fees otherwise payable to it by the Investing
Fund in an amount at least equal to any compensation (including fees
received pursuant to any plan adopted by a Fund under rule 12b-1 under
the Act) received from a Fund by the Investing Fund Advisor, or Trustee
or Sponsor, or an affiliated person of the Investing Fund Advisor, or
Trustee or Sponsor, other than any advisory fees paid to the Investing
Fund Advisor, or Trustee, or Sponsor, or its affiliated person by the
Fund, in connection with the investment by the Investing Fund in the
Fund. Any Investing Fund Subadviser will waive fees otherwise payable
to the Investing Fund Subadviser, directly or indirectly, by the
Investing Management Company in an amount at least equal to any
compensation received from a Fund by the Investing Fund Subadviser, or
an affiliated person of the Investing Fund Subadviser, other than any
advisory fees paid to the Investing Fund Subadviser or its affiliated
person by the Fund, in connection with the investment by the Investing
Management Company in the Fund made at the direction of the Investing
Fund Subadviser. In the event that the Investing Fund Subadviser waives
fees, the benefit of the waiver will be passed through to the Investing
Management Company.
    6. No Investing Fund or Investing Fund Affiliate (except to the
extent it is acting in its capacity as an investment adviser to a Fund)
will cause a Fund to purchase a security in an Affiliated Underwriting.
    7. The Board of a Fund, including a majority of the disinterested
Board members, will adopt procedures reasonably designed to monitor any
purchases of securities by the Fund in an Affiliated Underwriting, once
an investment by an Investing Fund in the securities of the Fund
exceeds the limit of section 12(d)(1)(A)(i) of the Act, including any
purchases made directly from an Underwriting Affiliate. The Board will
review these purchases periodically, but no less frequently than
annually, to determine whether the purchases were influenced by the
investment by the Investing Fund in the Fund. The Board will consider,
among other things: (i) Whether the purchases were consistent with the
investment objectives and policies of the Fund; (ii) how the
performance of securities purchased in an Affiliated Underwriting
compares to the performance of comparable securities purchased during a
comparable period of time in underwritings other than Affiliated
Underwritings or to a benchmark such as a comparable market index; and
(iii) whether the amount of securities purchased by the Fund in
Affiliated Underwritings and the amount purchased directly from an
Underwriting Affiliate have changed significantly from prior years. The
Board will take any appropriate actions based on its review, including,
if appropriate, the institution of procedures designed to assure that
purchases of securities in Affiliated Underwritings are in the best
interest of shareholders.
    8. Each Fund will maintain and preserve permanently in an easily
accessible place a written copy of the procedures described in the
preceding condition, and any modifications to such procedures, and will
maintain and preserve for a period of not less than six years from the
end of the fiscal year in which any purchase in an Affiliated
Underwriting occurred, the first two years in an easily accessible
place, a written record of each purchase of securities in Affiliated
Underwritings once an investment by an Investing Fund in the securities
of the Fund exceeds the limit of section 12(d)(1)(A)(i) of the Act,
setting forth from whom the securities were acquired, the identity of
the underwriting syndicate's members, the terms of the purchase, and
the information or materials upon which the Board's determinations were
made.
    9. Before investing in a Fund in excess of the limits in section
12(d)(1)(A), an Investing Fund will execute a FOF Participation
Agreement with the Fund stating that their respective boards of
directors or trustees and their investment advisers, or Trustee and
Sponsor, as applicable, understand the terms and conditions of the
order, and agree to fulfill their responsibilities under the order. At
the time of its investment in shares of a Fund in excess of the limit
in section 12(d)(1)(A)(i), an Investing Fund will notify the Fund of
the investment. At such time, the Investing Fund will also transmit to
the Fund a list of the names of each Investing Fund Affiliate and
Underwriting Affiliate. The Investing Fund will notify the Fund of any
changes to the list as soon as reasonably practicable after a change
occurs. The Fund and the Investing Fund will maintain and preserve a
copy of the order, the FOF Participation Agreement, and the list with
any updated information for the duration of the investment and for a
period of not less than six years thereafter, the first two years in an
easily accessible place.
    10. Before approving any advisory contract under section 15 of the
Act, the board of directors or trustees of each Investing Management
Company,

including a majority of the disinterested directors or trustees, will
find that the advisory fees charged under such contract are based on
services provided that will be in addition to, rather than duplicative
of, the services provided under the advisory contract(s) of any Fund in
which the Investing Management Company may invest. These findings and
their basis will be recorded fully in the minute books of the
appropriate Investing Management Company.
    11. Any sales charges and/or service fees charged with respect to
shares of an Investing Fund will not exceed the limits applicable to a
fund of funds as set forth in NASD Conduct Rule 2830.
    12. No Fund relying on this section 12(d)(1) relief will acquire
securities of any investment company or company relying on section
3(c)(1) or 3(c)(7) of the Act in excess of the limits contained in
section 12(d)(1)(A) of the Act, except to the extent permitted by
exemptive relief from the Commission permitting the Fund to purchase
shares of other investment companies for short-term cash management
purposes.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-29569 Filed 12-6-12; 8:45 am]
BILLING CODE 8011-01-P