[Federal Register: April 17, 2008 (Volume 73, Number 75)]
[Notices]
[Page 20999-21001]
[DOCID:fr17ap08-108]

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SECURITIES AND EXCHANGE COMMISSION

Release No. 34-57652; File No. SR-FICC-2007-08]

Self-Regulatory Organizations; The Fixed Income Clearing
Corporation; Order Approving Proposed Rule Change as Amended To Resume
Interbank Clearing for the GCF Repo Service

April 11, 2008.

I. Introduction

    On July 11, 2007, the Fixed Income Clearing Corporation (``FICC'')
filed with the Securities and Exchange Commission (``Commission'')
proposed rule change SR-FICC-2007-08 pursuant to Section 19(b)(1) of
the Securities Exchange Act of 1934 (``Act'').\1\ On August 28, 2007,
the Commission published notice of the proposed rule change to solicit
comments from interested parties.\2\ On January 22, 2008, FICC amended
the proposed rule change. On February 12, 2008, the Commission
published notice of the amended proposed rule change to solicit
comments from interested parties.\3\ The Commission received no comment
letters in response to the proposed rule change as originally filed or
as amended. For the reasons discussed below, the Commission is
approving the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ Securities Exchange Act Release No. 56303 (August 22, 2007),
72 FR 49339.
    \3\ Securities Exchange Act Release No. 57281 (February 6,
2008), 73 FR 8081.
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II. Description

1. Background

    The GCF Repo service allows FICC Government Securities Division
(``GSD'') dealer members to trade GCF Repos throughout the day with
inter-dealer broker netting members (``brokers'') on a blind basis
without requiring intraday, trade-for-trade settlement on a delivery-
versus-payment (``DVP'') basis. Standardized, generic CUSIP numbers
have been established exclusively for GCF Repo processing and are used
to specify the acceptable type of underlying Fedwire book-entry
eligible collateral, which includes Treasuries, Agencies, and certain
mortgage-backed securities.
    The GCF Repo service was developed as part of a collaborative
effort among FICC's predecessor, the Government Securities Clearing
Corporation (``GSCC''), its two clearing banks, The Bank of New York
(``BNY'') and The Chase Manhattan Bank, now JP Morgan Chase Bank,
National Association (``Chase''), and industry representatives.\4\ GSCC
introduced the GCF Repo service on an intraclearing bank basis in
1998.\5\ Under the intrabank service, dealer members could only engage
in GCF Repo transactions with other dealers that cleared at the same
clearing bank.
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    \4\ BNY and Chase remain the two clearing banks approved by FICC
to provide GCF Repo settlement services. In the future, other banks
that FICC in its sole discretion determines meet its requirements
may be approved to provide GCF Repo settlement services.
    \5\ Securities Exchange Act Release No. 40623 (October 30,
1998), 63 FR 59831 (November 5, 1998) (SR-GSCC-98-02).
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    In 1999, GSCC expanded the GCF Repo service to permit dealer
members to engage in GCF Repo trading on an interclearing bank basis,
which allowed dealers using different clearing banks to enter into GCF
Repo transactions on a blind brokered basis.\6\ Because dealer members
that participated in the GCF Repo service did not, and still do not,
all clear at the same clearing bank, expanding the service to an
interclearing bank basis necessitated the establishment of a mechanism
to permit after-hours movements of securities between the two clearing
banks to address the situation where GSCC had an unbalanced net GCF
securities positions and unbalanced net cash positions at each clearing
bank at the end of each day. (In other words, where

at the end of GCF Repo processing each business day, the dealers at one
clearing bank would be net funds borrowers while the dealers at the
other clearing bank would be net funds lenders). To address this issue,
GSCC and its clearing banks established a legal mechanism by which
securities would ``move'' across the clearing banks without the use of
the securities Fedwire.\7\ At the end of the day after the GCF Repo net
results were produced, securities were pledged using a tri-party-like
mechanism, and the interbank cash component was moved through the cash
Fedwire. In the morning, the pledges were unwound with the funds being
returned to the net funds lenders and the securities being returned to
the net funds borrowers.
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    \6\ Securities Exchange Act Release No. 41303 (April 16, 1999),
64 FR 20346 (April 26, 1999) (SR-GSCC-99-01).
    \7\ Movements of cash did not present the same need because the
cash Fedwire is open later than the securities Fedwire.
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    However, as use of the service increased, certain payment systems
risk issues arose in connection to the interbank funds settlements. In
2003, FICC shifted the service back to an intrabank status to enable it
to study the risk issues presented and to devise a satisfactory
solution to those issues in order that it could bring the service back
to interbank status.\8\
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    \8\ Securities Exchange Act Release No. 48006 (June 10, 2003),
68 FR 35745 (June 16, 2003) (SR-FICC-2003-04).
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2. Proposal

    FICC is now seeking to return the GCF Repo service to an interbank
status. FICC will address the risk issues raised by the interbank funds
movement by placing a security interest on a dealer's ``net free
equity'' (``NFE'') at its clearing bank to collateralize its GCF Repo
cash obligation to FICC on an intraday basis and by making changes with
respect to the morning ``unwind'' period.\9\ No changes are being made
with respect to the procedures used for after-hours movement of
securities, which procedures were used when the interbank service was
first introduced.
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    \9\ NFE is a methodology that clearing banks use to determine
whether an account holder, such as a dealer, has sufficient
collateral to enter a specific transaction. NFE allows the clearing
bank to place a limit on its customer's activity by calculating the
value of the account holder's balances at the bank. Account holders
have the ability to monitor their NFE balance throughout the day.
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    Specifically, the interbank funds payment will not move during the
GCF Repo morning unwind process. In lieu of making funds payments, each
interbank dealer (``Interbank Pledging Member'') at the GCF net funds
borrower bank will grant to FICC a security interest in its NFE-Related
Collateral in an amount equal to its pro rata share of the total
interbank funds debit (``Prorated Interbank Cash Amount'').\10\ FICC's
lien on this collateral will be pari passu to any lien created by the
dealer in favor of the relevant GCF clearing bank.
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    \10\ ``NFE-Related Collateral'' is the total amount of
collateral that a dealer has at its clearing bank.
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    FICC will in turn grant to the GCF net funds lender bank, which was
due to receive funds, a security interest in the NFE-Related Collateral
to support the debit in FICC's account at the net funds lender bank.
The debit in FICC's account (``Interbank Cash Amount Debit'') is the
amount of the funds the lending dealers are due to receive in the
morning as a prerequisite to their release of GCF collateral. The
clearing banks will agree to manage the collateral value of the NFE-
Related Collateral as they do today.
    The debit in the FICC account at the GCF net funds lender bank will
be satisfied during the end of day GCF settlement process.
Specifically, that day's new activity will yield a new interbank funds
amount to move at end of day; however, this new interbank funds amount
will be netted with the amount that was due in the morning to reduce
the interbank funds movement. The NFE security interest will be
released when the interbank funds movement is made at end of day.
    As described above, FICC will have a security interest in the
dealers' NFE-Related Collateral on an intraday basis. In the unlikely
event of an intraday GCF Repo participant default, FICC will need to
have the NFE-Related Collateral liquidated in order to have use of the
proceeds. FICC will enter into an agreement with each of the clearing
banks whereby each bank will agree to liquidate the NFE-Related
Collateral both for itself as well as on behalf of FICC. FICC and each
bank will agree to share pro rata in the liquidation proceeds.
    Due to the nature of the various assets that may be part of a
particular dealer's NFE-Related Collateral and market conditions,
liquidation of the NFE-Related Collateral might take longer than one
day, which is GSD's typical collateral liquidation time frame, to be
completed. Therefore, FICC will establish standby liquidity facilities
or other financing arrangements with each of the clearing banks to be
invoked as needed in the event of the default of an interbank pledging
member and the subsequent liquidation of its NFE-Related Collateral.
    FICC will impose a collateral premium (``GCF Premium Charge'') on
the GCF Repo portion of the Clearing Fund deposits of all GCF Repo
participants to further protect FICC in the event of an intraday
default of a GCF Repo participant. FICC will require GCF Repo
participants to submit a quarterly ``snapshot'' of their holdings by
asset type to enable FICC Risk Management staff to determine the
appropriate Clearing Fund premium. Any GCF Repo participant that does
not submit this required information by the deadlines established by
FICC will be subject to a fine and an increased GCF Premium Charge.
    Because the NFE-Related Collateral is held at the clearing banks
and because the clearing banks monitor the activity of their dealer
customers, FICC will have the right, using its sole discretion, to
cease to act for a member that is a GCF Repo participant in the event
that a clearing bank ceases to extend credit to such member.
    The proposal results in the need for the following specific GSD
rule changes.
    1. The new terms referred to above (GCF Premium Charge, Interbank
Cash Amount Debit, Interbank Pledging Member, NFE-Related Collateral,
and Prorated Interbank Cash Amount) will be added to Rule 1
(Definitions). A new term, ``NFE-Related Account,'' which is referred
to in the definition of ``NFE-Related Collateral,'' will also be added.
    2. Section 3 (Collateral Allocation) of Rule 20 (Special Provisions
for GCF Repo Transactions), which governs the GCF Repo collateral
allocation process, will be amended to reflect the new process that
will occur on the morning of the unwind (to be referred to as the
morning of ``Day 2'' in the Rules).
    3. Section 3 of Rule 20 will be further amended to provide for the
following:
    (a) The granting of the security interest in the NFE-Related
Collateral to FICC by the dealers;
    (b) The granting of authority for FICC to provide instructions to
the clearing banks regarding the NFE-Related Collateral of the dealers;
    (c) The granting of the security interest in the NFE-Related
Collateral to the clearing banks by FICC; and
    (d) FICC's right to enter into agreements with the clearing banks
regarding the collateral management of the NFE-Related Collateral, the
liquidation of the NFE-Related Collateral, and the standby liquidity
facilities or other financing arrangements.
    4. Rule 4 (Clearing Fund, Watch List, and Loss Allocation) will be
amended to provide for the GCF Premium Charge that will be imposed on
GCF Repo participants. Rule 3 (Ongoing Membership Requirements) will be
amended to include the quarterly NFE reporting requirement which, if
not

followed timely by the members, will result in fines and GCF Premium
Charge.
    5. Rules 21 (Restrictions on Access to Services) and 22 (Insolvency
of a Member) will be amended to provide that FICC may in its sole
discretion cease to act for a member in the event that the member's
clearing bank has ceased to extend credit to the member.
    6. The schedule of GCF time frames will be amended to reflect
technical changes.

III. The Amendment

    The amendment to the proposed rule change addresses the situation
where FICC becomes concerned about the volume of interbank GCF Repo
activity. For example, such a concern might arise if market events were
to cause dealers to turn to the GCF Repo service for funding above
normal levels. In order to protect itself and its members, FICC
believes it is important to have the discretion to institute risk
mitigation and appropriate disincentive measures in order to bring GCF
Repo levels down to a level which it believes to be prudent from a risk
management perspective.
    Specifically, the amendment introduces the term ``GCF Repo Event,''
which will be declared by FICC if either of the following occurs: (1)
The GCF interbank funds amount exceeds five times the average interbank
funds amount over the previous ninety days for three consecutive days
\11\ or (2) the GCF interbank funds amount exceeds fifty percent of the
amount of GCF Repo collateral pledged for three consecutive days.\12\
FICC will review the Repo Event triggering levels on a semi-annual
basis to determine whether they remain adequate.\13\ FICC will also
have the right to declare a GCF Repo Event in any other circumstances
where in its sole discretion it is concerned about GCF Repo volumes and
believes it is necessary to declare a Repo Event in order to protect
itself and its members.\14\
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    \11\ For example, assume that the average interbank funds amount
over the previous ninety days is $11 billion. FICC would declare a
GCF Repo Event if the interbank funds amount exceeds $55 billion
over three consecutive days.
    \12\ For example, assume that on Monday the total amount of GCF
Repo collateral pledged was $86.8 billion and that the interbank
funds amount was $11 billion. The interbank funds amount is 12.7
percent of the daily pledged amount. FICC would declare a GCF Repo
Event if the overall pledged amount stayed at $86.6 billion and if
the interbank amount exceeded $43.3 billion for three consecutive
days.
    \13\ To change the Repo Event triggering levels, FICC is
required to submit a proposed rule change to the Commission.
    \14\ For example, FICC may determine it is prudent to declare a
GCF Repo Event if one of the specified events noted above occurs for
less than three consecutive days.
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    The declaration of a GCF Repo Event will trigger the imposition of
risk mitigation and disincentive measures. These measures will be
imposed each day during the GCF Repo Event, and they will be imposed on
each day's GCF net funds borrowers whose aggregate GCF net short
position exceeds a certain threshold.\15\
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    \15\ FICC will inform its members about the declaration of a GCF
Repo Event by issuing an Important Notice. The Important Notice
will, among other things, inform members of the implementation date
of the measures. FICC will also inform the Commission about the
declaration of the Event. The GCF Repo Event will last until FICC
notifies its members that the Event has ended.
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    Specifically, FICC will establish a ``GCF Repo Event Parameter,''
which will be a certain percentage of each dealer's average GCF Repo
net short settlement amount during a one-month look-back period. FICC
is establishing 140 percent as the maximum percentage for the GCF Repo
Event Parameter, and FICC will have the discretion to reduce this
percentage during a GCF Repo Event if it believes in its sole
discretion that the maximum percentage is not adequately addressing the
particular event. Any GCF Repo net short settlement amount that exceeds
the GCF Repo Event Parameter will be subject to a ``GCF Repo Event
Clearing Fund Premium'' and a ``GCF Repo Event Carry Charge.''
    FICC will set 12% as the minimum percentage on which the GCF Repo
Event Clearing Fund Premium will be based and 50 basis points as the
minimum on which the GCF Repo Event Carry Charge will be based.\16\
FICC will have the discretion to increase these amounts during a GCF
Repo Event if FICC believes in its sole discretion that the minimums
are not adequately addressing the particular GCF Repo Event.
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    \16\ For example, assume that FICC has declared a GCF Repo
Event, and on the day of implementation of the protective measures,
Dealer A's average net short settlement amount is $1 billion. This
means that Dealer A's GCF Repo Event Parameter is $1.4 billion. On
the day of implementation of the protective measures, Dealer A's net
settlement amount is $1.9 billion, so the measures will be applied
to $500 million (i.e., $1.9 billion minus $1.4 billion). If the
percentage for the GCF Repo Event Collateral Premium is 12 percent
and the GCF Repo Event Carry Charge is 50 basis points, Dealer A
will pay a GCF Repo Event Clearing Fund Premium of $60 million and a
GCF Repo Event Carry Charge of $6,944.44 on the day of
implementation. On each succeeding day that the GCF Repo Event
remains in effect, FICC will reevaluate Dealer A's net settlement
position.
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    FICC will retain the right to waive imposition of the GCF Repo
Event Clearing Fund Premium and the GCF Repo Event Carry Charge if FICC
determines, in its sole discretion based on monitoring against the GCF
Repo Event Parameters, that these measures are not necessary to protect
FICC and its members.

IV. Discussion

    Section 19(b) of the Act directs the Commission to approve a
proposed rule change of a self-regulatory organization if it finds that
such proposed rule change is consistent with the requirements of the
Act and the rules and regulations thereunder applicable to such
organization. Section 17A(b)(3)(F) of the Act requires that the rules
of a clearing agency be designed to promote the prompt and accurate
clearance and settlement of securities transactions.\17\ The Commission
believes that FICC's proposed rule change is consistent with this
Section because it should facilitate the prompt and accurate clearance
and settlement of securities by allowing GCF Repo participants to
expand their use of the GCF Repo service to include GCF Repos done with
dealers that clear at a different clearing bank. The Commission also
believes that FICC's proposed rule change is consistent with the
requirements of Section 17A(b)(3)(F) because FICC has designed the
interclearing bank procedures, including the risk monitoring and risk
mitigation measures, in such a way that they should help assure the
safeguarding of securities and funds which are in the custody or
control of FICC or for which FICC is responsible.
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    \17\ 15 U.S.C. 78q-1(b)(3)(F).
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V. Conclusion

    On the basis of the foregoing, the Commission finds that the
proposed rule change is consistent with the requirements of the Act and
in particular Section 17A of the Act and the rules and regulations
thereunder. In approving the proposed rule change, the Commission
considered the proposal's impact on efficiency, competition and capital
formation.\18\
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    \18\ 15 U.S.C. 78c(f).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (File No. SR-FICC-2007-08), as amended,
be and hereby is approved.

    For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-8233 Filed 4-16-08; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register: February 8, 2010 (Volume 75, Number 25)]
[Notices]
[Page 6229]
[DOCID:fr08fe10-91]

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SECURITIES AND EXCHANGE COMMISSION

Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of Investor Education and Advocacy, Washington, DC
20549-0213.

Extension:
    Form F-8; OMB Control No. 3235-0378; SEC File No. 270-332.

    Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``Commission'') has submitted to the Office of Management
and Budget this request for extension of the previously approved
collection of information discussed below.
    Form F-8 (17 CFR 239.38) may be used to register securities of
certain Canadian issuers under the Securities Act of 1933 (15 U.S.C.
77a et seq.) that will be used in an exchange offer or business
combination. The information collected is intended to ensure that the
information required to be filed by the Commission permits verification
of compliance with securities law requirements and assures the public
availability of such information. The information provided is mandatory
and all information is made available to the public upon request. Form
F-8 takes approximately one hour per response to prepare and is filed
by approximately 10 respondents. We estimate that 25% of one hour per
response (15 minutes) is prepared by the company for a total annual
reporting burden of 3 hours (15 minutes/60 minutes per response x 10
responses = 2.5 hours rounded to 3 hours).
    An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid control number.
    Written comments regarding the above information should be directed
to the following persons: (i) Desk Officer for the Securities and
Exchange Commission, Office of Information and Regulatory Affairs,
Office of Management and Budget, Room 10102, New Executive Office
Building, Washington, DC 20503 or send an e-mail to: Shagufta_
<EMAIL_ADDRESS>and (ii) Charles Boucher, Director/CIO, Securities
and Exchange Commission, C/O Shirley Martinson, 6432 General Green Way,
Alexandria, Virginia 22312; or send an e-mail to<EMAIL_ADDRESS>
Comments must be submitted to OMB within 30 days of this notice.

    Dated: February 1, 2010.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-2634 Filed 2-5-10; 8:45 am]
BILLING CODE 8011-01-P


EPA REGISTRATION DIVISION COMPANY NOTICE OF FILING FOR PESTICIDE PETITIONS PUBLISHED IN THE FEDERAL REGISTER

EPA Registration Division contact: Cynthia Giles-Parker,<PHONE_NUMBER>

TEMPLATE:

Syngenta Crop Protection, LLC

9E8798

	EPA has received a pesticide petition (9E8798) from Syngenta Crop Protection, LLC, P.O. Box 18300, Greensboro, NC 27419-8300 requesting, pursuant to section 408(d) of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a(d), to amend 40 CFR part 180

       	by establishing an import tolerance for residues of 	 	Fludioxonil (4-(2,2-difluoro-1,3-benzodioxol-4-yl)-1-H-pyrrole-3-carbonitrile) in or on the raw agricultural commodity banana at 2.0 parts per million (ppm).  EPA has determined that the petition contains data or information regarding the elements set forth in section 408 (d)(2) of  FDDCA; however, EPA has not fully evaluated the sufficiency of the submitted data at this time or whether the data supports granting of the petition. Additional data may be needed before EPA rules on the petition.

A. Residue Chemistry

	1. Plant metabolism. The metabolism of fludioxonil is adequately understood for the purpose of the proposed tolerances.

	2. Analytical method. Syngenta has developed and validated analytical methodology for enforcement purposes. This method (Syngenta Crop Protection Method AG-597B) has passed an Agency petition method validation for several commodities, and is currently the enforcement method for fludioxonil. This method has also been forwarded to the Food and Drug Administration for inclusion into PAM II. An extensive database of method validation data using this method on various crop commodities is available.

	3. Magnitude of residues. Complete residue data to support the requested import tolerance has been submitted and the requested import tolerance is adequately supported.

B. Toxicological Profile

EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk.  EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.  Specific information on the studies received and the nature of the toxic effects caused by fludioxonil as well as the no-observed-adverse-effect-level (NOAEL) from the toxicity studies can be found at the following website: http://regulations.gov page 17 of the document titled "Fludioxonil  -  Preliminary Human Health Risk Assessment for Registration Review,'' in Docket ID Number EPA - HQ - OPP - 2010-1067.  A summary of the toxicological endpoints for fludioxonil used for human risk assessment is discussed in Section III, Subsection A of the final interim decision for registration review published in the Federal Register on December 04, 2018 (Docket ID Number EPA-HQ-OPP-2010-1067-0037).  	1. Acute toxicity.  See above.

	2. Genotoxicty. See above.

	3. Reproductive and developmental toxicity. See above.

	4. Subchronic toxicity. See above.

	5. Chronic toxicity. See above.

	6. Animal metabolism. See above.

	7. Metabolite toxicology. See above.

	8. Endocrine disruption. See above.

C. Aggregate Exposure

	1. Dietary exposure. Tier III short-term and chronic dietary exposure evaluations were performed for fludioxonil using the using the Dietary Exposure Evaluation Model (DEEM-FCID(TM) Version 4.02) from Exponent; consumption data was from the USDA NHANES "What We Eat in America" survey, 2005-2010.  These assessments included all current and pending uses as well as a proposed import tolerance on bananas.  These assessments utilized residue data from field trials where fludioxonil was applied at the maximum intended use rate and samples were harvested at the minimum pre-harvest interval (PHI) to obtain the maximum expected residues. Updated 2019 estimated percent crop treated (%CT) values were incorporated into the Tier III assessments based upon economic, pest, and competitive pressures.  Secondary residues in animal commodities were estimated based on "maximum reasonably balanced diets" and transfer information from feeding and metabolism studies.  Drinking water estimates were incorporated directly into the chronic dietary exposure assessment using the highest estimated drinking water concentrations (EDWCs) for surface and ground water.

 Food. Acute exposure. Acute dietary (food only) assessments were not performed, since an endpoint of concern attributable to a single oral dose has not been identified.                            Chronic exposure.  The chronic dietary (food only) risk assessment was performed for all population subgroups using a chronic reference dose (cRfD) of 0.33 mg/kg-bw/day, based upon a one-year study in dogs with a NOAEL of 33.1 mg/kg-bw/day and an uncertainly factor of 100X to account for intra- and inter-species variations.  No additional FQPA safety factor was applied.  For the purpose of the chronic aggregate risk assessment, the exposure values were expressed in terms of margin of exposure (MOE), which was calculated by dividing the no observed adverse effect level (NOAEL) by the exposure for each population subgroup.  In addition, exposure was expressed as a percent of the chronic reference dose (% cRfD).  Chronic (food only) exposure to the U.S. population resulted in a MOE of 6,096 (1.6% of the cRfD of 0.33 mg/kg-bw/day).  The most exposed sub-population was children (1 2 years old) with a MOE of 1,740 (5.8% of the cRfD of 0.33 mg/kg-bw/day).  Since the Benchmark MOE for this assessment was 100 and since the EPA generally has no concern for exposures above the Benchmark MOE or below 100% of the cRfD, Syngenta believes that there is a reasonable certainty that no harm will result from dietary (food only) exposure to residues arising from the current, pending, and proposed uses for fludioxonil.

            Cancer.  A chronic cancer exposure analysis was not performed, since there is no evidence of human carcinogenic potential for fludioxonil.

 Drinking water. The Estimated Drinking Water Concentrations (EDWCs) of fludioxonil were determined using the Pesticide in Water Calculator (PWC v1.52).  PWC is a graphical user interface that incorporates the Pesticide Root Zone Model/Variable Volume Water Model (PRZM/VVWM) Tier II surface water and Tier I PRZM ground water (PRZM-GW) models.  This drinking water assessment was conducted to assess all currently registered and pending uses.  The highest chronic surface water EDWC was 17.7 ppb, based on the existing use on ornamentals with no Percent Cropped Area (PCA) adjustment. The highest chronic ground water EDWC was 48.34 ppb, based on the existing use on turf. Since the ground water EDWC exceeds the surface water EDWC, the ground water value was used for risk assessment purposes and will be considered protective for any surface water exposure concerns.                            Acute Exposure from Drinking Water:  Acute drinking water assessments were not performed, since an endpoint of concern attributable to a single oral dose has not been identified.

            Chronic Exposure from Drinking Water:  The chronic EDWC of 48.34 ppb was incorporated with food residues as "water, direct and indirect, all sources" directly into the DEEM-FCID(TM) software to obtain chronic dietary (water) exposures.  Chronic drinking water exposure to the U.S. population resulted in a MOE of 33,890 (0.3% of the cRfD of 0.33 mg/kg-bw/day).  The most sensitive sub-population was all infants (<1 year old), with a MOE of 9,073 (1.1% of the cRfD of 0.33 mg/kg-bw/day).  Since the Benchmark MOE for this assessment was 100 and since the EPA generally has no concern for exposures below 100% of the cRfD, Syngenta believes that there is a reasonable certainty that no harm will result from chronic drinking water exposure to residues arising from all current and proposed fludioxonil uses.

	2. Non-dietary exposure. Residential exposure risk assessments were performed for use of fludioxonil formulated as Instrata, Medallion, Medallion II, Medallion SC, Medallion WDG, and Palladium for ornamentals and residential turf.  Medallion(R) and Medallion(R) SC are intended primarily for professional use however, the product label does not exclude residential uses; therefore, a residential handler exposure assessment was conducted.  Residential exposure assessments were performed for fludioxonil to evaluate exposures resulting from off-site drift of agricultural products into residential areas.  Incidental exposure to consumers from spray drift from non-residential uses were not included in the aggregate consumer risk; this approach agrees with the EPA's current policy and practice.  The following endpoints were used: a 50 mg/kg/day NOAEL for adults (inhalation only) from a subchronic dog tox study; a 50 mg/kg/day short-term and intermediate-term NOAEL for children 1-6 years (incidental oral) from a subchronic dog tox study.  Residential handler exposure risk from fludioxonil was acceptable (MOE = 11,636; short-term) for youths (13-19 years) and adults (19+ years) treating residential turf with a manually-pressurized handwand.  Residential handler exposure scenarios are considered to be short-term only, due to the infrequent use patterns associated with homeowner products.  Since no dermal endpoints were selected, short- and intermediate-term assessments were not conducted for post-application exposure risk to children, youth or adults.  Post-application non-dietary oral hand-to-mouth exposure risks for children 1-6 years, resulting from contact with treated lawns were acceptable (MOE = 4,594) for short-term and intermediate-term durations.  Since the MOEs for children (1-6 years), youths (13-19 years) and adults (19+ years) were above the Benchmark MOE of 100, residential exposure risk for fludioxonil do not exceed the EPA's Level of Concern.

D. Cumulative Effects

	Cumulative Exposure to Substances with a Common Mechanism of Toxicity.  Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider "available information" concerning the cumulative effects of a particular pesticide's residues and "other substances that have a common mechanism of toxicity."  Unlike other pesticides for which the EPA has followed a cumulative risk approach based on a common mechanism of toxicity, the EPA has not made a common mechanism of toxicity finding as to fludioxonil and any other substances, and fludioxonil does not appear to produce a toxic metabolite produced by other substances.  For the purposes of this tolerance action, the EPA has not assumed that fludioxonil has a common mechanism of toxicity with other substances.

E. Safety Determination

	1. U.S. population. An acute toxicological endpoint has not been established for the U.S. population, so an acute exposure assessment was not performed for the U.S. population.  For short-term exposures, chronic dietary (food and water) exposures were aggregated with residential exposures, resulting in a worse-case short-term aggregate MOE of 2,892 to the U.S. population (Benchmark MOE = 100). The chronic aggregate exposure analysis showed that exposure from all current and proposed fludioxonil uses resulted in a MOE of 5,167 or 1.9% of the cRfD (cRfD=0.33 mg/kg-bw/day) for the general U.S. population, which exceeds the Benchmark MOE of 100.  Based on the completeness and reliability of the toxicity data supporting these petitions, Syngenta believes that there is a reasonable certainty that no harm will result from aggregate exposure to residues arising from all current, pending, and proposed uses of fludioxonil, including anticipated dietary exposure from food, water, and all other types of non-occupational exposures.

	2. Infants and children. An acute toxicological endpoint has not been established for infants and children, so an acute exposure assessment was not performed for infants and children. The chronic aggregate exposure analysis showed that exposure from all established and proposed fludioxonil uses resulted in a MOE of 1,625 or 6.2% of the cRfD (Benchmark MOE = 100; cRfD=0.33 mg/kg-bw/day) for children (1-2 years old).  The short-term aggregate assessment resulted in a MOE of 1,600 for the children (1-2 years old) population subgroup (Benchmark MOE = 100).  Since the worst-case aggregate MOE of 2,407 exceeds the Benchmark MOE of 100, Syngenta believes that there is a reasonable certainty that no harm will result from aggregate exposure to residues arising from all current, pending and proposed fludioxonil uses, including anticipated dietary exposure from food, water, and all other types of non-occupational exposures.

F. International Tolerances

	Codex Maximum Residue Limits (MRLs) for residues of fludioxonil per se have been established on a number of commodities including apple pomace, basil, beans, blackberries, blueberries, broccoli, cabbages, carrot, cereal grains, chives, citrus fruits, cotton seed, cucumber, dewberries, eggplant, grapes, kiwifruit, head lettuce, mango, melons except watermelon, mustard greens, bulb onion, peas, peppers, pistachio nuts, pome fruits, pomegranate, potato, rape seed, raspberries, squash, stone fruits, cereal grains, strawberry, sweet corn, sweet potato, tomato, watercress, yams, and various meat, milk, and egg commodities.


[Federal Register Volume 78, Number 189 (Monday, September 30, 2013)]
[Notices]
[Pages 59985-59991]
[FR Doc No: 2013-23687]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-30700; File No. 812-14108]

Variable Insurance Trust, et al.; Notice of Application

September 24, 2013.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for an exemption pursuant to Section 6(c)
of the Investment Company Act of 1940, as amended (the ``Act''),
seeking exemptions from Sections 9(a), 13(a), 15(a) and 15(b) of the
Act and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder.

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Applicants: Variable Insurance Trust (the ``Fund'') and MFund Services
LLC (``MFund'') (collectively, ``Applicants'').

SUMMARY: Summary of Application: Applicants request an order pursuant
to Section 6(c) of the Act granting exemptions from the provisions of
Sections 9(a), 13(a), 15(a), and 15(b) of the Act and Rules 6e-2(b)(15)
and 6e-3(T)(b)(15) thereunder in cases where a life insurance company
separate account supporting variable life insurance contracts (``VLI
Accounts'') holds shares of an existing portfolio of the Fund or any
other ``Insurance Fund,'' as defined below (collectively, the
``Insurance Funds''), and one or more of the following other types of
investors also hold shares of the Insurance Funds: (i) Separate
accounts registered as investment companies or separate accounts that
are not registered as investment companies under the Act pursuant to
exemptions from registration under Section 3(c) of the Act that fund
variable annuity contracts (``VA Accounts'') and VLI Accounts (VA
Accounts and VLI Accounts together ``Separate Accounts'') issued by
both affiliated life insurance companies and unaffiliated life
insurance companies (``Participating Insurance Companies''); (ii)
trustees of qualified group pension or group retirement plans
(``Qualified Plans'') outside the Separate Account context; (iii)
investment adviser(s) or affiliated person(s) of the investment
adviser(s) to a series of an Insurance Fund (the ``Adviser''), for the
purpose of providing seed capital to a series of an Insurance Fund; and
(iv) any general account of an insurance company depositor of VA
Accounts and/or VLI Accounts (``General Accounts''). An Insurance Fund
is any investment company (or investment portfolio or series thereof),
including an existing portfolio of the Fund, designed to be sold to VA
Accounts and/or VLI Accounts and to which an Applicant or its
affiliates serve or may serve in the future as investment advisers,
investment subadvisers, investment managers, administrators, principal
underwriters or sponsors.

DATES: Filing Date: The application was filed on January 7, 2013, and
amended and restated on July 23, 2013.

Hearing or Notification of Hearing: An order granting the application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Secretary of the
Commission 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 October 21, 2013, 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 may request notification of a hearing by writing to
the Secretary of the Commission.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street
NE., Washington, DC 20549-1090. Applicants: Jerry Szilagyi, MFund
Services LLC, 22 High Street, Huntington, NY 11743 and Jerry Szilagyi,
Variable Insurance Trust, 5 Abbington Drive, Lloyd Harbor, NY 11743.
Copy to JoAnn Strasser, Esq., Thompson Hine LLP, 41 South High Street,
Suite 1700, Columbus, OH 43215.

FOR FURTHER INFORMATION CONTACT: Mark Cowan, Senior Counsel, or Michael
Kosoff, Branch Chief, Insured Investments Office, Division of
Investment Management at<PHONE_NUMBER>.

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 for an
applicant using the Company name box, at http://www.sec.gov/search.htm,
or by calling<PHONE_NUMBER>.

Applicants' Representations

    1. The Fund is registered under the Act as an open-end management
investment company (File No. 811-22512) and is currently comprised of
four portfolios, one of which, the Vice Fund Portfolio, is registered
under the Securities Act of 1933 on Form N-1A. The Fund may establish
additional portfolios and classes of shares of each portfolio in the
future. Shares of the Fund will not be offered to the general public.
    2. MFund provides management and administrative services to the
Fund and other portfolios, subject to the supervision of the applicable
Board.
    3. The Fund proposes, and other Insurance Funds may in the future,
offer and sell Shares to Separate Accounts of various Participating
Insurance Companies as an investment medium to support variable life
contracts (``VLI Contracts'') and variable annuity contracts (``VA
Contracts'') (collectively, ``Variable Contracts'') issued through such
Separate Accounts. Each Separate Account is, or will be, established as
a segregated asset account by a Participating Insurance Company
pursuant to the insurance law of the insurance company's state of
domicile. If a Separate Account is registered as an investment company
under the Act, or is exempt from such registration under Section 3(c)
of the Act, it will be a ``separate account'' as defined in Rule 0-1(e)
(or any successor rule) under the Act. For purposes of the Act, the
Participating Insurance Company that establishes such a Separate
Account is the depositor and sponsor of the account as those terms have
been interpreted by the Commission with respect to variable life
insurance and variable annuity separate accounts. Each Participating
Insurance Company may rely on Rule 6e-2 or Rule 6e- 3(T) under the Act.
    4. The Insurance Funds will sell shares to Separate Accounts only
if each Participating Insurance Company sponsoring a Separate Account
enters into a participation agreement (a ``Participation Agreement'')
with such Insurance Fund. The Participation Agreement will govern
participation by the Participating Insurance Company in such Insurance
Fund and will memorialize, among other matters, the fact that the
Participating Insurance Company will remain responsible for
establishing and maintaining any Separate Account covered by the
Participation Agreement and for complying with all applicable
requirements of state and federal law pertaining to such accounts and
to the sale and distribution of Variable Contracts issued through such
accounts. The role of the Insurance Funds under this arrangement
insofar as federal securities laws are applicable, will consist of
offering shares to the Separate Accounts and fulfilling any conditions
that the Commission may impose upon granting the requested order.
    5. The use of a common management investment company (or investment
portfolio thereof) as an investment medium for both VLI Accounts and VA
Accounts of the same Participating Insurance Company, or of two or more
insurance companies that that are affiliated persons of each other, is
referred to as ``mixed funding.'' The use of a common management
investment company (or investment portfolio thereof) as an investment
medium for VLI Accounts and/or VA Accounts of the two or more
Participating Insurance Companies that are not affiliated persons of
each other, is referred to as ``shared funding.''
    6. Applicants propose that the Insurance Funds also be permitted to
offer and/or sell Shares directly to Qualified Plans and to the
Insurance Fund's Adviser or General Account of Participating Insurance
Companies.
    8. The use of a common management investment company (or investment
portfolio thereof) as an investment medium for VLI Accounts, VA
Accounts, investment advisers, a General Account and Qualified Plans is
referred to herein as ``extended mixed funding.''

Applicants' Legal Analysis

    1. Section 9(a)(2) of the Act makes it unlawful for any company to
serve as an investment adviser or principal underwriter of any
investment company, including a unit investment trust, if an affiliated
person of that company is subject to disqualification enumerated in
Section 9(a)(1) or (2) of the Act. Sections 13(a), 15(a), and 15(b) of
the Act have been deemed by the Commission to require ``pass-through''
voting with respect to an underlying investment company's shares.
    2. Rules 6e-2(b)(15) and 6e-3(T)(b)(15) under the Act provide
partial exemptions from Sections 9(a), 13(a), 15(a), and 15(b) of the
Act to VLI Accounts supporting certain VLI Contracts and to their life
insurance company depositors under limited circumstances, as described
in the application. VLI Accounts, their depositors and their principal
underwriters may not rely on the exemptions provided by Rules 6e-
2(b)(15) and 6e-3(T)(b)(15) if shares of the Fund are held by a VLI
Account through which certain VLI Contracts are issued, a VLI Account
of an unaffiliated Participating Insurance Company, an unaffiliated
Adviser, any VA Account, a Qualified Plan or a General Account.
Accordingly, Applicants request an order of the Commission granting
exemptions from Sections 9(a), 13(a), 15(a), and 15(b) of the Act and
Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, in cases where VLI
Account holds Shares of an Insurance Fund and one or more of the
following types of investors also hold such Shares: (i) VA Accounts and
VLI Accounts issued by both affiliated and unaffiliated Participating
Insurance Companies; (ii) Qualified Plans; (iii) a portfolio's Adviser
for the purpose of providing seed capital to a portfolio; and (iv)
General Accounts.
    3. Applicants maintain that there is no policy reason for the sale
of Shares to Qualified Plans, Advisers and General Accounts to prohibit
or otherwise limit a VLI Account and its Participating Insurance
Company depositor from relying on the relief provided by Rules 6e-
2(b)(15) and 6e-3(T)(b)(15) just because Shares are held

by Qualified Plans, Advisers or General Accounts. Notwithstanding, Rule
6e-2 and Rule 6e-3(T) each specifically provide that the relief granted
thereunder is available only where shares of the underlying fund are
offered exclusively to insurance company separate accounts. In this
regard, Applicants request exemptive relief to the extent necessary to
permit Shares to be sold to Qualified Plans, Advisers and General
Accounts while allowing Participating Insurance Companies and their VA
Accounts and VLI Accounts to enjoy the benefits of the relief granted
under Rule 6e-2(b)(15) and Rule 6e-3(T)(b)(15). Applicants note that if
the Insurance Funds were to sell their shares only to Qualified Plans,
exemptive relief under Rule 6e-2 and Rule 6e-3(T) would not be
necessary. The relief provided for under Rule 6e-2(b)(15) and Rule 6e-
3(T)(b)(15) does not relate to qualified pension and retirement plans
or to a registered investment company's ability to sell its shares to
such plans.
    4. Applicants are not aware of any reason for excluding separate
accounts and investment companies engaged in shared funding from the
exemptive relief provided under Rules 6e-2(b)(15) and 6e-3(T)(b)(15),
or for excluding separate accounts and investment companies engaged in
mixed funding from the exemptive relief provided under Rule 6e-
2(b)(15). Similarly, Applicants are not aware of any reason for
excluding Participating Insurance Companies from the exemptive relief
requested because the Insurance Funds also may sell their Shares to
Qualified Plans, Advisers and General Accounts. Rather, Applicants
assert that the proposed sale of Shares to these purchasers, in fact,
may allow for the development of larger pools of assets resulting in
the potential for greater investment and diversification opportunities,
and for decreased expenses at higher asset levels resulting in greater
cost efficiencies.
    5. Applicants have concluded, as explained in more detail below,
that investment by Qualified Plans, Advisers and General Accounts in
the Insurance Funds should not increase the risk of material
irreconcilable conflicts between owners of VLI Contracts and other
types of investors or between owners of VLI Contracts issued by
unaffiliated Participating Insurance Companies.
    6. Consistent with the Commission's authority under Section 6(c) of
the Act to grant exemptive orders to a class or classes of persons and
transactions, Applicants request exemptions for a class consisting of
VLI Accounts investing in shares of existing and future portfolios of
Insurance Funds, their Participating Insurance Company depositors and
their principal underwriters that currently invest in or in the future
will invest in the Fund.
    7. Section 6(c) of the Act provides, in part, that the Commission,
by order upon application, may conditionally or unconditionally exempt
any person, security or transaction or class or classes of any person,
security or transaction from any provision or provisions of the Act, or
the rules or regulations thereunder, 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. The Applicants submit
that the exemptions requested are appropriate and in the public
interest, consistent with the protection of investors, and consistent
with the purposes fairly intended by the policy and provisions of the
Act.
    8. Section 9(a)(3) of the Act provides, among other things, that it
is unlawful for any company to serve as investment adviser or principal
underwriter of any registered open-end investment company if an
affiliated person of that company is subject to disqualification
enumerated in Sections 9(a)(1) or (2). Rules 6e-2(b)(15)(i) and (ii)
and Rules 6e-3(T)(b)(15)(i) and (ii) under the Act provide exemptions
from Section 9(a) under certain circumstances, subject to the
limitations discussed above on mixed funding, extended mixed funding
and shared funding. These exemptions limit the application of the
eligibility restrictions to affiliated individuals or companies that
directly participate in management of the underlying investment
company.
    9. Rules 6e-2(b)(15)(iii) and 6e-3(T)(b)(15)(iii) under the Act
provide exemptions from pass-through voting requirements with respect
to several significant matters, assuming the limitations on mixed
funding, extended mixed funding and shared funding are observed. Rules
6e-2(b)(15)(iii)(A) and 6e-3(T)(b)(15)(iii)(A) provide that the
insurance company may disregard the voting instructions of its variable
life insurance contract owners with respect to the investments of an
underlying investment company, or any contract between such an
investment company and its investment adviser, when required to do so
by an insurance regulatory authority (subject to the provisions of
paragraphs (b)(5)(i) and(b)(7)(ii)(A) of Rules 6e-2 and 6e-3(T)).
    10. The Applicants represent that the sale of Shares to Qualified
Plans, the Adviser or General Account will not have any impact on the
exemptions requested herein regarding the disregard of pass-through
voting rights. Shares sold to Qualified Plans will be held by such
Plans, not insurance companies. The exercise of voting rights by
Qualified Plans, whether by trustees, other fiduciaries, participants,
beneficiaries, or investment managers engaged by the Qualified Plans,
does not raise the type of issues respecting disregard of voting rights
that are raised by VLI Accounts. With respect to Qualified Plans, which
are not registered as investment companies under the Act, there is no
requirement to pass through voting rights to Qualified Plan
participants. Indeed, to the contrary, applicable law expressly
reserves voting rights associated with Qualified Plan assets to certain
specified persons as discussed in the application.
    11. Similarly, the Adviser to an Insurance Fund and the General
Accounts of Participating Insurance Companies are not subject to any
pass-through voting requirements. Accordingly, unlike the circumstances
surrounding VLI Account and VA Account investments in portfolio shares,
Applicants represent that investment in such shares by Qualified Plans
would not raise issues respecting resolution of material irreconcilable
conflicts of interest with respect to voting. Consequently, the Funds
may not sell their shares to the public.
    12. Applicants assert that the rights of an insurance company on
its own initiative or on instructions from a state insurance regulator
to disregard the voting instructions of owners of Variable Contracts is
not inconsistent with either mixed funding or shared funding.
Applicants state that The National Association of Insurance
Commissioners Variable Life Insurance Model Regulation (the ``NAIC
Model Regulation'') suggests that it is unlikely that insurance
regulators would find an underlying fund's investment policy,
investment adviser or principal underwriter objectionable for one type
of Variable Contract but not another type.
    13. Applicants assert that shared funding by unaffiliated insurance
companies does not present any issues that do not already exist where a
single insurance company is licensed to do business in several or all
states. A particular state insurance regulatory body could require
action that is inconsistent with the requirements of other states in
which the insurance company offers its contracts. However,

the fact that different insurers may be domiciled in different states
does not create a significantly different or enlarged problem. Shared
funding by unaffiliated insurers, in this respect, is no different than
the use of the same investment company as the funding vehicle for
affiliated insurers, which Rules 6e-2(b)(15) and 6e-3(T)(b)(15) under
the Act permit. Applicants note that affiliated insurers may be
domiciled in different states and be subject to differing state law
requirements. Affiliation does not reduce the potential, if any exists,
for differences in state regulatory requirements. In any event, the
conditions set forth below are designed to safeguard against, and
provide procedures for resolving, any adverse effects that differences
among state regulatory requirements may produce. If a particular state
insurance regulator's decision conflicts with the majority of other
state regulators, then the affected Participating Insurance Company
will be required to withdraw its separate account investments in the
relevant portfolio. This requirement will be provided for in the
Participation Agreement that will be entered into by Participating
Insurance Companies with an Insurance Fund.
    14. Rules 6e-2(b)(15) and 6e-3(T)(b)(15) under the Act give
Participating Insurance Companies the right to disregard the voting
instructions of VLI Contract owners in certain circumstances. This
right derives from the authority of state insurance regulator over VLI
Accounts and VA Accounts. Under Rules 6e-2(b)(15) and 6e-3(T)(b)(15), a
Participating Insurance Company may disregard VLI Contract owner voting
instructions only with respect to certain specified items. Applicants
state that affiliation does not eliminate the potential, if any exists,
for divergent judgments as to the advisability or legality of a change
in investment policies, principal underwriter or investment adviser
initiated by such contract owners. The potential for disagreement is
limited by the requirements in Rules 6e-2 and 6e-3(T) under the Act
that the Participating Insurance Company's disregard of voting
instructions be reasonable and based on specific good faith
determinations.
    15. Applicants state that a particular Participating Insurance
Company's disregard of voting instructions, nevertheless, could
conflict with the voting instructions of a majority of VLI Contract
owners. The Participating Insurance Company's action possibly could be
different than the determination of all or some of the other
Participating Insurance Companies (including affiliated insurers) that
the voting instructions of VLI Contract owners should prevail, and
either could preclude a majority vote approving the change or could
represent a minority view. If the Participating Insurance Company's
judgment represents a minority position or would preclude a majority
vote, then the Participating Insurance Company may be required, at the
Insurance Fund's election, to withdraw its VLI Accounts and VA
Accounts' investments in the relevant portfolio. No charge or penalty
will be imposed as a result of such withdrawal. This requirement will
be provided for in the Participation Agreement entered into between the
Participating Insurance Company and the Insurance Fund.
    16. Applicants assert that there is no reason why the investment
policies of a portfolio would or should be materially different from
what these policies would or should be if the portfolio supported only
VLI Accounts or VA Accounts, whether flexible premium or scheduled
premium VLI Contracts.
    17. Applicants represent that each portfolio will be managed to
attempt to achieve its specified investment objective, and not favor or
disfavor any particular Participating Insurance Company or type of
insurance contact. There is no reason to believe that different
features of various types of Variable Contracts will lead to different
investment policies for each or for different Separate Accounts. The
sale of all Variable Contracts and ultimate success of all Separate
Accounts depends, at least in part, on satisfactory investment
performance, which provides an incentive for each Participating
Insurance Company to seek optimal investment performance.
    18. Furthermore, Applicants state that no single investment
strategy can be identified as appropriate to a particular Variable
Contract. Each ``pool'' of VLI Contract and VA Contract owners is
composed of individuals of diverse financial status, age, insurance
needs and investment goals. A portfolio supporting even one type of
Variable Contract must accommodate these diverse factors in order to
attract and retain purchasers. Permitting mixed and shared funding will
provide economic support for the continuation of the portfolios. Mixed
and shared funding will broaden the base of potential Variable Contract
owners, which may facilitate the establishment of additional portfolios
serving diverse goals.
    19. Applicants do not believe that the sale of the Shares to
Qualified Plans, Advisers or General Accounts will increase the
potential for material irreconcilable conflicts of interest between or
among different types of investors. In particular, Applicants see very
little potential for such conflicts beyond those that would otherwise
exist between owners of VLI Contracts and VA Contracts. Applicants
submit that either there are no conflicts of interest or that there
exists the ability by the affected parties to resolve potential
conflicts consistent with the best interests of Variable Contract
owners and participants in Qualified Plans.
    20. Applicants considered whether there are any issues raised under
the Internal Revenue Code, Treasury Regulations, or Revenue Rulings
thereunder, if Qualified Plans, VLI Accounts, VA Accounts, Advisers and
General Accounts all invest in the same portfolio. Applicants have
concluded that neither the Code, nor the Treasury Regulations nor
Revenue Rulings thereunder, present any inherent conflicts of interest
if Qualified Plans, Advisers, General Accounts, VLI Accounts and VA
Accounts all invest in the same portfolio. Applicants note that, while
there are differences in the manner in which distributions from VLI
Accounts and Qualified Plans are taxed, these differences have no
impact on the portfolios.
    21. Applicants considered whether it is possible to provide an
equitable means of giving voting rights to VLI Contract owners and to
Qualified Plans. In connection with any meeting of an Insurance Fund
shareholders, the relevant transfer agent will inform each
Participating Insurance Company, Adviser and Qualified Plan of their
share holdings and provide other information necessary for such
shareholders to participate in the meeting (e.g., proxy materials).
Each Participating Insurance Company then will solicit voting
instructions from owners of VLI Contracts and VA Contracts as required
by Rules 6e-2 and 6e-3(T), or Section 12(d)(1)(E)(iii)(aa) of the Act,
as applicable, and its Participation Agreement with an Insurance Fund.
Shares held by a General Account of a Participating Insurance Company
will be voted by the Participating Insurance Company in the same
proportion as shares for which it receives voting instructions from its
Variable Contract owners. Shares held by Qualified Plans will be voted
in accordance with applicable law. The voting rights provided to
Qualified Plans with respect to the shares would be no different from
the voting rights that are provided to Qualified Plans with respect to
shares of mutual funds sold to the general public. Furthermore, if a
material irreconcilable conflict arises because of a Qualified Plan's

decision to disregard Qualified Plan participant voting instructions,
if applicable, and that decision represents a minority position or
would preclude a majority vote, the Qualified Plan may be required, at
the election of the Insurance Fund, to withdraw its investment in a
portfolio, and no charge or penalty will be imposed as a result of such
withdrawal.
    22. Applicants do not believe that the ability of an Insurance Fund
to sell Shares directly to its Adviser, Qualified Plans, or a General
Account of a Participating Insurance Company gives rise to a senior
security. ``Senior Security'' is defined in Section 18(g) of the Act to
include ``any stock of a class having priority over any other class as
to distribution of assets or payment of dividends.'' As noted above,
regardless of the rights and benefits of participants under Qualified
Plans and owners of VLI Contracts, VLI Accounts, VA Accounts,
Participating Insurance Companies, Qualified Plans, General Accounts
and the Adviser, only have, or will only have, rights with respect to
their respective Shares. These parties can only redeem such Shares at
net asset value. No shareholder of a portfolio has any preference over
any other shareholder with respect to distribution of assets or payment
of dividends.
    23. Applicants do not believe that the veto power of state
insurance commissioners over certain potential changes to portfolio
investment objectives approved by owners of VLI Contracts creates
conflicts between the interests of such owners and the interests of
Qualified Plan participants. Applicants note that a basic premise of
corporate democracy and shareholder voting is that not all shareholders
may agree with a particular proposal. Their interests and opinions may
differ, but this does not mean that inherent conflicts of interest
exist between or among such shareholders or that occasional conflicts
of interest that do occur between or among them are likely to be
irreconcilable.
    24. Although Participating Insurance Companies may have to overcome
regulatory impediments in redeeming shares of a portfolio held by their
VLI Accounts, the Qualified Plans and the participants in participant-
directed Qualified Plans can make decisions quickly and redeem their
Shares and reinvest in another investment company or other funding
vehicle without impediments, or as is the case with most Qualified
Plans, hold cash pending suitable investment. As a result, conflicts
between the interests of VLI Contract owners and the interests of
Qualified Plans and Qualified Plan participants can usually be resolved
quickly since the Qualified Plans can, on their own, redeem their
Shares.
    25. Finally, Applicants considered whether there is a potential for
future conflicts of interest between Participating Insurance Companies
and Qualified Plans created by future changes in the tax laws.
Applicants do not see any greater potential for material irreconcilable
conflicts arising between the interests of participants in the
Qualified Plans and VLI Contract owners (or for that matter, VA
Contract owners) and Qualified Plan participants from future changes in
the federal tax laws than that which already exists between Variable
Contract owners.
    26. Applicants believe that the discussion contained in the
application demonstrates that the sale of shares to Qualified Plans
does not increase the risk of material irreconcilable conflicts of
interest between the interests of Qualified Plan participants and VLI
Contract owners or other investors. Further, Applicants submit that the
use of a portfolio with respect to Qualified Plans is not substantially
dissimilar from each portfolio's current and anticipated use, in that
Qualified Plans, like VLI Accounts, are generally long-term investors.
    27. Applicants assert that permitting an Insurance Fund to sell
Shares to its Adviser (for the purpose of obtaining seed capital) or to
the General Account of a Participating Insurance Company will enhance
management of the Insurance Fund without raising significant concerns
regarding material irreconcilable conflicts among different types of
investors.
    28. Various factors have limited the number of insurance companies
that offer Variable Contracts. These factors include the costs of
organizing and operating a funding vehicle, certain insurers' lack of
experience with respect to investment management, and the lack of name
recognition by the public of certain insurers as investment experts. In
particular, some smaller life insurance companies may not find it
economically feasible, or within their investment or administrative
expertise, to enter the Variable Contract business on their own. Use of
a portfolio as a common investment vehicle for VLI Accounts would
reduce or eliminate these concerns. Mixed and shared funding should
also provide several benefits to VLI Contract owners by eliminating a
significant portion of the costs of establishing and administering
separate underlying funds.
    29. Applicants state that Participating Insurance Companies will
benefit not only from the investment expertise of the Adviser, but also
from the potential cost efficiencies and investment flexibility
afforded by larger pools of funds. Mixed and shared funding also would
permit a greater amount of assets available for investment by a
portfolio, thereby promoting economies of scale, by permitting
increased safety through greater diversification, or by making the
addition of new portfolios more feasible. Therefore, making the
portfolios available for mixed and shared funding will encourage more
insurance companies to offer VLI Accounts. This should result in
increased competition with respect to both VLI Account design and
pricing, which can in turn be expected to result in more product
variety.
    30. Applicants also submit that, regardless of the type of
shareholder in a portfolio, the Adviser is or would be contractually
and otherwise obligated to manage the portfolio solely and exclusively
in accordance with that portfolio's investment objectives, policies and
restrictions, as well as any guidelines established by the Board.
    31. Applicants assert that sales of Shares as described above will
not have any adverse federal income tax consequences to other investors
in the portfolios.
    32. In addition, Applicants assert that granting the exemptions
requested in the application is in the public interest and, as
discussed above, will not compromise the regulatory purposes of
Sections 9(a), 13(a), 15(a), or 15(b) of the Act or Rules 6e-2 or 6e-
3(T) thereunder.

Applicants' Conditions

    Applicants agree that the order granting the requested relief shall
be subject to the following conditions, which shall apply to each
Insurance Fund:
    1. A majority of the Board will consist of persons who are not
``interested persons'' of an Insurance Fund, as defined by Section
2(a)(19) of the Act, and the rules thereunder, and as modified by any
applicable orders of the Commission, except that if this condition is
not met by reason of death, disqualification or bona fide resignation
of any trustee or trustees, then the operation of this condition will
be suspended: (a) For a period of 90 days if the vacancy or vacancies
may be filled by the Board; (b) for a period of 150 days if a vote of
shareholders is required to fill the vacancy or vacancies; or (c) for
such longer period as the Commission may prescribe by order upon
application or by future rule.

    2. The Board will monitor an Insurance Fund for the existence of
any material irreconcilable conflict between and among the interests of
the owners of all VLI Contracts and VA Contracts and participants of
all Qualified Plans investing in the Insurance Fund, and determine what
action, if any should be taken in response to such conflicts. A
material irreconcilable conflict may arise for a variety of reasons,
including: (a) An action by any state insurance regulatory authority;
(b) a change in applicable federal or state insurance, tax, or
securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretive letter, or any similar action by
insurance, tax or securities regulatory authorities; (c) an
administrative or judicial decision in any relevant proceeding; (d) the
manner in which the investments of an Insurance Fund are being managed;
(e) a difference in voting instructions given by VA Contracts owners,
VLI Contact owners, and Qualified Plans or Qualified Plan participants;
(f) a decision by a Participating Insurance Company to disregard the
voting instructions of contract owners; or (g) if applicable, a
decision by a Qualified Plan to disregard the voting instructions of
Qualified Plan participants.
    3. Participating Insurance Companies (on their own behalf, as well
as by virtue of any investment of General Account assets in a portfolio
of an Insurance Fund), an adviser and its affiliates, and any Qualified
Plan that executes a Participation Agreement upon becoming an owner of
10 percent or more of the assets of a portfolio (collectively,
``Participants'') will report any potential or existing conflicts to
the Board. Each Participant will be responsible for assisting the Board
in carrying out the Board's responsibilities under these conditions by
providing the Board with all information reasonably necessary for the
Board to consider any issues raised. This responsibility includes, but
is not limited to, an obligation by each Participating Insurance
Company to inform the Board whenever variable Contract owner voting
instructions are disregarded, and, if pass-through voting is
applicable, an obligation by each Trustee for a Qualified Plan to
inform the Board whenever it has determined to disregard Qualified Plan
participant voting instructions. The responsibility to report such
information and conflicts, and to assist the Board, will be a
contractual obligation of all Participating Insurance Companies under
their Participation Agreement with the relevant Insurance Fund, and
these responsibilities will be carried out with a view only to the
interests of the Variable Contract owners. The responsibility to report
such information and conflicts, and to assist the Board, also will be
contractual obligations of all Qualified Plans under their
Participation Agreement with the relevant Insurance Fund, and such
agreements will provide that these responsibilities will be carried out
with a view only to the interests of Qualified Plan participants.
    4. If it is determined by a majority of the Board, or a majority of
the disinterested trustees of such Board, that a material
irreconcilable conflict exists, then the relevant Participant will, at
its expense and to the extent reasonably practicable (as determined by
a majority of the disinterested trustees), take whatever steps are
necessary to remedy or eliminate the material irreconcilable conflict,
up to and including: (a) Withdrawing the assets allocable to some or
all of their VLI Accounts or VA Accounts from the relevant portfolio
and reinvesting such assets in a different investment vehicle including
another portfolio, (b) in the case of a Participating Insurance
Company, submitting the question as to whether such segregation should
be implemented to a vote of all affected Variable Contract owners and,
as appropriate, segregating the assets of any appropriate group (i.e.,
VA Contract owners or VLI Contract owners of one or more Participating
Insurance Companies) that votes in favor of such segregation, or
offering to the affected Contract owners the option of making such a
change; (c) withdrawing the assets allocable to some or all of the
Qualified Plans or Separate Accounts from the affected portfolio or
Participating Insurance Company and reinvesting them in a different
investment medium and (d) establishing a new registered management
investment company or managed separate account. If a material
irreconcilable conflict arises because of a decision by a Participating
Insurance Company to disregard Variable Contract owner voting
instructions, and that decision represents a minority position or would
preclude a majority vote, then the Participating Insurance Company may
be required, at the election of the Insurance Fund, to withdraw such
Participating Insurance Company's VLI Account and VA Account
investments in a portfolio, and no charge or penalty will be imposed as
a result of such withdrawal. If a material irreconcilable conflict
arises because of a Qualified Plan's decision to disregard Qualified
Plan participant voting instructions, if applicable, and that decision
represents a minority position or would preclude a majority vote, the
Qualified Plan may be required, at the election of the Insurance Fund,
to withdraw its investment in the portfolio, and no charge or penalty
will be imposed as a result of such withdrawal. The responsibility to
take remedial action in the event of a Board determination of a
material irreconcilable conflict and to bear the cost of such remedial
action will be a contractual obligation of all Participants under their
Participation Agreement with an Insurance Fund, and these
responsibilities will be carried out with a view only to the interests
of Variable Contract owners or, as applicable, Qualified Plan
participants.
    For purposes of this Condition 4, a majority of the disinterested
trustees of the Board will determine whether or not any proposed action
adequately remedies any material irreconcilable conflict, but, in no
event, will an Insurance Fund or its Adviser, as relevant, be required
to establish a new funding vehicle for any Variable Contract or
Qualified Plan. No Participating Insurance Company will be required by
this Condition 4 to establish a new funding vehicle for any Variable
Contract if any offer to do so has been declined by vote of a majority
of the Variable Contract owners materially and adversely affected by
the material irreconcilable conflict. Further, no Qualified Plan will
be required by this Condition 4 to establish a new funding vehicle for
the Qualified Plan if: (a) A majority of the Qualified Plan
participants materially and adversely affected by the irreconcilable
material conflict vote to decline such offer, or (b) pursuant to
documents governing the Qualified Plan, the Qualified Plan trustee
makes such decision without a Qualified Plan participant vote.
    5. The determination by the Board of the existence of a material
irreconcilable conflict and its implications will be made known in
writing promptly to all Participants.
    6. Participating Insurance Companies will provide pass-through
voting privileges to all Variable Contract owners whose Contracts are
issued through registered VLI Accounts or registered VA Accounts for as
long as required by the Act as interpreted by the Commission. However,
as to Variable Contracts issued through VLI Accounts or VA Accounts,
not registered as investment companies under the Act, pass-through
voting privileges will be extended to Variable Contract owners to the
extent granted by the Participating Insurance Company. Accordingly,
such Participating Insurance Companies,

where applicable, will vote the shares of each portfolio held in their
VLI Accounts and VA Accounts in a manner consistent with voting
instructions timely received from Variable Contract owners.
Participating Insurance Companies will be responsible for assuring that
their VLI Accounts and VA Accounts investing in the relevant portfolio
calculate voting privileges in a manner consistent with all other
participants.
    The obligation to calculate voting privileges as provided in this
Application shall be a contractual obligation of all Participating
Insurance Companies under their Participation Agreement with an
Insurance Fund. Each Participating Insurance Company will vote Shares
held in its VLI Accounts or VA Accounts for which it has not received
timely voting instructions, as well as Shares held in its General
Account or otherwise attributed to it, in the same proportion as those
shares for which it has received voting instructions. Each Qualified
Plan will vote as required by applicable law, governing Qualified Plan
documents and as provided in this application.
    7. As long as the Act requires pass-through voting privileges to be
provided to Variable Contract owners or the Commission interprets the
Act to require the same, an Adviser or any General Account will vote
their respective Shares in the same proportion as all votes cast on
behalf of all Variable Contract owners having voting rights; provided,
however, that the Adviser or General Account will vote its shares in
such other manner as may be required by the Commission or its staff.
    8. Each Insurance Fund will comply with all provisions of the Act
requiring voting by shareholders (which, for these purposes, shall be
the persons having a voting interest in its shares) and, in particular,
an Insurance Fund will either provide for annual meetings (except to
the extent that the Commission may interpret Section 16 of the Act not
to require such meetings) or comply with Section 16(c) of the Act
(although each Insurance Fund is not, or will not be, one of those
trusts of the type described in Section 16(c) of the Act), as well as
with Section 16(a) of the Act and, if and when applicable, Section
16(b) of the Act. Further, each Insurance Fund will act in accordance
with the Commission's interpretations of the requirements of Section
16(a) with respect to periodic elections of trustees and with whatever
rules the Commission may promulgate thereto.
    9. An Insurance Fund will make available Shares under a Variable
Contract and/or Qualified Plan at or about the time it accepts any seed
capital from the Adviser or from a General Account of a Participating
Insurance Company.
    10. Each Insurance Fund has notified, or will notify, all
Participants that disclosure regarding potential risks of mixed and
shared funding may be appropriate in VLI Account and VA Account
prospectuses or Qualified Plan documents. Each Insurance Fund will
disclose, in its prospectus that: (a) Shares may be offered to VLI
Accounts and VA Accounts funding both VA Contracts and VLI Contracts
and, if applicable, to Qualified Plans; (b) due to differences in tax
treatment and other considerations, the interests of various Variable
Contract owners participating in an Insurance Fund and the interests of
Qualified Plans investing in an Insurance Fund, if applicable, may
conflict; and (c) the Board will monitor events in order to identify
the existence of any material irreconcilable conflicts and to determine
what action, if any, should be taken in response to any such conflicts.
    11. If and to the extent that Rule 6e-2 and Rule 6e-3(T) under the
Act are amended, or proposed Rule 6e-3 under the Act is adopted, to
provide exemptive relief from any provision of the Act, or the rules
promulgated thereunder, with respect to mixed or shared funding, on
terms and conditions materially different from any exemptions granted
in the order requested in this Application, then an Insurance Fund and/
or Participating Insurance Companies, as appropriate, shall take such
steps as may be necessary to comply with Rules 6e-2 or 6e-3(T), as
amended, or Rule 6e-3, to the extent such rules are applicable.
    12. Each Participant, at least annually, shall submit to the Board,
on behalf of an Insurance Fund, such reports, materials or data as the
Board reasonably may request so that the trustees may fully carry out
the obligations imposed upon the Board by the conditions contained in
this Application. Such reports, materials and data shall be submitted
more frequently if deemed appropriate by the Board. The obligations of
the Participants to provide these reports, materials and data to the
Board, when it so reasonably requests, shall be a contractual
obligation of all Participants under their Participation Agreement with
an Insurance Fund.
    13. All reports of potential or existing conflicts received by the
Board, on behalf of an Insurance Fund, and all Board action with regard
to determining the existence of a conflict, notifying Participants of a
conflict and determining whether any proposed action adequately
remedies a conflict, will be properly recorded in the minutes of the
Board or other appropriate records, and such minutes or other records
shall be made available to the Commission upon request.
    14. Each Insurance Fund will not accept a purchase order from a
Qualified Plan if such purchase would make the Qualified Plan an owner
of 10 percent or more of the assets of a portfolio unless the Qualified
Plan executes an agreement with an Insurance Fund governing
participation in the portfolio that includes the conditions set forth
in the Application to the extent applicable. A Qualified Plan will
execute an application containing an acknowledgement of this condition
at the time of its initial purchase of shares.

Conclusion

    Applicants submit, for all the reasons explained above, that the
exemptions requested are 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.

    For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Kevin O'Neill,
Deputy Secretary.
[FR Doc. 2013-23687 Filed 9-27-13; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 75, Number 219 (Monday, November 15, 2010)]
[Notices]
[Pages 69737-69739]
[FR Doc No: 2010-28699]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No. FMCSA-2010-0287]

Qualification of Drivers; Exemption Applications; Vision

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

ACTION: Notice of applications for exemptions; request for comments.

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

SUMMARY: FMCSA announces receipt of applications from 15 individuals
for exemption from the vision requirement in the Federal Motor Carrier
Safety Regulations. If granted, the exemptions would enable these
individuals to qualify as drivers of commercial motor vehicles (CMVs)
in interstate commerce without meeting the Federal vision standard.

DATES: Comments must be received on or before December 15, 2010.

ADDRESSES: You may submit comments bearing the Federal Docket
Management System (FDMS) Docket No. FMCSA-2010-0287 using any of the
following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the on-line instructions for submitting
comments.
     Mail: Docket Management Facility; U.S. Department of
Transportation, 1200 New Jersey Avenue, SE., West Building Ground
Floor, Room W12-140, Washington, DC 20590-0001.
     Hand Delivery: West Building Ground Floor, Room W12-140,
1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal Holidays.
     Fax: 1-202-493-2251.
    Instructions: Each submission must include the Agency name and the
docket numbers for this notice. Note that all comments received will be
posted without change to http://www.regulations.gov, including any
personal information provided. Please see the Privacy Act heading below
for further information.
    Docket: For access to the docket to read background documents or
comments, go to http://www.regulations.gov at any time or Room W12-140
on the ground level of the West Building, 1200 New Jersey Avenue, SE.,
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays. The FDMS is available 24 hours each day, 365
days each year. If you want acknowledgment that we received your
comments, please include a self-addressed, stamped envelope or postcard
or print the acknowledgement page that appears after submitting
comments on-line.
    Privacy Act: Anyone may search the electronic form of all comments
received into any of our dockets by the name of the individual
submitting the comment (or of the person signing the comment, if
submitted on behalf of an association, business, labor union, etc.).
You may review DOT's Privacy Act Statement for the FDMS published in
the Federal Register on January 17, 2008 (73 FR 3316), or you may visit
http://edocket.access.gpo.gov/2008/pdf/E8-785.pdf.

FOR FURTHER INFORMATION CONTACT: Dr. Mary D. Gunnels, Director, Medical

Programs,<PHONE_NUMBER><EMAIL_ADDRESS>FMCSA, Department of
Transportation, 1200 New Jersey Avenue, SE., Room W64-224, Washington,
DC 20590-0001. Office hours are from 8:30 a.m. to 5 p.m., Monday
through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Background

    Under 49 U.S.C. 31136(e) and 31315, FMCSA may grant an exemption
from the Federal Motor Carrier Safety Regulations for a 2-year period
if it finds ``such exemption would likely achieve a level of safety
that is equivalent to, or greater than, the level that would be
achieved absent such exemption.'' FMCSA can renew exemptions at the end
of each 2-year period. The 15 individuals listed in this notice have
each requested such an exemption from the vision requirement in 49 CFR
391.41(b)(10), which applies to drivers of CMVs in interstate commerce.
Accordingly, the Agency will evaluate the qualifications of each
applicant to determine whether granting an exemption will achieve the
required level of safety mandated by statute.

Qualifications of Applicants

Robert W. Blankenship

    Mr. Blankenship, age 50, has had amblyopia in his left eye since
childhood. The best corrected visual acuity in his right eye is 20/20
and in his left eye, 20/200. Following an examination in 2010, his
optometrist noted, ``In my opinion, Mr. Blankenship has sufficient
vision to perform the driving tasks to operate a commercial vehicle.''
Mr. Blankenship reported that he has driven straight trucks for 29
years, accumulating 580,000 miles and tractor-trailer combinations for
29 years, accumulating 2.3 million miles. He holds a Class A Commercial
Driver's License (CDL) from California. His driving record for the last
3 years shows one crash and one conviction for a moving violation in a
CMV. He exceeded the speed limit by 10 mph.

Bryan K. Deborde

    Mr. Deborde, 39, has had amblyopia in his left eye since birth. The
best corrected visual acuity in his right eye is 20/20 and in his left
eye, 20/50. Following an examination in 2010, his optometrist noted,
``It is my opinion that Mr. Deborde has sufficient vision to perform
the driving tasks required to operate a commercial vehicle.'' Mr.
Deborde reported that he has driven tractor-trailer combinations for 19
years, accumulating 1.6 million miles. He holds a Class A CDL from
Washington. His driving record for the last 3 years shows no crashes
and one conviction for a moving violation in a CMV. He exceeded the
speed limit by 10 miles per hour (mph).

Michael K. Engemann

    Mr. Engemann, 32, has had a distorted cornea in his right eye since
1989 due trauma. The best corrected visual acuity in his right eye is
20/400 and in his left eye, 20/20. Following an examination in 2010,
his optometrist noted, ``Mike has sufficient vision to operate a
commercial vehicle.'' Mr. Engemann reported that he has driven straight
trucks for 12 years, accumulating 480,000 miles and tractor-trailer
combinations for 12 years, accumulating 960,000 miles. He holds a Class
A CDL from Missouri. His driving record for the last 3 years shows no
crashes and no convictions for moving violations in a CMV.

Pete R. Gonzalez

    Mr. Gonzalez, 25, has had optic nerve atrophy in his right eye
since 1998 due to trauma. The best corrected visual acuity in his right
eye is 20/300 and in his left eye, 20/20. Following an examination in
2010, his optometrist noted, ``Pete has sufficient vision in the right
eye to perform the driving tasks required to operate a commercial
vehicle.'' Mr. Gonzalez reported that he has driven straight trucks for
4 years, accumulating 360,000 miles and tractor-trailer combinations
for 4 years, accumulating 360,000 miles. He holds a Class A CDL from
New Mexico. His driving record for the last 3 years shows no crashes
and no convictions for moving violations in a CMV.

John W. Harbaugh

    Mr. Harbaugh, 62, has had amblyopia and optic atrophy in his right
eye since birth. The best corrected visual acuity in his right eye is
count-finger vision only and in his left eye, 20/20. Following an
examination in 2010, his ophthalmologist noted, ``Formal visual field
perimetry testing reveals 140 degrees of dynamic perception in the left
eye permitting Mr. Harbaugh to operate a commercial vehicle without
restrictions.'' Mr. Harbaugh reported that he has driven straight
trucks for 32 years, accumulating 1.2 million miles. He holds a Class B
CDL from Illinois. His driving record for the last 3 years shows no
crashes and no convictions for moving violations in a CMV.

Michael E. Herrera, Jr.,

    Mr. Herrera, 53, has had primary open angle glaucoma in his left
eye since 2009. The best corrected visual acuity in his right eye is
20/60 and in his left eye, 20/20. Following an examination in 2010, his
ophthalmologist noted, ``In my professional opinion. Mr. Herrera has
sufficient vision to drive a commercial vehicle. Mr. Herrera reported
that he has driven straight trucks for 23 years, accumulating 23,000
miles and tractor-trailer combinations for 8 years, accumulating 8,000
miles. He holds a Class A CDL from New Mexico. His driving record for
the last 3 years shows no crashes and no convictions for moving
violations in a CMV.

William E. Jacobs

    Mr. Jacobs, 63, has had toxoplasmosis in his right eye since
childhood. The best corrected visual acuity in his right eye is 20/200
and in his left eye, 20/20. Following an examination in 2010, his
ophthalmologist noted, ``I feel he has sufficient vision to perform the
driver's tasks required to operate a commercial vehicle.'' Mr. Jacobs
reported that he has driven buses for 13 years, accumulating 247,000
miles. He holds a Class B CDL from Texas. His driving record for the
last 3 years shows no crashes and no convictions for moving violations
in a CMV.

Perry D. Jensen

    Mr. Jensen, 50, has had amblyopia in his left eye since childhood.
The best corrected visual acuity in his right eye is 20/20 and in his
left eye, 20/200. Following an examination in 2010, his optometrist
noted, ``This patient has sufficient vision to drive a commercial
vehicle.'' Mr. Jensen reported that he has driven straight trucks for
30 years, accumulating 600,000 miles and tractor-trailer combinations
for 30 years, accumulating 150,000 miles. He holds a Class A CDL from
Wisconsin. His driving record for the last 3 years shows no crashes and
no convictions for moving violations in a CMV.

Joseph L. Jones

    Mr. Jones, 55, has had exotropia and amblyopia in his right eye
since childhood. The best corrected visual acuity in his right eye is
20/400 and in his left eye, 20/20. Following an examination in 2010,
his ophthalmologist noted, ``Mr. Jones exhibits sufficient vision to
operate a commercial vehicle.'' Mr. Jones reported that he has driven
straight trucks for 32 years, accumulating 480,000 miles and tractor-
trailer combinations for 32 years, accumulating 1.9 million miles. He
holds a Class A CDL from Maryland. His driving record for the last 3
years shows no crashes and no convictions for moving violations in a
CMV.

Gary L. Nicholas

    Mr. Nicholas, 53, has complete loss of vision in his right eye
since childhood. The best corrected visual acuity in his left eye is
20/20. Following an examination in 2010, his ophthalmologist noted, ``I
feel that he has sufficient vision to perform the driving tasks
required to operate a commercial vehicle.'' Mr. Nicholas reported that
he has driven straight trucks for 36 years, accumulating 360,000 miles.
He holds a Class C chauffeur's license from Michigan. His driving
record for the last 3 years shows one crash, for which he was not
cited, and no convictions for moving violations in a CMV.

James G. Pitchford

    Mr. Pitchford, 67, has had a prosthetic right eye since childhood.
The best corrected visual acuity in his left eye is 20/20. Following an
examination in 2010, his optometrist noted, ``It is my opinion that
this patient has sufficient vision to perform his driving tasks and
operate a commercial vehicle.'' Mr. Pitchford reported that he has
driven straight trucks for 20\1/2\ years, accumulating 483,585 miles
and tractor-trailer combinations for 20\1/2\ years, accumulating 1.1
million miles. He holds a Class A CDL from Ohio. His driving record for
the last 3 years shows no crashes and no convictions for moving
violations in a CMV.

Virgil R. Story

    Mr. Story, 50, has had amblyopia in his right eye since childhood.
The best corrected visual acuity in his right eye is 20/400 and in his
left eye, 20/20. Following an examination in 2010, his optometrist
noted, ``I feel in my medical opinion that patient has sufficient
vision to perform his currently assigned driving tasks required to
operate a commercial vehicle.'' Mr. Story reported that he has driven
tractor-trailer combinations for 20 years, accumulating 1.6 million
miles. He holds a Class A CDL from Arkansas. His driving record for the
last 3 years shows no crashes and no convictions for moving violations
in a CMV.

John A. Thomas, Jr.

    Mr. Thomas, 50, has had amblyopia in his right eye since childhood.
The best corrected visual acuity in his right eye is 20/200 and in his
left eye, 20/20. Following an examination in 2010, his optometrist
noted, ``I find that his vision is adequate to operate any commercial
vehicle without glasses.'' Mr. Thomas reported that he has driven
straight trucks for 32 years, accumulating 640,000 miles and tractor-
trailer combinations for 32 years, accumulating 1.7 million miles. He
holds a Class A CDL from North Carolina. His driving record for the
last 3 years shows no crashes and no convictions for moving violations
in a CMV.

Richard L. Totels

    Mr. Totels, 57, has had macular scarring in his left eye since
childhood. The best corrected visual acuity in his right eye is 20/20
and in his left eye, 20/200. Following an examination in 2010, his
ophthalmologist noted, ``In my medical opinion, this patient has
adequate vision to perform the driving tasks required to operate a
commercial vehicle.'' Mr. Totels reported that he has driven tractor-
trailer combinations for 37 years, accumulating 3.7 million miles. He
holds a Class A CDL from Texas. His driving record for the last 3 years
shows no crashes and no convictions for moving violations in a CMV.

James B. Woolwine

    Mr. Woolwine, 44, has had amblyopia in his left eye since
childhood. The best corrected visual acuity in his right eye is 20/20
and in his left eye, 20/400. Following an examination in 2010, his
ophthalmologist noted, ``He has sufficient visual capabilities to
operate a commercial vehicle.'' Mr. Woolwine reported that he has
driven straight trucks for 4 years, accumulating 200,000 miles and
tractor-trailer combinations for 4 years, accumulating 60,000 miles. He
holds a Class A CDL from Virginia. His driving record for the last 3
years shows no crashes and no convictions for moving violations in a
CMV.

Request for Comments

    In accordance with 49 U.S.C. 31136(e) and 31315, FMCSA requests
public comment from all interested persons on the exemption petitions
described in this notice. The Agency will consider all comments
received before the close of business December 15, 2010. Comments will
be available for examination in the docket at the location listed under
the ADDRESSES section of this notice. The Agency will file comments
received after the comment closing date in the public docket, and will
consider them to the extent practicable. In addition to late comments,
FMCSA will also continue to file, in the public docket, relevant
information that becomes available after the comment closing date.
Interested persons should monitor the public docket for new material.

    Issued on: November 5, 2010.
Larry W. Minor,
Associate Administrator, Office of Policy and Program Development.
[FR Doc. 2010-28699 Filed 11-12-10; 8:45 am]
BILLING CODE 4910-EX-P