
[Federal Register Volume 82, Number 22 (Friday, February 3, 2017)]
[Notices]
[Pages 9251-9256]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-02262]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79901; File Nos. SR-NYSE-2016-90; SR-NYSEArca-2016-167; 
SR-NYSEMKT-2016-122]


Self-Regulatory Organizations; New York Stock Exchange LLC; NYSE 
Arca, Inc.; NYSE MKT LLC; Order Approving Proposed Rule Changes, Each 
as Modified by Amendment No. 1 Thereto, in Connection With the Proposed 
Acquisition of National Stock Exchange, Inc. by the NYSE Group, Inc.

January 30, 2017.

I. Introduction

    On December 16, 2016, the New York Stock Exchange LLC (``NYSE''), 
NYSE Arca, Inc. (``NYSE Arca''), and NYSE MKT LLC (``NYSE MKT'') 
(collectively, the ``Exchanges'') filed with the Securities and 
Exchange Commission (``Commission''), pursuant to Section 19(b)(1) of 
the Securities Exchange Act of 1934 (``Exchange Act''),\1\ and Rule 
19b-4 thereunder,\2\ proposed rule changes in connection with the 
acquisition of National Stock Exchange, Inc. (``NSX'') by the 
Exchanges' parent company, the NYSE Group, Inc. (``NYSE Group''). The 
proposed rule changes were published for comment in the Federal 
Register on December 28, 2016.\3\ On January 23, 2017, the Exchanges 
each filed Amendment No. 1 to their respective proposed rule 
changes.\4\ The Commission received no comment letters on the proposed 
rule changes. This order approves the proposed rule changes.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release Nos. 79671 (December 22, 
2016), 81 FR 96128 (``NYSE Notice''); 79678 (December 22, 2016), 81 
FR 96102 (May 16, 2016) (``NYSE Arca Notice''); and 79675 (December 
22, 2016), 81 FR 96128 (May 16, 2016) (``NYSE MKT Notice'').
    \4\ In Amendment No. 1, the Exchanges updated an incorrect 
reference in the proposed amendment to the Sixth Amended and 
Restated Bylaws of the Intercontinental Exchange, Inc. Amendment No. 
1 was technical in nature and therefore does not need to be 
published for comment. See letters from Martha Redding, Associate 
General Counsel, Assistant Secretary, NYSE, to Brent J. Fields, 
Secretary, Commission, dated January 23, 2017.
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    The Commission has reviewed carefully the proposed rule changes and 
finds that the proposed rule changes are consistent with the 
requirements of the

[[Page 9252]]

Act and the rules and regulations thereunder applicable to a national 
securities exchange.\5\ In particular, the Commission finds that the 
proposed rule changes are consistent with Sections 6(b)(1) and (3) of 
the Act,\6\ which, among other things, require 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. The 
Commission also finds that the proposals are consistent with Section 
6(b)(5) of the Act,\7\ which requires that the rules of an 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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    \5\ 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).
    \6\ 15 U.S.C. 78f(b)(1) and (b)(3).
    \7\ 15 U.S.C. 78f(b)(5).
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II. Discussion

A. Background

    Currently, the Exchanges are wholly owned subsidiaries of NYSE 
Group. NYSE Group, in turn, is a wholly owned subsidiary of NYSE 
Holdings LLC (``NYSE Holdings''), which is wholly owned by 
Intercontinental Exchange Holdings, Inc. (``ICE Holdings'').\8\ On 
December 14, 2016, ICE entered into an agreement with NSX, pursuant to 
which NYSE Group would acquire all of the outstanding capital stock of 
NSX (the ``Acquisition'').\9\ As a result of the Acquisition, NSX will 
be renamed NYSE National, Inc. (``NYSE National'') and will be operated 
as a wholly-owned subsidiary of NYSE Group.\10\
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    \8\ Intercontinental Exchange, Inc. (``ICE''), a public company 
listed on the NYSE, owns 100% of ICE Holdings. See NYSE Notice, 
supra note 3 at 96124; NYSE Arca Notice, supra note 3, at 96102; and 
NYSE MKT Notice, supra note 3, at 96129.
    \9\ See id.
    \10\ See id.
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    In order to consummate the Acquisition and reflect NYSE Group's 
proposed ownership of NYSE National, the Exchanges propose to amend 
certain organizational documents of NYSE Group and its intermediary and 
ultimate parent entities. In particular, as described below, the 
Exchanges propose to amend the (1) Sixth Amended and Restated Bylaws of 
ICE (``ICE Bylaws''), (2) Seventh Amended and Restated Certificate of 
Incorporation of ICE Holdings (``ICE Holdings COI''), (3) Fourth 
Amended and Restated Bylaws of ICE Holdings (``ICE Holdings Bylaws''), 
(4) Independence Policy of the Board of Directors of ICE (``ICE 
Independence Policy''), (5) Seventh Amended and Restated Limited 
Liability Company Agreement of NYSE Holdings (``NYSE Holdings LLC 
Agreement''), (6) Fourth Amended and Restated Certificate of 
Incorporation of NYSE Group (``NYSE Group COI''), and (7) Second 
Amended and Restated Bylaws of NYSE Group (``NYSE Group Bylaws'').
    The Exchanges represent that the current organizational documents 
of ICE and its wholly-owned subsidiaries, provide certain protections 
to the NYSE Exchanges that are designed to protect and facilitate their 
self-regulatory functions, including certain restrictions on the 
ability to vote and own shares of ICE.\11\ The Exchanges also represent 
that the proposed amendments are designed to provide similar 
protections to NYSE National as are currently provided to the Exchanges 
under those organizational documents.\12\ Moreover, the Exchanges 
represent that the proposed changes to the organizational documents 
consist of technical and conforming amendments to reflect the proposed 
new ownership of NYSE National by the NYSE Group, and, indirectly, 
ICE.\13\
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    \11\ See id.
    \12\ See id.
    \13\ See NYSE Notice, supra note 3 at 96124; NYSE Arca Notice, 
supra note 3, at 96102; and NYSE MKT Notice, supra note 3, at 96129.
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B. ICE Bylaws

    The ICE Bylaws will be amended to reflect the Acquisition and 
incorporate NYSE National into the ICE Bylaws' existing (i) voting and 
ownership restrictions, (ii) provisions relating to the qualifications 
of directors and officers and their submission to jurisdiction, (iii) 
compliance with the federal securities laws, (iv) access to books and 
records, and (v) other matters related to ICE's control of its 
registered national securities exchanges. Specifically, the ICE Bylaws 
will be amended as follows:
     Update the heading to reflect that the bylaws will be the 
seventh amendment and restatement.
     Amend the definition of ``U.S. Regulated Subsidiaries'' in 
Article III (Directors), Section 3.15, which currently includes the 
NYSE, NYSE Market (DE), Inc. (``NYSE Market''), NYSE Regulation, Inc. 
(``NYSE Regulation''), NYSE Arca, LLC, NYSE Arca, NYSE Arca Equities, 
Inc. (``NYSE Arca Equities''), and NYSE MKT, to include NYSE National, 
and to delete obsolete references to NYSE Market and NYSE 
Regulation.\14\
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    \14\ According to the Exchanges, NYSE Market and NYSE Regulation 
were previously parties to a Delegation Agreement whereby the NYSE 
delegated certain regulatory functions to NYSE Regulation and 
certain market functions to NYSE Market (DE). See NYSE Notice, supra 
note 3 at 96124, n.7; NYSE Arca Notice, supra note 3, at 96103, n.7; 
and NYSE MKT Notice, supra note 3, at 96129, n.7. The Delegation 
Agreement was terminated when the NYSE re-integrated its regulatory 
and market functions and the two entities ceased being regulated 
subsidiaries. Id. NYSE Regulation has since been merged out of 
existence. Id.
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     Article VIII (Confidential Information), Section 8.1, 
provides that, for so long as ICE controls any of the U.S. Regulated 
Subsidiaries, all confidential information that shall come into the 
possession of ICE pertaining to any of the U.S. Regulated Subsidiaries 
contained in the books and records of any of the U.S. Regulated 
Subsidiaries shall (x) not be made available to any persons (other than 
as provided in Sections 8.2 and 8.3 of the ICE Bylaws) other than to 
those officers, directors, employees and agents of ICE that have a 
reasonable need to know the contents thereof; (y) be retained in 
confidence by ICE and the officers, directors, employees and agents of 
ICE; and (z) not be used for any commercial purposes. Section 8.1 will 
be amended to include NYSE National and to delete the obsolete 
references to NYSE Market and NYSE Regulation.
     Article XI (Amendments to the Bylaws), Section 11.3, 
provides that, for so long as ICE controls any of the U.S. Regulated 
Subsidiaries, any amendment to or repeal of the ICE Bylaws must either 
be (i) filed with or filed with and approved by the Commission under 
Section 19 of the Exchange Act and the rules promulgated thereunder, or 
(ii) submitted to the boards of directors of the U.S. Regulated 
Subsidiaries or the boards of directors of their successors, in each 
case, only to the extent that such entity continues to be controlled 
directly or indirectly by ICE. Section 11.3 will be amended to include 
NYSE National, and to delete the obsolete references to NYSE Market and 
NYSE Regulation.
    The Exchanges also propose to add Article XII (Voting and Ownership 
Limitations) to the ICE Bylaws. Specifically, proposed Section 12.1(a) 
of Article XII will provide that, subject to

[[Page 9253]]

its fiduciary obligations under applicable law, for so long as ICE 
directly or indirectly controls NYSE National (or its successor), the 
board of directors of ICE shall not adopt any resolution pursuant to 
clause (b) of Section A.2 of Article V of the certificate of 
incorporation of ICE,\15\ unless the board of directors of ICE shall 
have determined that:
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    \15\ Section A.2(b) of Article V (Limitations on Voting and 
Ownership) of the certificate of incorporation of ICE relates to ICE 
board of directors approval of voting of ICE capital stock by a 
person together with its related persons in excess of ``10%'' [sic] 
of the then outstanding votes entitled to be cast.
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     In the case of a resolution to approve the exercise of 
voting rights in excess of 20% of the then outstanding votes entitled 
to be cast on such matter, neither such Person \16\ nor any of its 
Related Persons \17\ is an ETP Holder (as defined in the bylaws of NYSE 
National, as such bylaws may be in effect from time to time) of NYSE 
National (any such Person that is a Related Person of an ETP Holder 
shall hereinafter also be deemed to be an ``ETP Holder'' for purposes 
of these bylaws, as the context may require);
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    \16\ For the purpose of new Section 12.1, ``Person'' has the 
meaning assigned in the certificate of incorporation of ICE, as it 
shall be in effect from time to time.
    \17\ For the purpose of new Section 12.1, ``Related Person'' has 
the meaning assigned by the certificate of incorporation of ICE, as 
it shall be in effect from time to time.
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     in the case of a resolution to approve entering into an 
agreement, plan or other arrangement under circumstances that would 
result in shares of stock of ICE that would be subject to such 
agreement, plan or other arrangement not being voted on any matter, or 
the withholding of any proxy relating thereto, where the effect of such 
agreement, plan or other arrangement would be to enable any person, but 
for Article V of the certificate of incorporation of ICE, either alone 
or together with its Related Persons, to vote, possess the right to 
vote or cause the voting of shares of stock of ICE that would exceed 
20% of the then outstanding votes entitled to be cast on such matter 
(assuming that all shares of stock of ICE that are subject to such 
agreement, plan or other arrangement are not outstanding votes entitled 
to be cast on such matter), neither such Person nor any of its Related 
Persons is, with respect to NYSE National, an ETP Holder.
    Proposed Section 12.1(b) will provide that, subject to its 
fiduciary obligations under applicable law, for so long as ICE directly 
or indirectly controls NYSE National (or its successor), the board of 
directors of ICE shall not adopt any resolution pursuant to clause (b) 
of Section B.2 of Article V of the ICE's certificate of 
incorporation,\18\ unless the board of directors of ICE shall have 
determined that neither such Person nor any of its Related Persons is 
an ETP Holder.
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    \18\ Section B.2(b) of Article V (Limitations on Voting and 
Ownership) of the certificate of incorporation of ICE relates to ICE 
board of directors approval of ownership of ICE capital stock by a 
person together with its related persons in excess of 20% of the 
then outstanding votes entitled to be cast.
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    Proposed Section 12.2 will provide that, for so long as ICE shall 
control, directly or indirectly, NYSE National (or its successor), the 
ICE board of directors shall not adopt any resolution to repeal or 
amend any provision of the certificate of incorporation of ICE unless 
such amendment or repeal shall either be (a) filed with or filed with 
and approved by the Commission under Section 19 of the Exchange Act and 
the rules promulgated thereunder or (b) submitted to the board of 
directors of NYSE National (or the board of directors of its 
successor), and if such board of directors determines that such 
amendment or repeal must be filed with or filed with and approved by 
the Commission under Section 19 of the Exchange Act and the rules 
promulgated thereunder before such amendment or repeal may be 
effectuated, then such amendment or repeal shall not be effectuated 
until filed with or filed with and approved by the Commission, as the 
case may be.
    The Commission believes that the proposed changes to the ICE Bylaws 
are consistent with the requirements of Section 6(b) of the Exchange 
Act. The Commission also believes that the proposed provisions in the 
ICE Bylaws are reasonably designed to ensure that the Exchanges are 
able to carry out their self-regulatory obligations under the Exchange 
Act and thereby should minimize the potential that a person could 
improperly interfere with or restrict the ability of the Commission or 
the Exchanges to effectively carry out their respective regulatory 
oversight responsibilities under the Exchange Act. Furthermore, the 
Commission believes that it is appropriate to remove the obsolete 
references and add references to NYSE National in the ICE Bylaws so 
that the Bylaws will reflect the proposed ownership structure of NYSE 
National following the closing of the Acquisition.

C. ICE Holdings COI

    The ICE Holdings COI will be amended as follows:
     Update the heading and paragraphs (2)-(5) to reflect that 
the certificate of incorporation will be the eighth amendment and 
restatement, including replacing an incorrect reference to ``Sixth'' 
before ``Amended'' in paragraph (3). The date of the ICE Holdings COI 
will also be updated in the preamble.
     Amend subsection A.3(c)(ii) of Article V (Limitations on 
Voting and Ownership) to define an ETP Holder of NYSE Arca Equities as 
an ``NYSE Arca Equities ETP Holder,'' to distinguish between the ETP 
Holders of NYSE Arca Equities and those of NYSE National. The obsolete 
references to NYSE Market and NYSE Regulation will be deleted.
     Amend Subsection A.3(c) of Article V to add subsection 
(v), similar to those in place for the Exchanges, which will provide 
that, for so long as the ICE Holdings directly or indirectly controls 
NYSE National (or its successor), no person nor any of its related 
persons (as those terms are defined therein) is an ETP Holder (as 
defined in the bylaws of NYSE National, as such bylaws may be in effect 
from time to time) of NYSE National.
     Amend Subsection A.3(d) of Article V to add ``NYSE Arca'' 
before ``ETP Holder'' in one place to distinguish between the NYSE Arca 
Equities ETP Holders and those of NYSE National.
     Amend Subsection A.3(d) of Article V to add subsection (v) 
similar to those in place for the Exchanges. Proposed subsection (v) 
will incorporate NYSE National into an existing restriction, such that 
the board of directors of ICE Holdings will not be able to adopt a 
resolution to approve the exercise of voting rights that would exceed 
20% of the then outstanding votes entitled to be cast on such matter, 
where neither such person nor any of its related persons is, with 
respect to NYSE National, an NYSE National ETP Holder.
     Amend Subsection B.3(d) of Article V to add ``NYSE Arca'' 
before ``ETP Holder'' to distinguish between the NYSE Arca Equities ETP 
Holders and those of NYSE National.
     Amend subsection B.3 of Article V to add subsection (g) 
similar to those in place for the Exchanges, incorporating NYSE 
National into the restriction on the ICE Holdings board of directors 
from adopting any resolution pursuant to clause (b) of Section B.2 of 
Article V of the ICE Holdings COI \19\ unless the NYSE Holdings board 
of directors determines that, for so long as ICE Holdings controls NYSE 
National,

[[Page 9254]]

neither such person nor any of its related persons is an NYSE National 
ETP Holder.
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    \19\ Section B.2(b) of Article V (Limitations on Voting and 
Ownership) of the ICE Holdings COI relates to ICE Holdings board of 
directors approval of ownership of ICE Holdings capital stock by a 
person together with its related persons in excess of 20% of the 
then outstanding votes entitled to be cast.
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     Amend Article X (Amendments) which provides that, for so 
long as ICE Holdings shall control, directly or indirectly, any of the 
U.S. Regulated Subsidiaries, before any amendment or repeal of any 
provision of the ICE Holdings COI shall be effective, the amendment or 
repeal must be submitted to the boards of directors of NYSE, NYSE 
Market, NYSE Regulation, NYSE Arca, NYSE Arca Equities, and NYSE MKT 
(or the boards of directors of their successors), to add the board of 
directors of NYSE National to the list of those exchanges that would 
receive any amendment or repeal of any provision of the ICE Holdings 
COI. The obsolete references to NYSE Market and NYSE Regulation will be 
deleted.
    The Commission believes that the proposed changes to the ICE 
Holdings COI are consistent with the Exchange Act in that they are 
reasonably designed to facilitate the Exchanges' ability to fulfill 
their self-regulatory obligations under the Exchange Act. Additionally, 
the Commission believes that the proposed changes should minimize the 
potential that a person could improperly interfere with or restrict the 
ability of the Commission or the Exchanges to effectively carry out 
their respective regulatory oversight responsibilities under the 
Exchange Act. Furthermore, the Commission believes it is appropriate to 
replace outdated or obsolete references in the ICE Holdings COI 
following the closing of the Acquisition.

D. ICE Holdings Bylaws

    The cover page and heading on the first page of the ICE Holdings 
Bylaws will be amended to reflect that the bylaws will be the fifth 
amendment and restatement. The effective date on the cover page will 
also be updated. Additionally, similar to the ICE Bylaws discussed 
above, the ICE Holdings Bylaws will be amended to include ``NYSE 
National, Inc.'' in: (1) The definition of ``U.S. Regulated 
Subsidiaries'' in Article III (Directors), Section 3.15; \20\ (2) 
Article VIII (Confidential Information), Section 8.1, which will be 
amended to extend the same protection to confidential information 
relating to the self-regulatory function of NYSE National or its 
successor; \21\ and (3) Article XI (Amendment to the Bylaws), Section 
11.3, which provides that, for so long as ICE Holdings controls any of 
the U.S. Regulated Subsidiaries, any amendment to or repeal of the ICE 
Holdings Bylaws must either be (i) filed with or filed with and 
approved by the Commission under Section 19 of the Exchange Act and the 
rules promulgated thereunder, or (ii) submitted to the boards of 
directors of the U.S. Regulated Subsidiaries or the boards of directors 
of their successors, in each case only to the extent that such entity 
continues to be controlled directly or indirectly by ICE Holdings.\22\
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    \20\ Article VIII, Section 3.15 will also be amended to delete 
obsolete references to NYSE Market and NYSE Regulation.
    \21\ Article VIII, Section 8.1 will also be amended to delete 
obsolete references to NYSE Market and NYSE Regulation.
    \22\ Article XI, Section 11.3 will also be amended to delete 
obsolete references to NYSE Market and NYSE Regulation.
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    The Commission believes that these proposed changes are consistent 
with the Exchange Act in that they are intended to align the Exchanges' 
upstream ownership governance documents with the proposed ownership 
structure of NYSE National following the closing of the Acquisition.

E. ICE Independence Policy

    The ICE Independence Policy will be amended to add NYSE National to 
the section describing ``Independence Qualifications.'' In particular, 
NYSE National will be added to categories 1.b. and c. that refer to 
``members,'' as defined in Section 3(a)(3)(A)(i)-(iv) of the Exchange 
Act.\23\ The clause ``and `Person Associated with an ETP Holder' (as 
defined in Rule 1.5 of NYSE National, Inc.)'' will also be added to 
category 1.b. Additionally, NYSE National will be added to subsections 
4. and 5. of the ``Independence Qualifications'' section. Obsolete 
references to NYSE Market and NYSE Regulation will be deleted.\24\
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    \23\ See 15 U.S.C. 78c(a)(3)(a).
    \24\ The Exchanges also propose to update the Web site link in 
footnote 2 to the NYSE Listed Company Manual and commentary.
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    The Commission believes that these changes should reduce confusion 
caused by obsolete references and align the Exchanges' upstream 
ownership governance documents with the proposed ownership structure of 
NYSE National following the closing of the Acquisition.

F. NYSE Holdings LLC Agreement

    The Exchanges propose to amend the NYSE Holdings LLC Agreement as 
follows:
     The heading and preamble will be amended to reflect that 
the LLC agreement will be the eighth amendment and restatement. The 
effective date will also be updated. In addition, a new clause will be 
added in the second full sentence that states the proposed amended NYSE 
Holdings LLC Agreement amends and restates the Seventh Amended and 
Restated Limited Liability Company Agreement, dated as of May 22, 2015.
     The current penultimate WHEREAS clause will be amended by 
adding ``in May 2015'' before ``the Company'' and the phrase ``now 
desires to amend and restate'' immediately following will be replaced 
with ``amended and restated.'' The words ``have'' and ``are'' will be 
changed to the past tense ``had'' and ``were'' in the final sentence.
     The following new WHEREAS clause will be added immediately 
above the current last WHEREAS clause: ``WHEREAS, the Company now 
desires to amend and restate the Seventh Amended and Restated Agreement 
to reflect the acquisition of NYSE National, Inc. by the Company's 
wholly-owned subsidiary NYSE Group, Inc.;''.
     The definition of ``ETP Holder'' in Article I 
(Interpretation), Section 1.1 will be deleted and new definitions of an 
``NYSE Arca ETP Holder'' and ``NYSE National ETP Holder'' will be added 
to the definitions section. The Exchanges will also add a definition 
for ``NYSE National.'' The obsolete definition of NYSE Market will be 
deleted.
     Article IX (Voting and Ownership Limitations), Section 
9.1(a)3.C will be amended to add ``NYSE Arca'' before ``ETP Holder'' 
and the defined term ``NYSE Arca ETP Holder'' to distinguish between 
the ETP Holders of NYSE Arca Equities and those of NYSE National. An 
obsolete reference to NYSE Market will be deleted from Section 
9.1(a)3.C.
     Clause (v) will be added to Section 9.1(a)3.C. similar to 
those in place for the Exchanges. Clause (v) will incorporate NYSE 
National into the existing restriction, such that the NYSE Holdings 
board of directors will not be able to adopt a resolution pursuant to 
clause (b) of Section 9.1(a)2 unless the NYSE Holdings board of 
directors determines that, for so long as NYSE Holdings directly or 
indirectly controls NYSE National (or its successor), neither such 
person nor any of its related persons is an ETP Holder (as defined in 
the bylaws of NYSE National, as such bylaws may be in effect from time 
to time) of NYSE National (``NYSE National ETP Holder''). The clause 
will also provide that any such person that is a related person of an 
ETP Holder shall hereinafter also be deemed to be an ``NYSE National 
ETP Holder'' for purposes of the NYSE Holdings LLC Agreement, as the 
context may require.
     Article IX (Voting and Ownership Limitations), Section 
9.1(a)3.D will be amended to add ``NYSE Arca'' before

[[Page 9255]]

``ETP Holder'' in one place to distinguish between the NYSE Arca 
Equities ETP Holders and those of NYSE National. An outdated reference 
to NYSE Market will be deleted.
     Clause (v) will be added to Section 9.1(a)3.D to 
incorporate NYSE National into the existing restriction on the NYSE 
Holdings Board of Directors, such that it will not be able to adopt a 
resolution to approve the exercise of voting rights that would exceed 
20% of the then outstanding votes entitled to be cast on such matter 
for so long as NYSE Holdings controls NYSE National. The clause will 
provide that ``for so long as the Corporation directly or indirectly 
controls NYSE National, neither such person nor any of its Related 
Persons is an NYSE National ETP Holder.''
     Article IX, Section 9.1(b)3 will be amended to add subpart 
G. to incorporate NYSE National into the existing restriction on the 
NYSE Holdings Board of Directors, so that it will provide that, subject 
to its fiduciary obligations under applicable law, for so long as NYSE 
Holdings directly or indirectly controls NYSE National (or its 
successor), the board of directors of NYSE Holdings shall not adopt any 
resolution pursuant to (b) of Section 9.1(b)(2) of the NYSE Holdings 
LLC Agreement, unless the board of directors of NYSE Holdings shall 
have determined that neither such person nor any of its related persons 
is an NYSE National ETP Holder.
    The Commission believes that the proposed changes to the NYSE 
Holdings LLC Agreement are consistent with the Exchange Act in that 
they are reasonably designed to facilitate the Exchanges'ability to 
fulfill their self-regulatory obligations under the Exchange Act. 
Additionally, the Commission believes that the proposed changes should 
minimize the potential that a person could improperly interfere with or 
restrict the ability of the Commission or the Exchanges to effectively 
carry out their respective regulatory oversight responsibilities under 
the Exchange Act. Furthermore, the Commission believes that the 
replacement of outdated or obsolete references may reduce confusion 
that could result from having these references in the NYSE Holdings LLC 
Agreement following the closing of the Acquisition.

G. NYSE Group COI

    The Exchanges propose to amend the NYSE Group COI as follows:
     The heading and recitations will be amended to reflect 
that the certificate of incorporation will be the fifth amendment and 
restatement.
     NYSE National will be added to the list of ``Regulated 
Subsidiaries'' in Article IV (Stock), Section 4(b)(1), and the obsolete 
references to NYSE Market and NYSE Regulation will be deleted.
     Section 4(b)(1)(y) of Article IV (Stock) will be amended 
to define an ETP Holder of NYSE Arca Equities as an ``NYSE Arca 
Equities ETP Holder,'' to distinguish between the ETP Holders of NYSE 
Arca Equities and those of NYSE National, An outdated reference to NYSE 
Market will be deleted.
     Section 4(b)(1)(y) will also be amended to add a provision 
similar to those in place for the Exchanges providing that, for so long 
as NYSE Group directly or indirectly controls NYSE National (or its 
successor), neither such person nor any of its related persons is an 
ETP Holder (as defined in the rules of NYSE National, as such rules may 
be in effect from time to time) of NYSE National (defined as an ``NYSE 
National ETP Holder'') and that any such person that is a related 
person of an NYSE National ETP Holder shall hereinafter also be deemed 
to be an ``NYSE National ETP Holder'' for purposes of the NYSE Group 
COI, as the context may require.
     Section 4(b)(1)(z) of Article IV will be amended to define 
an ETP Holder of NYSE Arca Equities as an ``NYSE Arca Equities ETP 
Holder'' and delete an outdated reference to NYSE Market. Section 
4(b)(1)(z) will also be amended to incorporate NYSE National into the 
existing restriction on the NYSE Group Board of Directors, such that it 
will not be able to adopt a resolution to approve the exercise of 
voting rights that would exceed 20% of the then outstanding votes 
entitled to be cast on such matter, where neither such person nor any 
of its related persons is, with respect to NYSE National, an NYSE 
National ETP Holder.
     Section 4(b)(1)(z)(iv) of Article IV will be amended to 
add ``NYSE Arca'' before ``ETP Holder'' to distinguish between the NYSE 
Arca Equities ETP Holders and those of NYSE National.
     Subpart (vii) will be added to Section 4(b)(2)(C) of 
Article IV to incorporate NYSE National into the existing restriction 
on the NYSE Group Board of Directors, such that it will not be able to 
adopt a resolution to approve the exercise of voting rights that would 
exceed 20% of the then outstanding votes entitled to be cast on such 
matter, where neither such person nor any of its related persons is, 
with respect to NYSE National, an NYSE National ETP Holder.\25\
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    \25\ An obsolete reference to NYSE Market will be deleted from 
Article IV (Stock), Section 4(b)(2)(C)(v).
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     Article X (Confidential Information) will be amended to 
extend the same protection to confidential information relating to the 
self-regulatory function of NYSE National or its successor and delete 
obsolete references to NYSE Market and NYSE Regulation.
    Article XII (Amendments to Certificate of Incorporation) provides 
that, for so long as NYSE Group controls the Regulated Subsidiaries, 
before any amendment or repeal of any provision of the NYSE Group COI 
shall be effective, such amendment or repeal shall either (a) be filed 
with or filed with and approved by the Commission under Section 19 of 
the Exchange Act and the rules promulgated thereunder or (b) be 
submitted to the boards of directors of NYSE, NYSE Market, NYSE 
Regulation, NYSE Arca, NYSE Arca Equities, and NYSE MKT or the boards 
of directors of their successors. Article XII will be amended to add 
NYSE National to subsection (b) and delete obsolete references to NYSE 
Market and NYSE Regulation.
    The Commission believes that the proposed changes to the NYSE Group 
COI are consistent with the Exchange Act in that they are reasonably 
designed to facilitate the Exchanges' ability to fulfill their self-
regulatory obligations under the Exchange Act. Additionally, the 
Commission believes that the proposed changes should minimize the 
potential that a person could improperly interfere with or restrict the 
ability of the Commission or the Exchanges to effectively carry out 
their respective regulatory oversight responsibilities under the 
Exchange Act. Furthermore, the Commission believes that the replacement 
of outdated or obsolete references will reduce confusion that might 
result from having these references in the NYSE Group COI following the 
closing of the Acquisition.

H. NYSE Group Bylaws

    The heading of the NYSE Group Bylaws will be amended to reflect 
that the bylaws will be the third amendment and restatement. 
Additionally, Article VII (Miscellaneous), Section 7.9(A)(b) will be 
amended to (1) delete obsolete references to NYSE Market and NYSE 
Regulation, (2) replace the outdated reference to ``NYSE Alternext US 
LLC'' with ``NYSE MKT LLC,'' and (3) add NYSE National to the list of 
those exchanges that would receive any

[[Page 9256]]

amendment or repeal of any provision of the NYSE Group Bylaws.\26\
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    \26\ Article VII (Miscellaneous), Section 7.9(A)(b) currently 
provides that, for so long as NYSE Group controls, directly or 
indirectly, any of the Exchanges, before any amendment or repeal of 
any provision of the NYSE Group Bylaws shall be effective, such 
amendment or repeal must either be (i) filed with or filed with and 
approved by the Commission under Section 19 of the Exchange Act and 
the rules promulgated thereunder, or (ii) submitted to the boards of 
directors of the NYSE, NYSE Market, NYSE Regulation, NYSE Arca, NYSE 
Arca Equities, and NYSE Alternext US LLC or the boards of directors 
of their successors, in each case only to the extent that such 
entity continues to be controlled directly or indirectly by NYSE 
Group.
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    The Commission believes that the proposed changes to the NYSE Group 
Bylaws are consistent with the Exchange Act in that they are intended 
to eliminate confusion that may result from having outdated or obsolete 
references and reflect the proposed new ownership of NYSE National by 
the NYSE Group.

III. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act 
\27\ that the proposed rule changes (SR-NYSE-2016-90; SR-NYSEArca-2016-
167; and SR-NYSEMKT-2016-122), as modified by their respective 
Amendment No. 1, be, and hereby are, approved.
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    \27\ 15 U.S.C. 78f(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\28\
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    \28\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-02262 Filed 2-2-17; 8:45 am]
 BILLING CODE 8011-01-P


