Federal Register / Vol. 82, No. 193 / Friday, October 6, 2017 / Notices 46845 

13 17 CFR 240.17Ad–22(b)(3). 

14 15 U.S.C. 78q–1. 

15 17 CFR 240.17Ad–22. 

16Notice, 82 FR at 41455. 

17 In approving the proposed rule change, the 

Commission considered the proposal’s impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 

18 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4The Exchange originally filed to amend the 

Price List on August 31, 2017 (SR–NYSE–2017–46), 

withdrew such filing on September 13, 2017, and 

refiled the same day (SR–NYSE–2017–48). SR– 

NYSE–48 [sic] was subsequently withdrawn and 

replaced by this filing. 

responsible. Rule 17Ad–22(b)(3) 13

requires, inter alia, that a registered 

clearing agency acting as a central 

counterparty for security-based swaps 

shall establish, implement, maintain, 

and enforce written policies and 

procedures reasonably designed to 

maintain sufficient financial resources 

to withstand, at a minimum, a default 

by the two participant families to which 

it has the largest exposures in extreme 

but plausible market conditions, in its 

capacity as a central counterparty for 

security-based swaps. 

The Commission finds that the 

proposed rule change, which enhances 

ICC’s Stress Testing Framework and 

Liquidity Risk Management Framework, 

is consistent with section 17A 14 of the 

Act and Rule 17Ad–22 15 thereunder. As 

noted above, in response to the clearing 

of SN CDS referencing CPs, the 

proposed change would expand the 

range of stress tests that ICC considers 

to be extreme but plausible. The 

Commission has reviewed the Notice 

and ICC’s rules, policies, and 

procedures, and believes that the 

expanded range of extreme but plausible 

scenarios, supplemented by the 

information that will be provided by 

certain additional GWWR and contagion 

stress scenarios considered to be 

extreme but implausible, enhance ICC’s 

processes for estimating the amount of 

financial resources ICC should collect. 

Additionally, while adoption of the 

sensitivity analyses described above 

will not immediately require ICC to 

collect additional financial resources, it 

will provide ICC with additional risk 

management information. Further, ICC 

stated that at least in some cases, one of 

the newly added analyses could provide 

a potential remedy where deficiencies 

are identified in ICC’s current sizing 

methodology.16 Consequently, the 

Commission believes that the proposed 

rule change is reasonably designed to 

ensure that ICC maintains sufficient 

financial resources in accordance with 

the requirements of Rule 17Ad–22(b)(3) 

and will thereby enhance ICC’s ability 

to safeguard the securities and funds of 

CPs in the event of participant defaults. 

As a result, the Commission finds that 

the proposed change is consistent with 

the requirements of section 17A of the 

Act and the relevant provisions of Rule 

17Ad–22. 

IV. Conclusion 

It is therefore ordered pursuant to 

section 19(b)(2) of the Act that the 

proposed rule change (SR–ICC–2017– 

012) be, and hereby is, approved.17

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–21540 Filed 10–5–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81791; File No. SR–NYSE– 

2017–50] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend Its 

Price List To Permit Affiliated Member 

Organizations That Are Supplemental 

Liquidity Providers 

October 2, 2017. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on 

September 25, 2017, New York Stock 

Exchange LLC (‘‘NYSE’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the self-regulatory 

organization. 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 amend its 

Price List to permit affiliated member 

organizations that are Supplemental 

Liquidity Providers (‘‘SLPs’’) on the 

Exchange to obtain the most favorable 

rate when (1) at least one affiliate 

satisfies the quoting requirements for 

SLPs in assigned securities, and (2) the 

combined SLPs’ aggregate volumes 

satisfy the adding liquidity volume 

requirements for SLP tiered and nontiered rates. The Exchange proposes to 

implement the proposed changes on 

September 25, 2017.4 The proposed rule 

change is available on the Exchange’s 

Web site 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 

The Exchange proposes to amend its 

Price List to permit affiliated member 

organizations that are SLPs on the 

Exchange to obtain the most favorable 

rate when (1) at least one affiliate 

satisfies the quoting requirements for 

SLPs in assigned securities, and (2) the 

combined SLPs’ aggregate volumes 

satisfy the adding liquidity volume 

requirements for SLP tiered and nontiered rates. 

The proposed changes would be 

applicable to all SLP transactions, 

regardless of price of the security. 

The Exchange proposes to implement 

these changes to its Price List effective 

September 25, 2017. 

Proposed Rule Change 

SLPs are eligible for certain credits 

when adding liquidity to the Exchange. 

The amount of the credit is currently 

determined by the ‘‘tier’’ for which the 

SLP qualifies, which is based on the 

SLP’s level of quoting and ADV of 

liquidity added by the SLP in assigned 

securities. 

Currently, SLP Tier 3 provides that 

when adding liquidity to the NYSE in 

securities with a share price of $1.00 or 

more, an SLP is eligible for a credit of 

$0.0023 per share traded if the SLP (1) 

meets the 10% average or more quoting 

requirement in an assigned security 

pursuant to Rule 107B and (2) adds 

liquidity for all assigned SLP securities 


asabaliauskas on DSKBBXCHB2PROD with NOTICES
46846 Federal Register / Vol. 82, No. 193 / Friday, October 6, 2017 / Notices 

5Under Rule 107B, an SLP can be either a 

proprietary trading unit of a member organization 

(‘‘SLP-Prop’’) or a registered market maker at the 

Exchange (‘‘SLMM’’). For purposes of the 10% 

average or more quoting requirement in assigned 

securities pursuant to Rule 107B, quotes of an SLPProp and an SLMM of the same member 

organization are not aggregated. However, for 

purposes of adding liquidity for assigned SLP 

securities in the aggregate, shares of both an SLPProp and an SLMM of the same member 

organization are included. 

6NYSE CADV is defined in the Price List as the 

consolidated average daily volume of NYSE-listed 

securities. 

7Rule 107B(i)(2)(A) prohibits a DMM from acting 

as a SLP in the same securities in which it is a 

DMM. 

8 In determining whether an SLP meets the 

requirement to add liquidity in the aggregate of an 

ADV of more than 0.20% depending on whether the 

SLP is also a DMM, the SLP may include shares of 

both an SLP-Prop and an SLMM of the same 

member organization. 

9The Exchange also proposes to add a hyphen 

between ‘‘SLP’’ and ‘‘Prop’’ following ‘‘quotes of 

an’’ in the SLP Tier 2 fee. 

10For purposes of applying any provision of the 

Exchange’s Price List where the charge assessed, or 

credit provided, by the Exchange depends on the 

volume of a member organization’s activity, a 

member organization may request that the Exchange 

aggregate its eligible activity with activity of such 

member organization’s affiliates. A member 

organization requesting aggregation of eligible 

affiliate activity is required to (1) certify to the 

Exchange the affiliate status of member 

organizations whose activity it seeks to aggregate 

prior to receiving approval for aggregation, and (2) 

inform the Exchange immediately of any event that 

causes an entity to cease being an affiliate. 

11 15 U.S.C. 78f(b). 

12 15 U.S.C. 78f(b)(4) & (5). 

in the aggregate 5 of an ADV of more 

than 0.20% of NYSE consolidated ADV 

(‘‘CADV’’),6 or with respect to an SLP 

that is also a DMM and subject to Rule 

107B(i)(2)(a),7 more than 0.20% of 

NYSE CADV after a discount of the 

percentage for the prior quarter of NYSE 

CADV in DMM assigned securities as of 

the last business day of the prior month. 

The SLP Tier 3 credit in the case of 

Non-Displayed Reserve Orders is 

$0.0006. 

SLP Tier 2 provides that an SLP 

adding liquidity in securities with a per 

share price of $1.00 or more is eligible 

for a per share credit of $0.0026 if the 

SLP: (1) Meets the 10% average or more 

quoting requirement in an assigned 

security pursuant to Rule 107B; and (2) 

adds liquidity for all assigned SLP 

securities in the aggregate of an ADV of 

more than 0.45% of NYSE CADV, or 

with respect to an SLP that is also a 

DMM and subject to Rule 107B(i)(2)(a), 

more than 0.45% of NYSE CADV after 

a discount of the percentage for the 

prior quarter of NYSE CADV in DMM 

assigned securities as of the last 

business day of the prior month.8 The 

SLP Tier 2 credit in the case of NonDisplayed Reserve Orders is $0.0009. 

SLP Tier 1A provides that an SLP 

adding liquidity in securities with a per 

share price of $1.00 or more is eligible 

for a per share credit of $0.00275 if the 

SLP: (1) Meets the 10% average or more 

quoting requirement in an assigned 

security pursuant to Rule 107B; and (2) 

adds liquidity for all for assigned SLP 

securities in the aggregate of an ADV of 

more than 0.60% of NYSE CADV, or 

with respect to an SLP that is also a 

DMM and subject to Rule 107B(i)(2)(a), 

more than 0.60% after a discount of the 

percentage for the prior quarter of NYSE 

CADV in DMM assigned securities as of 

the last business day of the prior month. 

The SLP Tier 1A credit in the case of 

Non-Displayed Reserve Orders is 

$0.00105. 

SLP Tier 1 provides that an SLP 

adding liquidity in securities with a per 

share price of $1.00 or more is eligible 

for a per share credit of $0.0029 if the 

SLP: (1) Meets the 10% average or more 

quoting requirement in an assigned 

security pursuant to Rule 107B; and (2) 

adds liquidity for all for assigned SLP 

securities in the aggregate of an ADV of 

more than 0.90% of NYSE CADV, or 

with respect to an SLP that is also a 

DMM and subject to Rule 107B(i)(2)(a), 

more than 0.90% after a discount of the 

percentage for the prior quarter of NYSE 

CADV in DMM assigned securities as of 

the last business day of the prior month. 

The SLP Tier 1 credit in the case of 

Non-Displayed Reserve Orders is 

$0.0012. 

Finally, a SLP adding liquidity in 

securities with a per share price of less 

than $1.00 is eligible for a per share 

credit of $0.0005 if the SLP: (1) Meets 

the 10% average or more quoting 

requirement in an assigned security 

pursuant to Rule 107B; and (2) adds 

liquidity for all for assigned SLP 

securities in the aggregate of an ADV of 

more than 0.22% of NYSE CADV in the 

applicable month. 

The Exchange proposes to amend the 

Price List to permit affiliated member 

organizations that are SLPs to obtain the 

most favorable rate when (1) at least one 

affiliate satisfies the quoting 

requirements for SLPs in assigned 

securities, and (2) the combined SLPs’ 

aggregate volumes satisfy the adding 

liquidity volume requirements for SLP 

tiered (i.e., SLP Tier 1, SLP Tier 1A, SLP 

Tier 2 and SLP Tier 3) and non-tiered 

rates. 

To effect this change, for each of the 

SLP tiered and non-tiered rates, the 

Exchange proposes to: (i) Replace the 

phrase ‘‘Credit per share—per 

transaction—for SLPs’’ with the phrase 

‘‘Credit per share—per transaction for 

affiliated SLPs;’’ (ii) add a footnote that 

provides that affiliated member 

organizations that are SLPs would be 

eligible for the most favorable rate for 

any such security traded in an 

applicable month provided that one or 

both affiliated member organizations 

request and are approved for aggregation 

of eligible activity pursuant to the 

requirements set forth in the Price List; 

(iii) replace the phrase ‘‘the SLP,’’ with 

the phrase ‘‘an SLP;’’ and (iv) add the 

phrase ‘‘or an affiliated’’ before the term 

‘‘member organization.’’ 9

In order to qualify as affiliates for 

purposes of obtaining the more 

favorable rate and aggregating the 

adding liquidity of an ADV volumes, 

one or both member organizations that 

are SLPs would be required to follow 

the procedures set forth in the Price List 

for requesting that the Exchange 

aggregate its eligible activity with the 

eligible activity of its affiliates.10

For example, assume a member 

organization with a SLP (SLP1) is 

affiliated with another member 

organization that also has a SLP (SLP2). 

If the adding liquidity for all for 

assigned SLP securities is 0.40% of 

NYSE CADV for SLP1 in the billing 

month and 0.10% of NYSE CADV for 

SLP2, the combined adding liquidity for 

SLP1 and SLP2 would be 0.50% of 

NYSE CADV, and both SLP1 and SLP2 

would meet the 0.45% NYSE CADV 

adding requirement. If in that same 

billing month, SLP1 has 8.0% quoting 

in SLP symbol XYZ and SLP2 has 

12.0% quoting in that same symbol 

XYZ, both SLP1 and SLP2 would 

qualify for the SLP Tier 2 credit of 

$0.0026 in symbol XYZ, by way of 

SLP2’s 12.0% quoting and the combined 

adding liquidity of SLP1 and SLP 2 of 

0.50% of NYSE CADV. If SLP2 did not 

quote in symbol XYZ at least 10%, then 

SLP1 would not qualify for the SLP Tier 

2 credit due to their 8.0% quoting being 

short of the 10% requirement, and then 

SLP1 and SLP2 would instead receive 

the applicable non-Tier Adding Credit, 

Tier 3 Adding Credit, Tier 2 Adding 

Credit or Tier 1 Adding Credit. 

The proposed changes are not 

otherwise intended to address any other 

issues, and the Exchange is not aware of 

any problems that member 

organizations would have in complying 

with the proposed change. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

section 6(b) of the Act,11 in general, and 

furthers the objectives of sections 6(b)(4) 

and (5) of the Act,12 in particular, 

because it provides for the equitable 

allocation of reasonable dues, fees, and 


asabaliauskas on DSKBBXCHB2PROD with NOTICES
Federal Register / Vol. 82, No. 193 / Friday, October 6, 2017 / Notices 46847 

13See, e.g., Securities Exchange Act Release No. 

77604 (April 13, 2016), 81 FR 23043 (April 19, 

2016) (SR–NYSE–2016–29), for the most recent 

pricing changes applicable to SLPs. 14 15 U.S.C. 78f(b)(8). 

15 15 U.S.C. 78s(b)(3)(A). 

16 17 CFR 240.19b–4(f)(2). 

17 15 U.S.C. 78s(b)(2)(B). 

other charges among its members, 

issuers and other persons using its 

facilities and does not unfairly 

discriminate between customers, 

issuers, brokers or dealers and 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. 

The Exchange believes that the 

proposed rule change is reasonable 

because the SLP credit rates, established 

in previous rule filings, would remain 

the same.13 The Exchange further 

believes that the proposed rule change 

is equitable because it establishes a 

manner for the Exchange to treat 

affiliated member organizations that are 

approved as SLPs for purposes of 

assessing charges or credits that are 

based on volume. The provision is also 

equitable because all member 

organizations seeking to aggregate their 

activity are subject to the same 

parameters, in accordance with 

established procedures set forth on the 

Price List regarding aggregation across 

affiliated member organizations. 

The Exchange further believes that the 

proposal is not unfairly discriminatory 

because it would serve to reduce 

disparity of treatment between member 

organizations with regard to the pricing 

of different services and reduce any 

potential for confusion on how SLP 

activity can be aggregated. The 

Exchange believes that the proposed 

rule change avoids disparate treatment 

of member organizations that have 

divided their various business activities 

between separate corporate entities as 

compared to member organizations that 

operate those business activities within 

a single corporate entity. The Exchange 

further believes that the proposed rule 

change is designed to remove 

impediments to and perfect the 

mechanism of a free and open market 

because it aligns how affiliated member 

organizations that are approved as SLPs 

may aggregate volume in the same 

manner that affiliated member 

organizations currently aggregate nonSLP trading volume. 

The Exchange believes that it is 

subject to significant competitive forces, 

as described below in the Exchange’s 

statement regarding the burden on 

competition. 

For the foregoing reasons, the 

Exchange believes that the proposal is 

consistent with the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with section 6(b)(8) of 

the Act,14 the Exchange believes that the 

proposed rule change would not impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. Instead, the 

proposed rule change is designed to 

encourage the submission of additional 

liquidity to a public exchange, thereby 

promoting price discovery and 

transparency and enhancing order 

execution opportunities for member 

organizations. The Exchange believes 

that this could promote competition 

between the Exchange and other 

execution venues, including those that 

currently offer comparable transaction 

pricing, by encouraging additional 

orders to be sent to the Exchange for 

execution. 

Finally, the Exchange notes that it 

operates in a highly competitive market 

in which market participants can 

readily favor competing venues if they 

deem fee levels at a particular venue to 

be excessive or rebate opportunities 

available at other venues to be more 

favorable. In such an environment, the 

Exchange must continually adjust its 

fees and rebates to remain competitive 

with other exchanges and with 

alternative trading systems that have 

been exempted from compliance with 

the statutory standards applicable to 

exchanges. Because competitors are free 

to modify their own fees and credits in 

response, and because market 

participants may readily adjust their 

order routing practices, the Exchange 

believes that the degree to which fee 

changes in this market may impose any 

burden on competition is extremely 

limited. As a result of all of these 

considerations, the Exchange does not 

believe that the proposed changes will 

impair the ability of member 

organizations or competing order 

execution venues to maintain their 

competitive standing in the financial 

markets. 

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 foregoing rule change is effective 

upon filing pursuant to section 

19(b)(3)(A) 15 of the Act and 

subparagraph (f)(2) of Rule 19b–4 16

thereunder, because it establishes a due, 

fee, or other charge imposed by the 

Exchange. 

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) 17 of the Act to 

determine whether the proposed rule 

change should be approved or 

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 rule-comments@

sec.gov. Please include File Number SR– 

NYSE–2017–50 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–NYSE–2017–50. 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 


asabaliauskas on DSKBBXCHB2PROD with NOTICES
46848 Federal Register / Vol. 82, No. 193 / Friday, October 6, 2017 / Notices 

18 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3On June 30, 2016, HoldCo acquired all of the 

capital stock of U.S. Exchange Holdings, Inc., the 

Exchange’s indirect parent company (the 

‘‘Acquisition’’). As a result, the Exchange, in 

addition to its affiliates Nasdaq ISE, LLC (‘‘ISE’’) 

and Nasdaq GEMX, LLC (‘‘GEMX’’), became a 

wholly-owned subsidiary of HoldCo, and also 

became an affiliate of NSM, Phlx, and BX through 

common, ultimate ownership by HoldCo. HoldCo is 

the ultimate parent of the Exchange. See Securities 

Exchange Act Release No. 78119 (June 21, 2016), 81 

FR 41611 (June 27, 2016) (SR–ISEMercury-2016– 

10). 

4The Exchange’s affiliates, ISE and GEMX, have 

submitted nearly identical proposed rule changes. 

See Securities Exchange Release No. 81263 (July 31, 

2017), 82 FR 36497 (August 4, 2017) (SR–ISE–2017– 

32) (ISE Approval Order) and Securities Exchange 

Release No. 81422 (August 17, 2017), 82 FR 40026 

(August 23, 2017) (SR–GEMX–2017–37) (GEMX 

Notice of Filing). 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of 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; 

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–NYSE– 

2017–50 and should be submitted on or 

before October 27, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–21535 Filed 10–5–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81795; File No. SR–MRX– 

2017–18] 

Self-Regulatory Organizations; Nasdaq 

MRX, LLC; Notice of Filing of Proposed 

Rule Change To Adopt New Corporate 

Governance and Related Process 

Similar to Those of the Nasdaq 

Exchanges 

October 2, 2017. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on 

September 19, 2017, Nasdaq MRX, LLC 

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

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes a rule change 

(the ‘‘Proposed Rule Change’’) in 

connection with the proposed merger 

(the ‘‘Merger’’) with a newly-formed 

Delaware limited liability company 

under the Exchange’s ultimate parent, 

Nasdaq, Inc., resulting in the Exchange 

as the surviving entity. Following the 

Merger, the Exchange’s board and 

committee structure, and all related 

corporate governance processes, will be 

harmonized with that of the three other 

registered national securities exchanges 

and self-regulatory organizations owned 

by Nasdaq, Inc., namely: The NASDAQ 

Stock Market LLC (‘‘NSM’’), NASDAQ 

PHLX LLC (‘‘Phlx’’), and NASDAQ BX, 

Inc. (‘‘BX’’ and together with NSM and 

Phlx, the ‘‘Nasdaq Exchanges’’). 

In connection with the Merger and as 

discussed more fully below, the 

Exchange proposes to adopt new 

organizational documents that set forth 

a corporate governance framework and 

related processes that are substantially 

similar in all material respects to those 

of the Nasdaq Exchanges. 

The Exchange intends to implement 

the Proposed Rule Change no later than 

by the end of Q4 2017. The Exchange 

will alert its members in the form of a 

Regulatory Alert to provide notification 

of the implementation date. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at 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 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 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 was recently acquired 

by Nasdaq, Inc. (‘‘HoldCo’’).3 Following 

the acquisition, the Exchange has 

continued to operate as a separate selfregulatory organization (‘‘SRO’’) and 

continues to have separate rules, 

membership rosters, and listings, 

distinct from the rules, membership 

rosters, and listings of the Nasdaq 

Exchanges as well as from ISE and 

GEMX. The Exchange now proposes to 

harmonize the corporate governance 

framework of the Exchange with that of 

the Nasdaq Exchanges, and submits this 

Proposed Rule Change to seek the 

Commission’s approval of various 

changes to the Exchange’s 

organizational documents and Rules 

that are necessary in connection with 

the Merger, as described below. 

The proposed changes consist of: (1) 

Deleting the Exchange’s current Limited 

Liability Company Agreement (the 

‘‘Current LLC Agreement’’) in its 

entirety and replacing it with a new 

limited liability company agreement 

(the ‘‘LLC Agreement’’) that is based on 

the limited liability company agreement 

of NSM, (2) deleting the Exchange’s 

current Constitution (‘‘Current 

Constitution’’ and together with the 

Current LLC Agreement, the ‘‘Current 

Governing Documents’’) in its entirety 

and replacing it with a new set of bylaws (the ‘‘Bylaws’’ and together with 

the LLC Agreement, the ‘‘New 

Governing Documents’’) that is based on 

the by-laws of NSM, and (3) making 

minor clarifying changes to its rules, as 

discussed below.4

All of the proposed changes are 

designed to align the Exchange’s 

corporate governance framework to the 

existing structure at the Nasdaq 

Exchanges, particularly as it relates to 


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