81 FR 59699 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Amending and Restating the Second Amended and Restated Certificate of Incorporation of the Exchange's Ultimate Parent Company, Intercontinental Exchange, Inc.

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 168 (August 30, 2016)

[Federal Register Volume 81, Number 168 (Tuesday, August 30, 2016)]
[Notices]
[Pages 59699-59700]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-20742]



[[Page 59699]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78661; File No. SR-NYSE-2016-57]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change Amending and Restating the 
Second Amended and Restated Certificate of Incorporation of the 
Exchange's Ultimate Parent Company, Intercontinental Exchange, Inc.

August 24, 2016.
    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 August 17, 2016, New York Stock Exchange LLC (``NYSE'' 
or the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I 
and II 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend and restate the Second Amended and 
Restated Certificate of Incorporation (the ``ICE Certificate'') of the 
Exchange's ultimate parent company, Intercontinental Exchange, Inc. 
(``ICE''), to increase ICE's authorized share capital, and to make 
other, non-substantive changes. 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.

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

1. Purpose
    The proposed amendments would revise the ICE Certificate \4\ to 
increase the total number of authorized shares of ICE common stock, par 
value $0.01 per share (``Common Stock''), and make other, non-
substantive changes. More specifically, the Exchange proposes to make 
the following amendments to the ICE Certificate:
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    \4\ ICE owns 100% of the equity interest in Intercontinental 
Exchange Holdings, Inc., which in turn owns 100% of the equity 
interest in NYSE Holdings LLC. NYSE Holdings LLC owns 100% of the 
equity interest of NYSE Group, Inc., which in turn directly owns 
100% of the equity interest of the Exchange and its affiliates NYSE 
Arca, Inc. and NYSE MKT LLC. ICE is a publicly traded company listed 
on the Exchange. The Exchange's affiliates, NYSE MKT LLC and NYSE 
Arca, Inc., have each submitted substantially the same proposed rule 
change to propose the changes described herein. See SR-NYSEMKT-2016-
80 and SR-NYSEArca-2016-119.
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     In Article IV, Section A, the total number of shares of 
stock that ICE is authorized to issue would be changed from 600,000,000 
to 1,600,000,000 shares, and the portion of that total constituting 
Common Stock would be changed from 500,000,000 to 1,500,000,000 shares.
     In Article V, Section A.5, the reference to ``this Section 
A of ARTICLE VI'' would be corrected to refer to ``this Section A of 
ARTICLE V''.
     References to the ``Second Amended and Restated 
Certificate of Incorporation'' would be changed throughout to refer to 
the ``Third Amended and Restated Certificate of Incorporation'', and 
related technical and conforming changes would be made to the recitals 
and signature page of the ICE Certificate.
    The proposed amendments to the ICE Certificate were approved by the 
board of directors of ICE (``ICE Board'') on August 1, 2016. The 
Exchange proposes that the above amendments to the ICE Certificate 
would be effective when filed with the Department of State of Delaware, 
which would not occur until approval of the amendments by the 
stockholders of ICE is obtained at a Special Meeting of Stockholders on 
October 12, 2016.
    The trading price of ICE's Common Stock has risen significantly 
since ICE's initial public offering in 2005,\5\ and the ICE Board 
believes that such price appreciation may impact the liquidity of ICE's 
Common Stock, making it more difficult to efficiently trade and 
potentially less attractive to certain investors. Accordingly, the ICE 
Board approved pursuing a 5-for-1 stock split by way of a stock 
dividend, pursuant to which the holders of record of shares of Common 
Stock would receive, by way of a dividend, four shares of Common Stock 
for each share of Common Stock held by such holder (the ``Stock 
Dividend''). The ICE Board's approval of the Stock Dividend was 
contingent upon Commission and ICE stockholder approval of the proposed 
amendments to the ICE Certificate.
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    \5\ The closing price of ICE's Common Stock on July 29, 2016, 
the trading date prior to the ICE Board vote to approve the 
proposal, was $264.20. The price of ICE's Common Stock at its 
initial public offering on November 16, 2005, was $26.00.
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    The number of shares of Common Stock proposed to be issued in the 
Stock Dividend exceeds ICE's authorized but unissued shares of Common 
Stock. The proposed rule change would increase ICE's authorized shares 
of Common Stock and shares of capital stock sufficient to allow ICE to 
effectuate the Stock Dividend.
    The proposed changes would not alter the limitations on voting and 
ownership set forth in Section V of the ICE Certificate. Such 
limitations were introduced at the time of ICE's acquisition of the 
Exchange, to ``minimize the potential that a person could improperly 
interfere with or restrict the ability of the Commission, the Exchange, 
or its subsidiaries to effectively carry out their regulatory oversight 
responsibilities under the Act.'' \6\
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    \6\ See Securities Exchange Act Release No. 70210 (August 15, 
2013), 78 FR 51758 (August 21, 2013) (SR-NYSE-2013-42; SR-NYSEMKT-
2013-50; and SR-NYSEArca-2013-62), at 51760. ICE was previously 
named IntercontinentalExchange Group, Inc. See Securities Exchange 
Act Release No. 72158 (May 13, 2014), 79 FR 28784 (May 19, 2014) 
(SR-NYSE-2014-23).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Exchange Act,\7\ in general, and Section 
6(b)(1) of the Exchange Act,\8\ 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.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(1).
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    The proposal to increase ICE's authorized shares of Common Stock 
and shares of capital stock sufficient to

[[Page 59700]]

allow ICE to effectuate the Stock Dividend would not impact the 
Exchange's ability to be so organized as to have the capacity to be 
able to carry out the purposes of the Exchange Act. In particular, the 
proposed changes would not alter the limitations on voting and 
ownership set forth in Section V of the ICE Certificate, and so the 
proposed changes would not enable a person to ``improperly interfere 
with or restrict the ability of the Commission, the Exchange, or its 
subsidiaries to effectively carry out their regulatory oversight 
responsibilities under the Act.'' \9\
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    \9\ See Securities Exchange Act Release No. 70210, supra note 6, 
at 51760.
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    For similar reasons, the proposal is consistent with Section 
6(b)(5) of the Exchange Act,\10\ because it would not impact the 
Exchange's governance or regulatory structure, which would continue to 
be 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.
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    \10\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that approval of the proposal would remove 
impediments to, and perfect the mechanism of a free and open market and 
a national market system and, in general, protect investors and the 
public interest, because by increasing ICE's authorized shares of 
Common Stock and shares of capital stock sufficient to allow ICE to 
effectuate the Stock Dividend, the proposed rule change will facilitate 
broader ownership of ICE.
    The Exchange believes that amending Article V, Section A.5, to 
correct the reference to ``this Section A of ARTICLE VI'' to refer to 
``this Section A of ARTICLE V'' would reduce potential confusion that 
may result from having an incorrect reference in the ICE Certificate. 
Replacing such incorrect reference would further the goal of 
transparency and add clarity to the ICE Certificate.

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 Exchange Act. The proposed rule 
change is not designed to address any competitive issue but rather is 
concerned solely with the number of authorized shares of Common Stock 
and shares of capital stock of the Exchange's ultimate parent.

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

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

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the 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 protected]. Please include 
File Number SR-NYSE-2016-57 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2016-57. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet 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-NYSE-2016-57, and should be 
submitted on or before September 20, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-20742 Filed 8-29-16; 8:45 am]
 BILLING CODE 8011-01-P