82 FR 6669 - Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change in Connection With the Proposed Transaction Involving CHX Holdings, Inc. and North America Casin Holdings, Inc.

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 12 (January 19, 2017)

[Federal Register Volume 82, Number 12 (Thursday, January 19, 2017)]
[Notices]
[Pages 6669-6673]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-01152]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79781; File No. SR-CHX-2016-20]


Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Order Instituting Proceedings To Determine Whether To Approve or 
Disapprove a Proposed Rule Change in Connection With the Proposed 
Transaction Involving CHX Holdings, Inc. and North America Casin 
Holdings, Inc.

January 12, 2017.

I. Introduction

    On December 2, 2016, the Chicago Stock Exchange, Inc. (``CHX'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change in connection with the proposed transaction 
(``Transaction'') involving CHX Holdings, Inc. (``CHX Holdings'') and 
North America Casin Holdings, Inc. (``N.A. Casin Holdings''). The 
proposed rule change was published for comment in the Federal Register 
on December 12, 2016.\3\ The Commission received five comment letters 
on the proposed rule change \4\ and two letters from the

[[Page 6670]]

Exchange in response to certain comments.\5\ This order institutes 
proceedings under Section 19(b)(2)(B) of the Exchange Act \6\ to 
determine whether to approve or disapprove the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 79474 (December 12, 
2016), 81 FR 89543 (``Notice'').
    \4\ See letters from: Representative Robert Pittenger, 
Representative Earl L. ``Buddy'' Carter, Representative Peter 
DeFazio, Representative Collin Peterson, and Representative David 
Joyce, dated December 22, 2016 (``Pittenger Letter''); James N. 
Hill, dated December 23, 2016 (``Hill Letter''); John Ciccarelli, 
dated January 2, 2017 (``Ciccarelli Letter''); Anonymous, dated 
January 3, 2017 (``Anonymous Letter''); and David E. Kaplan, 
Executive Director, Global Investigative Journalism Network, dated 
January 4, 2017 (``GIJN Letter''). All of the comments are available 
at https://www.sec.gov/comments/sr-chx-2016-20/chx201620.shtml.
    \5\ See letters from John K. Kerin, President and Chief 
Executive Officer, CHX, dated January 5, 2016 (``CHX Response Letter 
1'') and Albert J. Kim, Vice President and Associate General 
Counsel, CHX, dated January 6, 2016 (``CHX Response Letter 2'') 
(responding specifically to the Ciccarelli Letter). Both of these 
letters are available at https://www.sec.gov/comments/sr-chx-2016-20/chx201620.shtml.
    \6\ 15 U.S.C. 78s(b)(2)(B).
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II. Summary of the Proposal

    The Exchange is a wholly-owned subsidiary of CHX Holdings. 
According to the Exchange, CHX Holdings is currently beneficially owned 
by 193 firms or individuals, including Exchange Participants or 
affiliates of Exchange Participants.\7\ Under the terms of the 
Transaction, CHX Holdings would become a wholly-owned subsidiary of 
N.A. Casin Holdings. According to the Exchange, current CHX Holdings 
stockholders would receive the right to receive cash in exchange for 
their shares under the terms of the Transaction.\8\ The Exchange states 
that consummation of the Transaction is subject to the satisfaction of 
certain conditions precedent, which include approval of the proposed 
rule change by the Commission.\9\
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    \7\ See Notice, supra note 3 at 89544. See also CHX Article 1, 
Rule 1(s) defining ``Participant.''
    \8\ See Notice, supra note 3 at 89544.
    \9\ See id.
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    Upon the closing of the Transaction, the Exchange represents that 
all of the outstanding and issued shares of N.A. Casin Holdings would 
be held by the following firms and individuals (the ``upstream 
owners'') in the following percentages:
     Non-U.S. Upstream Owners:

[cir] N.A. Casin Group, Inc. (``N.A. Casin Group''), a corporation 
incorporated under the laws of the State of Delaware and wholly-owned 
by Chongqing Casin Enterprise Group (``Chongqing Casin'')--20%
[cir] Chongqing Jintian Industrial Co., Ltd., a corporation 
incorporated under the laws of the People's Republic of China--15%
[cir] Chongqing Longshang Decoration Co., Ltd., a corporation 
incorporated under the laws of the People's Republic of China--14.5%

     U.S. Upstream Owners:
[cir] Castle YAC Enterprises, LLC (``Castle YAC''), a limited liability 
company organized under the laws of the State of New York, the sole 
member of which is Jay Lu,\10\ a U.S. citizen and Vice President of 
N.A. Casin Group--19%
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    \10\ According to the Exchange, Jay Lu, the sole member of 
Castle YAC, is associated with an affiliate of Chongqing Casin and 
is also the son of Shengju Lu, the Chairman of Chongqing Casin. See 
Notice, supra note 3 at 89545 n.18.
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[cir] Raptor Holdco LLC (``Raptor''), a limited liability company 
organized under the laws of the State of Delaware--11.75%
[cir] Saliba Ventures Holdings, LLC (``Saliba''), a limited liability 
company organized under the laws of the State of Illinois--11.75%
[cir] Xian Tong Enterprises, Inc., a corporation incorporated under the 
laws of the State of New York--6.94%
[cir] Equity incentive shares to five members of the CHX Holdings 
management team, all U.S. citizens--0.88%
[cir] Cheevers & Co., Inc., a corporation incorporated under the laws 
of the State of Illinois--0.18%\11\
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    \11\ See id. at 89544-55.

    Following the closing of the Transaction, CHX would remain 
registered as a national securities exchange under Section 6 of the Act 
\12\ and a self-regulatory organization (``SRO'') as defined in Section 
3(a)(26) of the Act.\13\ According to the Exchange, CHX rules would 
remain in full force and effect as of the date of the proposed rule 
filing, would continue to govern the activities of CHX up to and after 
the closing of the Transaction, and CHX would continue to discharge its 
SRO responsibilities pursuant to CHX's registration under Section 6 of 
the Act.\14\ In addition, the Exchange states that following the 
closing, CHX's affiliated routing broker, CHXBD, would remain a 
Delaware limited liability corporation of which CHX Holdings would 
remain the sole member.
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    \12\ 15 U.S.C. 78f.
    \13\ 15 U.S.C. 78c(a)(26).
    \14\ See Notice, supra note 3 at 89545-46.
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    In order to facilitate the Transaction, the Exchange is proposing 
to amend its certificate of incorporation and bylaws,\15\ the 
certificate of incorporation and bylaws of CHX Holdings,\16\ and its 
rules.\17\ CHX has also filed the following documents in connection 
with the Transaction: (i) The certificate of incorporation and bylaws 
of N.A. Casin Holdings; \18\ (ii) text of a proposed resolution of the 
CHX Holdings Board of Directors to waive certain ownership and voting 
limitations to permit the Transaction; \19\ (iii) the proposed N.A. 
Casin Holdings Stockholders Agreement,\20\ which includes transfer-of-
share provisions for the upstream owners that provide a right of first 
offer, a right to acquire interest upon change of control, and a right 
to purchase new securities; (iv) proposed put agreements between 
Saliba, N.A. Casin Group, and N.A. Casin Holdings,\21\ and Raptor, N.A. 
Casin Group, and N.A. Casin Holdings,\22\ respectively, which would 
grant Saliba and Raptor the right to compel N.A. Casin Holdings to 
purchase or arrange for an unspecified third-party to purchase a 
specified amount of Saliba's or Raptors's equity interest in N.A. Casin 
Holdings, respectively.
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    \15\ See Exhibits 5C and 5D.
    \16\ See Exhibits 5A and 5B.
    \17\ See Exhibit 5E.
    \18\ See Exhibits 5F and 5G.
    \19\ See Exhibit 5H. See infra note 23.
    \20\ See Exhibit 5I.
    \21\ See Exhibit 5J.
    \22\ See Exhibit 5K.
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    The Exchange proposes several substantive and technical amendments 
to its corporate governance documents, rules, and the governing 
documents of CHX Holdings. The amendments include revised provisions 
addressing, among other items, board and committee composition and 
procedures, procedures regarding stockholder meetings, consent to U.S. 
and Commission jurisdiction, and Commission access to corporate books 
and records.
    The proposed amendments also would revise provisions in the 
certificate of incorporation of CHX Holdings relating to ownership and 
voting limitations. Additionally, the proposed certificate of 
incorporation of N.A. Casin Holdings would contain identical ownership 
concentration and voting limitations and other provisions substantially 
similar to those contained in the CHX Holdings documents, which would 
apply directly to the upstream owners.\23\ These provisions specify 
that no person, either alone or with its Related Persons,\24\ shall be 
permitted at

[[Page 6671]]

any time to own beneficially shares of stock of CHX Holdings or N.A. 
Casin Holdings representing in the aggregate more than 40% of the then 
outstanding votes entitled to be cast on any matter unless specific 
procedures are followed prior to acquiring shares in excess of the 
ownership limitation.\25\ Furthermore, as proposed, no Exchange 
Participant, either alone or with its Related Persons, shall be 
permitted at any time to own beneficially shares of stock of CHX 
Holdings or N.A. Casin Holdings representing in the aggregate more than 
20% of the then outstanding votes entitled to be cast on any 
matter.\26\ In addition, no person that is subject to any statutory 
disqualification as defined in Section 3(a)(39) of the Exchange Act 
shall be permitted at any time to own beneficially, either alone or 
with its Related Persons, shares of stock of CHX Holdings or N.A. Casin 
Holdings representing in the aggregate more than 20% of the then 
outstanding votes entitled to be cast on any matter.\27\ CHX also 
proposes cure provisions that would require CHX Holdings or N.A. Casin 
Holdings, as applicable, to call shares held in excess of these 
ownership limitations and to not register any shares transferred in 
violation of these ownership limitations.\28\
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    \23\ The current CHX Holdings Certificate contains ownership 
concentration and voting concentration limitations that are similar 
to those being proposed by the Exchange. In order to effect the 
Transaction, the CHX Holdings Board of Directors has waived the 
applicability of those limitations so that CHX Holdings can become a 
wholly owned subsidiary of N.A. Casin Holdings. See Exhibit 5H.
    \24\ As set forth in the proposed certificates of incorporation 
of N.A. Casin Holdings and CHX Holdings, the term ``Related 
Persons'' shall mean: ``(1) with respect to any Person, any 
executive officer (as such term is defined in Rule 3b-7 under the 
Securities Exchange Act of 1934 (``Exchange Act'')) director, 
general partner, manager or managing member, as applicable, and all 
``affiliates'' and ``associates'' of such Person (as those terms are 
defined in Rule 12b-2 under the Exchange Act), and other Person(s) 
whose beneficial ownership of shares of stock of the Corporation 
with the power to vote on any matter would be aggregated with such 
first Person's beneficial ownership of such stock or deemed to be 
beneficially owned by such first Person pursuant to Rules 13d-3 and 
13d-5 under the Exchange Act; and (2) in the case of any Person 
constituting a member (as that term is defined in Section 3(a)(3)(A) 
of the Exchange Act) of CHX (defined in the Rules of the Chicago 
Stock Exchange, Inc. (``CHX Rules''), as such rules may be amended 
from time to time, as a ``Participant'') for so long as CHX remains 
a registered national securities exchange, such Person and any 
broker or dealer with which such Person is associated; and (3) any 
other Person(s) with which such Person has any agreement, an 
arrangement or understanding (whether or not in writing) to act 
together for the purpose of acquiring, voting, holding or disposing 
of shares of the stock of the Corporation; and (4) in the case of a 
Person that is a natural person, any relative or spouse of such 
Person, or any relative of such spouse, who has the same home as 
such Person or who is a director or officer of the Corporation or 
any of its parents or subsidiaries.''
    \25\ See Notice, supra note 3, at 89552.
    \26\ See id. at 89552-53.
    \27\ See id. at 89553.
    \28\ See id.
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    Additionally, both the certificates of incorporation of CHX 
Holdings and N.A. Casin Holdings would preclude any stockholder, either 
alone or with its Related Persons, from voting more than 20% of the 
then outstanding shares entitled to be cast on any matter unless 
specific procedures are followed prior to voting in excess of the 
limitation.\29\ Similarly, no person, either alone or with its Related 
Persons, would be permitted to enter into an agreement, plan, or other 
arrangement that would result in an aggregate of more than 20% of the 
then outstanding votes entitled to be cast on a matter to not be voted 
unless specific procedures are followed prior to entering into such an 
agreement, plan, or arrangement in violation.\30\ The certificates of 
incorporation would require that CHX Holdings or N.A. Casin Holdings, 
as applicable, disregard any votes cast in excess of the voting 
limitations.\31\
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    \29\ See id.
    \30\ See id.
    \31\ See id.
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III. Summary of the Comments

    The Commission received four comments regarding the proposed rule 
change.\32\ The Commission also received one comment letter stating 
that, contrary to what the Ciccarelli Letter stated, the Ciccarelli 
Letter was not submitted by or on behalf of the Global Investigative 
Journalism Network.\33\ The Exchange submitted a letter responding to 
the comments generally and a letter responding to the Ciccarelli 
Letter.\34\
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    \32\ See supra note 4.
    \33\ See GIJN Letter, supra note 4; see also CHX Response Letter 
2, supra note 5.
    \34\ See supra note 5.
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    In general, three of the commenters express concern over the 
proposed upstream ownership of CHX.\35\ One commenter questions whether 
the Chinese government may influence Chongqing Casin, stating that 
Chongqing Casin is involved in a number of Chinese market sectors that 
require close ties to the state, particularly in state-sensitive 
environmental protection areas, that its financial assets were 
originally state-controlled, and that its chairman sits on an industry 
council overseen directly by the mayor of the Chongqing 
Municipality.\36\ The commenter states that, in particular, Chinese 
ownership or involvement presents risks as Chinese government-sponsored 
cyber-attacks have been conducted to devalue foreign businesses and 
steal intellectual property and proprietary data.\37\ This commenter 
asserts that the United States government has been unable to adequately 
address transparency concerns with regard to the operations of Chinese 
businesses.\38\ In its first response to comments, CHX affirms that no 
prospective investor controls, or is controlled by, or is under common 
control with, a governmental entity or any political subdivision 
thereof, including the Chinese government.\39\
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    \35\ See generally Pittinger Letter, supra note 4; Ciccarelli 
Letter, supra note 4; Anonymous Letter, supra note 4.
    \36\ See Pittinger Letter, supra note 4, at 1.
    \37\ See id.
    \38\ See id. at 2.
    \39\ See CHX Response Letter 1, supra note 5, at 2.
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    Another commenter argues that due to jurisdiction limitations and 
transparency concerns, the Commission cannot exercise proper regulatory 
oversight under the current proposal.\40\ In response, CHX states that 
it believes that its rules are consistent with the requirements of the 
Exchange Act, and that the CHX rules and Exchange Act contain various 
provisions that would facilitate the ability of U.S. regulators, 
including the Commission, to monitor, compel and enforce compliance by 
each of the upstream owners, particularly in that upstream owners would 
be required to adhere to the ownership and voting limitations; submit 
to U.S. regulatory jurisdiction and maintain agents in the U.S. for the 
service of process; maintain open books and records related to their 
ownership of CHX and keep such books and records in the U.S.; and 
refrain from interfering with, and give due consideration to, the SRO 
function of CHX.\41\ CHX also asserts that, pursuant to the Exchange 
Act, the Exchange is subject to direct and rigorous oversight by the 
Commission, which includes, among other things, frequent examinations 
of various aspects of CHX operations by Commission staff, including 
security and trading protocols, as well as Commission approval of 
certain regulatory, operational, and strategic initiatives prior to 
implementation by CHX.\42\
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    \40\ See Ciccarelli Letter, supra note 4, at 1-2.
    \41\ See CHX Response Letter 1, supra note 5, at 4; CHX Response 
Letter 2, supra note 5, at 3.
    \42\ See CHX Response Letter 2, supra note 5, at 3-4.
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    This commenter also questions the identity of the proposed upstream 
owners and the validity of CHX's representation that there are no 
Related Persons among the proposed upstream owners other than Castle 
YAC and N.A. Casin Group.\43\ The commenter asserts that contrary to 
CHX's representations in the Notice, several of the proposed upstream 
owners may be affiliated.\44\ In addition, the commenter argues that 
Chongqing Casin has virtual control over Raptor and Saliba due to the 
put agreements.\45\ The commenter therefore concludes that after the 
proposed transaction, approximately 99% of the voting stock in CHX 
would be controlled by Chinese entities or affiliated shell 
nominees.\46\ In response, CHX asserts that 50.5% of CHX will be 
indirectly owned by U.S. citizens, and

[[Page 6672]]

that it has not misrepresented any facts regarding the Transaction.\47\ 
CHX reaffirms the representations that it made in the Notice that the 
only Related Persons among the prospective owners are Castle YAC and 
N.A. Casin Group, there are no other Related Persons among the 
prospective owners, and that none of the prospective owners directly, 
or indirectly through one or more intermediaries, controls, or is 
controlled by, or is under common control with, a governmental entity 
or subdivision thereof.\48\ CHX notes that each of these 
representations is supported by an opinion of counsel provided to the 
Commission by outside counsel for CHX.\49\ CHX asserts that, as 
described in the Notice, Xian Tong Enterprises, Inc. and Castle YAC are 
controlled by U.S. citizens, Quiling Luo and Jay Lu, respectively.\50\ 
CHX also states that under the terms of the Saliba and Raptor put 
agreements, N.A. Casin Holdings could not compel Saliba or Raptor to 
exercise their put options, and that in the event that either the 
Saliba or Raptor put agreement is exercised, the CHX rules would 
require the resulting ownership structure to comport with the ownership 
and voting limitations.\51\ In addition, CHX states that it ``provided 
[the Committee for Foreign Investment in the United States (``CFIUS'')] 
with detailed information regarding the [p]rospective [o]wners, which 
recently concluded its investigation into the [p]roposed Transaction 
and found no unresolved national security concerns.'' \52\
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    \43\ See generally Ciccarelli Letter, supra note 4.
    \44\ See id. at 2-3.
    \45\ See id. at 3.
    \46\ See id. at 2.
    \47\ See CHX Response Letter 2, supra note 5, at 2.
    \48\ See id. at 5.
    \49\ See id.
    \50\ See id. at 5-6.
    \51\ See id. at 6.
    \52\ See id. at 5.
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    This commenter also asserts that there are few or no controls in 
place at the upstream corporate ownership level that would prevent the 
upstream owners from transferring their voting power in CHX to what the 
commenter opines could be more opaque owners, including those that 
involve the Chinese government.\53\ In response, CHX represents that no 
prospective owner and its Related Persons would maintain an equity 
interest in N.A. Casin Holdings in excess of the 40% ownership 
limitation, and that no prospective owner and its Related Persons would 
be permitted to exercise voting power in excess of the 20% voting 
limitation.\54\ CHX also responds that the proposed governance 
documents for N.A. Casin Holdings and CHX Holdings provide robust 
enforcement mechanisms for the ownership and voting limitations, and 
that the CHX board's composition would be required to meet certain 
independence requirements.\55\ As described above, CHX notes that the 
CHX rules and Exchange Act contain various provisions that would 
facilitate the ability of U.S. regulators, including the Commission, to 
monitor, compel and enforce compliance by each of the upstream 
owners.\56\ CHX states that in the event that a prospective owner does 
not comply with the ownership or voting limitations, the proposed 
governance documents enable the relevant holding companies to cure non-
compliance.\57\
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    \53\ See Ciccarelli Letter, supra note 4, at 2.
    \54\ See CHX Response Letter 1, supra note 5, at 3; CHX Response 
Letter 2, supra note 5, at 2.
    \55\ See CHX Response Letter 1, supra note 5, at 3; CHX Response 
Letter 2, supra note 5, at 3.
    \56\ See supra note 41 and accompanying text.
    \57\ See CHX Response Letter 2, supra note 5, at 3.
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    Two commenters assert that the proposed acquisition may present 
financial security risks to investors and the U.S. marketplace.\58\ One 
of these commenters raises concerns that a bad actor with access to a 
national stock exchange's data could use information available through 
brokerage records and the Consolidated Audit Trail to engage in spear 
phishing, blackmail attempts, and other similar attacks.\59\ In its 
response, CHX states that CFIUS investigated the Transaction and 
``CFIUS determined that there were no unresolved national security 
concerns with respect to the [p]roposed Transaction. . . .'' \60\
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    \58\ See Pittinger Letter, supra note 4, at 1; Anonymous Letter, 
supra note 4.
    \59\ See Anonymous Letter, supra note 4.
    \60\ See CHX Response Letter 1, supra note 5, at 5.
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    Finally, three commenters express concern regarding the length of 
the comment period and the timing of the filing over the holiday 
season.\61\ Two of the commenters request that the Commission extend 
the comment period.\62\ In response, CHX states that it has been in 
regular contact with the Commission's staff since the merger agreement 
was executed, and that the timing of the filing was not intended to 
circumvent thorough Commission review of the proposed rule change.\63\
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    \61\ See Pittinger Letter, supra note 4, at 1; Hill Letter, 
supra note 4; Ciccarelli Letter, supra note 4, at 4.
    \62\ See Pittinger Letter, supra note 4, at 1; Hill Letter, 
supra note 4.
    \63\ See CHX Response Letter 1, supra note 5, at 4-5.
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IV. Proceedings To Determine Whether To Approve or Disapprove SR-CHX-
2016-20 and Grounds for Disapproval Under Consideration

    The Commission is instituting proceedings pursuant to Section 
19(b)(2)(B) of the Exchange Act \64\ to determine whether the proposed 
rule change should be approved or disapproved. Institution of such 
proceedings is appropriate at this time in view of the legal and policy 
issues raised by the proposed rule change. Institution of proceedings 
does not indicate that the Commission has reached any conclusions with 
respect to any of the issues involved. Rather, as stated below, the 
Commission seeks and encourages interested persons to provide comments 
on the proposed rule change.
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    \64\ 15 U.S.C. 78s(b)(2)(B).
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    Pursuant to Section 19(b)(2)(B) of the Exchange Act,\65\ the 
Commission is providing notice of the grounds for disapproval under 
consideration. The Commission is instituting proceedings to allow for 
additional analysis of the proposed rule change's consistency with 
Section 6(b)(1) of the Exchange Act, which requires that a national 
securities exchange is so organized and has the capacity to be able to 
carry out the purposes of the Exchange Act and to comply, and to 
enforce compliance by its members and persons associated with its 
members, with the provisions of the Exchange Act, the rules and 
regulations thereunder, and the rules of the exchange. In addition, the 
Commission is instituting proceedings to allow for additional analysis 
of the proposed rule change's consistency with Section 6(b)(5) of the 
Exchange Act, which requires, among other things, that the rules of a 
national securities exchange are designed to protect investors and the 
public interest.
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    \65\ Id.
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IV. Procedure: Request for Written Comments

    The Commission requests that interested persons provide written 
submissions of their views, data, and arguments with respect to the 
issues identified above, as well as any other concerns they may have 
with the proposal. In particular, the Commission invites the written 
views of interested persons concerning whether the proposal is 
consistent with Sections 6(b)(1), 6(b)(5), or any other provision of 
the Exchange Act, or the rules and regulations thereunder. Although 
there do not appear to be any issues relevant to approval or 
disapproval that would be facilitated by an oral presentation of

[[Page 6673]]

views, data, and arguments, the Commission will consider, pursuant to 
Rule 19b-4, any request for an opportunity to make an oral 
presentation.\66\
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    \66\ Section 19(b)(2) of the Exchange Act, as amended by the 
Securities Act Amendments of 1975, Public Law 94-29 (June 4, 1975), 
grants the Commission flexibility to determine what type of 
proceeding--either oral or notice and opportunity for written 
comments--is appropriate for consideration of a particular proposal 
by a self-regulatory organization. See Securities Act Amendments of 
1975, Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No. 
75, 94th Cong., 1st Sess. 30 (1975).
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    Interested persons are invited to submit written data, views, and 
arguments regarding whether the proposal should be approved or 
disapproved by February 21, 2017. Any person who wishes to file a 
rebuttal to any other person's submission must file that rebuttal by 
March 6, 2017. The Commission asks that commenters address the 
sufficiency of the Exchange's statements in support of the proposal, in 
addition to any other comments they may wish to submit about the 
proposed rule change.
    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-CHX-2016-20 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 Numbers SR-CHX-2016-20. 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 these filings 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-CHX-2016-20 and should be 
submitted on or before February 21, 2017. Rebuttal comments should be 
submitted by March 6, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\67\
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    \67\ 17 CFR 200.30-3(a)(57).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-01152 Filed 1-18-17; 8:45 am]
 BILLING CODE 8011-01-P