83 FR 61692 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Certificate of Incorporation, Bylaws and Rule 3.3

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 231 (November 30, 2018)

Page Range		61692-61699
FR Document		2018-25998
Federal Register, Volume 83 Issue 231 (Friday, November 30, 2018)
[Federal Register Volume 83, Number 231 (Friday, November 30, 2018)]
[Notices]
[Pages 61692-61699]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-25998]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84648; File No. SR-NYSEArca-2018-85]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Its 
Certificate of Incorporation, Bylaws and Rule 3.3

November 26, 2018.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on November 20, 2018, NYSE Arca, Inc. (``Exchange'' or ``NYSE 
Arca'') 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 Exchange. The 
Commission is publishing this notice to solicit comments on the

[[Page 61693]]

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 its certificate of incorporation, 
bylaws and Rule 3.3(a)(1)(B) to (1) harmonize certain provisions 
thereunder with similar provisions in the governing documents of the 
Exchange's national securities exchange affiliates and parent 
companies; and (2) make clarifying and updating changes. The proposed 
rule change is available on the Exchange's website 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 Exchange proposes to amend the Certificate of Incorporation of 
the Exchange (``Exchange Certificate''), Amended and Restated Bylaws of 
the Exchange (``Exchange Bylaws''), and Rule 3.3(a)(1)(B) to (1) 
harmonize certain provisions thereunder with similar provisions in the 
governing documents of the Exchange's national securities exchange 
affiliates \4\ and parent companies; and (2) make clarifying and 
updating changes.
---------------------------------------------------------------------------

    \4\ The Exchange has four registered national securities 
exchange affiliates: NYSE National, Inc. (``NYSE National''), New 
York Stock Exchange LLC (``NYSE''), NYSE America [sic] LLC (``NYSE 
American''), and Chicago Stock Exchange, Inc. (``CHX'' and together 
with the Exchange, NYSE National, NYSE American, and NYSE, the 
``NYSE Group Exchanges''). CHX has filed to change its name to NYSE 
Chicago, Inc. See Exchange Act Release No. 84494 (October 26, 2018), 
83 FR 54953 (November 1, 2018) (SR-CHX-2018-05) (``NYSE Chicago 
Release'') (notice of filing and immediate effectiveness of proposal 
to reflect name changes of the Exchange and its direct parent 
company and to amend certain corporate governance provisions). The 
rule changes set forth in the NYSE Chicago Release will become 
operative upon the Second Amended and Restated Certificate of 
Incorporation of Chicago Stock Exchange, Inc. (``NYSE Chicago 
Certificate'') becoming effective pursuant to its filing with the 
Secretary of State of the State of Delaware.
---------------------------------------------------------------------------

    The Exchange is owned by the Holding Member, which in turn is 
indirectly wholly owned by NYSE Holdings LLC (``NYSE Holdings''). NYSE 
Holdings is a wholly owned subsidiary of Intercontinental Holdings, 
Inc. (``ICE Holdings''), which is in turn wholly owned by the 
Intercontinental Exchange, Inc. (``ICE'').\5\
---------------------------------------------------------------------------

    \5\ See Exchange Act Release No. 82638 (February 6, 2018), 83 FR 
6072 (February 12, 2018) (SR-NYSE Arca-2018-09) (notice of filing 
and immediate effectiveness of proposed rule change to amend certain 
of the governing documents of the Exchange's intermediate parent 
companies).
---------------------------------------------------------------------------

    The Exchange operates as a separate self-regulatory organization 
and has rules, membership rosters and listings distinct from the rules, 
membership rosters and listings of the other NYSE Group Exchanges. At 
the same time, however, the Exchange believes it is important for each 
of the NYSE Group Exchanges to have a consistent approach to corporate 
governance in certain matters, to simplify complexity and create 
greater consistency among the NYSE Group Exchanges.\6\
---------------------------------------------------------------------------

    \6\ See NYSE Chicago Release, supra note 4, at 54953.
---------------------------------------------------------------------------

    Because the Exchange is a Delaware non-stock corporation, most of 
the proposed changes are based on the governing documents of CHX and 
NYSE National, which are Delaware corporations, as the most comparable 
NYSE Group Exchanges.\7\ The proposed Exchange Certificate and Exchange 
Bylaws reflect the expectation that the Exchange will continue to be 
operated with a governance structure substantially similar to that of 
other NYSE Group Exchanges, primarily CHX and NYSE National.
---------------------------------------------------------------------------

    \7\ The other NYSE Group Exchanges, NYSE and NYSE American, are 
limited liability companies organized under New York and Delaware 
limited liability company law, respectively.
---------------------------------------------------------------------------

    The changes described herein would become operative upon the 
Exchange Certificate becoming effective pursuant to its filing with the 
Secretary of State of the State of Delaware.
    The proposed amendments described below are primarily based on the 
Second Amended and Restated Certificate of Incorporation of Chicago 
Stock Exchange, Inc. (``NYSE Chicago Certificate''); Second Amended and 
Restated By-Laws of NYSE Chicago, Inc. (``NYSE Chicago Bylaws'') \8\; 
Amended and Restated Certificate of Incorporation of NYSE National, 
Inc. (``NYSE National Certificate''); Fifth Amended and Restated Bylaws 
of NYSE National, Inc. (``NYSE National Bylaws'') \9\; and Sixth 
Amended and Restated Certificate of Incorporation of NYSE Group, Inc. 
(``NYSE Group Certificate). In addition, the amendments to the 
indemnification provisions are based on the Eighth Amended and Restated 
Bylaws of Intercontinental Exchange, Inc. (``ICE Bylaws'') and the 
Sixth Amended and Restated Bylaws of Intercontinental Exchange 
Holdings, Inc. (``ICE Holdings Bylaws'').
---------------------------------------------------------------------------

    \8\ The NYSE Chicago Certificate and NYSE Chicago Bylaws will 
become operative when the NYSE Chicago Certificate becomes effective 
pursuant to its filing with the Secretary of State of the State of 
Delaware. Id.
    \9\ The Exchange notes that, concurrent with this filing, NYSE 
National is filing changes to the NYSE National Certificate and 
Bylaws. See SR-NYSENat-2018-24. References to such documents in this 
filing are to the NYSE National Certificate and Bylaws currently in 
effect. The Exchange governing documents use ``member,'' 
``Exchange'' and ``Board'' instead of ``stockholder,'' 
``Corporation,'' and ``Board of Directors,'' which are used by CHX 
and NYSE National in their governing documents. When comparing a 
proposed change to the provision it is based on, the below 
descriptions do not note when such terms differ, as they are not 
substantive differences.
---------------------------------------------------------------------------

Proposed Amendments to the Exchange Certificate
    The Exchange proposes to amend the Exchange Certificate as follows.
Title and Introductory Paragraphs
    The Exchange proposes to amend the title to reflect that the 
proposed Exchange Certificate is the ``Amended and Restated Certificate 
of Incorporation of NYSE Arca, Inc.'' \10\ In addition, it proposes to 
adopt introductory paragraphs stating the Exchange's name and stating 
that the Exchange Certificate was adopted and amended in accordance 
with specific provisions of the General Corporation Law of the State of 
Delaware (``DGCL''). The introductory paragraphs are substantially 
similar to the introductory paragraphs of the NYSE Chicago Certificate.
---------------------------------------------------------------------------

    \10\ See Exhibit B [sic] to Amendment No. 2, SR-PCX-2006-24 
(March 6, 2006); see also Exchange Act Release No. 53615 (April 7, 
2006), 71 FR 19226 (April 13, 2006) (SR-PCX-2006-24) (notice of 
filing and immediate effectiveness of proposed rule change and 
Amendments No. 1 and 2 thereto to change the names of the Pacific 
Exchange, Inc., PCX Equities, Inc., PCX Holdings, Inc., and the 
Archipelago Exchange, L.L.C.).
---------------------------------------------------------------------------

Article 1
    In a non-substantive change, the Exchange proposes to replace 
``NYSE ARCA, INC.'' with ``NYSE Arca, Inc.'' in Article 1, to reflect 
that the legal name of the Exchange is not entirely in capital letters. 
Proposed Article 1 is substantially similar to Article 1 of the NYSE 
Chicago Certificate and Article

[[Page 61694]]

FIRST of the NYSE National Certificate, provided that the Exchange 
Certificate provision defines ``Exchange.''
Article 2 and Certificate of Change of Registered Agent and/or 
Registered Office
    In a non-substantive change, the Exchange proposes to update the 
address of the registered office and name of the registered agent, as 
previously filed. The Exchange also proposes to delete the 
``Certificate of Change of Registered Agent and/or Registered Office.'' 
\11\
---------------------------------------------------------------------------

    \11\ See Exchange Act Release No. 82924 (March 22, 2018), 83 FR 
13163 (March 27, 2018) (SR-NYSEArca-2018-18).
---------------------------------------------------------------------------

Article 9
    Article 9 permits the Exchange to enter into a compromise with its 
creditors in certain circumstances. The Exchange proposes to amend 
current Article 9 to be consistent with the relevant provision of the 
DGCL, including the use of ``corporation'' instead of ``Exchange.'' 
\12\ The proposed article would be substantially similar to Article 
TENTH of the NYSE Chicago Certificate and Article TENTH of the NYSE 
National Certificate.
---------------------------------------------------------------------------

    \12\ See Del. Code tit. 8, Sec.  102(b)(2)(ii).
---------------------------------------------------------------------------

Article 10
    In a non-substantive change, the Exchange proposes to correct a 
reference to ``this Article 11'' to reference Article 10.
Article 12
    Article 12 addresses indemnification. The Exchange proposes to 
delete Article 12 in its entirety, as the indemnification provision is 
set forth in Article VII, Section 7.01 of the Exchange Bylaws, making 
this provision redundant. Subsequent articles would be renumbered 
accordingly. NYSE Chicago made a similar change, deleting Article 
EIGHTH(a) of its Certificate.\13\
---------------------------------------------------------------------------

    \13\ See NYSE Chicago Release, supra note 4, at 54956.
---------------------------------------------------------------------------

Article 13
    Current Article 13 (proposed Article 12) states that the approval 
of a majority of the members of the Board and a majority of the 
existing Corporate Members shall be required to amend or repeal any 
provision of the Exchange Certificate, and that any change to the 
Exchange Certificate or Bylaws that is required to be approved by or 
filed with the Commission before it may become effective shall not 
become effective until the required Commission procedures have been 
satisfied.
    The Exchange proposes to amend the provision to state that the 
Exchange reserves the right to amend the Exchange Certificate and to 
change or repeal any provision thereof, provided that any amendment 
must be approved by a majority of the members of the Board present at 
the relevant meeting and by a majority of the existing Corporate 
Members. In addition, the Exchange proposes to add a sentence providing 
that before any amendment to, alteration or repeal of any provision of 
the Exchange Certificate shall be effective, those changes shall be 
submitted to the Board and, if required, the proposed changes shall not 
become effective until filed with or filed with and approved by the 
Commission, as the case may be. The revised provision would read as 
follows (deletions bracketed; new text italicized):
    The approval of either a majority of the Board of Directors or the 
affirmative vote of a majority of the existing Corporate Members, shall 
be required to adopt, amend or repeal any provision of the bylaws of 
the Exchange. The [approval of ]Exchange reserves the right to amend 
this certificate of incorporation, and to change or repeal any 
provision of the certificate of incorporation, and all rights conferred 
upon Corporate Members by such certificate of incorporation are granted 
subject to this reservation; provided, however, that any amendment to 
this certificate of incorporation must be approved by a majority of the 
members of the Board of Directors who are present at the meeting at 
which the amendment is proposed and by a majority of the existing 
Corporate Members [shall be required to amend or repeal any provision 
of this Certificate of Incorporation]. Any change to the Certificate of 
Incorporation or bylaws that is required to be approved by or filed 
with the United States Securities and Exchange Commission (the 
``Commission'') before it may become effective shall not become 
effective until the procedures of the Commission necessary to make it 
effective shall have been satisfied. Before any amendment to, or repeal 
of, any provision of this Certificate of Incorporation shall be 
effective, those changes shall be submitted to the Board of Directors 
of the Exchange and if such amendment or repeal must be filed with or 
filed with and approved by the Commission, then the proposed changes to 
this Certificate of Incorporation shall not become effective until 
filed with or filed with and approved by the Commission, as the case 
may be.
    The proposed new text would be substantially similar to Article 
ELEVENTH of the NYSE Chicago Certificate. In addition, the proposed 
final sentence is consistent with the final sentence of Article 
ELEVENTH of the NYSE National Certificate.
Article 14
    Article 14 sets forth the name and mailing address of each of the 
incorporators. In a non-substantive change, the Exchange proposes to 
delete current Article 14 in its entirety, as it is obsolete.\14\ 
Neither NYSE Chicago nor NYSE National have a similar provision in 
their respective certificates.\15\
---------------------------------------------------------------------------

    \14\ See Del. Code tit. 8, Sec.  242(a)(7)(a).
    \15\ The Exchange notes that the certificates of incorporation 
of NYSE Group, ICE Holdings and ICE also do not have similar 
provisions.
---------------------------------------------------------------------------

Proposed Article 13 and Signature Block
    In an administrative change, the Exchange proposes to add a 
statement in proposed Article 13 setting forth the date and time that 
the Exchange Certificate shall be effective, as well as to add a 
signature block with the date of execution. The proposed change would 
be consistent with Article XIV and signature block of the NYSE Group 
Certificate.
Proposed Amendments to the Exchange Bylaws
    The Exchange proposes to amend the Exchange Bylaws as follows.
Article I (Offices)
    Article I contains a provision stating that the Exchange shall have 
a registered office in Delaware as required by law, and elsewhere as 
determined by the Board. The Exchange proposes to (a) amend the title 
and number to the provision in Article I, and (b) add a sentence that 
states that the Exchange's Delaware registered agent shall be such 
person or entity determined by the Board. The proposed title and final 
sentence would be consistent with the final sentence of Article I, 
Section 1 of the NYSE Chicago Bylaws and of Article II, Section 2.1 of 
the NYSE National Bylaws.\16\
---------------------------------------------------------------------------

    \16\ See NYSE Chicago Release, supra note 4, at 54957.
---------------------------------------------------------------------------

Article II (Members)
    The Exchange proposes to delete Sections 2.02, 2.04, and 2.05, 
which are marked ``Reserved,'' and renumber the remaining sections of 
Article II accordingly.
    Proposed Article 2.03 (Dividends; Regulatory Fees and Penalties: 
Current Section 2.06 states that ``revenues received by the Exchange 
from regulatory fees or regulatory penalties will be applied to fund 
the legal,

[[Page 61695]]

regulatory and surveillance operations of the Exchange and will not be 
used to pay dividends.''
    The Exchange proposes to maintain the substance of current Section 
2.06, renumbering it as Article 2.03, but substantially conforming the 
provision to the governing documents of the other NYSE Group 
Exchanges.\17\ The proposed language would expand the scope of the 
provision to include regulatory assets and fines as well as fees or 
penalties collected by the Exchange's regulatory staff, and would add a 
prohibition on the payment of distributions to other entities. The 
Exchange would also revise the title and add subparagraphs. Proposed 
Section 2.03 provides as follows (deletions bracketed; new text 
italicized):
---------------------------------------------------------------------------

    \17\ See NYSE Chicago Bylaws, Article IX, Section 5; NYSE 
National Bylaws, Article X, Section 10.4; NYSE Operating Agreement, 
Article IV, Section 4.05; and NYSE American Operating Agreement, 
Article IV, Section 4.05.
---------------------------------------------------------------------------

    (b) Any [revenues received by the Exchange from]regulatory assets 
or any regulatory fees, fines or [regulatory] penalties collected by 
the Exchange's regulatory staff will be applied to fund the legal, 
regulatory and surveillance operations of the Exchange, and the 
Exchange shall not distribute such assets, fees, fines or penalties 
[and will not be used] to pay dividends or be distributed to any other 
entity. For purposes of this Section, regulatory penalties shall 
include restitution and disgorgement of funds intended for customers.
Article III (Board of Directors)
    Section 3.03 (Vacancies): Section 3.03 provides that any vacancy on 
the Board may be filled by the Chairman of the Board, subject to the 
approval by a majority of the directors.
    In an administrative change, the Exchange proposes to add text 
stating that (a) such approval must be made by a majority of the 
directors then in office, as opposed to total number of seats on the 
Board; and (b) the Holding Member may also fill any vacancy, and those 
vacancies resulting from removal from office by a vote of the Holding 
Member for cause may be filled by a vote of the Holding Member at the 
same meeting at which such removal occurs. The first sentence of the 
amended paragraph would be as follows (additions italicized):
    Whenever between meetings of the Exchange any vacancy exists on the 
Board of Directors by reason of death, resignation, removal or increase 
in the authorized number of directors or otherwise, it may be filled 
(i) by the Chairman of the Board, subject to approval by a majority of 
the Board of Directors then in office, or (ii) by action taken by the 
Holding Member, and those vacancies resulting from removal from office 
by a vote of the Holding Member for cause may be filled by a vote of 
the Holding Member at the same meeting at which such removal occurs.
    The change would be consistent with clause (ii) of Article II, 
Section 5 of the NYSE Chicago Bylaws, which was amended at the time of 
its acquisition by ICE.\18\
---------------------------------------------------------------------------

    \18\ See Exchange Act Release No. 83635 (July 13, 2018), 83 FR 
34182 (July 19, 2018) (SR-CHX-2018-004), and Partial Amendment No. 2 
to SR-CHX-2018-004 (June 11, 2018).
---------------------------------------------------------------------------

    Section 3.04 (Place of Meetings): Section 3.04 provides that any 
meeting of the Board may be held within or without the State of 
Delaware.
    In an administrative change, the Exchange proposes to amend the 
provision to state that the meeting shall be at the place designated in 
the notice of the meeting, but that if no designation is made, the 
meeting will be at the principal office of the Exchange. The change 
would be consistent with the first sentence of NYSE National Bylaws 
Article III, Section 3.8 and NYSE Chicago Bylaws, Article II, Section 
7.\19\
---------------------------------------------------------------------------

    \19\ The remaining text of the NYSE National and NYSE Chicago 
provisions address conference call meetings, which are covered in 
Article III, Section 3.10 of the Exchange Bylaws.
---------------------------------------------------------------------------

    Sections 3.07 (Quorum): Section 3.07 (Quorum) provides that the 
presence of a majority of the number of directors on the Board is 
necessary to constitute a quorum, and adds that, if less than a quorum 
is present at a Board meeting, the directors present may adjourn the 
meeting to another time or place until a quorum is present.
    The Exchange proposes to revise the quorum requirement to state 
that ``Except as otherwise required by law, at all meetings of the 
Board, the presence of a majority of the number of directors then in 
office shall constitute a quorum for the transaction of business.'' In 
addition, it proposes to replace the sentence regarding procedures if 
less than a quorum is present with the statement that, if a quorum is 
not present, ``a majority of the directors present at the meeting may 
adjourn the meeting, without notice other than announcement at the 
meeting, until a quorum shall be present.''
    Changing the quorum requirement to a majority of the directors then 
in office would be consistent with the quorum provisions of the other 
NYSE Group Exchanges.\20\ The proposed text is substantially similar to 
the second and fourth sentences of NYSE Chicago Bylaws Article II, 
Section 10. \21\
---------------------------------------------------------------------------

    \20\ See NYSE Chicago Bylaws Article II, Section 10; NYSE 
National Bylaws Article III, Section 3.11; NYSE Operating Agreement, 
Article II, Section 2.03(d); and NYSE American Operating Agreement, 
Article II, Section 2.03(d). See also DCGL Section 141(b).
    \21\ See NYSE Chicago Release, supra note 4, at 54958-54959.
---------------------------------------------------------------------------

    Section 3.08 (Vote): Pursuant to Section 3.08, the act of a 
majority of the directors present at any meeting at which there is a 
quorum shall be the act of the Board, except as may be otherwise 
specifically provided by law, the Exchange Certificate, the Exchange 
Bylaws or the Rules.
    The Exchange proposes to add a sentence stating that each director 
shall be entitled to one vote. The revised provision is substantially 
similar to the first and third sentences of NYSE Chicago Bylaws Article 
II, Section 10. \22\
---------------------------------------------------------------------------

    \22\ See id. See also NYSE National Bylaws Article III, Section 
3.11.
---------------------------------------------------------------------------

    Section 3.09 (Action in Lieu of a Meeting): Section 3.09 provides 
that, unless otherwise restricted by the Exchange Certificate, Exchange 
By-Laws, or Exchange Rules, action may be taken without a meeting if 
certain procedural requirements are met.
    In an administrative change, the Exchange proposes to replace 
``Unless otherwise restricted by'' with ``Unless otherwise provided by 
law.'' The proposed change would allow the provision to be consistent 
with both applicable law and the Exchange governing documents and 
rules, should applicable law set forth specific requirements that 
differ from such documents. The change would be consistent with NYSE 
Chicago Bylaws Article II, Section 13.
Article V (Officers)
    Section 5.01 (General): Section 5.01 provides that officers of the 
Exchange must include a Secretary and may include a President, Chief 
Executive Officer (``CEO'') and, upon the CEO's recommendation, any 
other officers deemed desirable for the conduct of business. In 
addition, it states that any two or more offices may be held by the 
same person.
    In an administrative change, the Exchange proposes to amend Section 
5.01 to provide that the Board shall elect officers of the Exchange as 
it deems appropriate. The statement that two or more offices may be 
held by the same person would be revised to exclude the Chief 
Regulatory Officer and the Secretary from holding the office of CEO or 
President. The revised provision would be substantially similar to 
Article VI, Section 6.1 of the NYSE National

[[Page 61696]]

Bylaws and Article V, Section 1 of the NYSE Chicago Bylaws.\23\
---------------------------------------------------------------------------

    \23\ See NYSE Chicago Release, supra note 4, at 54962.
---------------------------------------------------------------------------

    Section 5.02 (Privileges): In a non-substantive change, the 
Exchange proposes to revise the name of Section 5.02 to ``Powers and 
Duties,'' as it is more indicative of the content of the Section, which 
sets forth the powers and duties of officers. The Exchange does not 
propose to amend the text of Section 5.02. The revised title would be 
the same as the title of Article VI, Section 6.4 of the NYSE National 
Bylaws and Article V, Section 3 of the NYSE Chicago Bylaws.
    Section 5.03 (Term of Office; Removal and Vacancy): The first 
sentence of Section 5.03 provides that ``[e]ach officer shall hold 
office until his or her successor is elected and qualified or until his 
or her earlier resignation or removal.''
    The Exchange proposes to add death and retirement as events that 
would cause an officer to no longer hold office. The proposed change 
would be consistent with Article V, Section 2(a) of the NYSE Chicago 
Bylaws.\24\
---------------------------------------------------------------------------

    \24\ See id.
---------------------------------------------------------------------------

    Section 5.04 (Chief Executive Officer): The second sentence of 
Section 5.04 states that ``[s]ubject to the control of the Board of 
Directors, the Chief Executive Officer, or such other officer or 
officers as may be designated by the Board, shall have general 
executive charge, management and control of the properties, business 
and operations of the Exchange with all such powers as may be 
reasonably incident to such responsibilities; may agree upon and 
execute all leases, contracts, evidences of indebtedness and other 
obligations in the name of the Exchange; and shall have such other 
powers and duties as designated in accordance with these Bylaws and as 
from time to time may be assigned by the Board of Directors.''
    The Exchange proposes to delete the second sentence of Section 
5.04, as Section 5.02 already provides that the any officer of the 
Exchange, including the CEO, shall, unless otherwise ordered by the 
Board, have such powers and duties as generally pertain to their office 
as well as such powers and duties as from time to time may be conferred 
by the Board. The Exchange notes that Article VI of the NYSE National 
Bylaws similarly does not have a separate provision regarding the 
powers of its chief executive officer.\25\
---------------------------------------------------------------------------

    \25\ See also NYSE Operating Agreement, Article II, Section 
2.04(c); and NYSE American Operating Agreement, Article II, Section 
2.04(c);
---------------------------------------------------------------------------

Article VI (Miscellaneous)
    Section 6.05 (Affiliate Transaction): Section 6.05 sets forth a 
list of transactions that the Exchange may not enter into with any 
affiliate of the Exchange unless such transaction shall have been first 
approved by a majority vote of the disinterested directors of the 
Exchange who are also public directors, and sets our related 
definitions and requirements.
    The Exchange proposes to delete Section 6.05 in its entirety. 
Section 6.05 of the Exchange Bylaws dates to the demutualization of the 
Exchange (then ``Pacific Exchange, Inc.''), when its ownership 
structure was materially different.\26\ The Exchange believes that 
Section 6.05 is no longer necessary given the corporate structure of 
ICE and the Exchange, as reflected by the fact that no other NYSE Group 
Exchange has a similar provision in its governing documents.\27\
---------------------------------------------------------------------------

    \26\ See Exchange Act Release No. 49718 (May 17, 2004), 69 FR 
29611 (May 24, 2004) (SR-PCX-2004-08) (order approving proposed rule 
change and notice of filing and order granting accelerated approval 
of Amendment No. 1 thereto relating to the demutualization of the 
Pacific Exchange, Inc.); see also Article VI, Section 6.05 of 
Exhibit E to SR-PCX-2004-08 (February 10, 2004).
    \27\ The Exchange notes that it has not found a similar 
provision in the bylaws of other incorporated self-regulatory 
organizations. See Tenth Amended and Restated Bylaws of CBOE 
Exchange, Inc. [sic]; Ninth Amended and Restated Bylaws of CBOE EDGA 
Exchange, Inc.; Ninth Amended and Restated Bylaws of CBOE EDGX 
Exchange, Inc.; Eighth Amended And Restated Bylaws of CBOE BYX 
Exchange, Inc.; and By-Laws Of Nasdaq BX, Inc. See also By-Laws of 
The Nasdaq Stock Market LLC; By-Laws Of Nasdaq ISE, LLC; and the 
Second Amended and Restated Operating Agreement of Investors' 
Exchange LLC.
---------------------------------------------------------------------------

Article VII (Indemnification)
    Section 7.01 (Indemnification): Section 7.01 sets forth provisions 
related to indemnification by the Exchange. As a wholly-owned 
subsidiary of ICE, the Exchange believes it appropriate to harmonize 
the Exchange's indemnification provisions with those of ICE and the 
Exchange's intermediate holding company, ICE Holdings.\28\ The same 
change was made to Article VI of the NYSE Chicago Bylaws.\29\
---------------------------------------------------------------------------

    \28\ See ICE Bylaws, Article X, Section 10.6, and ICE Holdings 
Bylaws, Article X, Section 10.6.
    \29\ See NYSE Chicago Release, supra note 4, at 54962-54963. The 
Exchange understands that NYSE, NYSE American, and NYSE National 
propose to file similar changes to their respective indemnification 
provisions.
---------------------------------------------------------------------------

    Accordingly, the Exchange proposes to delete the text of Section 
7.01 (Indemnification) in its entirety and replace it with proposed 
text that is substantially similar to the CHX, ICE and ICE Holdings 
provisions, with the exception of changes to be consistent with the 
Exchange Bylaws' terminology.\30\ The proposed text follows:
---------------------------------------------------------------------------

    \30\ For example, proposed Section 7.01 uses ``officer'' instead 
of ``Senior Officers,'' ``Exchange'' instead of ``Corporation,'' and 
``Section 7.01'' instead of ``Section 10.6.''
---------------------------------------------------------------------------

    (a) The Exchange shall, to the fullest extent permitted by law, as 
those laws may be amended and supplemented from time to time, indemnify 
any director or officer made, or threatened to be made, a party to any 
action, suit or proceeding, whether criminal, civil, administrative or 
investigative, by reason of being a director or officer of the Exchange 
or a predecessor corporation or, at the Exchange's request, a director, 
officer, partner, member, employee or agent of another corporation or 
other entity; provided, however, that the Exchange shall indemnify any 
director or officer in connection with a proceeding initiated by such 
person only if such proceeding was authorized in advance by the Board 
of Directors of the Exchange. The indemnification provided for in this 
Section 7.01 shall: (i) Not be deemed exclusive of any other rights to 
which those indemnified may be entitled under any bylaw, agreement or 
vote of stockholders or disinterested directors or otherwise, both as 
to action in their official capacities and as to action in another 
capacity while holding such office; (ii) continue as to a person who 
has ceased to be a director or officer; and (iii) inure to the benefit 
of the heirs, executors and administrators of an indemnified person.
    (b) Expenses incurred by any such person in defending a civil or 
criminal action, suit or proceeding by reason of the fact that he is or 
was a director or officer of the Exchange (or was serving at the 
Exchange's request as a director, officer, partner, member, employee or 
agent of another corporation or other entity) shall be paid by the 
Exchange in advance of the final disposition of such action, suit or 
proceeding upon receipt of an undertaking by or on behalf of such 
director or officer to repay such amount if it shall ultimately be 
determined that he or she is not entitled to be indemnified by the 
Exchange as authorized by law. Notwithstanding the foregoing, the 
Exchange shall not be required to advance such expenses to a person who 
is a party to an action, suit or proceeding brought by the Exchange and 
approved by a majority of the Board of Directors of the Exchange that 
alleges willful misappropriation of corporate assets by such person, 
disclosure of confidential information in violation of such person's 
fiduciary or contractual

[[Page 61697]]

obligations to the Exchange or any other willful and deliberate breach 
in bad faith of such person's duty to the Exchange or its stockholders.
    (c) The foregoing provisions of this Section 7.01 shall be deemed 
to be a contract between the Exchange and each director or officer who 
serves in such capacity at any time while this bylaw is in effect, and 
any repeal or modification thereof shall not affect any rights or 
obligations then existing with respect to any state of facts then or 
theretofore existing or any action, suit or proceeding theretofore or 
thereafter brought based in whole or in part upon any such state of 
facts. The rights provided to any person by this bylaw shall be 
enforceable against the Exchange by such person, who shall be presumed 
to have relied upon it in serving or continuing to serve as a director 
or officer or in such other capacity as provided above.
    (d) The Board of Directors in its discretion shall have power on 
behalf of the Exchange to indemnify any person, other than a director 
or officer, made or threatened to be made a party to any action, suit 
or proceeding, whether criminal, civil, administrative or 
investigative, by reason of the fact that such person, or his or her 
testator or intestate, is or was an officer, employee or agent of the 
Exchange or, at the Exchange's request, is or was serving as a 
director, officer, partner, member, employee or agent of another 
corporation or other entity.
    (e) To assure indemnification under this Section 7.01 of all 
directors, officers, employees and agents who are determined by the 
Exchange or otherwise to be or to have been ``fiduciaries'' of any 
employee benefit plan of the Exchange that may exist from time to time, 
Section 145 of the Delaware General Corporation Law shall, for the 
purposes of this Section 7.01, be interpreted as follows: An ``other 
enterprise'' shall be deemed to include such an employee benefit plan, 
including without limitation, any plan of the Exchange that is governed 
by the Act of Congress entitled ``Employee Retirement Income Security 
Act of 1974,'' as amended from time to time; the Exchange shall be 
deemed to have requested a person to serve an employee benefit plan 
where the performance by such person of his duties to the Exchange also 
imposes duties on, or otherwise involves services by, such person to 
the plan or participants or beneficiaries of the plan; excise taxes 
assessed on a person with respect to an employee benefit plan pursuant 
to such Act of Congress shall be deemed ``fines.''
Article IX (Amendment)
    In a conforming change, the Exchange proposes to add a section 
number before the word ``Amendment.''
Proposed Amendments to Rule 3.3(a)(1)(B)
    Rule 3.3(a)(1)(B) establishes the composition of the Exchange 
Regulatory Oversight Committee (``ROC''), and is substantially the same 
as the related provisions in the governing documents of the other NYSE 
Group Exchanges.\31\ Among other things, the provision states that 
``[t]he Board may, on affirmative vote of a majority of directors, at 
any time remove a member of the ROC for cause.'' The Exchange proposes 
to add language clarifying that the majority affirmative vote 
requirement is based on the ``directors then in office,'' as opposed to 
total number of seats on the Board. The change would be consistent with 
Article IV, Section 6 of the NYSE Chicago Bylaws.\32\
---------------------------------------------------------------------------

    \31\ See NYSE National Bylaws, Article V, Section 5.6; NYSE 
Operating Agreement, Article II, Section 2.03(h)(ii); NYSE American 
Operating Agreement, Article II, Section 2.03(h)(ii); and NYSE 
Chicago Bylaws, Article IV, Section 6.
    \32\ See NYSE Chicago Release, supra note 4, at 54961. The 
Exchange understands that NYSE, NYSE American, and NYSE National 
propose to file similar changes to their respective ROC provisions.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Exchange Act,\33\ in general, and furthers the 
objectives of Section 6(b)(1) \34\ 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. The 
Exchange also believes that the proposed rule change is consistent with 
Section 6(b)(5) of the Exchange Act,\35\ in that it is designed to 
prevent fraudulent and manipulative acts and practices, to promote just 
and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in facilitating transactions in 
securities, 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.
---------------------------------------------------------------------------

    \33\ 15 U.S.C. 78f(b).
    \34\ 15 U.S.C. 78f(b)(1).
    \35\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed amendments to the Exchange 
Bylaws, Certificate and Rule 3.3(a) would enable 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, because such amendments 
would add or expand upon existing provisions to protect and maintain 
the independence and integrity of the Exchange and its regulatory 
function and reinforce the notion that the Exchange is not solely a 
commercial enterprise, but a national securities exchange subject to 
the obligations imposed by the Exchange Act. Such provisions include 
ensuring that regulatory assets, fees, fines, and penalties may only be 
used to fund legal, regulatory and surveillance operations; and 
providing that any amendments to the Exchange Certificate must be 
submitted to the Board and, as applicable, shall not be effective until 
filed with or filed with and approved by the Commission. The Exchange 
believes that such provisions are consistent with and will facilitate a 
governance structure that will provide the Commission with appropriate 
oversight tools to ensure that the Commission will have the ability to 
enforce the Exchange Act with respect to the Exchange. The Exchange 
also believes that such amendments would act to insulate the Exchange's 
regulatory functions from its market and other commercial interests so 
that the Exchange can carry out its regulatory obligations and that, in 
general, the Exchange is administered in a way that is equitable to all 
those who trade on its market or through its facilities. Therefore, the 
Exchange believes that the proposed rule change would prevent 
fraudulent and manipulative acts and practices, promote just and 
equitable principles of trade, foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, 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.
    The Exchange believes that the proposed amendments to harmonize 
certain provisions of the Exchange Bylaws, Certificate and Rule 3.3(a) 
with similar provisions of the governing documents of other NYSE Group 
Exchanges, ICE and ICE Holdings would contribute to the orderly 
operation of the Exchange and would enable the

[[Page 61698]]

Exchange to be so organized as to have the capacity to carry out the 
purposes of the Exchange Act and comply with the provisions of the 
Exchange Act by its members and persons associated with members. For 
example, the proposed changes would create greater conformity between 
the Exchange's provisions relating to officers, committees, and 
indemnification and those of its affiliates, particularly NYSE National 
and CHX. The Exchange believes that such conformity would streamline 
the NYSE Group Exchanges' corporate processes, create more equivalent 
governance processes among them, and also provide clarity to the 
Exchange's members, which is beneficial to both investors and the 
public interest. At the same time, the Exchange will continue to 
operate as a separate self-regulatory organization and to have rules, 
membership rosters and listings distinct from the rules, membership 
rosters and listings of the other NYSE Group Exchanges.
    The Exchange also believes that the greater consistency among the 
governing documents of the NYSE Group Exchanges, ICE and ICE Holdings 
would promote the maintenance of a fair and orderly market, the 
protection of investors and the protection of the public interest. 
Indeed, the proposed amendments would make the corporate requirements 
and administrative processes relating to the Board, Board committees, 
officers, and other corporate matters more similar to those of the NYSE 
Group Exchanges, in particular NYSE National and CHX, which have been 
established as fair and designed to protect investors and the public 
interest.\36\
---------------------------------------------------------------------------

    \36\ See NYSE Chicago Release, supra note 4; Exchange Act 
Release Nos. 83303 (May 22, 2018), 83 FR 24517 (May 29, 2018) (SR-
CHX-2018-004); and 79902 (January 30, 2017), 82 FR 9258 (February 3, 
2017) (SR-NSX-2016-16) (order approving proposed rule change in 
connection with proposed acquisition of the Exchange by NYSE Group, 
Inc.).
---------------------------------------------------------------------------

    The Exchange believes that the deletion of Article VI, Section 6.05 
of the Exchange Bylaws would be consistent with 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 with the provisions of the Exchange Act by its members and 
persons associated with members. Section 6.05 does not relate to the 
operations of the Exchange's markets, but rather to potential 
transactions with affiliates of the Exchange. Section 6.05 dates to the 
demutualization of the Exchange, when its ownership structure was 
materially different.\37\ The Exchange believes that Section 6.05 is no 
longer necessary given the corporate structure of ICE and the Exchange, 
as reflected by the fact that no other NYSE Group Exchange has a 
similar provision in its governing documents.\38\ For the same reasons, 
the Exchange believes that the proposed deletion would be consistent 
with the promotion of the maintenance of a fair and orderly market, the 
protection of investors and the protection of the public interest.
---------------------------------------------------------------------------

    \37\ See note 26, supra.
    \38\ See note 27, supra.
---------------------------------------------------------------------------

    The proposed amendments to clarify the meaning of certain 
provisions of the Exchange Bylaws, Certificate and Rule 3.3(a), to 
better comport certain provisions with the DGCL and to effect non-
substantive changes would facilitate the Exchange's continued 
compliance with the Exchange Certificate and Bylaws and applicable law, 
which would further enable 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. Such amendments would also remove impediments to and 
perfects the mechanism of a free and open market by removing confusion 
that may result from corporate governance provisions that are either 
unclear or inconsistent with the governing law.
    The Exchange also believes that the proposed amendments would 
remove impediments to and perfect the mechanism of a free and open 
market by ensuring that persons subject to the Exchange's jurisdiction, 
regulators, and the investing public can more easily navigate and 
understand the governing documents. The Exchange further believes that 
the proposed amendments would not be inconsistent with the public 
interest and the protection of investors because investors will not be 
harmed and in fact would benefit from increased transparency and 
clarity, thereby reducing potential confusion.

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 intended to address competitive issues but rather is 
concerned solely with the corporate governance and administration of 
the Exchange.

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \39\ and Rule 19b-4(f)(6) thereunder.\40\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
---------------------------------------------------------------------------

    \39\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \40\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \41\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \41\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-NYSEArca-2018-85 on the subject line.

[[Page 61699]]

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-NYSEArca-2018-85. 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 website (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 website 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All ubmissions 
should refer to File Number SR-NYSEArca-2018-85 and should be submitted 
on or before December 21, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\42\
---------------------------------------------------------------------------

    \42\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-25998 Filed 11-29-18; 8:45 am]
 BILLING CODE 8011-01-P
61692 Federal Register / Vol. 83, No. 231 / Friday, November 30, 2018 / Notices

an associated person, as its custodian. is experiencing financial or operational with respect to the proposed rule
Therefore, the expansion of the difficulties may find it difficult to find change that are filed with the
categories of eligible custodians should another member that is willing to act as Commission, and all written
impose no new burdens on firms that custodian. Further, FINRA continues to communications relating to the
continue to designate associated persons evaluate the viability that FINRA make proposed rule change between the
as their custodians. Introducing firms itself available as an alternative Commission and any person, other than
that designate their clearing firms as custodian for members’ records after those that may be withheld from the
custodians, subject to their consent, may withdrawal. public in accordance with the
incur additional costs associated with provisions of 5 U.S.C. 552, will be
C. Self-Regulatory Organization’s
clearing services. available for website viewing and
Firms that designate members as their Statement on Comments on the
printing in the Commission’s Public
custodians, subject to their consent, may Proposed Rule Change Received From
Reference Room, 100 F Street NE,
incur costs associated with record- Members, Participants, or Others
Washington, DC 20549, on official
keeping services provided by such Written comments were neither business days between the hours of 10
members. For instance, a member that solicited nor received. a.m. and 3 p.m. Copies of such filing
agrees to act as custodian is likely to III. Date of Effectiveness of the also will be available for inspection and
incur operational and technology costs Proposed Rule Change and Timing for copying at the principal office of
associated with integrating the former Commission Action FINRA. All comments received will be
member’s books and records into its posted without change.
record-keeping systems. Moreover, the Within 45 days of the date of Persons submitting comments are
proposed rule change could result in a publication of this notice in the Federal cautioned that we do not redact or edit
change in how custodianship of books Register or within such longer period (i) personal identifying information from
and records by firms leaving the as the Commission may designate up to comment submissions. You should
industry is paid for and managed. For 90 days of such date if it finds such submit only information that you wish
instance, clearing firms might adapt longer period to be appropriate and to make available publicly. All
their business models to integrate the publishes its reasons for so finding or submissions should refer to File
costs of custodial services into clearing (ii) as to which the self-regulatory Number SR–FINRA–2018–039 and
agreements at the outset of the clearing organization consents, the Commission should be submitted on or before
relationship. This would potentially will: December 21, 2018.
lead to an industry-wide increase in the (A) By order approve or disapprove
such proposed rule change, or For the Commission, by the Division of
costs of clearing agreements, regardless Trading and Markets, pursuant to delegated
of any custodial undertaking by the (B) institute proceedings to determine
authority.14
clearing firms. However, considering the whether the proposed rule change
should be disapproved. Eduardo A. Aleman,
small number of firms that file Form Assistant Secretary.
BDW per year, FINRA believes that this IV. Solicitation of Comments [FR Doc. 2018–26000 Filed 11–29–18; 8:45 am]
is a low probability outcome.13 Further,
Interested persons are invited to BILLING CODE 8011–01–P
the competitive dynamics of procuring
submit written data, views and
clearing services may preclude this
arguments concerning the foregoing,
outcome, as firms that raise their fees SECURITIES AND EXCHANGE
including whether the proposed rule
may lose clients. COMMISSION
The clarification of a custodian’s change is consistent with the Act.
obligations does not add any new direct Comments may be submitted by any of
the following methods: [Release No. 34–84648; File No. SR–
burdens, but it could make it harder for NYSEArca–2018–85]
firms to identify a custodian willing to Electronic Comments
agree to the obligations. Likewise, the Self-Regulatory Organizations; NYSE
• Use the Commission’s internet
affirmative consent requirement and the Arca, Inc.; Notice of Filing and
comment form (http://www.sec.gov/
requirement to provide a representation Immediate Effectiveness of Proposed
rules/sro.shtml); or
to FINRA may make it more difficult for Rule Change To Amend Its Certificate
• Send an email to rule-comments@
firms to find a willing custodian. of Incorporation, Bylaws and Rule 3.3
sec.gov. Please include File Number SR–
However, given the importance to FINRA–2018–039 on the subject line. November 26, 2018.
FINRA and investors of proper custody
of books and records, FINRA believes Paper Comments Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
that these additional burdens are • Send paper comments in triplicate (‘‘Act’’) 2 and Rule 19b–4 thereunder,3
warranted. to Secretary, Securities and Exchange notice is hereby given that, on
Alternatives Considered Commission, 100 F Street NE, November 20, 2018, NYSE Arca, Inc.
Washington, DC 20549–1090. (‘‘Exchange’’ or ‘‘NYSE Arca’’) filed
FINRA considered whether to amend
All submissions should refer to File with the Securities and Exchange
Rule 4570 to require a firm that is going
Number SR–FINRA–2018–039. This file Commission (‘‘Commission’’) the
out of business to be only able to
number should be included on the proposed rule change as described in
designate another member as its
subject line if email is used. To help the Items I, II, and III below, which Items
custodian. While such a requirement
Commission process and review your have been prepared by the Exchange.
amozie on DSK3GDR082PROD with NOTICES1

would further enhance FINRA’s ability
comments more efficiently, please use The Commission is publishing this
to obtain the books and records of
only one method. The Commission will notice to solicit comments on the
former firms, FINRA determined that a
post all comments on the Commission’s
firm that is leaving the industry and that
internet website (http://www.sec.gov/ 14 17 CFR 200.30–3(a)(12).
13 On average, 220 firms have filed a Form BDW
rules/sro.shtml). Copies of the 1 15 U.S.C. 78s(b)(1).
each year over the last five years. This represents submission, all subsequent 2 15 U.S.C. 78a.

about five percent of all active firms. amendments, all written statements 3 17 CFR 240.19b–4.

VerDate Sep<11>2014 17:00 Nov 29, 2018 Jkt 247001 PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 E:\FR\FM\30NON1.SGM 30NON1
Federal Register / Vol. 83, No. 231 / Friday, November 30, 2018 / Notices 61693

proposed rule change from interested parent companies; and (2) make and Restated Certificate of Incorporation
persons. clarifying and updating changes. of NYSE National, Inc. (‘‘NYSE National
The Exchange is owned by the Certificate’’); Fifth Amended and
I. Self-Regulatory Organization’s Holding Member, which in turn is Restated Bylaws of NYSE National, Inc.
Statement of the Terms of Substance of indirectly wholly owned by NYSE
the Proposed Rule Change (‘‘NYSE National Bylaws’’) 9; and Sixth
Holdings LLC (‘‘NYSE Holdings’’). Amended and Restated Certificate of
The Exchange proposes to amend its NYSE Holdings is a wholly owned Incorporation of NYSE Group, Inc.
certificate of incorporation, bylaws and subsidiary of Intercontinental Holdings, (‘‘NYSE Group Certificate). In addition,
Rule 3.3(a)(1)(B) to (1) harmonize Inc. (‘‘ICE Holdings’’), which is in turn the amendments to the indemnification
certain provisions thereunder with wholly owned by the Intercontinental provisions are based on the Eighth
similar provisions in the governing Exchange, Inc. (‘‘ICE’’).5 Amended and Restated Bylaws of
documents of the Exchange’s national The Exchange operates as a separate Intercontinental Exchange, Inc. (‘‘ICE
securities exchange affiliates and parent self-regulatory organization and has Bylaws’’) and the Sixth Amended and
companies; and (2) make clarifying and rules, membership rosters and listings Restated Bylaws of Intercontinental
updating changes. The proposed rule distinct from the rules, membership Exchange Holdings, Inc. (‘‘ICE Holdings
change is available on the Exchange’s rosters and listings of the other NYSE Bylaws’’).
website at www.nyse.com, at the Group Exchanges. At the same time,
principal office of the Exchange, and at however, the Exchange believes it is Proposed Amendments to the Exchange
the Commission’s Public Reference important for each of the NYSE Group Certificate
Room. Exchanges to have a consistent The Exchange proposes to amend the
approach to corporate governance in Exchange Certificate as follows.
II. Self-Regulatory Organization’s
certain matters, to simplify complexity
Statement of the Purpose of, and Title and Introductory Paragraphs
and create greater consistency among
Statutory Basis for, the Proposed Rule
the NYSE Group Exchanges.6 The Exchange proposes to amend the
Change Because the Exchange is a Delaware title to reflect that the proposed
In its filing with the Commission, the non-stock corporation, most of the Exchange Certificate is the ‘‘Amended
self-regulatory organization included proposed changes are based on the and Restated Certificate of Incorporation
statements concerning the purpose of, governing documents of CHX and NYSE of NYSE Arca, Inc.’’ 10 In addition, it
and basis for, the proposed rule change National, which are Delaware proposes to adopt introductory
and discussed any comments it received corporations, as the most comparable paragraphs stating the Exchange’s name
on the proposed rule change. The text NYSE Group Exchanges.7 The proposed and stating that the Exchange Certificate
of those statements may be examined at Exchange Certificate and Exchange was adopted and amended in
the places specified in Item IV below. Bylaws reflect the expectation that the accordance with specific provisions of
The Exchange has prepared summaries, Exchange will continue to be operated the General Corporation Law of the
set forth in sections A, B, and C below, with a governance structure State of Delaware (‘‘DGCL’’). The
of the most significant parts of such substantially similar to that of other introductory paragraphs are
statements. NYSE Group Exchanges, primarily CHX substantially similar to the introductory
and NYSE National. paragraphs of the NYSE Chicago
A. Self-Regulatory Organization’s The changes described herein would
Statement of the Purpose of, and the Certificate.
become operative upon the Exchange
Statutory Basis for, the Proposed Rule Certificate becoming effective pursuant Article 1
Change to its filing with the Secretary of State In a non-substantive change, the
1. Purpose of the State of Delaware. Exchange proposes to replace ‘‘NYSE
The proposed amendments described ARCA, INC.’’ with ‘‘NYSE Arca, Inc.’’ in
The Exchange proposes to amend the
below are primarily based on the Article 1, to reflect that the legal name
Certificate of Incorporation of the
Second Amended and Restated of the Exchange is not entirely in capital
Exchange (‘‘Exchange Certificate’’),
Certificate of Incorporation of Chicago letters. Proposed Article 1 is
Amended and Restated Bylaws of the
Stock Exchange, Inc. (‘‘NYSE Chicago substantially similar to Article 1 of the
Exchange (‘‘Exchange Bylaws’’), and
Certificate’’); Second Amended and NYSE Chicago Certificate and Article
Rule 3.3(a)(1)(B) to (1) harmonize
Restated By-Laws of NYSE Chicago, Inc.
certain provisions thereunder with
(‘‘NYSE Chicago Bylaws’’) 8; Amended 9 The Exchange notes that, concurrent with this
similar provisions in the governing
filing, NYSE National is filing changes to the NYSE
documents of the Exchange’s national of Chicago Stock Exchange, Inc. (‘‘NYSE Chicago National Certificate and Bylaws. See SR–NYSENat–
securities exchange affiliates 4 and Certificate’’) becoming effective pursuant to its 2018–24. References to such documents in this
filing with the Secretary of State of the State of filing are to the NYSE National Certificate and
4 The Exchange has four registered national Delaware. Bylaws currently in effect. The Exchange governing
securities exchange affiliates: NYSE National, Inc. 5 See Exchange Act Release No. 82638 (February documents use ‘‘member,’’ ‘‘Exchange’’ and
(‘‘NYSE National’’), New York Stock Exchange LLC 6, 2018), 83 FR 6072 (February 12, 2018) (SR–NYSE ‘‘Board’’ instead of ‘‘stockholder,’’ ‘‘Corporation,’’
(‘‘NYSE’’), NYSE America [sic] LLC (‘‘NYSE Arca–2018–09) (notice of filing and immediate and ‘‘Board of Directors,’’ which are used by CHX
American’’), and Chicago Stock Exchange, Inc. effectiveness of proposed rule change to amend and NYSE National in their governing documents.
(‘‘CHX’’ and together with the Exchange, NYSE certain of the governing documents of the When comparing a proposed change to the
National, NYSE American, and NYSE, the ‘‘NYSE Exchange’s intermediate parent companies). provision it is based on, the below descriptions do
6 See NYSE Chicago Release, supra note 4, at not note when such terms differ, as they are not
Group Exchanges’’). CHX has filed to change its
name to NYSE Chicago, Inc. See Exchange Act 54953. substantive differences.
amozie on DSK3GDR082PROD with NOTICES1

Release No. 84494 (October 26, 2018), 83 FR 54953 7 The other NYSE Group Exchanges, NYSE and 10 See Exhibit B [sic] to Amendment No. 2, SR–

(November 1, 2018) (SR–CHX–2018–05) (‘‘NYSE NYSE American, are limited liability companies PCX–2006–24 (March 6, 2006); see also Exchange
Chicago Release’’) (notice of filing and immediate organized under New York and Delaware limited Act Release No. 53615 (April 7, 2006), 71 FR 19226
effectiveness of proposal to reflect name changes of liability company law, respectively. (April 13, 2006) (SR–PCX–2006–24) (notice of filing
the Exchange and its direct parent company and to 8 The NYSE Chicago Certificate and NYSE and immediate effectiveness of proposed rule
amend certain corporate governance provisions). Chicago Bylaws will become operative when the change and Amendments No. 1 and 2 thereto to
The rule changes set forth in the NYSE Chicago NYSE Chicago Certificate becomes effective change the names of the Pacific Exchange, Inc., PCX
Release will become operative upon the Second pursuant to its filing with the Secretary of State of Equities, Inc., PCX Holdings, Inc., and the
Amended and Restated Certificate of Incorporation the State of Delaware. Id. Archipelago Exchange, L.L.C.).

VerDate Sep<11>2014 17:00 Nov 29, 2018 Jkt 247001 PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 E:\FR\FM\30NON1.SGM 30NON1
61694 Federal Register / Vol. 83, No. 231 / Friday, November 30, 2018 / Notices

FIRST of the NYSE National Certificate, The Exchange proposes to amend the ELEVENTH of the NYSE Chicago
provided that the Exchange Certificate provision to state that the Exchange Certificate. In addition, the proposed
provision defines ‘‘Exchange.’’ reserves the right to amend the final sentence is consistent with the
Exchange Certificate and to change or final sentence of Article ELEVENTH of
Article 2 and Certificate of Change of
repeal any provision thereof, provided the NYSE National Certificate.
Registered Agent and/or Registered that any amendment must be approved
Office by a majority of the members of the Article 14
In a non-substantive change, the Board present at the relevant meeting Article 14 sets forth the name and
Exchange proposes to update the and by a majority of the existing mailing address of each of the
address of the registered office and Corporate Members. In addition, the incorporators. In a non-substantive
name of the registered agent, as Exchange proposes to add a sentence change, the Exchange proposes to delete
previously filed. The Exchange also providing that before any amendment current Article 14 in its entirety, as it is
proposes to delete the ‘‘Certificate of to, alteration or repeal of any provision obsolete.14 Neither NYSE Chicago nor
Change of Registered Agent and/or of the Exchange Certificate shall be NYSE National have a similar provision
Registered Office.’’ 11 effective, those changes shall be in their respective certificates.15
submitted to the Board and, if required,
Article 9 Proposed Article 13 and Signature Block
the proposed changes shall not become
Article 9 permits the Exchange to effective until filed with or filed with In an administrative change, the
enter into a compromise with its and approved by the Commission, as the Exchange proposes to add a statement in
creditors in certain circumstances. The case may be. The revised provision proposed Article 13 setting forth the
Exchange proposes to amend current would read as follows (deletions date and time that the Exchange
Article 9 to be consistent with the bracketed; new text italicized): Certificate shall be effective, as well as
relevant provision of the DGCL, The approval of either a majority of to add a signature block with the date
including the use of ‘‘corporation’’ the Board of Directors or the affirmative of execution. The proposed change
instead of ‘‘Exchange.’’ 12 The proposed vote of a majority of the existing would be consistent with Article XIV
article would be substantially similar to Corporate Members, shall be required to and signature block of the NYSE Group
Article TENTH of the NYSE Chicago adopt, amend or repeal any provision of Certificate.
Certificate and Article TENTH of the the bylaws of the Exchange. The
Proposed Amendments to the Exchange
NYSE National Certificate. [approval of ]Exchange reserves the
Bylaws
right to amend this certificate of
Article 10 incorporation, and to change or repeal The Exchange proposes to amend the
any provision of the certificate of Exchange Bylaws as follows.
In a non-substantive change, the
Exchange proposes to correct a reference incorporation, and all rights conferred Article I (Offices)
to ‘‘this Article 11’’ to reference Article upon Corporate Members by such
certificate of incorporation are granted Article I contains a provision stating
10. that the Exchange shall have a registered
subject to this reservation; provided,
Article 12 however, that any amendment to this office in Delaware as required by law,
certificate of incorporation must be and elsewhere as determined by the
Article 12 addresses indemnification. Board. The Exchange proposes to (a)
The Exchange proposes to delete Article approved by a majority of the members
of the Board of Directors who are amend the title and number to the
12 in its entirety, as the indemnification provision in Article I, and (b) add a
provision is set forth in Article VII, present at the meeting at which the
amendment is proposed and by a sentence that states that the Exchange’s
Section 7.01 of the Exchange Bylaws, Delaware registered agent shall be such
making this provision redundant. majority of the existing Corporate
Members [shall be required to amend or person or entity determined by the
Subsequent articles would be Board. The proposed title and final
renumbered accordingly. NYSE Chicago repeal any provision of this Certificate
of Incorporation]. Any change to the sentence would be consistent with the
made a similar change, deleting Article final sentence of Article I, Section 1 of
EIGHTH(a) of its Certificate.13 Certificate of Incorporation or bylaws
that is required to be approved by or the NYSE Chicago Bylaws and of Article
Article 13 filed with the United States Securities II, Section 2.1 of the NYSE National
and Exchange Commission (the Bylaws.16
Current Article 13 (proposed Article
‘‘Commission’’) before it may become Article II (Members)
12) states that the approval of a majority
effective shall not become effective until
of the members of the Board and a The Exchange proposes to delete
the procedures of the Commission
majority of the existing Corporate Sections 2.02, 2.04, and 2.05, which are
necessary to make it effective shall have
Members shall be required to amend or marked ‘‘Reserved,’’ and renumber the
been satisfied. Before any amendment
repeal any provision of the Exchange remaining sections of Article II
to, or repeal of, any provision of this
Certificate, and that any change to the accordingly.
Certificate of Incorporation shall be
Exchange Certificate or Bylaws that is Proposed Article 2.03 (Dividends;
effective, those changes shall be
required to be approved by or filed with submitted to the Board of Directors of Regulatory Fees and Penalties: Current
the Commission before it may become the Exchange and if such amendment or Section 2.06 states that ‘‘revenues
effective shall not become effective until repeal must be filed with or filed with received by the Exchange from
the required Commission procedures and approved by the Commission, then regulatory fees or regulatory penalties
amozie on DSK3GDR082PROD with NOTICES1

have been satisfied. the proposed changes to this Certificate will be applied to fund the legal,
of Incorporation shall not become
11 See Exchange Act Release No. 82924 (March 14 See Del. Code tit. 8, § 242(a)(7)(a).
effective until filed with or filed with
22, 2018), 83 FR 13163 (March 27, 2018) (SR– 15 The Exchange notes that the certificates of
NYSEArca–2018–18). and approved by the Commission, as incorporation of NYSE Group, ICE Holdings and
12 See Del. Code tit. 8, § 102(b)(2)(ii). the case may be. ICE also do not have similar provisions.
13 See NYSE Chicago Release, supra note 4, at The proposed new text would be 16 See NYSE Chicago Release, supra note 4, at

54956. substantially similar to Article 54957.

VerDate Sep<11>2014 17:00 Nov 29, 2018 Jkt 247001 PO 00000 Frm 00096 Fmt 4703 Sfmt 4703 E:\FR\FM\30NON1.SGM 30NON1
61696 Federal Register / Vol. 83, No. 231 / Friday, November 30, 2018 / Notices

Bylaws and Article V, Section 1 of the Article VI (Miscellaneous) with the Exchange Bylaws’
NYSE Chicago Bylaws.23 Section 6.05 (Affiliate Transaction): terminology.30 The proposed text
Section 5.02 (Privileges): In a non- Section 6.05 sets forth a list of follows:
substantive change, the Exchange transactions that the Exchange may not (a) The Exchange shall, to the fullest
proposes to revise the name of Section enter into with any affiliate of the extent permitted by law, as those laws
5.02 to ‘‘Powers and Duties,’’ as it is Exchange unless such transaction shall may be amended and supplemented
more indicative of the content of the have been first approved by a majority from time to time, indemnify any
Section, which sets forth the powers vote of the disinterested directors of the director or officer made, or threatened to
and duties of officers. The Exchange Exchange who are also public directors, be made, a party to any action, suit or
does not propose to amend the text of and sets our related definitions and proceeding, whether criminal, civil,
Section 5.02. The revised title would be requirements. administrative or investigative, by
the same as the title of Article VI, The Exchange proposes to delete reason of being a director or officer of
Section 6.4 of the NYSE National Section 6.05 in its entirety. Section 6.05 the Exchange or a predecessor
Bylaws and Article V, Section 3 of the of the Exchange Bylaws dates to the corporation or, at the Exchange’s
NYSE Chicago Bylaws. demutualization of the Exchange (then request, a director, officer, partner,
Section 5.03 (Term of Office; Removal ‘‘Pacific Exchange, Inc.’’), when its member, employee or agent of another
and Vacancy): The first sentence of ownership structure was materially corporation or other entity; provided,
Section 5.03 provides that ‘‘[e]ach different.26 The Exchange believes that however, that the Exchange shall
officer shall hold office until his or her Section 6.05 is no longer necessary indemnify any director or officer in
successor is elected and qualified or given the corporate structure of ICE and connection with a proceeding initiated
until his or her earlier resignation or the Exchange, as reflected by the fact by such person only if such proceeding
removal.’’ that no other NYSE Group Exchange has was authorized in advance by the Board
a similar provision in its governing of Directors of the Exchange. The
The Exchange proposes to add death indemnification provided for in this
documents.27
and retirement as events that would Section 7.01 shall: (i) Not be deemed
cause an officer to no longer hold office. Article VII (Indemnification) exclusive of any other rights to which
The proposed change would be Section 7.01 (Indemnification): those indemnified may be entitled
consistent with Article V, Section 2(a) of Section 7.01 sets forth provisions under any bylaw, agreement or vote of
the NYSE Chicago Bylaws.24 related to indemnification by the stockholders or disinterested directors
Section 5.04 (Chief Executive Officer): Exchange. As a wholly-owned or otherwise, both as to action in their
The second sentence of Section 5.04 subsidiary of ICE, the Exchange believes official capacities and as to action in
states that ‘‘[s]ubject to the control of the it appropriate to harmonize the another capacity while holding such
Board of Directors, the Chief Executive Exchange’s indemnification provisions office; (ii) continue as to a person who
Officer, or such other officer or officers with those of ICE and the Exchange’s has ceased to be a director or officer;
as may be designated by the Board, shall intermediate holding company, ICE and (iii) inure to the benefit of the heirs,
have general executive charge, Holdings.28 The same change was made executors and administrators of an
management and control of the to Article VI of the NYSE Chicago indemnified person.
properties, business and operations of Bylaws.29 (b) Expenses incurred by any such
the Exchange with all such powers as Accordingly, the Exchange proposes person in defending a civil or criminal
may be reasonably incident to such to delete the text of Section 7.01 action, suit or proceeding by reason of
responsibilities; may agree upon and (Indemnification) in its entirety and the fact that he is or was a director or
execute all leases, contracts, evidences replace it with proposed text that is officer of the Exchange (or was serving
of indebtedness and other obligations in substantially similar to the CHX, ICE at the Exchange’s request as a director,
the name of the Exchange; and shall and ICE Holdings provisions, with the officer, partner, member, employee or
have such other powers and duties as exception of changes to be consistent agent of another corporation or other
designated in accordance with these entity) shall be paid by the Exchange in
26 See Exchange Act Release No. 49718 (May 17,
Bylaws and as from time to time may be advance of the final disposition of such
2004), 69 FR 29611 (May 24, 2004) (SR–PCX–2004–
assigned by the Board of Directors.’’ 08) (order approving proposed rule change and action, suit or proceeding upon receipt
The Exchange proposes to delete the notice of filing and order granting accelerated of an undertaking by or on behalf of
second sentence of Section 5.04, as approval of Amendment No. 1 thereto relating to such director or officer to repay such
the demutualization of the Pacific Exchange, Inc.);
Section 5.02 already provides that the see also Article VI, Section 6.05 of Exhibit E to SR–
amount if it shall ultimately be
any officer of the Exchange, including PCX–2004–08 (February 10, 2004). determined that he or she is not entitled
the CEO, shall, unless otherwise ordered 27 The Exchange notes that it has not found a to be indemnified by the Exchange as
by the Board, have such powers and similar provision in the bylaws of other authorized by law. Notwithstanding the
incorporated self-regulatory organizations. See foregoing, the Exchange shall not be
duties as generally pertain to their office Tenth Amended and Restated Bylaws of CBOE
as well as such powers and duties as Exchange, Inc. [sic]; Ninth Amended and Restated required to advance such expenses to a
from time to time may be conferred by Bylaws of CBOE EDGA Exchange, Inc.; Ninth person who is a party to an action, suit
the Board. The Exchange notes that Amended and Restated Bylaws of CBOE EDGX or proceeding brought by the Exchange
Exchange, Inc.; Eighth Amended And Restated
Article VI of the NYSE National Bylaws Bylaws of CBOE BYX Exchange, Inc.; and By-Laws
and approved by a majority of the Board
similarly does not have a separate Of Nasdaq BX, Inc. See also By-Laws of The Nasdaq of Directors of the Exchange that alleges
provision regarding the powers of its Stock Market LLC; By-Laws Of Nasdaq ISE, LLC; willful misappropriation of corporate
amozie on DSK3GDR082PROD with NOTICES1

chief executive officer.25 and the Second Amended and Restated Operating assets by such person, disclosure of
Agreement of Investors’ Exchange LLC.
28 See ICE Bylaws, Article X, Section 10.6, and
confidential information in violation of
23 See NYSE Chicago Release, supra note 4, at
ICE Holdings Bylaws, Article X, Section 10.6. such person’s fiduciary or contractual
54962. 29 See NYSE Chicago Release, supra note 4, at
24 See id.
54962–54963. The Exchange understands that 30 For example, proposed Section 7.01 uses
25 See also NYSE Operating Agreement, Article II, NYSE, NYSE American, and NYSE National ‘‘officer’’ instead of ‘‘Senior Officers,’’ ‘‘Exchange’’
Section 2.04(c); and NYSE American Operating propose to file similar changes to their respective instead of ‘‘Corporation,’’ and ‘‘Section 7.01’’
Agreement, Article II, Section 2.04(c); indemnification provisions. instead of ‘‘Section 10.6.’’

VerDate Sep<11>2014 17:00 Nov 29, 2018 Jkt 247001 PO 00000 Frm 00098 Fmt 4703 Sfmt 4703 E:\FR\FM\30NON1.SGM 30NON1
61698 Federal Register / Vol. 83, No. 231 / Friday, November 30, 2018 / Notices

Exchange to be so organized as to have different.37 The Exchange believes that corporate governance and
the capacity to carry out the purposes of Section 6.05 is no longer necessary administration of the Exchange.
the Exchange Act and comply with the given the corporate structure of ICE and
C. Self-Regulatory Organization’s
provisions of the Exchange Act by its the Exchange, as reflected by the fact
Statement on Comments on the
members and persons associated with that no other NYSE Group Exchange has
Proposed Rule Change Received From
members. For example, the proposed a similar provision in its governing
documents.38 For the same reasons, the Members, Participants, or Others
changes would create greater conformity
between the Exchange’s provisions Exchange believes that the proposed No written comments were solicited
relating to officers, committees, and deletion would be consistent with the or received with respect to the proposed
indemnification and those of its promotion of the maintenance of a fair rule change.
affiliates, particularly NYSE National and orderly market, the protection of
investors and the protection of the III. Date of Effectiveness of the
and CHX. The Exchange believes that
public interest. Proposed Rule Change and Timing for
such conformity would streamline the
The proposed amendments to clarify Commission Action
NYSE Group Exchanges’ corporate
processes, create more equivalent the meaning of certain provisions of the The Exchange has filed the proposed
governance processes among them, and Exchange Bylaws, Certificate and Rule rule change pursuant to Section
also provide clarity to the Exchange’s 3.3(a), to better comport certain 19(b)(3)(A)(iii) of the Act 39 and Rule
members, which is beneficial to both provisions with the DGCL and to effect 19b–4(f)(6) thereunder.40 Because the
investors and the public interest. At the non-substantive changes would proposed rule change does not: (i)
same time, the Exchange will continue facilitate the Exchange’s continued Significantly affect the protection of
to operate as a separate self-regulatory compliance with the Exchange investors or the public interest; (ii)
organization and to have rules, Certificate and Bylaws and applicable impose any significant burden on
membership rosters and listings distinct law, which would further enable the competition; and (iii) become operative
from the rules, membership rosters and Exchange to be so organized as to have prior to 30 days from the date on which
listings of the other NYSE Group the capacity to be able to carry out the it was filed, or such shorter time as the
Exchanges. purposes of the Exchange Act and to Commission may designate, if
comply, and to enforce compliance by consistent with the protection of
The Exchange also believes that the
its exchange members and persons investors and the public interest, the
greater consistency among the governing
associated with its exchange members, proposed rule change has become
documents of the NYSE Group
with the provisions of the Exchange Act, effective pursuant to Section 19(b)(3)(A)
Exchanges, ICE and ICE Holdings would
the rules and regulations thereunder, of the Act and Rule 19b–4(f)(6)(iii)
promote the maintenance of a fair and
and the rules of the Exchange. Such thereunder.
orderly market, the protection of
amendments would also remove
investors and the protection of the At any time within 60 days of the
impediments to and perfects the
public interest. Indeed, the proposed filing of such proposed rule change, the
mechanism of a free and open market by
amendments would make the corporate Commission summarily may
removing confusion that may result
requirements and administrative temporarily suspend such rule change if
from corporate governance provisions
processes relating to the Board, Board it appears to the Commission that such
that are either unclear or inconsistent
committees, officers, and other action is necessary or appropriate in the
with the governing law.
corporate matters more similar to those The Exchange also believes that the public interest, for the protection of
of the NYSE Group Exchanges, in proposed amendments would remove investors, or otherwise in furtherance of
particular NYSE National and CHX, impediments to and perfect the the purposes of the Act. If the
which have been established as fair and mechanism of a free and open market by Commission takes such action, the
designed to protect investors and the ensuring that persons subject to the Commission shall institute proceedings
public interest.36 Exchange’s jurisdiction, regulators, and under Section 19(b)(2)(B) 41 of the Act to
The Exchange believes that the the investing public can more easily determine whether the proposed rule
deletion of Article VI, Section 6.05 of navigate and understand the governing change should be approved or
the Exchange Bylaws would be documents. The Exchange further disapproved.
consistent with the orderly operation of believes that the proposed amendments IV. Solicitation of Comments
the Exchange and would enable the would not be inconsistent with the
Exchange to be so organized as to have public interest and the protection of Interested persons are invited to
the capacity to carry out the purposes of investors because investors will not be submit written data, views, and
the Exchange Act and comply with the harmed and in fact would benefit from arguments concerning the foregoing,
provisions of the Exchange Act by its increased transparency and clarity, including whether the proposed rule
members and persons associated with thereby reducing potential confusion. change is consistent with the Act.
members. Section 6.05 does not relate to Comments may be submitted by any of
the operations of the Exchange’s B. Self-Regulatory Organization’s the following methods:
markets, but rather to potential Statement on Burden on Competition
Electronic Comments
transactions with affiliates of the The Exchange does not believe that
Exchange. Section 6.05 dates to the the proposed rule change will impose • Use the Commission’s internet
demutualization of the Exchange, when any burden on competition that is not comment form (http://www.sec.gov/
its ownership structure was materially necessary or appropriate in furtherance rules/sro.shtml); or
amozie on DSK3GDR082PROD with NOTICES1

of the purposes of the Exchange Act. • Send an email to rule-comments@
36 See NYSE Chicago Release, supra note 4; The proposed rule change is not sec.gov. Please include File Number SR–
Exchange Act Release Nos. 83303 (May 22, 2018), intended to address competitive issues NYSEArca–2018–85 on the subject line.
83 FR 24517 (May 29, 2018) (SR–CHX–2018–004);
and 79902 (January 30, 2017), 82 FR 9258 (February
but rather is concerned solely with the
39 15 U.S.C. 78s(b)(3)(A)(iii).
3, 2017) (SR–NSX–2016–16) (order approving
37 See note 26, supra. 40 17 CFR 240.19b–4(f)(6).
proposed rule change in connection with proposed
acquisition of the Exchange by NYSE Group, Inc.). 38 See note 27, supra. 41 15 U.S.C. 78s(b)(2)(B).

VerDate Sep<11>2014 17:00 Nov 29, 2018 Jkt 247001 PO 00000 Frm 00100 Fmt 4703 Sfmt 4703 E:\FR\FM\30NON1.SGM 30NON1
Document Created: 2018-11-30 04:35:39
Document Modified: 2018-11-30 04:35:39
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		83 FR 61692