Self-Regulatory Organizations; CME Securities Clearing Inc.; Order Approving Proposed Rule Change To Modify the CME Securities Clearing Inc. Amended and Restated By-Laws, Board of Directors Charter, Risk Management Committee Charter, Nominating Committee Charter, and Audit Committee Charter

[Federal Register Volume 91, Number 73 (Thursday, April 16, 2026)]
[Notices]
[Pages 20550-20554]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-07345]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-105214; File No. SR-CMESC-2026-002]


Self-Regulatory Organizations; CME Securities Clearing Inc.; 
Order Approving Proposed Rule Change To Modify the CME Securities 
Clearing Inc. Amended and Restated By-Laws, Board of Directors Charter, 
Risk Management Committee Charter, Nominating Committee Charter, and 
Audit Committee Charter

April 13, 2026.

I. Introduction

    On February 26, 2026, CME Securities Clearing Inc. (``CMESC'') 
filed with the Securities and Exchange Commission (``Commission'') 
proposed rule change CMESC-2026-002, pursuant to Section 19(b)(1) of 
the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder.\2\ The proposed rule change would modify the Amended and 
Restated By-Laws of CME Securities Clearing Inc. (``By-Laws''), the 
Board of Directors Charter (``Board Charter''), the Risk Management 
Committee Charter, the Nominating Committee Charter, the Audit 
Committee Charter, and the

[[Page 20551]]

Regulatory Oversight Committee Charter (collectively, the ``Committee 
Charters''). The proposed rule change was published for comment in the 
Federal Register on March 12, 2026.\3\ The Commission has received no 
comments on the changes proposed.
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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. 104955 (Mar. 9, 
2026), 91 FR 12224 (Mar. 12, 2026) (File No. SR-CMESC-2026-002) 
(``Notice of Filing'').
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    For the reasons discussed below, the Commission is approving the 
proposed rule change.

II. Background

    On December 13, 2024, CMESC filed with the Commission its 
application on Form CA-1 (``Application'') for registration as a 
clearing agency to provide central counterparty services for 
transactions involving U.S. Treasury securities. The Commission 
published notice of the Application in the Federal Register on January 
22, 2025.\4\ The Application contained certain proposed governance 
documents, including CMESC's By-Laws,\5\ Board of Directors Charter,\6\ 
Risk Management Committee Charter,\7\ Nominating Committee Charter,\8\ 
Audit Committee Charter,\9\ and Regulatory Oversight Committee 
Charter.\10\ Together, these governance documents constitute CMESC's 
governance framework as a registered, operating clearing agency 
(``Governance Framework''). On December 1, 2025, the Commission issued 
an order granting CMESC's Application for registration as a clearing 
agency, finding that the Application satisfied the requirements of the 
Act and rules and regulations thereunder.\11\ In the order, the 
Commission discussed CMESC's governance arrangements as reflected in 
the foregoing governance documents and found that ``CMESC is so 
organized and has the capacity to be able to facilitate the prompt and 
accurate clearance and settlement of securities transactions and to 
comply with the provisions of the Exchange Act and the rule[s and] 
regulations thereunder.'' \12\
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    \4\ Securities Exchange Act Release No. 102200 (Jan. 15, 2025), 
90 FR 7713 (Jan. 22, 2025). Non-confidential aspects of the 
Application, including any exhibits thereto cited in this order, are 
available on the Commission's website at: https://www.sec.gov/rules-regulations/other-commission-orders-notices-information/cme-form-ca-1.
    \5\ See Exhibit E-2A(2) to Form CA-1, available at https://www.sec.gov/files/cmesc-ca-1-exhibit-e-2a-2-amended-restated-bylaws-12-13-24.pdf.
    \6\ See Exhibit E-2B to Form CA-1, available at https://www.sec.gov/files/cmesc-ca-1-exhibit-e-2b-board-directors-charter-12-13-24.pdf.
    \7\ See Exhibit E-2C to Form CA-1, available at https://www.sec.gov/files/cmesc-ca-1-exhibit-e-2c-risk-management-committee-charter-12-13-24.pdf.
    \8\ See Exhibit E-2D to Form CA-1, available at https://www.sec.gov/files/cmesc-ca-1-exhibit-e-2d-nominating-committee-charter-12-13-24.pdf.
    \9\ See Exhibit E-2E to Form CA-1, available at https://www.sec.gov/files/cmesc-ca-1-exhibit-e-2e-audit-committee-charter-12-13-24.pdf.
    \10\ See Exhibit E-2F to Form CA-1, available at https://www.sec.gov/files/cmesc-ca-1-exhibit-e-2f-regulatory-oversight-committee-charter-12-13-24.pdf.
    \11\ Securities Exchange Act Release No. 104281 (Dec. 1, 2025), 
90 FR 55926 (Dec. 4, 2025), available at https://www.federalregister.gov/documents/2025/12/04/2025-21908/cme-securities-clearing-inc-order-granting-an-application-for-registration-as-a-clearing-agency (``CMESC Registration Approval'').
    \12\ Id. at 55932.
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    CMESC states that, as a newly registered clearing agency, it does 
not have any operating history and is in the early stage of engaging 
with prospective Members and Users that are to be represented on its 
Board and, therefore, the adoption of the Governance Framework requires 
CMESC to take certain steps in sequence.\13\ As the initial step to 
adopt the Governance Framework, CMESC states that the current CMESC 
Board or CMESC's stockholder will adopt the By-Laws in accordance with 
CMESC's current By-Laws,\14\ and that, upon adoption of the By-Laws, 
the Secretary will call a special stockholders meeting to elect 
Directors, consistent with the requirements of Article III, Section 1 
of the By-Laws.\15\ After the new Board is constituted, CMESC states 
that it will undertake formal Board actions to adopt the Board Charter 
and Committee Charters and appoint members to the Nominating Committee 
and other Committees in accordance with the Committee Charters and, 
once constituted, the Nominating Committee and other Committees will 
assume their responsibilities under their respective Committee 
Charters.\16\ CMESC further states that the Nominating Committee will 
review the classification of each Director elected to the initial Board 
to verify the Director's classification as an Independent Director or 
non-Independent Director.\17\
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    \13\ See Notice of Filing, supra note 3, at 12225.
    \14\ See Exhibit E-2A(1) to Form CA-1, available at https://www.sec.gov/files/cmesc-ca-1-exhibit-e-2a-1-initial-bylaws-12-13-24.pdf. Article IX sets forth the provisions for adoption of 
amendments to the By-Laws.
    \15\ See Notice of Filing, supra note 3, at 12225.
    \16\ Id.
    \17\ Id.
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    CMESC states that it is necessary for CMESC to make certain 
modifications to the By-Laws, Board Charter, and Committee Charters to 
provide the flexibility needed to facilitate composing and standing up 
the new Board and to smooth the implementation of the Governance 
Framework.\18\
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    \18\ Id.
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III. Description of the Proposed Rule Change

    The proposed rule change would modify the Board Charter to provide 
flexibility in the initial number of Directors on the Board and to 
reflect a transition from a staggered Board structure to a unitary 
Board elected annually, as well as to clarify the Board's 
responsibilities and standards for conducting its meetings. Conforming 
clarifications would also be made to the Amended and Restated By-Laws 
and the Nominating Committee Charter to align those documents with the 
annual Board term structure and its flexible initial size and to update 
cross-references. In addition, the Risk Management Committee Charter 
would be revised to add oversight of CMESC's Enterprise Risk Management 
Framework, and the Audit Committee Charter would be amended to correct 
a technical cross-reference. Finally, non-substantive clarifying 
changes would be made to each Committee Charter to clarify that a 
majority of its Directors must be Independent Directors, along with 
other non-substantive clarifying and conforming edits. The proposed 
changes are described in more detail below.

A. Changes to the By-Laws

    The proposed rule change would make several changes to the By-Laws. 
First, Article III, Section 1 (``Number, Composition, and Election of 
Directors'') would remove the current discussion regarding the initial 
sizing of the Board of Directors (as initially being two and then 
increased to nine upon adopting of the by-laws). CMESC states that it 
is more appropriate to address the size of the initial Board in the 
Board Charter, as described in part III.B below.\19\ CMESC states that 
this flexibility to appoint fewer than nine Directors to the first 
Board is consistent with the existing authority under Article III 
Section 1 of the By-Laws to appoint between one and fifteen 
directors.\20\
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    \19\ Id. at 12226.
    \20\ Id.
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    Second, Section 1 of Article III would clarify that the Nominating 
Committee process for reviewing and recommending candidates to serve on 
the Board will apply to the first Board to be elected after the 
election of the initial Board following adoption of the By-Laws.\21\
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    \21\ CMESC states that, following its appointment, the 
Nominating Committee will also have other responsibilities under the 
Nominating Committee Charter, which would include nominating 
candidates to fill any vacancy that may occur on the Board including 
a vacancy on the initial Board, and its role in verifying the 
classification of a Director as an Independent Director or a non-
Independent Director. Id.

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[[Page 20552]]

    Third, the proposed rule change would modify the manner of filling 
an officer vacancy in Article IV (``Officers''), Section 2 
(``Election''). Currently, Article IV, Section 2 of the By-Laws 
provides that officer vacancies shall be filled by the Board, which, 
according to CMESC, contradicts certain provisions in the other 
governance documents.\22\ The proposed rule change would modify the 
relevant language in Article IV, Section 2 to state that officer 
vacancies shall be filled as specified in the By-Laws or any Board 
committee charter. Similarly, the proposed rule change would remove the 
language in the same paragraph regarding the salaries of all officers 
being fixed by the Board to take into consideration that the 
compensation of certain officers may not be fixed by the Board under 
certain existing Board committee charters.
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    \22\ Id. For example, the Regulatory Oversight Committee Charter 
provides that if the Chief Compliance Officer position becomes 
vacant, the Head of the Corporation shall appoint a successor, 
subject to the approval of the Regulatory Oversight Committee. See 
Exhibit E-2F to Form CA-1, available at https://www.sec.gov/files/cmesc-ca-1-exhibit-e-2f-regulatory-oversight-committee-charter-12-13-24.pdf. Id.
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    Finally, the proposed rule change would create a defined term 
``Annual Meeting'' in Article II, Section 2 to refer to the annual 
meeting of Stockholders.

B. Changes to the Board Charter

    The proposed changes to the Board Charter relate to composing and 
standing up the new CMESC Board. First, the proposed rule change would 
modify the second bullet under Section II (``Board Composition'') to 
reflect that the initial Board would include no more than nine 
Directors. The proposed rule change would also provide that the number 
of Directors on the Board shall continually be composed of a sufficient 
number of Directors to meet the composition requirements described in 
the Board Charter, which would be subject to the provisions of the By-
Laws (i.e., in Section I of Article III regarding the election of the 
initial Board following adoption of the By-Laws.\23\
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    \23\ Id.
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    Second, the proposed rule change would change the staggered 
(classified) Board structure to a non-classified Board structure with a 
unitary annual term by eliminating Section IV (``Term of Office; 
Classes'') entirely and revising the existing Section V (``Election of 
Directors'') to provide that the Directors will be elected by the 
Stockholder at the Annual Meeting of the Stockholder and that each 
Director so elected will serve until the end of the annual term or 
until the Director's earlier death, resignation, or removal. CMESC 
states that, on further consideration, a staggered or classified Board 
structure, which is often utilized by Delaware corporations as an anti-
takeover defense mechanism, is not an appropriate structure for 
CMESC.\24\ CMESC states that, as a registered clearing agency, it does 
not need a staggered Board structure as a defense mechanism, and a 
staggered Board structure would unnecessarily complicate the process of 
composing the Board and administering the terms of the Directors.\25\ 
As a result of removing Section IV, Section V (``Election of 
Directors'') would be renumbered as Section IV and ``Term of Office'' 
would be added to the heading of the new Section IV. In addition, the 
proposed rule change would capitalize the term ``annual meeting'' 
throughout the new Section IV to clarify that it is a defined term.
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    \24\ See Notice of Filing, supra note 3, at 12226.
    \25\ Id.
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    Third, the proposed rule change would add language to Section I 
(``Purpose'') to specify the standards and obligations of the Board of 
Directors in fulfilling its responsibilities. Specifically, the 
proposed rule change would add new language as a third bullet under 
Section I to require the Board, in fulfilling its responsibilities, to 
consider the legitimate interests of Members and Users, and prioritize 
the overall risk management, safety, and efficiency of CMESC, including 
its obligations to facilitate and promote the prompt and accurate 
clearance and settlement of securities transactions and to assure 
safeguarding securities and funds, and generally support the stability 
of the broader financial system in accordance with best practices in 
the industry. CMESC states that this language is designed to provide 
greater transparency to Directors of the Board and the public regarding 
the Board's responsibilities.\26\
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    \26\ See id. and Amended and Restated By-Laws, Art. III, Sec. 
3(c), Art. X, Sec. 1.
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    The proposed rule change would also add language to existing 
Section VIII (``Meetings'')--to be re-numbered as Section VII after the 
proposed removal of existing Section IV--to state considerations the 
Board should take into account when evaluating a proposal. 
Specifically, when evaluating a proposal in front of the Board, the 
Board of Directors would be required to take into account all factors 
that the Board of Directors deems relevant, including, to the extent 
deemed relevant: (i) the potential impact of the proposal on the 
integrity, continuity, and stability of the Corporation, on the ability 
to prevent fraudulent and manipulative acts and practices, and on 
investors and the public, and (ii) whether such proposal would promote 
the prompt and accurate clearance and settlement of securities 
transactions and, to the extent applicable, derivative agreements, 
contracts, and transactions, assure the safeguarding of securities and 
funds which are in the custody or control of the clearing agency or for 
which it is responsible, foster cooperation and coordination with 
persons engaged in the clearance and settlement of securities 
transactions, and remove impediments to and perfect the mechanism of a 
national system for the prompt and accurate clearance and settlement of 
securities transactions, in light of the nature of CMESC and its 
operations as a registered clearing agency and its status as a self-
regulatory organization. CMESC states that this language is consistent 
with the statutory requirements and the clearing agency standards 
promulgated by the Commission under the statute and provides greater 
transparency to Board Directors and the public regarding the Board's 
responsibilities.\27\
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    \27\ See Notice of Filing, supra note 3, at 12227.
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    Finally, the proposed rule change would modify the Board Charter to 
improve clarity, maintain consistency among various governance 
documents, and correct certain errors, including:
    •  Clarifying that it is the Nominating Committee's 
responsibility, with support from the Secretary, to broadly consider 
all relevant facts and circumstances to evaluate, determine, and 
document, as necessary, whether reported new relationships or changes 
to existing relationships may likely impair the categorization of a 
Director as an Independent Director and preclude a Director from being 
an Independent Director in the fifth bullet under Section II.
    •  Making non-substantive revisions to the existing fourth, 
fifth, and sixth sub-bullets under the fifth bullet of Section II to 
combine them into a new sub-bullet to create a new defined term 
``Interested Party'' to refer to the types of third-party organization, 
entity, or outside auditor described in the existing sub-bullets under 
the existing fifth bullet of Section II. CMESC states that this new 
sub-bullet continues to be closely aligned with Rules 17ad-25(f)(4), 
(5) and (6) of the Act.\28\ It also states that the revisions are 
designed to improve drafting efficiency by incorporating the new 
defined term ``Interested Party'' and

[[Page 20553]]

allow the subsequent sub-bullets (i.e., existing seventh and eighth 
sub-bullets) to conveniently use the term ``Interested Party'' to refer 
to the type of third-party organization, entity or outside auditor 
described in Rule 17ad-25(f)(4)-(6) with respect to disclosure and 
monitoring of a Director's relationships and relationships of the 
Director's family members with CMESC, its affiliates, or Interested 
Parties that could affect the Director's categorization as an 
Independent Director.\29\
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    \28\ See Notice of Filing, supra note 3, at 12227 and 17 CFR 
240.17ad-25(f)(4)-(6).
    \29\ Id.
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    •  Clarifying that the Chairman of the Board shall be 
selected by the Board ``on an annual basis'' in Section III (``Chairman 
of the Board''), which is consistent with the new annual term of the 
Board under the proposed declassified (non-staggered) Board structure.
    •  Removing reference to ``the President'' from existing 
Section VII (``Removal and Resignation'')--which will become Section VI 
after the proposed removal of Section IV--to clarify that ``President'' 
is not an officer position in CMESC.

C. Changes to the Risk Management Committee Charter

    The proposed rule change would clarify the text prescribing the 
composition requirements for the Risk Management Committee (``CSRMC'') 
in the Risk Management Committee Charter. Specifically, the proposed 
rule change would revise the first bullet in Section II (``Membership & 
Organization'') to clarify that a majority of the Directors serving on 
the CSRMC must be Independent Directors, the same as required for the 
Board, rather than the existing language ``in at least the same 
majority percentage as required for the Board,'' which CMESC states 
does not accurately reflect the original intent.\30\
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    \30\ See Notice of Filing, supra note 3, at 12227.
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    The proposed rule change would also clarify the responsibilities of 
the CSRMC. Specifically, the proposed rule change would add two bullets 
to Section IV (``CSRMC Meetings, Tasks and Authority'') under 
``Responsibilities.'' The first proposed bullet would require the CSRMC 
to provide oversight of CMESC's Enterprise Risk Management Framework 
(``ERMF''), including annual review of the ERMF and review and approval 
of substantive changes to the ERMF, as well as a requirement to 
annually submit a recommendation to the Board to approve the ERMF. The 
second proposed bullet would require the CSRMC to review the quarterly 
Enterprise Risk Profile report on CMESC's enterprise risks. CMESC 
states that the proposed additions clarify the CSRMC's 
responsibilities, which is critical to CMESC's overall risk 
management.\31\
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    \31\ Id.
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D. Changes to the Nominating Committee Charter

    The proposed rule change would also clarify the text in the 
Nominating Committee Charter that prescribes the composition of the 
Nominating Committee. Specifically, the proposed rule change would 
revise the first bullet in Section II (``Membership & Organization'') 
to clarify that a majority of the Directors serving on the Nominating 
Committee (as with the Board) shall be Independent Directors, rather 
than the existing language ``in at least the same majority percentage 
as required for the Board,'' which CMESC states does not accurately 
reflect the original intent.\32\
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    \32\ Id.
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    The proposed rule change would also make certain conforming changes 
to the Nominating Committee Charter, as follows:
    •  Changing the existing language regarding Board nominations 
to reflect the proposed change from a staggered Board structure to a 
declassified (non-staggered) Board structure with a unitary annual 
term.
    •  Changing a cross-reference located in Section IV 
(``Nominating Committee Meetings, Tasks and Authority'') under 
``Responsibilities'' to Section V, reflecting the proposed removal of 
Section IV from the Board of Directors Charter.

E. Changes to the Audit Committee Charter

    The proposed rule change would clarify the text prescribing the 
composition of the Audit Committee. Specifically, the proposed rule 
change would revise the first bullet in Section II (``Membership & 
Organization'') to clarify that a majority of the Directors serving on 
the Audit Committee (as with the Board) shall be Independent Directors, 
rather than the existing language ``in at least the same majority 
percentage as required for the Board,'' which CMESC states does not 
accurately reflect the original intent.\33\
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    \33\ Id. at 12228.
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    CMESC is also proposing to correct a cross-reference located in 
Section VII (``Confidentiality'') of the Audit Committee Charter by 
correcting a reference to Rule 1203 of the Rulebook to reference Rule 
1202 instead.

F. Changes to the Regulatory Oversight Committee Charter

    Finally, CMESC is proposing to make the same clarifying change to 
the text prescribing the composition of the Regulatory Oversight 
Committee in the Regulatory Oversight Committee Charter as the other 
Committee Charters. CMESC proposes to revise the first bullet in 
Section II (``Membership & Organization'') to clarify CMESC's intention 
that a majority of the Directors serving on the Regulatory Oversight 
Committee (as with the Board) shall be Independent Directors, rather 
than the existing language ``in at least the same majority percentage 
as required for the Board,'' which CMESC states does not accurately 
reflect the original intent.\34\
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    \34\ Id.
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IV. Discussion and Commission Findings

    Section 19(b)(2)(C) of the Act \35\ directs the Commission to 
approve a proposed rule change of a self-regulatory organization if it 
finds that such proposed rule change is consistent with the 
requirements of the Act and rules and regulations thereunder applicable 
to such organization. After careful review of the proposed rule change, 
the Commission finds that the proposed rule change is consistent with 
the requirements of the Act and the rules and regulations thereunder 
applicable to CMESC. More specifically, for the reasons given below, 
the Commission finds that the proposed rule change is consistent with 
Sections 17A(b)(3)(A) and (C) of the Act \36\ and Rules 17ad-
22(e)(2)(i) and 17ad-25 thereunder.\37\
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    \35\ 15 U.S.C. 78s(b)(2)(C).
    \36\ 15 U.S.C. 78q-1(b)(3)(A) and (C).
    \37\ 17 CFR 240.17ad-22(e)(2)(i) and 17ad-25.
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A. Consistency With Section 17A(b)(3)(A)

    Section 17A(b)(3)(A) of the Act requires, among other things, that 
CMESC be so organized and have the capacity to be able to comply with 
the provisions of the Act and the rules and regulations thereunder.\38\ 
Based on review of the record, and for the reasons discussed below,\39\ 
CMESC's proposed rule changes described in Section III above are 
consistent with CMESC being so organized and having the capacity to 
comply with the provisions of the Act and the rules and regulations 
thereunder. Accordingly, the proposed

[[Page 20554]]

rule changes are consistent with Section 17A(b)(3)(A) of the Act.
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    \38\ 15 U.S.C. 78q-1(b)(3)(A).
    \39\ See infra Sections IV. C. (Consistency with Rule 17ad-
22(e)(2)(i)) and IV.D (Consistency with Rule 17ad-25).
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B. Consistency With Section 17A(b)(3)(C)

    Section 17A(b)(3)(C) of the Act requires, among other things, that 
CMESC's rules assure a fair representation of its shareholders (or 
members) and participants in the selection of its directors and 
administration of its affairs.\40\ As described above in Sections 
III.A. and B., the proposed rule change modifies the Board Charter 
(and, correspondingly, the By-Laws) by changing the amount of Directors 
required to be on the initial Board following adoption of the By-Laws 
from exactly nine to no more than nine Directors, which would provide 
CMESC the flexibility for composing the Board shortly before the launch 
of CMESC's clearing services. By capping the initial Board at up to 
nine Directors while preserving one seat for a representative of a 
Member and one seat for a representative of a User, the proposed rule 
change should preserve meaningful participant representation within 
CMESC's governance structure.\41\ Moreover, the proposed requirement 
that the Board, in fulfilling its responsibilities, ``consider the 
legitimate interests of Members and Users'' should enhance participant 
representation by embedding consideration of participant perspectives 
into the Board's decision-making framework. Therefore, these changes 
should help to assure fair representation in the selection of its 
directors and administration of its affairs, consistent with Section 
17A(b)(3)(C) of the Act.
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    \40\ 15 U.S.C. 78q-1(b)(3)(C).
    \41\ See CMESC Registration Approval, supra note 11, at 55935 
(``As such CMESC's approach, in reserving positions on the Board of 
Directors for a representative of a Member and a representative of a 
User, is consistent with fair representation, helping to provide a 
voice in CMESC's governance to a range of views from among the 
customers of the clearing agency'').
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C. Consistency With Rule 17ad-22(e)(2)(i)

    Rule 17Ad-22(e)(2)(i) requires, among other things, that covered 
clearing agencies establish, implement, maintain and enforce written 
policies and procedures reasonably designed to provide for governance 
arrangements that are clear and transparent.\42\ As described above in 
Sections III.A. through F., the proposed rule change introduces 
clarifying and conforming amendments to CMESC's Amended and Restated 
By-Laws, Board Charter, and Committee Charters. By removing 
contradictory language regarding officer appointments, clarifying 
Committee responsibilities, specifying the considerations the Board 
should take into account when evaluating a proposal, and updating 
cross-references, definitions, and terminology to improve clarity and 
internal consistency, these changes should enhance the clarity and 
transparency of CMESC's governance arrangements, consistent with Rule 
17ad-22(e)(2)(i).
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    \42\ 17 CFR 240.17ad-22(e)(2)(i).
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D. Consistency With Rule 17ad-25

    Rule 17Ad-25 requires, among other things, that the majority of the 
members of the board of directors of a registered clearing agency, and 
any committee with authority to act on behalf of the board of 
directors, be independent directors.\43\ As described above in Sections 
III.C. through E., the proposed rule changes to the charters of the 
Risk Management Committee, Nominating Committee, Audit Committee, and 
Regulatory Oversight Committee clarify that the majority of directors 
serving on the CSRMC, Nominating Committee, Audit Committee, and 
Regulatory Oversight Committee will be Independent Directors, 
consistent with the requirements of Rule 17Ad-25.\44\
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    \43\ 17 CFR 240.17ad-25.
    \44\ Similarly, the removal of CMESC's current staggered Board 
structure is also consistent with Rule 17ad-25, which does not 
require such a structure.
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III. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposed rule change is consistent with the requirements of the 
Exchange Act and in particular with the requirements of Section 17A of 
the Exchange Act \45\ and the rules and regulations promulgated 
thereunder.
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    \45\ 15 U.S.C. 78q-1.
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Exchange Act \46\ that
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    \46\ 15 U.S.C. 78s(b)(2).
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    proposed rule change SR-CMESC-2026-002 be, and hereby is, 
approved.\47\
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    \47\ In approving the proposed rule change, the Commission 
considered the proposals' impact on efficiency, competition, and 
capital formation. 15 U.S.C. 78c(f).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\48\
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    \48\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-07345 Filed 4-15-26; 8:45 am]
BILLING CODE 8011-01-P