[Federal Register Volume 83, Number 229 (Wednesday, November 28, 2018)]
[Notices]
[Pages 61177-61182]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-25896]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84644; File No. SR-NYSENAT-2018-24]


Self-Regulatory Organizations; NYSE National, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its 
Certificate of Incorporation and Bylaws

November 21, 2018.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on November 20, 2018, NYSE National, Inc. (``Exchange'' or ``NYSE 
National'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its certificate of incorporation and 
bylaws to (1) harmonize certain provisions thereunder with similar 
provisions in the governing documents of the Exchange's national 
securities exchange affiliates and parent companies; and (2) make 
clarifying and updating changes. The proposed rule change is available 
on the Exchange's website at www.nyse.com, at the principal office of 
the Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
(1) Generally [sic]
    The Exchange proposes to the amend the Amended and Restated 
Certificate of Incorporation of the Exchange (``Exchange Certificate'') 
and the Fifth Amended and Restated Bylaws of the Exchange (``Exchange 
Bylaws'') to (1) harmonize certain provisions thereunder with similar 
provisions in the governing documents of the Exchange's national 
securities exchange affiliates \4\ and parent companies; and (2) make 
clarifying and updating changes.
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    \4\ The Exchange has four registered national securities 
exchange affiliates: NYSE Arca, Inc. (``NYSE Arca''), New York Stock 
Exchange LLC (``NYSE''), NYSE American LLC (``NYSE American''), and 
Chicago Stock Exchange, Inc. (``CHX'' and together with the 
Exchange, NYSE Arca, NYSE American, and NYSE, the ``NYSE Group 
Exchanges''). CHX has filed to change its name to NYSE Chicago, Inc. 
See Exchange Act Release No. 84494 (October 26, 2018) (SR-CHX-2018-
05) (``NYSE Chicago Release'') (notice of filing and immediate 
effectiveness of proposal to reflect name changes of the Exchange 
and its direct parent company and to amend certain corporate 
governance provisions). The rule changes set forth in the NYSE 
Chicago Release will become operative upon the Second Amended and 
Restated Certificate of Incorporation of Chicago Stock Exchange, 
Inc. (``NYSE Chicago Certificate'') becoming effective pursuant to 
its filing with the Secretary of State of the State of Delaware.
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    The Exchange is owned by NYSE Group, Inc. (``NYSE Group''), which 
in turn is indirectly wholly owned by NYSE Holdings LLC (``NYSE 
Holdings''). NYSE Holdings is a wholly owned subsidiary of 
Intercontinental Holdings, Inc. (``ICE Holdings''), which is in turn 
wholly owned by the Intercontinental Exchange, Inc. (``ICE'').\5\
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    \5\ See Exchange Act Release No. 79902 (January 30, 2017), 82 FR 
9258 (February 3, 2017) (SR-NSX-2016-16) (order approving proposed 
rule change in connection with proposed acquisition of the Exchange 
by NYSE Group, Inc.).
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    The Exchange operates as a separate self-regulatory organization 
and has rules and membership rosters distinct from the rules and 
membership rosters of the other NYSE Group Exchanges. At the same time, 
however, the Exchange believes it is important for each of the NYSE 
Group Exchanges to have a consistent approach to corporate governance 
in certain matters, to simplify complexity and create greater

[[Page 61178]]

consistency among the NYSE Group Exchanges.\6\
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    \6\ See NYSE Chicago Release, supra note 4, at 3.
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    Because the Exchange is a Delaware corporation, most of the 
proposed changes are based on the governing documents of CHX, which is 
also a Delaware corporation, and NYSE Arca, which is a Delaware non-
stock corporation, as the most comparable NYSE Group Exchanges.\7\ The 
proposed Exchange Certificate and Exchange Bylaws reflect the 
expectation that the Exchange will continue to be operated with a 
governance structure substantially similar to that of other NYSE Group 
Exchanges, primarily CHX and NYSE Arca.
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    \7\ The other NYSE Group Exchanges, NYSE and NYSE American, are 
limited liability companies organized under New York and Delaware 
limited liability company law, respectively.
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    The other changes described herein would become operative upon the 
Exchange Certificate becoming effective pursuant to its filing with the 
Secretary of State of the State of Delaware.
    The proposed amendments described below are primarily based on the 
Second Amended and Restated Certificate of Incorporation of Chicago 
Stock Exchange, Inc. (``NYSE Chicago Certificate''), the Second Amended 
and Restated By-Laws of NYSE Chicago, Inc. (``NYSE Chicago 
Bylaws''),\8\ and the Amended and Restated Bylaws of NYSE Arca, Inc. 
(``NYSE Arca Bylaws''). In addition, the amendments to the 
indemnification provisions are based on the Eighth Amended and Restated 
Bylaws of Intercontinental Exchange, Inc. (``ICE Bylaws'') and the 
Sixth Amended and Restated Bylaws of Intercontinental Exchange 
Holdings, Inc. (``ICE Holdings Bylaws'').
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    \8\ The NYSE Chicago Certificate and NYSE Chicago Bylaws have 
been filed with the SEC, and will become operative when the NYSE 
Chicago Certificate becomes effective pursuant to its filing with 
the Secretary of State of the State of Delaware. See NYSE Chicago 
Release, supra note 4, at 4.
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Proposed Amendments to the Exchange Certificate
    The Exchange proposes to amend the Exchange Certificate as follows.
Introductory Paragraph
    In a non-substantive change, the Exchange proposes to delete the 
sentence stating ``[t]he Certificate of Incorporation was restated on 
June 29, 2006, December 30, 2011, and February 18, 2015.''
Article FIRST
    In a non-substantive change, the Exchange proposes to replace 
``NYSE NATIONAL, INC.'' with ``NYSE National, Inc.'' in Article FIRST, 
to reflect that the legal name of the Exchange is not entirely in 
capital letters.
Article SECOND and Certificate of Change of Registered Agent and/or 
Registered Office
    In a non-substantive change, the Exchange proposes to update the 
address of the registered office and name of the registered agent, as 
previously filed, and, because such address and office are no longer 
the initial address and office, delete the word ``initial'' from the 
provision. The Exchange also proposes to delete the ``Certificate of 
Change of Registered Agent and/or Registered Office.'' \9\
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    \9\ See Exchange Act Release No. 82925 (March 22, 2018), 83 FR 
13165 (March 27, 2018) (SR-NYSENAT-2018-04).
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Article FIFTH
    Current paragraph (b) of Article FIFTH (Removal of Directors) 
provides that any director may be removed from office by a vote of the 
stockholders at any time with or without cause, except that Non-
Affiliated Directors, as defined in the Exchange Bylaws, may only be 
removed for cause. The Exchange proposes to amend the definition of 
``cause'' to provide that the list set forth in the provision is 
inclusive. The Exchange notes that the revised provision would be 
consistent with Article FIFTH(b) of the NYSE Chicago Certificate.\10\
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    \10\ See NYSE Chicago Release, supra note 4, at 14. See also 
Eighth Amended and Restated Bylaws of Cboe BZX Exchange, Inc. 
(``Cboe BZX Bylaws''), Section 3.4(c) (providing that ``[n]o 
Representative Director may be removed from office by a vote of the 
stockholders at any time except for cause, which shall include, but 
not limited to, (i) a breach of a Representative Director's duty of 
loyalty to the Corporation or its stockholders, (ii) acts or 
omissions not in good faith or which involve intentional misconduct 
or a knowing violation of law, (iii) transactions from which a 
Representative Director derived an improper personal benefit, or 
(iv) a failure of a Representative Director to be free from a 
statutory disqualification (as defined in Section 3(a)(39) of the 
Act)'') (emphasis added; NYSE Operating Agreement, Article II, 
Section 2.03(l) (providing that cause ``shall include, without 
limitation, the failure of [a] Director to be free of any statutory 
disqualification . . .''); and NYSE American Operating Agreement, 
Article II, Section 2.03(l) (same).
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Article EIGHTH
    In a non-substantive change, the Exchange proposes to correct a 
typographical error in the title of Article EIGHTH, correcting 
``Liabilitv'' with ``Liability''.
Article NINTH
    In a non-substantive change, the Exchange proposes to amend Article 
NINTH to replace a reference to ``Delaware'' with ``the State of 
Delaware.''
Date
    The Exchange proposes to update the date in the final paragraph.
Proposed Amendments to the Exchange Bylaws
    The Exchange proposes to amend the Exchange Bylaws as follows.
Conforming Changes
    In non-substantive changes, the Exchange proposes to delete the 
cover page and table of contents of the Exchange Bylaws, and amend the 
title to reflect that the proposed Exchange Bylaws are the ``Sixth 
Amended and Restated Bylaws of NYSE National, Inc.''
Article III (Board of Directors)
    Section 3.6 (Vacancies): Section 3.6(a)(i) provides that any 
vacancy on the Board may be filled by the Chairman of the Board, 
subject to the approval by a majority of the directors then in office, 
and that any vacancy will be filled with a person who satisfies the 
classification associated with the vacant seat.
    In an administrative change, the Exchange proposes to add that that 
the stockholders may also fill any vacancy, and those vacancies 
resulting from removal from office by a vote of the stockholders for 
cause may be filled by a vote of the stockholders at the same meeting 
at which such removal occurs. Because, under Section 3.2(a), the 
stockholders determine the number of directors, a new directorship may 
be created. Accordingly, the Exchange proposes to add to Section 
3.6(a)(i) that any newly created directorship will be filled with a 
person who satisfies the classification associated with the seat.
    The first two sentences of the amended paragraph would be as 
follows (additions italicized):
    Notwithstanding any provision herein to the contrary, any vacancy 
in the Board, however occurring, including a vacancy resulting from an 
increase in the number of the directors, may be filled (i) by the 
Chairman of the Board, subject to the approval by a majority of the 
directors then in office, or (ii) by action taken by the stockholders 
of the Exchange, and those vacancies resulting from removal from office 
by a vote of the stockholders for cause may be filled by a vote of the 
stockholders at the same meeting at which such removal occurs. Any 
vacancy or newly-created directorship will be filled with a person who 
satisfies the classification (e.g., public) associated with the vacant 
seat.

[[Page 61179]]

    The change would be consistent with clause (ii) of Article II, 
Section 5 of the NYSE Chicago Bylaws, which was amended at the time of 
its acquisition by ICE.\11\
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    \11\ See Exchange Act Release No. 83635 (July 13, 2018), 83 FR 
34182 (July 19, 2018) (SR-CHX-2018-004), and Partial Amendment No. 2 
to SR-CHX-2018-004 (June 11, 2018).
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    Section 3.7 (Removal): Section 3.7 provides that any director may 
be removed from office by a vote of the stockholders at any time with 
or without cause, except that non-affiliated directors may only be 
removed for cause. The Exchange proposes to amend the definition of 
``cause'' to provide that the list set forth in the provision is 
inclusive, by replacing ``mean only'' with ``include.'' As a result of 
the proposed amendment, the definition of ``cause'' would be 
substantially similar to the definition in Article FIFTH(b) of the NYSE 
Chicago Certificate.
    In a non-substantive change, the Exchange proposes to amend clause 
(iii) to replace a reference to ``Delaware'' with ``the State of 
Delaware.''
    Section 3.9 (Regular Meetings): Section 3.9 specifies that regular 
meetings may be held, with or without notice, at such time or place as 
the Board may specify in a resolution. The Exchange proposes an 
administrative change to eliminate the requirement for a Board 
resolution. The change would be consistent with the governing documents 
of the other NYSE Group Exchanges, which do not require a board 
resolution in order to call a meeting.\12\
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    \12\ See NYSE Arca Bylaws, Article III, Section 3.05; NYSE 
Chicago Bylaws, Article II, Section 8; NYSE Operating Agreement, 
Article II, Section 2.03(c); and NYSE American Operating Agreement, 
Article II, Section 2.03(c).
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    Section 3.10 (Special Meetings): Paragraph (a) of Section 3.10 
permits special meetings of the Board to be called on two days' notice 
to each Director by the Chairman or the Chief Executive Officer, or by 
the Secretary upon the request of any three Directors. In an 
administrative change, The Exchange proposes to reduce the minimum 
notice requirement from two days to one day, consistent with Article 
II, Section 9(a) of the NYSE Chicago Bylaws.\13\ The Exchange believes 
that reducing the minimum notice requirement to one day is reasonable 
as it would facilitate the Board meeting quickly.
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    \13\ See NYSE Chicago Release, supra note 4, at 24. One day of 
notice would be consistent with the bylaws of other national 
securities exchanges. See NYSE Operating Agreement, Article II, 
Section 2.03(c) (requiring 12 or 24 hours of notice, with the 
exception of mailed notice); NYSE American Operating Agreement, 
Article II, Section 2.03(c) (requiring 12 or 24 hours of notice, 
with the exception of mailed notice); Cboe BZX Bylaws, Section 3.11 
(requiring 24 hours of notice); Tenth Amended and Restated Bylaws of 
Cboe Exchange, Inc. (``Cboe Exchange Bylaws''), Section 3.11 
(requiring 24 hours of notice); and Bylaws of Nasdaq, Inc., Article 
IV, Section 4.12 (requiring that notice be sent no later than ``the 
day before the day'' of the meeting, with the exception of mailed 
notice).
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    Paragraph (b) of Section 3.10 requires the person calling a special 
meeting to fix the time and place at which the meeting will be held, 
and deems notice to be given five business days after deposit in the 
United States mail. In an administrative change, the Exchange proposes 
to:
     Eliminate the requirement that the person calling the 
special meeting fix the time and place of the meeting, as Article III, 
Section 3.8 already addresses the place and mode of Board meetings;
     state that notice may be given by written, electronic or 
telephonic means; and
     reduce the period for deemed notice of mailed notice from 
five to two business days.
    The changes would be consistent with Article II, Section 9(b) of 
the NYSE Chicago Bylaws.
    Sections 3.11 (Voting; Quorum and Action by the Board) and 3.14 
(Action in Lieu of Meeting): Section 3.11 provides that the presence of 
a majority of the directors then in office shall constitute a quorum 
for Board meetings. Section 3.14 provides that, unless otherwise 
restricted by statute, the Exchange Certificate or the Exchange By-
Laws, action may be taken without a meeting if certain procedural 
requirements are met. The Exchange proposes to make the following 
administrative changes to the provisions:
     In Section 3.11, the Exchange proposes to clarify that the 
proposed quorum requirement would apply ``[e]xcept as otherwise 
required by law'' \14\ and to change a reference to ``statute'' with 
``law.''
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    \14\ See, e.g. DCGL Section 141(b).
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     In Section 3.14, the Exchange proposes to replace 
``restricted by statute'' with ``provided by law.''
    The change to add an exception to Section 3.11 would allow the 
written notice to be consistent with both applicable law and the 
Exchange Bylaws, should applicable law set forth specific requirements 
that differ from the Bylaw provision. The Exchange proposes to change 
``statute'' to ``law,'' as the latter is a broader term, which includes 
non-statutory law, such as common law. The changes would be consistent 
with the NYSE Chicago Bylaws.\15\
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    \15\ See NYSE Chicago Bylaws, Article II, Sections 10 and 13; 
and NYSE Chicago Release, supra note 4, at 26-27.
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Article IV (Stockholders)
    Sections 4.1 (Annual Meeting), 4.2 (Special Meetings), and 4.4 
(Quorum and Vote Required for Action): Among other provisions, Sections 
4.1 and 4.2 set forth the notice requirements for annual and special 
meetings of stockholders. Section 4.4 sets forth the quorum and voting 
requirements. For the reasons set forth above, the Exchange proposes to 
make the following administrative changes to the provisions:
     The Exchange proposes to add ``[e]xcept as otherwise 
provided by law,'' before the sentences in Sections 4.1 and 4.2 that 
set forth the written notice requirements.\16\
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    \16\ See Del. Code tit. 8, Sec.  222.
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     In Section 4.4, the Exchange proposes to replace 
``statute'' with ``law'' in paragraph (a) and ``Statute'' with 
``General Corporation Law of the State of Delaware'' in paragraph (b).
    The changes would be consistent with the NYSE Chicago Bylaws.\17\
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    \17\ See NYSE Chicago Bylaws, Article III, Sections 1, 2, and 
5(b); and NYSE Chicago Release, supra note 4, at 29-31.
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    Section 4.3 (List of Stockholders): Section 4.3 provides that the 
Secretary or a designated person shall have charge of the stock ledger 
of the Exchange and, before every stockholder meeting, shall prepare a 
list of stockholders entitled to vote. In an administrative change, the 
Exchange proposes to amend the provision such that, as permitted by 
Section 219(a) of the DGCL, the ``Exchange'' keeps the ledger and 
prepares the list of stockholders.\18\ The change would be consistent 
with Article III, Section 4 of the NYSE Chicago Bylaws.\19\
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    \18\ Del. Code tit. 8, Sec.  219(a).
    \19\ See NYSE Chicago Release, supra note 4, at 30.
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    Section 4.6 (Action in Lieu of Meeting): Section 4.6 permits 
stockholder action to be taken by written consent and provides certain 
requirements related to such written consent. In an administrative 
change, the Exchange proposes to amend the provisions to permit 
stockholder action to be taken by written consent and to the extent 
provided by the DGCL, but only if the matter to be voted upon were 
approved by the Board and the Board had directed that the matter be 
brought before the stockholders. The amended provision would be 
substantially similar

[[Page 61180]]

to Article III, Section 7 of the NYSE Chicago Bylaws.\20\
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    \20\ See id., at 31-32.
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Article V (Committees)
    Section 5.2 (Appointment; Vacancies; and Removal): Section 5.2(b) 
provides that any vacancy in a Board committee shall be filled by the 
Chief Executive Officer with the approval of the Board. Consistent with 
the DGCL and Article IV, Section 2(b) of the NYSE Chicago Bylaws,\21\ 
the Exchange proposes to provide that only the Board can fill a vacancy 
in a Board committee.
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    \21\ See Del. Code tit. 8, Sec.  141(c)(1).
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    Section 5.6 (Regulatory Oversight Committee): Section 5.6 
establishes the powers and responsibilities of the Regulatory Oversight 
Committee, and is substantially the same as the related provisions in 
the governing documents of the other NYSE Group Exchanges. \22\ Among 
other things, the provision states that ``[t]he Board may, on 
affirmative vote of a majority of directors, at any time remove a 
member of the ROC for cause.'' The Exchange proposes to add language 
clarifying that the majority affirmative vote requirement is based on 
the ``directors then in office,'' as opposed to total number of seats 
on the Board. The change would be consistent with Article IV, Section 6 
of the NYSE Chicago Bylaws.\23\
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    \22\ See NYSE Arca Rule 3.3; NYSE Operating Agreement, Article 
II, Section 2.03(h)(ii); NYSE American Operating Agreement, Article 
II, Section 2.03(h)(ii); NYSE Chicago Bylaws, Article IV, Section 6.
    \23\ See NYSE Chicago Release, supra note 4, at 35. The Exchange 
understands that NYSE, NYSE American, and NYSE Arca propose to file 
similar changes to their respective ROC provisions.
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Article VII (Indemnification)
    Current Article VII includes provisions related to indemnification 
by the Exchange. As a wholly-owned subsidiary of ICE, the Exchange 
believes it appropriate to harmonize the Exchange's indemnification 
provisions with those of ICE and the Exchange's intermediate holding 
company, ICE Holdings.\24\ The same change was made to Article VI of 
the NYSE Chicago Bylaws.\25\
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    \24\ See ICE Bylaws, Article X, Section 10.6, and ICE Holdings 
Bylaws, Article X, Section 10.6.
    \25\ See NYSE Chicago Release, supra note 4, at 41. The Exchange 
understands that NYSE, NYSE American, and NYSE Arca propose to file 
similar changes to their respective indemnification provisions.
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    Accordingly, the Exchange proposes to delete the text of Section 
7.1 (Indemnification) in its entirety and replace it with proposed text 
that is substantially similar to the CHX, ICE and ICE Holdings 
provisions, with the exception of changes to be consistent with the 
Exchange Bylaws' terminology.\26\ The proposed text follows:
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    \26\ For example, proposed Section 7.1 uses ``officer'' instead 
of ``Senior Officers,'' ``Exchange'' instead of ``Corporation,'' and 
``Section 7.1'' instead of ``Section 10.6.''
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    (a) The Exchange shall, to the fullest extent permitted by law, as 
those laws may be amended and supplemented from time to time, indemnify 
any director or officer made, or threatened to be made, a party to any 
action, suit or proceeding, whether criminal, civil, administrative or 
investigative, by reason of being a director or officer of the Exchange 
or a predecessor corporation or, at the Exchange's request, a director, 
officer, partner, member, employee or agent of another corporation or 
other entity; provided, however, that the Exchange shall indemnify any 
director or officer in connection with a proceeding initiated by such 
person only if such proceeding was authorized in advance by the Board 
of Directors of the Exchange. The indemnification provided for in this 
Section 7.1 shall: (i) Not be deemed exclusive of any other rights to 
which those indemnified may be entitled under any bylaw, agreement or 
vote of stockholders or disinterested directors or otherwise, both as 
to action in their official capacities and as to action in another 
capacity while holding such office; (ii) continue as to a person who 
has ceased to be a director or officer; and (iii) inure to the benefit 
of the heirs, executors and administrators of an indemnified person.
    (b) Expenses incurred by any such person in defending a civil or 
criminal action, suit or proceeding by reason of the fact that he is or 
was a director or officer of the Exchange (or was serving at the 
Exchange's request as a director, officer, partner, member, employee or 
agent of another corporation or other entity) shall be paid by the 
Exchange in advance of the final disposition of such action, suit or 
proceeding upon receipt of an undertaking by or on behalf of such 
director or officer to repay such amount if it shall ultimately be 
determined that he or she is not entitled to be indemnified by the 
Exchange as authorized by law. Notwithstanding the foregoing, the 
Exchange shall not be required to advance such expenses to a person who 
is a party to an action, suit or proceeding brought by the Exchange and 
approved by a majority of the Board of Directors of the Exchange that 
alleges willful misappropriation of corporate assets by such person, 
disclosure of confidential information in violation of such person's 
fiduciary or contractual obligations to the Exchange or any other 
willful and deliberate breach in bad faith of such person's duty to the 
Exchange or its stockholders.
    (c) The foregoing provisions of this Section 7.1 shall be deemed to 
be a contract between the Exchange and each director or officer who 
serves in such capacity at any time while this bylaw is in effect, and 
any repeal or modification thereof shall not affect any rights or 
obligations then existing with respect to any state of facts then or 
theretofore existing or any action, suit or proceeding theretofore or 
thereafter brought based in whole or in part upon any such state of 
facts. The rights provided to any person by this bylaw shall be 
enforceable against the Exchange by such person, who shall be presumed 
to have relied upon it in serving or continuing to serve as a director 
or officer or in such other capacity as provided above.
    (d) The Board of Directors in its discretion shall have power on 
behalf of the Exchange to indemnify any person, other than a director 
or officer, made or threatened to be made a party to any action, suit 
or proceeding, whether criminal, civil, administrative or 
investigative, by reason of the fact that such person, or his or her 
testator or intestate, is or was an officer, employee or agent of the 
Exchange or, at the Exchange's request, is or was serving as a 
director, officer, partner, member, employee or agent of another 
corporation or other entity.
    (e) To assure indemnification under this Section 7.1 of all 
directors, officers, employees and agents who are determined by the 
Exchange or otherwise to be or to have been ``fiduciaries'' of any 
employee benefit plan of the Exchange that may exist from time to time, 
Section 145 of the Delaware General Corporation Law shall, for the 
purposes of this Section 7.1, be interpreted as follows: An ``other 
enterprise'' shall be deemed to include such an employee benefit plan, 
including without limitation, any plan of the Exchange that is governed 
by the Act of Congress entitled ``Employee Retirement Income Security 
Act of 1974,'' as amended from time to time; the Exchange shall be 
deemed to have requested a person to serve an employee benefit plan 
where the performance by such person of his duties to the Exchange also 
imposes duties on, or otherwise involves services by, such person to 
the plan or participants or beneficiaries of the plan; excise taxes 
assessed on a person with respect to an employee benefit plan pursuant 
to such Act of Congress shall be deemed ``fines.''

[[Page 61181]]

Article IX (Certificates of Stock and Their Transfer)
    Section 9.1 (Form and Execution of Certificates): Section 9.1 
provides requirements related to the execution of stockholder 
certificates. The Exchange proposes to amend the requirements to 
provide that the certificate may be signed by ``any two authorized 
officers,'' instead of listing the specific officers authorized to 
execute a certificate, which better reflects the requirements of 
Section 158 of the DGCL.\27\ The change would be consistent with 
Article VIII, Section 1 of the NYSE Chicago Bylaws.\28\
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    \27\ See Del. Code tit. 8, Sec.  158.
    \28\ See NYSE Chicago Release, supra note 4, at 47.
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    Article XI (General Provisions)
    Section 11.2 (Dividends): Section 11.2 permits the Board to declare 
dividends. The Exchange proposes to replace the phrase ``[s]ubject to 
any provisions of any applicable statute,'' which qualifies the Board's 
authority to issue dividends, with ``[s]ubject to any applicable law'' 
so as to eliminate redundant language and clarify that proposed Section 
11.2 would be subject to any non-statutory law, such as common law. The 
change would be consistent with Article X, Section 2 of the NYSE 
Chicago Bylaws.\29\
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    \29\ See id., at 51.
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    Section 11.4 (Subsidiaries): Section 11.4 authorizes the Board to 
constitute any officer of the Exchange to vote the stock of any 
subsidiary corporation on behalf of the Exchange. In an administrative 
change, the Exchange proposes to add a second sentence stating that 
``[i]n the absence of specific action by the Board of Directors, the 
Chief Executive Officer and Secretary of the Exchange shall have 
authority to represent the Exchange and to vote, on behalf of the 
Exchange, the securities of other corporations, both domestic and 
foreign, held by the Exchange.''
    The Exchange believes that permitting the Secretary of the Exchange 
to act on behalf of the Exchange pursuant to proposed Section 4 is 
appropriate given that the Secretary is frequently tasked to execute 
the Exchange's actions, especially as it relates to corporate 
governance. Under Section 11.4, the Board may constitute any officer of 
the Exchange, which includes the Secretary, to vote the stock of any 
subsidiary of the Exchange. The Board has approved the proposed changes 
to the Bylaws, including the proposed changes to Section 11.4. By 
approving the proposed changes to Section 11.4, the Board granted the 
Secretary the authority described therein. Moreover, proposed Section 
11.4 would continue to permit the Board to revoke such voting power or 
constitute another officer with such voting power. The change would be 
consistent with Article X, Section 4 of the NYSE Chicago Bylaws.\30\
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    \30\ See id., at 51-52.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Exchange Act,\31\ in general, and furthers the 
objectives of Section 6(b)(1) \32\ in particular, in that it enables 
the Exchange to be so organized as to have the capacity to be able to 
carry out the purposes of the Exchange Act and to comply, and to 
enforce compliance by its exchange members and persons associated with 
its exchange members, with the provisions of the Exchange Act, the 
rules and regulations thereunder, and the rules of the Exchange. The 
Exchange also believes that the proposed rule change is consistent with 
Section 6(b)(5) of the Exchange Act,\33\ in that it is designed to 
prevent fraudulent and manipulative acts and practices, to promote just 
and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in facilitating transactions in 
securities, 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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    \31\ 15 U.S.C. 78f(b).
    \32\ 15 U.S.C. 78f(b)(1).
    \33\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed amendments to harmonize 
certain provisions of the Exchange Certificate and Bylaws with similar 
provisions of the governing documents of other NYSE Group Exchanges, 
ICE and ICE Holdings would contribute to the orderly operation of the 
Exchange and would enable the Exchange to be so organized as to have 
the capacity to carry out the purposes of the Exchange Act and comply 
with the provisions of the Exchange Act by its members and persons 
associated with members. For example, the proposed changes would create 
greater conformity between the Exchange's provisions relating to 
stockholders, officers, and stock certificates and those of its 
affiliates, particularly CHX and NYSE Arca. The Exchange believes that 
such conformity would streamline the NYSE Group Exchanges' corporate 
processes, create more equivalent governance processes among them, and 
also provide clarity to the Exchange's members, which is beneficial to 
both investors and the public interest. At the same time, the Exchange 
will continue to operate as a separate self-regulatory organization and 
to have rules and membership rosters distinct from the rules and 
membership rosters of the other NYSE Group Exchanges.
    The Exchange also believes that the greater consistency among the 
governing documents of the NYSE Group Exchanges, ICE and ICE Holdings 
would promote the maintenance of a fair and orderly market, the 
protection of investors and the protection of the public interest. 
Indeed, the proposed amendments would make the corporate requirements 
and administrative processes relating to the Board, Board committees, 
officers, stockholders, and other corporate matters more similar to 
those of the NYSE Group Exchanges, in particular CHX and NYSE Arca, 
which have been established as fair and designed to protect investors 
and the public interest.\34\
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    \34\ See NYSE Chicago Release, supra note 4, Exchange Act 
Release Nos. 83303 (May 22, 2018), 83 FR 24517 (May 29, 2018) (SR-
CHX-2018-004); and 81419 (August 17, 2017), 82 FR 40044 (August 23, 
2017) (SR-NYSEArca-2017-40).
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    The proposed amendments to clarify the meaning of certain 
provisions of the Exchange Certificate and the Exchange Bylaws, to 
better comport certain provisions with the DGCL and to effect non-
substantive changes would facilitate the Exchange's continued 
compliance with the Exchange Certificate and Bylaws and applicable law, 
which would further enable the Exchange to be so organized as to have 
the capacity to be able to carry out the purposes of the Exchange Act 
and to comply, and to enforce compliance by its exchange members and 
persons associated with its exchange members, with the provisions of 
the Exchange Act, the rules and regulations thereunder, and the rules 
of the Exchange. Such amendments would also remove impediments to and 
perfects the mechanism of a free and open market by removing confusion 
that may result from corporate governance provisions that are either 
unclear or inconsistent with the governing law.
    The Exchange also believes that the proposed amendments would 
remove impediments to and perfect the mechanism of a free and open 
market by ensuring that persons subject to the Exchange's jurisdiction, 
regulators, and the investing public can more easily navigate and 
understand the governing documents. The Exchange further believes that 
the proposed amendments would not be inconsistent with the public 
interest and the protection of investors because investors will not be 
harmed and in fact would benefit from

[[Page 61182]]

increased transparency and clarity, thereby reducing potential 
confusion.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Exchange Act. The proposed rule 
change is not intended to address competitive issues but rather is 
concerned solely with the corporate governance and administration of 
the Exchange.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \35\ and Rule 19b-4(f)(6) thereunder.\36\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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    \35\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \36\ 17 CFR 240.19b-4(f)(6).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \37\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \37\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the 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-NYSENAT-2018-24 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.

All submissions should refer to File Number SR-NYSENAT-2018-24. 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 website (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 website 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 a.m. and 3 
p.m. Copies of the filing also will be available for inspection and 
copying at the principal office 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-NYSENAT-2018-24 and should be submitted 
on or before December 19, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\38\
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    \38\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2018-25896 Filed 11-27-18; 8:45 am]
 BILLING CODE 8011-01-P


