Federal Register / Vol. 77, No. 51 / Thursday, March 15, 2012 / Notices 15417 

23See supra notes 1 and 2. 

24 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

facilitate a governance and regulatory 

structure that 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 regulating, clearing, settling, 

processing information with respect to, 

and 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. 

Specifically, the Exchange believes that 

the proposed rule change will provide 

the Commission and the Exchange with 

access to necessary information that will 

allow the Exchange to efficiently and 

effectively enforce compliance with the 

Exchange Act, as well as allow the 

Commission to provide proper 

oversight, which will ultimately 

promote just and equitable principles of 

trade and protect investors. In addition, 

the Exchange believes the proposed rule 

change will preserve the independence 

of the Exchange’s self-regulatory 

function and ensure that the Exchange 

will be able to obtain any information it 

needs in order to detect and deter any 

fraudulent and manipulative acts in its 

marketplace and carry out its regulatory 

responsibilities under the Exchange Act. 

Finally, the Exchange is not proposing 

any changes to the Exchange’s 

operational or trading structure in 

connection with the Transaction. 

Instead, the Exchange represents that 

the proposed rule change consists of 

administrative amendments to ISE 

Holding’s corporate documents and the 

Resolution and the Agreement and 

Consent relating to EGD. The Trust, the 

Resolution, and the Bylaws are similar 

to corporate documents that were 

previously approved by the 

Commission.23

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. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

The Exchange has neither solicited 

nor received written comments on the 

proposed rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the Exchange consents, 

the Commission will: 

(A) By order approve or disapprove 

such proposed rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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 rulecomments@sec.gov. Please include File 

Number SR–EDGA–2012–08 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–EDGA–2012–08. 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 

a.m. and 3 p.m. Copies of such filing 

also will be available for inspection and 

copying at the principal office of the 

Exchange. All comments received will 

be posted without change; the 

Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–EDGA– 

2012–08 and should be submitted on or 

before April 5, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–6258 Filed 3–14–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66566; File No. SR–ISE– 

2012–21] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing of Proposed Rule 

Change Relating to a Corporate 

Transaction in Which Its Indirect 

Parent, SIX Swiss Exchange AG, Will 

Transfer Its Indirect Ownership Interest 

in ISE Holdings, Inc. to a Newly 

Formed Swiss Corporation, Eurex 

Global Derivatives AG 

March 9, 2012. 

Pursuant to Section 19(b)(1) 1 of the 

U.S. Securities Exchange Act of 1934, as 

amended (‘‘Exchange Act’’), and Rule 

19b–4 thereunder,2 notice is hereby 

given that on March 8, 2012, 

International Securities Exchange, LLC 

(‘‘Exchange’’ or ‘‘ISE’’) filed with the 

U.S. Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to (i) make 

changes to its corporate structure in 

connection with the transfer of SIX 

Swiss Exchange AG’s (‘‘SIX’’) 50% 

indirect ownership interest of 

International Securities Exchange 

Holdings, Inc. (‘‘ISE Holdings’’) to a 


srobinson on DSK4SPTVN1PROD with NOTICES
15418 Federal Register / Vol. 77, No. 51 / Thursday, March 15, 2012 / Notices 

3See Securities and Exchange Act Release No. 

56955 (December 13, 2007); 72 FR 71979 (December 

19, 2007) (SR–ISE–2007–101). 

4See Securities and Exchange Act Release No. 

59135 (December 22, 2008); 73 FR 79954 (December 

30, 2008) (SR–ISE–2008–85). 

5See Securities and Exchange Act Release No. 

60651 (September 11, 2009); 74 FR 47827 

(September 17, 2009) (File Nos. 10–193 and 10– 

194). 

6See Securities and Exchange Act Release No. 

61698 (March 12, 2010); 75 FR 13151 (March 18, 

2010) (approving File Nos. 10–194 and 10–196). 

7 ISE Holdings will continue to be the sole 

member of the Exchange. 

8Under the Trust, the term ‘‘Trust Shares’’ means 

either Excess Shares or Deposited Shares, or both, 

as the case may be. The term ‘‘Excess Shares’’ 

means that a Person obtained an ownership or 

voting interest in ISE Holdings in excess of certain 

ownership and voting restrictions pursuant to 

Article FOURTH of the Amended and Restated 

Certificate of Incorporation of ISE Holdings (the 

‘‘Certificate’’), through, for example, ownership of 

one of the non-U.S. Upstream Owners or U.S. 

Exchange Holdings, without obtaining the approval 

of the Commission. The term ‘‘Deposited Shares’’ 

means shares that are transferred to the Trust 

pursuant to the Trust’s exercise of the Call Option. 

9Under the Trust, the term ‘‘Material Compliance 

Event’’ means, with respect to a non-U.S. Upstream 

Owner, any state of facts, development, event, 

circumstance, condition, occurrence, or effect that 

results in the failure of any of the non-U.S. 

Upstream Owners to adhere to their respective 

commitments under the resolutions in any material 

respect. 

10Under the Trust, the term ‘‘Call Option’’ means 

the option granted by the Trust Beneficiary to the 

Trust to call the Voting Shares as set forth in 

Section 4.2 therein. 

11Under the Trust, the term ‘‘Trust Beneficiary’’ 

means U.S. Exchange Holdings. 

newly formed Swiss corporation, Eurex 

Global Derivatives AG (‘‘EGD’’), which 

will become a wholly-owned subsidiary 

of Deutsche Bo ̈rse AG (‘‘Deutsche 

Bo ̈rse’’), effectively granting Deutsche 

Bo ̈rse a 100% indirect ownership 

interest in ISE Holdings and, in turn, the 

Exchange (the ‘‘Transaction’’), (ii) 

amend and restate the Amended and 

Restated Trust Agreement (‘‘Trust’’), (iii) 

file the form of EGD Corporate 

Resolution (‘‘Resolution’’), (iv) file the 

form of Agreement and Consent by and 

between EGD and Eurex Zu ̈rich AG 

(‘‘Eurex Zu ̈rich’’) (‘‘Agreement and 

Consent’’), and (v) amend and restate 

the Amended and Restated Bylaws of 

ISE Holdings (‘‘Bylaws’’). The text of the 

proposed rule change is available on the 

Exchange’s Web site www.ise.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 

Exchange has included statements 

concerning the purpose of, and basis for, 

the Proposed Rule Change. The text of 

these 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 aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to (i) make 

changes to its corporate structure in 

connection with the Transaction, (ii) 

amend and restate the Trust, (iii) file the 

form of Resolution, (iv) file the form of 

Agreement and Consent, and (v) amend 

and restate the Bylaws. 

Background 

On December 17, 2007, ISE Holdings, 

the direct parent of the Exchange, 

became a direct wholly-owned 

subsidiary of U.S. Exchange Holdings, 

Inc. (‘‘U.S. Exchange Holdings’’), which, 

in turn, is a wholly-owned subsidiary of 

Eurex Frankfurt AG (‘‘Eurex 

Frankfurt’’).3 Eurex Frankfurt is a 

wholly-owned subsidiary of Eurex 

Zu ̈rich, which, in turn, is jointly owned 

by Deutsche Bo ̈rse and SIX. SIX is 

owned by SIX Group AG (‘‘SIX Group’’). 

On December 23, 2008, the Exchange 

merged the ISE Stock Exchange, LLC, 

with and into Maple Merger Sub, LLC, 

a wholly-owned subsidiary of Direct 

Edge Holdings LLC (‘‘Direct Edge’’).4 As 

part of the same transaction, ISE 

Holdings purchased a 31.54% equity 

interest in Direct Edge. 

On May 7, 2009, Direct Edge’s direct 

subsidiaries, EDGA Exchange, Inc. 

(‘‘EDGA’’) and EDGX Exchange, Inc. 

(‘‘EDGX’’), each filed a Form 1 

Application with the Commission, to 

own and operate a registered national 

securities exchange.5 On March 12, 

2010, the Commission granted the Form 

1 exchange registration applications of 

EDGA and EDGX.6 EDGA and EDGX 

will be separately filing a proposed rule 

change in connection with the 

Transaction that will be substantially 

the same as the Exchange’s proposed 

rule change. 

On June 7, 2011, Deutsche Bo ̈rse, SIX 

Group, and SIX signed a definitive 

agreement for the Transaction, which 

would give Deutsche Bo ̈rse a 100% 

indirect ownership interest in the 

currently jointly-owned Eurex Zu ̈rich. 

Deutsche Bo ̈rse currently has a 50% 

direct ownership interest in Eurex 

Zu ̈rich, and, after the Transaction 

closes, Deutsche Bo ̈rse will have a 100% 

direct ownership interest in EGD, which 

will have a 50% direct ownership 

interest in Eurex Zu ̈rich.7 Accordingly, 

SIX and SIX Group will no longer have 

an indirect ownership interest in the 

Exchange, EDGA, or EDGX. Therefore, 

the Exchange is proposing to take the 

following actions with respect to the 

Trust, the Resolution, the Bylaws, all of 

which were previously approved by the 

Commission, and the Agreement and 

Consent, to reflect the ownership 

changes proposed by the Transaction. 

EGD acknowledges that, to the extent 

it becomes aware of possible violations 

of the rules of the Exchange or the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’), it will be responsible 

for referring such possible violations to 

the Exchange. In addition, EGD will 

become a party to an agreement among 

Deutsche Bo ̈rse, Eurex Frankfurt, Eurex 

Zu ̈rich, SIX, SIX Group, U.S. Exchange 

Holdings, ISE Holdings, and the 

Exchange to provide for adequate 

funding for the Exchange’s regulatory 

responsibilities, and, following 

consummation of the Transaction, SIX 

and SIX Group will no longer be parties 

to such agreement. 

Trust 

The Exchange proposes to amend 

certain provisions of the Trust in 

connection with the Transaction. The 

Trust serves four general purposes: (i) to 

accept, hold and dispose of Trust 

Shares 8 on the terms and subject to the 

conditions set forth therein; (ii) to 

determine whether a Material 

Compliance Event 9 has occurred or is 

continuing; (iii) to determine whether 

the occurrence and continuation of a 

Material Compliance Event requires the 

exercise of the Call Option; 10 and (iv) to 

transfer Deposited Shares from the Trust 

to the Trust Beneficiary 11 as provided 

in Section 4.2(h) therein. 

Accordingly, the Exchange proposes 

to update the recitals of the Trust, 

remove references to SIX and SIX Group 

from the definition of ‘‘Affected 

Affiliate’’ in Section 1.1 of the Trust, 

add a reference to EGD in the definition 

of ‘‘Affected Affiliate’’ in Section 1.1 of 

the Trust, remove SIX’s address from 

the notice provisions in Section 8.8 of 

the Trust, and add EGD’s address to the 

notice provisions in Section 8.8 of the 

Trust. The Exchange also proposes to 

correct several typographical errors in 

the Trust. 

Resolution 

Each of Deutsche Bo ̈rse, Eurex 

Frankfurt, Eurex Zu ̈rich, SIX, and SIX 

Group (the ‘‘non-U.S. Upstream 

Owners’’) have taken appropriate steps 


srobinson on DSK4SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 51 / Thursday, March 15, 2012 / Notices 15419 

12The form of Resolution is substantially similar 

to the resolutions previously adopted by each of the 

non-U.S. Upstream Owners. The form of Resolution 

differs from the resolutions previously adopted by 

each of the non-U.S. Upstream Owners in that the 

Resolution would explicitly reference EDGA and 

EDGX, and the FINMA procedure would allow EGD 

to provide information relating to the activities of 

the Exchange, EDGA, or EDGX to the Commission 

through Eurex Zu ̈rich, which will provide such 

information to FINMA, whereas the resolutions 

previously adopted by each of the non-U.S. 

Upstream Owners incorporated EDGA and EDGX by 

reference, and the FINMA procedure allows SIX, 

SIX Group, and Eurex Zu ̈rich to provide 

information relating to the activities of the 

Exchange, EDGA, and EDGX to the Commission 

directly through FINMA. See supra note 4. 

13 Due to EGD’s status as an unregulated Swiss 

corporation, FINMA cannot directly compel EGD to 

produce such information. As such, it is necessary 

to include Eurex Zu ̈rich (which is regulated by 

FINMA) as an additional conduit in the FINMA 

procedure. 

14See Art. 271 of Swiss Criminal Code. 

15Application of the FINMA procedure would be 

limited to issues arising in the context of the 

Transaction and the Commission’s oversight of the 

Exchange, EDGA, and EDGX. Information-sharing 

and cooperation between the Commission and 

FINMA in securities enforcement matters will 

continue to be governed by the letters of 

cooperation between the Commission and FINMA. 

16See supra notes 7 and 8. 

to incorporate provisions regarding 

ownership, jurisdiction, books and 

records, and other issues related to their 

control of the Exchange, EDGA, and 

EDGX. Specifically, each of the non-U.S. 

Upstream Owners have adopted 

resolutions, which were previously 

approved by the Commission, to 

incorporate these concepts with respect 

to itself, as well as its board members, 

officers, employees, and agents (as 

applicable). Accordingly, EGD as a 50% 

owner of Eurex Zu ̈rich, and thus a ‘‘nonU.S. Upstream Owner,’’ will adopt the 

Resolution to incorporate provisions 

regarding ownership, jurisdiction, books 

and records, and other issues related to 

its control of the Exchange, EDGA, and 

EDGX, with respect to itself, as well as 

to its board members, officers, 

employees, and agents (as applicable).12

The Resolution would provide that 

EGD shall comply with the U.S. federal 

securities laws and the rules and 

regulations thereunder and shall 

cooperate with the Commission and 

with the Exchange, EDGA, and EDGX. 

In addition, the Resolution would 

provide that the board members, 

including each person who becomes a 

board member, would so consent to 

comply and cooperate and EGD would 

take reasonable steps to cause its 

officers, employees, and agents to also 

comply and cooperate. 

The Resolution would also provide 

that, where necessitated by Swiss law, 

EGD will provide information related to 

the activities of the Exchange, EDGA, or 

EDGX, including books and records of 

EGD related to the activities of the 

Exchange, EDGA, or EDGX, to the 

Commission promptly, through Eurex 

Zu ̈rich, which will, in turn, provide 

such information to the Swiss Financial 

Market Supervisory Authority FINMA 

(‘‘FINMA’’), which will provide such 

information to the Commission.13

Moreover, oral exchanges between EGD 

and the Commission related to the 

activities of the Exchange, EDGA, or 

EDGX will include, at all times, the 

participation of Eurex Zu ̈rich and 

FINMA, through its oversight of Eurex 

Zu ̈rich as a regulated legal entity, where 

necessitated by Swiss law. These 

procedures collectively are referred to as 

the ‘‘FINMA procedure.’’ The Exchange 

notes that the transmission of 

information between EGD and Eurex 

Zu ̈rich is dealt with in the Agreement 

and Consent. 

Swiss law designed to protect Swiss 

sovereignty raises concerns about the 

ability of EGD to provide the 

Commission with direct access to 

information, including books and 

records, related to the activities of the 

Exchange, EDGA, or EDGX.14 In order 

not to run afoul of Swiss law, the 

Commission and FINMA have 

developed the FINMA procedure under 

which FINMA undertakes to serve as a 

conduit for unfiltered delivery of books 

and records of EGD related to the 

activities of the Exchange, EDGA, or 

EDGX.15

Notwithstanding the FINMA 

procedure, EGD would remain fully 

responsible for meeting all of its 

obligations as an owner of the Exchange, 

EDGA, or EDGX. The Exchange notes 

that if EGD does not comply with the 

FINMA procedure, such noncompliance 

may trigger a Material Compliance 

Event and the exercise of the Call 

Option under the Trust.16

The Resolution will provide that, to 

the extent that EGD is involved in the 

activities of the Exchange, EDGA, or 

EDGX, it will be deemed to irrevocably 

submit to the jurisdiction of the United 

States federal courts and the 

Commission for the purposes of any 

suit, action or proceeding pursuant to 

the United States federal securities laws, 

and the rules or regulations thereunder, 

commenced or initiated by the 

Commission arising out of, or relating 

to, the activities of the Exchange, EDGA, 

or EDGX (and will be deemed to agree 

that (i) ISE Holdings may serve as the 

U.S. agent for purposes of service of 

process in such suit, action or 

proceeding with respect to the 

Exchange; and (ii) Direct Edge may 

serve as the U.S. agent for purposes of 

service of process in such suit, action or 

proceeding with respect to EDGA or 

EDGX), and will be deemed to waive, 

and agree not to assert by way of 

motion, as a defense or otherwise in any 

such suit, action or proceeding, any 

claims that it is not personally subject 

to the jurisdiction of the Commission, 

that such suit, action or proceeding is an 

inconvenient forum or that the venue of 

such suit, action or proceeding is 

improper, or that the subject matter 

thereof may not be enforced in or by 

such courts or agency. 

In addition, the Resolution will 

provide that for so long as EGD directly 

or indirectly controls the Exchange, 

EDGA, or EDGX: (a) The books, records, 

officers, directors (or equivalent) and 

employees of EGD will be deemed to be 

the books, records, officers, directors 

and employees of the Exchange, EDGA, 

or EDGX for purposes of and subject to 

oversight pursuant to the Exchange Act 

to the extent that such books and 

records are related to, or such officers, 

directors (or equivalent) and employees 

are involved in, the activities of the 

Exchange, EDGA, or EDGX; and (b) 

EGD’s books and records related to the 

activities of the Exchange, EDGA, or 

EDGX will at all times be made 

available for inspection and copying by 

the Commission, the Exchange, EDGA, 

or EDGX subject, where necessitated by 

Swiss law, to the FINMA procedure. 

Additionally, the Resolution would 

provide that EGD shall, to the extent it 

is involved in the activities of the 

Exchange, EDGA, or EDGX, give due 

regard to the preservation of the 

independence of the self-regulatory 

function of the Exchange, EDGA, and 

EDGX and to their respective obligations 

to investors and the general public, and 

shall not take any actions that would 

interfere with the effectuation of any 

decisions by the board of directors of 

the Exchange, EDGA, or EDGX relating 

to their respective regulatory 

responsibilities (including enforcement 

and disciplinary matters) or that would 

interfere with the ability of the 

Exchange, EDGA, or EDGX to carry out 

their respective responsibilities under 

the Exchange Act. The Resolution also 

would provide that the EGD board 

members, including each person who 

becomes a board member, would 

consent to the requirements and that 

EGD would take reasonable steps to 

cause its officers and employees to agree 

to the requirements. 

Furthermore, the Resolution would 

provide that, to the fullest extent 

permitted by applicable law, all 

confidential information that shall come 

into the possession of EGD pertaining to 

the self-regulatory function of the 


srobinson on DSK4SPTVN1PROD with NOTICES
15420 Federal Register / Vol. 77, No. 51 / Thursday, March 15, 2012 / Notices 

17On January 17, 2012, the Commission approved 

a proposed rule change by the Exchange relating to 

a corporate transaction in which Deutsche Bo ̈rse 

and NYSE Euronext would become subsidiaries of 

Alpha Beta Netherlands Holding N.V. (the 

‘‘Combination’’). See Securities Exchange Act 

Release No. 66171 (January 17, 2012), 77 FR 3297 

(January 23, 2012) (SR–ISE–2011–69). As part of 

that proposed rule change, the Exchange submitted 

proposed amendments to the Bylaws. The 

Commission’s approval was conditioned on the 

Combination being consummated. The Combination 

was not consummated and, therefore, the proposed 

rule change, including the proposed amendments to 

the Bylaws, did not become effective. 

18See Certificate, Article FOURTH, Section III. 

19 15 U.S.C. 78s(b). 

Exchange, EDGA, or EDGX contained in 

the books and records of the Exchange, 

EDGA, or EDGX shall: (a) Not be made 

available to any persons other than to 

those officers, directors (or equivalent), 

employees and agents of EGD that have 

a reasonable need to know the contents 

thereof; (b) be retained in confidence by 

EGD and the officers, directors (or 

equivalent), employees, and agents of 

EGD; and (c) not be used for any 

commercial purposes. In addition, the 

Resolution would provide that the terms 

regarding such confidential information 

shall not be interpreted so as to limit or 

impede: (i) the rights of the 

Commission, the Exchange, EDGA, or 

EDGX to have access to and examine 

such confidential information pursuant 

to the U.S. federal securities laws and 

the rules and regulations thereunder; or 

(ii) the ability of any officers, directors, 

employees, or agents of EGD to disclose 

such confidential information to the 

Commission, the Exchange, EDGA, or 

EDGX subject, where necessitated by 

Swiss law, to the FINMA procedure. 

The Resolution would also provide that 

the EGD board members, including each 

person who becomes a board member, 

would consent to these requirements 

regarding confidential information and 

that EGD would take reasonable steps to 

cause its officers, employees, and agents 

to agree to the requirements. 

The Resolution would provide that 

the board members of EGD would, in 

discharging his or her responsibilities, 

to the extent such board member is 

involved in the activities of the 

Exchange, EDGA, or EDGX and to the 

fullest extent permitted by applicable 

law, take into consideration the effect 

that EGD’s actions would have on the 

ability of: (a) The Exchange, EDGA, and 

EDGX to carry out their respective 

responsibilities under the Exchange Act; 

and (b) the Exchange, EDGA, EDGX, and 

EGD: (i) To engage in conduct that 

fosters and does not interfere with the 

ability of the Exchange, EDGA, EDGX, 

or EGD to prevent fraudulent and 

manipulative acts and practices in the 

securities markets; (ii) to promote just 

and equitable principles of trade in the 

securities markets; (iii) to foster 

cooperation and coordination with 

persons engaged in regulating, clearing, 

settling, processing information with 

respect to, and facilitating transactions 

in securities; (iv) to remove 

impediments to and perfect the 

mechanisms of a free and open market 

in securities and a U.S. national 

securities market system; and (v) in 

general, to protect investors and the 

public interest. 

Finally, the Resolution will provide 

that EGD will provide notification of 

certain ownership levels and that EGD 

will take reasonable steps to cause ISE 

Holdings and Direct Edge to be in 

compliance with their respective 

ownership limits and voting limits. The 

Resolution would provide that before 

any amendment to or repeal of any 

provision of the Resolution, the 

Agreement and Consent, or any action 

by EGD that would have the effect of 

amending or repealing any provision of 

the Resolution or the Agreement and 

Consent becomes effective, it must be 

submitted to the board of directors of 

the Exchange, EDGA, and EDGX, and, if 

it must be filed with, or filed with and 

approved by, the Commission before it 

may become effective, under Section 19 

of the Exchange Act and the rules 

promulgated thereunder, then it will not 

become effective until filed with, or 

filed with and approved by, the 

Commission, as the case may be. 

Agreement and Consent 

EGD will also sign an Agreement and 

Consent with Eurex Zu ̈rich establishing 

the FINMA procedure, which will 

ensure that EGD will (1) cooperate with 

the Commission, the Exchange, EDGA, 

and EDGX; (2) comply with U.S. federal 

securities laws; (3) comply with the 

inspection and copying of EGD’s books 

and records; (4) agree that EGD’s books, 

records, officers, directors and 

employees be deemed to be those of the 

Exchange, EDGA, or EDGX; (5) maintain 

confidentiality of information pertaining 

to the self-regulatory function of the 

Exchange, EDGA, or EDGX; (6) preserve 

the independence of the self-regulatory 

function of the Exchange, EDGA, and 

EDGX; (7) take reasonable steps to cause 

EGD’s officers, directors and employees 

to consent to the applicability to him or 

her of the Resolution; and (8) take 

reasonable steps to cause EGD’s agents 

to cooperate with the Commission, the 

Exchange, EDGA, or EDGX. The form of 

the Agreement and Consent is attached 

hereto as Exhibit 5C. 

Finally, the Agreement and Consent 

would provide that before any 

amendment to or repeal of any 

provision of the Agreement and Consent 

or any action by EGD that would have 

the effect of amending or repealing any 

provision of the Agreement and Consent 

becomes effective, it must be submitted 

to the board of directors of the 

Exchange, EDGA, and EDGX, and, if it 

must be filed with, or filed with and 

approved by, the Commission before it 

may become effective, under Section 19 

of the Exchange Act and the rules 

promulgated thereunder, then it will not 

become effective until filed with, or 

filed with and approved by, the 

Commission, as the case may be. 

Bylaws 17

The Certificate currently restricts any 

person, either alone or together with its 

related persons, from having voting 

control, either directly or indirectly, 

over more than 20% of the outstanding 

capital stock of ISE Holdings and from 

directly or indirectly owning of record 

or beneficially more than 40% of the 

outstanding capital stock of ISE 

Holdings (or in the case of any Exchange 

member, acting alone or together with 

its related persons, from directly or 

indirectly owning of record or 

beneficially more than 20% of the 

outstanding capital stock of ISE 

Holdings).18 If a person were to obtain 

a voting or ownership interest in excess 

of the voting or ownership restrictions 

without obtaining the approval of the 

Commission, the shares of ISE Holdings 

would automatically transfer to the 

Trust. The Certificate and the Bylaws 

provide that the board of directors of 

ISE Holdings may waive these voting 

and ownership restrictions in an 

amendment to the Bylaws if it makes 

certain findings and the amendment to 

the Bylaws has been filed with, and 

approved by, the Commission under 

Section 19(b) of the Exchange Act.19

Acting pursuant to this waiver 

provision, the board of directors of ISE 

Holdings has approved the amendment 

to the Bylaws set forth in Exhibit 5D 

(the ‘‘Bylaws Amendment’’) in order to 

permit EGD to indirectly own 50% of 

the outstanding common stock of ISE 

Holdings as of and after consummation 

of the Transaction. In adopting such 

amendment, the board of directors of 

ISE Holdings made the necessary 

determinations and approved the 

submission of the proposed rule change 

to the Commission. The Exchange will 

continue to operate and regulate its 

market and members exactly as it has 

done prior to the Transaction. In 

addition, the Transaction will not 

impair the ability of ISE Holdings, the 

Exchange, EDGA, EDGX, or any facility 

thereof, to carry out their respective 

functions and responsibilities under the 


srobinson on DSK4SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 51 / Thursday, March 15, 2012 / Notices 15421 

20 15 U.S.C. 78f(b). 

21 15 U.S.C. 78f(b)(1). 

22 15 U.S.C. 78f(b)(5). 23See supra notes 1 and 2. 

Exchange Act. Moreover, the 

Transaction will not impair the ability 

of the Commission to enforce the 

Exchange Act. The Exchange will 

operate in the same manner following 

the Transaction as it operates today. 

Thus, the Commission will continue to 

have plenary regulatory authority over 

the Exchange, as is the case currently 

with the Exchange. The ISE Holdings 

board of directors also determined that 

ownership of ISE Holdings by EGD is in 

the best interests of ISE Holdings, its 

shareholders, the Exchange, EDGA, and 

EDGX. In addition, neither EGD, nor any 

of its related persons, is (1) an ISE 

Member; (2) an EDGA Member; (3) an 

EDGX Member; or (4) subject to any 

‘‘statutory disqualification.’’ The 

Exchange is requesting approval by the 

Commission of the Bylaws Amendment 

in order to allow the Transaction to take 

place. 

2. Statutory Basis 

The Exchange believes that this filing 

is consistent with Section 6(b) 20 of the 

Exchange Act in general, and furthers 

the objectives of Section 6(b)(1) 21 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. 

Moreover, the Transaction will not 

impair the ability of the Commission to 

enforce the Exchange Act. The Exchange 

will operate in the same manner 

following the Transaction as it operates 

today. Thus, the Commission will 

continue to have plenary regulatory 

authority over the Exchange, as is the 

case currently with the Exchange. The 

proposed rule change is consistent with 

and will facilitate an ownership 

structure that will continue to provide 

the Commission with appropriate 

oversight tools to ensure that the 

Commission will have the ability to 

enforce the Exchange Act with respect 

to the Exchange, its direct and indirect 

parents, and EGD, including its 

directors, officers, employees and agents 

to the extent they are involved in the 

activities of the Exchange. 

The Exchange also believes that this 

filing furthers the objectives of Section 

6(b)(5) 22 of the Exchange Act because 

the proposed rule change summarized 

herein would be consistent with and 

facilitate a governance and regulatory 

structure that 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 regulating, clearing, settling, 

processing information with respect to, 

and 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. 

Specifically, the Exchange believes that 

the proposed rule change will provide 

the Commission and the Exchange with 

access to necessary information that will 

allow the Exchange to efficiently and 

effectively enforce compliance with the 

Exchange Act, as well as allow the 

Commission to provide proper 

oversight, which will ultimately 

promote just and equitable principles of 

trade and protect investors. In addition, 

the Exchange believes the proposed rule 

change will preserve the independence 

of the Exchange’s self-regulatory 

function and ensure that the Exchange 

will be able to obtain any information it 

needs in order to detect and deter any 

fraudulent and manipulative acts in its 

marketplace and carry out its regulatory 

responsibilities under the Exchange Act. 

Finally, the Exchange is not proposing 

any changes to the Exchange’s 

operational or trading structure in 

connection with the Transaction. 

Instead, the Exchange represents that 

the proposed rule change consists of 

administrative amendments to ISE 

Holding’s corporate documents and the 

Resolution and the Agreement and 

Consent relating to EGD. The Trust, the 

Resolution, and the Bylaws are similar 

to corporate documents that were 

previously approved by the 

Commission.23

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. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

The Exchange has neither solicited 

nor received written comments on the 

proposed rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve or disapprove 

such proposed rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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 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 e-mail to rulecomments@sec.gov. Please include File 

Number SR–ISE–2012–21 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

100 F Street NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–ISE–2012–21. 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 


srobinson on DSK4SPTVN1PROD with NOTICES
15422 Federal Register / Vol. 77, No. 51 / Thursday, March 15, 2012 / Notices 

24 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities and Exchange Act Release No. 

56955 (December 13, 2007); 72 FR 71979 (December 

19, 2007) (SR–ISE–2007–101). 

4See Securities and Exchange Act Release No. 

59135 (December 22, 2008); 73 FR 79954 (December 

30, 2008) (SR–ISE–2008–85). 

5See Securities and Exchange Act Release No. 

60651 (September 11, 2009); 74 FR 47827 

(September 17, 2009) (File Nos. 10–193 and 10– 

194). 

6See Securities and Exchange Act Release No. 

61698 (March 12, 2010); 75 FR 13151 (March 18, 

2010) (approving File Nos. 10–194 and 10–196). 

7 ISE Holdings will continue to be the sole 

member of ISE. 

business days between the hours of 10 

a.m. and 3 p.m. Copies of such filing 

also will be available for inspection and 

copying at the principal office of the 

Exchange. All comments received will 

be posted without change; the 

Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–ISE– 

2012–21 and should be submitted on or 

before April 5, 2012. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.24

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–6257 Filed 3–14–12; 8:45 a.m.] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66565; File No. SR–EDGX– 

2012–07] 

Self-Regulatory Organizations; EDGX 

Exchange, Inc.; Notice of Filing of 

Proposed Rule Change Relating to a 

Corporate Transaction in Which Its 

Indirect Parent, SIX Swiss Exchange 

AG, Will Transfer Its Indirect 

Ownership Interest in ISE Holdings, 

Inc. to a Newly Formed Swiss 

Corporation, Eurex Global Derivatives 

AG 

March 9, 2012. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 (the 

‘‘Exchange Act’’), and Rule 19b–4 

thereunder,2 notice is hereby given that 

on March 8, 2012, EDGX Exchange, Inc. 

(the ‘‘Exchange’’ or ‘‘EDGX’’) filed with 

the U.S. Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to (i) make 

changes to its corporate structure in 

connection with the transfer of SIX 

Swiss Exchange AG’s (‘‘SIX’’) 50% 

indirect ownership interest of 

International Securities Exchange 

Holdings, Inc. (‘‘ISE Holdings’’) to a 

newly formed Swiss corporation, Eurex 

Global Derivatives AG (‘‘EGD’’), which 

will become a wholly-owned subsidiary 

of Deutsche Bo ̈rse AG (‘‘Deutsche 

Bo ̈rse’’), effectively granting Deutsche 

Bo ̈rse a 100% indirect ownership 

interest in ISE Holdings and, in turn, 

International Securities Exchange, LLC 

(‘‘ISE’’) (the ‘‘Transaction’’), (ii) amend 

and restate the Amended and Restated 

Trust Agreement (‘‘Trust’’), (iii) file the 

form of EGD Corporate Resolution 

(‘‘Resolution’’), (iv) file the form of 

Agreement and Consent by and between 

EGD and Eurex Zu ̈rich AG (‘‘Eurex 

Zu ̈rich’’) (‘‘Agreement and Consent’’) 

and (v) amend and restate the Amended 

and Restated Bylaws of ISE Holdings 

(‘‘Bylaws’’). The text of the proposed 

rule change is available on the 

Exchange’s Web site www.directedge.

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 

Exchange has included statements 

concerning the purpose of, and basis for, 

the Proposed Rule Change. The text of 

these 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 aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to (i) make 

changes to its corporate structure in 

connection with the Transaction, (ii) 

amend and restate the Trust, (iii) file the 

form of Resolution, (iv) file the form of 

Agreement and Consent, and (v) amend 

and restate the Bylaws. 

Background 

On December 17, 2007, ISE Holdings, 

the direct parent of ISE, became a direct 

wholly-owned subsidiary of U.S. 

Exchange Holdings, Inc. (‘‘U.S. 

Exchange Holdings’’), which, in turn, is 

a wholly-owned subsidiary of Eurex 

Frankfurt AG (‘‘Eurex Frankfurt’’).3

Eurex Frankfurt is a wholly-owned 

subsidiary of Eurex Zu ̈rich, which, in 

turn, is jointly owned by Deutsche Bo ̈rse 

and SIX. SIX is owned by SIX Group AG 

(‘‘SIX Group’’). 

On December 23, 2008, ISE merged 

the ISE Stock Exchange, LLC, with and 

into Maple Merger Sub, LLC, a whollyowned subsidiary of Direct Edge 

Holdings LLC (‘‘Direct Edge’’).4 As part 

of the same transaction, ISE Holdings 

purchased a 31.54% equity interest in 

Direct Edge. 

On May 7, 2009, Direct Edge’s direct 

subsidiaries, the Exchange and EDGA 

Exchange, Inc. (‘‘EDGA’’), each filed a 

Form 1 Application with the 

Commission, to own and operate a 

registered national securities exchange.5

On March 12, 2010, the Commission 

granted the Form 1 exchange 

registration applications of the 

Exchange and EDGA.6 ISE and EDGA 

will be separately filing a proposed rule 

change in connection with the 

Transaction that will be substantially 

the same as the Exchange’s proposed 

rule change. 

On June 7, 2011, Deutsche Bo ̈rse, SIX 

Group, and SIX signed a definitive 

agreement for the Transaction, which 

would give Deutsche Bo ̈rse a 100% 

indirect ownership interest in the 

currently jointly-owned Eurex Zu ̈rich. 

Deutsche Bo ̈rse currently has a 50% 

direct ownership interest in Eurex 

Zu ̈rich, and, after the Transaction 

closes, Deutsche Bo ̈rse will have a 100% 

direct ownership interest in EGD, which 

will have a 50% direct ownership 

interest in Eurex Zu ̈rich.7 Accordingly, 

SIX and SIX Group will no longer have 

an indirect ownership interest in the 

Exchange, ISE, or EDGA. Therefore, the 

Exchange is proposing to take the 

following actions with respect to the 

Trust, the Resolution, the Bylaws, all of 

which were previously approved by the 

Commission, and the Agreement and 

Consent, to reflect the ownership 

changes proposed by the Transaction. 

EGD acknowledges that, to the extent 

it becomes aware of possible violations 

of the rules of the Exchange or the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’), it will be responsible 

for referring such possible violations to 

the Exchange. In addition, EGD will 

become a party to an agreement among 

Deutsche Bo ̈rse, Eurex Frankfurt, Eurex 

Zu ̈rich, SIX, SIX Group, U.S. Exchange 


srobinson on DSK4SPTVN1PROD with NOTICES