73362 Federal Register / Vol. 79, No. 237 / Wednesday, December 10, 2014 / Notices 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release Nos. 73373 

(October 16, 2014), 79 FR 63191 (SR–NYSE–2014– 

53); 73372 (October 16, 2014), 79 FR 63201 (SR– 

NYSEMKT–2014–83); 73374 (October 16, 2014), 79 

FR 63188 (SR–NYSEArca–2014–112). 

4 In Amendment No. 1, the NYSE Exchanges 

made a technical and non-material correction to a 

statement in each filing regarding the ownership of 

NYSE Amex Options LLC by ICE. The Commission 

notes that the NYSE Exchanges submitted a 

comment letter to each filing on October 24, 2014 

attaching Amendment No. 1, and, consequently, 

Amendment No. 1 is available in the public 

comment files for SR–NYSE–2014–53, SR– 

NYSEMKT–2014–83, and SR–NYSEArca–2014–112 

on the Commission’s Web site. Because 

Amendment No. 1 is technical in nature, the 

Commission is not required to publish it for public 

comment. 

5 ICE, a public company listed on the Exchange, 

owns 100% of Intercontinental Exchange Holdings, 

Inc., a Delaware corporation (‘‘ICE Holdings’’), 

which in turn owns 100% of NYSE Holdings. 

Through ICE Holdings, NYSE Holdings and NYSE 

Group, ICE indirectly owns (1) 100% of the equity 

interest of three registered national securities 

exchanges and self-regulatory organizations, the 

NYSE Exchanges and (2) 100% of the equity 

interest of NYSE Market (DE), Inc. (‘‘NYSE 

Market’’), NYSE Regulation, Inc. (‘‘NYSE 

Regulation’’), NYSE Arca L.L.C. and NYSE Arca 

Equities, Inc. ICE also indirectly owns a majority 

interest in NYSE Amex Options LLC. See Exchange 

Act Release No. 70210 (August 15, 2013), 78 FR 

51758 (August 21, 2013) (SR–NYSE–2013–42; SR– 

NYSEMKT–2013–50; SR–NYSEArca–2013–62) 

(approving proposed rule change relating to a 

corporate transaction in which NYSE Euronext will 

become a wholly owned subsidiary of 

IntercontinentalExchange Group, Inc.). 

6See Exchange Act Release No. 55026 (Dec. 29, 

2006) (SR–NYSE–2006–120), 72 FR 814, 816–17 

(January 8, 2007) (the ‘‘NYSE Euronext Notice’’). 

NYSE Euronext acquired NYSE MKT, the third of 

the NYSE Exchanges, in 2008. 7An explanation of the terms of the Dutch 

foundation and the Delaware trust is included in 

the NYSE Euronext Notice. Subsequent 

modifications to the arrangements, to the extent 

relevant to the proposed rule change, are described 

in the Notices. 

8Excerpts from the Further Amended and 

Restated Governance and Option Agreement, dated 

March 21, 2014, among the Dutch foundation, 

Euronext Group N.V. and ICE are attached to the 

Notices as Exhibit 5C. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73740; File Nos. SR–NYSE– 

2014–53; SR–NYSEMKT–2014–83; SR– 

NYSEArca–2014–112] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; NYSE MKT 

LLC; NYSE Arca, Inc.; Order Approving 

a Proposed Rule Change, as Modified 

by Amendment No. 1 Thereto, in 

Connection With the Proposed 

Termination of the Amended and 

Restated Trust Agreement, Dated as of 

November 13, 2013 and Amended on 

June 2, 2014 By and Among NYSE 

Holdings LLC, a Delaware Limited 

Liability Company, NYSE Group, Inc., a 

Delaware Corporation, Wilmington 

Trust Company, as Delaware Trustee, 

and Each of Jacques de Larosie`re de 

Champfeu, Alan Trager and John 

Shepard Reed, as Trustees 

December 4, 2014. 

I. Introduction 

On October 8, 2014, each of New York 

Stock Exchange LLC (‘‘Exchange’’), 

NYSE MKT LLC (‘‘NYSE MKT’’), and 

NYSE Arca, Inc. (‘‘NYSE Arca’’ and, 

with the Exchange and NYSE MKT, the 

‘‘NYSE Exchanges’’), filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 proposed rule changes in 

connection with the proposed 

termination of the Amended and 

Restated Trust Agreement, dated as of 

November 13, 2013 and amended on 

June 2, 2014 (the ‘‘Trust Agreement’’), 

by and among NYSE Holdings LLC, a 

Delaware limited liability company 

(‘‘NYSE Holdings’’), NYSE Group, Inc., 

a Delaware corporation (‘‘NYSE 

Group’’), Wilmington Trust Company, 

as Delaware Trustee, and each of 

Jacques de Larosie`re de Champfeu, Alan 

Trager and John Shepard Reed, as 

Trustees. The proposed rule changes 

were published for comment in the 

Federal Register on October 22, 2014.3

The Commission did not receive any 

comment letters on the proposal. On 

October 21, 2014, the NYSE Exchanges 

filed Amendment No. 1 to the proposed 

rule changes.4 This order approves the 

proposed rule changes as modified by 

Amendment No. 1 thereto. 

II. Description of the Proposal 

The NYSE Exchanges seek approval 

for their 100% direct parent, NYSE 

Group, and its 100% indirect parent, 

NYSE Holdings, to terminate the Trust 

Agreement.5 The NYSE Exchanges 

believe that the regulatory 

considerations that led to the 

implementation of the Trust Agreement 

in 2007 are now moot as a result of the 

sale by Intercontinental Exchange, Inc., 

a Delaware corporation (‘‘ICE’’), of 

Euronext N.V. (‘‘Euronext’’) in June 

2014 and certain changes in the 

corporate governance of ICE, ICE 

Holdings and NYSE Holdings that 

occurred upon such sale. 

In 2007, NYSE Group, which is the 

100% owner of the NYSE Exchanges, 

combined with Euronext (the 

‘‘Combination’’). The new parent 

company formed in the Combination, 

NYSE Euronext, operated several 

regulated entities in the United States 

and various jurisdictions in Europe. In 

the Commission’s notice relating to the 

proposed Combination, the NYSE 

Exchanges emphasized the importance 

of continuing to regulate marketplaces 

locally: 

A core aspect of the structure of the 

Combination is continued local regulation of 

the marketplaces. Accordingly, the 

Combination is premised on the notion that 

. . . [c]ompanies listing their securities only 

on markets operated by Euronext and its 

subsidiaries will not become newly subject to 

U.S. laws or regulation by the SEC as a result 

of the Combination, and companies listing 

their securities only on the Exchange or 

NYSE Arca, will not become newly subject 

to European rules or regulation as a result of 

the Combination.6

In connection with obtaining 

regulatory approval of the Combination, 

NYSE Euronext implemented certain 

special arrangements consisting of two 

standby structures, one involving a 

Dutch foundation (Stichting) and one 

involving a Delaware trust. The Dutch 

foundation was empowered to take 

actions to mitigate the effects of any 

material adverse change in U.S. law that 

had an ‘‘extraterritorial’’ impact on nonU.S. issuers listed on Euronext markets, 

non-U.S. financial services firms that 

were members of Euronext markets or 

holders of exchange licenses with 

respect to the Euronext markets. The 

Delaware trust was empowered to take 

actions to mitigate the effects of any 

material adverse change in European 

law that had an ‘‘extraterritorial’’ impact 

on the non-European issuers listed on 

NYSE Group securities exchanges, nonEuropean financial services firms that 

were members of any NYSE Group 

securities market or holders of exchange 

licenses with respect to the NYSE Group 

securities exchanges.7

The Dutch foundation and the 

Delaware trust remained in effect after 

the merger of ICE Holdings (then known 

as IntercontinentalExchange, Inc.) and 

NYSE Euronext in 2013 under ICE (then 

known as IntercontinentalExchange 

Group, Inc.) as a new public holding 

company. However, in connection with 

ICE’s announced plan to sell the 

Euronext securities exchanges in an 

initial public offering, the Dutch 

Ministry of Finance permitted 

modifications of the terms of the 

governing document of the Dutch 

foundation under which the powers of 

the Dutch foundation would cease to 

apply to ICE and its affiliates at such 

time as ICE ceased to hold a 

‘‘controlling interest’’ in Euronext, with 

‘‘controlling interest’’ defined by 

reference to the definition of ‘‘control’’ 

under Rule 10 of the International 

Financial Reporting Standards (‘‘IFRS 

10’’).8 In June 2014, ICE announced that 

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Federal Register / Vol. 79, No. 237 / Wednesday, December 10, 2014 / Notices 73363 

9 ICE’s press release dated June 24, 2014 is 

available at the following link: http://ir.theice.com/ 

investors-and-media/press/press-releases/pressrelease-details/2014/Intercontinental-ExchangeAnnounces-Closing-of-Euronext-Initial-PublicOffering/default.aspx. 

10An English translation provided by the NYSE 

Exchanges of the Dutch Ministry of Finance’s letter 

is attached to the Notices as Exhibit 5D. 

11See Exchange Act Release No. 70210 (August 

15, 2013), 78 FR 51758 (August 21, 2013) (SR– 

NYSE–2013–42; SR–NYSEMKT–2013–50; SR– 

NYSEArca–2013–62). 

12See Exchange Act Release No. 72158 (May 13, 

2014) (SR–NYSE–2014–23), 79 FR 28784 (May 19, 

2014) (notice of filing and immediate effectiveness 

of proposed rule change relating to name changes 

of the Exchange’s ultimate parent and revising Trust 

Agreement to reflect name changes of ICE and ICE 

Holdings). 

13A form of unanimous written consent of all 

parties to, or otherwise bound by, the Trust 

Agreement resolving that the Delaware trust be 

terminated is attached to the Notices as Exhibit 5B. 

14 In particular, the NYSE Exchanges propose to 

amend: (1) The Fifth Amended and Restated 

Limited Liability Company Agreement of NYSE 

Holdings to eliminate the definition of the term 

‘‘Trust’’ in Section 1.1 and the references to the 

Delaware trust in Section 7.2; (2) the Third 

Amended and Restated Certificate of Incorporation 

of NYSE Group to eliminate references to the 

Delaware trust in Article IV, Section 4(a) and (b); 

(3) the Sixth Amended and Restated Operating 

Agreement of the Exchange to eliminate references 

to the Delaware trust in Section 3.03; (4) the Fifth 

Amended and Restated Operating Agreement of 

NYSE MKT to eliminate references to the Delaware 

trust in Section 3.03; (5) the Second Amended and 

Restated Certificate of Incorporation of NYSE 

Market to eliminate references to the Delaware trust 

in Article IV, Section 2; and (6) the Restated 

Certificate of Incorporation of NYSE Regulation to 

eliminate references to the Delaware trust in Article 

V. 

15 15 U.S.C. 78f. 

16Additionally, in approving these proposed rule 

changes, the Commission has considered the 

proposed rules’ impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

17 15 U.S.C. 78f(b)(5). 

18 17 CFR 240.19b–4. 

19 15 U.S.C. 78f(b)(5). 

it had sold all but approximately 6% of 

the ownership interest in Euronext in an 

underwritten public offering outside the 

United States.9 As stated in the Notices, 

upon ICE’s application, the Dutch 

Ministry of Finance confirmed on July 

16, 2014 that the conditions to the 

cessation of the application of the Dutch 

foundation to ICE had been satisfied or 

waived.10 As a result, the NYSE 

Exchanges represent that ICE and its 

subsidiaries are no longer subject to the 

provisions of the Dutch foundation. 

In the 2013 merger, NYSE Euronext 

was succeeded by the entity now known 

as NYSE Holdings, which is currently a 

party to the Trust Agreement. At that 

time, references to the nominating and 

governance committee of the board of 

directors of NYSE Euronext, which 

selected the Trustees of the Delaware 

trust, were replaced by references to the 

nominating and governance committee 

of the board of directors of ICE.11 Other 

provisions of the Trust Agreement are 

substantially unchanged.12

In connection with the Combination 

of NYSE Group and Euronext in 2007 

and the establishment of the Dutch 

foundation and the Delaware trust, the 

Certificate of Incorporation and Bylaws 

of NYSE Euronext included several 

provisions relating to representation of 

European interests on the board of 

directors and other provisions requiring 

the board to give due consideration to 

European regulatory requirements and 

the interests of identified categories of 

European stakeholders. These 

provisions are summarized in the NYSE 

Euronext Notice. Each such provision 

was subject to automatic revocation in 

the event that NYSE Euronext no longer 

held a controlling interest in Euronext 

or certain of its subsidiaries. For this 

purpose, ‘‘controlling interest’’ was 

defined to mean 50% or more of the 

outstanding shares of each class of 

voting securities and of the combined 

voting power of outstanding voting 

securities entitled to vote generally in 

the election of directors. Substantially 

identical provisions were added to the 

Certificate of Incorporation and Bylaws 

of ICE and ICE Holdings, and were 

retained in the Operating Agreement of 

NYSE Holdings, when ICE acquired 

NYSE Euronext in 2013, except that the 

‘‘controlling interest’’ test was modified 

to become a ‘‘control’’ test under IFRS 

10, as described above with respect to 

the Dutch foundation. As a result of the 

initial public offering of Euronext, ICE 

has established that it no longer controls 

Euronext within the meaning of IFRS 

10, and the provisions of the constituent 

documents of ICE, ICE Holdings and 

NYSE Holdings have automatically and 

without further action become void and 

are of no further force and effect. 

Termination of the Delaware trust 

would be implemented through a 

unanimous written consent of all parties 

to, or otherwise bound by, the Trust 

Agreement.13 The proposed rule 

changes and exhibits thereto contain 

modifications to the corporate 

governance documents of NYSE 

Holdings, NYSE Group, the Exchange, 

NYSE MKT, NYSE Market and NYSE 

Regulation that delete references to the 

Delaware trust and make related 

conforming changes thereto.14

III. Discussion and Commission’s 

Findings 

After careful review, the Commission 

finds that the proposed rule changes are 

consistent with the requirements of 

Section 6 of the Act 15 and the rules and 

regulations thereunder applicable to a 

national securities exchange.16 The 

Commission finds that the proposed 

rule changes are consistent with Section 

6(b)(5) of the Act,17 which requires, 

among other things, that the exchanges’ 

rules be designed to promote just and 

equitable principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. 

The NYSE Exchanges believe that the 

regulatory considerations that led to the 

implementation of the Trust Agreement 

in 2007 have been mooted by the sale 

of Euronext in June 2014, the automatic 

revocation of corporate governance 

provisions applicable to ICE, ICE 

Holdings and NYSE Holdings that 

occurred upon such sale, and the NYSE 

Exchanges’ representation that the 

Dutch foundation which functioned as a 

European analog to the Delaware trust, 

ceased to have any authority over ICE 

and its subsidiaries upon the closing of 

the sale of Euronext. In addition, the 

NYSE Exchanges represent that 

continuance of the Trust Agreement 

imposes administrative burdens and 

costs upon the exchanges and their 

affiliates that create impediments to a 

free and open market, and may cause 

investor uncertainty. In particular, 

according to the NYSE Exchanges, the 

Trust Agreement imposes 

administrative burdens on ICE and the 

nominating and governance committee 

of its board of directors, such as the 

need to periodically consider and vote 

on trustees; the need to consider 

whether any proposed action requires 

approval under the Trust Agreement 

and, if so, the obligation to prepare 

materials for consideration and vote by 

the Trustees; and the need to consider 

whether any proposed action requires 

an amendment to the Trust Agreement 

and, if so, the additional obligation to 

submit such amendment to the 

Commission for approval under Rule 

19b–4.18 According to the NYSE 

Exchanges, the Trust Agreement also 

results in out-of-pocket costs to the 

exchanges and their affiliates including 

the fees of the individual Trustees and 

the Delaware Trustee as well as fees of 

counsel incurred in connection with 

review of proposed amendments and 

assistance with the Commission 

approval process. 

The Commission believes that the 

NYSE Exchanges’ proposal to terminate 

the Trust Agreement is consistent with 

the requirements of Section 6(b)(5) of 

the Act 19 because the proposed rule 

changes would be consistent with and 

facilitate a corporate governance 

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73364 Federal Register / Vol. 79, No. 237 / Wednesday, December 10, 2014 / Notices 

20 15 U.S.C. 78s(b)(2). 

21 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 73391 

(October 20, 2014), 79 FR 63657 (October 24, 2014) 

(SR–FICC–2014–07). 

4The FCUA defines ‘‘Insured credit unions’’ as 

‘‘any credit union the member accounts of which 

are insured in accordance with the provisions of 

Title II of [FCUA] . . .’’ According to FICC, the term 

‘‘insured credit union’’ includes all credit unions 

chartered by the National Credit Union 

Administration (‘‘NCUA’’), the independent federal 

agency that regulates charters and supervises 

federal credit unions, because Title II of the FCUA 

requires all credit unions that are chartered by the 

NCUA to have insured accounts. Furthermore, FICC 

has stated that the term ‘‘insured credit unions’’ 

also includes both federally-insured state credit 

unions and federally-insured credit unions 

operating under the jurisdiction of the Department 

of Defense because Title II of the FCUA permits the 

NCUA Board to insure those types of credit unions. 

5 15 U.S.C. 78s(b)(2)(C). 

6 15 U.S.C. 78q–1(b)(3)(F). 

7 15 U.S.C. 78q–1(b)(3)(F). 

structure for the NYSE Exchanges that is 

designed to promote just and equitable 

principles of trade, to remove 

impediments to, and perfect the 

mechanism of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. Furthermore, the 

termination of the Delaware trust may 

remove impediments to the operation of 

the NYSE exchanges by eliminating 

certain expenses and administrative 

burdens as well as the potential for 

uncertainty among analysts and 

investors as to the practical implications 

of the Delaware trust on the exchanges. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,20 that the 

proposed rule changes (SR–NYSE– 

2014–53; SR–NYSEMKT–2014–83; SR– 

NYSEArca–2014–112), as modified by 

Amendment No. 1, be, and hereby are, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–28878 Filed 12–9–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73735; File No. SR–FICC– 

2014–07] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Order 

Approving Proposed Rule Change To 

Amend the Clearing Rules of the 

Mortgage-Backed Securities Division 

To Establish a Membership Category 

and Minimum Financial Requirements 

for Insured Credit Unions 

December 4, 2014. 

I. Introduction 

On October 15, 2014, the Fixed 

Income Clearing Corporation (‘‘FICC’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) proposed 

rule change SR–FICC–2014–07 pursuant 

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

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder.2 The proposed rule 

change was published for comment in 

the Federal Register on October 24, 

2014.3 The Commission received no 

comment letters in response to the 

proposed rule change. For the reasons 

discussed below, the Commission is 

approving the proposed rule change. 

II. Description 

Pursuant to this filing, FICC proposed 

to amend the clearing rules of the 

Mortgage-Backed Securities Division 

(‘‘MBSD’’) of FICC in order to establish 

a membership category and minimum 

financial requirements for ‘‘insured 

credit unions,’’ as such term is defined 

in the Federal Credit Union Act 

(‘‘FCUA’’).4 Specifically, FICC proposed 

to revise MBSD Rule 2A, Section 1, to 

create a membership category for 

insured credit unions that are in good 

standing with their primary regulators 

(‘‘Insured Credit Union Clearing 

Member’’). For loss allocation purposes, 

Insured Credit Union Clearing Members 

would be designated as ‘‘Tier One 

Clearing Members’’ in accordance with 

MBSD Rule 4, Section 7. In addition, 

FICC has proposed to add a provision to 

MBSD Rule 2A, Section 2, which would 

require an applicant applying to become 

an Insured Credit Union Clearing 

Member to have a level of equity capital 

as of the end of the month prior to the 

effective date of their membership of at 

least $100 million and achieve the ‘‘well 

capitalized’’ statutory net worth 

category classification defined by the 

National Credit Union Administration 

(‘‘NCUA’’) under 12 CFR part 702. 

Insured credit unions applying for 

membership under this new category 

would be required to meet all other 

applicable financial, credit, and 

operational membership qualifications 

and standards for clearing members that 

are contained in MBSD Rule 2A, Section 

2. In particular, such applicants would 

have to demonstrate an established 

profitable business history of a 

minimum of 6 months or personnel 

with sufficient operational background 

and business experience for the firm to 

conduct its business and to be a member 

(as is required of all other membership 

categories). Insured credit unions 

seeking membership would have to 

demonstrate an ability to communicate 

with FICC, fulfill anticipated 

commitments to and meet the 

operational requirements of FICC with 

necessary promptness and accuracy, 

and conform to any condition and 

requirement that FICC reasonably deems 

necessary for its protection or that of its 

Members. 

FICC believes the participation of 

insured credit unions as guaranteed 

service members will contribute to the 

safety, efficiency, and transparency of 

the market by allowing FICC to capture 

a greater part of the activity of its 

existing members and by introducing 

activity of current non-members to 

FICC. FICC also believes that insured 

credit unions will benefit from the 

MBSD clearing service and the 

associated operational efficiencies of a 

central counterparty service. 

III. Discussion 

Section 19(b)(2)(C) of the Act 5 directs 

the Commission to approve a selfregulatory organization’s proposed rule 

change if the Commission finds that 

such proposed rule change is consistent 

with the requirements of the Act and the 

rules and regulations thereunder 

applicable to such organization. Section 

17A(b)(3)(F) of the Act 6 requires, among 

other things, that the rules of a clearing 

agency are designed to promote the 

prompt and accurate clearance and 

settlement of securities transactions. 

The Commission finds that, as 

proposed, FICC’s rule change to 

establish a membership category and 

minimum financial, credit, and 

operational requirements and standards 

for insured credit unions, as defined in 

FICC’s proposal, is consistent with 

Section 17A(b)(3)(F) of the Act.7 The 

Commissions believes that the proposed 

rule change should promote the prompt 

and accurate clearance and settlement of 

securities transactions, because by 

allowing insured credit unions to 

participate as MBSD members, these 

firms will be able to avail themselves of 

the benefits of central counterparty 

service including, among other things, 

trade comparison, to-be-announced 

netting, electronic pool notification 

allocation, pool comparison, pool 

netting, settlement, and risk 

management for eligible securities. 

Furthermore, the rule change will also 

allow existing FICC members to submit 

eligible trading activity with qualified 

insured credit unions directly to the 

MBSD of FICC, thereby also extending 

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