[Federal Register Volume 82, Number 222 (Monday, November 20, 2017)]
[Notices]
[Pages 55141-55145]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-25030]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82077; File No. SR-CHX-2016-20]


Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Notice of Filing of Amendment No. 2 to Proposed Rule Change in 
Connection With the Proposed Transaction Involving CHX Holdings, Inc. 
and North America Casin Holdings, Inc.

November 14, 2017.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Exchange Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby 
given that on November 6, 2017, the Chicago Stock Exchange, Inc. 
(``CHX'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``SEC'' or ``Commission'') Amendment No. 2 to the proposed 
rule change as described in Item I below, which Item has been prepared 
by the Exchange and is reproduced below verbatim.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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    The proposed rule change was designed to effect an acquisition of 
CHX Holdings, Inc. by North America Casin Holdings, Inc., which would 
be owned by a consortium of investors (``upstream investors''). On 
August 9, 2017, the Division of Trading and Markets, for the Commission 
pursuant to delegated authority,\3\ approved the proposed rule change, 
as modified by Amendment No. 1.\4\ Pursuant to Commission Rule of 
Practice 431,\5\ the Commission is reviewing the delegated action, and 
the approval order is stayed.\6\ On August 18, 2017, the Commission 
issued a scheduling order, pursuant to Commission Rule of Practice 431, 
providing until September 17, 2017 for any party or other person to 
file any additional statements.\7\ On October 2, 2017, during the 
Commission's review of the delegated action, CHX informed the 
Commission that three of the upstream investors were withdrawing from 
the investor group. CHX subsequently filed Amendment No. 2 to the 
proposed rule change to update its proposal to reflect this change in 
the investor group. Because of this change and a number of other 
changes to the proposed transaction, as described below, including, 
among other things, a change to the North America Casin Holdings, Inc. 
Certificate of Incorporation that provides for an 85% super-majority 
vote requirement for certain corporate actions, revised put agreements 
for Raptor Holdco LLC and Saliba Ventures Holdings, LLC, and a new put 
agreement for Penserra Securities, LLC, the Commission is publishing 
this notice to solicit comments on the proposed rule change, as 
amended, from interested persons.
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    \3\ 17 CFR 200.30 3(a)(12).
    \4\ See Exchange Act Release No. 81366, 82 FR 38734 (August 15, 
2017).
    \5\ 17 CFR 201.431.
    \6\ See Letter from Secretary of the Commission to Albert (A.J.) 
Kim, VP and Associate General Counsel, Chicago Stock Exchange, Inc., 
dated August 9, 2017 (providing notice of Commission review of 
delegated action and stay of order), available at https://www.sec.gov/rules/sro/chx/2017/34-81366-letter-from-secretary.pdf.
    \7\ See Exchange Act Release No. 81435, 82 FR 40187 (August 24, 
2017).
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I. Amendment No. 2 to SR-CHX-2016-20

    The Chicago Stock Exchange, Inc. is filing this Partial Amendment 
no. 2 to SR-CHX-2016-20, a proposed rule change related to a proposed 
transaction (``Proposed Transaction'') involving, among others, the 
Exchange's direct parent company, CHX Holdings, Inc. (``CHX 
Holdings''), and North America Casin Holdings, Inc. (``NA Casin 
Holdings''), which was originally filed on December 2, 2016 (``Initial 
Filing'') and modified by Partial Amendment No. 1 on August 7, 2017. 
The proposed rule change was published for comment in the Federal 
Register on December 12, 2016.\8\ The U.S. Securities and Exchange 
Commission then received seven comment letters,\9\ including two 
response letters from the Exchange.\10\ On January 12, 2017, the 
Commission instituted proceedings to determine whether to approve or 
disapprove the proposed rule change,\11\ pursuant to Section 19(b)(2) 
of the Securities Exchange Act of 1934 (``Exchange

[[Page 55142]]

Act'').\12\ On June 6, 2017, the Commission designated a longer period 
for Commission action on the proceedings,\13\ pursuant to Section 
19(b)(2) of the Exchange Act.\14\ During the proceedings, the 
Commission received 25 comment letters,\15\ including two response 
letters from the Exchange.\16\ On August 7, 2017, the Exchange filed 
Partial Amendment No. 1 to the Initial Filing.\17\ On August 9, 2017, 
the Commission approved, pursuant to delegated authority by Commission 
staff, the Initial Filing, as modified by Partial Amendment No. 1.\18\ 
On the same day, the Commission stayed the Approval Order and 
instituted a review of the delegated action.\19\ On August 18, 2017, 
the Commission issued an order scheduling filing of statements on its 
review of the delegated action.\20\ After the Commission stayed the 
Approval Order, the Commission received 43 comment letters,\21\ 
including two response letters from the Exchange.\22\
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    \8\ See Exchange Act Release No. 79474 (December 6, 2016), 81 FR 
89543 (December 12, 2016) (SR-CHX-2016-20) (``Notice'').
    \9\ All comment letters on the Initial Filing may be found at 
https://www.sec.gov/comments/sr-chx-2016-20/chx201620.shtml.
    \10\ See Letter to Brent J. Fields, Secretary, Commission, from 
John K. Kerin, President and CEO, CHX (January 5, 2017) (``First CHX 
Letter''); see also Letter to Brent J. Fields, Secretary, 
Commission, from Albert J. Kim, Vice President and Associate General 
Counsel, CHX (January 6, 2017) (``Second CHX Letter'').
    \11\ See Exchange Act Release No. 79781 (January 12, 2017), 82 
FR 6669 (January 19, 2017).
    \12\ 15 U.S.C. 78s(b)(2).
    \13\ See Exchange Act Release No. 80864 (June 6, 2017), 82 FR 
26966 (June 12, 2017).
    \14\ 15 U.S.C. 78s(b)(2).
    \15\ See supra note 9.
    \16\ See Letter to Brent J. Fields, Secretary, Commission, from 
John K. Kerin, President and CEO, CHX (March 6, 2017) (``Third CHX 
Letter''); see also Letter to Brent J. Fields, Secretary, 
Commission, from Albert J. Kim, Vice President and Associate General 
Counsel, CHX (August 8, 2017) (``Fourth CHX Letter'').
    \17\ See Exchange Act Release No. 81366 (August 9, 2017), 82 FR 
38734 (August 15, 2017) (``Approval Order''); see also generally 
Fourth CHX Letter, supra note 16.
    \18\ See generally Approval Order, supra note 17.
    \19\ See Letter to Albert J. Kim, Vice President and Associate 
General Counsel, CHX, from Brent J. Fields, Secretary, Commission 
(August 9, 2017).
    \20\ See Exchange Act Release No. 81435 (August 18, 2017), 82 FR 
40187 (August 24, 2017).
    \21\ See supra note 9.
    \22\ See Letter to Brent J. Fields, Secretary, Commission, from 
John K. Kerin, President and CEO, CHX (August 25, 2017) (``Fifth CHX 
Letter''); see also Letter to Brent J. Fields, Secretary, 
Commission, from James G. Ongena, Executive Vice President and 
General Counsel, CHX (October 1, 2017) (``Sixth CHX Letter'').
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    The Exchange now submits this Partial Amendment No. 2 to amend the 
Initial Filing, as modified by Partial Amendment No. 1, as described 
below.

Updated NACH Capitalization Table

    In the Initial Filing,\23\ as modified by Partial Amendment No. 
1,\24\ the Exchange stated that upon the Closing \25\ of the Proposed 
Transaction, CHX Holdings will become a wholly-owned direct subsidiary 
of NA Casin Holdings, which will, in turn, be owned by the following 
Indirect Upstream Owners in the following percentages:
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    \23\ See Notice, supra note 8, at 89544-89545.
    \24\ See Approval Order, supra note 17, at n. 10.
    \25\ Unless otherwise specified, capitalized terms used in this 
rule filing are defined as set forth herein, the Initial Filing or 
Partial Amendment No. 1.
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     Non-U.S. Indirect Upstream Owners:

 NA Casin Group, a corporation wholly-owned by Chongqing 
Casin--20%
 Chongqing Jintian Industrial Co., Ltd. (``Chongqing 
Jintian'')--15%
 Chongqing Longshang Decoration Co., Ltd. (``Chongqing 
Longshang'')--14.50%.

     U.S. Indirect Upstream Owners:

 Castle YAC Enterprises, LLC (``Castle YAC'')--19%
 Raptor Holdco LLC (``Raptor'')--11.75%
 Saliba Ventures Holdings, LLC (``Saliba'')--11.75%
 Xian Tong Enterprises, Inc. (``Xian Tong'')--6.94%
 Equity Incentive Shares to five members of the CHX Holdings 
management team--0.88%
 Penserra Securities, LLC (`Penserra')--0.18%.

    Furthermore, the Exchange also stated the following: \26\
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    \26\ See Notice, supra note 8, at 89545.

     The only Related Persons \27\ among the Indirect 
Upstream Owners are Castle YAC and NA Casin Group.
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    \27\ Mr. Jay Lu, the sole member of Castle YAC, is associated 
with an affiliate of Chongqing Casin and is also the son of Mr. 
Shengju Lu, the Chairman of Chongqing Casin.
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     There are no other Related Persons among the Indirect 
Upstream Owners.
     None of the Indirect Upstream Owners directly, or 
indirectly through one or more intermediaries, controls, or is 
controlled by, or is under common control with, a governmental 
entity or any political subdivision thereof.

    Since the Approval Order was stayed on August 9, 2017, three of the 
prospective Indirect Upstream Owners (i.e., Chongqing Jintian, 
Chongqing Longshang and Xian Tong) have withdrawn from the NACH 
investor group. Consequently, NA Casin Holdings reorganized the NACH 
capitalization table to reallocate the shares formerly attributed to 
Chongqing Jintian, Chongqing Longshang and Xian Tong among the 
remaining Indirect Upstream Owners. As such, upon the Closing, all of 
the outstanding and issued shares of NA Casin Holdings will be held by 
the following Indirect Upstream Owners (by Related Persons) in the 
following percentages:

------------------------------------------------------------------------
                                                             NA Casin
                                                             holdings
                Indirect upstream owners                     ownership
                                                            percentages
------------------------------------------------------------------------
NA Casin Group (29%) and Castle YAC (11%)...............              40
Raptor..................................................              25
Saliba..................................................            24.5
Five Members of the CHX Holdings management \28\........            8.32
Penserra................................................            2.18
------------------------------------------------------------------------

    The Exchange submits that the modified NACH capitalization table 
complies with the proposed Ownership and Voting Limitation.\29\ 
Specifically, no Indirect Upstream Owner and its Related Persons will 
exceed the proposed 40% Concentration Limitation. Moreover, no Indirect 
Upstream Owner and its Related Persons will be permitted to vote in 
excess of the proposed 20% Voting Limitation.
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    \28\ Prior to the Closing, the five members of the CHX Holdings 
management will enter into a voting agreement which will require 
that, among other things, the five members vote as a block, thereby 
rendering the members Related Persons.
    \29\ See Notice, supra note 8, at 89552-89554.
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    The Exchange notes that the modified NACH capitalization table 
provides that 71% of the voting shares of NA Casin Holdings will be 
owned by U.S. citizens and, due to the proposed Voting Limitations,\30\ 
no less than 80% of the voting power of NA Casin Holdings will be held 
by U.S. citizens. In addition, none of the Indirect Upstream Owners 
directly, or indirectly through one or more intermediaries, controls, 
or is controlled by, or is under common control with, a governmental 
entity or any political subdivision thereof.
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    \30\ See id.
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    Attached to the Partial Amendment No. 1 were Investor Certificates 
and Investor Statements for all of the then current Indirect Upstream 
Owners.\31\ In the event the Commission were to lift the stay of the 
Approval Order or otherwise permit the Closing of the Proposed 
Transaction, the Exchange will provide the Commission, prior to the 
Closing of the Proposed Transaction, updated Investor Certificates and 
Investor Statements that will reflect changes to the proposed NACH 
investor group described herein.
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    \31\ See generally Fourth CHX Letter, supra note 16.
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Other Amendments

    This Partial Amendment No. 2 also effects the following changes:
     Amends the proposed NA Casin Certificate to:

 require a super-majority vote requirement for certain 
corporate actions, as described under Article IX;
 reflect a recent name change of the registered agent from 
``National Corporate Research'' to ``Cogency Global, Inc.'' under 
Article II; and

[[Page 55143]]

 modify the term expiration years of the three classes of 
directors under Section (6) of Article V given that the next annual 
meeting of the stockholders will be held in 2018.
     Amends the Raptor and Saliba Put Agreements to reflect 
the increased ownership levels for Raptor and Saliba described above 
and other changes that would not render the parties to the 
agreements Related Persons.\32\
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    \32\ See Notice, supra note 8, at 89545.
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     Provide a new put agreement for Penserra (new Exhibit 
5L), which is substantively similar to the Raptor and Saliba Put 
Agreements.
     Other non-substantive amendments.

    As such, the Exchange amends the Initial Filing, as modified by 
Partial Amendment No. 1, as follows:
    1. Amend pages 3 through 5 of the Initial Filing (pages 64 and 65 
of the Exhibit 1):
    Replace the second paragraph on page 3 that carries over to pages 4 
and 5 (second paragraph on page 64 that carries over to page 65 of the 
Exhibit 1) with the following text, while retaining footnotes 5 through 
9:

    The text of the proposed Third Amended and Restated Certificate 
of Incorporation of CHX Holdings (``CHX Holdings Certificate'') is 
attached as Exhibit 5A.\5\ The text of the proposed amended Bylaws 
of CHX Holdings (``CHX Holdings Bylaws'') \6\ is attached as Exhibit 
5B.\7\ The text of the proposed Amended and Restated Certificate of 
Incorporation for CHX (``CHX Certificate'') is attached as Exhibit 
5C.\8\ The text of the proposed amended Bylaws of the CHX (``CHX 
Bylaws'') is attached as Exhibit 5D.\9\ The text of the proposed 
amendments to the Rules of the CHX (``CHX Rules'') is attached as 
Exhibit 5E. The text of the proposed Amended and Restated 
Certificate of Incorporation of NA Casin Holdings (``NA Casin 
Holdings Certificate'') is attached as Exhibit 5F. The text of the 
proposed Amended and Restated Bylaws of NA Casin Holdings (``NA 
Casin Holdings Bylaws'') is attached as Exhibit 5G. The text of a 
resolution of the Board of Directors of CHX Holdings dated November 
22, 2016 to waive certain ownership and voting limitations to permit 
the Transaction (``Resolutions'') is attached as Exhibit 5H. The 
text of the Stockholders' Agreement of NA Casin Holdings (``NACH 
Stockholders' Agreement'') is herein attached as Exhibit 5I. The 
text of the Second Amended and Restated Put Agreement by and among 
North America Casin Group, Inc. (``NA Casin Group''), NA Casin 
Holdings, and Saliba Ventures Holdings, LLC (``Saliba'') (``Saliba 
Put Agreement'') is herein attached as Exhibit 5J. The text of the 
Second Amended and Restated Put Agreement by and among NA Casin 
Group, NA Casin Holdings, and Raptor Holdco LLC (``Raptor'') 
(``Raptor Put Agreement'') is herein attached as Exhibit 5K. The 
text of the Put Agreement by and among NA Casin Group, NA Casin 
Holdings, and Penserra Securities, LLC (``Penserra'') (``Penserra 
Put Agreement'') is herein attached as Exhibit 5L.

    2. Amend page 7 of the Initial Filing (pages 67 and 68 of the 
Exhibit 1):
    Replace the first sentence of the first paragraph on page 7 (first 
sentence of the third full paragraph on page 67 that carries over to 
page 68 of the Exhibit 1) with the following text, while retaining 
footnote 13:

    Pursuant to the terms of a Merger Agreement dated February 4, 
2016, as amended on February 3, 2017 and August 29, 2017 (``Merger 
Agreement''), by and among NA Casin Holdings, Merger Sub, Chongqing 
Casin Enterprise Group Co., LTD. (``Chongqing Casin''), a limited 
company organized under the laws of the People's Republic of China 
(``PRC''), Richard G. Pane solely in his capacity as the 
Stockholders Representative thereunder, and CHX Holdings, Merger Sub 
will merge into CHX Holdings,\13\ which will then become a wholly-
owned direct subsidiary of NA Casin Holdings.

    3. Amend pages 8 through 10 of the Initial Filing (pages 69 through 
71 of the Exhibit 1):
    Replace all text starting with the first bullet on page 8 through 
the first paragraph on page 10 (first bullet on page 69 through the 
first paragraph that begins on page 70 that carries over the page 71 of 
the Exhibit 1) with the following text, while retaining footnotes 16 
through 20:

 Non-U.S. Indirect Upstream Owners:

     NA Casin Group, a corporation incorporated under the 
laws of the State of Delaware and wholly-owned by Chongqing Casin--
29%
     U.S. Indirect Upstream Owners:
 Raptor, a limited liability company organized under the 
laws of the State of Delaware--25%
 Saliba, a limited liability company organized under the 
laws of the State of Illinois--24.5%
 Castle YAC Enterprises, LLC (``Castle YAC''), a limited 
liability company organized under the laws of the State of New York, 
the sole member of which is Mr. Jay Lu, a U.S. citizen and Vice 
President of NA Casin Group--11%
 Five members of the CHX Holdings management (``CHX Holdings 
Management''), all U.S. citizens--collectively 8.32%, with no one 
person attributed more than 5%
 Penserra, a corporation incorporated under the laws of the 
State of Illinois--2.18%

    The Exchange submits the following regarding the Indirect Upstream 
Owners: \16\
     The only Related Persons \17\ among the Indirect Upstream 
Owners are as follows:

 Castle YAC and NA Casin Group.18
 The five members of CHX Holdings Management due to a voting 
agreement requiring the members to vote as a block, which will be 
executed prior to the Closing.
     There are no other Related Persons among the Indirect 
Upstream Owners.
     None of the Indirect Upstream Owners directly, or 
indirectly through one or more intermediaries, controls, or is 
controlled by, or is under common control with, a governmental 
entity or any political subdivision thereof.
    As Related Persons, NA Casin Group and Castle YAC would own a 
combined 40% voting interest in NA Casin Holdings, which is within 
the proposed 40% Concentration Limitation of NA Casin Holdings and 
CHX Holdings described below.\19\ Also, the CHX Holdings Management 
would own a combined 8.32% voting interest in NA Casin Holdings, 
which is within the proposed Concentration Limitations described 
below. However, NA Casin Group and Castle YAC will not be permitted 
to exercise their collective voting interest in excess of the 
proposed 20% Voting Limitations of NA Casin Holdings and CHX 
Holdings described below.\20\ Also, for so long as the voting 
agreement among the members of the CHX Management Team is in effect, 
the CHX Holdings Management would be considered Related Persons and 
would not be permitted to exercise their collective voting interest 
in excess of the proposed 20% Voting Limitations.

    4. Amend pages 11 and 12 of the Initial Filing (pages 72 and 73 of 
the Exhibit 1):
    Replace the first paragraph that begins on page 11 that carries 
over to page 12 (the first paragraph that begins on page 72 that 
carries over to page 73 of the Exhibit 1) with the following text, 
while retaining footnotes 24 and 25:

    The Exchange further notes that execution of the Saliba Put 
Agreement, the Raptor Put Agreement or the Penserra Put Agreement 
would not result in any Indirect Upstream Owners becoming Related 
Persons for the purposes of compliance with the proposed Ownership 
and Voting Limitations. Specifically, the Saliba Put Agreement 
grants Saliba a put option (``Saliba Put Option'') that, if 
exercised by Saliba, would compel NA Casin Holdings (and not another 
Indirect Upstream Owner) to purchase, or arrange for an unspecified 
third-party to purchase, a specified amount of Saliba's equity 
interest in NA Casin Holdings. Similarly, the Raptor Put Agreement 
grants Raptor a put option (``Raptor Put Option'') that, if 
exercised by Raptor, would compel NA Casin Holdings (and not another 
Indirect Upstream Owner) to purchase, or arrange for an unspecified 
third-party to purchase, a specified amount of Raptor's equity 
interest in NA Casin Holdings. Also, the Penserra Put Agreement 
grants Penserra a put option (``Penserra Put Option'') that, if 
exercised by Penserra, would compel NA Casin Holdings (and not 
another Indirect Upstream Owner) to purchase, or arrange for an 
unspecified third-party to purchase, a specified amount of 
Penserra's equity interest in NA Casin Holdings. Accordingly, the 
Exchange submits

[[Page 55144]]

that execution of the Saliba Put Agreement, the Raptor Put Agreement 
or the Penserra Put Agreement would not result in the parties to 
each of the agreements becoming Related Persons for the purposes of 
compliance with the proposed Ownership and Voting Limitations.\24\ 
The Exchange also notes that the exercise of the put options under 
the Saliba Put Agreement, the Raptor Put Agreement or the Penserra 
Put Agreement would be subject to, among other things, compliance 
with the proposed Ownership and Voting Limitations.\25\
    Also, replace all text under footnote 25 on page 12 (page 73 of 
the Exhibit 1) with the following:
    See Section 3(c) of the Saliba Put Agreement; see also Section 
3(c) of the Raptor Put Agreement.; see also Section 3(c) of the 
Penserra Put Agreement.

    5. Amend page 24 of the Initial Filing (page 86 of the Exhibit 1):
    Within the first paragraph following the bullet, in the sentence 
immediately following footnote 74 (first sentence on page 86 of the 
Exhibit 1), replace the number ``13'' with the number ``10.''
    6. Amend page 31 of the Initial Filing (page 92 of the Exhibit 1):
    Within the first full sentence (second sentence within the first 
paragraph beginning on page 92 of the Exhibit 1), replace the number 
``13'' with the number ``10.''
    7. Amend page 45 of the Initial Filing (page 107 of the Exhibit 1):
    Under footnote 102, replace reference to ``NA Casin Bylaws'' with 
``NA Casin Holdings Bylaws.''
    8. Amend page 52 of the Initial Filing (page 114 of the Exhibit 1):
    Immediate above the subtitle ``Statutory Basis,'' insert the 
following new text:

Super-Majority Vote Requirement

    Sections (2)-(3) of Article VIII of the proposed NA Casin 
Holdings Certificate provides for a super-majority vote requirement 
for certain corporate actions. Specifically, Section (2) provides 
that in addition to any affirmative vote required by applicable law 
or this Certificate of Incorporation: (a) Any merger or 
consolidation of the Corporation or any Subsidiary with any or any 
other corporation or other entity; (b) any sale, lease, exchange, 
mortgage, pledge, transfer or other disposition (in one transaction 
or a series of transactions) to or with any other corporation or 
other entity, of all or substantially all of the assets of the 
Corporation or any Subsidiary; (c) the issuance or transfer by the 
Corporation or any Subsidiary (in one transaction or a series of 
transactions) of any securities of the Corporation or any Subsidiary 
that would result in: (i) Any an individual, corporation, 
partnership, joint venture, limited liability company, governmental 
or regulatory body, unincorporated organization, trust, association 
or other entity (each a ``Person'') owning a majority of the shares 
of Common Stock of the Corporation, or (ii) any Person other than a 
Subsidiary or the Corporation, owning a majority of the shares of 
voting stock of any Subsidiary; (d) the adoption of any plan or 
proposal for the liquidation or dissolution of the Corporation that 
is not the result of a transaction contemplated by Sections 2(a), 
2(b) or 2(c) of this Article VIII; (e) any reclassification of 
securities (including any reverse stock split), recapitalization of 
the Corporation or any merger or consolidation of the Corporation 
with any of its Subsidiaries or any other transaction which has the 
effect, directly or indirectly, of increasing the proportionate 
share of the outstanding shares of any class of equity or 
convertible securities of the Corporation or any Subsidiary which 
are directly or indirectly owned by any Person with the result that 
such Person becomes the holder of a majority of the shares of Common 
Stock of the Corporation; or (f) any agreement, contract or other 
arrangement providing for any one or more of the actions specified 
in the foregoing (a) to (e); shall require, except as otherwise 
prohibited by applicable law, the affirmative vote of the holders of 
at least 85% of the then outstanding voting shares entitled to be 
cast on such matter. Moreover, such affirmative vote shall be 
required notwithstanding the fact that no vote may be required, or 
that a lesser percentage may be permitted, by applicable law. 
Section (3) provides that as used in this Article VIII, 
``Subsidiary'' means any corporation or other Person of which 
securities or other ownership interests having ordinary voting power 
to elect a majority of the board of directors or other persons 
performing similar functions are at any time directly or indirectly 
owned by the Corporation.
    The proposed super-majority vote requirement is designed to 
ensure that any significant change to the assets or ownership of NA 
Casin Holdings or subsidiaries, including the Exchange, be agreed 
upon by a super-majority of the Indirect Upstream Owners. As a 
result, this will serve to protect the investments of the Indirect 
Upstream Owners, as well as to ensure that the Exchange's ownership 
and assets remain reliable and stable, which further enables the 
Exchange to meet its self-regulatory obligations. The Exchange notes 
that the super-majority vote requirement would apply to all NACH 
stockholders equally and, as such, no one stockholder's voting power 
would be enhanced or diminished relative to the other stockholders 
by the requirement.

    9. Amend page 53 of the Initial Filing (page 116 of the Exhibit 1):
    Replace the last sentence within the first full paragraph (first 
full sentence on page 116 of the Exhibit 1) with the following text, 
while retaining footnote 108:

    Specifically, the Exchange submits that the CHX Rules, the 
relevant governing documents of CHX and its upstream affiliates, CHX 
Holdings and NA Casin Holdings, the NACH Stockholders' Agreement, 
the Saliba Put Agreement, the Raptor Put Agreement and the Penserra 
Put Agreement, as proposed to be adopted or amended, to permit the 
Transaction, are consistent with Section 6(b) of the Act,\108\ in 
general and 6(b)(5), in particular.

    10. Amend page 55 of the Initial Filing (page 118 of the Exhibit 
1):
    Immediately after the first full paragraph (immediately after the 
first paragraph on page 118 that carries over from page 117 of the 
Exhibit 1), insert the following text:

    Moreover, the proposed super-majority vote requirement under 
Section (2) of Article IX of the proposed NA Casin Holdings 
Certificate is designed to ensure that any significant change to the 
assets or ownership of NA Casin Holdings or subsidiaries, including 
the Exchange, be agreed upon by a super-majority of the Indirect 
Upstream Owners. This will serve to ensure that the Exchange's 
ownership and assets remain reliable and stable, which further 
enables the Exchange to meet its self-regulatory obligations under 
Section 6 of the Act.

    11. Amend page 57 of the Initial Filing (page 120 of the Exhibit 
1):
    Replace the first sentence of the first paragraph that begins on 
page 57 (the first sentence of the first full paragraph on page 120 of 
the Exhibit 1) with the following text:

    In addition, the proposed NACH Stockholders' Agreement, Saliba 
Put Agreement, Raptor Put Agreement and Penserra Put Agreement 
includes provisions that provide reasonable financial protections to 
the Indirect Upstream Owners so as to facilitate consummation of the 
Transaction without violating the proposed Ownership and Voting 
Limitations.

    12. Amend page 62 of the Initial Filing:
    Immediately below the text ``Exhibit 5K: Text of Proposed Raptor 
Put Agreement,'' insert the following:

    Exhibit 5L: Text of Proposed Penserra Put Agreement

II. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended, is consistent with the Exchange Act. Comments may 
be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-CHX-2016-20 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.


[[Page 55145]]


All submissions should refer to File Number SR-CHX-2016-20. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal offices of the Exchange. 
All comments received will be posted without change. Persons submitting 
comments are cautioned that we do not redact or edit personal 
identifying information from comment submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-CHX-2016-20, and should be 
submitted on or before December 5, 2017. Any person who wishes to file 
a rebuttal to any other person's submission must file that rebuttal by 
December 15, 2017.

    By the Commission.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-25030 Filed 11-17-17; 8:45 am]
BILLING CODE 8011-01-P


