80 FR 71864 - Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing of Proposed Rule Change Relating to a Corporate Transaction Involving Its Indirect Parent
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 221 (November 17, 2015)
Federal Register Volume 80, Issue 221 (November 17, 2015)
| Page Range | 71864-71866 | |
| FR Document | 2015-29214 |
[Federal Register Volume 80, Number 221 (Tuesday, November 17, 2015)] [Notices] [Pages 71864-71866] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-29214] [[Page 71864]] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-76415; File No. SR-ISE-2015-36] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing of Proposed Rule Change Relating to a Corporate Transaction Involving Its Indirect Parent November 10, 2015. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on October 30, 2015, the International Securities Exchange, LLC (the ``Exchange'' or the ``ISE'') filed with the Securities and Exchange Commission (``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\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change The Exchange proposes to remove Eurex Frankfurt AG (``Eurex Frankfurt'') as an indirect, non-U.S. upstream owner of the Exchange (the ``Transaction''). In order to consummate the Transaction, the Exchange proposes to: (i) Amend and restate the Third Amended and Restated Trust Agreement (the ``Trust Agreement'') that exists among International Securities Exchange Holdings, Inc. (``ISE Holdings''), U.S. Exchange Holdings, Inc. (``U.S. Exchange Holdings''), and the Trustees (as defined therein) in order to remove references to Eurex Frankfurt; and (ii) amend and restate the Third Amended and Restated Certificate of Incorporation of U.S. Exchange Holdings (``U.S. Exchange Holdings COI'') to update a reference therein to the Trust Agreement. The text of the proposed rule change is available at the Commission's Public Reference Room and on the Exchange's Internet Web site at http://www.ise.com. II. Self-Regulatory Organization's Statement of the Purpose of, and the 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 these statements may be examined at the places specified in Item IV below. The self-regulatory organization 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposal is to remove Eurex Frankfurt as an indirect, non-U.S. upstream owner of the Exchange.\3\ --------------------------------------------------------------------------- \3\ The Exchange's affiliate, ISE Gemini, LLC (``ISE Gemini''), has submitted a nearly identical proposed rule change. See SR- ISEGemini-2015-24. --------------------------------------------------------------------------- Background On December 17, 2007, ISE Holdings, the sole, direct parent of the Exchange, became a direct, wholly-owned subsidiary of U.S. Exchange Holdings.\4\ U.S. Exchange Holdings is 85% directly owned by Eurex Frankfurt and 15% directly owned by Deutsche B[ouml]rse AG (``Deutsche B[ouml]rse''). Eurex Frankfurt is a wholly-owned, direct subsidiary of Deutsche B[ouml]rse.\5\ Deutsche B[ouml]rse therefore owns 100% of U.S. Exchange Holdings through its aggregate direct and indirect ownership. --------------------------------------------------------------------------- \4\ See Securities Exchange Act Release No. 56955 (December 13, 2007), 72 FR 71979 (December 19, 2007) (SR-ISE-2007-101). \5\ See Securities Exchange Act Release No. 66834 (April 19, 2012), 77 FR 24752 (April 25, 2012) (SR-ISE-2012-21). Each of Deutsche B[ouml]rse and Eurex Frankfurt is referred to as a ``Non- U.S. Upstream Owner'' and collectively as the ``Non-U.S. Upstream Owners.'' Each of the Non-U.S. Upstream Owners has previously taken appropriate steps to incorporate provisions regarding ownership, jurisdiction, books and records, and other issues related to their control of the Exchange. Specifically, each of the Non-U.S. Upstream Owners has adopted resolutions, which were previously approved by the Commission, to incorporate these concepts with respect to itself, as well as its board members, officers, employees, and agents (as applicable), to the extent that they are involved in the activities of the Exchange. See also SR-ISE-2007-101, supra note 4. --------------------------------------------------------------------------- The Transaction The Transaction is designed to simplify the indirect ownership structure of the Exchange.\6\ The Transaction will not have any effect on ISE Holdings' direct ownership of the Exchange or the operations of the Exchange. Consummation of the Transaction is subject to approval of this proposed rule change by the Commission.\7\ In order to effectuate the Transaction, on or about December 31, 2015, Eurex Frankfurt will transfer its 85% ownership in U.S. Exchange Holdings to Deutsche B[ouml]rse.\8\ As a result of the Transaction, Eurex Frankfurt will cease to be a Non-U.S. Upstream Owner of the Exchange, as Deutsche B[ouml]rse will be the sole, direct owner of U.S. Exchange Holdings.\9\ U.S. Exchange Holdings will remain the sole, direct owner of ISE Holdings. ISE Holdings will also remain the sole, direct owner of the Exchange. The Transaction will not result in any additional person or entity acquiring direct or indirect ownership in the Exchange. --------------------------------------------------------------------------- \6\ In 2014 the Exchange submitted a proposed rule change with the Commission to similarly simplify the indirect ownership structure of the Exchange. See Securities Exchange Act Release No. 73860 (December 17, 2014), 79 FR 77066 (December 23, 2014) (SR-ISE- 2014-44). \7\ See infra notes 15 and 16. \8\ As referenced above, Deutsche B[ouml]rse is already the 100% indirect owner of Eurex Frankfurt. In addition, Deutsche B[ouml]rse also is already an approved Non-U.S. Upstream Owner of the Exchange. See supra note 5. \9\ In connection with each of their ownership interests in the Exchange, Deutsche B[ouml]rse, Eurex Frankfurt, U.S. Exchange Holdings, ISE Holdings and the Exchange became parties to an agreement to provide for adequate funding for the Exchange's regulatory responsibilities. ISE Gemini subsequently became a party to the agreement. Following the completion of the Transaction, Eurex Frankfurt will cease to be a Non-U.S. Upstream Owner of the Exchange, and as such, will no longer be a party to such agreement. --------------------------------------------------------------------------- In order to consummate the Transaction in the manner described above, certain administrative amendments will need to be made to the Trust Agreement and the U.S. Exchange Holdings COI. The proposed amendments to such documents are described below. Trust Agreement \10\ --------------------------------------------------------------------------- \10\ The Trust Agreement exists among ISE Holdings, U.S. Exchange Holdings, and the Trustees (as defined therein). --------------------------------------------------------------------------- The Trust Agreement serves four general purposes: (i) To accept, hold and dispose of Trust Shares \11\ on the terms and subject to the conditions set forth therein; (ii) to determine whether a Material Compliance Event \12\ has [[Page 71865]] occurred or is continuing; (iii) to determine whether the occurrence and continuation of a Material Compliance Event requires the exercise of the Call Option; \13\ and (iv) to transfer Deposited Shares from the Trust to the Trust Beneficiary \14\ as provided in Section 4.2(h) therein. --------------------------------------------------------------------------- \11\ Under the Trust Agreement, the term ``Trust Shares'' means either Excess Shares or Deposited Shares, or both, as the case may be. The term ``Excess Shares'' means that a Person obtained an ownership or voting interest in ISE Holdings in excess of certain ownership and voting restrictions pursuant to Article FOURTH of the ISE Holdings COI, through, for example, ownership of one of the Non- U.S. Upstream Owners or U.S. Exchange Holdings, without obtaining the approval of the Commission. The term ``Deposited Shares'' means shares that are transferred to the Trust pursuant to the Trust's exercise of the Call Option. \12\ Under the Trust Agreement, the term ``Material Compliance Event'' means, with respect to a Non-U.S. Upstream Owner, any state of facts, development, event, circumstance, condition, occurrence or effect that results in the failure of any of the Non-U.S. Upstream Owners to adhere to their respective commitments under the resolutions (i.e., as referenced in note 5) in any material respect. \13\ Under the Trust Agreement, the term ``Call Option'' means the option granted by the Trust Beneficiary to the Trust to call the Voting Shares as set forth in Section 4.2 therein. \14\ Under the Trust Agreement, the term ``Trust Beneficiary'' means U.S. Exchange Holdings. --------------------------------------------------------------------------- The Exchange proposes to amend certain provisions of the Trust Agreement in connection with the Transaction. Specifically, the Exchange proposes to: (i) Update the recitals of the Trust Agreement with respect to the Transaction; and (ii) remove references to Eurex Frankfurt from the definition of ``Affected Affiliate'' in Section 1.1 of the Trust Agreement.\15\ The proposed amendments to the Trust Agreement are strictly administrative changes to reflect the updated corporate structure resulting from the Transaction and will not affect the mechanisms established by the Trust Agreement for the benefit of the Trust Beneficiary. --------------------------------------------------------------------------- \15\ The proposed, amended Trust Agreement is attached hereto as Exhibit 5A. Section 8.2 of the Trust Agreement provides, in part, that, for so long as ISE Holdings controls, directly or indirectly, the Exchange, before any amendment or repeal of any provision of the Trust Agreement shall be effective, such amendment or repeal shall be submitted to the board of directors of the Exchange, as applicable, and if such amendment or repeal must be filed with or filed with and approved by the Commission under Section 19 of the Securities Exchange Act of 1934 (the ``Act'') and the rules promulgated thereunder before such amendment or repeal may be effectuated, then such amendment or repeal shall not be effectuated until filed with or filed with and approved by the Commission, as the case may be. The Exchange also proposes to retitle the Trust Agreement as the ``Fourth'' Amended and Restated Trust Agreement and update the date thereof. --------------------------------------------------------------------------- U.S. Exchange Holdings COI The Exchange proposes to make a non-substantive, administrative change to the U.S. Exchange Holdings COI to update a reference therein to the Trust Agreement. Article THIRTEENTH of the U.S. Exchange Holdings COI contains references to (i) the ``Third Amended and Restated'' Trust Agreement, which, as discussed herein, will become the ``Fourth Amended and Restated'' Trust Agreement; and (ii) the effective date of the Trust Agreement, which, as discussed herein, will change to a date in December 2015 that corresponds to the effective closing date of the Transaction. The Exchange proposes to update these references. The Exchange also proposes to retitle the document as the ``Fourth'' Amended and Restated Certificate of Incorporation of U.S. Exchange Holdings and update the effective date thereof.\16\ --------------------------------------------------------------------------- \16\ The proposed, amended U.S. Exchange Holdings COI is attached hereto as Exhibit 5B. Article SIXTEENTH of the U.S. Exchange Holdings COI provides that, for so long as U.S. Exchange Holdings shall control, directly or indirectly, the Exchange, or facility thereof, before any amendment to or repeal of any provision of the U.S. Exchange Holdings COI shall be effective, the same shall be submitted to the board of directors of the Exchange, and if the same must be filed with, or filed with and approved by, the Commission before the same may be effective, under Section 19 of the Act and the rules promulgated thereunder, then the same shall not be effective until filed with, or filed with and approved by, the Commission, as the case may be. --------------------------------------------------------------------------- Certain Resolutions As described above, each of the Non-U.S. Upstream Owners, including Eurex Frankfurt, has previously taken appropriate steps to incorporate provisions regarding ownership, jurisdiction, books and records, and other issues related to their control of the Exchange. Specifically, each of such Non-U.S. Upstream Owners has adopted resolutions, which were previously approved by the Commission, to incorporate these concepts with respect to itself, as well as its board members, officers, employees, and agents (as applicable), to the extent that they are involved in the activities of the Exchange.\17\ For example, the resolution of each of such Non-U.S. Upstream Owners provides that it shall comply with the U.S. federal securities laws and the rules and regulations thereunder and shall cooperate with the Commission and with the Exchange. In addition, the resolution of each of such Non-U.S. Upstream Owners provides that the board members, including each person who becomes a board member, would so consent to comply and cooperate and the particular Non-U.S. Upstream Owner would take reasonable steps to cause its officers, employees, and agents to also comply and cooperate, to the extent that he or she is involved in the activities of the Exchange. --------------------------------------------------------------------------- \17\ See supra notes 4 and 5. See also SR-ISE-2007-101, supra note 4; SR-ISE-2012-21, supra note 5. --------------------------------------------------------------------------- As Eurex Frankfurt will cease to be a Non-U.S. Upstream Owner of the Exchange after the Transaction, the Exchange proposes that the resolutions of Eurex Frankfurt, as referenced above, will cease to be rules of the Exchange as of a date in December 2015 that corresponds to the effective closing date of the Transaction.\18\ --------------------------------------------------------------------------- \18\ As referenced above, resolutions in relation to board members, officers, employees, and agents (as applicable) of Eurex Frankfurt also would cease accordingly. This proposed change would have no impact on the resolutions of Deutsche B[ouml]rse or its board members, officers, employees, and agents (as applicable). --------------------------------------------------------------------------- Summary Upon the consummation of the Transaction the Exchange will continue to operate and regulate its market and members in the same exact manner as it did prior to the Transactions. The Transaction will not impair the ability of ISE Holdings, the Exchange, or any facility thereof, to carry out their respective functions and responsibilities under the Act. Moreover, the Transaction will not impair the ability of the Commission to enforce the Act with respect to the Exchange and its Non- U.S. Upstream Owners (which will solely be Deutsche B[ouml]rse after the Transaction), including each of their directors, officers, employees and agents, to the extent they are involved in the activities of the Exchange. As such, the Commission's plenary regulatory authority over the Exchange will not be affected by the approval of this proposed rule change. 2. Statutory Basis The Exchange believes that this proposal is consistent with Section 6(b)of the Act,\19\ in general, and furthers the objectives of Section 6(b)(1) of the Act,\20\ 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 Act and to comply, and to enforce compliance by its exchange members and persons associated with its exchange members, with the provisions of the Act, the rules and regulations thereunder, and the rules of the Exchange. The Exchange will operate in the same manner following the Transaction as it operates today. Thus, the Commission will continue to have plenary regulatory authority over the Exchange, as is the case currently with the Exchange. The proposed rule change is consistent with and will facilitate an ownership structure that will continue to provide the Commission with appropriate oversight tools to ensure that the Commission will have the ability to enforce the Act with respect to the Exchange and its Non-U.S. Upstream Owners, including their directors, officers, employees and agents, to the extent they are involved in the activities of the Exchange. --------------------------------------------------------------------------- \19\ 15 U.S.C. 78s(b). \20\ 15 U.S.C. 78s(b)(1). --------------------------------------------------------------------------- The Exchange also believes that this filing furthers the objectives of Section 6(b)(5) \21\ of the Act because the proposed rule change would be consistent with and facilitate a governance and regulatory structure that [[Page 71866]] 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. Specifically, the Exchange believes that the proposed rule change will continue to provide the Commission and the Exchange with access to necessary information that will allow the Exchange to efficiently and effectively enforce compliance with the Act, as well as allow the Commission to provide proper oversight, which will ultimately promote just and equitable principles of trade and protect investors. In addition, the Exchange believes that the proposed rule change will continue to preserve the independence of the Exchange's self-regulatory function and ensure that the Exchange will be able to obtain any information it needs in order to detect and deter any fraudulent and manipulative acts in its marketplace and carry out its regulatory responsibilities under the Act. --------------------------------------------------------------------------- \21\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- Approval of this proposed rule change will enable ISE Holdings to continue its operations and the Exchange to continue its orderly discharge of regulatory duties 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. Finally, the Exchange is not proposing any significant or novel regulatory issues, nor is it proposing any changes to the Exchange's operational or trading structure in connection with the Transaction. Instead, the Exchange represents that the proposed rule change consists of administrative amendments to the Trust Agreement and the U.S. Exchange Holdings COI and addresses certain resolutions in relation to Eurex Frankfurt, which currently is a Non-U.S. Upstream Owner of the Exchange, but whose status as such will cease as a result of the Transaction, such that the resolutions will cease to be rules of the Exchange as they relate to Eurex Frankfurt, and that no changes will be made to other aspects of the Exchange's organizational documents that were previously approved by the Commission. B. Self-Regulatory Organization's Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,\22\ the Exchange believes that the proposed rule change would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposed rule change implicates any competitive issues. Rather, the Transaction merely represents a restructuring of indirect ownership interests of the Exchange, and will not involve the introduction of any new direct or indirect owners or any entity or individual that would have the right to direct the actions of the Exchange or vote the shares of the Exchange. As such, the Exchange believes that the proposal is consistent with the Act. --------------------------------------------------------------------------- \22\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) by order approve or disapprove 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 CommentsUse 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-ISE-2015-36 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-ISE-2015-36. 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 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal offices of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-ISE-2015-36, and should be submitted on or before December 8, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\23\ --------------------------------------------------------------------------- \23\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2015-29214 Filed 11-16-15; 8:45 am] BILLING CODE 8011-01-P
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SECURITIES AND EXCHANGE and discussed any comments it received proposed rule change by the
COMMISSION on the proposed rule change. The text Commission.7 In order to effectuate the
of these statements may be examined at Transaction, on or about December 31,
[Release No. 34–76415; File No. SR–ISE–
the places specified in Item IV below. 2015, Eurex Frankfurt will transfer its
2015–36]
The self-regulatory organization has 85% ownership in U.S. Exchange
Self-Regulatory Organizations; prepared summaries, set forth in Holdings to Deutsche Börse.8 As a result
International Securities Exchange, sections A, B and C below, of the most of the Transaction, Eurex Frankfurt will
LLC; Notice of Filing of Proposed Rule significant aspects of such statements. cease to be a Non-U.S. Upstream Owner
Change Relating to a Corporate A. Self-Regulatory Organization’s of the Exchange, as Deutsche Börse will
Transaction Involving Its Indirect Statement of the Purpose of, and the be the sole, direct owner of U.S.
Parent Statutory Basis for, the Proposed Rule Exchange Holdings.9 U.S. Exchange
Change Holdings will remain the sole, direct
November 10, 2015. owner of ISE Holdings. ISE Holdings
Pursuant to Section 19(b)(1) of the 1. Purpose will also remain the sole, direct owner
Securities Exchange Act of 1934 (the The purpose of the proposal is to of the Exchange. The Transaction will
‘‘Act’’),1 and Rule 19b–4 thereunder,2 remove Eurex Frankfurt as an indirect, not result in any additional person or
notice is hereby given that on October non-U.S. upstream owner of the entity acquiring direct or indirect
30, 2015, the International Securities Exchange.3 ownership in the Exchange.
Exchange, LLC (the ‘‘Exchange’’ or the In order to consummate the
‘‘ISE’’) filed with the Securities and Background Transaction in the manner described
Exchange Commission (‘‘Commission’’) On December 17, 2007, ISE Holdings, above, certain administrative
the proposed rule change, as described the sole, direct parent of the Exchange, amendments will need to be made to the
in Items I, II, and III below, which items became a direct, wholly-owned Trust Agreement and the U.S. Exchange
have been prepared by the self- subsidiary of U.S. Exchange Holdings.4 Holdings COI. The proposed
regulatory organization. The U.S. Exchange Holdings is 85% directly amendments to such documents are
Commission is publishing this notice to owned by Eurex Frankfurt and 15% described below.
solicit comments on the proposed rule directly owned by Deutsche Börse AG
change from interested persons. Trust Agreement 10
(‘‘Deutsche Börse’’). Eurex Frankfurt is a
wholly-owned, direct subsidiary of The Trust Agreement serves four
I. Self-Regulatory Organization’s
Deutsche Börse.5 Deutsche Börse general purposes: (i) To accept, hold
Statement of the Terms of the Substance
therefore owns 100% of U.S. Exchange and dispose of Trust Shares 11 on the
of the Proposed Rule Change
Holdings through its aggregate direct terms and subject to the conditions set
The Exchange proposes to remove and indirect ownership. forth therein; (ii) to determine whether
Eurex Frankfurt AG (‘‘Eurex Frankfurt’’) a Material Compliance Event 12 has
as an indirect, non-U.S. upstream owner The Transaction
of the Exchange (the ‘‘Transaction’’). In The Transaction is designed to 7 See infra notes 15 and 16.
order to consummate the Transaction, simplify the indirect ownership 8 As referenced above, Deutsche Börse is already
the Exchange proposes to: (i) Amend the 100% indirect owner of Eurex Frankfurt. In
structure of the Exchange.6 The addition, Deutsche Börse also is already an
and restate the Third Amended and Transaction will not have any effect on approved Non-U.S. Upstream Owner of the
Restated Trust Agreement (the ‘‘Trust ISE Holdings’ direct ownership of the Exchange. See supra note 5.
Agreement’’) that exists among Exchange or the operations of the 9 In connection with each of their ownership
International Securities Exchange Exchange. Consummation of the interests in the Exchange, Deutsche Börse, Eurex
Holdings, Inc. (‘‘ISE Holdings’’), U.S. Frankfurt, U.S. Exchange Holdings, ISE Holdings
Transaction is subject to approval of this and the Exchange became parties to an agreement
Exchange Holdings, Inc. (‘‘U.S. to provide for adequate funding for the Exchange’s
Exchange Holdings’’), and the Trustees 3 The Exchange’s affiliate, ISE Gemini, LLC (‘‘ISE regulatory responsibilities. ISE Gemini
(as defined therein) in order to remove Gemini’’), has submitted a nearly identical subsequently became a party to the agreement.
references to Eurex Frankfurt; and (ii) proposed rule change. See SR–ISEGemini–2015–24. Following the completion of the Transaction, Eurex
4 See Securities Exchange Act Release No. 56955 Frankfurt will cease to be a Non-U.S. Upstream
amend and restate the Third Amended (December 13, 2007), 72 FR 71979 (December 19, Owner of the Exchange, and as such, will no longer
and Restated Certificate of Incorporation 2007) (SR–ISE–2007–101). be a party to such agreement.
of U.S. Exchange Holdings (‘‘U.S. 5 See Securities Exchange Act Release No. 66834 10 The Trust Agreement exists among ISE
Exchange Holdings COI’’) to update a (April 19, 2012), 77 FR 24752 (April 25, 2012) (SR– Holdings, U.S. Exchange Holdings, and the Trustees
ISE–2012–21). Each of Deutsche Börse and Eurex (as defined therein).
reference therein to the Trust
Frankfurt is referred to as a ‘‘Non-U.S. Upstream 11 Under the Trust Agreement, the term ‘‘Trust
Agreement. Owner’’ and collectively as the ‘‘Non-U.S. Upstream Shares’’ means either Excess Shares or Deposited
The text of the proposed rule change Owners.’’ Each of the Non-U.S. Upstream Owners Shares, or both, as the case may be. The term
is available at the Commission’s Public has previously taken appropriate steps to ‘‘Excess Shares’’ means that a Person obtained an
Reference Room and on the Exchange’s incorporate provisions regarding ownership, ownership or voting interest in ISE Holdings in
jurisdiction, books and records, and other issues excess of certain ownership and voting restrictions
Internet Web site at http://www.ise.com. related to their control of the Exchange. pursuant to Article FOURTH of the ISE Holdings
II. Self-Regulatory Organization’s Specifically, each of the Non-U.S. Upstream COI, through, for example, ownership of one of the
Owners has adopted resolutions, which were Non-U.S. Upstream Owners or U.S. Exchange
Statement of the Purpose of, and the previously approved by the Commission, to Holdings, without obtaining the approval of the
Statutory Basis for, the Proposed Rule incorporate these concepts with respect to itself, as Commission. The term ‘‘Deposited Shares’’ means
Change well as its board members, officers, employees, and shares that are transferred to the Trust pursuant to
mstockstill on DSK4VPTVN1PROD with NOTICES
agents (as applicable), to the extent that they are the Trust’s exercise of the Call Option.
In its filing with the Commission, the involved in the activities of the Exchange. See also 12 Under the Trust Agreement, the term ‘‘Material
self-regulatory organization included SR–ISE–2007–101, supra note 4. Compliance Event’’ means, with respect to a Non-
6 In 2014 the Exchange submitted a proposed rule U.S. Upstream Owner, any state of facts,
statements concerning the purpose of,
change with the Commission to similarly simplify development, event, circumstance, condition,
and basis for, the proposed rule change the indirect ownership structure of the Exchange. occurrence or effect that results in the failure of any
See Securities Exchange Act Release No. 73860 of the Non-U.S. Upstream Owners to adhere to their
1 15 U.S.C. 78s(b)(1). (December 17, 2014), 79 FR 77066 (December 23, respective commitments under the resolutions (i.e.,
2 17 CFR 240.19b–4. 2014) (SR–ISE–2014–44). as referenced in note 5) in any material respect.
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![71866 Federal Register / Vol. 80, No. 221 / Tuesday, November 17, 2015 / Notices
is designed to prevent fraudulent and organizational documents that were • Send an email to rule-comments@
manipulative acts and practices, to previously approved by the sec.gov. Please include File Number SR–
promote just and equitable principles of Commission. ISE–2015–36 on the subject line.
trade, to foster cooperation and
B. Self-Regulatory Organization’s Paper Comments
coordination with persons engaged in
Statement on Burden on Competition
regulating, clearing, settling, processing • Send paper comments in triplicate
information with respect to, and In accordance with Section 6(b)(8) of
the Act,22 the Exchange believes that the to Secretary, Securities and Exchange
facilitating transactions in securities, to
proposed rule change would not impose Commission, 100 F Street NE.,
remove impediments to, and perfect the
mechanism of a free and open market any burden on competition that is not Washington, DC 20549–1090.
and a national market system and, in necessary or appropriate in furtherance All submissions should refer to File
general, to protect investors and the of the purposes of the Act. The Number SR–ISE–2015–36. This file
public interest. Specifically, the Exchange does not believe that the number should be included on the
Exchange believes that the proposed proposed rule change implicates any subject line if email is used.
rule change will continue to provide the competitive issues. Rather, the
Commission and the Exchange with Transaction merely represents a To help the Commission process and
access to necessary information that will restructuring of indirect ownership review your comments more efficiently,
allow the Exchange to efficiently and interests of the Exchange, and will not please use only one method. The
effectively enforce compliance with the involve the introduction of any new Commission will post all comments on
Act, as well as allow the Commission to direct or indirect owners or any entity the Commission’s Internet Web site
provide proper oversight, which will or individual that would have the right (http://www.sec.gov/rules/sro.shtml).
ultimately promote just and equitable to direct the actions of the Exchange or Copies of the submission, all subsequent
principles of trade and protect investors. vote the shares of the Exchange. As amendments, all written statements
In addition, the Exchange believes that such, the Exchange believes that the with respect to the proposed rule
the proposed rule change will continue proposal is consistent with the Act. change that are filed with the
to preserve the independence of the C. Self-Regulatory Organization’s Commission, and all written
Exchange’s self-regulatory function and Statement on Comments on the communications relating to the
ensure that the Exchange will be able to Proposed Rule Change Received From proposed rule change between the
obtain any information it needs in order Members, Participants, or Others Commission and any person, other than
to detect and deter any fraudulent and those that may be withheld from the
manipulative acts in its marketplace and The Exchange has not solicited, and
does not intend to solicit, comments on public in accordance with the
carry out its regulatory responsibilities provisions of 5 U.S.C. 552, will be
under the Act. this proposed rule change. The
Approval of this proposed rule change Exchange has not received any available for Web site viewing and
will enable ISE Holdings to continue its unsolicited written comments from printing in the Commission’s Public
operations and the Exchange to members or other interested parties. Reference Room on official business
continue its orderly discharge of days between the hours of 10:00 a.m.
III. Date of Effectiveness of the
regulatory duties to prevent fraudulent and 3:00 p.m. Copies of such filing also
Proposed Rule Change and Timing for
and manipulative acts and practices, to Commission Action will be available for inspection and
promote just and equitable principles of copying at the principal offices of the
trade, to foster cooperation and Within 45 days of the date of Exchange. All comments received will
coordination with persons engaged in publication of this notice in the Federal be posted without change; the
regulating, clearing, settling, processing Register or within such longer period Commission does not edit personal
information with respect to, and up to 90 days (i) as the Commission may
identifying information from
facilitating transactions in securities, to designate if it finds such longer period
to be appropriate and publishes its submissions. You should submit only
remove impediments to and perfect the information that you wish to make
mechanism of a free and open market reasons for so finding or (ii) as to which
the self-regulatory organization available publicly. All submissions
and a national market system, and, in should refer to File Number SR–ISE–
general, to protect investors and the consents, the Commission will:
(A) by order approve or disapprove 2015–36, and should be submitted on or
public interest. before December 8, 2015.
Finally, the Exchange is not proposing such proposed rule change; or
(B) institute proceedings to determine For the Commission, by the Division of
any significant or novel regulatory
whether the proposed rule change Trading and Markets, pursuant to delegated
issues, nor is it proposing any changes
should be disapproved. authority.23
to the Exchange’s operational or trading
structure in connection with the IV. Solicitation of Comments Robert W. Errett,
Transaction. Instead, the Exchange Interested persons are invited to Deputy Secretary.
represents that the proposed rule change submit written data, views, and [FR Doc. 2015–29214 Filed 11–16–15; 8:45 am]
consists of administrative amendments arguments concerning the foregoing, BILLING CODE 8011–01–P
to the Trust Agreement and the U.S. including whether the proposed rule
Exchange Holdings COI and addresses change is consistent with the Act.
certain resolutions in relation to Eurex Comments may be submitted by any of
mstockstill on DSK4VPTVN1PROD with NOTICES
Frankfurt, which currently is a Non-U.S. the following methods:
Upstream Owner of the Exchange, but
whose status as such will cease as a Electronic Comments
result of the Transaction, such that the • Use the Commission’s Internet
resolutions will cease to be rules of the comment form (http://www.sec.gov/
Exchange as they relate to Eurex rules/sro.shtml); or
Frankfurt, and that no changes will be
made to other aspects of the Exchange’s 22 15 U.S.C. 78f(b)(8). 23 17 CFR 200.30–3(a)(12).
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Document Created: 2015-12-14 14:00:56
Document Modified: 2015-12-14 14:00:56
| 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 71864 |
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