Document ID: SEC-2014-0177-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE MKT LLC
Posted Date: 2014-01-30T05:00Z

[Federal Register Volume 79, Number 20 (Thursday, January 30, 2014)]
[Notices]
[Pages 5003-5009]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-01811]

[[Page 5003]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71395; File No. SR-NYSEMKT-2014-10]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of 
Proposed Rule Change Relating to a Corporate Action in Which Its 
Indirect Parent, NYSE Euronext Holdings LLC, Will Become a Wholly Owned 
Subsidiary of IntercontinentalExchange, Inc.

January 24, 2014.
    Pursuant to Section 19(b)(1) \1\ of the U.S. Securities Exchange 
Act of 1934, as amended (the ``Exchange Act''), and Rule 19b-4 
thereunder,\2\ notice is hereby given that on January 22, 2014, NYSE 
MKT LLC (``NYSE MKT'') 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 substantially 
by NYSE MKT. 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

A. Overview of the Proposed Merger

    NYSE MKT, a New York limited liability company, registered national 
securities exchange and self-regulatory organization, is submitting 
this rule filing (the ``Proposed Rule Change'') to the U.S. Securities 
and Exchange Commission (the ``Commission'') in connection with the 
contribution by IntercontinentalExchange Group, Inc., a Delaware 
corporation (``ICE Group''), of its 100% membership interest in NYSE 
Euronext Holdings LLC, a Delaware limited liability company (``NYX 
Holdings''), which is an indirect owner of a 100% interest in NYSE MKT, 
to another wholly owned subsidiary of ICE Group, 
IntercontinentalExchange, Inc., a Delaware corporation (``ICE Inc.'').
    NYX Holdings owns 100% of the equity interest of NYSE Group, Inc., 
a Delaware corporation (``NYSE Group''), which in turn directly or 
indirectly owns (1) 100% of the equity interest of three registered 
national securities exchanges and self-regulatory organizations 
(together, the ``NYSE Exchanges'')--NYSE MKT, The New York Stock 
Exchange, LLC (the ``Exchange'') and NYSE Arca, Inc. (``NYSE Arca'')--
and (2) 100% of the equity interest of NYSE Market (DE), Inc. (``NYSE 
Market''), NYSE Regulation, Inc. (``NYSE Regulation''), NYSE Arca 
L.L.C., NYSE Arca Equities, Inc. (``NYSE Arca Equities'') and NYSE Amex 
Options LLC (``NYSE Amex Options'') (the NYSE Exchanges, together with 
(x) NYSE Market, NYSE Regulation, NYSE Arca L.L.C., NYSE Arca Equities 
and NYSE Amex Options and (y) any similar U.S. regulated entity 
acquired, owned or created after the date hereof, the ``U.S. Regulated 
Subsidiaries'' and each, a ``U.S. Regulated Subsidiary''). Each of NYSE 
Arca and the Exchange will be separately filing a proposed rule change 
in connection with the matters addressed herein that will be 
substantially the same as the Proposed Rule Change.
    Upon completion of ICE Group's contribution to ICE Inc. of 100% of 
NYX Holdings (the ``Transfer''), each U.S. Regulated Subsidiary will 
become an indirect wholly owned subsidiary of ICE Inc. ICE Inc. will 
remain a direct wholly owned subsidiary of ICE Group, a public company 
that is listed on the Exchange. The Transfer is strictly an internal 
reorganization that does not affect the interests of ICE Group's 
stockholders. The Transfer will not affect the operation of the U.S. 
Regulated Subsidiaries.
    The Transfer is part of the process pursuant to which ICE Group 
will prepare for the previously announced sale of the continental 
European cash equity platforms and the derivatives trading on them (the 
``Euronext Sale'') currently owned by Euronext N.V., a Dutch company 
with limited liability (``Euronext'') and a wholly owned subsidiary of 
ICE Group. The Transfer also will facilitate the transitioning of the 
derivatives businesses of another current subsidiary of Euronext, Liffe 
Administration and Management (``LAM''), to ICE Futures Europe, a 
subsidiary of ICE Inc., and will enable ICE Inc. to continue in 
compliance with certain debt covenants after the Euronext Sale. (The 
transitioning of the derivatives business of LAM is subject to 
regulatory approval in the United Kingdom.)

B. Summary of Proposed Rule Change

    NYSE MKT is proposing that, in connection with the Transfer, the 
Commission approve the organizational documents of ICE Inc. and 
amendments to the Amended and Restated Limited Liability Company 
Agreement of NYX Holdings (``NYX Holdings Operating Agreement'') and 
the Amended and Restated Bylaws of ICE Group (``ICE Group Bylaws'' ). 
The Proposed Rule Change is summarized as follows:
    Certificate of Incorporation and Bylaws of ICE Inc. ICE Inc. would 
take appropriate steps to incorporate voting and ownership 
restrictions, provisions relating to the qualifications of directors 
and officers and their submission to jurisdiction, compliance with the 
federal securities laws, access to books and records, and other matters 
related to its control of the U.S. Regulated Subsidiaries. 
Specifically, the Fifth Amended and Restated Certificate of 
Incorporation of ICE Inc. (the ``ICE Inc. Certificate'') \3\ and the 
Second Amended and Restated Bylaws of ICE Inc. (the ``ICE Inc. 
Bylaws'') \4\ would contain provisions to incorporate these concepts 
with respect to itself, as well as its directors, officers, employees 
and agents (as applicable):
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    \3\ The text of the proposed ICE Inc. Certificate is attached to 
the Proposed Rule Change as Exhibit 5A.
    \4\ The text of the proposed ICE Inc. Bylaws is attached to the 
Proposed Rule Change as Exhibit 5B.
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     Voting and Ownership Restrictions in the ICE Inc. 
Certificate. The ICE Inc. Certificate would contain voting and 
ownership restrictions that will take effect only in the event ICE 
Group does not hold all of the issued and outstanding shares of stock 
of ICE Inc. The ICE Inc. Certificate would restrict any person, either 
alone or together with its related persons, from having voting control 
over ICE Inc. shares entitling the holder thereof to cast more than 10% 
of the then outstanding votes entitled to be cast on a matter or 
beneficially owning ICE Inc. shares representing more than 20% of the 
outstanding votes entitled to be cast on a matter. The ICE Inc. 
Certificate would provide that ICE Inc. will be required to disregard 
any votes purported to be cast in excess of the voting restriction. In 
the event that any person(s) exceeds the ownership restrictions, it 
will be obligated to sell promptly, and ICE Inc. will be obligated to 
purchase promptly, at a price equal to the par value of such shares and 
to the extent funds are legally available for such purchase, the number 
of shares of ICE Inc. necessary so that such person, together with its 
related persons, will beneficially own shares of ICE Inc. representing 
in the aggregate no more than 20% of the then outstanding votes 
entitled to be cast on any matter, after taking into account that such 
repurchased shares will become treasury shares and will no longer be 
deemed to be outstanding. The ICE Inc. board of directors may waive the 
voting and ownership restrictions if it makes certain determinations 
and expressly resolves to permit the voting and ownership that is 
subject to such

[[Page 5004]]

restrictions, and such resolutions have been filed with, and approved 
by, the Commission under Section 19(b) of the U.S. Securities Exchange 
Act of 1934, as amended (together, with the rules promulgated 
thereunder, the ``Exchange Act'') and filed with, and approved by, the 
relevant European Regulators having appropriate jurisdiction and 
authority. The ICE Inc. Certificate further provides that the board of 
directors may not approve either voting or ownership rights in excess 
of a 20% threshold with respect to any person that is a Member of the 
Exchange (an ``NYSE Member''), a Member of NYSE MKT (including any 
person who is a related person of such member, a ``NYSE MKT Member''), 
an ETP Holder of NYSE Arca Equities (an ``ETP Holder''), or an OTP 
Holder or OTP Firm of NYSE Arca, (an ``OTP Holder'' and ``OTP Firm,'' 
respectively), as each of these terms is defined in the ICE Inc. 
Certificate.
     Jurisdiction. The ICE Inc. Bylaws will provide that ICE 
Inc. and its directors, and, to the extent they are involved in the 
activities of the U.S. Regulated Subsidiaries, its officers, and those 
of its employees whose principal place of business and residence is 
outside the United States will be deemed to irrevocably submit to the 
jurisdiction of the U.S. federal courts and the Commission for the 
purposes of any suit, action or proceedings pursuant to the U.S. 
federal securities laws and the rules or regulations thereunder, 
arising out of, or relating to, the activities of the U.S. Regulated 
Subsidiaries. In addition, the ICE Inc. Bylaws would provide that, so 
long as ICE Inc. directly or indirectly controls any U.S. Regulated 
Subsidiary, the directors, officers and employees will be deemed to be 
directors, officers and employees of such U.S. Regulated Subsidiaries 
for purposes of, and subject to oversight pursuant to, the Exchange 
Act. The ICE Inc. Bylaws would provide that ICE Inc. will take 
reasonable steps necessary to cause its officers, directors and 
employees to agree and consent in writing to the applicability to them 
of these jurisdictional and oversight provisions with respect to their 
activities related to any U.S. Regulated Subsidiary.
     Books and Records. The ICE Inc. Bylaws would provide that 
for so long as ICE Inc. directly or indirectly controls any U.S. 
Regulated Subsidiary, the books, records and premises of ICE Inc. will 
be deemed to be the books, records and premises of such U.S. Regulated 
Subsidiaries for purposes of, and subject to oversight pursuant to, the 
Exchange Act, and that ICE Inc.'s books and records will at all times 
be made available for inspection and copying by the Commission, and by 
any U.S. Regulated Subsidiary to the extent they are related to the 
activities of such U.S. Regulated Subsidiary or any other U.S. 
Regulated Subsidiary over which such U.S. Regulated Subsidiary has 
regulatory authority or oversight. In addition, ICE Inc.'s books and 
records related to the U.S. Regulated Subsidiaries will be maintained 
within the United States, except that to the extent that books and 
records may relate to both European subsidiaries and U.S. Regulated 
Subsidiaries, ICE Inc. may maintain such books and records either in 
the home jurisdiction of one or more European subsidiaries or in the 
United States.
     Restrictions on Amendments to ICE Inc. Certificate and 
Bylaws. The ICE Inc. Certificate would provide that before any 
amendment to the ICE Inc. Certificate may be effectuated, such 
amendment would need to be submitted to the board of directors of each 
U.S. Regulated Subsidiary and, if so determined by any such board, 
would need to be filed with, or filed with and approved by, the 
Commission before such amendment may become effective. The ICE Inc. 
Bylaws would include the same requirement.
     Additional Matters. The ICE Inc. Bylaws would include 
provisions regarding cooperation with the Commission and the U.S. 
Regulated Subsidiaries, compliance with U.S. federal securities laws, 
confidentiality of information regarding the U.S. Regulated 
Subsidiaries' self-regulatory function, preservation of the 
independence of the U.S. Regulated Subsidiaries' self-regulatory 
function, and directors' consideration of the effect of ICE Inc.'s 
actions on the U.S. Regulated Subsidiaries' ability to carry out their 
respective responsibilities under the Exchange Act.
     Proposed Amendments to NYX Holdings Operating 
Agreement.\5\ The NYX Holdings Operating Agreement currently provides 
that all membership interests in NYX Holdings must be held by ICE 
Group. In order that ICE Group may contribute all of the membership 
interests in NYX Holdings to ICE Inc., the NYX Holdings Operating 
Agreement would be amended to reflect that ICE Inc. is the ``Member'' 
and previously was the ``Initial Member'', as those terms are used 
throughout the NYX Holdings Operating Agreement, and to make 
nonsubstantive conforming changes to the recitals and definitions.
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    \5\ The text of the proposed Second Amended and Restated Limited 
Liability Company Operating Agreement of NYX Holdings is attached to 
the Proposed Rule Change as Exhibit 5C.
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     Proposed Approval of Transfer of NYX Holdings Membership 
Interests. NYX Holdings Operating Agreement currently provides that ICE 
Group, as the sole member, may not transfer or assign any membership 
interests of NYX Holdings to any person or entity without the 
Commission's approval. ICE Group has adopted the resolutions in order 
to permit ICE Group to transfer its membership interest in NYX Holdings 
to ICE Inc. and to amend the NYX Holdings Operating Agreement to 
reflect the change of ownership (the ``ICE Group 2013 
Resolutions'').\6\ NYX Holdings has adopted resolutions making the 
determinations required under the NYX Holdings Operating Agreement to 
approve the assumption of ownership by ICE Inc. (the ``NYX Holdings 
Resolutions'').\7\
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    \6\ A copy of the ICE Group 2013 Resolutions is attached to the 
Proposed Rule Change as Exhibit 5D-1.
    \7\ A copy of the NYX Holdings Resolutions is attached to the 
Proposed Rule Change as Exhibit 5E.
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    The proposed Fifth Amended and Restated Certificate of 
Incorporation of IntercontinentalExchange, Inc., effective as of the 
consummation of the Transfer; the proposed Second Amended and Restated 
Bylaws of IntercontinentalExchange, Inc., effective as of the 
consummation of the Transfer; the proposed Second Amended and Restated 
Limited Liability Company Agreement of NYSE Euronext Holdings LLC, 
effective as of the consummation of the Transfer; the resolutions of 
the Board of Directors of IntercontinentalExchange Group, Inc., adopted 
by the Board of Directors of IntercontinentalExchange Group, Inc. on 
December 13, 2013; the resolutions of the Board of Directors of 
IntercontinentalExchange Group, Inc. that will be adopted by the Board 
of Directors of IntercontinentalExchange Group, Inc. as of the 
consummation of the Transfer; the resolutions of the Board of Managers 
of NYSE Euronext Holdings LLC, that will be adopted by the Board of 
Directors of NYSE Euronext Holdings LLC; and the proposed Second 
Amended and Restated Bylaws of IntercontinentalExchange Group, Inc., 
effective as of the consummation of the Transfer are attached to the 
Proposed Rule Change as Exhibits 5A, 5B, 5C, 5D-1, 5D-2, 5E and 5F, 
respectively.
    The text of the Proposed Rule Change is available at NYSE MKT, the 
Commission's Public Reference Room, and on the Web site of NYSE MKT 
(www.nyse.com). The text of Exhibits 5A through 5F to the Proposed Rule 
Change

[[Page 5005]]

is also available on NYSE MKT's Web site and on the Commission's Web 
site (www.sec.gov/rules/sro.shtml).

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, NYSE MKT 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. NYSE MKT 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this rule filing is to adopt the rules necessary to 
permit ICE Group to effect the Transfer.
1. Overview of the Transfer
    NYSE MKT is submitting the Proposed Rule Change to the Commission 
in connection with the transfer by ICE Group of all membership 
interests in NYX Holdings to ICE Inc. Other than as described herein 
and in the separate proposed rule changes filed by each NYSE Exchange, 
ICE Group, ICE Inc. and the NYSE Exchanges do not plan to make any 
changes to the regulated activities of the U.S. Regulated Subsidiaries 
in connection with the Transfer. If ICE Group or ICE Inc. determines to 
make any such changes to the regulated activities of any U.S. Regulated 
Subsidiary, it will seek the approval of the Commission. The Proposed 
Rule Change, if approved by the Commission, will not be effective until 
the consummation of the Transfer.
    ICE Inc. is a wholly owned subsidiary of ICE Group and a sister 
subsidiary of NYX Holdings. ICE Group will contribute the equity 
interests in NYX Holdings to ICE Inc., at which point NYX Holdings will 
become a direct wholly owned subsidiary of ICE Inc., and the U.S. 
Regulated Subsidiaries owned by NYX Holdings will become indirect 
wholly owned subsidiaries of ICE Inc. ICE Group will continue as the 
ultimate parent entity of NYX Holdings through ICE Inc.
2. Overview of ICE Inc. Following the Transaction
    Following the Transfer, ICE Group will continue to hold all of the 
equity interests in ICE Inc., and ICE Inc. will hold all the membership 
interests in NYX Holdings. NYX Holdings will continue to hold (1) 100% 
of the equity interests of NYSE Group (which, in turn, directly or 
indirectly holds 100% of the equity interests of the U.S. Regulated 
Subsidiaries) and (2) 100% of the equity interest of Euronext (which, 
in turn, directly or indirectly holds 100% of the equity interests in 
certain regulated trading markets in Belgium, France, the Netherlands, 
Portugal and the United Kingdom). The Transfer is part of the process 
pursuant to which ICE Group will prepare for the Euronext Sale.
    The ICE Inc. Certificate and Bylaws will include ownership and 
voting limitations and certain other provisions to satisfy U.S. and 
European regulatory requirements as described in detail in the Proposed 
Rule Change. These provisions are modeled on provisions currently in 
the ICE Group Certificate of Incorporation and Bylaws, as well as those 
in the NYX Holdings Operating Agreement.
    Other than certain modifications described herein, the current 
corporate structure, governance and self-regulatory independence and 
separation of each U.S. Regulated Subsidiary will be preserved.
    ICE Group and ICE Inc. acknowledge that to the extent either 
becomes aware of possible violations of the rules of the Exchange, NYSE 
Arca or NYSE MKT, it will be responsible for referring such possible 
violations to each such exchange, respectively.
3. Proposed Approval of Transfer of NYX Holdings Membership Interests
    Article VII of the current NYX Holdings Operating Agreement 
provides that the sole Member, ICE Group, may not transfer or assign 
any membership interests of NYX Holdings to any person or entity unless 
such transfer shall (1) be filed with and approved by the Commission 
under Section 19 of the Exchange Act and (2) filed with and approved by 
the relevant European Regulators under the Applicable European Exchange 
Regulations. ICE Group, as sole Member, has adopted the ICE Group 2013 
Resolutions in order to permit ICE Group to transfer its membership 
interests in NYX Holdings to ICE Inc. and to amend the NYX Holdings 
Operating Agreement to reflect the change of ownership. NYX Holdings 
has adopted the NYX Holdings Resolutions making the determinations 
required under the NYX Holdings Operating Agreement to approve the 
assumption of ownership by ICE Inc. NYSE MKT is requesting approval by 
the Commission of the ICE Group 2013 Resolutions and the NYX Holdings 
Resolutions to allow the Transfer to take place.
4. Proposed Amendments to Ownership and Voting Restrictions after the 
Transfer
Overview
    NYSE MKT is proposing that, effective as of the completion of the 
Transfer, the ICE Inc. Certificate would contain voting and ownership 
restrictions that are substantially identical to those currently in the 
ICE Group Certificate and the NYX Holdings Operating Agreement and 
would restrict any person, either alone or together with its related 
persons, from having voting control over ICE Inc. shares entitling the 
holder thereof to cause more than 10% of the votes entitled to be cast 
on any matter or beneficially owning ICE Inc. shares representing more 
than 20% of the outstanding votes that may be cast on any matter. These 
limitations would apply only in the event that ICE Group does not own 
all of the issued and outstanding stock in ICE Inc. and only for so 
long as ICE Inc. directly or indirectly controls any U.S. Regulated 
Subsidiary or any European Market Subsidiary.
Voting and Ownership Restrictions in the ICE Inc. Certificate
    Under the Proposed Rule Change, the ICE Inc. Certificate would 
provide that, in the event ICE Group does not own all of the issued and 
outstanding shares of stock of ICE Inc., (1) no person, either alone or 
together with its related persons (as defined in the ICE Inc. 
Certificate), may be entitled to vote or cause the voting of shares of 
stock of ICE Inc. beneficially owned by such person or its related 
persons, in person or by proxy or through any voting agreement or other 
arrangement, to the extent that such shares represent in the aggregate 
more than 10% of the then outstanding votes entitled to be cast on such 
matter, and (2) no person, either alone or together with its related 
persons, may acquire the ability to vote more than 10% of the then 
outstanding votes entitled to be cast on any such matter by virtue of 
agreements or arrangements entered into with other persons to refrain 
from voting shares of stock of ICE Inc. (the ``ICE Inc. Voting 
Restriction'').\8\ The ICE Inc. Certificate will require ICE Inc. to 
disregard any votes purported to be cast in excess of the ICE Inc. 
Voting Restriction.
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    \8\ See ICE Inc. Certificate, Article V Section A.
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    In addition, the ownership restrictions in the ICE Inc. Certificate 
would provide that, if such restrictions apply, no person, either alone 
or

[[Page 5006]]

together with its related persons, may at any time own beneficially 
shares of ICE Inc. representing in the aggregate more than 20% of the 
then outstanding votes entitled to be cast on any matter (the ``ICE 
Inc. Ownership Restrictions'').\9\ If any person, either alone or 
together with its related persons, owns shares of ICE Inc. in excess of 
the ICE Inc. Ownership Restriction, then such person and its related 
persons are obligated to sell promptly, and ICE Inc. is obligated to 
purchase promptly, at a price equal to the par value of such shares and 
to the extent funds are legally available for such purchase, the number 
of shares of ICE Inc. necessary so that such person, together with its 
related persons, will beneficially own shares of ICE Inc. representing 
in the aggregate no more than 20% of the then outstanding votes 
entitled to be cast on any matter, after taking into account that such 
repurchased shares will become treasury shares and will no longer be 
deemed to be outstanding.\10\
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    \9\ See ICE Inc. Certificate, Article V Section B.
    \10\ See ICE Inc. Certificate, Article V Section B.4.
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    The ICE Inc. Certificate would provide that the ICE Inc. Voting 
Restriction and the ICE Inc. Ownership Restriction would apply only for 
so long as ICE Inc. directly or indirectly controls any U.S. Regulated 
Subsidiary.
    The ICE Inc. Voting Restriction applies to each person unless and 
until (1) such person has delivered a notice in writing to the board of 
directors of ICE Inc., not less than 45 days (or such shorter period as 
the board of directors of ICE Inc. expressly permits) prior to any 
vote, of such person's intention, either alone or together with its 
related persons, to vote or cause the voting of shares of ICE Inc. 
stock beneficially owned by such person or its related persons in 
excess of the ICE Inc. Voting Restriction; (2) the board of directors 
of ICE Inc. has resolved to expressly permit such voting; and (3) such 
resolution has been filed with, and approved by, the Commission under 
Section 19(b) of the Exchange Act \11\ and filed with, and approved by, 
the relevant European Regulators having appropriate jurisdiction and 
authority.\12\ Subject to its fiduciary duties under applicable law, 
the ICE Inc. board of directors may not adopt any resolution pursuant 
to the foregoing clause (2) unless the board has determined that the 
exercise of such voting rights (or the entering into of a voting 
agreement), as applicable:
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    \11\ 15 U.S.C. 78s(b).
    \12\ See ICE Inc. Certificate, Article V Section A.2.
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     Will not impair the ability of any U.S. Regulated 
Subsidiary, ICE Inc., NYX Holdings or NYSE Group to discharge their 
respective responsibilities under the Exchange Act and the rules and 
regulations thereunder;
     will not impair the ability of any European Market 
Subsidiary, ICE Inc., NYX Holdings or Euronext NV to discharge their 
respective responsibilities under the European Exchange Regulations (as 
defined in the ICE Inc. Bylaws);
     is otherwise in the best interests of ICE Inc., its 
stockholder(s), the U.S. Regulated Subsidiaries and the European Market 
Subsidiaries, and will not impair the Commission's ability to enforce 
the Exchange Act or the European Regulators' ability to enforce the 
European Exchange Regulations;
     for so long as ICE Inc. directly or indirectly controls 
NYSE Arca, Inc. or NYSE Arca Equities or any facility of NYSE Arca, 
neither such person nor any of its related persons is an ETP Holder, an 
OTP Holder or an OTP Firm; and
     for so long as ICE Inc. directly or indirectly controls 
the Exchange or NYSE Market, neither such person nor any of its related 
persons is a NYSE Member;
     for so long as ICE Inc. directly or indirectly controls 
NYSE MKT, neither such person nor any of its related persons is an MKT 
Member; and
     neither such person nor any of its related persons is a 
U.S. Disqualified Person or a European Disqualified Person (as such 
terms are defined in the ICE Inc. Certificate).\13\
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    \13\ See ICE Inc. Certificate, Article V Sections A.3(c)(i), 
A.3(d)(i) and B.3(c)(i).
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    The ICE Inc. Ownership Restriction applies to each person unless 
and until (1) such person has delivered a notice in writing to the 
board of directors of ICE Inc., not less than 45 days (or such shorter 
period as the board of directors of ICE Inc. expressly permits) prior 
to the acquisition of any shares of ICE Inc. that would cause such 
person, either alone or together with its related persons, to exceed 
the ICE Inc. Ownership Restriction, of such person's intention, either 
alone or together with its related persons, to acquire such ownership; 
(2) the board of directors of ICE Inc. has resolved to expressly permit 
such ownership; and (3) such resolution has been filed with, and 
approved by, the Commission under Section 19(b) of the Exchange Act 
\14\ and filed with, and approved by, the relevant European Regulators 
having appropriate jurisdiction and authority.\15\ Subject to its 
fiduciary duties under applicable law, the ICE Inc. board of directors 
may not adopt any resolution pursuant to the foregoing clause (2) 
unless the board has determined that such ownership:
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    \14\ 15 U.S.C. 78s(b).
    \15\ See ICE Inc. Certificate, Article V Section B.2.
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     Will not impair the ability of any U.S. Regulated 
Subsidiary, ICE Inc., NYX Holdings or NYSE Group to discharge their 
respective responsibilities under the Exchange Act and the rules and 
regulations thereunder;
     will not impair the ability of any European Market 
Subsidiary, ICE Inc., NYX Holdings or Euronext NV to discharge their 
respective responsibilities under the European Exchange Regulations (as 
defined in the ICE Inc. Bylaws);
     is otherwise in the best interests of ICE Inc., its 
stockholder(s), the U.S. Regulated Subsidiaries and the European Market 
Subsidiaries, and will not impair the Commission's ability to enforce 
the Exchange Act or the European Regulators' ability to enforce the 
European Exchange Regulations;
     for so long as ICE Inc. directly or indirectly controls 
NYSE Arca, Inc. or NYSE Arca Equities or any facility of NYSE Arca, 
neither such person nor any of its related persons is an ETP Holder, an 
OTP Holder or an OTP Firm;
     for so long as ICE Inc. directly or indirectly controls 
the Exchange or NYSE Market, neither such person nor any of its related 
persons is a NYSE Member;
     for so long as ICE Inc. directly or indirectly controls 
NYSE MKT, neither such person nor any of its related persons is an MKT 
Member; and
     neither such person nor any of its related persons is a 
U.S. Disqualified Person or a European Disqualified Person.
    In order to allow ICE Inc. to own and vote all of the outstanding 
common stock of NYX Holdings after the Transfer, ICE Inc. has delivered 
written notice to the board of NYX Holdings pursuant to the procedures 
set forth in the NYX Holdings Operating Agreement requesting approval 
of its voting and ownership of NYX Holdings shares in excess of the 
Voting Restriction and the Ownership Restriction applicable to NYX 
Holdings. Among other things, in this notice, ICE Inc. represented to 
the board of NYX Holdings that neither it, nor any of its related 
persons, is (1) an NYSE Member; (2) an NYSE MKT Member; (3) an ETP 
Holder; (4) an OTP Holder or OTP Firm; or (5) a U.S. Disqualified 
Person or a European Disqualified Person.
    On December 13, 2013, the board of directors of ICE Group adopted 
the ICE Group 2013 Resolutions to authorize

[[Page 5007]]

and instruct the transfer ownership of NYX Holdings to ICE Inc. On --
--.2014, the board of managers of NYX Holdings, acting by unanimous 
written consent, adopted the NYX Holdings Resolutions to permit ICE 
Inc., either alone or with its related persons, to exceed the Voting 
Restriction and the Ownership Restriction applicable to NYX Holdings. 
In adopting such resolutions, the board of managers of NYX Holdings 
made the necessary determinations set forth in the NYX Holdings 
Operating Agreement (which are similar to those set forth above) and 
approved the submission of the Proposed Rule Change to the Commission.
5. Additional Matters To Be Addressed in the ICE Inc. Certificate and 
Bylaws \16\
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    \16\ The ICE Inc. Certificate and Bylaws will also set forth 
certain restrictions and requirements relating to ICE Group's [sic] 
European subsidiaries and applicable European regulatory matters, 
which will be substantially consistent with the analogous 
restrictions and requirements applicable with respect to ICE Group's 
[sic] U.S. Regulated Subsidiaries and U.S. regulatory matters.
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Jurisdiction Over Individuals
    Under the Proposed Rule Change, the ICE Inc. Bylaws would provide 
that ICE Inc. and its directors, and, to the extent that they are 
involved in the activities of the U.S. Regulated Subsidiaries, ICE 
Inc.'s officers and those of its employees whose principal place of 
business and residence is outside the United States, would be deemed to 
irrevocably submit to the jurisdiction of the U.S. federal courts and 
the Commission for the purposes of any suit, action or proceeding 
pursuant to the U.S. federal securities laws, and the rules and 
regulations thereunder, commenced or initiated by the Commission 
arising out of, or relating to, the activities of the U.S. Regulated 
Subsidiaries. The ICE Inc. Bylaws would also provide that, with respect 
to any such suit, action, or proceeding brought by the Commission, ICE 
Inc. and its directors, officers and employees would (1) be deemed to 
agree that ICE Inc. may serve as U.S. agent for purposes of service of 
process in such suit, action, or proceedings relating to ICE Inc. or 
any of its subsidiaries; and (2) 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 or they are not personally 
subject to the jurisdiction of the Commission, that the suit, action, 
or proceeding is an inconvenient forum or that the venue of the suit, 
action, or proceedings is improper, or that the subject matter thereof 
may not be enforced in or by the U.S. federal courts of the 
Commission.\17\
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    \17\ See ICE Inc. Bylaws, Section 7.1.
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    In addition, the ICE Inc. Bylaws would provide that, so long as ICE 
Inc. directly or indirectly controls any U.S. Regulated Subsidiary, the 
directors, officers and employees of ICE Inc. will be deemed to be 
directors, officers and employees of such U.S. Regulated Subsidiaries 
for purposes of, and subject to oversight pursuant to, the Exchange 
Act.\18\
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    \18\ See ICE Inc. Bylaws, Section 8.4.
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    The ICE Inc. Bylaws would provide that ICE Inc. will take 
reasonable steps necessary to cause its directors, officers and 
employees, prior to accepting a position as an officer, director or 
employee, as applicable, of ICE Inc. to agree and consent in writing to 
the applicability to them of these jurisdictional and oversight 
provisions with respect to their activities related to any U.S. 
Regulated Subsidiary.\19\
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    \19\ See ICE Inc. Bylaws, Section 9.3.
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    NYSE MKT anticipates that the functions and activities of each U.S. 
Regulated Subsidiary generally will be carried out by the officers and 
directors of such U.S. Regulated Subsidiary, over each of whom the 
Commission has direct authority pursuant to Section 19(h)(4) of the 
Exchange Act.\20\
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    \20\ 15 U.S.C. 78s(h)(4).
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Access to Books and Records
    Under the Proposed Rule Change, the ICE Inc. Bylaws would provide 
that for so long as ICE Inc. directly or indirectly controls any U.S. 
Regulated Subsidiary, the books, records and premises of ICE Inc. will 
be deemed to be the books, records and premises of such U.S. Regulated 
Subsidiaries for purposes of, and subject to oversight pursuant to, the 
Exchange Act.\21\ In addition, ICE Inc.'s books and records related to 
the U.S. Regulated Subsidiaries will be maintained within the United 
States, except that to the extent that books and records may relate to 
both European subsidiaries and U.S. Regulated Subsidiaries, ICE Inc. 
may maintain such books and records either in the home jurisdiction of 
one or more European subsidiaries or in the United States.\22\ The ICE 
Inc. Bylaws also would provide that ICE Inc.'s books and records will 
at all times be made available for inspection and copying by the 
Commission, and any U.S. Regulated Subsidiary to the extent they are 
related to the activities of the U.S. Regulated Subsidiary or any other 
U.S. Regulated Subsidiary over which such U.S. Regulated Subsidiary has 
regulatory authority or oversight.\23\
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    \21\ See ICE Inc. Bylaws, Section 8.4.
    \22\ See ICE Inc. Bylaws, Sections 8.4 and 8.6.
    \23\ See ICE Inc. Bylaws, Section 8.3.
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Additional Matters
    Under the Proposed Rule Change, the ICE Inc. Bylaws would provide 
that ICE Inc. will comply with the U.S. federal securities laws and the 
rules and regulations thereunder, and will cooperate with the 
Commission and with the U.S. Regulated Subsidiaries pursuant to and to 
the extent of their respective regulatory authority.\24\ In addition, 
ICE Inc. would be required to take reasonable steps necessary to cause 
its agents to cooperate with the Commission and, where applicable, the 
U.S. Regulated Subsidiaries pursuant to their regulatory authority.\25\ 
The ICE Inc. Bylaws would also provide that, in discharging his or her 
responsibilities as a member of the ICE Inc. board of directors or as 
an officer or employee of ICE Inc., each such director, officer or 
employee will (a) comply with the U.S. federal securities laws and the 
rules and regulations thereunder; (b) cooperate with the Commission; 
and (c) cooperate with the U.S. Regulated Subsidiaries pursuant to and 
to the extent of their regulatory authority (but this provision will 
not create any duty owed by any director, officer or employee of ICE 
Inc. to any person to consider, or afford any particular weight to, any 
such matters or to limit his or her consideration of such matters).\26\
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    \24\ See ICE Inc. Bylaws, Section 9.l.
    \25\ See id.
    \26\ See ICE Inc. Bylaws, Section 3.14(b).
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    The ICE Inc. Bylaws would also provide that all confidential 
information that comes into the possession of ICE Inc. pertaining to 
the self-regulatory function of any U.S. Regulated Subsidiary will (a) 
not be made available to any persons other than to those officers, 
directors, employees and agents of ICE Inc. that have a reasonable need 
to know the contents thereof; (b) be retained in confidence by ICE Inc. 
and the officers, directors, employees and agents of ICE Inc.; and (c) 
not be used for any commercial purposes.\27\ In addition, the ICE Inc. 
Bylaws would provide that these obligations regarding such confidential 
information will not be interpreted so as to limit or impede (i) the 
rights of the Commission or the relevant U.S. Regulated Subsidiary 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 ICE Inc. to disclose such confidential information

[[Page 5008]]

to the Commission or any U.S. Regulated Subsidiary.\28\
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    \27\ See ICE Inc. Bylaws, Section 8.1.
    \28\ See ICE Inc. Bylaws, Section 8.2.
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    In addition, the ICE Inc. Bylaws would provide that ICE Inc. and 
its directors, officers and employees will give due regard to the 
preservation of the independence of the self-regulatory function of the 
U.S. Regulated Subsidiaries (to the extent of each U.S. Regulated 
Subsidiary's self-regulatory function) and to its obligations to 
investors and the general public, and will not take any actions that 
would interfere with the effectuation of any decisions by the board of 
directors or managers of any U.S. Regulated Subsidiary relating to its 
regulatory responsibilities (including enforcement and disciplinary 
matters) or that would interfere with the ability of such U.S. 
Regulated Subsidiary to carry out its responsibilities under the 
Exchange Act.\29\
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    \29\ See ICE Inc. Bylaws, Section 9.4.
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    Finally, the ICE Inc. Bylaws would provide that each director of 
ICE Inc. would, in discharging his or her responsibilities, to the 
fullest extent permitted by applicable law, take into consideration the 
effect that ICE Inc.'s actions would have on the ability of (a) the 
U.S. Regulated Subsidiaries to carry out their responsibilities under 
the Exchange Act; and (b) the U.S. Regulated Subsidiaries, NYSE Group, 
NYX Holdings and ICE Inc. to (1) engage in conduct that fosters and 
does not interfere with the ability of the U.S. Regulated Subsidiaries, 
NYSE Group, NYX Holdings and ICE Inc. to prevent fraudulent and 
manipulative acts and practices in the securities markets; (2) promote 
just and equitable principles of trade in the securities markets; (3) 
foster cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities; (4) remove impediments to and 
perfect the mechanisms of a free and open market in securities and a 
U.S. national securities market system; and (5) in general, protect 
investors and the public interest.\30\
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    \30\ See ICE Inc. Bylaws, Section 3.14(a). This requirement 
would not, however, create any duty owed by any director, officer or 
employee of ICE Inc. to any person to consider, or afford any 
particular weight to, any of the foregoing matters or to limit his 
or her consideration to such matters. See ICE Inc. Bylaws, Section 
3.14(c).
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Amendments to the ICE Inc. Certificate and Bylaws
    Under the Proposed Rule Change, the ICE Inc. Bylaws would provide 
that, before any amendment to or repeal of any provision of the ICE 
Inc. Bylaws shall be effective, such amendment or repeal shall be 
submitted to the board of directors of each U.S. Regulated Subsidiary 
(or the boards of directors of their successors) and if any or all of 
such boards of directors determine that, before such amendment or 
repeal may be effectuated, the same must be filed with, or filed with 
and approved by, the Commission pursuant to Section 19 of the Exchange 
Act and the rules promulgated thereunder, then the same will not be 
effectuated until filed with, or filed with and approved by, the 
Commission, as the case may be.\31\ These requirements would also apply 
to any action by ICE Inc. that would have the effect of amending or 
repealing any provisions of the ICE Inc. Certificate.\32\
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    \31\ See ICE Inc. Bylaws, Section 11.3.
    \32\ See ICE Inc. Certificate, Article IX(C).
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6. Proposed Amendment to the NYX Holdings Operating Agreement
    In addition, NYSE MKT proposes that the NYX Holdings Operating 
Agreement be amended to reflect that ICE Inc. will be the sole member 
of the LLC as a result of ICE Group's transfer of the membership 
interest in NYX Holdings to ICE Inc.\33\ The NYX Holdings Operating 
Agreement also would be amended to reflect that ICE Inc. previously was 
the ``Initial Member'', to delete references to NYSE Euronext LLC and 
to make nonsubstantive conforming changes to the recitals and 
definitions.
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    \33\ See NYX Holdings Operating Agreement, Preamble.
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7. Proposed Amendment to the ICE Group Bylaws
    The provisions in the ICE Group Certificate establishing the 
standard for each director's approval of ownership or voting rights in 
excess of the limitations in the ICE Group Certificate do not currently 
require a director to consider whether such approval would impair the 
ability of ICE Inc. and NYX Holdings to comply with the Exchange Act 
and the rules and regulations thereunder.\34\ Also, the provisions in 
the ICE Group Bylaws establishing the standards for the Board's 
approval of any action by ICE Group does not currently require a 
director to take into consideration the effect that such action would 
have on the ability of ICE Inc. and NYX Holdings (a) to engage in 
conduct that fosters and does not interfere with the ability of each 
such entity to prevent fraudulent and manipulative acts and practices 
in the securities markets; (b) to promote just and equitable principles 
of trade in the securities markets; (c) to foster cooperation and 
coordination with persons engaged in regulating, clearing, settling, 
processing information with respect to, and facilitating transactions 
in securities; (d) 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 (e) in general, to protect investors and the public 
interest.\35\ Under the Proposed Rule Change, the ICE Group Bylaws 
would be amended to add references to ICE Inc. and NYX Holdings in each 
such provision.\36\
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    \34\ ICE Group Certificate, Article V, Sections A.3(a)(i) and 
B.3(a)(i).
    \35\ ICE Group Bylaws, Section 3.14(a)(3).
    \36\ Resolutions of the Board of Directors of ICE Group 
approving these amendments are attached to the Proposed Rule Change 
as Exhibit 5D-2 (the ``ICE Group 2014 Resolutions''). The proposed 
amendments to the ICE Group Bylaws are attached as Exhibit 5F to the 
Proposed Rule Change. See Proposed ICE Group Bylaws 3.14(a)(3) and 
3.15(g).
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2. Statutory Basis
    NYSE MKT believes that this filing is consistent with Section 6(b) 
of the Exchange Act \37\ in general, and furthers the objectives of 
Section 6(b)(1) \38\ in particular, in that it enables NYSE MKT 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 NYSE MKT. With respect to the 
ability of the Commission to enforce the Exchange Act as it applies to 
the U.S. Regulated Subsidiaries after the Transfer, the U.S. Regulated 
Subsidiaries will operate in the same manner following the Transfer as 
they operate today. Thus, the Commission will continue to have plenary 
regulatory authority over the U.S. Regulated Subsidiaries, as is the 
case currently with these entities. The Proposed Rule Change is 
consistent with and will facilitate an ownership structure that will 
provide the Commission with appropriate oversight tools to ensure that 
the Commission will have the ability to enforce the Exchange Act with 
respect to each U.S. Regulated Subsidiary, its direct and indirect 
parent entities and its directors, officers, employees and agents to 
the extent they are involved in the activities of such U.S. Regulated 
Subsidiary.
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    \37\ 15 U.S.C. 78f(b).
    \38\ 15 U.S.C. 78f(b)(1).
---------------------------------------------------------------------------

    NYSE MKT also believes that this filing furthers the objectives of 
Section 6(b)(5) of the Exchange Act \39\ because the Proposed Rule 
Change summarized herein would be consistent with and facilitate a 
governance and regulatory

[[Page 5009]]

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.
---------------------------------------------------------------------------

    \39\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    NYSE MKT 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 relates to an internal reorganization of subsidiaries of ICE 
Group and is not designed to address any competitive issue in the U.S. 
securities markets, or have any impact on competition in those markets. 
The Proposed Rule Change is part of ICE Group's process to implement 
the Euronext Sale. The Euronext Sale will be subject to review and 
approval by multiple European regulators.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    NYSE MKT 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 up to 90 days after 
publication (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-NYSEMKT-2014-10 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-NYSEMKT-2014-10. 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 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-NYSEMKT-2014-10, and should 
be submitted on or before February 20, 2014.
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    \40\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\40\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-01811 Filed 1-29-14; 8:45 am]
BILLING CODE 8011-01-P