Document ID: SEC-2015-0712-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange, LLC
Posted Date: 2015-04-24T04:00Z

[Federal Register Volume 80, Number 79 (Friday, April 24, 2015)]
[Notices]
[Pages 23057-23059]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-09497]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74766; File No. SR-NYSE-2015-16]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change to Amend the Seventh Amended 
and Restated Operating Agreement of the New York Stock Exchange LLC.

April 20, 2015
    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 April 6, 2015, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to proposes [sic] to amend the Seventh 
Amended and Restated Operating Agreement (``Operating Agreement'') of 
the Exchange to remove the requirement that the independent directors 
that make up the majority of the board of directors of the Exchange 
(the ``Board'') also be directors of Intercontinental Exchange, Inc., 
the Exchange's parent company. The text of 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 the Operating Agreement of the 
Exchange to remove the requirement that the independent directors 
making up the majority of the Board also be directors of 
Intercontinental Exchange, Inc. (``ICE''), the Exchange's parent.
    Section 2.03(a)(i) of the Operating Agreement, which governs board 
composition, provides that a majority of the Exchange's directors shall 
be U.S. persons \4\ who are members of the board of directors of ICE 
that satisfy the Exchange's independence requirements.\5\ Such 
directors are defined as ``ICE Independent Directors'' in the Operating 
Agreement. The Exchange proposes to amend Section 2.03(a)(i) of the 
Operating Agreement to remove the requirement that the independent 
directors making up the majority of the Board also be directors of ICE, 
to redefine ``ICE Independent Directors'' to remove the reference to 
ICE, and to make conforming changes in both Section 2.03(a)(i) and 
Section 2.03(a)(ii). The majority of directors of the Exchange board 
would continue to satisfy the company independence policy [sic]
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    \4\ Pursuant to Section 2.03(a)(1) of the Operating Agreement, a 
director is a ``U.S. Person'' if, as of the date of his or her most 
recent election or appointment to the Board, his or her domicile is, 
and for the immediately preceding 24 months has been, the United 
States. The Exchange does not propose to amend this requirement.
    \5\ The Exchange's independence requirements are set forth in 
the Independence Policy of the Board of Directors of the Exchange. 
See Securities Exchange Act Release No. 67564 (August 1, 2012), 77 
FR 47161 (August 7, 2012) (SR-NYSE-2012-17; SR-NYSEArca-2012-59; SR-
NYSEMKT-2012-07) (approving NYSE's director independence policy).
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    The Exchange believes that eliminating the requirement that the 
independent directors of the Exchange

[[Page 23058]]

also be directors of ICE will allow the Exchange to broaden the pool of 
potential Board members, resulting in a more diversified Board 
membership while still ensuring the directors' independence. 
Eliminating the requirement that the independent directors of the 
Exchange also be directors of ICE will also make the Exchange's board 
requirements more consistent with those of its affiliate NYSE Arca, 
Inc. (``NYSE Arca'') which does not require any of its directors to be 
directors of ICE.\6\
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    \6\ See Amended and Restated NYSE Arca Bylaws, Article III, 
Section 3.02. The Exchange notes that its NYSE MKT affiliate has 
also submitted a proposal to amend its Operating Agreement to remove 
the requirement that the independent directors that make up the 
majority of the Exchange Board also be directors of ICE, and to 
redefine ``ICE Independent Directors'' to remove the reference to 
ICE. See SR-NYSEMKT-2015-27.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Exchange Act \7\ in general, and with Section 
6(b)(1) \8\ 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.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(1).
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    The proposed change would remove the requirement that the 
independent directors that make up the majority of the Exchange Board 
also be ICE directors and would redefine ``ICE Independent Directors'' 
to remove the reference to ICE. As noted above, the proposed change 
would allow the Exchange to broaden the pool of potential Board 
members, resulting in a more diversified Board membership while still 
ensuring their independence, and would make the Exchange's board 
requirements more consistent with its affiliate NYSE Arca, which does 
not require its directors to be ICE directors. For these reasons, the 
Exchange believes that the proposed rule change would contribute to the 
orderly operation of the Exchange and would enable the Exchange to be 
so organized as to have the capacity to carry out the purposes of the 
Exchange Act and comply and enforce compliance with the provisions of 
the Exchange Act by its members and persons associated with its 
members. The Exchange therefore believes that approval of the proposed 
is consistent with Section 6(b)(1) of the Act.
    The Exchange also believes that this filing furthers the objectives 
of Section 6(b)(5) of the Exchange Act \9\ because the proposed rule 
change 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. The Exchange believes that 
eliminating the requirement that the independent directors of the 
Exchange also be directors of ICE will allow the Exchange to have a 
more diverse board of directors because not all of the independent 
directors will have to be directors of ICE, while still ensuring their 
independence. The Exchange believes that the proposed rule change is 
therefore consistent with and facilitates a governance and regulatory 
structure that furthers the objectives of Section 6(b)(5) of the Act.
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    \9\ 15 U.S.C. 78f(b)(5).
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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. The proposed rule 
change is not intended to address competitive issues but rather is 
concerned solely with the administration and functioning of the 
Exchange's board of directors.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or up to 90 days (i) as the Commission may designate 
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 the 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-NYSE-2015-16 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.
    All submissions should refer to File Number SR-NYSE-2015-16. 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 
10:00 a.m. and 3:00 p.m. Copies of the filing will also be available 
for inspection and copying at the NYSE's principal office and on its 
Internet Web site at www.nyse.com. 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-2015-16 and should be submitted on or before May 
15, 2015.

[[Page 23059]]

     
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    \10\ 17 CFR 200.30-3(a)(12).
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    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Brent J. Fields,
Secretary.
[FR Doc. 2015-09497 Filed 4-23-15; 8:45 am]
BILLING CODE 8011-01-P