80 FR 25341 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of Proposed Rule Change To Amend the Sixth Amended and Restated Operating Agreement of the Exchange
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 85 (May 4, 2015)
Federal Register Volume 80, Issue 85 (May 4, 2015)
| Page Range | 25341-25344 | |
| FR Document | 2015-10312 |
[Federal Register Volume 80, Number 85 (Monday, May 4, 2015)] [Notices] [Pages 25341-25344] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-10312] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-74825; File No. SR-NYSEMKT-2015-27] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of Proposed Rule Change To Amend the Sixth Amended and Restated Operating Agreement of the Exchange April 28, 2015. Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 (the ``Act'')\2\ and Rule 19b-4 thereunder,\3\ notice is hereby given that, on April 17, 2015, NYSE MKT LLC (the ``Exchange'' or ``NYSE MKT'') filed with the Securities and Exchange Commission (the ``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C.78s(b)(1). \2\ 15 U.S.C. 78a. \3\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the Sixth Amended and Restated Operating Agreement of the Exchange (``Operating Agreement'') to (1) establish a Regulatory Oversight Committee (``ROC'') as a committee of the board of directors of the Exchange (the ``Board''), and (2) remove the requirement that the independent directors that make up the majority of the Board also be directors of Intercontinental Exchange, Inc., the Exchange's parent company. The text of the proposed rule change is available on the Exchange's Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. [[Page 25342]] A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend the Operating Agreement to (a) establish a ROC as a committee of the Board, and (b) remove the requirement that the independent directors that make up the majority of the Board also be directors of Intercontinental Exchange, Inc. (``ICE''), the Exchange's parent company. Creation of a ROC The proposed ROC would have the responsibility to independently monitor the Exchange's regulatory operations.\4\ To effectuate this change, the Exchange proposes to amend Section 2.03(h) of the Operating Agreement to add a subsection (ii) providing for a ROC and delineating its composition and functions. The proposed new Section 2.03(h)(ii) of the Operating Agreement would be substantially similar to Article III, Section 5(c) of the By-Laws of the NASDAQ Stock Market LLC (``Committees Composed Solely of Directors'').\5\ --------------------------------------------------------------------------- \4\ NYSE Regulation, Inc. (``NYSE Regulation''), a not-for- profit subsidiary of the Exchange's affiliate New York Stock Exchange LLC (``NYSE''), performs all of the Exchange's regulatory functions pursuant to an intercompany Regulatory Services Agreement (``RSA'') that gives the Exchange the contractual right to review NYSE Regulation's performance. NYSE Regulation performs regulatory functions for the Exchange's affiliate NYSE Arca, Inc. (``NYSE Arca'') pursuant to a similar intercompany RSA. NYSE Arca has submitted a similar proposal to establish a ROC with primary responsibility for overseeing regulatory operations. See SR- NYSEArca-2015-29. \5\ See Securities Exchange Act Release No. 34-53128 (January 13, 2006), 71 FR 3550 (January 23, 2006) (File No. 10-131) (``Release No. 34-53128'') (order granting application of NASDAQ Stock Market LLC (``NASDAQ'') for registration as a national securities exchange). As noted below, members of the NASDAQ ROC must satisfy NASDAQ's public director requirements in addition to its independent director requirements. NASDAQ defines a public director as ``a Director who has no material business relationship with a broker or dealer, the Company or its affiliates, or FINRA.'' NASDAQ Bylaws, Article I(y). The Exchange does not have separate public director requirements and does not distinguish between public and independent directors but notes that, like the NASDAQ public director requirement, in order to meet the Exchange's independence requirements, a director must ``not have any material relationships'' with ICE and its subsidiaries. In addition, among other limitations, in order to be found independent, a director may not be a member, allied member, or employed by a member organization of the Exchange. See Independence Policy of Board of Directors of NYSE MKT LLC, available at http://wallstreet.cch.com/MKT/pdf/independence_policy.pdf. See also Securities Exchange Act Release No. 67564 (August 1, 2012), 77 FR 47161 (August 7, 2012) (SR-NYSE- 2012-17; SR-NYSEArca-2012-59; SR-NYSEMKT-2012-07) (approving NYSE MKT's director independence policy). --------------------------------------------------------------------------- In particular, Section 2.03(h)(ii) would provide that the Board shall appoint a ROC on an annual basis. Proposed Section 2.03(h)(ii) would describe the composition of the ROC. Proposed Section 2.03(h)(ii) would also describe the functions and authority of the ROC. The proposed ROC's responsibilities would be to:Oversee the Exchange's regulatory and self-regulatory organization responsibilities and evaluate the adequacy and effectiveness of the Exchange's regulatory and self-regulatory organization responsibilities; Assess the Exchange's regulatory performance; and Advise and make recommendations to the Board or other committees of the Board about the Exchange's regulatory compliance, effectiveness and plans.\6\ --------------------------------------------------------------------------- \6\ These three core responsibilities of the proposed ROC would be substantially similar to those of other SROs' ROCs. See, e.g., NASDAQ Bylaws, Article III, Section 5 (``NASDAQ Bylaws''); Securities Exchange Act Release No. 34-58375 (August 18, 2008), 73 FR 49498, 49502 (August 21, 2008) (File No. 10-182) (``Release No. 34-58375'') (approving application of BATS Exchange, Inc. (``BATS'') seeking registration as a national securities exchange); Securities Exchange Act Release No. 34-61698 (March 10, 2010), 75 FR 13151, 13161 (March 12, 2010) (``Release No. 34-61698'') (approving application of EDGX Exchange, Inc. and EDGA Exchange, Inc., seeking registration as a national securities exchange); and Amended and Restated By-Laws of Miami International Securities Exchange, LLC, Article IV, Section 4.5(c). --------------------------------------------------------------------------- In furtherance of these functions, the proposed new subsection of the Operating Agreement would provide the ROC with the authority and obligation to review the regulatory budget of the Exchange and specifically inquire into the adequacy of resources available in the budget for regulatory activities. Under the proposed amendment, the ROC would be charged with meeting regularly with the Chief Regulatory Officer (``CRO'') in executive session and, in consultation with the Exchange's Chief Executive Officer, establishing the goals, assessing the performance, and recommending the CRO's compensation. Finally, under the proposed rule, the ROC would be responsible for keeping the Board informed with respect to the foregoing matters.\7\ --------------------------------------------------------------------------- \7\ The obligations of the proposed ROC would be substantially similar to those of other SROs' ROCs. See, e.g., NASDAQ Bylaws, Article III, Section 5; Bylaws of NASDAQ OMX PHLX LLC, Article V, Section 5-2; Third Amended and Restated Bylaws of BATS Exchange, Inc., Article V, Section 6(c). --------------------------------------------------------------------------- The Exchange proposes that the ROC would consist of at least three members, each of whom would be a director of either the Exchange or of NYSE Regulation and who satisfies the independence requirements of the Exchange.\8\ The Exchange believes that a ROC comprised of at least three independent members is appropriate. The size and composition of the proposed ROC would be largely the same as that of the ROCs of other self-regulatory organizations (``SROs''), with the exception of the possibility to include independent directors of NYSE Regulation on the ROC.\9\ A ROC with at least three independent directors has been recognized as one of several measures that can help ensure the independence of the regulatory function from the market operations and commercial interests of a national securities exchange.\10\ --------------------------------------------------------------------------- \8\ The Exchange's independence requirements are set forth in the Independence Policy of the Board of Directors of the Exchange. See supra, note 5. \9\ See e.g., NASDAQ By-laws, Article III, Section 5(c) (specifying a ROC comprising three directors who must satisfy both NASDAQ's public director and independent director requirements); Third Amended and Restated Bylaws of BATS Exchange, Inc., Article V, Section 6(c) (``BATS Bylaws'') (specifying a ROC comprising three non-industry (i.e., public) directors); and Chicago Board Options Exchange, Incorporated (``CBOE'') Bylaws, Article IV, Section 4.5 (specifying a ROC of at least three directors all of whom shall be ``non-industry'' directors). \10\ See, e.g., Release No. 34-53128, 71 FR at 3555 (NASDAQ); Release No. 34-58375, 73 FR at 49502 (BATS); Securities Exchange Act Release No. 34-61152 (December 10, 2009), 74 FR 66699, 66704-705 (December 16, 2009) (File No. 10-191) (approving application of C2 Options Exchange, Incorporated, seeking registration as a national securities exchange); and Release No. 34-61698, 75 FR at 13161. --------------------------------------------------------------------------- Further, proposed Section 2.03(h)(ii) would provide that the Board may, on affirmative vote of a majority of directors, at any time remove a member of the ROC for cause. Proposed Section 2.03(h)(ii) would also provide that a failure of the member to qualify as independent under the independence policy would constitute a basis to remove a member of the ROC for cause. Similar authority is found in the bylaws governing the ROCs of other SROs.\11\ In addition, proposed Section 2.03(h)(ii) would provide that, if the term of office of a ROC committee member terminates under this section, and the remaining term of office of such committee member at the time of termination is not more than three months, during the period of vacancy the ROC would not be deemed to be in violation of its compositional requirements by virtue of the vacancy. Once again, this is consistent with the rules and bylaws of [[Page 25343]] other SROs.\12\ Finally, the Exchange proposes to add text to Section 2.03(h) providing that vacancies in the membership of any board committee would be filled by the Exchange Board.\13\ --------------------------------------------------------------------------- \11\ See e.g., BATS Bylaws, Article V, Section 2(a) (``the Chairman may, at any time, with or without cause, remove any member of a committee so appointed, with the approval of the Board.''); Second Amended and Restated By-laws of National Stock Exchange, Inc., Article V, Section 5.2 (same). \12\ See e.g., NASDAQ Bylaws, Article III, Section 2(b). \13\ NASDAQ has the same provision. See Second Amended Limited Liability Co. Agreement of the NASDAQ Stock Market LLC, Section 9(g). --------------------------------------------------------------------------- The Exchange proposes that members of the ROC could be independent directors of either the Exchange Board or the NYSE Regulation board. The proposed eligibility of independent directors of the NYSE Regulation board for the ROC would allow individuals to be members of the ROC who have direct experience in overseeing the adequacy and effectiveness of the Exchange's and its affiliates' regulatory programs. The Exchange believes that the proposed rule change creating an independent board committee to oversee the adequacy and effectiveness of the performance of its self-regulatory responsibilities is consistent with previously approved rule changes for other self- regulatory organizations and would enable the Exchange to harmonize its corporate governance with that of its industry peers.\14\ Moreover, the Exchange believes that the proposed adoption of a ROC would ensure the continued independence of the regulatory process.\15\ The fundamental hallmarks of regulatory independence--determinations regarding the Exchange's regulatory plan, programs, budget and staffing made by individuals independent of Exchange management and a CRO having general supervision of the regulatory operations of the Exchange and reporting to a ROC--are integral to the proposal.\16\ --------------------------------------------------------------------------- \14\ See NASDAQ Bylaws, Article III, Section 5(c); BATS Bylaws, Article V, Section 6(c). \15\ See, e.g., Securities Exchange Act Release No. 34-48946 (December 17, 2003), 68 FR 74678, 74687 (August 21, 2008) (SR-NYSE- 2003-34). \16\ See, e.g., Release No. 34-53128, 71 FR at 3555. In connection with its acquisition by the NYSE in 2008, the Exchange's ROC was eliminated and the Exchange contracted with NYSE Regulation to perform all of its regulatory functions. See note 4, supra. The approval order noted that ``the governance of NYSE Regulation will provide a comparable level of independence that a ROC would provide.'' See Securities Exchange Act Release No. 34-58673 (September 29, 2008), 73 FR 57707 (October 3, 2008) (SR-Amex-2008- 62, SR-NYSE-2008-60) (``Amex Approval Order''). --------------------------------------------------------------------------- Exchange Independent Directors Section 2.03(a)(i) of the Operating Agreement, which governs Board composition, provides that a majority of the Exchange's directors shall be U.S. Persons \17\ who are members of the board of directors of ICE that satisfy the Exchange's independence requirements.\18\ Such directors are defined as ``ICE Independent Directors'' in the Operating Agreement. The Exchange proposes to amend Section 2.03(a)(i) of the Operating Agreement to remove the requirement that the independent directors that make up the majority of the Board also be directors of ICE, to redefine ``ICE Independent Directors'' to remove the reference to ICE, and to make conforming changes in both Section 2.03(a)(i) and Section 2.03(a)(ii). The majority of directors of the Exchange Board would continue to satisfy the company independence policy. --------------------------------------------------------------------------- \17\ Pursuant to Section 2.03(a)(1) [sic] of the Operating Agreement, a director is a ``U.S. Person'' if, as of the date of his or her most recent election or appointment to the Board, his or her domicile is, and for the immediately preceding 24 months has been, the United States. The Exchange does not propose to amend this requirement. \18\ See note 5, supra. --------------------------------------------------------------------------- The Exchange believes that eliminating the requirement that the independent directors of the Exchange also be directors of ICE would allow the Exchange to broaden the pool of potential Board members, resulting in a more diversified Board membership, while still ensuring the directors' independence. Eliminating the requirement that the independent directors of the Exchange also be directors of ICE would also make the Exchange's Board requirements more consistent with those of its affiliate NYSE Arca, which do not require any of its directors to be directors of ICE.\19\ --------------------------------------------------------------------------- \19\ See Amended and Restated NYSE Arca Bylaws, Article III, Section 3.02. The Exchange notes that its affiliate NYSE has also submitted a proposal to amend its Operating Agreement to remove the requirement that the independent directors that make up the majority of the Exchange Board also be directors of ICE, and to redefine ``ICE Independent Directors'' to remove the reference to ICE. See SR-NYSE-2015-16. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Exchange Act \20\ in general, and with Section 6(b)(1) \21\ in particular, in that it enables the Exchange to be so organized as to have the capacity to be able to carry out the purposes of the Exchange Act and to comply, and to enforce compliance by its exchange members and persons associated with its exchange members, with the provisions of the Exchange Act, the rules and regulations thereunder, and the rules of the Exchange. --------------------------------------------------------------------------- \20\ 15 U.S.C. 78f(b). \21\ 15 U.S.C. 78f(b)(1). --------------------------------------------------------------------------- The proposed change would create an independent board committee to oversee the adequacy and effectiveness of the performance of the Exchange's self-regulatory responsibilities. The proposed ROC, similar in composition and functions to the approved ROCs of other SROs, would be designed to oversee the Exchange's regulatory and self-regulatory organization responsibilities and evaluate the adequacy and effectiveness of the Exchange's regulatory and self-regulatory organization responsibilities; assess the Exchange's regulatory performance; and advise and make recommendations to the Board or other committees of the Board about the Exchange's regulatory compliance effectiveness and plans. As noted, the Exchange proposes that members of the ROC could be independent directors of either the Exchange Board or the NYSE Regulation board. The Exchange believes that proposing to allow independent directors of the NYSE Regulation board to be eligible for the ROC would provide the choice to include these individuals whose have direct experience in overseeing the adequacy and effectiveness of the Exchange's and its affiliates' regulatory programs. Accordingly, the Exchange believes that the proposed rule change would contribute to the orderly operation of the Exchange and would enable the Exchange to be so organized as to have the capacity to carry out the purposes of the Exchange Act and comply and enforce compliance by its members and persons associated with its members, with the provisions of the Exchange Act. The Exchange therefore believes that approval of the amendment to the Bylaws [sic] is consistent with Section 6(b)(1) of the Exchange Act. Further, the Exchange believes its proposed change to remove the requirement that the independent directors that make up the majority of the Exchange Board also be ICE directors and redefine ``ICE Independent Directors'' to remove the reference to ICE is consistent with the Exchange Act. As noted above, this change would allow the Exchange to consider including individuals on its Board that are not already members of the ICE board. The Exchange believes that a more diversified pool of Board members would allow it to include individuals on its Board that could focus on the unique responsibilities of an SRO. This change would also make the Exchange's Board requirements more consistent with those of its affiliate NYSE Arca, which does not require its directors to be ICE directors. For these reasons, the [[Page 25344]] Exchange believes that the proposed rule change would contribute to the orderly operation of the Exchange and would enable the Exchange to be so organized as to have the capacity to carry out the purposes of the Exchange Act and comply and enforce compliance with the provisions of the Exchange Act by its members and persons associated with its members. The Exchange therefore believes that approval of the proposed is consistent with Section 6(b)(1) of the Exchange Act. The Exchange also believes that this filing furthers the objectives of Section 6(b)(5) of the Exchange Act \22\ because the proposed rule change would be consistent with and facilitate a governance and regulatory structure that 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 regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to, and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest. --------------------------------------------------------------------------- \22\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- As discussed above, the Exchange believes that the proposed creation of a ROC composed of independent directors would align the Exchange's corporate governance practices with other SROs that have adopted a ROC to monitor the adequacy and effectiveness of the regulatory program, assess regulatory performance, and assist the Board in reviewing the regulatory plan and the overall effectiveness of the regulatory function. Moreover, the Exchange believes that the proposed ROC structure would also sufficiently ``insulate'' the regulatory functions from the Exchange's ``market and other commercial interests'' in order for the Exchange to carry out its regulatory obligations.\23\ The Exchange believes that eliminating the requirement that the independent directors of the Exchange also be directors of ICE would allow the Exchange to include individuals on its Board that have expertise it believes is necessary for its unique role as an SRO, because not all of the independent directors would have to be directors of ICE. The Exchange believes that the proposed rule change is therefore consistent with and facilitates a governance and regulatory structure that furthers the objectives of Section 6(b)(5) of the Exchange Act. The independent oversight of the Exchange's regulatory functions by the proposed ROC is also designed to protect investors as well as the public interest. --------------------------------------------------------------------------- \23\ Release No. 34-53128, 71 FR at 3556. --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change would impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act. The proposed rule change is not intended to address competitive issues but rather is concerned solely with the administration and functioning of the Exchange's Board. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) by order approve or disapprove the proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-NYSEMKT-2015-27 on the subject line. Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSEMKT-2015-27. 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 will also be available for inspection and copying at the NYSE's principal office and on its Internet Web site at www.nyse.com. 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-NYSEMKT-2015-27and should be submitted on or before May 26, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\24\ --------------------------------------------------------------------------- \24\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2015-10312 Filed 5-1-15; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 80, No. 85 / Monday, May 4, 2015 / Notices 25341
13. Subcommittees: The Board, in each registrant approximately 30 SECURITIES AND EXCHANGE
coordination with the DFO, has the minutes, for a total burden of 19.5 hours COMMISSION
authority to create subcommittees or (39 × .5 hours). Approximately 26.7% of
[Release No. 34–74825; File No. SR–
working groups. registrants (or 115 registrants) would be NYSEMKT–2015–27]
14. Recordkeeping: The records of the required to answer questions 1 through
Board shall be handled according to 5, question 11 and the signature section, Self-Regulatory Organizations; NYSE
section 2, General Records Schedule 26, which the Commission estimates would MKT LLC; Notice of Filing of Proposed
and governing OPM policies and take approximately 1 hour and 30 Rule Change To Amend the Sixth
procedures. These records will be minutes, for a total of 172.5 hours (115 Amended and Restated Operating
available for public inspection and
× 1.5 hours). Approximately 64.2% of Agreement of the Exchange
copying, subject to the Freedom of
the registrants (or 275 registrants) would April 28, 2015.
Information Act of 1966 (5 U.S.C. 552,
be required to complete the entire Form Pursuant to Section 19(b)(1) 1 of the
as amended).
TA–2, which the Commission estimates Securities Exchange Act of 1934 (the
U.S. Office of Personnel Management.
would take approximately 6 hours, for ‘‘Act’’)2 and Rule 19b–4 thereunder,3
Katherine L. Archuleta, a total of 1,650 hours (275 × 6 hours). notice is hereby given that, on April 17,
Director. The aggregate annual burden on all 429 2015, NYSE MKT LLC (the ‘‘Exchange’’
[FR Doc. 2015–10297 Filed 5–1–15; 8:45 am] registered transfer agents is thus or ‘‘NYSE MKT’’) filed with the
BILLING CODE 6325–63–P approximately 1,842 hours (19.5 hours + Securities and Exchange Commission
172.5 hours + 1,650 hours) and the (the ‘‘Commission’’) the proposed rule
average annual burden per transfer change as described in Items I, II, and
SECURITIES AND EXCHANGE agent is approximately 4.3 hours (1,842 III below, which Items have been
COMMISSION ÷ 429). prepared by the self-regulatory
This rule does not involve the organization. The Commission is
Submission for OMB Review; publishing this notice to solicit
Comment Request collection of confidential information.
comments on the proposed rule change
An agency may not conduct or from interested persons.
Upon Written Request, Copies Available sponsor, and a person is not required to
From: Securities and Exchange I. Self-Regulatory Organization’s
respond to, a collection of information
Commission, Office of FOIA Services, Statement of the Terms of Substance of
under the PRA unless it displays a
100 F Street NE., Washington, DC the Proposed Rule Change
20549–2736. currently valid OMB control number.
The public may view background The Exchange proposes to amend the
Extension: Sixth Amended and Restated Operating
Rule 17Ac2–2 and Form TA–2, SEC File documentation for this information
collection at the Agreement of the Exchange (‘‘Operating
No. 270–298, OMB Control No. 3235–
0337.
Agreement’’) to (1) establish a
following Web site: www.reginfo.gov. Regulatory Oversight Committee
Notice is hereby given that pursuant Comments should be directed to: (i) (‘‘ROC’’) as a committee of the board of
to the Paperwork Reduction Act of 1995 Desk Officer for the Securities and directors of the Exchange (the ‘‘Board’’),
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the Exchange Commission, Office of and (2) remove the requirement that the
Securities and Exchange Commission Information and Regulatory Affairs, independent directors that make up the
(‘‘Commission’’) has submitted to the Office of Management and Budget, majority of the Board also be directors
Office of Management and Budget Room 10102, New Executive Office of Intercontinental Exchange, Inc., the
(‘‘OMB’’) a request for approval of the Building, Washington, DC 20503, or by Exchange’s parent company. The text of
existing collection of information sending an email to: the proposed rule change is available on
provided for in Rule 17Ac2–2 (17 CFR Shagufta_Ahmed@omb.eop.gov; and (ii) the Exchange’s Web site at
240.17Ac2–2) and Form TA–2 under the Pamela Dyson, Director/Chief www.nyse.com, at the principal office of
Securities Exchange Act of 1934 (15 the Exchange, and at the Commission’s
Information Officer, Securities and
U.S.C. 78a et seq.) (‘‘Exchange Act’’). Public Reference Room.
Rule 17Ac2–2 and Form TA–2 under Exchange Commission, c/o Remi Pavlik-
the Exchange Act require transfer agents Simon, 100 F Street NE., Washington, II. Self-Regulatory Organization’s
to file an annual report of their business DC 20549, or by sending an email to: Statement of the Purpose of, and
activities with the Commission. These PRA_Mailbox@sec.gov. Comments must Statutory Basis for, the Proposed Rule
reporting requirements are designed to be submitted to OMB within 30 days of Change
ensure that all registered transfer agents this notice. In its filing with the Commission, the
are providing the Commission with Dated: April 28, 2015. self-regulatory organization included
sufficient information on an annual Brent J. Fields, statements concerning the purpose of,
basis about the transfer agent and basis for, the proposed rule change
Secretary.
community and to permit the and discussed any comments it received
[FR Doc. 2015–10285 Filed 5–1–15; 8:45 am]
Commission to effectively monitor on the proposed rule change. The text
business activities of transfer agents. BILLING CODE 8011–01–P
of those statements may be examined at
The amount of time needed to comply the places specified in Item IV below.
mstockstill on DSK4VPTVN1PROD with NOTICES
with the requirements of amended Rule The Exchange has prepared summaries,
17Ac2–2 and Form TA–2 varies. Of the set forth in sections A, B, and C below,
total 429 registered transfer agents, of the most significant parts of such
approximately 9.1% (or 39 registrants) statements.
would be required to complete only
questions 1 through 3 and the signature 1 15 U.S.C.78s(b)(1).
section of amended Form TA–2, which 2 15 U.S.C. 78a.
the Commission estimates would take 3 17 CFR 240.19b–4.
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![Federal Register / Vol. 80, No. 85 / Monday, May 4, 2015 / Notices 25343
other SROs.12 Finally, the Exchange Persons 17 who are members of the The proposed change would create an
proposes to add text to Section 2.03(h) board of directors of ICE that satisfy the independent board committee to
providing that vacancies in the Exchange’s independence oversee the adequacy and effectiveness
membership of any board committee requirements.18 Such directors are of the performance of the Exchange’s
would be filled by the Exchange defined as ‘‘ICE Independent Directors’’ self-regulatory responsibilities. The
Board.13 in the Operating Agreement. The proposed ROC, similar in composition
The Exchange proposes that members Exchange proposes to amend Section and functions to the approved ROCs of
of the ROC could be independent 2.03(a)(i) of the Operating Agreement to other SROs, would be designed to
directors of either the Exchange Board remove the requirement that the oversee the Exchange’s regulatory and
or the NYSE Regulation board. The independent directors that make up the self-regulatory organization
proposed eligibility of independent majority of the Board also be directors responsibilities and evaluate the
directors of the NYSE Regulation board of ICE, to redefine ‘‘ICE Independent adequacy and effectiveness of the
for the ROC would allow individuals to Directors’’ to remove the reference to Exchange’s regulatory and self-
ICE, and to make conforming changes in regulatory organization responsibilities;
be members of the ROC who have direct
both Section 2.03(a)(i) and Section assess the Exchange’s regulatory
experience in overseeing the adequacy
2.03(a)(ii). The majority of directors of performance; and advise and make
and effectiveness of the Exchange’s and
the Exchange Board would continue to recommendations to the Board or other
its affiliates’ regulatory programs.
satisfy the company independence committees of the Board about the
The Exchange believes that the policy. Exchange’s regulatory compliance
proposed rule change creating an effectiveness and plans.
independent board committee to The Exchange believes that
As noted, the Exchange proposes that
oversee the adequacy and effectiveness eliminating the requirement that the
members of the ROC could be
of the performance of its self-regulatory independent directors of the Exchange
independent directors of either the
responsibilities is consistent with also be directors of ICE would allow the
Exchange Board or the NYSE Regulation
previously approved rule changes for Exchange to broaden the pool of
board. The Exchange believes that
other self-regulatory organizations and potential Board members, resulting in a
proposing to allow independent
would enable the Exchange to more diversified Board membership,
directors of the NYSE Regulation board
harmonize its corporate governance while still ensuring the directors’
to be eligible for the ROC would provide
with that of its industry peers.14 independence. Eliminating the
the choice to include these individuals
Moreover, the Exchange believes that requirement that the independent whose have direct experience in
the proposed adoption of a ROC would directors of the Exchange also be overseeing the adequacy and
ensure the continued independence of directors of ICE would also make the effectiveness of the Exchange’s and its
the regulatory process.15 The Exchange’s Board requirements more affiliates’ regulatory programs.
fundamental hallmarks of regulatory consistent with those of its affiliate Accordingly, the Exchange believes that
independence—determinations NYSE Arca, which do not require any of the proposed rule change would
regarding the Exchange’s regulatory its directors to be directors of ICE.19 contribute to the orderly operation of
plan, programs, budget and staffing 2. Statutory Basis the Exchange and would enable the
made by individuals independent of Exchange to be so organized as to have
Exchange management and a CRO The Exchange believes that the the capacity to carry out the purposes of
having general supervision of the proposed rule change is consistent with the Exchange Act and comply and
regulatory operations of the Exchange Section 6(b) of the Exchange Act 20 in enforce compliance by its members and
and reporting to a ROC—are integral to general, and with Section 6(b)(1) 21 in persons associated with its members,
the proposal.16 particular, in that it enables the with the provisions of the Exchange Act.
Exchange to be so organized as to have The Exchange therefore believes that
Exchange Independent Directors the capacity to be able to carry out the approval of the amendment to the
purposes of the Exchange Act and to Bylaws [sic] is consistent with Section
Section 2.03(a)(i) of the Operating comply, and to enforce compliance by
Agreement, which governs Board 6(b)(1) of the Exchange Act.
its exchange members and persons Further, the Exchange believes its
composition, provides that a majority of associated with its exchange members, proposed change to remove the
the Exchange’s directors shall be U.S. with the provisions of the Exchange Act, requirement that the independent
the rules and regulations thereunder, directors that make up the majority of
12 See e.g., NASDAQ Bylaws, Article III, Section
and the rules of the Exchange. the Exchange Board also be ICE
2(b).
13 NASDAQ has the same provision. See Second directors and redefine ‘‘ICE Independent
Amended Limited Liability Co. Agreement of the 17 Pursuant to Section 2.03(a)(1) [sic] of the Directors’’ to remove the reference to
NASDAQ Stock Market LLC, Section 9(g). Operating Agreement, a director is a ‘‘U.S. Person’’ ICE is consistent with the Exchange Act.
14 See NASDAQ Bylaws, Article III, Section 5(c); if, as of the date of his or her most recent election As noted above, this change would
BATS Bylaws, Article V, Section 6(c). or appointment to the Board, his or her domicile is,
15 See, e.g., Securities Exchange Act Release No. and for the immediately preceding 24 months has allow the Exchange to consider
34–48946 (December 17, 2003), 68 FR 74678, 74687 been, the United States. The Exchange does not including individuals on its Board that
(August 21, 2008) (SR–NYSE–2003–34). propose to amend this requirement. are not already members of the ICE
18 See note 5, supra.
16 See, e.g., Release No. 34–53128, 71 FR at 3555. board. The Exchange believes that a
19 See Amended and Restated NYSE Arca Bylaws,
In connection with its acquisition by the NYSE in more diversified pool of Board members
2008, the Exchange’s ROC was eliminated and the Article III, Section 3.02. The Exchange notes that its
mstockstill on DSK4VPTVN1PROD with NOTICES
affiliate NYSE has also submitted a proposal to would allow it to include individuals on
Exchange contracted with NYSE Regulation to
perform all of its regulatory functions. See note 4, amend its Operating Agreement to remove the its Board that could focus on the unique
supra. The approval order noted that ‘‘the requirement that the independent directors that responsibilities of an SRO. This change
governance of NYSE Regulation will provide a make up the majority of the Exchange Board also would also make the Exchange’s Board
comparable level of independence that a ROC be directors of ICE, and to redefine ‘‘ICE
Independent Directors’’ to remove the reference to
requirements more consistent with
would provide.’’ See Securities Exchange Act
Release No. 34–58673 (September 29, 2008), 73 FR ICE. See SR–NYSE–2015–16. those of its affiliate NYSE Arca, which
57707 (October 3, 2008) (SR-Amex-2008–62, SR– 20 15 U.S.C. 78f(b). does not require its directors to be ICE
NYSE–2008–60) (‘‘Amex Approval Order’’). 21 15 U.S.C. 78f(b)(1). directors. For these reasons, the
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![25344 Federal Register / Vol. 80, No. 85 / Monday, May 4, 2015 / Notices
Exchange believes that the proposed oversight of the Exchange’s regulatory subject line if email is used. To help the
rule change would contribute to the functions by the proposed ROC is also Commission process and review your
orderly operation of the Exchange and designed to protect investors as well as comments more efficiently, please use
would enable the Exchange to be so the public interest. only one method. The Commission will
organized as to have the capacity to post all comments on the Commission’s
B. Self-Regulatory Organization’s Internet Web site (http://www.sec.gov/
carry out the purposes of the Exchange
Act and comply and enforce compliance Statement on Burden on Competition rules/sro.shtml). Copies of the
with the provisions of the Exchange Act The Exchange does not believe that submission, all subsequent
by its members and persons associated the proposed rule change would impose amendments, all written statements
with its members. The Exchange any burden on competition that is not with respect to the proposed rule
therefore believes that approval of the necessary or appropriate in furtherance change that are filed with the
proposed is consistent with Section of the purposes of the Exchange Act. Commission, and all written
6(b)(1) of the Exchange Act. The proposed rule change is not communications relating to the
The Exchange also believes that this intended to address competitive issues proposed rule change between the
filing furthers the objectives of Section but rather is concerned solely with the Commission and any person, other than
6(b)(5) of the Exchange Act 22 because administration and functioning of the those that may be withheld from the
the proposed rule change would be Exchange’s Board. public in accordance with the
consistent with and facilitate a provisions of 5 U.S.C. 552, will be
governance and regulatory structure that C. Self-Regulatory Organization’s available for Web site viewing and
is designed to prevent fraudulent and Statement on Comments on the printing in the Commission’s Public
manipulative acts and practices, to Proposed Rule Change Received From Reference Room, 100 F Street NE.,
promote just and equitable principles of Members, Participants, or Others Washington, DC 20549, on official
trade, to foster cooperation and No written comments were solicited business days between the hours of
coordination with persons engaged in or received with respect to the proposed 10:00 a.m. and 3:00 p.m. Copies of the
regulating, clearing, settling, processing rule change. filing will also be available for
information with respect to, and inspection and copying at the NYSE’s
facilitating transactions in securities, to III. Date of Effectiveness of the
principal office and on its Internet Web
remove impediments to, and perfect the Proposed Rule Change and Timing for
site at www.nyse.com. All comments
mechanism of a free and open market Commission Action
received will be posted without change;
and a national market system and, in Within 45 days of the date of the Commission does not edit personal
general, to protect investors and the publication of this notice in the Federal identifying information from
public interest. Register or up to 90 days (i) as the submissions. You should submit only
As discussed above, the Exchange Commission may designate if it finds information that you wish to make
believes that the proposed creation of a such longer period to be appropriate available publicly. All submissions
ROC composed of independent directors and publishes its reasons for so finding should refer to File Number SR–
would align the Exchange’s corporate or (ii) as to which the self-regulatory NYSEMKT–2015–27and should be
governance practices with other SROs organization consents, the Commission submitted on or before May 26, 2015.
that have adopted a ROC to monitor the will: For the Commission, by the Division of
adequacy and effectiveness of the (A) by order approve or disapprove Trading and Markets, pursuant to delegated
regulatory program, assess regulatory the proposed rule change, or authority.24
performance, and assist the Board in (B) institute proceedings to determine Brent J. Fields,
reviewing the regulatory plan and the whether the proposed rule change Secretary.
overall effectiveness of the regulatory should be disapproved. [FR Doc. 2015–10312 Filed 5–1–15; 8:45 am]
function. Moreover, the Exchange
believes that the proposed ROC IV. Solicitation of Comments BILLING CODE 8011–01–P
structure would also sufficiently Interested persons are invited to
‘‘insulate’’ the regulatory functions from submit written data, views, and SECURITIES AND EXCHANGE
the Exchange’s ‘‘market and other arguments concerning the foregoing, COMMISSION
commercial interests’’ in order for the including whether the proposed rule
Exchange to carry out its regulatory change is consistent with the Act. [Release No. 34–74822; File No. SR–BX–
obligations.23 The Exchange believes Comments may be submitted by any of 2015–023]
that eliminating the requirement that the following methods:
the independent directors of the Self-Regulatory Organizations; Notice
Exchange also be directors of ICE would Electronic Comments of Filing and Immediate Effectiveness
of Proposed Rule Change by NASDAQ
allow the Exchange to include • Use the Commission’s Internet
OMX BX, Inc. Relating to Fees, Dues
individuals on its Board that have comment form (http://www.sec.gov/
and Other Charges
expertise it believes is necessary for its rules/sro.shtml); or
unique role as an SRO, because not all • Send an email to rule-comments@ April 28, 2015.
of the independent directors would sec.gov. Please include File Number SR– Pursuant to Section 19(b)(1) of the
have to be directors of ICE. The NYSEMKT–2015–27 on the subject line. Securities Exchange Act of 1934
Exchange believes that the proposed (‘‘Act’’),1 and Rule 19b–4 thereunder,2
Paper Comments
mstockstill on DSK4VPTVN1PROD with NOTICES
rule change is therefore consistent with notice is hereby given that on April 17,
and facilitates a governance and • Send paper comments in triplicate 2015, NASDAQ OMX BX, Inc. (‘‘BX’’ or
regulatory structure that furthers the to Brent J. Fields, Secretary, Securities ‘‘Exchange’’) filed with the Securities
objectives of Section 6(b)(5) of the and Exchange Commission, 100 F Street and Exchange Commission (‘‘SEC’’ or
Exchange Act. The independent NE., Washington, DC 20549–1090.
All submissions should refer to File 24 17 CFR 200.30–3(a)(12).
22 15 U.S.C. 78f(b)(5). Number SR–NYSEMKT–2015–27. This 1 15 U.S.C. 78s(b)(1).
23 Release No. 34–53128, 71 FR at 3556. file number should be included on the 2 17 CFR 240.19b–4.
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Document Created: 2018-02-21 10:22:29
Document Modified: 2018-02-21 10:22:29
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 80 FR 25341 |
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