[Federal Register Volume 83, Number 161 (Monday, August 20, 2018)]
[Notices]
[Pages 42188-42193]
[FR Doc No: 2018-17832]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83845; File No. SR-NYSEArca-2018-57]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change, as Modified by Amendment No. 1, To List and
Trade Shares of the Amplify BlackSwan Growth & Treasury Core ETF Under
Commentary .02 to NYSE Arca Rule 5.2-E(j)(3)

August 14, 2018.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on July 31, 2018, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') a
proposed rule change. On August 10, 2018, the Exchange filed Amendment
No. 1 to the proposed rule change, as described in Items I and II
below, which Items have been prepared by the Exchange. The Commission
is publishing this notice to solicit comments on the proposed rule
change, as modified by Amendment No. 1, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to list and trade the shares of the following
fund of the Amplify ETF Trust under Commentary .02 to NYSE Arca Rule
5.2-E(j)(3) (``Investment Company Units''): the Amplify BlackSwan
Growth & Treasury Core ETF. This Amendment No. 1 to SR-NYSEArca-2018-57
replaces SR-NYSEArca-2018-57 as originally filed and supersedes such
filing in its entirety. The proposed change is available on the
Exchange's website at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

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

    In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.

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

1. Purpose
    The Exchange proposes to list and trade shares (``Shares'') of the
Amplify BlackSwan Growth & Treasury Core ETF (``Fund'') under
Commentary .02 to NYSE Arca Rule 5.2-E(j)(3), which governs the listing
and trading of Investment Company Units (``Units'') on the Exchange.\4\
The Fund will be an index-based exchange traded fund (``ETF''). The
Shares will be offered by the Amplify ETF Trust (``Trust''), which is
registered with the Commission as an investment company and has filed a
registration statement on Form N-1A (``Registration Statement'') with
the Commission on behalf of the Fund.\5\
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    \4\ NYSE Arca Rule 5.2-E(j)(3)(A) provides that an Investment
Company Unit is a security that represents an interest in a
registered investment company that holds securities comprising, or
otherwise based on or representing an interest in, an index or
portfolio of securities (or holds securities in another registered
investment company that holds securities comprising, or otherwise
based on or representing an interest in, an index or portfolio of
securities).
    \5\ See Post-Effective Amendment No. 65 to Registration
Statement on Form N-1A for the Trust, dated June 26, 2018 (File Nos.
333-207937 and 811-23108). The descriptions of the Fund and the
Shares contained herein are based, in part, on information in the
Registration Statement. In addition, the Commission has issued an
order granting certain exemptive relief to the Trust under the
Investment Company Act of 1940 (15 U.S.C. 80a-1) (``1940 Act''). See
Investment Company Act Release No. 31822 (September 14, 2015) (File
No. 812-14424) (``Exemptive Order'').
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    Amplify Investments LLC will be the investment adviser
(``Adviser'') to the Fund. CSAT Investment Advisory, L.P., d/b/a
Exponential ETFs will serve as sub-adviser for the Fund (``Sub-
Adviser''). U.S. Bancorp Fund Services, LLC will be the administrator,
custodian and fund accounting and transfer agent for the Fund. Quasar
Distributors LLC will serve as the distributor for the Fund.
    Commentary .02(b)(i) to Rule 5.2-E(j)(3) provides that, if the
applicable index is maintained by a broker-dealer or fund advisor, the
broker-dealer or fund advisor shall erect and maintain a ``fire wall''
around the personnel who have access to information concerning changes
and adjustments to the index.\6\

The ``Index Provider'' (``ARGI Investment Services LLC'') is registered
as an investment adviser but is not registered as a broker-dealer or
affiliated with a broker-dealer.\7\ The Adviser is not registered as a
broker-dealer but is affiliated with a broker-dealer and has
implemented and will maintain a fire wall with respect to its broker-
dealer affiliate regarding access to information concerning the
composition and/or changes to the Fund's portfolio. The Sub-Adviser is
not registered as a broker-dealer or affiliated with a broker-dealer.
In the event (a) the Adviser or the Sub-Adviser becomes registered as a
broker-dealer or newly affiliated with a broker-dealer, or (b) any new
adviser or sub-adviser is a registered broker-dealer or becomes
affiliated with a broker-dealer, it will implement and maintain a fire
wall with respect to its relevant personnel or its broker-dealer
affiliate regarding access to information concerning the composition
and/or changes to the 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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    \6\ An investment adviser to an open-end fund is required to be
registered under the Investment Advisers Act of 1940 (the ``Advisers
Act''). As a result, the Adviser and Sub-adviser 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.
    \7\ The Index Provider is not affiliated with the Fund, Adviser
or Sub-Adviser.
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    The Exchange is submitting this proposed rule change because the
Index for the Fund does not meet all of the ``generic'' listing
requirements of Commentary .02(a) to NYSE Arca Rule 5.2-E(j)(3),
applicable to the listing of Units based on an index of ``Fixed Income
Securities.'' \8\ Specifically, Commentary .02(a) to NYSE Arca Rule
5.2-E(j)(3) sets forth the requirements to be met by components of an
index or portfolio of Fixed Income Securities underlying a series of
Units. Because, as discussed in more detail herein, the ARGI BlackSwan
Core Index (the ``Index'') will include ``LEAPS'' (as described below),
the Index does not satisfy the requirements of Commentary .02(a)(1) to
Rule 5.2-E(j)(3).\9\ The Exchange represents that the Index will meet
each of the initial and continued listing criteria in Commentary .02 to
Rule 5.2-E(j)(3) with the exception of the requirements of Commentary
.02 (a)(1) to Rule 5.2-E(j)(3).
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    \8\ Commentary .02 to NYSE Arca Rule 5.2-E(j)(3) states that
Fixed Income Securities are debt securities that are notes, bonds,
debentures or evidence of indebtedness that include, but are not
limited to, U.S. Department of Treasury securities, government-
sponsored entity securities, municipal securities, trust preferred
securities, supranational debt and debt of a foreign country or a
subdivision thereof.
    \9\ Commentary .02(a)(1) to Rule 5.2-E(j)(3) provides that, with
respect to components of an index or portfolio underlying a series
of Units listed pursuant to Rule 19b-4(e) under the Act, the
following criterion shall be met on an initial and continued listing
basis: The index or portfolio must consist of (a) only Fixed Income
Securities or (b) Fixed Income Securities and cash.
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Amplify BlackSwan Growth & Treasury Core ETF
Principal Investments
    According to the Registration Statement, the Fund will seek
investment results that generally correspond (before fees and expenses)
to the price and yield of the Index. Under normal market
conditions,\10\ the Fund will invest at least 80% of its total assets
in the securities that comprise the Index, which are U.S. Treasury
securities and long-dated call options (``LEAPS'') \11\ on the SPDR S&P
500 ETF Trust (``SPY'').\12\ These options are referred to herein as
``SPY LEAPS''. The Fund, using an indexing investment approach,
attempts to replicate, before fees and expenses, the performance of the
Index.\13\ The Index was created and is maintained by the Index
Provider.
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    \10\ For purposes of this filing, the term ``normal market
conditions'' is as that term is defined in NYSE Arca Rule 8.600-
E(c)(5).
    \11\ Long-term Equity AnticiPation Securities\SM\
(``LEAPS[supreg]'') are long-term exchange-traded call options. Call
options allow holders the opportunity to participate in the
underlying securities' appreciation in excess of a specified strike
price without receiving payments equivalent to any cash dividends
declared on the underlying securities. A holder of a LEAPS will be
entitled to receive a specified number of shares of the underlying
stock upon payment of the strike price, and therefore the LEAPS will
be exercisable when the price of the underlying stock is above the
strike price. However, if at expiration the price of the underlying
stock is at or below the strike price, the LEAPS will expire and be
worthless. LEAPS are traded on U.S. options exchanges.
    \12\ Shares of the SPDR S&P 500 ETF Trust are listed and traded
on the Exchange.
    \13\ The Index is compiled by the Index Provider and calculated
by S-Network Global Indexes, Inc. (the ``Calculation Agent'').
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    According to the Registration Statement, the Index is a rules-
based, quantitative index that seeks to provide capital protection
against the unpredictable, rare and highly disruptive events that have
come to be referred to as ``Black Swans.'' The Index endeavors to
provide investment returns that correspond to those of the S&P 500
Index, while mitigating against significant losses. One portion of the
Index is a portfolio of U.S. Treasury securities and the other is a
portfolio of SPY LEAPS. Twice a year, in June and December, on the
Index reconstitution and rebalance date, the Index places 90% of its
index market capitalization in the portfolio of U.S. Treasury
securities and 10% of its index market capitalization in the portfolio
of LEAPS.
    According to the Registration Statement, the U.S. Treasury
portfolio of the Index is comprised of 2-, 3-, 5-, 7-, 10- and 30-year
U.S. Treasury securities that cumulatively provide a portfolio duration
that matches the initial duration of the 10-year U.S. Treasury
security.
    The LEAPS portfolio of the Index is composed of in-the-money LEAPS
that, at the time of purchase, had expirations of at least one year and
one day in the future and expire in either June or December, as
applicable.\14\ For the LEAPS in the Index and in which the Fund
invests, the reference asset is SPY. The LEAPS will generally have a
delta of 70 at the time of purchase, meaning that for every $1.00 of
movement in the share price of SPY, the price of the LEAPS will have a
corresponding movement of $0.70. LEAPS positions are reconstituted
twice per year on the first trading day of June and December. At each
June reconstitution, the Index liquidates its existing June LEAPS and
purchases LEAPS that expire the following June. The December LEAPS
positions will remain unchanged at each June reconstitution. At each
December reconstitution, the Index liquidates its existing December
LEAPS and purchases LEAPS that expire the following December. The June
LEAPS positions will remain unchanged at each December reconstitution.
Net gains or losses derived from the reconstitutions of the LEAPS
positions will be added to or subtracted from the U.S. Treasury
portfolio at each reconstitution.
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    \14\ An ``in-the-money'' call option contract is an option
contract with a strike price that is below the current price of the
underlying reference asset.
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Other Investments
    While, under normal market conditions, the Fund will invest at
least 80% of its total assets in the securities that comprise the
Index, as described above, the Fund may hold other securities and
financial instruments, as described below.
    The Fund may hold cash and cash equivalents.\15\
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    \15\ For purposes of this filing, the term ``cash equivalents''
has the meaning specified in Commentary .01(c) to NYSE Arca Rule
8.600-E.
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The ARGI BlackSwan Core Index
    According to the Registration Statement, the ARGI BlackSwan Core
Index is composed of U.S. Treasury securities and SPY LEAPS. The Index
seeks to realize capital appreciation in

line with the performance of SPY while avoiding substantial capital
drawdowns.
    On each rebalancing date, the Index places 90% of its index market
capitalization in treasuries and 10% in SPY LEAPS. The weighting among
U.S. Treasury securities is determined by the option reconstitution
schedule.
    The option portion of the portfolio holds 5% of Index market
capitalization in June 70-delta SPY LEAPS and 5% in December 70-delta
SPY LEAPS. Initially and at each Index rebalance date, calls that are
purchased should all have at least one year plus one day until
expiration. The 70-delta rule only applies to initial purchases on the
rebalance date. Should there not be a 70-delta option, the closest
option above 70 will be utilized.
    The treasury position holds 5% of its allocated portion of Index
market capitalization in a ``barbell'' portfolio of 2- and 30-year
treasuries, and 95% of its allocated portion of market capitalization
in a core portfolio that invests in 3-, 5-, 7-, 10- and 30-year
treasuries.
    The Index is overseen by a committee (the ``Committee'') that is
responsible for overseeing the activities of the Calculation Agent and
approving all changes to the Index related to its semi-annual
reconstitutions and quarterly rebalances. All members of the Committee
and their advisors shall comply with the Calculation Agent's code of
conduct and ethics with respect to the disclosure and use of material
non-public information.
Surveillance
    The Exchange believes that sufficient protections are in place to
protect against market manipulation of the Fund's Shares and SPY LEAPS
for several reasons: (i) The diversity, liquidity, and market cap of
the securities underlying the S&P 500 Index, which deters manipulation
of the S&P 500 Index and mitigates risk associated with manipulation in
SPY LEAPS; \16\ (ii) liquidity in the market for SPY LEAPS and shares
of the SPDR S&P 500 ETF Trust; \17\ and (iii) surveillances by the
Exchange and the Financial Industry Regulatory Authority (``FINRA'')
designed to detect violations of self-regulatory organization (``SRO'')
rules and the federal securities laws.\18\ In this regard, the Exchange
has in place a surveillance program for transactions in ETFs to ensure
the availability of information necessary to detect and deter potential
manipulations and other trading abuses, thereby making the Shares less
readily susceptible to manipulation. The Exchange notes that the Fund's
portfolio is not readily susceptible to manipulation as assets in the
portfolio, comprised primarily of U.S. Treasury securities \19\ and SPY
LEAPS, will be acquired in extremely liquid and highly regulated
markets.
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    \16\ Intraday quotations and last sale information for LEAPS are
available directly from the exchange on which they are traded or
through the Options Price Reporting Authority. Information about
existing outstanding interest in LEAPS is available on the Options
Clearing Corporation's (``OCC'') website.
    \17\ The Exchange notes that the S&P 500 Index underlying SPY
would meet the generic listing standards applicable to an index
composed of U.S. Component Stocks in Commentary .01(a) to NYSE Arca
Rule 5.2-E(j)(3), including criteria relating to liquidity, market
capitalization and diversification.
    \18\ FINRA conducts cross-market surveillances on behalf of the
Exchange pursuant to a regulatory services agreement. The Exchange
is responsible for FINRA's performance under this regulatory
services agreement.
    \19\ The U.S. Treasury securities market is highly liquid. The
Treasury market and its participants are subject to a wide range of
oversight and regulations, including requirements designed to
prevent market manipulation and other abuses. For example, Treasury
market participants and the Treasury market, itself, are subject to
significant oversight by a number of regulatory authorities,
including the Treasury, the Commission, federal bank regulators, and
FINRA. The Exchange believes that the U.S. Treasury securities that
the Fund will acquire as part of its strategy are not readily
susceptible to market manipulation due to the liquidity and
extensive oversight associated with the U.S. Treasury securities
market.
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    Exchange and FINRA surveillances referred to above generally focus
on detecting securities trading outside their normal patterns, which
could be indicative of manipulative or other violative activity. When
such situations are detected, surveillance analysis follows and
investigations are opened, where appropriate, to review the behavior of
all relevant parties for all relevant trading violations.
    The Exchange or FINRA, on behalf of the Exchange, or both, will
communicate as needed regarding trading in the Shares and SPY LEAPS
with other markets and other entities that are members of the
Intermarket Surveillance Group (``ISG''), and the Exchange or FINRA, on
behalf of the Exchange, or both, may obtain trading information
regarding trading in the Shares and SPY LEAPS from such markets and
other entities.\20\ In addition, the Exchange may obtain information
regarding trading in the Shares and SPY LEAPS from markets and other
entities that are members of ISG or with which the Exchange has in
place a comprehensive surveillance sharing agreement. In addition,
FINRA, on behalf of the Exchange, is able to access, as needed, trade
information for certain fixed income securities held by the Fund
reported to FINRA's Trade Reporting and Compliance Engine (``TRACE'').
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    \20\ For a list of the current members of ISG, see
www.isgportal.org. The Exchange notes that not all components of the
Fund's portfolio may trade on markets that are members of ISG or
with which the Exchange has in place a comprehensive surveillance
sharing agreement.
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    All statements and representations made in this filing regarding
(a) the description of the portfolio or reference asset, (b)
limitations on portfolio holdings or reference assets, or (c) the
applicability of Exchange listing rules specified in this rule filing
shall constitute continued listing requirements for listing the Shares
of the Fund on the Exchange.
    The issuer must notify the Exchange of any failure by the Fund to
comply with the continued listing requirements, and, pursuant to its
obligations under Section 19(g)(1) of the Act, the Exchange will
monitor for compliance with the continued listing requirements. If the
Fund is not in compliance with the applicable listing requirements, the
Exchange will commence delisting procedures under NYSE Arca Rule 5.5-
E(m).
    SPY LEAPS are highly liquid and derive their value from the
actively traded S&P 500 Index components. The contracts are cash-
settled, and trade in competitive auction markets with price and quote
transparency. The Exchange believes the highly regulated options
markets and the broad base and scope of the S&P 500 Index make
securities that derive their value from that index less susceptible to
market manipulation in view of market capitalization and liquidity of
the S&P 500 Index components, price and quote transparency, and
arbitrage opportunities.
    The Exchange believes that the liquidity of the markets for U.S.
Treasury securities in the Fund's portfolio, S&P 500 Index securities,
and SPY LEAPS is sufficiently great to deter fraudulent or manipulative
acts associated with the price of a Fund's Shares.\21\ The Exchange
also believes that such liquidity is sufficient to support the creation
and redemption mechanism. The Fund's investments will be consistent
with its investment objective and will not be used to enhance leverage.
The Fund's investments will not be used to seek

performance that is the multiple or inverse multiple (e.g., 2x or -2x)
of the Index. The Fund's use of derivative instruments will be
collateralized. The Exchange represents that, except as described
above, the Fund and the Index will meet each of the initial and
continued listing criteria in Commentary .02 to Rule 5.2-E (j)(3) with
the exception of meeting the requirements of Commentary .02(a)(1) to
Rule 5.2-E(j)(3) with respect to SPY LEAPS applicable to the listing of
Units based upon an index of Fixed Income Securities. In addition, the
Exchange represents that the Shares of the Fund will comply with all
other requirements applicable to Units, which includes requirements
relating to the dissemination of key information such as the Index
value, the net asset value (``NAV''), and the Intraday Indicative Value
(``IIV''), rules governing the trading of equity securities, trading
hours, trading halts, firewalls for the Index Provider and Adviser,
surveillance, and the Information Bulletin, as set forth in Exchange
rules applicable to Units and the orders approving such rules.
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    \21\ As of August 9, 2018, open interest in SPY LEAPS was
1,072,869 contracts. In addition, options on SPY have the highest
liquidity among all exchange-traded fund options, with open interest
far in excess of other ETFs in option market liquidity. As of June
19, 2018, open interest on SPY contracts were 17,771,528, whereas
the next highest ETF options were iShares MSCI Emerging Markets ETF
(EEM) and PowerShares QQQ Trust (QQQ) at 6,635,087 and 6,488,055,
respectively. Source: Bloomberg.
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    Quotation and last sale information for U.S. exchange-listed
options contracts cleared by the OCC is available via the Options Price
Reporting Authority. Quotation information for LEAPS is available
directly from the exchange on which they are traded. The intra-day,
closing and settlement prices of exchange-traded options will be
readily available from the options exchanges, automated quotation
systems, published or other public sources, or online information
services such as Bloomberg or Reuters. Price information on Treasury
bills, cash equivalents and other short-term instruments is available
from major broker-dealer firms or market data vendors, as well as from
automated quotation systems, published or other public sources, or
online information services. On each business day, before commencement
of trading in the Shares on the Exchange during the Exchange's Core
Trading Session, the portfolio that will form the basis for the Fund's
calculation of the NAV at the end of the business day will be provided
on the Adviser's website at www.amplifyetfs.com.
Suitability
    NYSE Arca Rule 9.2-E(a) provides that every ETP Holder shall use
due diligence to learn the essential facts relative to every customer,
every order, every account accepted or carried by such ETP Holder and
every person holding power of attorney over any account accepted or
carried by such ETP Holder.
    In recommending to a customer the purchase, sale or exchange of any
security, an ETP Holder shall have reasonable grounds for believing
that the recommendation is suitable for such customer upon the basis of
any facts disclosed by the customer as to his or her other security
holdings, financial situation and needs.
Availability of Information
    The Trust's website (www.amplifyetfs.com), which will be publicly
available prior to the public offering of Shares, will include a form
of the prospectus for the Fund that may be downloaded. The website will
include additional quantitative information updated on a daily basis,
including, for the Fund: (1) The prior business day's reported NAV,
mid-point of the bid/ask spread at the time of calculation of such NAV
(the ``Bid/Ask Price''),\22\ and a calculation of the premium and
discount of the Bid/Ask Price against the NAV; and (2) data in chart
format displaying the frequency distribution of discounts and premiums
of the daily Bid/Ask Price against the NAV, within appropriate ranges,
for each of the four previous calendar quarters.
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    \22\ The Bid/Ask Price of the Fund's Shares will be determined
using the midpoint of the highest bid and the lowest offer on the
Exchange as of the time of calculation of the Fund's NAV. The
records relating to Bid/Ask Prices will be retained by the Fund and
its service providers.
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    On each business day, before commencement of trading in Shares in
the Core Trading Session \23\ on the Exchange, the Trust will disclose
on its website the following information regarding each portfolio
holding, as applicable to the type of holding: Ticker symbol, CUSIP
number or other identifier, if any; a description of the holding
(including the type of holding); the identity of the security, index or
other asset or instrument underlying the holding, if any; for options,
the option strike price; quantity held (as measured by, for example,
par value, notional value or number of shares, contracts or units);
maturity date, if any; coupon rate, if any; market value of the
holding; and the percentage weighting of the holding in the Fund's
portfolio. The website information will be publicly available at no
charge.
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    \23\ The Core Trading Session is 9:30 a.m. to 4:00 p.m. Eastern
Time (``E.T'').
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    In addition, a portfolio composition file, which will include the
security names and quantities of securities and other assets required
to be delivered in exchange for the Fund's Shares, together with
estimates and actual cash components, will be publicly disseminated
prior to the opening of the Exchange via the National Securities
Clearing Corporation. The portfolio will represent one Creation Unit of
the Fund. Authorized Participants may refer to the portfolio
composition file for information regarding LEAPS, U.S. Treasury
Securities, money market instruments, and any other instrument that may
comprise the Fund's portfolio on a given day.
    Investors can also obtain the Trust's Statement of Additional
Information (``SAI''), the Fund's Shareholder Reports, and its Form N-
CSR, filed twice a year. The Trust's SAI and Shareholder Reports will
be available free upon request from the Trust, and those documents and
the Form N-CSR may be viewed on screen or downloaded from the
Commission's website at www.sec.gov. Information regarding market price
and trading volume for the Shares will be continually available on a
real-time basis throughout the day on brokers' computer screens and
other electronic services. Information regarding the previous day's
closing price and trading volume information for the Shares will be
published daily in the financial section of newspapers. Quotation and
last sale information for the Shares will be available via the
Consolidated Tape Association (``CTA'') high-speed line. Quotation and
last sale information for LEAPS will be available via the Options Price
Reporting Authority. Price information on fixed income portfolio
securities, including U.S. Treasury securities, cash equivalents and
other short term instruments is available from major broker-dealer
firms or market data vendors, as well as from automated quotation
systems, published or other public sources, or online information
services. In addition, the value of the Index will be published by one
or more major market data vendors every 15 seconds during the NYSE Arca
Core Trading Session. Information about the Index constituents, the
weighting of the constituents, the Index's methodology and the Index's
rules will be available on the Index Provider's website.
    In addition, the IIV as defined in NYSE Arca Rule 5.2-E (j)(3),
Commentary .02 (c) will be widely disseminated at least every 15
seconds during the Core Trading Session by one or more major market
data vendors.\24\

All Fund holdings will be included in calculating the IIV.
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    \24\ Currently, it is the Exchange's understanding that several
major market data vendors display and/or make widely available IIV's
taken from the CTA or other data feeds.
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    The dissemination of the IIV is intended to allow investors to
determine the value of the underlying portfolio of the Fund on a daily
basis and to approximate that value throughout the trading day. The
intra-day, closing and settlement prices of the portfolio securities
and other Fund investments will also be readily available from the
exchanges trading such instruments, automated quotation systems,
published or other public sources. The intra-day, closing and
settlement prices of treasuries and money market instruments will be
readily available from published and other public sources or on-line
information services.
Initial and Continued Listing
    The Shares will conform to the initial and continued listing
criteria under NYSE Arca Rules 5.2-E(j)(3) and 5.5-E(g)(2), except that
the Index will not meet the requirements of NYSE Arca Rule 5.2-E(j)(3),
Commentary .02(a)(1) in that the Index will include of SPY LEAPS. The
Exchange represents that, for initial and/or continued listing, the
Fund will be in compliance with Rule 10A-3 \25\ under the Act, as
provided by NYSE Arca Rule 5.3-E. A minimum of 100,000 Shares for the
Fund will be outstanding at the commencement of trading on the
Exchange. The Exchange will obtain a representation from the issuer of
the Shares that the NAV per Share will be calculated daily every day
the New York Stock Exchange is open and that the NAV and will be made
available to all market participants at the same time.
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    \25\ See 17 CFR 240.10A-3.
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2. Statutory Basis
    The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) \26\ that an exchange have rules that
are designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to remove
impediments to, and perfect the mechanism of a free and open market
and, in general, to protect investors and the public interest.
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    \26\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices in that the
Shares will be listed on the Exchange pursuant to the initial and
continued listing criteria in NYSE Arca Commentary .02 to Rule 5.2-
E(j)(3) and NYSE Arca Rule 5.2-E(g)(2) [sic], except that the Index
includes SPY LEAPS, rather than only Fixed Income Securities. Under
normal market conditions, the Fund will invest at least 80% of its
total assets in the securities that comprise the Index, which will be
composed of U.S. Treasury securities and SPY LEAPS.
    As noted above, SPY LEAPS are highly liquid and derive their value
from the actively traded S&P 500 Index components. The Exchange
believes the highly regulated options markets and the broad base and
scope of the S&P 500 Index make securities that derive their value from
that index less susceptible to market manipulation in view of market
capitalization and liquidity of the S&P 500 Index components, price and
quote transparency, and arbitrage opportunities.
    The Exchange believes that the liquidity of the markets for U.S.
Treasury securities in the Fund's portfolio, S&P 500 Index securities,
and SPY LEAPS is sufficiently great to deter fraudulent or manipulative
acts associated with the price of a Fund's Shares. The Exchange also
believes that such liquidity is sufficient to support the creation and
redemption mechanism.
    The Shares will be subject to the existing trading surveillances
administered by the Exchange or FINRA on behalf of the Exchange, which
are designed to deter and detect violations of Exchange rules and
applicable federal securities laws relating to trading on the Exchange.
FINRA and the Exchange, as applicable, may each obtain information via
ISG from other exchanges that are members of ISG, and in the case of
the Exchange, from other market or entities with which the Exchange has
entered into a comprehensive surveillance sharing agreement.
    The Index Provider is registered as an investment adviser but is
not registered as a broker-dealer or affiliated with a broker-dealer.
The Adviser is not registered as a broker-dealer but is affiliated with
a broker-dealer and has implemented and will maintain a fire wall with
respect to its broker-dealer affiliate regarding access to information
concerning the composition and/or changes to the Fund's portfolio. The
Sub-Adviser is not registered as a broker-dealer or affiliated with a
broker-dealer. In the event that (a) the Adviser or Sub-Adviser becomes
registered as a broker-dealer or newly affiliated with another broker-
dealer; or (b) any new adviser or sub-adviser is a registered broker-
dealer or becomes affiliated with a broker-dealer, it will implement
and maintain a fire wall with respect to its relevant personnel or such
broker-dealer affiliate, as applicable, regarding access to information
concerning the composition and/or changes to the portfolio, and will be
subject to procedures designed to prevent the use and dissemination of
material non-public information regarding such portfolio.
    The proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
that the Exchange will obtain a representation from the issuer of the
Shares that the NAV per Share will be calculated daily every day the
New York Stock Exchange is open, and that the NAV will be made
available to all market participants at the same time. In addition, a
large amount of publicly available information will be publicly
available regarding the Fund and the Shares, thereby promoting market
transparency. Moreover, the IIV will be widely disseminated by one or
more major market data vendors at least every 15 seconds during the
Exchange's Core Trading Session.
    On each business day, before commencement of trading in the Shares
in the Core Trading Session on the Exchange, the Fund will disclose on
its website the portfolio that will form the basis for the Fund's
calculation of NAV at the end of the business day. 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, and quotations
and last sale information will be available via the CTA high-speed
line.
    Information relating to U.S. exchange-listed options is available
via the Options Price Reporting Authority. Quotation and last sale
information for the Shares will be available via the CTA high-speed
line. Quotation and last sale information for U.S. exchange-listed
options contracts cleared by the OCC is available via the Options Price
Reporting Authority. Quotation information for LEAPS is available
directly from the exchange on which they are traded. The intra-day,
closing and settlement prices of exchange-traded options will be
readily available from the options exchanges, automated quotation
systems, published or other public sources, or online information
services such as Bloomberg or Reuters. Such price information on fixed
income portfolio securities, including U.S. Treasury securities, cash
equivalents and other short term instruments is available from major
broker-dealer firms or market data vendors, as well as from automated
quotation systems, published or other public sources, or online
information services.

    The website for the Fund will include the prospectus for the Fund
and additional data relating to NAV and other applicable quantitative
information. Moreover, prior to commencement of trading, the Exchange
will inform its ETP Holders in an Information Bulletin of the special
characteristics and risks associated with trading the Shares. Trading
in Shares of the Fund will be halted if the circuit breaker parameters
in NYSE Arca Rule 7.12-E have been reached or because of market
conditions or for reasons that, in the view of the Exchange, make
trading the Shares inadvisable. In addition, as noted above, investors
will have ready access to information regarding the Fund's holdings,
the IIV, the Fund's portfolio, and quotation and last sale information
for the Shares.
    The proposed rule change is designed to perfect the mechanism of a
free and open market and, in general, to protect investors and the
public interest in that it will facilitate the listing and trading of
an additional type of exchange-traded product that will enhance
competition among market participants, to the benefit of investors and
the marketplace. As noted above, the Shares will be subject to the
existing trading surveillances administered by the Exchange or FINRA on
behalf of the Exchange, which are designed to detect violations of
Exchange rules and federal securities laws applicable to trading on the
Exchange. The Exchange or FINRA, on behalf of the Exchange, will
communicate as needed regarding trading in the Shares and LEAPS with
other market and other entities that are members of ISG, and the
Exchange or FINRA, on behalf of the Exchange, may obtain trading
information in the Shares and LEAPS from such markets and other
entities. In addition, the Exchange may obtain information regarding
trading in the Shares and LEAPS from markets and other entities that
are members of ISG or with which the Exchange has in place a
comprehensive surveillance sharing agreement. In addition, as noted
above, investors will have ready access to information regarding the
Fund's holdings, the IIV, and quotation and last sale information for
the Shares.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purpose of the Act. The Exchange notes that the
proposed rule change will facilitate the listing and trading of an
additional type of Units that can hold options contracts and that will
enhance competition among market participants, to the benefit of
investors and the marketplace.

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

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

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, as modified by Amendment No. 1, is consistent with the Act.
Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-NYSEArca-2018-57 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2018-57. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of such filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSEArca-2018-57, and should be
submitted on or before September 10, 2018.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
---------------------------------------------------------------------------

    \27\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2018-17832 Filed 8-17-18; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register: February 24, 2009 (Volume 74, Number 35)]
[Notices]
[Page 8264-8265]
[DOCID:fr24fe09-81]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2007-D-0429] (formerly Docket No. 2007D-0496)

Agency Information Collection Activities; Submission for Office
of Management and Budget Review; Comment Request; Labeling of
Nonprescription Human Drug Products Marketed Without an Approved
Application as Required by the Dietary Supplement and Nonprescription
Drug Consumer Protection Act: Questions and Answers

AGENCY:  Food and Drug Administration, HHS.

ACTION:  Notice.

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

SUMMARY:  The Food and Drug Administration (FDA) is announcing that a
proposed collection of information has been submitted to the Office of
Management and Budget (OMB) for review and clearance under the
Paperwork Reduction Act of 1995 (the PRA). Elsewhere in this issue of
the Federal Register, FDA is announcing that a proposed collection of
information regarding dietary supplement labeling requirements and
recommendations has been submitted for OMB review.

DATES: Fax written comments on the collection of information by March
26, 2009.

ADDRESSES:  To ensure that comments on the information collection are
received, OMB recommends that written comments be faxed to the Office
of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer,
FAX:<PHONE_NUMBER>, or e-mailed to<EMAIL_ADDRESS>All
comments should be identified with the title ``Labeling of
Nonprescription Human Drug Products Marketed Without an Approved
Application as Required by the Dietary Supplement and Nonprescription
Drug Consumer Protection Act: Questions and Answers.'' Also include the
FDA docket number found in brackets in the heading of this document.

FOR FURTHER INFORMATION CONTACT:  Elizabeth Berbakos, Office of
Information Management (HFA-710), Food and Drug Administration, 5600
Fishers Lane, Rockville, MD 20857,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: In compliance with 44 U.S.C. 3507, FDA has
submitted the following proposed collection of information to OMB for
review and clearance.

Labeling of Nonprescription Human Drug Products Marketed Without an
Approved Application as Required by the Dietary Supplement and
Nonprescription Drug Consumer Protection Act: Questions and Answers

    On December 22, 2006, the President signed into law the Dietary
Supplement and Nonprescription Drug Consumer Protection Act (Public Law
109-462, 120 Stat. 3469). This law amends the Federal Food, Drug, and
Cosmetic Act (the act) with respect to serious adverse event reporting
for dietary supplements and nonprescription drugs marketed without an
approved application.
    Section 502(x) of the act (21 U.S.C. 352(x)), which was added by
Public Law 109-462, requires the label of a nonprescription drug
product marketed without an approved application in the United States
to include a domestic address or domestic telephone number through
which a responsible person may receive a report of a serious adverse
event associated with the product. In the Federal Register of January
2, 2008 (73 FR 196), FDA announced the availability of a draft guidance
document entitled ``Questions and Answers Regarding the Labeling of
Nonprescription Human Drug Products Marketed Without an Approved
Application as Required by the Dietary Supplement and Nonprescription
Drug Consumer Protection Act.'' In the Federal Register of December 11,
2008 (73 FR 75436), FDA published a notice of availability of a revised
version of the same draft guidance document. The guidance document
contains questions and answers relating to the labeling requirement and
provides guidance to industry on the following topics: (1) The meaning
of ``domestic address'' for purposes of the labeling requirements of
section 502(x) of the act; (2) FDA's recommendation for the use of an
introductory statement before the domestic address or telephone number
that is required to appear on the product label under section 502(x) of
the act; and (3) FDA's intent regarding enforcing the labeling
requirements of section 502(x) of the act.
    Title: Labeling of Nonprescription Human Drug Products Marketed
Without an Approved Application as Required by the Dietary Supplement
and Nonprescription Drug Consumer Protection Act: Questions and
Answers.
    Description of Respondents: Respondents to this collection of
information are manufacturers, packers, and distributors whose name
(under section 502(b)(1) of the act (21 U.S.C. 352(b)(1))) appears on
the label of a nonprescription drug product marketed in the United
States without an approved application.
    Burden Estimate: FDA is requesting public comment on the estimated
one-time reporting burden from these respondents, as required by 502(x)
of the act and described in the guidance ``Labeling of Nonprescription
Human Drug Products Marketed Without an Approved Application as
Required by

the Dietary Supplement and Nonprescription Drug Consumer Protection
Act: Questions and Answers.'' The estimates for one-time reporting are
based on FDA's knowledge of nonprescription drug product labeling in
the United States, whether or not marketed under an approved
application.
    FDA estimates the burden of this collection of information as
follows:

                                 Table 1.--Estimated Annual Reporting Burden \1\
----------------------------------------------------------------------------------------------------------------
                      No. of           Frequency per                            Hours per
                   Respondents           Response         Total Responses        Response         Total Hours
----------------------------------------------------------------------------------------------------------------
Domestic                      200                   500            100,000                  4            400,000
 address or
 telephone
 number
 labeling
 requirement
 (21 U.S.C.
 502(x)) and
 recommendatio
 n to clarify
 its purpose
----------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or maintenance and operating costs associated with this collection of
  information.

    As indicated in Table 1 of this document, we estimate that
approximately 200 manufacturers will revise approximately 100,000
labels to add a full domestic address and a domestic telephone number,
and should they choose to adopt the guidance's recommendation, to add a
statement identifying the purpose of the domestic address or telephone
number. FDA believes that designing the label change should not take
longer than 4 hours per label. Automated printing of the labels should
only require a few seconds per label. This estimate accounts for the
possibility that every manufacturer will make label revision, which is
unlikely. Because the majority of over-the-counter drug product labels
currently have a domestic telephone number that satisfies the
requirement, we believe many manufacturers will opt not to adopt the
guidance's recommendation to add a statement identifying the purpose of
the address or telephone number, significantly reducing the number of
total responses. However, assuming that all labels are revised,
estimate a one-time reporting burden for this information collection of
400,000 hours.
    In the Federal Register of January 2, 2008 (73 FR 196), FDA
published a notice of availability for the original draft guidance that
also gave notice of the proposed collections of information in the
draft guidance, included an analysis and burden estimate for those
proposed collections of information, and provided 60 days for public
comment under the PRA. FDA did not revise the PRA burden analysis and
estimate when it issued the revised draft guidance in December 2008
because the revisions did not affect them.
    FDA received one comment on the proposed collections of
information, stating that the time involved in revising labels would be
significantly longer than the typical timeframe to implement labeling
changes because the volume of labels required to be revised at one time
might exceed manufacturers' labeling revision capacity. Several
comments requested that FDA extend the date of its enforcement
discretion. In response to comments, in December 2008, FDA published a
notice of availability of the revised draft guidance for industry. The
revised draft guidance was identical to the first draft guidance, with
the exception that, in the revised draft guidance, FDA stated its
intention to exercise enforcement discretion until January 1, 2010. As
a result, any label revision made as a result of this guidance would
likely be made contemporaneously with other scheduled label revisions,
minimizing the burden to industry.

    Dated: February 17, 2009.
Jeffrey Shuren,
Associate Commissioner for Policy and Planning.
[FR Doc. E9-3917 Filed 2-23-09; 8:45 am]

BILLING CODE 4160-01-S


[Federal Register Volume 85, Number 172 (Thursday, September 3, 2020)]
[Rules and Regulations]
[Pages 54896-54900]
[FR Doc No: 2020-19386]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2020-0783; Project Identifier MCAI-2020-01026-T;
Amendment 39-21225; AD 2020-18-04]
RIN 2120-AA64

Airworthiness Directives; Airbus SAS Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule; request for comments.

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

SUMMARY: The FAA is adopting a new airworthiness directive (AD) for all
Airbus SAS Model A350-941 and -1041 airplanes. This AD was prompted by
a report of a slat system jam during landing. This AD requires a one-
time health check of the slat power control unit (PCU) torque sensing
unit (TSU) for discrepancies, and corrective actions if necessary; a
detailed inspection of the left-hand (LH) and right-hand (RH) slat
transmission systems for discrepancies, and corrective actions if
necessary; and LH and RH track 12 slat gear rotary actuator (SGRA)
water drainage and vent plug cleaning (which includes an inspection for
moisture), as specified in a European Union Aviation Safety Agency
(EASA) AD, which is incorporated by reference. The FAA is issuing this
AD to address the unsafe condition on these products.

DATES: This AD becomes effective September 18, 2020.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in this AD as of September
18, 2020.
    The FAA must receive comments on this AD by October 19, 2020.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.
     Hand Delivery: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.
    For material incorporated by reference (IBR) in this AD, contact
the EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; phone: +49
221 8999 000; email<EMAIL_ADDRESS>internet: www.easa.europa.eu.
You may find this IBR material on the EASA website at https://ad.easa.europa.eu. You may view this IBR material at the FAA,
Airworthiness Products Section, Operational Safety Branch, 2200 South
216th St., Des Moines, WA. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>. It is also available in the AD
docket on the internet at https://www.regulations.gov by searching for
and locating Docket No. FAA-2020-0783.

Examining the AD Docket

    You may examine the AD docket on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2020-
0783; or in person at Docket Operations between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays. The AD docket contains
this AD, any comments received, and other information. The street
address for Docket Operations is listed above. Comments will be
available in the AD docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Kathleen Arrigotti, Aerospace
Engineer, Large Aircraft Section, International Validation Branch, FAA,
2200 South 216th St., Des Moines, WA 98198; phone and fax: 206-231-
3218; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Discussion

    The EASA, which is the Technical Agent for the Member States of the
European Union, has issued EASA AD 2020-0163R1, dated August 7, 2020
(``EASA AD 2020-0163R1'') (also referred to as the Mandatory Continuing
Airworthiness Information, or ``the MCAI''), to correct an unsafe
condition for all Airbus SAS Model A350-941 and -1041 airplanes.
    This AD was prompted by a report of a slat system jam during
landing. The FAA is issuing this AD to address a slat system jam during
landing phase which could lead to a double shaft disconnection or
rupture, potentially causing one or more slat surfaces to be no longer
connected to either the slat wing tip brake or the slat PCU, possibly
resulting in reduced control of the airplane. See the MCAI for
additional background information.

Related IBR Material Under 1 CFR Part 51

    EASA AD 2020-0163R1 describes procedures for a one-time health
check of the slat PCU TSU for discrepancies (i.e., for certain TSU
values), and corrective actions (corrective actions include repairing
discrepancies, and repeating the slat PCU TSU health check, and
replacing the slat PCU); a detailed inspection of the LH and RH slat
transmission systems for discrepancies (e.g., wear, scratches, and
abrasion), and corrective actions (corrective actions may include
replacing parts); and LH and RH track 12 SGRA water drainage and vent
plug cleaning (which includes an inspection for moisture). This
material is reasonably available because the interested parties have
access to it through their normal course of business or by the means
identified in the ADDRESSES section.

FAA's Determination

    This product has been approved by the aviation authority of another
country, and is approved for operation in the United States. Pursuant
to the FAA's bilateral agreement with the State of Design Authority,
the FAA has been notified of the unsafe condition described in the MCAI
referenced above. The FAA is issuing this AD because the FAA evaluated
all pertinent information and determined the unsafe condition exists
and is likely to exist or develop on other products of the same type
design.

Requirements of This AD

    This AD requires accomplishing the actions specified in EASA AD
2020-0163R1, described previously, as incorporated by reference, except
for any differences identified as exceptions in the regulatory text of
this AD.

Explanation of Required Compliance Information

    In the FAA's ongoing efforts to improve the efficiency of the AD
process, the FAA initially worked with Airbus and EASA to develop a
process to use certain EASA ADs as the primary source of information
for compliance with requirements for corresponding FAA ADs. The FAA has
since coordinated with other manufacturers and civil aviation
authorities (CAAs) to use this process. As a result, EASA AD 2020-
0163R1 is incorporated by reference in this final rule. This AD,
therefore, requires compliance with EASA AD 2020-0163R1 in its
entirety, through that incorporation, except for any differences
identified as exceptions in the regulatory text of this AD. Using
common terms that are the same as the heading of a particular section
in the EASA AD does not mean that operators need comply only with that
section. For example, where the AD requirement refers to ``all required
actions and compliance times,'' compliance with this AD requirement is
not limited to the section titled ``Required Action(s) and Compliance
Time(s)'' in the EASA AD. Service information specified in EASA AD
2020-0163R1 that is required for compliance with EASA AD 2020-0163R1 is
available on the internet at https://www.regulations.gov by searching
for and locating Docket No. FAA-2020-0783.

Justification for Immediate Adoption and Determination of the Effective
Date

    Section 553(b)(3)(B) of the Administrative Procedure Act (APA) (5
U.S.C. 551 et seq.) authorizes agencies to dispense with notice and
comment procedures for rules when the agency, for ``good cause,'' finds
that those procedures are ``impracticable, unnecessary, or contrary to
the public interest.'' Under this section, an agency, upon finding good
cause, may issue a final rule without providing notice and seeking
comment prior to issuance. Further, section 553(d) of the APA
authorizes agencies to make rules effective in less than thirty days,
upon a finding of good cause.
    An unsafe condition exists that requires the immediate adoption of
this AD without providing an opportunity for public comments prior to
adoption. The FAA has found that the risk to the flying public
justifies waiving notice and comment prior to adoption of this rule
because a slat system jam during landing could lead to a double shaft
disconnection/rupture, potentially causing one or more slat surfaces to
be no longer connected to either the slat

wing tip brake or the slat PCU, possibly resulting in reduced control
of the airplane. In addition, the compliance time for the required
action is shorter than the time necessary for the public to comment and
for publication of the final rule. Therefore this rule must be issued
immediately, to ensure the safety of the flight crews conducting such
flights. Accordingly, notice and opportunity for prior public comment
are impracticable and contrary to the public interest pursuant to 5
U.S.C. 553(b)(3)(B).
    In addition, the FAA finds that good cause exists pursuant to 5
U.S.C. 553(d) for making this amendment effective in less than 30 days,
for the same reasons the FAA found good cause.

Comments Invited

    This AD is a final rule that involves requirements affecting flight
safety, and the FAA did not precede it by notice and opportunity for
public comment. The FAA invites you to send any written relevant data,
views, or arguments about this AD. Send your comments to an address
listed under the ADDRESSES section. Include ``Docket No. FAA-2020-0783;
Project Identifier MCAI-2020-01026-T'' at the beginning of your
comments. The most helpful comments reference a specific portion of the
proposal, explain the reason for any recommended change, and include
supporting data. Except for Confidential Business Information (CBI) as
described in the following paragraph, and other information as
described in 14 CFR 11.35, the FAA will consider all comments received
by the closing date and may amend this AD based on those comments.
    The FAA will post all comments the FAA receives, without change, to
https://www.regulations.gov, including any personal information you
provide. The FAA will also post a report summarizing each substantive
verbal contact the FAA receives about this AD.

Confidential Business Information

    CBI is commercial or financial information that is both customarily
and actually treated as private by its owner. Under the Freedom of
Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public
disclosure. If your comments responsive to this AD contain commercial
or financial information that is customarily treated as private, that
you actually treat as private, and that is relevant or responsive to
this AD, it is important that you clearly designate the submitted
comments as CBI. Please mark each page of your submission containing
CBI as ``PROPIN.'' The FAA will treat such marked submissions as
confidential under the FOIA, and they will not be placed in the public
docket of this AD. Submissions containing CBI should be sent to the
person identified in the FOR FURTHER INFORMATION CONTACT section. Any
commentary that the FAA receives which is not specifically designated
as CBI will be placed in the public docket for this rulemaking.

Interim Action

    The FAA considers this AD interim action. The inspection reports
that are required by this AD will enable the manufacturer to obtain
better insight into the nature, cause, and extent of the issue, and
eventually to develop final action to address the unsafe condition.
Once final action has been identified, the FAA might consider further
rulemaking.

Regulatory Flexibility Act (RFA)

    The requirements of the RFA do not apply when an agency finds good
cause pursuant to 5 U.S.C. 553 to adopt a rule without prior notice and
comment. Because the FAA has determined that it has good cause to adopt
this rule without notice and comment, RFA analysis is not required.

Costs of Compliance

    The FAA estimates that this AD affects 14 airplanes of U.S.
registry. The FAA estimates the following costs to comply with this AD:

                                     Estimated Costs for Required Actions *
----------------------------------------------------------------------------------------------------------------
                                                                                Cost on U.S.
                      Labor cost                            Parts cost       Cost per product      operators
----------------------------------------------------------------------------------------------------------------
11 work-hours x $85 per hour = $935...................                 $0                $935            $13,090
----------------------------------------------------------------------------------------------------------------
* Table does not include estimated costs for reporting.

    The FAA estimates that it takes about 1 work-hour per product to
comply with the reporting requirement in this AD. The average labor
rate is $85 per hour. Based on these figures, the FAA estimates the
cost of reporting on U.S. operators to be $1,190, or $85 per product
    The FAA has received no definitive data that would enable us to
provide cost estimates for the on-condition actions specified in this
AD.

Paperwork Reduction Act

    A federal agency may not conduct or sponsor, and a person is not
required to respond to, nor shall a person be subject to penalty for
failure to comply with a collection of information subject to the
requirements of the Paperwork Reduction Act unless that collection of
information displays a current valid OMB control number. The control
number for the collection of information required by this AD is 2120-
0056. The paperwork cost associated with this AD has been detailed in
the Costs of Compliance section of this document and includes time for
reviewing instructions, as well as completing and reviewing the
collection of information. Therefore, all reporting associated with
this AD is mandatory. Comments concerning the accuracy of this burden
and suggestions for reducing the burden should be directed to
Information Collection Clearance Officer, Federal Aviation
Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177-1524.

Authority for This Rulemaking

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

Regulatory Findings

    The FAA determined that this AD will not have federalism
implications

under Executive Order 13132. This AD will not have a substantial direct
effect on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.
    For the reasons discussed above, I certify that this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866, and
    (2) Will not affect intrastate aviation in Alaska.

List of Subjects in 14 CFR Part 39

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

Adoption of the Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

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

2020-18-04 Airbus SAS: Amendment 39-21225; Docket No. FAA-2020-0783;
Project Identifier MCAI-2020-01026-T.

(a) Effective Date

    This AD becomes effective September 18, 2020.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to all Airbus SAS Model A350-941 and -1041
airplanes, certificated in any category.

(d) Subject

    Air Transport Association (ATA) of America Code 27, Flight
controls.

(e) Reason

    This AD was prompted by a report of a slat system jam during
landing. The FAA is issuing this AD to address a slat system jam
during landing which could lead to a double shaft disconnection/
rupture, potentially causing one or more slat surfaces to be no
longer connected to either the slat wing tip brake or the slat power
control unit (PCU), possibly resulting in reduced control of the
airplane.

(f) Compliance

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

(g) Requirements

    Except as specified in paragraph (h) of this AD: Comply with all
required actions and compliance times specified in, and in
accordance with, European Union Aviation Safety Agency (EASA) AD
2020-0163R1, dated August 7, 2020 (``EASA AD 2020-0163R1'').

(h) Exceptions to EASA AD 2020-0163

    (1) Where EASA AD 2020-0163R1 refers to its effective date, this
AD requires using the effective date of this AD.
    (2) Where EASA AD 2020-0163R1 refers to July 27, 2020, this AD
requires using the effective date of this AD.
    (3) Where EASA AD 2020-0163R1 requires certain actions to be
done ``before exceeding the thresholds specified in the AOT [alert
operators transmission],'' this AD requires those actions to be done
``at the applicable compliance time specified in paragraph <IP_ADDRESS>
of the AOT.''
    (4) The ``Remarks'' section of EASA AD 2020-0163R1 does not
apply to this AD.
    (5) Paragraph (5) of EASA AD 2020-0163R1 specifies to report the
results of the actions specified in paragraph (1) of EASA AD 2020-
0163R1 to Airbus within a certain compliance time. For this AD,
report the results at the applicable time specified in paragraph
(h)(5)(i) or (ii) of this AD.
    (i) If the action was done on or after the effective date of
this AD: Submit the report within 30 days after the inspection.
    (ii) If the action was done before the effective date of this
AD: Submit the report within 30 days after the effective date of
this AD.

(i) Other FAA AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
Large Aircraft Section, International Validation Branch, FAA, has
the authority to approve AMOCs for this AD, if requested using the
procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19,
send your request to your principal inspector or local Flight
Standards District Office, as appropriate. If sending information
directly to the Large Aircraft Section, International Validation
Branch, send it to the attention of the person identified in
paragraph (j) of this AD. Information may be emailed to<EMAIL_ADDRESS>Before using any approved AMOC, notify your
appropriate principal inspector, or lacking a principal inspector,
the manager of the local flight standards district office/
certificate holding district office.
    (2) Contacting the Manufacturer: For any requirement in this AD
to obtain instructions from a manufacturer, the instructions must be
accomplished using a method approved by the Manager, Large Aircraft
Section, International Validation Branch, FAA; or EASA; or Airbus
SAS's EASA Design Organization Approval (DOA). If approved by the
DOA, the approval must include the DOA-authorized signature.
    (3) Required for Compliance (RC): For any service information
referenced in EASA AD 2020-0163R1 that contains paragraphs that are
labeled as RC: Except as required by paragraphs (h)(5) and (i)(2) of
this AD, the instructions in RC paragraphs, including subparagraphs
under an RC paragraph, must be done to comply with this AD; any
paragraphs, including subparagraphs under that paragraph, that are
not identified as RC are recommended. The instructions in
paragraphs, including subparagraphs under that paragraph, not
identified as RC may be deviated from using accepted methods in
accordance with the operator's maintenance or inspection program
without obtaining approval of an AMOC, provided the instructions
identified as RC can be done and the airplane can be put back in an
airworthy condition. Any substitutions or changes to instructions
identified as RC require approval of an AMOC.
    (4) Paperwork Reduction Act Burden Statement: A federal agency
may not conduct or sponsor, and a person is not required to respond
to, nor shall a person be subject to a penalty for failure to comply
with a collection of information subject to the requirements of the
Paperwork Reduction Act unless that collection of information
displays a current valid OMB Control Number. The OMB Control Number
for this information collection is 2120-0056. Public reporting for
this collection of information is estimated to be approximately 1
hour per response, including the time for reviewing instructions,
searching existing data sources, gathering and maintaining the data
needed, and completing and reviewing the collection of information.
All responses to this collection of information are mandatory as
required by this AD. Send comments regarding this burden estimate or
any other aspect of this collection of information, including
suggestions for reducing this burden to Information Collection
Clearance Officer, Federal Aviation Administration, 10101 Hillwood
Parkway, Fort Worth, TX 76177-1524.

(j) Related Information

    For more information about this AD, contact Kathleen Arrigotti,
Aerospace Engineer, Large Aircraft Section, International Validation
Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; phone and
fax:<PHONE_NUMBER>; email<EMAIL_ADDRESS>
(k) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless this AD specifies otherwise.
    (i) European Union Aviation Safety Agency (EASA) AD 2020-0163R1,
dated August 7, 2020.
    (ii) [Reserved]
    (3) For information about EASA AD 2020-0163R1, contact the EASA,
Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; phone: +49 221 8999
000; email<EMAIL_ADDRESS>internet: www.easa.europa.eu. You
may find this EASA AD on the EASA website at https://ad.easa.europa.eu.

    (4) You may view this material at the FAA, Airworthiness
Products Section, Operational Safety Branch, 2200 South 216th St.,
Des Moines, WA. For information on the availability of this material
at the FAA, call<PHONE_NUMBER>. This material may be found in the AD
docket on the internet at https://www.regulations.gov by searching
for and locating Docket No. FAA-2020-0783.
    (5) You may view this material that is incorporated by reference
at the National Archives and Records Administration (NARA). For
information on the availability of this material at NARA, email
<EMAIL_ADDRESS>or go to: https://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued on August 20, 2020.
Lance T. Gant,
Director, Compliance & Airworthiness Division, Aircraft Certification
Service.
[FR Doc. 2020-19386 Filed 9-2-20; 8:45 am]
BILLING CODE 4910-13-P