Document ID: SEC-2012-0423-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: EDGA Exchange, Inc.
Posted Date: 2012-03-15T04:00Z

[Federal Register Volume 77, Number 51 (Thursday, March 15, 2012)]
[Notices]
[Pages 15413-15417]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-6258]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66567; File No. SR-EDGA-2012-08]

Self-Regulatory Organizations; EDGA 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, EDGA Exchange, Inc. (the 
``Exchange'' or ``EDGA'') 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to (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 B[ouml]rse AG (``Deutsche 
B[ouml]rse''), effectively granting Deutsche B[ouml]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 
Z[uuml]rich AG (``Eurex Z[uuml]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 Z[uuml]rich, which, in 
turn, is jointly owned by Deutsche B[ouml]rse

[[Page 15414]]

and SIX. SIX is owned by SIX Group AG (``SIX Group'').
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    \3\ See Securities and Exchange Act Release No. 56955 (December 
13, 2007); 72 FR 71979 (December 19, 2007) (SR-ISE-2007-101).
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    On December 23, 2008, ISE 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.
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    \4\ See Securities and Exchange Act Release No. 59135 (December 
22, 2008); 73 FR 79954 (December 30, 2008) (SR-ISE-2008-85).
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    On May 7, 2009, Direct Edge's direct subsidiaries, the Exchange 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 the Exchange and EDGX.\6\ ISE 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.
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    \5\ See Securities and Exchange Act Release No. 60651 (September 
11, 2009); 74 FR 47827 (September 17, 2009) (File Nos. 10-193 and 
10-194).
    \6\ See Securities and Exchange Act Release No. 61698 (March 12, 
2010); 75 FR 13151 (March 18, 2010) (approving File Nos. 10-194 and 
10-196).
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    On June 7, 2011, Deutsche B[ouml]rse, SIX Group, and SIX signed a 
definitive agreement for the Transaction, which would give Deutsche 
B[ouml]rse a 100% indirect ownership interest in the currently jointly-
owned Eurex Z[uuml]rich. Deutsche B[ouml]rse currently has a 50% direct 
ownership interest in Eurex Z[uuml]rich, and, after the Transaction 
closes, Deutsche B[ouml]rse will have a 100% direct ownership interest 
in EGD, which will have a 50% direct ownership interest in Eurex 
Z[uuml]rich.\7\ Accordingly, SIX and SIX Group will no longer have an 
indirect ownership interest in the Exchange, ISE, 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.
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    \7\ ISE Holdings will continue to be the sole member of ISE.
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    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 B[ouml]rse, Eurex Frankfurt, Eurex 
Z[uuml]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.
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    \8\ Under 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.
    \9\ Under 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.
    \10\ Under 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.
    \11\ Under the Trust, the term ``Trust Beneficiary'' means U.S. 
Exchange Holdings.
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    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 B[ouml]rse, Eurex Frankfurt, Eurex Z[uuml]rich, 
SIX, and SIX Group (the ``non-U.S. Upstream Owners'') have taken 
appropriate steps to incorporate provisions regarding ownership, 
jurisdiction, books and records, and other issues related to their 
control of the Exchange, ISE, 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 
Z[uuml]rich, and thus a ``non-U.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, ISE, and EDGX, with respect to itself, as well as to its 
board members, officers, employees, and agents (as applicable).\12\
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    \12\ The 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 the Exchange and EDGX, and 
the FINMA procedure would allow EGD to provide information relating 
to the activities of the Exchange, ISE, or EDGX to the Commission 
through Eurex Z[uuml]rich, which will provide such information to 
FINMA, whereas the resolutions previously adopted by each of the 
non-U.S. Upstream Owners incorporated the Exchange and EDGX by 
reference, and the FINMA procedure allows SIX, SIX Group, and Eurex 
Z[uuml]rich to provide information relating to the activities of the 
Exchange, ISE, and EDGX to the Commission directly through FINMA. 
See supra note 4.
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    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, ISE, 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, ISE, or EDGX, including books and records of EGD related to 
the activities of the Exchange, ISE, or EDGX, to the Commission 
promptly, through Eurex Z[uuml]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\

[[Page 15415]]

Moreover, oral exchanges between EGD and the Commission related to the 
activities of the Exchange, ISE, or EDGX will include, at all times, 
the participation of Eurex Z[uuml]rich and FINMA, through its oversight 
of Eurex Z[uuml]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 Z[uuml]rich is dealt with in the Agreement and 
Consent.
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    \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 Z[uuml]rich (which is 
regulated by FINMA) as an additional conduit in the FINMA procedure.
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    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, ISE, 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, 
ISE, or EDGX.\15\
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    \14\ See Art. 271 of Swiss Criminal Code.
    \15\ Application of the FINMA procedure would be limited to 
issues arising in the context of the Transaction and the 
Commission's oversight of the Exchange, ISE, 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.
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    Notwithstanding the FINMA procedure, EGD would remain fully 
responsible for meeting all of its obligations as an owner of the 
Exchange, ISE, 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\
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    \16\ See supra notes 7 and 8.
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    The Resolution will provide that, to the extent that EGD is 
involved in the activities of the Exchange, ISE, 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, ISE, 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 ISE; 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 the Exchange 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, ISE, 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, ISE, 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, ISE, or 
EDGX; and (b) EGD's books and records related to the activities of the 
Exchange, ISE, or EDGX will at all times be made available for 
inspection and copying by the Commission, the Exchange, ISE, 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, ISE, or EDGX, 
give due regard to the preservation of the independence of the self-
regulatory function of the Exchange, ISE, 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, ISE, or EDGX 
relating to their respective regulatory responsibilities (including 
enforcement and disciplinary matters) or that would interfere with the 
ability of the Exchange, ISE, 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 Exchange, ISE, or EDGX contained in the books and 
records of the Exchange, ISE, 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, ISE, 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, 
ISE, 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, ISE, 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, ISE, and EDGX to carry out their respective 
responsibilities under the Exchange Act; and (b) the Exchange, ISE, 
EDGX, and EGD: (i) To engage in conduct that fosters and does not 
interfere with the ability of the Exchange, ISE, 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

[[Page 15416]]

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, ISE, 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 Z[uuml]rich 
establishing the FINMA procedure, which will ensure that EGD will (1) 
cooperate with the Commission, the Exchange, ISE, 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, ISE, or EDGX; (5) maintain confidentiality of information 
pertaining to the self-regulatory function of the Exchange, ISE, or 
EDGX; (6) preserve the independence of the self-regulatory function of 
the Exchange, ISE, 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, ISE, 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, ISE, 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\
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    \17\ On January 17, 2012, the Commission approved a proposed 
rule change by the Exchange relating to a corporate transaction in 
which Deutsche B[ouml]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-EDGA-2011-34). 
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.
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    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 ISE member [sic], 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\
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    \18\ See Certificate, Article FOURTH, Section III.
    \19\ 15 U.S.C. 78s(b).
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    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, ISE, EDGX, or any facility thereof, to carry 
out their respective functions and responsibilities under the 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, ISE, 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.
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    \20\ 15 U.S.C. 78f(b).
    \21\ 15 U.S.C. 78f(b)(1).
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    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

[[Page 15417]]

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.
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    \22\ 15 U.S.C. 78f(b)(5).
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    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\
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    \23\ See supra notes 1 and 2.
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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 rule-comments@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\
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    \24\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-6258 Filed 3-14-12; 8:45 am]
BILLING CODE 8011-01-P