[Federal Register Volume 79, Number 108 (Thursday, June 5, 2014)]
[Notices]
[Pages 32586-32594]
[FR Doc No: 2014-13019]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72281; File No. SR-NASDAQ-2014-057]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing of Proposed Rule Change Relating to the Listing and
Trading of the Shares of the First Trust Low Duration Mortgage
Opportunities ETF of First Trust Exchange-Traded Fund IV

May 30, 2014.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on May 20, 2014, The NASDAQ Stock Market LLC (``Nasdaq'' or the
``Exchange'') filed with the Securities and Exchange

Commission (``Commission'') the proposed rule change as described in
Items I and II below, which Items have been prepared by the Exchange.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    Nasdaq proposes to list and trade the shares of the First Trust Low
Duration Mortgage Opportunities ETF (the ``Fund'') of First Trust
Exchange-Traded Fund IV (the ``Trust'') under Nasdaq Rule 5735
(``Managed Fund Shares'').\3\ The shares of the Fund are collectively
referred to herein as the ``Shares.''
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    \3\ The Commission approved Nasdaq Rule 5735 (formerly Nasdaq
Rule 4420(o)) in Securities Exchange Act Release No. 57962 (June 13,
2008), 73 FR 35175 (June 20, 2008) (SR-NASDAQ-2008-039). There are
already multiple actively-managed funds listed on the Exchange; see,
e.g., Securities Exchange Act Release Nos. 69464 (April 26, 2013),
78 FR 25774 (May 2, 2013) (SR-NASDAQ-2013-036) (order approving
listing and trading of First Trust Senior Loan Fund); 68972
(February 22, 2013), 78 FR 13721 (February 28, 2013) (SR-NASDAQ-
2012-147) (order approving listing and trading of First Trust High
Yield Long/Short ETF); 66489 (February 29, 2012), 77 FR 13379 (March
6, 2012) (SR-NASDAQ-2012-004) (order approving listing and trading
of WisdomTree Emerging Markets Corporate Bond Fund). The Exchange
believes the proposed rule change raises no significant issues not
previously addressed in those prior Commission orders.
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    The text of the proposed rule change is available at
nasdaq.cchwallstreet.com, at Nasdaq's principal office, and at the
Commission's Public Reference Room.

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

    In its filing with the Commission, Nasdaq included statements
concerning the purpose of, and basis for, the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. Nasdaq has prepared summaries, set forth in Sections A,
B, and C below, of the most significant aspects of such statements.

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

1. Purpose
    The Exchange proposes to list and trade the Shares of the Fund
under Nasdaq Rule 5735, which governs the listing and trading of
Managed Fund Shares \4\ on the Exchange. The Fund will be an actively-
managed exchange-traded fund (``ETF''). The Shares will be offered by
the Trust, which was established as a Massachusetts business trust on
September 15, 2010.\5\ The Trust is registered with the Commission as
an investment company and has filed a registration statement on Form N-
1A (``Registration Statement'') with the Commission.\6\ The Fund will
be a series of the Trust.
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    \4\ A Managed Fund Share is a security that represents an
interest in an investment company registered under the Investment
Company Act of 1940 (15 U.S.C. 80a-1) (the ``1940 Act'') organized
as an open-end investment company or similar entity that invests in
a portfolio of securities selected by its investment adviser
consistent with its investment objectives and policies. In contrast,
an open-end investment company that issues Index Fund Shares, listed
and traded on the Exchange under Nasdaq Rule 5705, seeks to provide
investment results that correspond generally to the price and yield
performance of a specific foreign or domestic stock index, fixed
income securities index or combination thereof.
    \5\ The Commission has issued an order, upon which the Trust may
rely, granting certain exemptive relief under the 1940 Act. See
Investment Company Act Release No. 30029 (April 10, 2012) (File No.
812-13795) (the ``Exemptive Relief''). In addition, on December 6,
2012, the staff of the Commission's Division of Investment
Management (``Division'') issued a no-action letter (``No-Action
Letter'') relating to the use of derivatives by actively-managed
ETFs. See No-Action Letter dated December 6, 2012 from Elizabeth G.
Osterman, Associate Director, Office of Exemptive Applications,
Division of Investment Management. The No-Action Letter stated that
the Division would not recommend enforcement action to the
Commission under applicable provisions of and rules under the 1940
Act if actively-managed ETFs operating in reliance on specified
orders (which include the Exemptive Relief) invest in options
contracts, futures contracts or swap agreements provided that they
comply with certain representations stated in the No-Action Letter.
    \6\ See Post-Effective Amendment No. 69 to Registration
Statement on Form N-1A for the Trust, dated May 16, 2014 (File Nos.
333-174332 and 811-22559). The descriptions of the Fund and the
Shares contained herein are based, in part, on information in the
Registration Statement.
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    First Trust Advisors L.P. will be the investment adviser
(``Adviser'') to the Fund. First Trust Portfolios L.P. (the
``Distributor'') will be the principal underwriter and distributor of
the Fund's Shares. The Bank of New York Mellon Corporation (``BNY'')
will act as the administrator, accounting agent, custodian and transfer
agent to the Fund.
    Paragraph (g) of Rule 5735 provides that if the investment adviser
to the investment company issuing Managed Fund Shares is affiliated
with a broker-dealer, such investment adviser shall erect a ``fire
wall'' between the investment adviser and the broker-dealer with
respect to access to information concerning the composition and/or
changes to such investment company portfolio.\7\ In addition, paragraph
(g) further requires that personnel who make decisions on the open-end
fund's portfolio composition must be subject to procedures designed to
prevent the use and dissemination of material, non-public information
regarding the open-end fund's portfolio. Rule 5735(g) is similar to
Nasdaq Rule 5705(b)(5)(A)(i); however, paragraph (g) in connection with
the establishment of a ``fire wall'' between the investment adviser and
the broker-dealer reflects the applicable open-end fund's portfolio,
not an underlying benchmark index, as is the case with index-based
funds. The Adviser is not a broker-dealer, but it is affiliated with
the Distributor, a broker-dealer, and has implemented a fire wall with
respect to its broker-dealer affiliate regarding access to information
concerning the composition and/or changes to the portfolio. In
addition, personnel who make decisions on the Fund's portfolio
composition will be subject to procedures designed to prevent the use
and dissemination of material non-public information regarding the
Fund's portfolio. In the event (a) the Adviser or any sub-adviser
becomes, or becomes newly affiliated with, a broker-dealer, or (b) any
new adviser or sub-adviser is a registered broker-dealer or becomes
affiliated with a broker-dealer, it will implement a fire wall with
respect to its relevant personnel and/or such broker-dealer affiliate,
as applicable, regarding access to information concerning the
composition and/or changes to the portfolio and will be subject to
procedures designed to prevent the use and dissemination of material
non-public information regarding such portfolio. The Fund currently
does not intend to use a sub-adviser.
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    \7\ An investment adviser to an open-end fund is required to be
registered under the Investment Advisers Act of 1940 (the ``Advisers
Act''). As a result, the Adviser and its related personnel are
subject to the provisions of Rule 204A-1 under the Advisers Act
relating to codes of ethics. This Rule requires investment advisers
to adopt a code of ethics that reflects the fiduciary nature of the
relationship to clients as well as compliance with other applicable
securities laws. Accordingly, procedures designed to prevent the
communication and misuse of non-public information by an investment
adviser must be consistent with Rule 204A-1 under the Advisers Act.
In addition, Rule 206(4)-7 under the Advisers Act makes it unlawful
for an investment adviser to provide investment advice to clients
unless such investment adviser has (i) adopted and implemented
written policies and procedures reasonably designed to prevent
violation, by the investment adviser and its supervised persons, of
the Advisers Act and the Commission rules adopted thereunder; (ii)
implemented, at a minimum, an annual review regarding the adequacy
of the policies and procedures established pursuant to subparagraph
(i) above and the effectiveness of their implementation; and (iii)
designated an individual (who is a supervised person) responsible
for administering the policies and procedures adopted under
subparagraph (i) above.

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First Trust Low Duration Mortgage Opportunities ETF
Principal Investments
    The primary investment objective of the Fund will be to generate
current income and its secondary objective will be capital
appreciation. Under normal market conditions,\8\ the Fund will seek to
achieve its investment objectives by investing at least 80% of its net
assets (including investment borrowings) in the mortgage-related debt
securities and other mortgage-related instruments (collectively,
``Mortgage-Related Investments'') described below.
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    \8\ The term ``under normal market conditions'' as used herein
includes, but is not limited to, the absence of adverse market,
economic, political or other conditions, including extreme
volatility or trading halts in the fixed income markets or the
financial markets generally; operational issues causing
dissemination of inaccurate market information; or force majeure
type events such as systems failure, natural or man-made disaster,
act of God, armed conflict, act of terrorism, riot or labor
disruption or any similar intervening circumstance.
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    Under normal market conditions, the Fund will invest in Mortgage-
Related Investments tied to residential and commercial mortgages.\9\
Mortgage-Related Investments represent an interest in a pool of
mortgage loans made by banks and other financial institutions to
finance purchases of homes, commercial buildings and other real estate.
The individual mortgage loans are packaged or ``pooled'' together for
sale to investors. As the underlying mortgage loans are paid off,
investors receive principal and interest payments. Mortgage-Related
Investments may be fixed-rate or adjustable-rate Mortgage-Related
Investments (ARMS).
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    \9\ Mortgage-Related Investments consist of: (1) residential
mortgage-backed securities (RMBS); (2) commercial mortgage-backed
securities (CMBS); (3) stripped mortgage-backed securities (SMBS)
which are mortgage-backed securities where mortgage payments are
divided up between paying the loan's principal and paying the loan's
interest; and (4) collateralized mortgage obligations (CMOs) and
real estate mortgage investment conduits (REMICs) where they are
divided into multiple classes with each class being entitled to a
different share of the principal and/or interest payments received
from the pool of underlying assets.
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    The Mortgage-Related Investments in which the Fund will invest may
be, but are not required to be, issued or guaranteed by the U.S.
government, its agencies or instrumentalities, such as Ginnie Mae and
U.S. government-sponsored entities, such as Fannie Mae and Freddie Mac
(the U.S. government, its agencies and instrumentalities, and U.S.
government-sponsored entities are referred to collectively as
``Government Entities'').\10\ The Fund may invest in callable agency
securities, which give the issuer (the U.S. government agency) the
right to redeem the security prior to maturity. The Fund will limit its
investments in Mortgage-Related Investments that are not issued or
guaranteed by Government Entities to 20% of its net assets.\11\
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    \10\ Securities issued by Government Entities have different
levels of credit support. For example, Ginnie Mae securities carry a
guarantee as to the timely repayment of principal and interest that
is backed by the full faith and credit of the U.S. government.
However, the full faith and credit guarantee does not apply to the
market prices and yields of the Ginnie Mae securities or to the net
asset value, trading price or performance of the Fund, which will
vary with changes in interest rates and other market conditions.
Fannie Mae and Freddie Mac pass-through mortgage certificates are
backed by the credit of the respective instrumentality and are not
guaranteed by the U.S. government. Other securities issued by
Government Entities may only be backed by the creditworthiness of
the issuing institution, not the U.S. government, or the issuers may
have the right to borrow from the U.S. Treasury to meet their
obligations.
    \11\ For the avoidance of any doubt, however, investments in
Mortgage-Related Investments that are not issued or guaranteed by
Government Entities will be included for purposes of the 80%
requirement described in the first paragraph under the heading
``Principal Investments.''
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    Many Mortgage-Related Investments are pass-through securities,
which means they provide investors with monthly payments consisting of
a pro rata share of both regular interest and principal payments as
well as unscheduled prepayments on the underlying mortgage loans.
Because prepayment rates of individual mortgage pools vary widely, the
average life of a particular pool cannot be predicted accurately.
    The Fund currently targets an estimated effective duration \12\ of
three (3) years or less. The Adviser will calculate the duration of the
portfolio by modeling the cash flows of all the individual holdings,
including the impact of prepayment variability and coupon adjustments
where applicable, to determine the duration of each holding and then
aggregating based on the size of the position. In performing this
duration calculation, the Adviser will utilize third-party models.
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    \12\ In comparison to maturity (which is the date on which a
debt instrument ceases and the issuer is obligated to repay the
principal amount), duration is a measure of the expected price
volatility of a debt instrument as a result of changes in market
rates of interest, based on the weighted average timing of the
instrument's expected principal and interest payments and other
factors. Duration differs from maturity in that it considers a
security's yield, coupon payments, principal payments, call features
and coupon adjustments in addition to the amount of time until the
security finally matures. As the value of a security changes over
time, so will its duration. Prices of securities with lower
durations tend to be less sensitive to interest rate changes than
securities with higher durations. In general, a portfolio of
securities with a lower duration can be expected to be less
sensitive to interest rate changes than a portfolio with a higher
duration.
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    The Fund may invest, without limitation, in mortgage dollar
rolls.\13\ The Fund intends to enter into mortgage dollar rolls only
with high quality securities dealers and banks, as determined by the
Adviser. The Fund may also invest in to-be-announced transactions
(``TBA Transactions'').\14\ Further, the Fund may enter into short
sales as part of its overall portfolio management strategies or to
offset a potential decline in the value of a security; however, the
Fund does not expect, under normal market conditions, to engage in
short sales with respect to more than 30% of the value of its net
assets. To the extent required under applicable federal securities
laws, rules, and interpretations thereof, the Fund will ``set aside''
liquid assets or engage in other measures to ``cover'' open positions
and short positions held in connection with the foregoing types of
transactions.\15\
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    \13\ In a mortgage dollar roll, the Fund will sell (or buy)
mortgage-backed securities for delivery on a specified date and
simultaneously contract to repurchase (or sell) substantially
similar (same type, coupon and maturity) securities on a future
date. During the period between a sale and repurchase, the Fund will
forgo principal and interest paid on the mortgage-backed securities.
The Fund will earn or lose money on a mortgage dollar roll from any
difference between the sale price and the future purchase price. In
a sale and repurchase, the Fund will also earn money on the interest
earned on the cash proceeds of the initial sale.
    \14\ A TBA Transaction is a method of trading mortgage-backed
securities. TBA Transactions generally are conducted in accordance
with widely-accepted guidelines which establish commonly observed
terms and conditions for execution, settlement and delivery. In a
TBA Transaction, the buyer and the seller agree on general trade
parameters such as agency, settlement date, par amount and price.
The actual pools delivered generally are determined two days prior
to the settlement date. The mortgage TBA market is liquid and
positions can be easily added, rolled or closed. According to the
Financial Industry Regulatory Authority (``FINRA'') Trade Reporting
and Compliance Engine (``TRACE'') data, TBA Transactions represented
approximately 93% of total trading volume for agency mortgage-backed
securities in the month of January 2014.
    \15\ See 15 U.S.C. 80a-18; Investment Company Act Release No.
10666 (April 18, 1979), 44 FR 25128 (April 27, 1979); Dreyfus
Strategic Investing, Commission No-Action Letter (June 22, 1987);
Merrill Lynch Asset Management, L.P., Commission No-Action Letter
(July 2, 1996).
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    Although the Fund intends to invest primarily in investment grade
securities,\16\ the Fund may invest up to

20% of its net assets in securities of any credit quality, including
securities that are below investment grade and securities that are
unrated and have not been judged by the Adviser to be of comparable
quality to rated investment grade securities.
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    \16\ Investment grade securities include securities with, at the
time of investment, credit ratings within the four highest rating
categories of a nationally recognized statistical rating
organization such as Moody's Investors Service, Inc. (``Moody's''),
Fitch Ratings (``Fitch''), or Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc. (``S&P Ratings''), or
another nationally recognized statistical rating organization
(``NRSRO''), and unrated securities judged to be of comparable
quality by the Adviser. Comparable quality of unrated securities
will be determined by the Adviser based on fundamental credit
analysis of the unrated security and comparable NRSRO-rated
securities. On a best efforts basis, the Adviser will attempt to
make a rating determination based on publicly available data. In
making a ``comparable quality'' determination, the Adviser may
consider, for example, whether the issuer of the security has issued
other rated securities, the nature and provisions of the relevant
security, whether the obligations under the relevant security are
guaranteed by another entity and the rating of such guarantor (if
any), relevant cash flows, macroeconomic analysis, and/or sector or
industry analysis.
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Other Investments
    The Fund may invest in exchange-listed options on U.S. Treasury
securities, exchange-listed options on U.S. Treasury futures contracts
and exchange-listed U.S. Treasury futures contracts.\17\ The use of
these derivative transactions may allow the Fund to obtain net long or
short exposures to selected interest rates or durations. These
derivatives may also be used to hedge risks associated with the Fund's
other portfolio investments.
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    \17\ At least 90% of the Fund's net assets that are invested in
exchange-traded equity securities and exchange-traded derivatives
(in the aggregate) will be invested in investments that trade in
markets that are members of the Intermarket Surveillance Group
(``ISG'') or are parties to a comprehensive surveillance sharing
agreement with the Exchange.
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    Under normal market conditions, no more than 20% of the value of
the Fund's net assets will be invested in derivative instruments.\18\
The Fund's investments in derivative instruments will be consistent
with the Fund's investment objectives and the 1940 Act and will not be
used to seek to achieve a multiple or inverse multiple of an index.
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    \18\ The Fund will limit its direct investments in futures and
options on futures to the extent necessary for the Adviser to claim
the exclusion from regulation as a ``commodity pool operator'' with
respect to the Fund under Rule 4.5 promulgated by the Commodity
Futures Trading Commission (``CFTC''), as such rule may be amended
from time to time. Under Rule 4.5 as currently in effect, the Fund
will limit its trading activity in futures and options on futures
(excluding activity for ``bona fide hedging purposes,'' as defined
by the CFTC) such that it will meet one of the following tests: (i)
aggregate initial margin and premiums required to establish its
futures and options on futures positions will not exceed 5% of the
liquidation value of the Fund's portfolio, after taking into account
unrealized profits and losses on such positions; or (ii) aggregate
net notional value of its futures and options on futures positions
will not exceed 100% of the liquidation value of the Fund's
portfolio, after taking into account unrealized profits and losses
on such positions.
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    The Fund may invest up to 20% of its net assets in short-term debt
securities, money market funds and other cash equivalents, or it may
hold cash. The percentage of the Fund invested in such holdings will
vary and will depend on several factors, including market conditions.
For temporary defensive purposes, during the initial invest-up period
and during periods of high cash inflows or outflows, the Fund may
depart from its principal investment strategies and invest part or all
of its assets in these securities or it may hold cash. During such
periods, the Fund may not be able to achieve its investment objectives.
The Fund may adopt a defensive strategy when the Adviser believes
securities in which the Fund normally invests have elevated risks due
to political or economic factors and in other extraordinary
circumstances.
    Short-term debt securities are securities from issuers having a
long-term debt rating of at least A by S&P Ratings, Moody's or Fitch
and having a maturity of one year or less. The use of temporary
investments will not be a part of a principal investment strategy of
the Fund.
    Short-term debt securities are defined to include, without
limitation, the following: (1) fixed rate and floating rate U.S.
government securities, including bills, notes and bonds differing as to
maturity and rates of interest, which are either issued or guaranteed
by the U.S. Treasury or by U.S. government agencies or
instrumentalities; (2) certificates of deposit issued against funds
deposited in a bank or savings and loan association; (3) bankers'
acceptances, which are short-term credit instruments used to finance
commercial transactions; (4) repurchase agreements,\19\ which involve
purchases of debt securities; (5) bank time deposits, which are monies
kept on deposit with banks or savings and loan associations for a
stated period of time at a fixed rate of interest; and (6) commercial
paper, which is short-term unsecured promissory notes. The Fund may
only invest in commercial paper rated A-1 or higher by S&P Ratings,
Prime-1 or higher by Moody's or F1 or higher by Fitch.
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    \19\ The Fund intends to enter into repurchase agreements only
with financial institutions and dealers believed by the Adviser to
present minimal credit risks in accordance with criteria approved by
the Board of Trustees of the Trust (``Trust Board''). The Adviser
will review and monitor the creditworthiness of such institutions.
The Adviser will monitor the value of the collateral at the time the
transaction is entered into and at all times during the term of the
repurchase agreement.
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    In addition to its investments in Mortgage-Related Investments
issued or guaranteed by Government Entities (as described in Principal
Investments above) and in the short-term debt securities described in
clause (1) of the preceding paragraph, the Fund may also invest up to
20% of its net assets in other direct obligations of the U.S.
government and in other securities issued or guaranteed by Government
Entities. Such investments may include, without limitation, U.S.
government inflation-indexed securities.\20\
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    \20\ Inflation-indexed securities are fixed-income securities
that are structured to provide protection against inflation. The
value of the security's principal or the interest income paid on the
security is adjusted to track changes in an official inflation
measure. The U.S. Treasury uses the Consumer Price Index for Urban
Consumers as the inflation measure.
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    The Fund may invest up to 20% of its net assets in the securities
of other investment companies, including money market funds (as noted
above) and other ETFs.\21\
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    \21\ An ETF is an investment company registered under the 1940
Act that holds a portfolio of securities. Many ETFs are designed to
track the performance of a securities index, including industry,
sector, country and region indexes. ETFs included in the Fund will
be listed and traded in the U.S. on registered exchanges. The Fund
may invest in the securities of ETFs in excess of the limits imposed
under the 1940 Act pursuant to exemptive orders obtained by other
ETFs and their sponsors from the Commission. In addition, the Fund
may invest in the securities of certain other investment companies
in excess of the limits imposed under the 1940 Act pursuant to an
exemptive order that the Trust has obtained from the Commission. See
Investment Company Act Release No. 30377 (February 5, 2013) (File
No. 812-13895). The ETFs in which the Fund may invest include Index
Fund Shares (as described in Nasdaq Rule 5705), Portfolio Depository
Receipts (as described in Nasdaq Rule 5705), and Managed Fund Shares
(as described in Nasdaq Rule 5735). While the Fund may invest in
inverse ETFs, the Fund will not invest in leveraged or inverse
leveraged (e.g., 2X or -3X) ETFs.
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    The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets (calculated at the time of investment),
including securities deemed illiquid by the Adviser.\22\ The Fund will
monitor its portfolio liquidity on an ongoing basis to determine
whether, in light of current circumstances, an adequate level of
liquidity is being maintained, and will consider taking appropriate
steps in order to maintain adequate liquidity if, through a change in
values, net assets, or other circumstances, more than 15% of the Fund's
net assets are held in illiquid assets. Illiquid assets include
securities subject to contractual or other restrictions on resale and
other instruments that lack readily available

markets as determined in accordance with Commission staff guidance.
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    \22\ In reaching liquidity decisions, the Adviser may consider
the following factors: the frequency of trades and quotes for the
security; the number of dealers wishing to purchase or sell the
security and the number of other potential purchasers; dealer
undertakings to make a market in the security; and the nature of the
security and the nature of the marketplace in which it trades (e.g.,
the time needed to dispose of the security, the method of soliciting
offers and the mechanics of transfer).
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    The Fund may not invest 25% or more of the value of its total
assets in securities of issuers in any one industry. This restriction
does not apply to obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities, or securities of other
investment companies.\23\
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    \23\ See Form N-1A, Item 9. The Commission has taken the
position that a fund is concentrated if it invests more than 25% of
the value of its total assets in any one industry. See, e.g.,
Investment Company Act Release No. 9011 (October 30, 1975), 40 FR
54241 (November 21, 1975).
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    The Fund intends to qualify each year as a regulated investment
company (``RIC'') under Subchapter M of the Internal Revenue Code of
1986, as amended.
Creation and Redemption of Shares
    The Fund will issue and redeem Shares on a continuous basis at net
asset value (``NAV'') \24\ only in large blocks of Shares (``Creation
Units'') in transactions with authorized participants, generally
including broker-dealers and large institutional investors
(``Authorized Participants''). Creation Units generally will consist of
50,000 Shares, although this may change from time to time. Creation
Units, however, are not expected to consist of less than 50,000 Shares.
As described in the Registration Statement and consistent with the
Exemptive Relief, the Fund will issue and redeem Creation Units in
exchange for an in-kind portfolio of instruments and/or cash in lieu of
such instruments (the ``Creation Basket''). In addition, if there is a
difference between the NAV attributable to a Creation Unit and the
market value of the Creation Basket exchanged for the Creation Unit,
the party conveying instruments with the lower value will pay to the
other an amount in cash equal to the difference (referred to as the
``Cash Component'').
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    \24\ The NAV of the Fund's Shares generally will be calculated
once daily Monday through Friday as of the close of regular trading
on the New York Stock Exchange, generally 4:00 p.m., Eastern time
(the ``NAV Calculation Time''). NAV per Share will be calculated by
dividing the Fund's net assets by the number of Fund Shares
outstanding. For more information regarding the valuation of Fund
investments in calculating the Fund's NAV, see the Registration
Statement.
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    Creations and redemptions must be made by an Authorized Participant
or through a firm that is either a member of the National Securities
Clearing Corporation (``NSCC'') or a Depository Trust Company
participant, that, in each case, must have executed an agreement that
has been agreed to by the Distributor and BNY with respect to creations
and redemptions of Creation Units. All standard orders to create
Creation Units must be received by the transfer agent no later than the
closing time of the regular trading session on the New York Stock
Exchange (ordinarily 4:00 p.m., Eastern time) (the ``Closing Time'') in
each case on the date such order is placed in order for the creation of
Creation Units to be effected based on the NAV of Shares as next
determined on such date after receipt of the order in proper form.
Shares may be redeemed only in Creation Units at their NAV next
determined after receipt not later than the Closing Time of a
redemption request in proper form by the Fund through the transfer
agent and only on a business day.
    The Fund's custodian, through the NSCC, will make available on each
business day, prior to the opening of business of the Exchange, the
list of the names and quantities of the instruments comprising the
Creation Basket, as well as the estimated Cash Component (if any), for
that day. The published Creation Basket will apply until a new Creation
Basket is announced on the following business day.
Net Asset Value
    The Fund's NAV will be determined as of the close of trading
(normally 4:00 p.m., Eastern time) on each day the New York Stock
Exchange is open for business. NAV will be calculated for the Fund by
taking the market price of the Fund's total assets, including interest
or dividends accrued but not yet collected, less all liabilities, and
dividing such amount by the total number of Shares outstanding. The
result, rounded to the nearest cent, will be the NAV per Share. All
valuations will be subject to review by the Trust Board or its
delegate.
    The Fund's investments will be valued daily at market value or, in
the absence of market value with respect to any investment, at fair
value, in each case in accordance with valuation procedures (which may
be revised from time to time) adopted by the Trust Board (the
``Valuation Procedures'') and in accordance with the 1940 Act. A market
valuation generally means a valuation (i) obtained from an exchange, an
independent pricing service (``Pricing Service''), or a major market
maker (or dealer) or (ii) based on a price quotation or other
equivalent indication of value supplied by an exchange, a Pricing
Service, or a major market maker (or dealer). The information
summarized below is based on the Valuation Procedures as currently in
effect; however, as noted above, the Valuation Procedures are amended
from time to time and, therefore, such information is subject to
change.
    Mortgage-Related Investments will generally be valued by using a
Pricing Service. If a Pricing Service does not cover a particular
Mortgage-Related Investment, or discontinues covering a Mortgage-
Related Investment, the security will be priced using a broker quote.
To derive values, Pricing Services and broker-dealers may use matrix
pricing and valuation models, as well as recent market transactions for
the same or similar assets. Occasionally, the Adviser's pricing
committee (the ``Pricing Committee'') may determine that a Pricing
Service price does not represent an accurate value of a Mortgage-
Related Investment, based on the broker quote it receives, a recent
trade in the security by the Fund, information from a portfolio
manager, or other market information. In the event that the Pricing
Committee determines that the Pricing Service price is unreliable or
inaccurate based on such other information, the broker quote may be
used. Additionally, if the Pricing Committee determines that the price
of a Mortgage-Related Investment obtained from a Pricing Service and
the available broker quote is unreliable or inaccurate due to market
conditions or other reasons, or if a Pricing Service price or broker
quote is unavailable, the security will be valued using fair value
pricing, as described below.
    Certain securities in which the Fund may invest will not be listed
on any securities exchange or board of trade. Such securities will
typically be bought and sold by institutional investors in individually
negotiated private transactions that function in many respects like an
over-the-counter secondary market, although typically no formal market
makers will exist. Certain securities, particularly debt securities,
will have few or no trades, or trade infrequently, and information
regarding a specific security may not be widely available or may be
incomplete. Accordingly, determinations of the fair value of debt
securities may be based on infrequent and dated information. Because
there is less reliable, objective data available, elements of judgment
may play a greater role in valuation of debt securities than for other
types of securities. Typically, debt securities (other than those
described below) will be valued using information provided by a Pricing
Service. Debt securities having a remaining maturity of 60 days or less
when purchased will be valued at cost adjusted for amortization of
premiums and accretion of discounts. Overnight repurchase agreements
will be valued at cost and term repurchase agreements (i.e., those
whose maturity

exceeds seven days) will be valued at the average of the bid quotations
obtained daily from at least two recognized dealers.
    Equity securities listed on any exchange other than the Exchange
will be valued at the last sale price on the business day as of which
such value is being determined. Equity securities listed on the
Exchange will be valued at the official closing price on the business
day as of which such value is being determined. If there has been no
sale on such day, or no official closing price in the case of
securities traded on the Exchange, the securities will be valued using
fair value pricing, as described below. Equity securities traded on
more than one securities exchange will be valued at the last sale price
or official closing price, as applicable, on the business day as of
which such value is being determined at the close of the exchange
representing the principal market for such securities.
    Registered open-end management investment companies (other than
ETFs) will be valued at their net asset values as reported by such
registered open-end management investment companies to Pricing
Services.
    Exchange-traded options and futures contracts will be valued at the
closing price in the market where such contracts are principally
traded.
    Certain securities may not be able to be priced by pre-established
pricing methods. Such securities may be valued by the Trust Board or
its delegate at fair value. The use of fair value pricing by the Fund
will be governed by the Valuation Procedures and conducted in
accordance with the provisions of the 1940 Act. Valuing the Fund's
securities using fair value pricing will result in using prices for
those securities that may differ from current market valuations or
official closing prices on the applicable exchange.
Availability of Information
    The Fund's Web site (www.ftportfolios.com), which will be publicly
available prior to the public offering of Shares, will include a form
of the prospectus for the Fund that may be downloaded. The Web site
will include the Shares' ticker, Cusip and exchange information along
with additional quantitative information updated on a daily basis,
including, for the Fund: (1) daily trading volume, the prior business
day's reported NAV and closing price, mid-point of the bid/ask spread
at the time of calculation of such NAV (the ``Bid/Ask Price''),\25\ and
a calculation of the premium and discount of the Bid/Ask Price against
the NAV; and (2) data in chart format displaying the frequency
distribution of discounts and premiums of the daily Bid/Ask Price
against the NAV, within appropriate ranges, for each of the four
previous calendar quarters. On each business day, before commencement
of trading in Shares in the Regular Market Session \26\ on the
Exchange, the Fund will disclose on its Web site the identities and
quantities of the portfolio of securities and other assets (the
``Disclosed Portfolio'' as defined in Nasdaq Rule 5735(c)(2)) held by
the Fund that will form the basis for the Fund's calculation of NAV at
the end of the business day.\27\
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    \25\ The Bid/Ask Price of the Fund will be determined using the
mid-point of the highest bid and the lowest offer on the Exchange as
of the time of calculation of the Fund's NAV. The records relating
to Bid/Ask Prices will be retained by the Fund and its service
providers.
    \26\ See Nasdaq Rule 4120(b)(4) (describing the three trading
sessions on the Exchange: (1) Pre-Market Session from 4 a.m. to 9:30
a.m., Eastern time; (2) Regular Market Session from 9:30 a.m. to 4
p.m. or 4:15 p.m., Eastern time; and (3) Post-Market Session from 4
p.m. or 4:15 p.m. to 8 p.m., Eastern time).
    \27\ Under accounting procedures to be followed by the Fund,
trades made on the prior business day (``T'') will be booked and
reflected in NAV on the current business day (``T+1''). Accordingly,
the Fund will be able to disclose at the beginning of the business
day the portfolio that will form the basis for the NAV calculation
at the end of the business day.
---------------------------------------------------------------------------

    The Fund's disclosure of derivative positions in the Disclosed
Portfolio will include information that market participants can use to
value these positions intraday. On a daily basis, the Fund will
disclose on the Fund's Web site the following information regarding
each portfolio holding, as applicable to the type of holding: ticker
symbol, CUSIP number or other identifier, if any; a description of the
holding (including the type of holding); the identity of the security
or other asset or instrument underlying the holding, if any; for
options, the option strike price; quantity held (as measured by, for
example, par value, notional value or number of shares, contracts or
units); maturity date, if any; coupon rate, if any; effective date, if
any; market value of the holding; and the percentage weighting of the
holding in the Fund's portfolio.
    In addition, for the Fund, an estimated value, defined in Rule
5735(c)(3) as the ``Intraday Indicative Value,'' that reflects an
estimated intraday value of the Fund's Disclosed Portfolio, will be
disseminated. Moreover, the Intraday Indicative Value, available on the
NASDAQ OMX Information LLC proprietary index data service,\28\ will be
based upon the current value for the components of the Disclosed
Portfolio and will be updated and widely disseminated by one or more
major market data vendors and broadly displayed at least every 15
seconds during the Regular Market Session. The Intraday Indicative
Value will be based on quotes and closing prices from the securities'
local market and may not reflect events that occur subsequent to the
local market's close. Premiums and discounts between the Intraday
Indicative Value and the market price may occur. This should not be
viewed as a ``real time'' update of the NAV per Share of the Fund,
which is calculated only once a day.
---------------------------------------------------------------------------

    \28\ Currently, the NASDAQ OMX Global Index Data Service
(``GIDS'') is the NASDAQ OMX global index data feed service,
offering real-time updates, daily summary messages, and access to
widely followed indexes and Intraday Indicative Values for ETFs.
GIDS provides investment professionals with the daily information
needed to track or trade NASDAQ OMX indexes, listed ETFs, or third-
party partner indexes and ETFs.
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    The dissemination of the Intraday Indicative Value, together with
the Disclosed Portfolio, will allow investors to determine the value of
the underlying portfolio of the Fund on a daily basis and will provide
a close estimate of that value throughout the trading day.
    Investors will also be able to obtain the Fund's Statement of
Additional Information (``SAI''), the Fund's annual and semi-annual
reports (together, ``Shareholder Reports''), and its Form N-CSR and
Form N-SAR, filed twice a year. The Fund's SAI and Shareholder Reports
will be available free upon request from the Fund, and those documents
and the Form N-CSR and Form N-SAR may be viewed on-screen or downloaded
from the Commission's Web site at www.sec.gov. Information regarding
market price and trading volume of the Shares will be continually
available on a real-time basis throughout the day on brokers' computer
screens and other electronic services. Information regarding the
previous day's closing price and trading volume information for the
Shares will be published daily in the financial section of newspapers.
Quotation and last sale information for the Shares will be available
via Nasdaq proprietary quote and trade services, as well as in
accordance with the Unlisted Trading Privileges and the Consolidated
Tape Association (``CTA'') plans for the Shares. Intraday executable
price information for fixed income securities, exchange-traded equity
securities and derivatives held by the Fund will be available from
major broker-dealer firms and major market data vendors.

Additionally, FINRA's TRACE will be a source of price information for
the Mortgage-Related Investments held by the Fund. For exchange-traded
assets, intraday price information will be available directly from the
applicable listing exchanges. Intraday price information will also
generally be available through subscription services which can be
accessed by Authorized Participants and other investors. Registered
open-end management investment companies (other than ETFs) are
generally priced once each business day and such prices are available
through the applicable fund's Web site or major market data vendors.
    Additional information regarding the Fund and the Shares, including
investment strategies, risks, creation and redemption procedures, fees,
Fund holdings disclosure policies, distributions and taxes will be
included in the Registration Statement. All terms relating to the Fund
that are referred to, but not defined in, this proposed rule change
will be defined in the Registration Statement.
Initial and Continued Listing
    The Shares will be subject to Rule 5735, which sets forth the
initial and continued listing criteria applicable to Managed Fund
Shares. The Exchange represents that, for initial and/or continued
listing, the Fund must be in compliance with Rule 10A-3\29\ under the
Act. A minimum of 100,000 Shares will be outstanding at the
commencement of trading on the Exchange. The Exchange will obtain a
representation from the issuer of the Shares that the NAV per Share
will be calculated daily and that the NAV and the Disclosed Portfolio
will be made available to all market participants at the same time.
---------------------------------------------------------------------------

    \29\ See 17 CFR 240.10A-3.
---------------------------------------------------------------------------

Trading Halts
    With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares of the Fund. Nasdaq will halt trading in the
Shares under the conditions specified in Nasdaq Rules 4120 and 4121,
including the trading pauses under Nasdaq Rules 4120(a)(11) and (12).
Trading may be halted because of market conditions or for reasons that,
in the view of the Exchange, make trading in the Shares inadvisable.
These may include: (1) the extent to which trading is not occurring in
the securities and/or the other assets constituting the Disclosed
Portfolio of the Fund; or (2) whether other unusual conditions or
circumstances detrimental to the maintenance of a fair and orderly
market are present. Trading in the Shares also will be subject to Rule
5735(d)(2)(D), which sets forth circumstances under which Shares of the
Fund may be halted.
Trading Rules
    Nasdaq deems the Shares to be equity securities, thus rendering
trading in the Shares subject to Nasdaq's existing rules governing the
trading of equity securities. Nasdaq will allow trading in the Shares
from 4:00 a.m. until 8:00 p.m., Eastern time. The Exchange has
appropriate rules to facilitate transactions in the Shares during all
trading sessions. As provided in Nasdaq Rule 5735(b)(3), the minimum
price variation for quoting and entry of orders in Managed Fund Shares
traded on the Exchange is $0.01.
Surveillance
    The Exchange represents that trading in the Shares will be subject
to the existing trading surveillances, administered by both Nasdaq and
also FINRA on behalf of the Exchange, which are designed to detect
violations of Exchange rules and applicable federal securities
laws.\30\ The Exchange represents that these procedures are adequate to
properly monitor Exchange trading of the Shares in all trading sessions
and to deter and detect violations of Exchange rules and applicable
federal securities laws.
---------------------------------------------------------------------------

    \30\ FINRA surveils trading on the Exchange pursuant to a
regulatory services agreement. The Exchange is responsible for
FINRA's performance under this regulatory services agreement.
---------------------------------------------------------------------------

    The surveillances referred to above generally focus on detecting
securities trading outside their normal patterns, which could be
indicative of manipulative or other violative activity. When such
situations are detected, surveillance analysis follows and
investigations are opened, where appropriate, to review the behavior of
all relevant parties for all relevant trading violations.
    FINRA, on behalf of the Exchange, will communicate as needed
regarding trading in the Shares and the other exchange-traded assets
with other markets and other entities that are members of ISG,\31\ and
FINRA may obtain trading information regarding trading in the Shares
and the other exchange-traded assets from such markets and other
entities. In addition, the Exchange may obtain information regarding
trading in the Shares and the other exchange-traded assets from markets
and other entities that are members of ISG, which includes securities
and futures exchanges, or with which the Exchange has in place a
comprehensive surveillance sharing agreement. Moreover, FINRA, on
behalf of the Exchange, will be able to access, as needed, trade
information for certain fixed income securities held by the Fund
reported to FINRA's TRACE.
---------------------------------------------------------------------------

    \31\ For a list of the current members of ISG, see
www.isgportal.org. The Exchange notes that not all components of the
Disclosed Portfolio may trade on markets that are members of ISG or
with which the Exchange has in place a comprehensive surveillance
sharing agreement.
---------------------------------------------------------------------------

    At least 90% of the Fund's net assets that are invested in
exchange-traded equity securities and exchange-traded derivatives (in
the aggregate) will be invested in investments that trade in markets
that are members of ISG or are parties to a comprehensive surveillance
sharing agreement with the Exchange.
    In addition, the Exchange also has a general policy prohibiting the
distribution of material, non-public information by its employees.
Information Circular
    Prior to the commencement of trading, the Exchange will inform its
members in an Information Circular of the special characteristics and
risks associated with trading the Shares. Specifically, the Information
Circular will discuss the following: (1) the procedures for purchases
and redemptions of Shares in Creation Units (and that Shares are not
individually redeemable); (2) Nasdaq Rule 2111A, which imposes
suitability obligations on Nasdaq members with respect to recommending
transactions in the Shares to customers; (3) how information regarding
the Intraday Indicative Value is disseminated; (4) the risks involved
in trading the Shares during the Pre-Market and Post-Market Sessions
when an updated Intraday Indicative Value will not be calculated or
publicly disseminated; (5) the requirement that members deliver a
prospectus to investors purchasing newly issued Shares prior to or
concurrently with the confirmation of a transaction; and (6) trading
information. The Information Circular will also discuss any exemptive,
no-action and interpretive relief granted by the Commission from any
rules under the Act.
    Additionally, the Information Circular will reference that the Fund
is subject to various fees and expenses described in the Registration
Statement. The Information Circular will also disclose the trading
hours of the Shares of the Fund and the applicable NAV Calculation Time
for the Shares. The Information Circular will disclose that information
about the Shares of the

Fund will be publicly available on the Fund's Web site.
2. Statutory Basis
    Nasdaq believes that the proposal is consistent with Section 6(b)
of the Act in general and Section 6(b)(5) of the Act in particular in
that it is designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, and to remove impediments to and perfect
the mechanism of a free and open market and, in general, to protect
investors and the public interest.
    The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices in that the
Shares will be listed and traded on the Exchange pursuant to the
initial and continued listing criteria in Nasdaq Rule 5735. The
Exchange represents that trading in the Shares will be subject to the
existing trading surveillances, administered by both Nasdaq and also
FINRA on behalf of the Exchange, which are designed to detect
violations of Exchange rules and applicable federal securities laws.
    The Adviser is not a broker-dealer, but it is affiliated with the
Distributor, a broker-dealer, and is required to implement a ``fire
wall'' with respect to such broker-dealer affiliate regarding access to
information concerning the composition and/or changes to the Fund's
portfolio. In addition, paragraph (g) of Nasdaq Rule 5735 further
requires that personnel who make decisions on the open-end fund's
portfolio composition must be subject to procedures designed to prevent
the use and dissemination of material non-public information regarding
the open-end fund's portfolio.
    FINRA, on behalf of the Exchange, will communicate as needed
regarding trading in the Shares and other exchange-traded assets with
other markets and other entities that are members of ISG, and FINRA may
obtain trading information regarding trading in the Shares and other
exchange-traded assets from such markets and other entities. In
addition, the Exchange may obtain information regarding trading in the
Shares and other exchange-traded assets from markets and other entities
that are members of ISG, which includes securities and futures
exchanges, or with which the Exchange has in place a comprehensive
surveillance sharing agreement. Moreover, FINRA, on behalf of the
Exchange, will be able to access, as needed, trade information for
certain fixed income securities held by the Fund reported to FINRA's
TRACE. At least 90% of the Fund's net assets that are invested in
exchange-traded equity securities and exchange-traded derivatives (in
the aggregate) will be invested in investments that trade in markets
that are members of ISG or are parties to a comprehensive surveillance
sharing agreement with the Exchange.
    The primary investment objective of the Fund will be to generate
current income and its secondary objective will be capital
appreciation. Under normal market conditions, the Fund will seek to
achieve its investment objectives by investing at least 80% of its net
assets (including investment borrowings) in Mortgage-Related
Investments. The Fund will limit its investments in Mortgage-Related
Investments that are not issued or guaranteed by Government Entities to
20% of its net assets. Additionally, although the Fund intends to
invest primarily in investment grade securities, the Fund may invest up
to 20% of its net assets in securities of any credit quality, including
securities that are below investment grade and securities that are
unrated and have not been judged by the Adviser to be of comparable
quality to rated investment grade securities. The Fund may invest in
derivative instruments (consisting of exchange-listed options on U.S.
Treasury securities, exchange-listed options on U.S. Treasury futures
contracts and exchange-listed U.S. Treasury futures contracts). Under
normal market conditions, no more than 20% of the value of the Fund's
net assets will be invested in derivative instruments. The Fund's
investments in derivative instruments will be consistent with the
Fund's investment objectives and the 1940 Act and will not be used to
seek to achieve a multiple or inverse multiple of an index. Also, the
Fund may hold up to an aggregate amount of 15% of its net assets in
illiquid assets (calculated at the time of investment), including
securities deemed illiquid by the Adviser. The Fund will monitor its
portfolio liquidity on an ongoing basis to determine whether, in light
of current circumstances, an adequate level of liquidity is being
maintained, and will consider taking appropriate steps in order to
maintain adequate liquidity if, through a change in values, net assets,
or other circumstances, more than 15% of the Fund's net assets are held
in illiquid assets. Illiquid assets include securities subject to
contractual or other restrictions on resale and other instruments that
lack readily available markets as determined in accordance with
Commission staff guidance.
    The proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
that the Exchange will obtain a representation from the issuer of the
Shares that the NAV per Share will be calculated daily and that the NAV
and the Disclosed Portfolio will be made available to all market
participants at the same time. In addition, a large amount of
information will be publicly available regarding the Fund and the
Shares, thereby promoting market transparency. Moreover, the Intraday
Indicative Value, available on the NASDAQ OMX Information LLC
proprietary index data service, will be widely disseminated by one or
more major market data vendors and broadly displayed at least every 15
seconds during the Regular Market Session. On each business day, before
commencement of trading in Shares in the Regular Market Session on the
Exchange, the Fund will disclose on its Web site the Disclosed
Portfolio that will form the basis for the Fund's calculation of NAV at
the end of the business day. Information regarding market price and
trading volume of the Shares will be continually available on a real-
time basis throughout the day on brokers' computer screens and other
electronic services, and quotation and last sale information for the
Shares will be available via Nasdaq proprietary quote and trade
services, as well as in accordance with the Unlisted Trading Privileges
and the CTA plans for the Shares. Intraday executable price information
for fixed income securities, exchange-traded equity securities and
derivatives held by the Fund will be available from major broker-dealer
firms and major market data vendors. Additionally, FINRA's TRACE will
be a source of price information for the Mortgage-Related Investments
held by the Fund. For exchange-traded assets, intraday price
information will be available directly from the applicable listing
exchanges. Intraday price information will also generally be available
through subscription services which can be accessed by Authorized
Participants and other investors.
    The Fund's Web site will include a form of the prospectus for the
Fund and additional data relating to NAV and other applicable
quantitative information. Trading in Shares of the Fund will be halted
under the conditions specified in Nasdaq Rules 4120 and 4121 or because
of market conditions or for reasons that, in the view of the Exchange,
make trading in the Shares inadvisable, and trading in the Shares will
be subject to Nasdaq

Rule 5735(d)(2)(D), which sets forth circumstances under which Shares
of the Fund may be halted. In addition, as noted above, investors will
have ready access to information regarding the Fund's holdings, the
Intraday Indicative Value, the Disclosed Portfolio, and quotation and
last sale information for the Shares.
    The Fund's investments will be valued daily at market value or, in
the absence of market value with respect to any investment, at fair
value, in each case in accordance with the Valuation Procedures and the
1940 Act.
    The proposed rule change is designed to perfect the mechanism of a
free and open market and, in general, to protect investors and the
public interest in that it will facilitate the listing and trading of
an additional type of actively-managed exchange-traded product that
will enhance competition among market participants, to the benefit of
investors and the marketplace. As noted above, FINRA, on behalf of the
Exchange, will communicate as needed regarding trading in the Shares
and other exchange-traded assets with other markets and other entities
that are members of ISG and FINRA may obtain trading information
regarding trading in the Shares and other exchange-traded assets from
such markets and other entities. In addition, the Exchange may obtain
information regarding trading in the Shares and other exchange-traded
assets from markets and other entities that are members of ISG, which
includes securities and futures exchanges, or with which the Exchange
has in place a comprehensive surveillance sharing agreement.
Furthermore, as noted above, investors will have ready access to
information regarding the Fund's holdings, the Intraday Indicative
Value, the Disclosed Portfolio, and quotation and last sale information
for the Shares.
    For the above reasons, Nasdaq believes the proposed rule change is
consistent with the requirements of Section 6(b)(5) of the Act.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange believes that
the proposed rule change will facilitate the listing and trading of an
additional type of actively-managed exchange-traded fund that will
enhance competition among market participants, to the benefit of
investors and the marketplace.

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

    Written comments were neither solicited nor received.

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

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

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2014-057 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2014-057. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site http://www.sec.gov/rules/sro.shtml.
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for Web site viewing and printing in
the Commission's Public Reference Room, 100 F Street NE., Washington,
DC 20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-NASDAQ-2014-057 and should
be submitted on or before June 26, 2014.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\32\
---------------------------------------------------------------------------

    \32\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-13019 Filed 6-4-14; 8:45 am]
BILLING CODE 8001-01-P


[Federal Register: August 18, 2009 (Volume 74, Number 158)]
[Notices]
[Page 41711]
[DOCID:fr18au09-56]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2008-N-0657]

Agency Information Collection Activities; Announcement of Office
of Management and Budget Approval; Recommendations for Early Food
Safety Evaluation of New Non-Pesticidal Proteins Produced by New Plant
Varieties Intended for Food Use

AGENCY:  Food and Drug Administration, HHS.

ACTION:  Notice.

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

SUMMARY:  The Food and Drug Administration (FDA) is announcing that a
collection of information entitled ``Recommendations for Early Food
Safety Evaluation of New Non-Pesticidal Proteins Produced by New Plant
Varieties Intended for Food Use'' has been approved by the Office of
Management and Budget (OMB) under the Paperwork Reduction Act of 1995.

FOR FURTHER INFORMATION CONTACT: Daniel Gittleson, Office of
Information Management (HFA-710), Food and Drug Administration, 5600
Fishers Lane, Rockville, MD 20857<EMAIL_ADDRESS>301-
796-5156.

SUPPLEMENTARY INFORMATION: In the Federal Register of April 17, 2009
(74 FR 17868), the agency announced that the proposed information
collection had been submitted to OMB for review and clearance under 44
U.S.C. 3507. 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 OMB control number. OMB has now approved the
information collection and has assigned OMB control number 0910-0583.
The approval expires on July 31, 2012. A copy of the supporting
statement for this information collection is available on the Internet
at http://www.reginfo.gov/public/do/PRAMain.

    Dated: August 11, 2009.
Jeffrey Shuren,
Associate Commissioner for Policy and Planning.
[FR Doc. E9-19784 Filed 8-17-09; 8:45 am]

BILLING CODE 4160-01-S


[Federal Register Volume 81, Number 128 (Tuesday, July 5, 2016)]
[Notices]
[Page 43602]
[FR Doc No: 2016-15855]

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ENVIRONMENTAL PROTECTION AGENCY

[Docket ID No. EPA-HQ-ORD-2016-0374; FRL-9948-71-ORD]

Evaluating Urban Resilience to Climate Change: A Multi-Sector
Approach; Correction

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice; correction.

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SUMMARY: The Environmental Protection Agency (EPA) published a document
in the Federal Register of June 21, 2016, announcing a 30-day public
comment period for the draft document titled ``Evaluating Urban
Resilience to Climate Change: A Multi-Sector Approach'' (EPA/600/R-15/
312). The document contained an incorrect docket number.

FOR FURTHER INFORMATION CONTACT: For technical information, contact
Susan Julius, NCEA; telephone:<PHONE_NUMBER>; facsimile:<PHONE_NUMBER>;
or email<EMAIL_ADDRESS>
Correction

    In the Federal Register of June 21, 2016, in FR Doc. 2016-14666, on
page 40302, in the document heading and on page 40303, in the first
column, in the first paragraph of section II. and in the same column,
in the ``Instructions:'' paragraph, the docket number is corrected to
read: EPA-HQ-ORD-2016-0374.

    Dated: June 24, 2016.
Mary A. Ross,
Deputy Director, National Center for Environmental Assessment.
[FR Doc. 2016-15855 Filed 7-1-16; 8:45 am]
 BILLING CODE 6560-50-P


[Federal Register: November 20, 2006 (Volume 71, Number 223)]
[Notices]
[Page 67183]
[DOCID:fr20no06-102]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54715A; File No. SR-NASD-2006-108]

Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Order Approving a Proposed Rule Change and Notice of
Filing and Order Granting Accelerated Approval of Amendment No. 1 to a
Proposed Rule Change Relating to an NASD Trade Reporting Facility
Established in Conjunction With the National Stock Exchange, Inc.;
Corrrection

November 14, 2006.
    In FR Doc. No. E6-19167, beginning on page 66354 for Tuesday,
November 14, 2006, the last sentence in part IV on page 66359 contained
an error. The sentence refers incorrectly to Section 6(b)(5) of the Act
rather than Section 15A(b)(6) of the Act. Accordingly, the sentence
should be revised to read as follows:
    ``Accordingly, the Commission finds that it is consistent with
Sections 15A(b)(6) and 19(b) of the Act to approve Amendment No. 1 on
an accelerated basis.''

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\1\
---------------------------------------------------------------------------

    \1\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-19537 Filed 11-17-06; 8:45 am]

BILLING CODE 8011-01-P


PAPERWORK REDUCTION ACT SUBMISSION Please read the instructions before completing this form. For additional forms or assistance in completing this form, contact your agency's Paperwork Clearance Officer. Send two copies of this form, the collection instrument to be reviewed, the Supporting Statement and any additional documentation to: Office of Information and Regulatory Affairs, Office of Management and Budget, Docket Library, Room 10102, 725 17th Street NW Washington, DC 20503.

1. Agency/ Subagency originating request U. S. Environmental Protection Agency Office of Solid Waste and Emergency Response 2. OMB control number b. G None a 2050 0053 3. Type of information collection ( check one) a. G New collection b. X Revision of a currently approved collection c. G Extension of a currently approved collection d. G Reinstatement, without change, of a previously approved collection for which approval has expired e. G Reinstatement, with change, of a previously approved collection for which approval has expired f. G Existing collection in use without an OMB control number 4. Type of review requested ( check one) a. X Regular b. G Emergency  Approval requested by: / / c. G Delegated 5. Small entities Will this information collection have a significant economic impact on a substantial number of small entities? G Yes X No For b f, note item A2 of Supporting Statement Instructions 6. Requested expiration date a. G Three years from approval date b. X Other Specify: 1/ 31/ 2008 7. Title: Identification Listing and Rulemaking Petitions ( Final Rule for Hazardous Waste Listing for Organic Dyes and/ or Pigments Production Wastes)

8. Agency form number( s) ( If applicable) : EPA ICR 1189.15 9. Keywords Environmental Protection, Hazardous Waste, Waste Treatment and Disposal 10. The Environmental Protection Agency ( EPA) is proposing to list nonwastewaters from the production of certain dyes, pigments, and FD& C colorants as hazardous wastes under the Resource Conservation and Recovery Act ( RCRA). EPA is proposing a mass loading based approach for these wastes. Under this approach, these wastes are hazardous if they contain any of the constituents of concern at annual mass loading levels that meet or exceed regulatory levels. If generators determine that their wastes are below regulatory levels for all constituents of concern, then their wastes are nonhazardous. If their wastes meet or exceed the regulatory levels for any of eight specific constituents of concern, the wastes must be managed as listed hazardous wastes. However, even if the wastes meet or exceed the regulatory levels, the wastes would not be hazardous if certain conditions are met.

11. Affected public ( Mark primary with " P" and all others that apply with " X") a. Individuals or households d. Farms b. P Business or other for profit e. Federal Government c. Not for profit institutions f. State, Local or Tribal Government 12. Obligation to respond ( Mark primary with " P" and all others that apply with " X") a. G Voluntary b. G Required to obtain or retain benefits c. P Mandatory 13. Annual reporting and recordkeeping hour burden a. Number of respondents 186 b. Total annual responses 186 1. Percentage of these responses collected electronically 0 % c. Total annual hours requested 22,074 d. Current OMB inventory 21,511 e. Difference____________ 563 f. Explanation of difference 1. Program Change 563 2. Adjustment 0 14. Annual reporting and recordkeeping cost burden ( in thousands of dollars) a. Total annualized capital/ startup costs $ 0 b. Total annual costs ( O& M) $ 980 c. Total annualized cost requested _______$ 980______ d. Current OMB inventory $ 895 e. Difference $ 85 f. Explanation of difference 1. Program change $ 85 2. Adjustment 0 15. Purpose of information collection ( Mark Primary With " P" and all others that apply with " X") a. __ Application for benefits e. __ Program planning or management b. __ Program evaluation f. ___ Research c. __ General purpose statistics g. _ P_ Regulatory or compliance d. __ Audit 16. Frequency of recordkeeping or reporting ( check all that apply) a. X Recordkeeping b. Q Third party disclosure c. X Reporting 1. X On occasion 2. Q Weekly 3. Q Monthly 4. Q Quarterly 5. Q Semi annually 6. Q Annually 7. Q Biennually 8. Q Other ( describe) 17. Statistical methods Does this information collection employ statistical methods?

Q Yes X No 18. Agency contact ( person who can best answer questions regarding the content of this submission) Name: Chichang Chen Phone: 703 308 0441 OMB 83 I 19. Certification for Paperwork Reduction Act Submissions On behalf of this Federal agency, 1 certify that the collection of information encompassed by this request complies with' 5 CFR 1320.9.

NOTE: The text of 5 CFR 1320.9, and the related provisions of 5 CFR 1320.8( b)( 3), appear at the end of the instructions. The certification is to be made with reference to those regulatory provisions as set forth in the instructions.

The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:

( a) It is necessary for the proper performance of agency functions;

( b) It avoids unnecessary duplication;

( c) It reduces burden on small entities;

( d) It uses plain, coherent, and unambiguous terminology that is understandable to respondents;

( e) Its implementation will be consistent and compatible with current reporting and recordkeeping practices;

( f) It indicates the retention periods for recordkeeping requirements;

( g) It informs respondents of the information called for under 5 CFR 1320.8( b)( 3): ( i) Why the information is being collected; ( ii) Use of information; ( iii) Burden estimate; ( iv) Nature of response ( voluntary, required for a benefit, or mandatory); ( v) Nature and extent of confidentiality; and ( vi) Need to display currently valid OMB control number;

( h) It was developed by an office that has planned and allocated resources for the efficient and effective management and use of the information to be collected ( see note in Item 19 of the instructions);

( i) It uses effective and efficient statistical survey methodology; and ( j) It makes appropriate use of information technology.

If you are unable to certify compliance with any of these provisions, identify the item below and explain the reason in Item 18 of the Supporting Statement.

Signature of Program Office Official Robert Dellinger, Acting Director Hazardous Waste Identification Divion Date Signature of Senior Official or designee Oscar Morales, Director Collections Strategies Division Date OMB 83 I 10/ 95


[Federal Register Volume 86, Number 75 (Wednesday, April 21, 2021)]
[Notices]
[Pages 20776-20777]
[FR Doc No: 2021-08137]

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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-613, OMB Control No. 3235-0712]

Submission for OMB Review; Comment Request

Upon Written Request Copies Available From: Securities and Exchange

Commission, Office of FOIA Services, 100 F Street NE, Washington, DC
20549-2736

Extension:
    Credit Risk Retention--Regulation RR

    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.
    Credit Risk Retention (``Regulation RR'') (17 CFR 246.1 through
246.22) recordkeeping and disclosure requirements implement Section 15G
of the Securities Exchange Act of 1934 (15 U.S.C. 78o-11) Section 15G
clarifies the scope and application of Section 306(a) of the Sarbanes-
Oxley Act of 2002 (15 U.S.C. 7244(a)). Section 306(a) of the Sarbanes-
Oxley Act requires, among other things, an issuer to provide timely
notice to its directors and executive officers and to the Commission of
the imposition of a blackout period that would trigger a trading
prohibition under Section 306(a)(1) of the Sarbanes-Oxley Act. Section
306(a)(1) prohibits any director or executive officer of an issuer of
any equity security, from directly or indirectly, purchasing, selling
or otherwise acquiring or transferring any equity security of that
issuer during the blackout period with respect to such equity security,
if the director or executive officer acquired the equity security in
connection with his or her service or employment. Approximately 1,647
issuers file using Regulation RR responses and it takes approximately
14.389 hours per response. We estimate that 75% of the 14.389 hours per
response (10.792 hours) is prepared by the registrant for a total
annual reporting burden of 17,774 hours (10.792 hours per response x
1,647 responses).
    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.
    The public may view background documentation for this information
collection at the following website: www.reginfo.gov. Find this
particular information collection by selecting ``Currently under 30-day
Review--Open for Public Comments'' or by using the search function.
Written comments and recommendations for the proposed information
collection should be sent within 30 days of publication of this notice
to (i) www.reginfo.gov/public/do/PRAMain and (ii) David Bottom,
Director/Chief Information Officer, Securities and Exchange Commission,
c/o Cynthia Roscoe, 100 F Street NE, Washington, DC 20549, or by
sending an email to<EMAIL_ADDRESS>
    Dated: April 15, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-08137 Filed 4-20-21; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 86, Number 238 (Wednesday, December 15, 2021)]
[Rules and Regulations]
[Pages 71135-71138]
[FR Doc No: 2021-27033]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2021-0655; Project Identifier MCAI-2020-01497-E;
Amendment 39-21846; AD 2021-25-03]
RIN 2120-AA64

Airworthiness Directives; Rolls-Royce Deutschland Ltd & Co KG
(Type Certificate Previously Held by Rolls-Royce plc) Turbofan Engines

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: The FAA is adopting a new airworthiness directive (AD) for all
Rolls-Royce Deutschland Ltd. & Co KG (RRD) Trent 7000-72 and Trent
7000-72C model turbofan engines. This AD was prompted by the
manufacturer revising the engine Time Limits Manual (TLM) life limits
of certain critical rotating parts and updating certain

maintenance tasks. This AD requires the operator to revise the
airworthiness limitation section (ALS) of their existing approved
continuous airworthiness maintenance program (CAMP) by incorporating
the revised tasks of the applicable TLM for each affected model
turbofan engine, as specified in a European Union Aviation Safety
Agency (EASA) AD, which is incorporated by reference. The FAA is
issuing this AD to address the unsafe condition on these products.

DATES: This AD is effective January 19, 2022.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in this AD as of January 19,
2022.

ADDRESSES: For material incorporated by reference in this AD, contact
EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; phone: +49 221
8999 000; email: [email protected]; website: www.easa.europa.eu. You
may find this material on the EASA website at https://ad.easa.europa.eu. You may view this service information at the FAA,
Airworthiness Products Section, Operational Safety Branch, 1200
District Avenue, Burlington, MA 01803. For information on the
availability of this material at the FAA, call<PHONE_NUMBER>. It is
also available at https://www.regulations.gov by searching for and
locating Docket No. FAA-2021-0655. For material identified in this AD
that is not incorporated by reference, contact Rolls-Royce plc,
Corporate Communications, P.O. Box 31, Derby, DE24 8BJ, United Kingdom;
phone: +44 (0)1332 242424 fax: +44 (0)1332 249936; website: https://www.rolls-royce.com/contact-us.aspx.

Examining the AD Docket

    You may examine the AD docket at https://www.regulations.gov by
searching for and locating Docket No. FAA-2021-0655; or in person at
Docket Operations between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays. The AD docket contains this final rule, the
EASA AD, any comments received, and other information. The address for
Docket Operations is U.S. Department of Transportation, M-30, West
Building Ground Floor, Room W12 140, 1200 New Jersey Avenue SE,
Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Kevin M. Clark, Aviation Safety
Engineer, ECO Branch, FAA, 1200 District Avenue, Burlington, MA 01803;
phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
[email protected].

SUPPLEMENTARY INFORMATION:

Background

    EASA, which is the Technical Agent for the Member States of the
European Union, has issued EASA AD 2020-0244, dated November 5, 2020
(EASA AD 2020-0244) (also referred to as the Mandatory Continuing
Airworthiness Information, or the MCAI), to correct an unsafe condition
for all RRD Trent 7000-72 and Trent 7000-72C model turbofan engines.
    The FAA issued a notice of proposed rulemaking (NPRM) to amend 14
CFR part 39 by adding an AD that would apply to all RRD Trent 7000-72
and Trent 7000-72C model turbofan engines. The NPRM published in the
Federal Register on August 12, 2021 (86 FR 44316). The NPRM was
prompted by the manufacturer revising the engine TLM life limits of
certain critical rotating parts and updating certain maintenance tasks.
In the NPRM, the FAA proposed to require accomplishing the actions
specified in EASA AD 2020-0244, described previously, as incorporated
by reference, except for any differences identified as exceptions in
the regulatory text of this proposed AD and except as discussed under
``Differences Between this Proposed AD and the EASA AD.'' The FAA is
issuing this AD to address the unsafe condition on these products. See
the MCAI for additional background information.

Discussion of Final Airworthiness Directive

Comments

    The FAA received comments from three commenters. The commenters
were Air Line Pilots Association, International, The Boeing Company,
and Delta Air Lines, Inc. (DAL). The following presents the comments
received on the NPRM and the FAA's response to each comment.

Request To Add Exception to the Definition of AMP

    DAL requested that paragraph (h), Exceptions to EASA AD 2020-0244,
of the proposed rule, be updated to provide an exception to the
definition of the AMP for airplanes operated under FAA regulations. DAL
noted that the EASA AD's definition of an AMP is applicable to an
airplane operated under European Union regulations.
    The FAA agrees and has updated paragraph (h)(1) of this AD.

Request To Add Exception for High-Pressure Turbine (HPT) Blade
Inspection

    DAL requested that paragraph (h), Exceptions to EASA AD 2020-0244,
of this AD, be updated to provide an exception for the HPT blade visual
inspections in the TLM to make the FAA AD consistent with the most
recent publication of RR Trent 7000 TLM-T-T7000-1RR (the TLM) and with
EASA AD 2021-0169, dated July 19, 2021 (EASA AD 2021-1069). DAL
reasoned that EASA AD 2021-0169 incorporates a life limit of 1,000
flight cycles since new on the HPT blade and explicitly cancels the
inspection intervals defined in the TLM.
    The FAA disagrees with adding this exception to paragraph (h) of
this AD. The unsafe condition and corrective actions in EASA AD 2021-
0169 are beyond the scope of this AD. The FAA may consider future
rulemaking in response to EASA AD 2021-0169.

Support for the AD

    Air Line Pilots Association, International, and The Boeing Company
supported the AD without change.

Conclusion

    The FAA reviewed the relevant data, considered any comments
received, and determined that air safety requires adopting this AD as
proposed. Accordingly, the FAA is issuing this AD to address the unsafe
condition on these products. Except for minor editorial changes, and
any other changes described previously, this AD is adopted as proposed
in the NPRM. None of the changes will increase the economic burden on
any operator.

Related Service Information Under 1 CFR Part 51

    The FAA reviewed EASA AD 2020-0244. EASA AD 2020-0244 specifies
revising the approved AMP by incorporating the limitations, tasks, and
associated thresholds and intervals described in the TLM. This service
information is reasonably available because the interested parties have
access to it through their normal course of business or by the means
identified in ADDRESSES.

Other Related Service Information

    The FAA reviewed Chapter 05-10 of RR Trent 7000 TLM T-T7000-1RR,
dated July 10, 2020. RR Trent 7000 TLM T-T7000-1RR, Chapter 05-10,
identifies the reduced life limits of certain critical rotating parts.
    The FAA also reviewed Chapter 05-20 of RR Trent 7000 TLM T-T7000-
1RR, dated July 10, 2020. RR Trent 7000 TLM T-T7000-1RR, Chapter 05-20,
identifies the critical rotating part inspection thresholds and
intervals.

Costs of Compliance

    The FAA estimates that this AD affects 10 engines installed on
airplanes of U.S. registry.
    The FAA estimates the following costs to comply with this AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per      Cost on U.S.
                Action                         Labor cost           Parts cost        product        operators
----------------------------------------------------------------------------------------------------------------
Revise the ALS........................  1 work-hour x $85 per                 $0             $85            $850
                                         hour = $85.
----------------------------------------------------------------------------------------------------------------

Authority for This Rulemaking

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

Regulatory Findings

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

List of Subjects in 14 CFR Part 39

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

The Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

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

2021-25-03 Rolls-Royce Deutschland Ltd & Co KG (Type Certificate
previously held by Rolls-Royce plc): Amendment 39-21846; Docket No.
FAA-2021-0655; Project Identifier MCAI-2020-01497-E.

(a) Effective Date

    This airworthiness directive (AD) is effective January 19, 2022.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Rolls-Royce Deutschland Ltd. & Co KG (RRD)
(Type Certificate previously held by Rolls-Royce plc) Trent 7000-72
and Trent 7000-72C model turbofan engines.

(d) Subject

    Joint Aircraft Service Component (JASC) Code 7200, Engine
(Turbine/Turboprop).

(e) Unsafe Condition

    This AD was prompted by the manufacturer revising the engine
Time Limits Manual (TLM) life limits of certain critical rotating
parts and updating certain maintenance tasks. The FAA is issuing
this AD prevent the failure of critical rotating parts. The unsafe
condition, if not addressed, could result in failure of one or more
engines, loss of thrust control, and loss of the airplane.

(f) Compliance

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

(g) Required Actions

    Except as specified in paragraph (h) of this AD: Perform all
required actions within the compliance times specified in, and in
accordance with, European Union Aviation Safety Agency AD 2020-0244,
dated November 5, 2020 (EASA AD 2020-0244).

(h) Exceptions to EASA AD 2020-0244

    (1) EASA AD 2020-0244 defines the AMP as: ``The approved
Aircraft Maintenance Programme (AMP) on the basis of which the
operator or the owner ensures the continuing airworthiness of each
operated engine. For engines installed on aeroplanes operated under
EU regulations, compliance with the approved AMP is required by
Commission Regulation (EU) 1321/2014, Part M.A.301, paragraph 3.''
In lieu of that definition, this AD defines the AMP as the existing
approved Continuous Airworthiness Maintenance Program (CAMP) that is
the basis for which the operator or the owner ensures the continuous
airworthiness of each operated airplane.
    (2) The requirements specified in paragraphs (1) and (2) of EASA
AD 2020-0244 are not required by this AD.
    (3) Where EASA AD 2020-0244 requires compliance from its
effective date, this AD requires using the effective date of this
AD.
    (4) Paragraph (3) of EASA AD 2020-0244 specifies revising the
approved AMP within 12 months after its effective date, but this AD
requires revising the existing approved CAMP within 90 days after
the effective date of this AD.
    (5) This AD does not mandate compliance with the ``Remarks''
section of EASA AD 2020-0244.

(i) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, ECO Branch, FAA, has the authority to approve
AMOCs for this AD, if requested using the procedures found in 14 CFR
39.19. In accordance with 14 CFR 39.19, send your request to your
principal inspector or local Flight Standards District Office, as
appropriate. If sending information directly to the manager of the
ECO Branch, send it to the attention of the person identified in
paragraph (j)(1) of this AD. Information may be emailed to: [email protected].
    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.

(j) Related Information

    (1) For more information about this AD, contact Kevin M. Clark,
Aviation Safety Engineer, ECO Branch, FAA, 1200 District Avenue,
Burlington, MA 01803; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>;
email: [email protected].

    (2) For material identified in this AD that is not incorporated
by reference, contact Rolls-Royce plc, Corporate Communications,
P.O. Box 31, Derby, DE24 8BJ, United Kingdom; phone: +44 (0)1332
242424 fax: +44 (0)1332 249936; website: https://www.rolls-royce.com/contact-us.aspx.

(k) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless the AD specifies otherwise.
    (i) European Union Aviation Safety Agency (EASA) AD 2020-0244,
dated November 5, 2020.
    (ii) [Reserved]
    (3) For EASA AD 2020-0244, contact EASA, Konrad-Adenauer-Ufer 3,
50668 Cologne, Germany; phone: +49 221 8999 000; email:
[email protected]; website: www.easa.europa.eu. You may find this
EASA AD on the EASA website at https://ad.easa.europa.eu.
    (4) You may view this service information at FAA, Airworthiness
Products Section, Operational Safety Branch, 1200 District Avenue,
Burlington, MA 01803. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>.
    (5) You may view this material that is incorporated by reference
at the National Archives and Records Administration (NARA). For
information on the availability of this material at NARA, email
[email protected], or go to https://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued on November 24, 2021.
Lance T. Gant,
Director, Compliance & Airworthiness Division, Aircraft Certification
Service.
[FR Doc. 2021-27033 Filed 12-14-21; 8:45 am]
BILLING CODE 4910-13-P