
[Federal Register Volume 78, Number 162 (Wednesday, August 21, 2013)]
[Notices]
[Pages 51758-51765]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-20338]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70210; File Nos. SR-NYSE-2013-42; SR-NYSEMKT-2013-50; 
SR-NYSEArca-2013-62)


Self-Regulatory Organizations; New York Stock Exchange LLC; NYSE 
MKT LLC; NYSE Arca, Inc.; Order Granting Approval of Proposed Rule 
Change Relating to a Corporate Transaction in Which NYSE Euronext Will 
Become a Wholly-Owned Subsidiary of IntercontinentalExchange Group, 
Inc.

August 15, 2013.

I. Introduction

    On June 14, 2013, each of New York Stock Exchange LLC 
(``Exchange''), NYSE MKT LLC (``NYSE MKT''), and NYSE Arca, Inc. 
(``NYSE Arca'' and, with the Exchange and NYSE MKT, the ``NYSE 
Exchanges''), filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) \1\ of the Securities 
Exchange Act of 1934 (``Act''),\2\ and Rule 19b-4 thereunder,\3\ 
proposed rule changes in which NYSE Euronext Holdings LLC (``NYX 
Holdings''), the successor entity to the NYSE Exchanges' indirect 
parent, NYSE Euronext (``NYSE Euronext''), will become a wholly-owned 
subsidiary of IntercontinentalExchange Group, Inc. (``ICE Group'') The 
proposed rule changes were published for comment in the Federal 
Register on July 1, 2013.\4\ The Commission received one comment letter 
on the NYSE proposal.\5\ The Exchange filed a response to these 
comments on August 8, 2013.\6\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
    \4\ See Securities Exchange Act Release Nos. 69851 (June 25, 
2013), 78 FR 39407 (July 1, 2013) (SR-NYSE-2013-42) (``Notice''); 
69849 (June 25, 2013), 78 FR 39369 (July 1, 2013)(SR-NYSEMKT-2013-
50) (``NYSEMKT Notice''); 69850 (June 25, 2013), 78 FR 39352 (July 
1, 2013) (SR-NYSEArca-2013-62) (``NYSE Arca Notice'').
    \5\ See Letter to Commission, from Andrew Rothlein, dated July 
11, 2013 (``Rothlein Letter'').
    \6\ See letter from Janet McGinness, NYSE, to Elizabeth M. 
Murphy, Secretary, Commission, dated August 8, 2013 (``NYSE Response 
to Comment''). On August 12, 2013, the Commission received a 
rebuttal letter to the NYSE Response to Comments (the ``Rothlein 
Rebuttal Letter'').
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    The Commission has reviewed carefully the proposed rule changes, 
the comment letter, and finds that the proposed rule changes are 
consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities exchange.\7\ 
In particular, the Commission finds that the proposed rule changes are 
consistent with Section 6(b) of the Act,\8\ which, among other things, 
requires a national securities exchange to be so organized and have the 
capacity to be able to carry out the purposes of the Act and to enforce 
compliance by its members and persons associated with its members with 
the provisions of the Act, the rules and regulations thereunder, and 
the rules of the exchange, and assure the fair representation of its 
members in the selection of its directors and administration of its 
affairs, and provide that one or more directors shall be representative 
of issuers and investors and not be associated with a member of the 
exchange, broker, or dealer. Section 6(b) of the Act \9\ also requires 
that the rules of the exchange be designed to promote just and 
equitable principles of trade, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and, 
in general, to protect investors and the public interest.
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    \7\ In approving the proposed rule changes, the Commission has 
considered their impact on efficiency, competition, and capital 
formation. See 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b).
    \9\ Id.
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II. Discussion

    The Exchange, NYSE MKT and NYSE Arca have submitted their proposed 
rule changes in connection with the proposed business combination (the 
``Combination'') pursuant to which NYSE Euronext's successor entity, 
NYSE Euronext Holdings LLC (``NYX Holdings''), will become a wholly-
owned subsidiary of ICE Group.
    NYSE Euronext owns 100% of the equity interest of NYSE Group, Inc., 
a Delaware corporation (``NYSE Group''), which in turn directly or 
indirectly owns (1) 100% of the equity interest of the NYSE Exchanges 
and, (2) 100% of the equity interest of NYSE Market (DE), Inc. (``NYSE 
Market''), NYSE Regulation, Inc. (``NYSE Regulation''), NYSE Arca 
L.L.C., NYSE Arca Equities, Inc. (``NYSE Arca Equities'') and NYSE Amex 
Options LLC (``NYSE Amex Options'') (the NYSE Exchanges, together with 
NYSE Market, NYSE Regulation, NYSE Arca L.L.C., NYSE Arca Equities, 
NYSE Amex Options and any similar U.S. regulated entity acquired, owned 
or created after the date hereof, the ``U.S. Regulated Subsidiaries'' 
and each, a ``U.S. Regulated Subsidiary'').
    IntercontinentalExchange, Inc. (``ICE'') is an operator of 
regulated exchanges and clearing houses serving the risk management 
needs of global markets for agricultural, credit, currency, emissions, 
energy and equity index products. ICE owns ICE Futures Europe, ICE 
Futures U.S., Inc., ICE Futures Canada, Inc., ICE U.S. OTC Commodity 
Markets, LLC, and five central counterparty clearing houses, including 
ICE Clear Europe Limited and ICE Clear Credit LLC, each of which is 
registered as a clearing agency under Section 17A of the Exchange 
Act,\10\ ICE Clear U.S., Inc., ICE Clear Canada, Inc., and The Clearing 
Corporation, and owns 100% of the equity in Creditex Group Inc., which 
in turn indirectly owns Creditex Securities Corporation. Neither ICE 
Group nor any company owned by it directly or indirectly, including, 
but not limited to, those referenced in this paragraph, is a registered 
national securities exchange or a member of any U.S. Regulated 
Subsidiary.
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    \10\ 15 U.S.C. 78q-1.
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    As a result of the Combination, the businesses of ICE and NYSE 
Euronext, including the U.S. Regulated Subsidiaries, will be held under 
ICE Group as a single publicly traded holding company that will be 
listed on the Exchange. The proposed rule changes are necessary to 
effectuate the consummation of the Combination and will not be 
operative until the date of the consummation of the Combination (the 
``Closing Date''). The proposed rule changes and exhibits thereto 
contain modifications to the underlying corporate governance documents 
of the U.S. Regulated Subsidiaries and their respective direct and 
indirect owners that reflect the current structure of the Combination. 
The Commission notes that any changes to the structure of the 
Combination that are made subsequent to the date of this approval order 
but

[[Page 51759]]

prior to the Closing Date may be considered additional proposed rule 
changes required to be filed with and approved by the Commission 
pursuant to Section 19 of the Act.\11\ In addition, the Commission 
notes that, if the Combination is not consummated, the proposed rule 
changes will not become effective.
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    \11\ 15 U.S.C. 78s.
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A. Corporate Structure

    Following the Combination, the successor to NYSE Euronext, the NYSE 
Exchanges' indirect parent, NYX Holdings, will be a wholly-owned 
subsidiary of ICE Group.\12\ ICE Group will hold all of the equity 
interests in ICE, which will continue its current operations, and in 
NYX Holdings, which will hold (1) 100% of the equity interests of NYSE 
Group (which, in turn, would continue to directly or indirectly hold 
100% of the equity interests of the U.S. Regulated Subsidiaries) and 
(2) 100% of the equity interest of Euronext N.V. (``Euronext'') (which, 
in turn, directly or indirectly holds 100% of the equity interests of 
trading markets in Belgium, France, the Netherlands, Portugal and the 
United Kingdom). ICE's common stock is listed on the Exchange under the 
symbol ``ICE,'' and following the completion of the Combination, ICE 
Group common stock is expected to be listed for trading on the Exchange 
under the same symbol.
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    \12\ ICE Group is currently a wholly-owned subsidiary of ICE. 
ICE Group in turn has two wholly-owned subsidiaries, ICE Merger Sub, 
a Delaware corporation, and NYSE Euronext Merger Sub, a Delaware 
limited liability company. To effect the Combination, (1) ICE Merger 
Sub will be merged with and into ICE (the ``ICE Merger''), with ICE 
as the surviving corporation and a wholly-owned subsidiary of ICE 
Group, and (2) immediately following the ICE Merger, NYSE Euronext 
shall be merged with and into NYSE Euronext Merger Sub, with NYSE 
Euronext Merger Sub as the surviving company and a wholly-owned 
subsidiary of ICE Group (the ``NYSE Euronext Merger''). NYSE 
Euronext Merger Sub, as the surviving entity in the NYSE Euronext 
Merger, will change its name to ``NYX Holdings'' from and after the 
closing of the Combination.
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    The NYSE Exchanges represent that the Combination will have no 
effect on the ability of any party to trade securities on the NYSE 
Exchanges. Other than as described herein, the NYSE Exchanges also 
represent that ICE Group will not make any changes to the regulated 
activities of the U.S. Regulated Subsidiaries in connection with the 
Combination. If ICE Group determines to make any such changes to the 
regulated activities of any U.S. Regulated Subsidiary, it will seek the 
approval of the Commission.
    A core aspect of the structure of the Combination is that it would 
maintain local regulation of the marketplace, members, and issuers. 
Therefore, securities exchanges, members, and issuers of the U.S. 
Regulated Subsidiaries will continue to be regulated in the same manner 
as they are currently regulated. The Commission notes that this 
conclusion (i.e., that securities exchanges, members, and issuers of 
the U.S. Regulated Subsidiaries will continue to be regulated in the 
same manner as they are currently regulated) is based on the structure 
of the Combination as described in this proposal.
1. ICE Group
    Following the Combination, ICE Group will be a for-profit, publicly 
traded corporation that will act as a holding company for the 
businesses of NYX Holdings and ICE. ICE Group will hold (i) all of the 
equity interests in NYX Holdings, which in turn, directly or indirectly 
holds 100 percent of the equity interests of the U.S. Regulated 
Subsidiaries, and (ii) all of the equity interests in ICE. Section 
19(b) of the Act and Rule 19b-4 thereunder require a self-regulatory 
organization (``SRO'') to file proposed rule changes with the 
Commission. Although ICE Group is not an SRO, certain provisions of its 
amended and restated Certificate of Incorporation (``ICE Group 
Certificate'') and amended and restated Bylaws (``ICE Group Bylaws'', 
and together with the ICE Group Certificate, ``the ICE Group 
Articles''), along with other corporate documents, are rules of an 
exchange \13\ if they are stated policies, practices, or 
interpretations, as defined in Rule 19b-4 under the Act, of the 
exchange, and must be filed with the Commission pursuant to Section 
19(b)(4) of the Act and Rule 19b-4 thereunder. Accordingly, the NYSE 
Exchanges have filed the proposed ICE Group Articles, along with other 
corporate documents, with the Commission.
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    \13\ See Section 3(a)(27) of the Act, 15 U.S.C. 78c(a)(27). If 
ICE Group decides to change the ICE Group Articles, ICE Group must 
submit such change to the board of directors of the U.S. Regulated 
Subsidiaries, and if any or all of such board of directors shall 
determine that such amendment must be filed with or filed with and 
approved by the Commission pursuant to Section 19 of the Act and the 
rules thereunder, such change shall not be effective until filed 
with or filed with and approved by the Commission, as applicable. 
See proposed ICE Group Certificate, Article X; proposed ICE Group 
Bylaws, Section 11.3.
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Voting and Ownership Limitations
    The proposed ICE Group Articles include restrictions on the ability 
to vote and own shares of stock of ICE Group. Under the proposed ICE 
Group Certificate (1) no person, either alone or together with its 
related persons,\14\ may be entitled to vote or cause the voting of 
shares of stock of ICE Group beneficially owned by such person or its 
related persons, in person or by proxy or through any voting agreement 
or other arrangement, to the extent that such shares represent in the 
aggregate more than 10% of the then outstanding votes entitled to be 
cast on such matter, and (2) no person, either alone or together with 
its related persons, may acquire the ability to vote more than 10% of 
the then outstanding votes entitled to be cast on any such matter by 
virtue of agreements or arrangements entered into with other persons to 
refrain from voting shares of stock of ICE Group (the ``ICE Group 
Voting Restriction'').\15\ The ICE Group Certificate will require ICE 
Group to disregard any votes purported to be cast in excess of the ICE 
Group Voting Restriction.
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    \14\ See proposed ICE Group Certificate, Article V, Section 
A(13).
    \15\ See proposed ICE Group Certificate, Article V, Section A.
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    In addition, the ownership restrictions in the ICE Group 
Certificate would provide that no person, either alone or together with 
its related persons, may at any time own beneficially shares of ICE 
Group representing in the aggregate more than 20% of the then 
outstanding votes entitled to be cast on any matter (the ``ICE Group 
Ownership Restrictions'').\16\ If any person, either alone or together 
with its related persons, owns shares of ICE Group in excess of the ICE 
Group Ownership Restriction, then such person and its related persons 
are obligated to sell promptly, and ICE Group is obligated to purchase 
promptly, at a price equal to the par value of such shares and to the 
extent funds are legally available for such purchase, the number of 
shares of ICE Group necessary so that such person, together with its 
related persons, will beneficially own shares of ICE Group representing 
in the aggregate no more than 20% of the then outstanding votes 
entitled to be cast on any matter, after taking into account that such 
repurchased shares will become treasury shares and will no longer be 
deemed to be outstanding.\17\
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    \16\ See proposed ICE Group Certificate, Article V, Section B.
    \17\ See proposed ICE Group Certificate, Article V, Section B.4.
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    The ICE Group Certificate would provide that the ICE Group Voting 
Restriction and the ICE Group Ownership Restriction would apply only 
for so long as ICE Group directly or indirectly controls a U.S. 
Regulated

[[Page 51760]]

Subsidiary or a European Market Subsidiary.\18\
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    \18\ See proposed ICE Group Certificate, Article V, Section A.1. 
and B.1.
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    The ICE Group board of directors may waive the provisions regarding 
voting and ownership limits, subject to a determination by the ICE 
Group board of directors that the exercise of such voting rights (or 
the entering into of a voting agreement) or ownership, as applicable:
     Will not impair the ability of any of the U.S. Regulated 
Subsidiaries, ICE Group, or NYSE Group to discharge their respective 
responsibilities under the Act and the rules and regulations 
thereunder;
     Will not impair the ability of any of the European Market 
Subsidiaries, ICE Group, or Euronext to discharge their respective 
responsibilities under the European Exchange Regulations; \19\
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    \19\ See proposed ICE Group Bylaws, Article III, Section 3.15(b) 
and (e) for the definitions of ``European Exchange Regulations'' and 
``European Market Subsidiary'', respectively.
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     Is otherwise in the best interest of ICE Group, its 
shareholders, the U.S. Regulated Subsidiaries and the European Market 
Subsidiaries; and
     Will not impair the Commission's ability to enforce the 
Act or the European Regulators' ability to enforce the European 
Exchange Regulations.\20\
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    \20\ See proposed ICE Group Certificate, Article V, Section 
A.11. for the definition of ``European Regulator.''
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Such resolution expressly permitting such voting or ownership must be 
filed with and approved by the Commission under Section 19 of the Act 
\21\ and filed with and approved by each European Regulator having 
appropriate jurisdiction and authority.
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    \21\ 15 U.S.C. 78s.
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    In addition, for so long as ICE Group directly or indirectly 
controls the Exchange, NYSE Market (DE), Inc., NYSE MKT, NYSE Arca, 
NYSE Arca Equities Inc. or any facility of NYSE Arca or NYSE MKT, the 
ICE Group board of directors cannot waive the voting and ownership 
limits above the 20% threshold for any person if such person or its 
related persons is a member of NYSE or NYSE MKT, an ETP Holder of NYSE 
Arca Equities,\22\ or an OTP Holder or an OTP Firm of NYSE Arca.\23\ 
Further, the ICE Group board of directors also cannot waive the voting 
and ownership limits above the 20% threshold if such person or its 
related persons is subject to any statutory disqualification (as 
defined in Section 3(a)(39) of the Act) (a ``U.S. Disqualified 
Person'') or has been determined by a European Regulator to be in 
violation of laws or regulations adopted in accordance with the 
European Directive on Markets in Financial Instruments applicable to 
any European Market Subsidiary requiring such person to act fairly, 
honestly and professionally (a ``European Disqualified Person'').\24\
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    \22\ ``ETP Holder'' is defined in NYSE Arca Equities Rule 
1.1(m). ``OTP Holder'' and ``OTP Firm'' are defined, respectively, 
in NYSE Arca Rule 1.1(q) and 1.1(r).
    \23\ See proposed ICE Group Certificate, Article V, Section A.3.
    \24\ Id.
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    Members that trade on an exchange traditionally have had ownership 
interests in such exchange. As the Commission has noted in the past, 
however, a member's interest in an exchange could become so large as to 
cast doubt on whether the exchange can fairly and objectively exercise 
its self-regulatory responsibilities with respect to that member.\25\ A 
member that is a controlling shareholder of an exchange might be 
tempted to exercise that controlling influence by directing the 
exchange to refrain from, or the exchange may hesitate to, diligently 
monitor and surveil the member's conduct or diligently enforce its 
rules and the federal securities laws with respect to conduct by the 
member that violates such provisions.\26\
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    \25\ See, e.g., Securities Exchange Act Release Nos. 62716 
(August 13, 2010), 75 FR 51295
    (August 19, 2010) (File No. 10-198) (order approving 
registration application of BATS Y-Exchange, Inc. as a national 
securities exchange); 61698 (March 12, 2010), 75 FR 13151 (March 18, 
2010) (File Nos. 10-194 and 10-196) (order approving registration 
applications of EDGX Exchange, Inc. and EDGA Exchange, Inc. as 
national securities exchanges); 58375 (August 18, 2008), 73 FR 49498 
(August 21, 2008) (File No. 10-182) (order approving registration 
application of BATS Exchange, Inc. as a national securities 
exchange); 55293 (February 14, 2007), 72 FR 8033 (February 22, 2007) 
(SR-NYSE-2006-120) (order approving proposed combination between 
NYSE Group, Inc. and Euronext N.V. (``NYSE-Euronext Merger Order''); 
53382 (February 27, 2006), 71 FR 11251 (March 6, 2006) (SR-NYSE-
2005-77) (order approving merger of New York Stock Exchange, Inc. 
and Archipelago, and demutualization of New York Stock Exchange, 
Inc.) (``NYSE Inc.-Archipelago Merger Order'')); 53128 (January 13, 
2006), 71 FR 3550 (January 23, 2006) (File No. 10-131); 51149 
(February 8, 2005), 70 FR 7531 (February 14, 2005) (SR-CHX-2004-26); 
49718 (May 17, 2004), 69 FR 29611 (May 24, 2004) (SR-PCX-2004-08); 
49098 (January 16, 2004), 69 FR 3974 (January 27, 2004) (SR-Phlx-
2003-73); and 49067 (January 13, 2004), 69 FR 2761 (January 20, 
2004) (SR-BSE-2003-19).
    \26\ See, e.g., id.
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    The Commission finds the ownership and voting restrictions in the 
proposed ICE Group Articles are consistent with the Act. These 
requirements should minimize the potential that a person could 
improperly interfere with or restrict the ability of the Commission, 
the Exchange, or its subsidiaries to effectively carry out their 
regulatory oversight responsibilities under the Act.\27\

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    \27\ See, e.g., NYSE-Euronext Merger Order, 72 FR at 8037.
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2. NYX Holdings and NYSE Group
    Following the Combination, NYX Holdings will be a wholly-owned 
subsidiary of ICE Group. Furthermore, NYX Holdings will not be a 
publicly-held company. The NYSE Exchanges have proposed certain changes 
to reflect that NYX Holdings will become a wholly-owned subsidiary and 
will not be publicly held. NYX Holdings will act as a holding company 
for the businesses of the NYSE Group and Euronext. NYX Holdings will 
own all of the equity interests in NYSE Group and its subsidiaries, 
including the Exchange, NYSE Arca, and NYSE MKT, and all of the equity 
interests in Euronext and its respective subsidiaries.\28\ Section 
19(b)

[[Page 51761]]

of the Act and Rule 19b-4 thereunder require a SRO to file proposed 
rule changes with the Commission. Although NYX Holdings and NYSE Group 
are not SROs, certain provisions of the proposed NYX Holdings Operating 
Agreement and NYSE Group's Third Amended and Restated Certificate of 
Incorporation (``NYSE Group Certificate of Incorporation'') \29\ are 
rules of an exchange \30\ if they are stated policies, practices, or 
interpretations, as defined in Rule 19b-4 under the Act, of the 
exchange, and must be filed with the Commission pursuant to Section 
19(b)(4) of the Act and Rule 19b-4 thereunder. Accordingly, the NYSE 
Exchanges have filed the proposed NYX Holdings Operating Agreement and 
the proposed NYSE Group Certificate of Incorporation with the 
Commission.
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    \28\ NYX Holdings, as a Delaware limited liability company, will 
operate pursuant to an operating agreement (the ``NYX Holdings 
Operating Agreement''). The NYX Holdings Operating Agreement is 
largely based on the organizational documents of NYSE Euronext, 
which would cease to be in effect. The NYX Holdings Operating 
Agreement would modify the current NYSE Euronext's organizational 
documents to (1) simplify and provide for a more efficient 
governance and capital structure that is appropriate for a wholly-
owned subsidiary; (2) conform certain provisions to analogous 
provisions of the organizational documents of NYSE Group, which will 
likewise be an indirect wholly-owned subsidiary of ICE Group 
following completion of the Combination; and (3) make certain 
clarification and technical edits (for example, to conform the use 
of defined terms and other provisions, and to update cross-
references to sections). In addition, the current Independence 
Policy of the NYSE Euronext board of directors would cease to be in 
effect.
    More specifically, the NYX Holdings Operating Agreement would 
reflect, in part, the following modifications to the NYSE Euronext 
Certificate and Bylaws: (i) removing the provision for preferred 
membership interests, (ii) allowing a majority of the membership 
interests outstanding to call special meetings, take shareholder 
action by written consent, and to postpone such meetings, (iii) 
allowing shareholders to fill board vacancies, (iv) deleting 
provisions requiring a supermajority vote of shareholders to amend 
or repeal certain sections of the NYX Holdings Operating Agreement, 
(v) clarifying that notice of shareholder meetings is not required 
if waived, (vi) deleting the requirement that directors be elected 
by a majority of the votes cast, (vii) deleting provisions requiring 
advance notice from shareholders of shareholder director nominations 
or shareholder proposals, (viii) deleting provisions relating to the 
mechanics of shareholders' meetings, such as the appointment of an 
inspector of elections, (ix) clarifying that NYX Holdings may not 
have a Nominating and Governance Committee, (x) deleting the 
requirement that 75% of the Euronext board must be independent, (xi) 
providing that the Corporation Trust Company would be the registered 
office and agent of NYX Holdings in Delaware, (xii) removing certain 
residency requirements applicable to directors and officers and 
references to U.S. and European director domiciles, (xiii) deleting 
that board meetings be held with equal frequency in the United 
States and Europe, (xiv) removing provisions related to 
participation requirements when the chairman or deputy chairman of 
the board of directors is also the chief executive officer or deputy 
chief executive officer, and (xv) simplifying certain aspects of the 
indemnification and expense advancement provisions in light of the 
fact that there are not expected to be any independent, non-
executive directors of NYX Holdings.
    \29\ Generally, the NYSE Exchanges propose, in part, the 
following changes to NYSE Group's Certificate of Incorporation: (i) 
clarifying the ability to fix the number of directors and making the 
board's ability to remove directors subject to the rights of holder 
of preferred stock; (ii) amending to contemplate successors to NYSE 
Euronext as the holder of all of the issued and outstanding shares 
of NYSE Group for purposes of the NYSE Trust Agreement, (iii) 
clarifying that the voting and ownership concentration limits would 
be effective ``for so long as the Corporation shall control, 
directly or indirectly'' a U.S. Regulated Subsidiary, (iv) amending 
the definition of ``Regulated Subsidiary'' in the NYSE Group Bylaws, 
and (v) making certain clarifications and technical edits.
    \30\ See Section 3(a)(27) of the Act, 15 U.S.C. 78c(a)(27). If 
NYX Holdings decides to change its Certificate of Incorporation or 
Bylaws, NYX Holdings must submit such change to the board of 
directors of the Exchange, NYSE Market, NYSE Regulation, NYSE MKT, 
NYSE Arca Equities and NYSE Arca, and if any or all of such board of 
directors shall determine that such amendment or repeal must be 
filed with or filed with and approved by the Commission pursuant to 
Section 19 of the Act and the rules thereunder, such change shall 
not be effective until filed with or filed with and approved by the 
Commission, as applicable. See proposed NYX Holdings Operating 
Agreement, Section 16. If NYSE Group decides to change its 
Certificate of Incorporation or Bylaws, NYSE Group must submit such 
change to the board of directors of the Exchange, NYSE Market, NYSE 
Regulation, NYSE MKT, NYSE Arca Equities and NYSE Arca, and if any 
or all of such board of directors shall determine that such 
amendment or repeal must be filed with or filed with and approved by 
the Commission pursuant to Section 19 of the Act and the rules 
thereunder, such change shall not be effective until filed with or 
filed with and approved by the Commission, as applicable. See 
proposed NYSE Group Certificate of Incorporation, Article XII.
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Voting and Ownership Limitations; Changes in Control
    The NYSE Exchanges have proposed changing the voting and ownership 
limitations of NYX Holdings to include a statement that such 
limitations would not be applicable as long as ICE Group owned all of 
the issued and outstanding shares of NYX Holdings \31\ and only for so 
long as NYX Holdings directly or indirectly controls any U.S. Regulated 
Subsidiary or any European Market Subsidiary.\32\ Instead, while NYX 
Holdings is a wholly-owned subsidiary of ICE Group, there shall be no 
transfer of the shares of NYX Holdings without the approval of the 
Commission.\33\ If NYX Holdings ceases to be wholly-owned by ICE Group, 
but directly or indirectly controls any U.S. Regulated Subsidiary or 
any European Market Subsidiary, the voting and ownership limitations 
would apply.\34\ The voting restrictions contained in the current NYSE 
Group Certificate of Incorporation are substantially the same as those 
in the current NYSE Euronext Certificate (except that the current NYSE 
Group Certificate of Incorporation does not contain any references to 
European subsidiaries, markets or regulators.) The Exchange proposes to 
update the NYSE Group Certificate of Incorporation to provide that its 
voting and ownership restrictions would apply in the event that NYX 
Holdings and the trust established pursuant to the NYSE Euronext Trust 
Agreement do not collectively own all of the issued and outstanding 
shares of stock of NYSE Group and only for so long as NYSE Group 
directly or indirectly controls any U.S. Regulated Subsidiary.\35\
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    \31\ See proposed NYX Holdings Operating Agreement, Article IX, 
Section 9.1.
    \32\ See proposed NYX Holdings Operating Agreement, Article IX, 
Sections 9.1(a)(voting restrictions) and 9.2(b)(ownership 
restrictions).
    \33\ See proposed NYX Holdings Operating Agreement, Article VII, 
Section 7.2.
    \34\ The proposed NYX Holdings Operating Agreement would make 
two additional changes as compared to the current NYSE Euronext 
Certificate and Bylaws:
    First, it would expand the definition of ``Related Persons'' to 
provide that (1) in the case of a person that is a ``member'' (as 
defined in Section 3(a)(3)(A)(i) of the Exchange Act) of NYSE MKT, 
such person's ``Related Persons'' would include the ``member'' (as 
defined in Section 3(a)(3)(A)(ii), (iii) or (iv) of the Exchange 
Act) with which such person is associated; and (2) in the case of 
any person that is a ``member'' (as defined in 3(a)(3)(A)(ii), (iii) 
or (iv) of the Exchange Act) of NYSE MKT, such person's ``Related 
Persons'' would include any ``member'' (as defined in Section 
3(a)(3)(A)(i) of the Exchange Act) that is associated with such 
person. See proposed NYX Holdings Operating Agreement, Article I, 
Section 1.1, xi and xii.
    Second, the mandatory repurchase of membership interests from a 
Person whose ownership represents in the aggregate more than 20% in 
interest of the interests entitled to vote on any matter would be at 
a price determined by reference to each incremental percentage 
ownership over 20% rather than at par value, specifically $1,000 for 
each percent. See proposed NYX Holdings Operating Agreement, Article 
IX, Section 9.1(b)(4).
    \35\ See proposed NYSE Group Certificate of Incorporation, 
Article IV, Section 4(b). In addition, the definition of ``Related 
Persons'' in the NYSE Group Certificate of Incorporation would be 
expanded to provide that (1) in the case of a person that is a 
``member'' (as defined in Section 3(a)(3)(A)(i) of the Exchange Act) 
of NYSE MKT, such person's ``Related Persons'' would include the 
``member'' (as defined in Section 3(a)(3)(A)(iv) of the Exchange 
Act, in addition to Sections 3(a)(3)(A)(ii) and (iii) of the 
Exchange Act, which are currently referenced in this provision of 
the NYSE Group Certificate) with which such person is associated; 
and (2) in the case of any person that is a ``member'' (as defined 
in Section 3(a)(3)(A)(iv) of the Exchange Act, in addition to 
Sections 3(a)(3)(A)(ii) and (iii) of the Exchange Act, which are 
currently referenced in this provision of the NYSE Group 
Certificate) of NYSE MKT, such person's ``Related Persons'' would 
include any ``member'' (as defined in Section 3(a)(3)(A)(i) of the 
Exchange Act) that is associated with such person. This conforms the 
definition of Related Person to that in the ICE Group Certificate 
and the proposed NYX Holdings Operating Agreement. See proposed NYSE 
Group Certificate of Incorporation, Article IV, Sections 
4(b)(1)(E)(vi) and (xii).
---------------------------------------------------------------------------

    The Commission finds that the changes to the ownership and voting 
restrictions in the proposed NYX Holdings Operating Agreement and the 
proposed NYSE Group Certificate of Incorporation, as well as the change 
in control provisions in the NYSE Euronext Certificate of Incorporation 
are consistent with the Act. The transfer, ownership and voting 
restrictions should minimize the potential that a person could 
improperly interfere with or restrict the ability of the Commission and 
the U.S. Regulated Subsidiaries to effectively carry out their 
regulatory oversight responsibilities under the Act.
    In addition, to allow ICE Group to wholly-own and vote all of NYSE 
Euronext stock upon consummation of the Combination, ICE Group 
delivered a written notice to the board of directors of NYSE Euronext 
pursuant to the procedures set forth in the current NYSE Euronext 
Certificate of Incorporation requesting approval of its ownership and 
voting of NYSE Euronext stock in excess of the NYSE Euronext voting 
restriction and NYSE Euronext ownership restriction.\36\ The board of 
directors of NYSE Euronext must resolve to expressly permit ownership 
or voting in excess of the NYSE Euronext voting restriction limitation 
and NYSE Euronext ownership restriction. Such resolution of the NYSE 
Euronext board of directors must be filed with and approved by the

[[Page 51762]]

Commission under Section 19(b) of the Act, and become effective 
thereunder. Further, the board of directors may not approve any voting 
or ownership in excess of the limitations unless it determines that 
such ownership or exercise of voting rights (i) Will not impair the 
ability of the U.S. Regulated Subsidiaries, NYSE Euronext, and NYSE 
Group to discharge their respective responsibilities under the Act and 
the rules and regulations thereunder, (ii) will not impair the ability 
of any European Market Subsidiary, NYSE Euronext, or Euronext to 
discharge their respective responsibilities under the European Exchange 
Regulations, (iii) is otherwise in the best interests of NYSE Euronext, 
its shareholders, the U.S. Regulated Subsidiaries, and the European 
Market Subsidiaries, and (iv) will not impair the Commission's ability 
to enforce the Act or the European Regulators' ability to enforce the 
European Exchange Regulations.\37\ For so long as NYSE Euronext 
directly or indirectly controls the Exchange or NYSE Market, NYSE Arca, 
NYSE Arca Equities, any facility of NYSE Arca, or NYSE MKT, the NYSE 
Euronext board of directors cannot waive the voting and ownership 
limits above the 20% threshold if such person or its related persons is 
a member of the Exchange or NYSE MKT, or an ETP Holder, an OTP Holder 
or an OTP Firm.\38\ Further, the NYSE Euronext board of directors 
cannot waive the voting and ownership limits above the 20% threshold if 
such person or its related persons is a U.S. Disqualified Person or a 
European Disqualified Person.\39\ On June 5, 2013, the board of 
directors of NYSE Euronext adopted by written consent the NYSE Euronext 
Resolutions to permit ICE Group, either alone or with its related 
persons, to exceed the NYSE Euronext ownership restriction and the NYSE 
Euronext voting restriction. In adopting such resolutions, the board of 
directors of NYSE Euronext made the necessary determinations set forth 
above and approved the submission of the proposed rule changes to the 
Commission. Among other things, in this notice, ICE Group represented 
to the board of directors of NYSE Euronext that neither ICE Group, nor 
any of its related persons, is (1) An NYSE Member; (2) an NYSE MKT 
Member; (3) an ETP Holder; (4) an OTP Holder or OTP Firm; or (5) a U.S. 
Disqualified Person or a European Disqualified Person. The NYSE 
Euronext board of directors adopted a resolution approving ICE Group's 
request that it be permitted, either alone or with its related persons, 
to exceed the NYSE Euronext voting restriction and the NYSE Euronext 
ownership restriction. The NYSE Euronext board of directors also 
determined that ownership of NYSE Euronext by ICE Group is in the best 
interests of NYSE Euronext, its stockholders and the U.S. Regulated 
Subsidiaries.\40\
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    \36\ Prior to permitting any person to exceed the ownership 
limitation and voting limitation, such person must deliver notice of 
such person's intention to own or vote shares in excess of the 
ownership limitation or voting limitation to the NYSE Euronext board 
of directors. See current NYSE Euronext Certificate of 
Incorporation, Article V, Sections 1(C) and 2(C).
    \37\ See current NYSE Euronext Certificate of Incorporation, 
Article V, Sections 1(C) and 2(C).
    \38\ See current NYSE Euronext Certificate of Incorporation, 
Article V, Sections 1(C) and 2(C).
    \39\ See current NYSE Euronext Certificate of Incorporation, 
Article V, Sections 1(C) and 2(C).
    \40\ Such resolution of the NYSE Euronext board of directors was 
filed as part of the proposed rule changes. See Exhibit D to each of 
the proposed rule changes, which exhibit is available on the 
Commission's Web site (http://www.sec.gov/rules/sro.shtml), at the 
Commission's Public Reference Room, at the NYSE, and on the NYSE's 
Web site (http://www.nyse.com).
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    The Commission believes it is consistent with the Act to allow ICE 
Group to wholly-own and vote all of the outstanding common stock of 
NYSE Euronext. The Commission notes that ICE Group represents that 
neither ICE Group nor any of its related persons is subject to any 
statutory disqualification (as defined in Section 3(a)(39) of the Act), 
or is a member of the Exchange or NYSE MKT, an ETP Holder, an OTP 
Holder or an OTP Firm, or a European Disqualified Person. ICE Group has 
also included in its corporate documents certain provisions designed to 
maintain the independence of the U.S. Regulated Subsidiaries' self-
regulatory functions from ICE Group, NYX Holdings and NYSE Group.\41\ 
Accordingly, the Commission believes that the acquisition of ownership 
and exercise of voting rights of NYSE Euronext common stock by ICE 
Group will not impair the ability of the Commission or any of the U.S. 
Regulated Subsidiaries to discharge their respective responsibilities 
under the Act.
---------------------------------------------------------------------------

    \41\ See infra note 47.
---------------------------------------------------------------------------

3. Proposed Amendments to Board Composition Requirements for the 
Exchange, NYSE MKT, NYSE Market and NYSE Regulation
    The Fourth Amended and Restated Operating Agreement, dated as of 
August 23, 2012, of the Exchange (the ``Exchange Operating 
Agreement''), currently provides that (1) a majority of the members of 
the Exchange's board of directors must be U.S. persons and members of 
the board of directors of NYSE Euronext who satisfy the independence 
requirements of the NYSE Euronext board, and (2) at least 20% of the 
Exchange's board members must be persons who are not board members of 
NYSE Euronext but who qualify as independent under the independence 
policy of the NYSE Euronext board of directors (the ``Non-Affiliated 
Exchange Directors'').\42\ The nominating and governance committee of 
the NYSE Euronext board of directors is required to designate as Non-
Affiliated Exchange Directors the candidates recommended jointly by the 
Director Candidate Recommendation Committees of each of NYSE Market and 
NYSE Regulation or, in the event there are Petition Candidates (as such 
term is defined in the Exchange Operating Agreement), the candidates 
that emerge from a specified process will be designated as the Non-
Affiliated Exchange Directors.\43\
---------------------------------------------------------------------------

    \42\ See Exchange Operating Agreement, Section 2.03(a).
    \43\ See id.
---------------------------------------------------------------------------

    Under the Proposed Rule Change, these provisions would be amended 
to refer to ICE Group instead of NYSE Euronext. Also, references 
throughout to the Exchange's ``Corporation Independence Policy'' would 
be changed to ``Company Independence Policy'' in recognition of the 
form of organization of the Exchange. Substantially the same revisions 
would be made to the analogous provisions of the Third Amended and 
Restated Operating Agreement of NYSE MKT.
    In addition, references to NYSE Euronext in the Director 
Independence Policy of each of the Exchange, NYSE Market, NYSE 
Regulation, NYSE Arca and NYSE MKT would be revised to refer to ICE 
Group.\44\
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    \44\ Generally, the NYSE Exchanges propose, in part, the 
following changes to the constituent documents of the Exchange, NYSE 
MKT, NYSE Market and NYSE Regulation: (i) replacing NYSE Euronext 
with ICE Group as appropriate, (ii) updating the address of the 
registered office and agent for NYSE Market, and (ii) correcting 
certain typographical errors and making certain technical changes.
     The NYSE Exchanges propose, in part, the following changes to 
the Exchange Rules, NYSE MKT Rules and NYSE Arca Equities Rules: (i) 
replacing NYSE Euronext with ICE Group or NYX Holdings, as 
appropriate, (ii) revising the Exchange Rules to delete the 
definitions of ``member'' and ``member organization'' relating to 
NYSE MKT due to the incorporation of such provisions into the 
proposed ICE Group Certificate, and (iii) eliminating certain 
provisions in NYSE MKT Rule 104T relating to restrictions on 
transfer in the NYSE Euronext Certificate because the referenced 
restrictions are no longer in effect and there will be no analogous 
provision in the ICE Group Certificate.
---------------------------------------------------------------------------

    The Commission finds that these proposals are consistent with the 
Act, particularly Section 6(b)(1),\45\ which requires an exchange to be 
so organized and have the capacity to carry out the purposes of the 
Act. Further, the Commission notes that the NYSE Exchanges are not 
proposing to change any of the provisions relating to (i) the

[[Page 51763]]

fair representation of the members of each of the NYSE Exchanges in the 
selection of its directors and administration of its affairs or (ii) 
one or more of the directors of each of the NYSE Exchanges being 
representative of issuers and investors and not being associated with a 
member of the exchange or with a broker dealer, each as required under 
Section 6(b)(3) of the Act.\46\
---------------------------------------------------------------------------

    \45\ 15 U.S.C. 78f(b)(1).
    \46\ 15 U.S.C. 78f(b)(3).
---------------------------------------------------------------------------

B. Relationship of ICE Group, NYX Holdings, NYSE Group, and the U.S. 
Regulated Subsidiaries; Jurisdiction Over ICE Group

    Although ICE Group itself will not carry out regulatory functions, 
its activities with respect to the operation of any of the U.S. 
Regulated Subsidiaries must be consistent with, and not interfere with, 
the U.S. Regulated Subsidiaries' self-regulatory obligations. The 
proposed ICE Group corporate documents include certain provisions that 
are designed to maintain the independence of the U.S. Regulated 
Subsidiaries' self-regulatory functions from ICE Group, NYX Holdings, 
and NYSE Group, enable the U.S. Regulated Subsidiaries to operate in a 
manner that complies with the U.S. federal securities laws, including 
the objectives and requirements of Sections 6(b) and 19(g) of the 
Act,\47\ and facilitate the ability of the U.S. Regulated Subsidiaries 
and the Commission to fulfill their regulatory and oversight 
obligations under the Act.\48\
---------------------------------------------------------------------------

    \47\ 15 U.S.C. 78f(b) and 15 U.S.C. 78s(g).
    \48\ See proposed ICE Group Bylaws Article IX.
---------------------------------------------------------------------------

    For example, under the proposed ICE Group Bylaws, ICE Group shall 
comply with the U.S. federal securities laws, the European Exchange 
Regulations, and the respective rules and regulations thereunder; shall 
cooperate with the Commission, the European Regulators, and the U.S. 
Regulated Subsidiaries.\49\ Also, each director, officer, and employee 
of ICE Group, to the extent in discharging his or her responsibilities 
shall comply with the U.S. federal securities laws and the rules and 
regulations thereunder, cooperate with the Commission, and cooperate 
with the U.S. Regulated Subsidiaries.\50\ In addition, in discharging 
his or her responsibilities as a member of the board, each director of 
ICE Group must, to the fullest extent permitted by applicable law, take 
into consideration the effect that ICE Group's actions would have on 
the ability of the U.S. Regulated Subsidiaries to carry out their 
responsibilities under the Act, on the ability of the European Market 
Subsidiaries to carry out their responsibilities under the European 
Exchange Regulations as operators of European Regulated Markets, and on 
the ability of the U.S. Regulated Subsidiaries, NYSE Group, and ICE 
Group (i) to engage in conduct that fosters and does not interfere with 
the ability of the U.S. Regulated Subsidiaries, NYSE Group, NYX 
Holdings and ICE Group to prevent fraudulent and manipulative acts and 
practices in the securities markets; (ii) to promote just and equitable 
principles of trade in the securities markets; (iii) to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities; (iv) to remove impediments to 
and perfect the mechanisms of a free and open market in securities and 
a U.S. national securities market system; and (v) in general, to 
protect investors and the public interest.\51\ For so long as ICE Group 
directly or indirectly controls any U.S. Regulated Subsidiary, ICE 
Group, its directors, officers and employees shall give due regard to 
the preservation of the independence of the self-regulatory function of 
the U.S. Regulated Subsidiaries (to the extent of each U.S. Regulated 
Subsidiary's self-regulatory function) and the European Market 
Subsidiaries (to the extent of each European Market Subsidiaries' self-
regulatory function).\52\ Further, ICE Group agrees to keep 
confidential all confidential information pertaining to: (1) the self-
regulatory function of the any U.S. Regulated Subsidiary (including but 
not limited to disciplinary matters, trading data, trading practices 
and audit information) contained in the books and records of any of the 
U.S. Regulated Subsidiaries; and (2) the self-regulatory function of 
the European Market Subsidiaries under the European Exchange 
Regulations as operator of a European Regulated Market (including but 
not limited to disciplinary matters, trading data, trading practices 
and audit information) contained in the books and records of the 
European Market Subsidiaries, and not use such information for any 
commercial \53\ purposes.\54\
---------------------------------------------------------------------------

    \49\ See proposed ICE Group Bylaws, Article IX, Section 9.1 and 
9.2.
    \50\ See proposed ICE Group Bylaws, Article III, Section 
3.14(b).
    \51\ See proposed ICE Group Bylaws, Article III, Section 
3.14(a).
    \52\ See proposed ICE Group Bylaws, Article IX, Section 9.4 and 
9.5.
    \53\ The Commission believes that any non-regulatory use of such 
information would be for a commercial purpose. See, e.g., NYSE-
Euronext Merger Order, supra note 25, 72 FR at 8041 n. 71.
    \54\ See proposed ICE Group Bylaws, Article VIII, Section 8.1.
---------------------------------------------------------------------------

    In addition, ICE Group's books and records shall be subject at all 
times to inspection and copying by the Commission, the European 
Regulators, any U.S. Regulated Subsidiary (provided that such books and 
records are related to the activities of such U.S. Regulated Subsidiary 
or any other U.S. Regulated Subsidiary over which such U.S. Regulated 
Subsidiary has regulatory authority or oversight) and any European 
Market Subsidiary (provided that such books and records are related to 
the operation or administration of such European Market Subsidiary or 
any European Regulated Market over which such European Market 
Subsidiary has regulatory authority or oversight).\55\ The ICE Group 
Bylaws would provide that these obligations regarding such confidential 
information will not be interpreted so as to limit or impede (i) the 
rights of the Commission or the relevant U.S. Regulated Subsidiary to 
have access to and examine such confidential information pursuant to 
the U.S. federal securities laws and the rules and regulations 
thereunder; or (ii) the ability of any officers, directors, employees 
or agents of ICE Group to disclose such confidential information to the 
Commission or any U.S. Regulated Subsidiary.\56\ ICE Group's books and 
records related to U.S. Regulated Subsidiaries shall be maintained 
within the United States, and ICE Group's books and records related to 
European Market Subsidiaries shall be maintained in the home 
jurisdiction of one or more of the European Market Subsidiaries or of 
any subsidiary of ICE Group in Europe.\57\ The ICE Group Bylaws also 
provide that if and to the extent than any of ICE Group's books and 
records may relate to both European Market Subsidiaries and U.S. 
Regulated Subsidiaries (each such book and record an ``Overlapping 
Record''), ICE Group shall be entitled to maintain such books and 
records either in the home jurisdiction of one or more European

[[Page 51764]]

Market Subsidiaries or in the United States.\58\
---------------------------------------------------------------------------

    \55\ See proposed ICE Group Bylaws, Article VIII, Section 8.3.
    \56\ See proposed ICE Group Bylaws, Article VIII, Section 8.2.
    \57\ See proposed ICE Group Bylaws, Article VIII, Sections 8.4 
and 8.5.
    \58\ See proposed ICE Group Bylaws, Article VIII, Section 8.6.
---------------------------------------------------------------------------

    In addition, for so long as ICE Group directly or indirectly 
controls any U.S. Regulated Subsidiary, the books, records, premises, 
officers, directors, and employees of ICE Group shall be deemed to be 
the books, records, premises, officers, directors, and employees of the 
U.S. Regulated Subsidiaries for purposes of and subject to oversight 
pursuant to the Act, and for so long as ICE Group directly or 
indirectly controls any European Market Subsidiary, the books, records, 
premises, officers, directors, and employees of ICE Group shall be 
deemed to be the books, records, premises, officers, directors, and 
employees of such European Market Subsidiaries for purposes of and 
subject to oversight pursuant to the European Exchange Regulations.\59\
---------------------------------------------------------------------------

    \59\ See proposed ICE Group Bylaws, Article VIII, Sections 8.4 
and 8.5.
---------------------------------------------------------------------------

    ICE Group and its directors and, to the extent they are involved in 
the activities of the U.S. Regulated Subsidiaries, ICE Group's officers 
and employees whose principal place of business and residence is 
outside of the United States irrevocably submit to the jurisdiction of 
the U.S. federal courts and the Commission with respect to activities 
relating to the U.S. Regulated Subsidiaries, and to the jurisdiction of 
the European Regulators and European courts with respect to activities 
relating to the European Market Subsidiaries.\60\
---------------------------------------------------------------------------

    \60\ See proposed ICE Group Bylaws, Article VII, Sections 7.1 
and 7.2.
---------------------------------------------------------------------------

    The ICE Group Bylaws would provide that ICE Group will take 
reasonable steps necessary to cause its directors, officers and 
employees, prior to accepting a position as an officer, director or 
employee, as applicable, of ICE Group to agree and consent in writing 
to the applicability to them of these jurisdictional and oversight 
provisions with respect to their activities related to any U.S. 
Regulated Subsidiary.\61\
---------------------------------------------------------------------------

    \61\ See proposed ICE Group Bylaws, Article IX, Section 9.3.
---------------------------------------------------------------------------

    Further, ICE Group acknowledges that it is responsible for 
referring possible rule violations to the NYSE Exchanges. In addition, 
ICE Group will enter into an agreement with NYSE Regulation 
acknowledging that each of the Exchange, NYSE MKT and NYSE Arca has 
contracted to have NYSE Regulation perform its self-regulatory 
obligations, in each case with the self-regulatory organization 
retaining its responsibility for the adequate performance of those 
regulatory obligations, and agreeing to provide adequate funding to 
NYSE Regulation. \62\
---------------------------------------------------------------------------

    \62\ See, e.g., Notice at 39412.
---------------------------------------------------------------------------

    Finally, the proposed ICE Group Articles require that, for so long 
as ICE Group controls, directly or indirectly, any of the U.S. 
Regulated Subsidiaries, any changes to the proposed ICE Group Articles 
be submitted to the board of directors of such U.S. Regulated 
Subsidiaries, and if any such boards of directors determines that such 
amendment is required to be filed with or filed with and approved by 
the Commission pursuant to Section 19 of the Act \63\ and the rules 
thereunder, such change shall not be effective until filed with or 
filed with and approved by, the Commission.\64\
---------------------------------------------------------------------------

    \63\ 15 U.S.C. 78s.
    \64\ See proposed ICE Group Bylaws, Article XI, Section 11.3; 
proposed ICE Group Certificate, Article X(C).
---------------------------------------------------------------------------

    The Commission finds that these provisions are consistent with the 
Act, and that they are intended to assist the NYSE Exchanges in 
fulfilling its self-regulatory obligations and in administering and 
complying with the requirements of the Act. With respect to the 
maintenance of books and records of ICE Group, the Commission notes 
that while ICE Group has the discretion to maintain Overlapping Records 
in either the United States or the home jurisdiction of one or more of 
the European Market Subsidiaries, ICE Group is liable for any books and 
records it is required to produce for inspection and copying by the 
Commission that are created outside the United States and where the law 
of a foreign jurisdiction prohibits ICE Group from providing such books 
and records to the Commission for inspection and copying.\65\ Moreover, 
the Commission notes that NYSE Euronext is under an existing obligation 
to make its books and records available in compliance with the 
requirements of Rule 17a-1(b).\66\ The Commission notes that the 
obligations of NYSE Euronext established in the prior orders remains in 
effect for its successors entity, i.e., NYX Holdings. \67\ The 
Commission also notes that the NYSE Euronext Trust Agreement (``Trust 
Agreement'') \68\ established under a prior order also remains in 
effect unchanged, other than revising the reference in the Trust 
Agreement from the nominating and governance committee of NYSE Euronext 
to the nominating and governance committee of ICE Group.\69\
---------------------------------------------------------------------------

    \65\ See Securities Exchange Act Release Nos. 55293 (February 
14, 2007), 72 FR 8033, 8041 (February 22, 2007) (SR-NYSE-2006-120).
    \66\ Id.
    \67\ NYSE Euronext is currently required to maintain in the 
United States originals or copies of books and records that relate 
to both the U.S. Regulated Subsidiaries and its European market 
subsidiaries covered by Rule 17a-1(b) promptly after creation of 
such books and records. See supra, note 65, 72 FR 8041, 8042.
    \68\ The NYSE Trust was created, in part, to take actions to 
mitigate the effects of any material adverse change in European law 
that has an ``extraterritorial'' impact on the non-European issuers 
listed on NYSE Group securities exchanges, non-European financial 
services firms that are members of any NYSE Group securities 
exchange, or any NYSE Group securities exchange. See supra, note 65, 
72 FR at 8042.
    \69\ Section 4(a) of Article IV of the NYSE Group Certificate 
also would be amended to contemplate successors to NYSE Euronext as 
the holder of all of the issued and outstanding shares of NYSE Group 
for purposes of the Trust Agreement.
---------------------------------------------------------------------------

    Under Section 20(a) of the Act,\70\ any person with a controlling 
interest in the U.S. Regulated Subsidiaries shall be jointly and 
severally liable with and to the same extent that the U.S. Regulated 
Subsidiaries are liable under any provision of the Act, unless the 
controlling person acted in good faith and did not directly or 
indirectly induce the act or acts constituting the violation or cause 
of action. In addition, Section 20(e) of the Act \71\ creates aiding 
and abetting liability for any person who knowingly provides 
substantial assistance to another person in violation of any provision 
of the Act or rule thereunder. Further, Section 21C of the Act \72\ 
authorizes the Commission to enter a cease-and-desist order against any 
person who has been ``a cause of'' a violation of any provision of the 
Act through an act or omission that the person knew or should have 
known would contribute to the violation. These provisions are 
applicable to ICE Group's dealings with the U.S. Regulated 
Subsidiaries.
---------------------------------------------------------------------------

    \70\ 15 U.S.C. 78t(a).
    \71\ 15 U.S.C. 78t(e).
    \72\ 15 U.S.C. 78u-3.
---------------------------------------------------------------------------

C. ICE Group Director Independence Policy

    Under the Proposed Rule Change, ICE Group will adopt a Director 
Independence Policy that would be substantially identical to the 
current Independence Policy of the NYSE Euronext board of directors 
except for the change of the entity whose board of directors adopted 
the policy and nonsubstantive conforming changes.
    The Commission finds that the proposed Director Independence Policy 
is consistent with the Act, particularly Section 6(b)(1),\73\ which 
requires an exchange to be so organized and have the capacity to carry 
out the purposes of the Act. The Commission notes that a majority of 
ICE Group's Board would

[[Page 51765]]

need to be independent. In addition, the Commission notes that as a 
company listed on the Exchange, ICE Group's board of directors must 
also satisfy the independence requirements applicable to a listed 
company's board of directors as contained in the Exchange's Listed 
Company Manual. Further, the Commission notes that there are 
requirements in ICE Group's Independence Policy that independent 
directors may not be or have been within the last year, and may not 
have an immediate family member who is or within the last year was, a 
member of the Exchange, NYSE Arca or NYSE MKT.
---------------------------------------------------------------------------

    \73\ 15 U.S.C. 78f(b)(1).
---------------------------------------------------------------------------

D. Options Trading Rights

    The Commission received one comment letter \74\ on the proposed 
rule changes regarding certain Option Trading Rights (``OTRs'') that 
were separated from full New York Stock Exchange, Inc.\75\ seats 
(``Separated OTRs''). All New York Stock Exchange seat ownership (with 
or without OTRs) was extinguished in the 2006 demutualization of New 
York Stock Exchange, Inc.\76\ Although the commenter takes no position 
on the merits of the Combination, the commenter opposes the Combination 
on the grounds that the Exchange does not fully own all of the assets 
being transferred. Specifically, the commenter contends that the owners 
of Separated OTRs retained their Separated OTRs, even after the New 
York Stock Exchange, Inc. exited the options business in 1997, with the 
expectation that their ownership of the Separated OTRs would afford 
them full rights to trade options under the auspices of New York Stock 
Exchange, Inc. or its successor entity. The commenter asked that the 
Commission withhold approval of the Combination until the matter of 
Separated OTRs is resolved.\77\ The NYSE Response to Comments states 
that the issue of the rights of owners of Separated OTRs is not before 
the Commission in the context of the proposed rule filing by the 
Exchange and notes that the Exchange is not proposing in its filing a 
change in the trading rights on the Exchange.\78\
---------------------------------------------------------------------------

    \74\ See Rothlein Letter, supra note 5.
    \75\ New York Stock Exchange, Inc. is the predecessor entity to 
NYSE. See NYSE Inc.-Archipelago Merger Order, supra note 25.
    \76\ See NYSE Inc.-Archipelago Merger Order, supra note 25.
    \77\ The Commission notes that the commenter continued to argue, 
in part, in its rebuttal to the NYSE Response to Comments that the 
Commission should withhold approval of the Combination until the 
matter of Separated OTRs are resolved. See Rothlein Rebuttal Letter, 
supra note 6.
    \78\ See NYSE Response to Comments, supra note 6.
---------------------------------------------------------------------------

    The issue of the rights of owners of Separated OTRs is not before 
the Commission in the context of this rule filing. Pursuant to Section 
19(b)(1) of the Act,\79\ an SRO (such as NYSE) is required to file with 
the Commission any proposed rule or any proposed change in, addition 
to, or deletion from the rules of such SRO. Further, pursuant to 
Section 19(b)(2) of the Act,\80\ the Commission shall approve a 
proposed rule change filed by an SRO if the Commission finds that such 
proposed rule change is consistent with the requirements of the Act and 
the rules and regulations thereunder applicable to the SRO.
---------------------------------------------------------------------------

    \79\ 15 U.S.C. 78s(b)(1).
    \80\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

III. Conclusion

    For the foregoing reasons, the Commission finds that the proposed 
rule change is consistent with the Act and the rules and regulations 
thereunder applicable to a national securities exchange. It is 
therefore ordered, pursuant to Section 19(b)(2) of the Act \81\ that 
the proposed rule changes (SR-NYSE-2013-42; SR-NYSEMKT-2013-50; SR-
NYSEArca-2013-62), are approved.
---------------------------------------------------------------------------

    \81\ Id.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\82\
---------------------------------------------------------------------------

    \82\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------


Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-20338 Filed 8-20-13; 8:45 am]
BILLING CODE 8011-01-P


