
[Federal Register Volume 80, Number 111 (Wednesday, June 10, 2015)]
[Notices]
[Pages 33005-33006]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-14132]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75105; File No. SR-NYSE-2015-16]


Self-Regulatory Organizations; New York Stock Exchange LLC; Order 
Approving Proposed Rule Change To Amend the Seventh Amended and 
Restated Operating Agreement of the New York Stock Exchange LLC

June 4, 2015.

I. Introduction

    On April 6, 2015, the New York Stock Exchange LLC (the ``Exchange'' 
or ``NYSE'') filed with the Securities and Exchange Commission (the 
``Commission''), pursuant to section 19(b)(1) \1\ of the Securities 
Exchange Act of 1934 (the ``Act''),\2\ and Rule 19b-4 thereunder,\3\ a 
proposed rule change to amend the Seventh Amended and Restated 
Operating Agreement (the ``Operating Agreement'') of the Exchange. The 
proposed rule change was published for comment in the

[[Page 33006]]

Federal Register on April 24, 2015.\4\ The Commission received no 
comment letters on the proposed rule change. This order approves the 
proposed rule change.
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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 No. 74766 (April 20, 
2015), 80 FR 23057 (``Notice'').
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II. Description of the Proposal

    NYSE proposed to amend the Exchange's Operating Agreement to remove 
the requirement that the independent directors that make up the 
majority of the board of directors of the Exchange (``Board'') also be 
directors of Intercontinental Exchange, Inc. (``ICE''), the Exchange's 
parent company. Currently, section 2.03(a)(i) of the Operating 
Agreement, which governs the Board's composition, provides that a 
majority of the Exchange's directors shall be U.S. persons who are 
members of the board of directors of ICE and who satisfy the Exchange's 
Company Director Independence Policy. Each such director is defined as 
an ``ICE Independent Director'' in section 2.03(a)(i)(1) of the 
Operating Agreement. The Exchange proposed to amend section 2.03(a)(i) 
to remove the requirement that the independent directors, making up the 
majority of the Board, also be directors of ICE, by amending the 
definition of ``ICE Independent Director'' to remove the reference to 
ICE, and to make conforming changes in both subparagraphs (i) and (ii) 
of section 2.03(a).
    The Exchange represented that, even upon approval of this 
modification to its Operating Agreement, a majority of the directors of 
the Board would continue to satisfy the Company Director Independence 
Policy.\5\ The Exchange also noted that it believes that eliminating 
the requirement that the independent directors of the Exchange also be 
directors of ICE will allow the Exchange to broaden the pool of 
potential Board members, resulting in a more diversified Board 
membership while still ensuring the directors' independence.\6\ The 
Exchange further represented that eliminating the requirement that the 
independent directors of the Exchange also be directors of ICE will 
result in the Exchange's Board composition requirements being more 
consistent with its affiliate, NYSE Arca, Inc., which does not require 
any of its directors to be directors of ICE.\7\
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    \5\ See Notice, 80 FR at 23057.
    \6\ Id.
    \7\ Id.
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III. Discussion and Commission Findings

    After review, 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.\8\ In particular, the 
Commission finds that the proposed rule change is consistent with 
section 6(b)(1) of the Act,\9\ which requires an exchange to be so 
organized and have the capacity to carry out the purposes of the Act 
and to comply and to enforce compliance by its members and persons 
associated with its members with the Act. The Commission also finds 
that the proposed rule change is consistent with section 6(b)(5) of the 
Act,\10\ which requires that the rules of the exchange be designed, 
among other things, to prevent fraudulent and manipulative acts and 
practices, 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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    \8\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
    \9\ 15 U.S.C. 78(b)(1).
    \10\ 15 U.S.C. 78(b)(5).
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    The Commission notes that, while the proposal removes the 
requirement that the independent directors who make up the majority of 
the Board also be ICE directors, it does not alter the requirement 
under the Operating Agreement that a majority of the Board must satisfy 
the Exchange's Company Director Independence Policy.\11\ Thus, the 
majority of directors on the Exchange's Board must still qualify as 
independent directors under the Exchange's Company Director 
Independence Policy. Moreover, removing the requirement that the 
independent directors on the Exchange's Board also be directors of ICE 
may result in a more diversified Board composition as candidates for 
membership on the Board who qualify as independent under the Company 
Director Independence Policy need not be limited to those candidates 
who also serve on the board of directors of ICE.
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    \11\ See Securities Exchange Act Release No. 67564 (August 1, 
2012), 77 FR 47151 (August 7, 2012) (SR-NYSE-2012-17) (approving, 
among other things, the Exchange's Company Director Independence 
Policy).
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IV. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the Act, 
that the proposed rule change (SR-NYSE-2015-16) is approved.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.

[FR Doc. 2015-14132 Filed 6-9-15; 8:45 am]
 BILLING CODE 8011-01-P


