Court Opinion

ID: 9891598
Source: CourtListenerOpinion
Date Created: 2023-10-19 00:00:40.75315+00
Date Added: 2024-06-11T13:43:28.300505
License: Public Domain

Case: 21-60626      Document: 00516935890          Page: 1      Date Filed: 10/18/2023

            United States Court of Appeals
                 for the Fifth Circuit                                  United States Court of Appeals
                                                                                 Fifth Circuit

                                  ____________                                 FILED
                                                                         October 18, 2023
                                   No. 21-60626                           Lyle W. Cayce
                                  ____________                                 Clerk

   Alliance for Fair Board Recruitment; National Center
   for Public Policy Research,

                                                                         Petitioners,

                                        versus

   Securities and Exchange Commission,

                                                                        Respondent.
                   ______________________________

                       Petition for Review of an Order of
             the United States Securities and Exchange Commission
                              Agency No. 34-92590
                  ______________________________

   Before Stewart, Dennis, and Higginson, Circuit Judges.
   Stephen A. Higginson, Circuit Judge:
           The “fundamental purpose” of the Securities Exchange Act of 1934
   (Exchange Act), codified as amended at 15 U.S.C. § 78a et seq., is to enforce
   “a philosophy of full disclosure . . . in the securities industry.” Affiliated Ute
   Citizens of Utah v. United States, 406 U.S. 128, 151 (1972) (quoting SEC v.
   Capital Gains Rsch. Bureau, 375 U.S. 180, 186 (1963)); e.g., Lorenzo v. SEC,
   139 S. Ct. 1094, 1103 (2019); Kokesh v. SEC, 581 U.S. 455, 458 n.1 (2017);
   SEC v. Zandford, 535 U.S. 813, 819 (2002); Cent. Bank of Denver, N.A. v. First
   Interstate Bank of Denver, N.A., 511 U.S. 164, 171 (1994); Basic Inc. v.
   Levinson, 485 U.S. 224, 230 (1988); Santa Fe Indus., Inc. v. Green, 430 U.S.
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                                    No. 21-60626

   462, 477-78 (1977). Consistent with this goal, Nasdaq Stock Market, LLC
   (Nasdaq) proposed a rule that would require companies listed on its stock
   exchange to disclose information about their board members, as well as a rule
   that would give certain companies access to a board recruiting service. After
   the Securities and Exchange Commission (SEC or Commission) approved
   these rules, Alliance for Fair Board Recruitment (AFBR) and the National
   Center for Public Policy Research (NCPPR) petitioned for review. Because
   the SEC’s Approval Order complies with the Exchange Act and the
   Administrative Procedure Act (APA), the petitions are DENIED.
                                         I.
                                        A.
          Nasdaq is a private company that operates a securities exchange.
   Under the Exchange Act, a securities exchange must register with the SEC
   as a “national securities exchange” or seek an exemption. 15 U.S.C. § 78e.
   To be registered as a “national securities exchange,” the exchange must have
   rules that “are designed to prevent fraudulent and manipulative acts and
   practices, to promote just and equitable principles of trade, . . . to remove
   impediments to and perfect the mechanism of a free and open market and a
   national market system, and, in general, to protect investors and the public
   interest.” Id. § 78f(b)(5). But the rules must not be “designed to permit
   unfair discrimination between customers, issuers, brokers, or dealers, or to
   regulate by virtue of any authority conferred by [the Exchange Act] matters
   not related to the purposes of [the Exchange Act] or the administration of the
   exchange.” Id. And the rules must not “impose any burden on competition
   not necessary or appropriate in furtherance of the purposes of [the Exchange
   Act].” Id. § 78f(b)(8).
          The Exchange Act classifies “national securities exchange[s]” like
   Nasdaq as “self-regulatory organization[s]” (SROs). 15 U.S.C. § 78c(26).
   The rules of an SRO may be changed in two ways. The method at issue in
   this case, set out in 15 U.S.C. § 78s(b), permits SROs to propose their own

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   rules and obtain Commission approval. 1 Under 15 U.S.C. § 78s(b)(1), an
   SRO must file its proposed rule with the SEC, and the SEC must publish
   notice of the proposed rule and provide an opportunity for comment. After
   notice and comment, the SEC must either approve or disapprove the rule.
   The SEC “shall approve a proposed rule change of a self-regulatory
   organization if it finds that such proposed rule change is consistent with the
   requirements of this chapter and the rules and regulations issued under this
   chapter that are applicable to such organization.”                 15 U.S.C.
   § 78s(b)(2)(C)(i) (emphasis added). If the SEC does not make such a
   finding, it must disapprove the proposed rule. 15 U.S.C. § 78s(b)(2)(C)(ii).
                                             B.
          On December 4, 2020, Nasdaq filed proposed rule changes to address
   board diversity. See Notice of Filing of Proposed Rule Change to Adopt
   Listing Rules Related to Board Diversity, Release No. 34-90574, 85 Fed. Reg.
   80,472 (Dec. 11, 2020); Notice of Proposed Rule Change to Adopt Listing
   Rule IM-5900-9 to Offer Certain Listed Companies Access to a
   Complimentary Board Recruit Solution to Help Advance Diversity on
   Company Boards, Release No. 34-90571 (Dec. 4, 2020). The SEC solicited
   comments on the proposed rules and received many, including from
   NCPPR. 2
        On February 26, 2021, Nasdaq submitted a letter in response to
   comments received and filed a superseding amendment with modifications

          _____________________
          1
            The SEC may also “abrogate, add to, and delete from” the rules of an SRO by
   following the process set out in 15 U.S.C. § 78s(c).
          2
             See U.S. Secs. & Exch. Comm’n, Comments on NASDAQ Rulemaking (last
   modified      Aug.   6,    2021),   https://www.sec.gov/comments/sr-nasdaq-2020-
   081/srnasdaq2020081.htm; Justin Danhof & Scott Shepard, Nat’l Ctr. for Pub. Pol’y Res.,
   Re:      File      Number     SR-NASDAQ-2020-081         (Dec.         30,      2020),
   https://www.sec.gov/comments/sr-nasdaq-2020-081/srnasdaq2020081-8259890-
   227947.pdf.

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   and clarifications to the proposed rules based on those comments. 3 AFBR
   filed a seventy-eight-page opposition to the proposed rules. 4
          The proposed rules included two parts: (1) a “Board Diversity
   Proposal” (Disclosure Rule) and (2) a “Board Recruiting Service Proposal”
   (Recruiting Rule) (collectively, the Rules). Release No. 34-92590, 86 Fed.
   Reg. 44,424-25 (Aug. 12, 2021) (Approval Order) (footnote omitted). As the
   SEC explained:
          Under the Board Diversity Proposal, the Exchange proposes to
          require each Nasdaq-listed company, subject to certain
          exceptions, to publicly disclose in an aggregated form, to the
          extent permitted by applicable law, information on the
          voluntary self-identified gender and racial characteristics and
          LGBTQ+ status (all terms defined below) of the company’s
          board of directors. The Exchange also proposes to require each
          Nasdaq-listed company, subject to certain exceptions, to have,
          or explain why it does not have, at least two members of its
          board of directors who are Diverse, including at least one
          director who self-identifies as female and at least one director
          who self-identifies as an Underrepresented Minority or
          LGBTQ+. Under the Board Recruiting Service Proposal, the
          Exchange proposes to provide certain Nasdaq-listed
          companies with one year of complimentary access for two users
          to a board recruiting service, which would provide access to a
           _____________________
           3
            See Jeffrey S. Davis, Senior Vice President, Senior Deputy Counsel, Nasdaq,
   Response to Comments and Notice of Filing of Amendment No. 1 of Proposed Rule
   Change to Adopt Listing Rules Related to Board Diversity (Feb. 26, 2021),
   https://www.sec.gov/comments/sr-nasdaq-2020-081/srnasdaq2020081-8425992-
   229601.pdf
           4
            See All. for Fair Bd. Recruitment, Comments Submitted on Behalf of Alliance for
   Fair Board Recruitment (Apr. 6, 2021), https://www.sec.gov/comments/sr-nasdaq-2020-
   081/srnasdaq2020081-8639478-230941.pdf.

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          network of board-ready diverse candidates for companies to
          identify and evaluate.
   Id.
          Under the proposed rules,
          “Diverse” would be defined to mean an individual who self-
          identifies in one or more of the following categories: (i) Female,
          (ii) Underrepresented Minority, or (iii) LGBTQ+. . . .
          “Female” would be defined to mean an individual who self-
          identifies her gender as a woman, without regard to the
          individual’s designated sex at birth; “Underrepresented
          Minority” would be defined to mean an individual who self-
          identifies as one or more of the following: Black or African
          American, Hispanic or Latinx, Asian, Native American or
          Alaska Native, Native Hawaiian or Pacific Islander, or Two or
          More Races or Ethnicities; and “LGBTQ+” would be defined
          to mean an individual who self-identifies as any of the
          following: Lesbian, gay, bisexual, transgender, or as a member
          of the queer community.
   Id. at 44,425 n.18.
           On August 6, 2021, the SEC issued an Approval Order, approving the
   proposed rule changes. See id. at 44,424-25. The SEC found that the Board
   Diversity Proposal “would establish a disclosure-based framework for
   Nasdaq-listed companies that would contribute to investors’ investment and
   voting decisions.” Id. at 44,428. The SEC recognized that “the proposal
   may have the effect of encouraging some Nasdaq-listed companies to
   increase diversity on their boards” but concluded that “the proposed rules
   do not mandate any particular board composition.” Id. Companies that
   failed to meet the objectives set forth in the proposed rule could nonetheless
   comply with the rule by explaining why the company does not meet the

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   objectives, “and the Exchange would not assess the substance of the
   company’s explanation.” Id. Moreover, as explained in the Approval Order:
         [W]hile there would be costs to listing elsewhere, companies
         that object to providing any explanation can choose instead to
         list on a different exchange. No company is required to list on
         Nasdaq. Rather, exchanges compete for listings, with four
         exchanges that currently list securities of operating companies
         and nine exchanges that have rules for the listing of issuers on
         the exchange. Listing exchanges compete with each other for
         listings in many ways, including listing fees, listing standards,
         and listing services. In approving proposed rule changes
         relating to complimentary services that exchanges offer to
         issuers, including issuers that switch listing markets, the
         Commission has also explained that exchanges are responding
         to competitive market pressures. . . . [T]he current proposals
         may provide another way in which the exchanges compete for
         listings.
   Id. The SEC ultimately concluded the proposed rules were consistent with
   the Exchange Act and approved the Rules. Id. at 44,432-33.
          On August 10, 2021, AFBR petitioned this court for review of the
   Approval Order. On September 8, 2021, this court granted Nasdaq leave to
   intervene on behalf of the SEC. On October 27, 2021, NCPPR’s petition was
   transferred from the Third Circuit to this court.
          Petitioners contend that the Rules violate the First and Fourteenth
   Amendments to the U.S. Constitution and violate the SEC’s statutory
   obligations under the Exchange Act and the APA.

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                                               II.
          We turn first to petitioners’ constitutional claims. 5 We review
   constitutional objections to agency actions de novo. See Emp. Sols. Staffing
   Grp. II, L.L.C. v. Off. of Chief Admin. Hearing Officer, 833 F.3d 480, 484 (5th
   Cir. 2016); Trinity Marine Prods., Inc. v. Chao, 512 F.3d 198, 201 (5th Cir.
   2007).
          In general, the Constitution only applies to state action. This doctrine
   “distinguishes the government from individuals and private entities,” and
   “[b]y enforcing that constitutional boundary[,] . . . protects a robust sphere
   of individual liberty.” Manhattan Cmty. Access Corp. v. Halleck, 139 S. Ct.
   1921, 1928 (2019).
          Petitioners have two state-action theories: first, that Nasdaq is itself a
   government entity bound by the Constitution; and second, that Nasdaq’s
   Rules in this case are attributable to the government such that constitutional
   restraints apply. Neither prevails.

           _____________________
           5
              As a threshold matter, the parties dispute whether NCPPR has standing. In its
   opening brief, NCPPR addressed standing only by stating that “NCPPR is a non-profit
   organization incorporated in Delaware and located in Washington, D.C. It both holds stock
   and exercises its voting rights in Nasdaq-listed companies.” The SEC argues that this
   statement fails to demonstrate standing because statements by counsel in briefs are not
   evidence, Skyline Corp. v. NLRB, 613 F.2d 1328, 1337 (5th Cir. 1980), and, even if such
   statements were evidence, “NCPPR does not state what Nasdaq-listed companies it owns
   stock in, whether those companies already meet Nasdaq’s diversity objectives, or how they
   plan to respond to the rules.” The SEC thus argues that NCPPR has forfeited the issue of
   its standing, and “only the arguments raised by AFBR are properly before the Court.” In
   its reply brief, NCPPR argues that it has not forfeited standing, and attaches a declaration
   by Scott Shepard, the director of NCPPR’s Free Enterprise Project, stating in part that
   NCPPR “held shares in about 30 Nasdaq-listed companies.” We opt to consider NCPPR’s
   declaration submitted in reply, because it appears that NCPPR’s cursory treatment of
   standing in its opening brief is explained by “a good-faith (though mistaken) belief that
   standing would be both undisputed and easy to resolve.” Ctr. for Biological Diversity v.
   EPA, 937 F.3d 533, 542 n.4 (5th Cir. 2019). And Shepard’s declaration suffices to establish
   NCPPR’s standing to sue.

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                                         A.
          First, NCPPR contends that Nasdaq itself “is a state actor constrained
   to act within constitutional bounds because it is a creature of federal law,
   serves federal interests, and is controlled by a federal agency.” This theory
   turns not on the SEC Approval Order, but rather on Nasdaq’s characteristics
   and its relationship to the SEC. In accord with the many courts that have
   considered this question, we hold that Nasdaq is not a state actor.
           Nasdaq is a private entity. It is a private limited liability company
   wholly owned by Nasdaq, Inc., a publicly traded corporation. Nasdaq’s
   board of directors is selected by its broker-dealer members and by Nasdaq,
   Inc., and companies wishing to list on Nasdaq do so by entering into contracts
   with Nasdaq. While Nasdaq must register with and is heavily regulated by
   the SEC, the Supreme Court has made clear that a private entity does not
   become a state actor merely by virtue of being regulated. “[T]he ‘being
   heavily regulated makes you a state actor’ theory of state action is entirely
   circular and would significantly endanger individual liberty and private
   enterprise.” Halleck, 139 S. Ct. at 1932.
           Based on similar facts, our fellow circuits have found that SROs
   registered with the SEC are private entities, not state actors. For instance,
   the Second Circuit has determined, and subsequently affirmed in several
   decisions, that SROs are not state actors. In Desiderio v. NASD, Inc., 191 F.3d
   198, 206 (2d Cir. 1999), a plaintiff claimed that her constitutional rights were
   violated by the mandatory arbitration clause in a form used by the National
   Association of Securities Dealers, Inc. (NASD), a “self-regulatory private
   corporation registered with the [SEC] as a national securities association.”
   Id. at 201. The court held that the plaintiff’s “constitutional arguments all
   fail because the requisite state action is absent.” Id. at 206. In reaching this
   conclusion, the Second Circuit held that the NASD is a private entity:
          The NASD is a private actor, not a state actor. It is a private
          corporation that receives no federal or state funding. Its

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          creation was not mandated by statute, nor does the government
          appoint its members or serve on any NASD board or
          committee. Moreover, the fact that a business entity is subject
          to ‘extensive and detailed’ state regulation does not convert
          that organization’s actions into that of the state. . . . Indeed, we
          have already ruled that the New York Stock Exchange—a self-
          regulatory private organization like the NASD—is not a state
          actor.
   Id. (citations omitted); see also D.L. Cromwell Invs., Inc. v. NASD Regulation,
   Inc., 279 F.3d 155, 162 (2d Cir. 2002) (“It has been found, repeatedly, that
   the NASD itself is not a government functionary.” (collecting cases));
   Perpetual Sec., Inc. v. Tang, 290 F.3d 132, 138 (2d Cir. 2002) (“It is clear that
   NASD is not a state actor and its requirement of mandatory arbitration is not
   state action.”). Other circuits have reached similar conclusions. See Epstein
   v. SEC, 416 F. App’x 142, 148 (3d Cir. 2010) (unpublished) (“Epstein cannot
   bring a constitutional due process claim against the NASD, because the
   NASD is a private actor, not a state actor.” (cleaned up)); First Jersey Secs.,
   Inc. v. Bergen, 605 F.2d 690, 698 (3d Cir. 1979) (noting that “Congress
   preferred self-regulation by a private body over direct involvement of a
   governmental agency”); Jones v. SEC, 115 F.3d 1173, 1183 (4th Cir. 1997)
   (“While the NASD is a closely regulated corporation, it is not a
   governmental agency, but rather a private corporation organized under the
   laws of Delaware. As such, it is highly questionable whether its disciplinary
   action of members, even if it is considered to be a quasi-public corporation,
   can implicate the Double Jeopardy Clause.”); Bernstein v. Lind-Waldock &
   Co., 738 F.2d 179, 186 (7th Cir. 1984) (explaining that a securities or
   commodity exchange is not “an arm of the federal government” because
   “the purpose of the federal law is to strengthen the power and responsibility
   of the exchange in performing a policing function that preexisted federal
   regulation,” and ultimately holding that “the action of the Mercantile
   Exchange was not the action of the federal government for purposes of the

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   due process clause of the Fifth Amendment”); Rosee v. Bd. of Trade of City of
   Chi., 311 F.2d 524, 526 (7th Cir. 1963) (“The activities of the [Chicago]
   Board of Trade. . . do not fall within the category of governmental action.”);
   Galuska v. N.Y. Stock Exch., 210 F.3d 374, 2000 WL 347851, at *2 (7th Cir.
   2000) (stating in dicta that the “NYSE is not a governmental actor subject to
   the Constitution’s mandates”); Duffield v. Robertson Stephens & Co., 144 F.3d
   1182, 1200-02 (9th Cir. 1998), overruled on other grounds by EEOC v. Luce,
   Forward, Hamilton & Scripps, 345 F.3d 742 (9th Cir. 2003) (considering
   NASD and NYSE’s arbitration rules and concluding that there was no state
   action); Roberts v. AT&T Mobility LLC, 877 F.3d 833, 843 (9th Cir. 2017)
   (approvingly citing Duffield’s reasoning on state action). 6
           Petitioners are incorrect that our court departed from this line of
   authority in Intercontinental Industries, Inc. v. American Stock Exchange, 452
   F.2d 935 (5th Cir. 1971). In that case, petitioner Intercontinental Industries,
   Inc. (INI) asked the court “to review an order of the [SEC] granting the
   American Stock Exchange the right to strike the common stock of INI from
   listing and registration on the Exchange.” Id. at 937. INI argued that the
   procedure followed by the SEC and the Exchange was one that “denied [INI]
   the full and fair hearing demanded by the due process of the Constitution.”

           _____________________
           6
             Petitioners filed a 28(j)-letter directing this court to a three-sentence order from
   a split D.C. Circuit panel, which granted an emergency injunction prohibiting the Financial
   Industry Regulatory Authority (“FINRA”) from expelling one of its members pending
   appeal. See Alpine Securities Corp. v. Financial Industry Regulatory Authority, No. 23-5129
   (D.C. Cir. July 5, 2023). In addition to the different procedural posture of that case (an
   injunction pending appeal) and the fact that it involves a different organization, the D.C.
   Circuit appeal relates to an enforcement proceeding, which is not at issue here. To the
   extent that Petitioner relies on the reasoning identified in one judge’s concurrence—that
   FINRA may be a state actor—that view represents the opinion of one judge at a preliminary
   stage of a case, prior to merits briefing, involves a wholly separate issue—an expedited
   enforcement action adjudicated by FINRA—and contradicts decades of case law across
   circuits. See discussion supra II.A.

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   Id. at 940. Before reaching the merits of INI’s due-process claim, the court
   said:
           [T]he Exchange’s position that constitutional due process is
           not required since the Exchange is not a governmental agency
           is clearly contrary to numerous court decisions. See Burton v.
           Wilmington Parking Authority, 365 U.S. 715 (1961); Colon v.
           Tompkins Square Neighbors, Inc., 294 F. Supp. 134 (S.D.N.Y.
           1968); McQueen v. Druker, 438 F.2d 781 (1st Cir. 1971). The
           intimate involvement of the Exchange with the [SEC] brings it
           within the purview of the Fifth Amendment controls over
           governmental due process.
   Id. at 941. The court also listed examples illustrating the SEC’s statutory
   relationship with the American Stock Exchange. Id. at 941 n.9. But in the
   fifty years since Intercontinental was written, the law upon which this passage
   relied has changed. Intercontinental invokes Burton v. Wilmington Parking
   Authority, where the Supreme Court attributed state action to a private entity
   because the state had “so far insinuated itself into a position of
   interdependence” with a private entity that “it must be recognized as a joint
   participant in the challenged activity.” 7 365 U.S. 715, 725 (1961). This no
   longer reflects the governing standard. As the Supreme Court explained in
   American Manufacturers Insurance Co. v. Sullivan, “Burton was one of our
   early cases dealing with ‘state action’ under the Fourteenth Amendment,
   and later cases have refined the vague ‘joint participation’ test embodied in
   that case.” 526 U.S. 40, 57 (1999). Specifically, after the Supreme Court’s
   decisions in Jackson v. Metropolitan Edison Co., 419 U.S. 345 (1974), Rendell-
   Baker v. Kohn, 457 U.S. 830 (1982), and Blum v. Yaretsky, 457 U.S. 991
   (1982), state action requires “affirmative” state “encouragement”—thus,
           _____________________
           7
             The other two cases cited by Intercontinental, Colon v. Tompkins Square Neighbors,
   Inc., 294 F. Supp. 134, 137-38 (S.D.N.Y. 1968), and McQueen v. Druker, 438 F.2d 781, 782-
   84 (1st Cir. 1971), also rely on Burton.

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   joint participation exists where private acts “not only contribute[] to, but also
   [a]re indispensable elements in, the financial success of a governmental
   agency.” Frazier v. Bd. of Trs. of Nw. Miss. Reg’l Med. Ctr., 765 F.2d 1278,
   1286-88 (5th Cir.) (citations omitted), amended in part, 777 F.2d 329 (5th Cir.
   1985). And as we explain, supra Section II.B, under the modern doctrine, the
   government did not act jointly with the SEC in this case.
           Moreover, this passage in Intercontinental is dicta. 452 F.2d at 941.
   The court clarified that “rather than decide” whether the exchange was a
   state actor, the court took no position on the issue. See id. Indeed, the court
   went on to reject INI’s due-process arguments on the merits. 8 Id. at 942–43.
   Because the state-action observation was not a necessary component of the
   court’s holding, the language on which petitioners rely is dicta. See In re
   Hearn, 376 F.3d 447, 453 (5th Cir. 2004) (noting that “obiter dictum” is a
   “judicial comment made during the course of delivering a judicial opinion,
   but one that is unnecessary to the decision in the case and therefore not
   precedential” (quoting Black’s Law Dictionary 1100 (7th ed. 1999)).
   Judge Friendly recognized as much a few years after Intercontinental was
   decided, characterizing the statement as dictum and casting doubt on the
   proposition in light of intervening Supreme Court precedent. See United
   States v. Solomon, 509 F.2d 863, 871 (2d Cir. 1975) (“We need not here decide
   whether stock exchanges may be subject to some due process requirements
   for certain types of action as stated in dictum in Intercontinental

           _____________________
           8
             In Rooms v. SEC, the Tenth Circuit made a similar move, pretermitting the state-
   action question in the context of a due-process challenge to SEC action. There, the
   petitioner argued to the Tenth Circuit that the SEC had violated his due-process rights by
   upholding a permanent bar that the NASD National Adjudicatory Council imposed on him
   as a sanction for misconduct. 444 F.3d 1208, 1212, 1213–14 (10th Cir. 2006). The court
   stated that “[d]ue process requires that an NASD rule give fair warning of prohibited
   conduct before a person may be disciplined for that conduct” and concluded that,
   “[b]ecause Mr. Rooms had fair notice that his conduct was contrary to [one of NASD’s
   rules], we reject his due process argument.” Id. at 1214. But the court did not discuss state
   action, much less explain if NASD’s rules constituted state action.

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   Industries . . . , although the recent decision in Jackson v. Metropolitan Edison
   Co., 419 U.S. 345 (1974), would suggest the need for some caution on this
   score.”).
          AFBR asserts that this court has cited Intercontinental “for its
   constitutional holding” in two subsequent cases, and that these cases are
   therefore “independent precedents” that bind us on the state-action
   question presented here. But even assuming that Intercontinental is good law,
   these cases do not turn Intercontinental’s dicta into precedent. AFBR first
   cites Harding v. American Stock Exchange, Inc., 527 F.2d 1366 (5th Cir. 1976).
   In Harding, the plaintiffs brought various claims against the American Stock
   Exchange for suspending the trading of its stock and for applying to delist its
   stock from the exchange. Id. at 1366–67. In affirming the district court’s
   dismissal of the action, the court held that plaintiffs lacked a federal cause of
   action for their constitutional due-process challenge. Id. at 1370. The court
   then wrote, in a footnote: “We note that [the plaintiff] could have raised
   alleged due process violations in an appeal from the SEC delisting order
   under [15 U.S.C. § 78y]” and cited Intercontinental. Id. at 1370 n.5. This
   passing remark about a hypothetical challenge not before the court has no
   precedential effect. See In re Hearn, 376 F.3d at 453.
           Second, AFBR cites North Alabama Express, Inc. v. United States, 585
   F.2d 783 (5th Cir. 1978). There, the court cited Intercontinental, among other
   cases, for the proposition that “[i]n the administrative context, due process
   requires that interested parties be given a reasonable opportunity to know the
   claims of adverse parties and an opportunity to meet them.” Id. at 786. The
   court then explained that these requirements are embodied in certain
   sections of the Interstate Commerce Act. Id. There is no mention of
   Intercontinental’s state-action language, much less a statement or even
   insinuation that stock exchanges are state actors by virtue of their
   relationship to the SEC. This case too fails to give binding effect to the
   passage in question from Intercontinental.

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          The Supreme Court’s Amtrak cases do not help the petitioners either.
   In Lebron v. National Railroad Passenger Corp., 513 U.S. 374 (1995), and
   Department of Transportation v. Association of American Railroads, 575 U.S. 43
   (2015), the Supreme Court examined whether Amtrak qualifies as a state
   actor for constitutional purposes. Holding that it does, the Court in Lebron
   wrote that where “the Government creates a corporation by special law, for
   the furtherance of governmental objectives, and retains for itself permanent
   authority to appoint a majority of the directors of that corporation, the
   corporation is part of the Government for purposes of the First
   Amendment.” 513 U.S. at 400. The Court elaborated in American Railroads:
          Given the combination of these unique features and its
          significant ties to the Government, Amtrak is not an
          autonomous private enterprise. Among other important
          considerations, its priorities, operations, and decisions are
          extensively supervised and substantially funded by the political
          branches. A majority of its Board is appointed by the President
          and confirmed by the Senate and is understood by the
          Executive to be removable by the President at will. Amtrak was
          created by the Government, is controlled by the Government,
          and operates for the Government’s benefit. Thus, in its joint
          issuance of the metrics and standards with the FRA, Amtrak
          acted as a governmental entity for purposes of the
          Constitution’s separation of powers provisions.
   575 U.S. at 53–54.
          Nasdaq is different. Although Nasdaq and other SROs must register
   with the SEC, they were not created by the government. See Free Enter. Fund
   v. Pub. Co. Acct. Oversight Bd., 561 U.S. 477, 484-85 (2010) (explaining that,
   although SROs are “subject to Commission oversight,” they are not
   “Government-created, Government-appointed” entities). Nor does Nasdaq
   operate under the direction or control of the SEC in the manner described in
   Lebron and American Railroads. Its board members are not appointed or

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   confirmed by government officials, nor are they removable by the
   government. And although SROs must register with and have their rules
   approved by the SEC, it is well established that “being regulated by the State
   does not make one a state actor.” Halleck, 139 S. Ct. at 1932; see also Jackson,
   419 U.S. at 350 (explaining that even where “many particulars” of a private
   company’s business are “subject to extensive state regulation,” the company
   does not become a government entity). So Nasdaq bears no resemblance to
   Amtrak. See Perpetual Sec., 290 F.3d at 138 (“It is clear that NASD is not a
   state actor and its requirement of mandatory arbitration is not state
   action. . . . Lebron is clearly distinguishable; Amtrak, the corporation at issue
   in Lebron, was created by the government ‘by special law for the furtherance
   of government objectives,’ and the government ‘retain[ed] for itself
   permanent authority to appoint a majority of the directors of’ Amtrak. There
   is no commonality between NASD and Amtrak.” (alteration in original)
   (citation omitted)). Indeed, Nasdaq has fewer government ties than other
   entities the Supreme Court has held not to be state actors. See, e.g., San
   Francisco Arts & Athletics, Inc. v. U.S. Olympic Comm., 483 U.S. 522, 542-44
   (1987) (holding that a federally chartered, regulated, and subsidized
   corporation was not a state actor).
         Finally, petitioners argue that Nasdaq must qualify as a state actor
   because otherwise its authority to self-regulate would violate the private
   nondelegation doctrine. According to petitioners, either Nasdaq is a state
   actor subject to constitutional scrutiny, or it is a private actor
   unconstitutionally exercising government power; the SEC and Nasdaq may
   not—the argument goes— “have it both ways.” 9

           _____________________
           9
             To be clear, because petitioners rely on this “either-or” proposition to establish
   state action and do not ask us to strike down Nasdaq’s Rules, the SEC’s Approval Order,
   or the Exchange Act on private nondelegation grounds, there is no private nondelegation
   challenge properly before us in this case.

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          But petitioners cite no authority for the proposition that a self-
   regulating entity subject to government oversight must either exercise
   delegated governmental authority or be a state actor. And it’s unsurprising
   that the petitioners cannot find a case to back up this catch-22 because the
   private-nondelegation and state-action inquiries are distinct. Under the
   private nondelegation doctrine, “[a] federal agency may not ‘abdicate its
   statutory duties’ by delegating them to a private entity.” Texas v. Rettig, 987
   F.3d 518, 531 (5th Cir. 2021) (quoting Sierra Club v. Lynn, 502 F.2d 43, 59
   (5th Cir. 1974)). The state-action doctrine, by contrast, asks whether the
   challenged conduct is fairly attributable to the government. See Am. Mfrs.
   Ins. Co. v. Sullivan, 526 U.S. 40, 50 (1999). Petitioners fail to explain why
   Nasdaq cannot be a private entity whose conduct, while subject to
   government regulation, is neither an exercise of the SEC’s government
   authority nor fairly attributable to the SEC. 10 The Second and Third Circuits
   have each impliedly found as much by holding that SROs are not state actors
   and that SROs do not exercise unconstitutional delegations of legislative
   power. See R.H. Johnson & Co. v. SEC, 198 F.2d 690, 695 (2d Cir.), cert.
   denied, 344 U.S. 855 (1952) (“In the light of the statutory provisions
   concerning (a) the Commission’s power, according to reasonably fixed
   statutory standards, to approve or disapprove of the association’s Rules, and

           _____________________
           10
              Nor does the Sixth Circuit’s recent decision in Oklahoma v. United States, 62
   F.4th 221 (6th Cir. 2023) support petitioners’ private nondelegation argument. AFBR filed
   a Rule 28(j) letter alerting us to the Oklahoma decision, contending that it supports
   petitioners’ position that constitutional restraints apply to Nasdaq’s Rules and the SEC’s
   approval of the Rules. But Oklahoma is inapposite. There, the Sixth Circuit considered a
   private nondelegation challenge to the rulemaking authority of the Horseracing Authority,
   a private entity regulated by the Federal Trade Commission. Id. at 225. In rejecting the
   nondelegation challenge, the court discussed the relationship between SROs and the SEC,
   noting that “[i]n case after case, the courts have upheld this arrangement, reasoning that
   the SEC’s ultimate control over the rules and their enforcement makes the SROs
   permissible aides and advisors.” Id. at 229 (citations omitted). The case weighs against
   petitioners’ assertions regarding private nondelegation and says nothing at all about state
   action.

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   (b) the Commission’s review of any disciplinary action, we see no merit in
   the contention that the Act unconstitutionally delegates power to
   [NASD].”); First Jersey Sec., Inc. v. Bergen, 605 F.2d 690, 697 (3d Cir. 1979),
   cert. denied, 444 U.S. 1074 (1980). Petitioners give us no reason to reach a
   different result here.
          Accordingly, we hold that Nasdaq is not a state actor subject to
   constitutional constraints.
                                         B.
           Petitioners argue in the alternative that the SEC’s involvement with
   and approval of Nasdaq’s Rules render the Rules subject to constitutional
   scrutiny. This is only so if the Rules are “fairly attributable to the State.”
   Sullivan, 526 U.S. at 50. For this standard to be satisfied, there must be “a
   sufficiently close nexus between the State and the challenged action of the
   regulated entity.” Id. at 52 (citation omitted). Such a close nexus exists “in
   a few limited circumstances—including, for example, (i) when the private
   entity performs a traditional, exclusive public function; (ii) when the
   government compels the private entity to take a particular action; or (iii)
   when the government acts jointly with the private entity.” Halleck, 139 S.
   Ct. at 1928 (internal citations omitted).
          None of these conditions is met here. First, exchange listing standards
   are not “a traditional, exclusive public function.” Id. The New York Stock
   Exchange was founded in 1792, adopted a constitution in 1817, and
   promulgated rules for listed companies. See Am. Bar Ass’n, Special Study on
   Market Structure, Listing Standards and Corporate Governance, 57 Bus. Law.
   1487, 1497 (2002); 69 Fed. Reg. 71,256, 71,257 (Dec. 8, 2004). Stock
   exchanges then existed for over one hundred years as private associations
   regulating their own members before the SEC was created in 1934. See 4
   Thomas Lee Hazen, Law Sec. Reg. § 14:8 (2022). Rules like the
   ones at issue in this case are therefore not “traditionally the exclusive

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   prerogative of the State.” Frazier, 765 F.2d at 1285 (emphasis omitted)
   (quoting Rendell-Baker v. Kohn, 457 U.S. 830, 842 (1982)).
          Next, this is not a case where “the government compel[led] the
   private entity to take a particular action.” Halleck, 139 S. Ct. at 1928 (citing
   Blum v. Yaretsky, 457 U.S. 991, 1004-05 (1982)). Far from it—Nasdaq came
   up with and proposed the Rules on its own.
          Petitioners attempt to show that the SEC in fact compelled Nasdaq to
   draft these Rules by pointing to the comments of two individual
   commissioners, Allison Herren Lee and Caroline Crenshaw, who had
   previously spoken in favor of diversity disclosure policies in the context of an
   SEC rule. The notice of Nasdaq’s proposed Rules appears to reference those
   comments in a list of reasons for the proposal. See 85 Fed. Reg. at 80,472 &
   n.7. Nasdaq’s reasons included its view that increased diversity results in
   “an increased variety of fresh perspectives, improved decision making and
   oversight, and strengthened internal controls,” as well as its “observ[ation]
   [of] recent calls from SEC commissioners and investors for companies to
   provide more transparency regarding board diversity.” Id. at 80,472-73.
           Because these comments were first mentioned in NCPPR’s reply
   brief, petitioners forfeited this argument. See Guillot ex rel. T.A.G. v. Russell,
   59 F.4th 743, 754 (5th Cir. 2023).
          But even if we were to consider this argument, the commissioners’
   remarks do not show that SEC compelled Nasdaq’s Rules. In making the
   cited statements, the individual commissioners were not speaking on behalf
   of the SEC as a body; rather, they were writing in a dissenting posture from
   the promulgation of a final rule. See, e.g., Comm’r Allison Herren Lee, U.S.
   Secs. & Exch. Comm’n, Statement, Regulation S-K and ESG Disclosures:
   An         Unsustainable         Silence        (Aug.       26,       2020),
   https://www.sec.gov/news/public-statement/lee-regulation-s-k-2020-08-
   26#_ftnref15. There is no evidence that the SEC as an entity weighed in on
   the merits of diversity disclosure rules, much less that Nasdaq was

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   “compelled” or even “significant[ly] encourage[d]” by the SEC to take this
   particular action. See Halleck, 139 S. Ct. at 1928; Blum, 457 U.S. at 1004
   (explaining that state action occurs if the government “exercise[s] coercive
   power” or “provide[s] such significant encouragement, either overt or
   covert, that the choice must in law be deemed to be that of the State”). Thus,
   the commissioners’ comments do not transform Nasdaq’s Rules into state
   action. See Jackson, 419 U.S. at 357 (“Approval by a state utility
   commission . . . , where the commission has not put its own weight on the
   side of the proposed practice by ordering it, does not transmute a practice
   initiated by the utility and approved by the commission into ‘state action.’”);
   cf. Skinner v. Ry. Lab. Execs.’ Ass’n, 489 U.S. 602, 615–16 (1989) (finding
   sufficient “encouragement, endorsement, and participation” that implicated
   the Fourth Amendment where the government “removed all legal barriers”
   to testing on trains; “made plain not only its strong preference for testing,
   but also its desire to share the fruits of such intrusions”; and “mandated that
   the railroads not bargain away” their ability to test).
           Nor is this a case where the government has acted jointly or is
   otherwise pervasively entwined with the private entity such that the
   challenged conduct is attributable to the government. See Halleck, 139 S. Ct.
   at 1928 (citing Lugar v. Edmonson Oil Co., 457 U.S. 922, 941–42 (1982)).
   Petitioners cite Brentwood Academy v. Tennessee Secondary School Athletic
   Association, in which the Supreme Court explained that it has “treated a
   nominally private entity as a state actor when it is controlled by an agency of
   the State, when it has been delegated a public function by the State, when it
   is entwined with governmental policies, or when the government is entwined
   in its management or control.” 531 U.S. 288, 296 (2001) (cleaned up). But
   these circumstances are absent here. Nasdaq generated the Rules itself, and
   then submitted them to the SEC for approval, as required by statute. The
   SEC engaged in its statutory review and issued the Approval Order. This
   yes-or-no approval process does not reflect the degree of entwinement
   required to turn the Rules into state action. See Sullivan, 526 U.S. at 52, 54

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   (explaining that “[a]ction taken by private entities with the mere approval or
   acquiescence of the State is not state action,” and that state “permission of
   a private choice cannot support a finding of state action”); Flagg Bros., Inc. v.
   Brooks, 436 U.S. 149, 165 (1978) (holding that a state is not responsible for a
   private decision that state law “permits but does not compel”); Jackson, 419
   U.S. at 357 (holding that a determination that a utility was “authorized to
   employ” a business practice did not make the practice state action); Blum,
   457 U.S. at 1004–05 (“Mere approval of or acquiescence in the initiatives of
   a private party is not sufficient to justify holding the State responsible for
   those initiatives.”); see also Desiderio, 191 F.3d at 206–07 (concluding that
   NASD’s challenged rule was not fairly attributable to the state because “no
   SEC rule or action that has been called to our attention encourages the NASD
   to compel arbitration,” and because “the arbitration clause in Form U-4 was
   drafted by the NASD in cooperation with other self-regulatory organizations,
   with no encouragement from the SEC,” and noting that though the rule “was
   subject to approval by the SEC, from which fact plaintiff infers that state
   action is present[,] [s]imply because the SEC approved the arbitration clause
   in Form U-4 is not enough. . . . The SEC’s ‘[m]ere approval’ of Form U-4 is
   ‘not sufficient’ to justify holding the state liable for effects of the arbitration
   clause.” (citations omitted)); Perpetual Sec., 290 F.3d at 139 (“Because
   NASD is a private actor and because there is no nexus between its challenged
   action (compulsory arbitration) and the state, Perpetual’s claim of a due
   process violation is patently without merit.”); Bernstein, 738 F.2d at 186
   (finding that the Fifth Amendment due process clause did not apply to the
   Mercantile Exchange because “the fact that it is heavily regulated by a federal
   commission will not do, as that would bring under the Fifth Amendment
   much of the private sector, ranging from hospitals to railroads”). And it does
   not matter, as NCPPR contends, that the SEC’s review is “active.” As the
   D.C. Circuit has explained, “[t]he Supreme Court has never held that the
   government becomes responsible for the actions of a third party due to the
   length or intensity of its attention to the actions of the party before approval.”
   Vill. of Bensenville v. FAA, 457 F.3d 52, 65 (D.C. Cir. 2006).

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          Finally, AFBR argues that because Nasdaq must enforce the Rules
   against its listed companies, subject to SEC sanctions if it fails to do so, the
   Rules are state action. AFBR relies on the Supreme Court’s decisions in
   Shelley v. Kraemer, 334 U.S. 1 (1948), and Moose Lodge No. 107 v. Irvis, 407
   U.S. 163 (1972), for this proposition. But this argument misses the mark. In
   Shelley, the Supreme Court found state action where state courts had
   enforced racially restrictive covenants. 334 U.S. at 19. Similarly, in Moose
   Lodge, the Supreme Court held that the Constitution prohibited “invok[ing]
   the sanctions of the State to enforce a concededly discriminatory private
   rule,” 407 U.S. at 179, and enjoined government enforcement of the
   discriminatory rule. Id. The SEC has the statutory authority under 15 U.S.C.
   § 78s(g) and (h) to sanction an SRO for failure to enforce its own rules.
   However, petitioners do not challenge these provisions or any enforcement
   action brought under these provisions as to Nasdaq’s Rules. Instead,
   petitioners seek constitutional review of the Rules themselves. Whether later
   enforcement of the Rules against Nasdaq would be state action is not a
   question presented by this petition, and so we will not touch it today.11

           _____________________
           11
                NCPPR argues in a similar vein that Nasdaq’s Rules are not private compacts
   but instead “operate[] . . . as federal law” because “companies must comply to participate
   in the securities market,” and Nasdaq faces penalties if it does not enforce its Rules.
   NCPPR cites Blount v. SEC, 61 F.3d 938 (D.C. Cir. 1995) in support of this contention and
   reiterated its reliance on this case at oral argument. Setting aside that this authority was
   cited for the first time in NCPPR’s reply brief, the case is unpersuasive. In Blount, the D.C.
   Circuit entertained a constitutional challenge to a rule of the Municipal Securities
   Rulemaking Board (“MSRB”), finding that the rule amounted to state action. Id. at 941.
   The court explained that the rule “operates not as a private compact among brokers and
   dealers but as federal law,” emphasizing that brokers and dealers are subject to financial,
   regulatory, and criminal penalties for failure to comply with MSRB rules. Id. The court
   concluded that the rule was “a government-enforced condition to any participation in a
   municipal securities career.” Id. (emphasis added). The same cannot be said about
   Nasdaq’s listing rules. The Rules govern the private relationships between Nasdaq and its
   listed companies. And should a company opt not to comply with the Rules, it can simply
   list on a different exchange. The Rules therefore do not operate as a government-enforced
   condition to participation in the market.

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                                  *        *         *
          The Supreme Court recently cautioned that “[e]xpanding the state-
   action doctrine beyond its traditional boundaries would expand
   governmental control while restricting individual liberty and private
   enterprise.” Halleck, 139 S. Ct. at 1934. We heed this warning in holding
   that the Rules drafted and proposed by Nasdaq, a private self-regulatory
   organization, are not attributable to the government and are therefore not
   subject to constitutional scrutiny.
                                          III.
         Petitioners also argue that the SEC’s Approval Order exceeds the
   agency’s authority under the Exchange Act and is arbitrary and capricious.
   We deny the petitions on these grounds.
                                          A.
          Under the APA, the SEC’s Approval Order may be set aside if it is
   “in excess of statutory . . . authority.” 5 U.S.C. § 706(2)(C). To determine
   the extent of the SEC’s statutory authority, we “rely on the conventional
   standards of statutory interpretation,” Chamber of Com. v. U.S. Dep’t of Lab.,
   885 F.3d 360, 369 (5th Cir. 2018), and “must give effect to the
   unambiguously expressed intent of Congress.” 12 Huawei Techs. USA, Inc. v.
   FCC, 2 F.4th 421, 433 (5th Cir. 2021) (internal quotation marks and citation
   omitted); accord Mex. Gulf Fishing Co. v. U.S. Dep’t of Com., 60 F.4th 956,
   963 (5th Cir. 2023).
          Petitioners raise four challenges to the SEC’s statutory authority.
   They argue (i) that the word “designed” in § 78f(b)(5) prohibits the SEC
   from considering investors’ subjective beliefs that disclosure would be
   valuable, (ii) that § 78f(b)(5) prohibits the SEC from approving an exchange
          _____________________
          12
              Because the Exchange Act unambiguously authorizes the SEC’s Approval
   Order, we do not consider whether, as NCPPR argues, deference to the SEC’s
   interpretation of the statute would be inappropriate.

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   rule that requires disclosure of information that would not be “material” for
   purposes of a securities fraud claim, (iii) that Congress did not explicitly
   authorize the SEC to approve a rule that infringes state sovereignty, and (iv)
   that Congress did not explicitly authorize the SEC to approve a rule that
   concerns “major policy questions of vast economic and political
   significance.”
          We reject these arguments and conclude that the SEC acted within its
   statutory authority in approving Nasdaq’s Rules. 13

           _____________________
           13
             NCPPR also contends that the Exchange Act violates the nondelegation doctrine.
   This argument fails. Under the nondelegation doctrine, Congress can give executive
   agencies “regulatory power” so long as Congress “provides an ‘intelligible principle’ by
   which the recipient of the power can exercise it.” Jarkesy v. SEC, 34 F.4th 446, 461 (5th
   Cir. 2022) (quoting Mistretta v. United States, 488 U.S. 361, 372 (1989)); see Consumers’
   Rsch. v. FCC, 63 F.4th 441, 447 (5th Cir. 2023). Here, Congress gave the SEC numerous
   parameters for approving exchange rules. See 15 U.S.C. § 78f(b). To name a few, as
   described earlier, a rule must be “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.” Id. § 78f(b)(5). A rule must not be
   “designed to permit unfair discrimination between customers, issuers, brokers, or
   dealers.” Id. A rule must not be “designed to . . . regulate by virtue of any authority
   conferred by this chapter matters not related to the purposes of this chapter or the
   administration of the exchange.” Id. And a rule must “not impose any burden on
   competition not necessary or appropriate in furtherance of the purposes of this chapter.”
   Id. § 78f(b)(8). This is more than enough guidance under this court’s and the Supreme
   Court’s nondelegation precedents. See, e.g., Gundy v. United States, 139 S. Ct. 2116, 2123–
   24 (2019) (plurality op.); Jarkesy, 34 F.4th at 462-63 (holding that the intelligible principle
   standard means “that a total absence of guidance is impermissible under the
   Constitution”); Consumers’ Rsch., 63 F.4th at 447. And the petitioners have litigated this
   case as though the SEC did have adequate guidance from Congress: the heart of the
   petitioners’ APA challenge is that the SEC acted arbitrarily and capriciously in concluding
   that Nasdaq’s Rules met the statute’s parameters.

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                                    No. 21-60626

                                          1.
          To start, NCPPR argues that the SEC improperly considered “[t]he
   subjective belief and desire of a subset of investors.” The Exchange Act
   requires that the SEC find that an exchange rule is “designed” to meet
   certain statutory objectives, see 15 U.S.C. § 78f(b)(5), and NCPPR contends
   that the SEC may only rely on “objective evidence” in doing so. NCPPR
   does not explain what counts as “objective evidence,” except to say
   “empirical evidence” is in bounds and “subjective belief” is not.
          But the Exchange Act does not limit the SEC to considering
   “objective evidence” in deciding whether to approve a proposed rule.
   Instead, “the findings of the [SEC] as to the facts, if supported by substantial
   evidence, are conclusive.”       15 U.S.C. § 78y(a)(4) (emphasis added).
   “Substantial evidence is such relevant evidence as a reasonable mind might
   accept to support a conclusion. It is more than a mere scintilla and less than
   a preponderance.” Meadows v. SEC, 119 F.3d 1219, 1224 (5th Cir. 1997)
   (quoting Riley v. Chater, 67 F.3d 552, 555 (5th Cir. 1995)). Under this
   standard, so long as evidence is relevant to the issue at hand, the SEC can
   rely on it.
          Domestic Securities, Inc. v. SEC illustrates the point. 333 F.3d 239
   (D.C. Cir. 2003). There, the petitioner challenged the SEC’s determination
   that a platform for displaying securities orders was technologically sound.
   See id. at 248. The petitioner argued that because the platform used an
   “obscure communications protocol” instead of the “standard industry
   protocol,” the platform would impose high costs on market participants. Id.
   at 249 (cleaned up). Relying on the fact that “several” networks for
   securities transactions “expressed an interest in fulfilling their quote display
   obligations through [the platform],” the SEC found that the platform was
   viable. Id. The D.C. Circuit thought that this was enough, holding that
   “[t]hese expressions of interest support the SEC’s conclusion” that the
   platform was viable, even though the platform did not use the “standard
   industry protocol.” Id. As Judge Sentelle explained, writing for the panel,

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   “[t]he making of policy decisions and the resolution of conflicting evidence”
   is the SEC’s job, not the court’s. Id.
           There is no textual basis in § 78f(b) for a separate “objective
   evidence” standard. NCPPR points to the requirement that an exchange rule
   be “designed to” meet certain goals,14 15 U.S.C. § 78f(b)(5), and argues that
   a rule is “designed to” meet a goal if there is a “close causal nexus” between
   the rule and the goal. Even if this were true, however, NCPPR gives no
   reason why such a “close causal nexus” would have to be supported by
   “objective evidence” as opposed to “substantial evidence,” which is all the
   plain text of the statute requires. 15 See id. § 78y(a)(4).
         Finally, NCPPR argues that the SEC cannot conduct an
   “independent review” of an exchange rule if the SEC relies on investors’
   “subjective belief” as evidence. We agree that “the SEC cannot simply

           _____________________
           14
             Once again, see supra note 12, these goals are “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.” 15 U.S.C. § 78f(b)(5).
           15
              The only case NCPPR cites in support of its theory, Business Roundtable v. SEC
   (“Business Roundtable II”), is unpersuasive. 647 F.3d 1144 (D.C. Cir. 2011). In Business
   Roundtable II, petitioners challenged an SEC rule that required “public companies to
   provide shareholders with information about, and their ability to vote for, shareholder-
   nominated candidates for the board of directors.” Id. at 1146. The court held that the SEC
   acted arbitrarily and capriciously for having failed “adequately to assess the economic
   effects of a new rule,” id. at 1148, in part because the SEC’s cost-benefit analysis was
   flawed. See id. at 1149–51. Among other mistakes, the SEC “relied upon insufficient
   empirical data when it concluded that [the rule] will improve board performance and
   increase shareholder value by facilitating the election of dissident shareholder nominees.”
   Id. at 1150. Specifically, the SEC relied “exclusively and heavily upon two relatively
   unpersuasive studies,” even though commenters submitted “numerous studies . . . that
   reached the opposite result.” Id. at 1150–51. So, Business Roundtable II faulted the SEC for
   misinterpreting the evidence and proceeding without enough evidence—not relying on the
   wrong type of evidence.

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   accept what a self-regulatory organization has done, but rather is obligated to
   make an independent review.” Susquehanna Int’l Grp., LLP v. SEC, 866
   F.3d 442, 446 (D.C. Cir. 2017) (emphasis added) (cleaned up). But the
   SEC’s obligation to look beyond an exchange’s self-serving statements does
   not otherwise restrict what evidence the SEC can consider as “relevant.”
   Meadows, 119 F.3d at 1224 (citation omitted). The SEC must independently
   analyze investor comments submitted during the administrative process.
   Still, the subjective opinions of those investors may be relevant evidence and
   sufficient to meet the substantial evidence standard, as they are here.
                                         2.
          Petitioners’ materiality challenge is also unconvincing. Their
   argument goes like this. Under the Exchange Act, the SEC cannot approve
   an exchange rule that is designed to “regulate by virtue of any authority
   conferred by [the Exchange Act] matters not related to the purposes of [the
   Exchange Act] or the administration of the exchange.” 15 U.S.C. § 78f(b)(5).
   According to the petitioners, “[a] disclosure requirement must be limited to
   ‘material’ information to fall within the scope of the Exchange Act,”
   meaning that there is “a substantial likelihood that a reasonable investor
   would consider the information important in making a decision to invest.”
   Petitioners argue that “information regarding directors’ race, gender, and
   sexuality is not material.” From these premises, petitioners conclude that
   the SEC acted outside its statutory authority in approving Nasdaq’s Rules.
          A “material misrepresentation (or omission)” is an element of
   securities fraud claims under certain parts of the Exchange Act and the
   SEC’s rules. Dura Pharms., Inc. v. Broudo, 544 U.S. 336, 341 (2005)
   (emphasis omitted) (discussing § 10(b), 15 U.S.C. § 78j(b), and Rule 10b-5,
   17 C.F.R. § 240.10b-5); see Heinze v. Tesco Corp., 971 F.3d 475, 483 (5th Cir.
   2020) (explaining that § 14(a), 15 U.S.C. § 78n(a), and Rule 14a-9, 17 C.F.R.
   § 240.14a-9(a), allow a claim based on “material omissions from proxy
   statements” under certain circumstances). And it’s true, as petitioners note,
   that this element is satisfied “if there is a substantial likelihood that a

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   reasonable investor would consider the information important in making a
   decision to invest.” SEC v. World Tree Fin., L.L.C., 43 F.4th 448, 459 (5th
   Cir. 2022) (internal quotation marks and citation omitted); see Levinson, 485
   U.S. at 240 (“[M]ateriality depends on the significance the reasonable
   investor would place on the withheld or misrepresented information.”); TSC
   Indus., Inc. v. Northway, Inc., 426 U.S. 438, 449 (1976) (similar).
            But a disclosure rule can be “related to the purposes of [the Exchange
   Act],” 15 U.S.C. § 78f(b)(5), even if the SEC does not find that the disclosure
   rule is limited to information that would be “material” in the securities fraud
   context. The “fundamental purpose” of the Exchange Act is “implementing
   a philosophy of full disclosure,” Levinson, 485 U.S. at 230 (internal quotation
   marks and citation omitted)—not just the disclosure of information sufficient
   to state a securities fraud claim. Indeed, the Exchange Act gives the SEC
   “very broad discretion to promulgate rules governing corporate disclosure.”
   Nat. Res. Def. Council, Inc. v. SEC, 606 F.2d 1031, 1050 (D.C. Cir. 1979). To
   give one example, for a security to be registered on an exchange, the SEC can
   require the issuer to disclose any information about “the organization,
   financial structure, and nature of the business” as is “necessary or
   appropriate in the public interest or for the protection of investors.” 15
   U.S.C. § 78l(b)(1)(A). Nothing in this provision or the provision governing
   exchange rules cabins disclosure rules to information that would meet the
   materiality element of a securities fraud claim. And, as the SEC Approval
   Order explains, “[e]xchanges have historically adopted listing rules that
   require disclosures in addition to those required by [SEC] rules.” 86 Fed.
   Reg. at 44,438 & n.202 (giving examples).
           A materiality standard for exchange disclosure rules is also
   unworkable. Determining the materiality of a given statement is a “fact-
   specific inquiry,” World Tree, 43 F.4th at 465 (quoting Levinson, 485 U.S. at
   240), that “is peculiarly within the competence of the trier of fact,” id.
   (citation omitted). Because materiality is context dependent, it is unclear
   how the SEC could say, in a factual vacuum, that a particular category of

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   information is or is not material to investors in all circumstances. 16 To make
   such a finding, the SEC would be forced to speculate about, and rule out, any
   factual scenarios in which there might be “a substantial likelihood that a
   reasonable investor would consider” any information falling within the
   relevant category “important in making a decision to invest.” Id. at 459
   (citation omitted). The prohibition in § 78f(b)(5) on exchange rules that are
   designed to regulate matters unrelated to the purposes of the Exchange Act
   does not contemplate such an impossible task. No court, to our knowledge,
   has ever said it does.
          Of course, the Exchange Act still limits the kinds of disclosure rules
   the SEC can approve. An exchange rule, including a disclosure rule, must be
   “designed to” accomplish certain statutory objectives. See 15 U.S.C.
   § 78f(b)(5). And disclosure rules that violate other requirements of § 78f
   cannot be approved. To the extent that petitioners have briefed arguments
   on these fronts, we address them below. Here, to resolve petitioners’
   statutory argument, we only need to hold that § 78f(b)(5) does not require an
   exchange disclosure rule to be limited to information that would be material
   for purposes of a securities fraud claim.
           Before moving on, we note that even if the petitioners’ theory were
   right, substantial evidence supports the SEC’s finding that Nasdaq’s rule
   would provide “information that would contribute to investors’ investment
   and voting decisions.” 86 Fed. Reg. at 44,430. The SEC based this
   conclusion on “the broad demand for this information” from “institutional
   investors, investment managers, listed companies, and individual investors,
   as well as statements made by institutional investors, asset managers, and

           _____________________
           16
             In a specific factual setting, a specific statement may be “immaterial as a matter of
   law” if “there is no substantial likelihood that a reasonable investor would consider [the]
   statement[] . . . to have significantly altered the total mix of information.” Nathenson v.
   Zonagen Inc., 267 F.3d 400, 422 (5th Cir. 2001) (internal quotation marks and citation
   omitted).

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   business organizations.” Id. In support, the SEC cited “statements from
   Vanguard, State Street Global Advisors, and BlackRock that call for
   companies to disclose board diversity information,” “petitions for [SEC]
   rulemaking from groups of institutional investors,” and comments from
   Goldman Sachs, Microsoft, and Facebook, among other market participants.
   Id. at 44,430 nn. 91 & 92; see id. at 44,429 (pointing out that “many
   commenters believe[d] that the proposed board diversity disclosures would
   be material to investors”). For example, one “large, global asset manager”
   asserted that “[t]he composition of a company’s board and management is
   an important element of [its] fundamental analysis,” 17 and a letter on behalf
   of investment institutions with over $325 billion under management said that
   a similar regime in Canada had “improv[ed] both the quality and quantity of
   diversity data” for use in “investment decision-making.” 18 This evidence is
   sufficient to support the SEC’s determination that regardless of whether
   investors think that board diversity is good or bad for companies, disclosure
   of information about board diversity would inform how investors behave in
   the market:
          [F]or investors who support board diversity, the proposed
          disclosures could inform their decision on issues related to
          corporate governance, including director elections, and
          company explanations as to why they do not meet the diversity
          objectives could better inform those investors as to the risks
          and costs of increased board diversity. And for investors who

          _____________________
          17
            William J. Stromberg & David Oestreicher, T. Rowe Price Group, Inc., RE: SR-
   2020-081 (Dec. 29, 2020), https://www.sec.gov/comments/sr-nasdaq-2020-
   081/srnasdaq2020081-8204319-227487.pdf.
          18
             Kristi Mitchem, BMO Glob. Asset Mgmt., Re: The Nasdaq Stock Market LLC:
   Notice of Filing of Proposed Rule Change to Adopt Listing Rules Related to Board
   Diversity (Release No. 34-90574; File No. SR-NASDAQ-2020-081) (Jan. 11, 2021),
   https://www.sec.gov/comments/sr-nasdaq-2020-081/srnasdaq2020081-8231371-
   227747.pdf.

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           do not believe that having additional “Diverse” directors
           would be beneficial for a company, the proposed disclosures
           could inform their decision to vote to preserve the existing
           board composition in a company.
   Id. at 44,431.
           Petitioners argue that board diversity information is immaterial
   because “there is no evidentiary basis to believe race, gender, and sexual
   preference of directors bear any relationship to corporate governance or
   performance.” But the SEC could find that disclosure of board diversity
   information would be “viewed by [a] reasonable investor as having
   significantly altered the ‘total mix’ of information made available,” Levinson,
   485 U.S. at 231–32 (citation omitted), even without conclusive empirical
   evidence that board diversity helps or hurts corporate performance. Here, as
   we explained, the SEC decided that board diversity information
   “contribute[s] to investors’ investment and voting decisions” based on
   substantial evidence of industry demand for this information to use in
   managing funds. 86 Fed. Reg. at 44,430. The SEC did not need to find that
   there is an empirical or scientific basis about the effects of board diversity or
   that these effects are beyond debate to conclude that a “reasonable investor”
   could find board diversity information “important.” World Tree, 43 F.4th at
   459. Rather, the SEC’s candid findings that “studies of the effects of board
   diversity are generally inconclusive” and “that the effects of even mandated
   changes remain the subject of reasonable debate,” 86 Fed. Reg. at 44,432, set
   alongside substantial evidence that many investors already use board
   diversity information to make investments, are consistent with a finding of
   materiality—assuming that it is even possible to make such a finding outside
   the context of securities fraud litigation. 19

           _____________________
           19
             AFBR also argues that “[t]he SEC itself has said the key inquiries for materiality
   focus on ‘quantitative considerations.’” But the Second Circuit case that AFBR quotes
   explained that “[a]ccording to [SEC guidance about materiality], both quantitative and

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                                                3.
           Next, NCPPR argues that the SEC’s Approval Order approving
   Nasdaq’s Rules regulates corporate governance, an issue reserved for the
   states. Although NCPPR does not specify how the Rules regulate “the
   internal affairs” of corporations, we think that NCPPR means that Nasdaq’s
   Rules “impose . . . demographic quota and disclosure requirements on
   corporate boards.” But the SEC conclusively determined, based on
   substantial evidence, that Nasdaq’s proposal is a disclosure rule, not a
   mandatory quota; that Nasdaq’s disclosure-based framework does not alter
   the state-federal balance; and that the Exchange Act unambiguously
   authorizes the SEC to approve disclosure rules.
                                                a.
          First, the SEC’s finding that Nasdaq’s proposal is a “disclosure-based
   framework” and not a quota is supported by substantial evidence and
   therefore conclusive. 20 86 Fed. Reg. at 44,428; 15 U.S.C. § 78y(a)(4). The
   SEC observed that:
           _____________________
   qualitative factors should be considered in assessing a statement’s materiality.” ECA, Loc.
   134 IBEW Joint Pension Tr. of Chi. v. JP Morgan Chase Co., 553 F.3d 187, 197 (2d Cir. 2009)
   (emphasis added). And the SEC guidance, which the Second Circuit treated as persuasive
   authority, demonstrates how incongruous it would be to import materiality into exchange-
   rule approval decisions: “[u]nder [the quantitative] factor, the SEC considers the financial
   magnitude of the misstatement.” Id. How could the SEC assess “the financial magnitude”
   of a category of information without any facts about the disclosing company or the
   disclosure? In any event, in the securities fraud context, a plaintiff doesn’t have to show
   that a misrepresentation is quantitative—or quantify its magnitude—to establish
   materiality. For example, conflicts of interest are generally material, even though a conflict
   of interest is not quantitative or readily quantifiable. See World Tree, 43 F.4th at 465
   (affirming district court’s conclusion “that a reasonable investor would consider important
   whether [d]efendants traded in the same securities as their clients,” and collecting cases).
           20
             Petitioners do not contest that the substantial evidence standard applies to this
   determination, as Nasdaq urges, so they have forfeited any argument that our review is
   under a different standard. See Guillot ex rel. T.A.G. v. Russell, 59 F.4th 743, 754 (5th Cir.
   2023).

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          the proposed rules do not mandate any particular board
          composition[,] . . . . would not require a company to select a
          director solely because that person falls within the proposed
          definition of ‘Diverse,’ would not prevent companies and their
          shareholders from selecting directors based on experience,
          competence, and skills, and would not substitute a regulator’s
          judgment for companies’ or their shareholders judgment in
          selecting directors.
   86 Fed. Reg. at 44,428. If a company does not meet diversity objectives, the
   company has the option to “explain[] why it does not meet the objectives.”
   Id. And Nasdaq “would not assess the substance of the company’s
   explanation.” Id. Instead, companies that “prefer not to explain their
   approach to board diversity” can take advantage of “substantial flexibility in
   crafting the required explanation.” Id. According to Nasdaq, permissible
   explanations include: “The Company does not meet the diversity objectives
   . . . because it does not believe Nasdaq’s listing rule is appropriate,” “because
   it does not believe achieving Nasdaq’s diversity objectives are feasible given
   the company’s current circumstances,” “because the Nominations
   Committee considers a variety of professional, industry, and personal
   backgrounds and skill sets to provide the Board with the appropriate talent,
   skills, and expertise to oversee the Company’s business,” and because the
   Nominations Committee “is committed to ensuring that the Board’s
   composition appropriately reflects the current and anticipated needs of the
   Board and the company.” 21 Therefore, all a company has to do is give an
   explanation, however short. In light of these parameters, the SEC was
   entitled to credit industry comments “stat[ing] that the proposal would not
   impose a quota for a minimum number of Diverse directors.” Id. at 44,427.

          _____________________
          21
               See Davis, supra note 3, at 8.

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          True, there are mandatory parts of Nasdaq’s proposal. Companies
   need to report board diversity statistics, and a company with less than two
   diverse board members must say more than, “the Company does not comply
   with Nasdaq’s diversity rule.” Id. at 44,426 n.31. If a company with less than
   two diverse board members refuses to disclose why—in even the most
   minimal terms—the company may be delisted. See id. at 44,426. However,
   as the SEC explained, “[t]his is distinct from facing a fine as an alternative to
   compliance or possibly facing the requirement to dissolve for non-
   compliance.” Id. at 44,432. In other words, the requirement that a company
   give an explanation is not a sanction that mandates compliance with the two-
   diverse-board-members benchmark. The only sanction is for giving no
   explanation at all.
          Thus, as the SEC concluded, the explanations are part of a disclosure
   framework, not a quota. See, e.g., id. at 44,428 n.54. The SEC acknowledged
   that this “proposal may have the effect of encouraging some Nasdaq-listed
   companies to increase diversity on their boards.” Id. at 44,428 (emphasis
   added). But the proposal does not require companies to have any number of
   diverse board members. All that’s required, under the proposal, is a de
   minimis explanation for having less than two diverse board members. 22
          In sum, the SEC made a reasonable finding—based on sufficient
   evidence about how Nasdaq’s proposal would work and industry reactions to
   it—that the proposal does not impose a diversity quota on corporate boards.
   We cannot “reweigh the evidence” and “substitute [our] judgment for that
   of the [SEC].” Meadows, 119 F.3d at 1224. Accordingly, we will adhere to
   the SEC’s conclusive determination that the proposal implements a

          _____________________
          22
               See generally Grutter v. Bollinger, 539 U.S. 306, 335 (2003) (“Properly
   understood, a ‘quota’ is a program in which a certain fixed number or proportion of
   opportunities are reserved exclusively for certain minority groups.” (emphasis added)
   (internal quotation marks and citation omitted)).

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   “disclosure-based framework.”               86   Fed.   Reg.    at   44,428;   see
   15 U.S.C. § 78y(a)(4).
                                          b.
           SEC approval of Nasdaq’s disclosure-based framework does not
   implicate the canon that Congress “must make its intention . . . unmistakably
   clear in the language of the statute” “to alter the usual constitutional balance
   between the States and the Federal Government.” Gregory v. Ashcroft, 501
   U.S. 452, 460 (1991) (internal quotation marks and citation omitted).
           At the threshold, this canon only applies when a statute is ambiguous.
   Salinas v. United States, 522 U.S. 52, 60 (1997) (citing Gregory, 501 U.S. at
   467). But instead of identifying any triggering ambiguity in the Exchange Act,
   NCPPR’s position appears to be that in approving Nasdaq’s proposal, the
   SEC construed the Exchange Act to permit federal encroachment upon a
   traditional state power. Without an adequately briefed articulation of what
   specific statutory provision is at issue, and why that provision is ambiguous
   such that the canon applies, we decline to hold that the SEC lacked statutory
   authority to approve Nasdaq’s proposal on this basis.
           Regardless, Nasdaq’s disclosure-based framework does not alter the
   state-federal balance. It is well-established that disclosure rules do not
   interfere with the role of “state corporate law” in “regulat[ing] the
   distribution of powers among the various players in the process of corporate
   governance.” Bus. Roundtable v. SEC (“Business Roundtable I”), 905 F.2d
   406, 411-12 (D.C. Cir. 1990). Although NCPPR suggests, contrary to this
   settled principle, that Nasdaq’s proposal “govern[s] the internal affairs of the
   corporation,” Santa Fe Indus., Inc. v. Green, 430 U.S. 462, 479 (1977)
   (citation omitted), NCPPR does not explain how a disclosure-based

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   framework could have this effect or encroach on state corporate law in any
   other way. 23
           In any event, the Exchange Act unambiguously requires the SEC to
   approve Nasdaq’s disclosure-based framework if it is “consistent with the
   requirements of [the Exchange Act].” 24 15 U.S.C. § 78s(b)(2)(C)(i).
   NCPPR does not point to any requirement of the Exchange Act that could be
   plausibly read to prohibit an exchange from adopting a disclosure-based
   framework for board diversity information. See supra Section III.A.2
   (rejecting petitioners’ argument that the purposes of the Exchange Act limit
   disclosure rules to material information). It would be surprising if NCPPR
   could find such a provision because, as we have repeated, the fundamental
   purpose of the Exchange Act is full disclosure in the securities industry. See,
   e.g., Affiliated Ute Citizens of Utah, 406 U.S. at 151; Levinson, 485 U.S. at 230.
           For those reasons, the federalism canon is not applicable here.
                                                4.
           Last, invoking the “major questions doctrine,” NCPPR argues that
   the SEC cannot approve an exchange rule that “impose[s] unprecedented
   demographic quotas and disclosure requirements regarding race, sex, and
   sexual preference on companies valued at over 20 trillion dollars” (emphasis
   in original), without “clear and explicit” Congressional authorization.

           _____________________
           23
               For its part, AFBR asserts that the proposal “impos[es] obligations on
   corporations.” This is true of every exchange listing rule that requires a listed company to
   take any action and is not a sufficient basis to conclude that the proposal alters the state-
   federal balance.
           24
              SROs have adopted listing rules on corporate governance matters with the SEC’s
   approval. See Business Roundtable I, 905 F.2d at 409–10 (“[T]he exchanges have routinely
   submitted changes in listing standards for approval . . . . Many of the past proposals dealt
   with matters of internal corporate governance, but in no such case did the SEC seek to
   exercise its veto.” (citations and footnotes omitted)). However, because the SEC’s finding
   that the proposal is a disclosure rule is conclusive, we do not need to decide anything about
   SRO rules that regulate corporate governance in this case.

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          This is not a “major questions case.” West Virginia v. EPA, 142 S. Ct.
   2587, 2610 (2022).         The “major questions doctrine” applies in
   “extraordinary cases” where the “history and the breadth of the authority
   that the agency has asserted, and the economic and political significance of
   that assertion, provide a reason to hesitate before concluding that Congress
   meant to confer such authority.” Id. at 2608 (cleaned up). In those
   “extraordinary cases, both separation of powers principles and a practical
   understanding of legislative intent make us reluctant to read into ambiguous
   statutory text” a statutory delegation of authority to the agency. Id. at 2609
   (internal quotation marks and citation omitted). Then, the agency “must
   point to a clear congressional authorization for the power it claims.” Id.
   (internal quotation marks and citation omitted). Here, the SEC’s asserted
   authority is an ordinary exercise of its power to approve exchange listing
   rules; a disclosure rule for board diversity information is not significant
   enough to trigger major questions concerns; and the Exchange Act authorizes
   SEC approval of exchange disclosure rules.
           The “history and the breadth” of the SEC’s asserted authority is
   unremarkable. Id. at 2608 (citation omitted). Since 1975, the Exchange Act
   has empowered and required the SEC to approve proposed changes to
   exchange rules. See Pub. L. No. 94-29, 89 Stat. 146 (1975) (codified as
   amended at 15 U.S.C. § 78s(b)). Because the core objective of the Exchange
   Act, as we have repeated, is to establish “a philosophy of full disclosure . . .
   in the securities industry,” Affiliated Ute Citizens of Utah, 406 U.S. at 151
   (citation omitted), exchanges sometimes adopt disclosure rules that go
   beyond the requirements of federal securities laws—for example, as the
   SEC’s Approval Order notes, Nasdaq “already requires its listed companies
   to publicly disclose compensation or other payments by third parties to a
   company’s directors or nominees.” 86 Fed. Reg. at 44,438. And more than
   a decade ago, the SEC itself adopted a disclosure rule related to board
   diversity.     See 17 C.F.R. § 229.407(c)(2)(vi); Proxy Disclosure
   Enhancements, 74 Fed. Reg. 68,334, 68,364 (Dec. 23, 2009) (codified at 17

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   C.F.R. § 229.407(c)(2)(vi)). This rule requires companies to disclose how
   the company’s nominating committee or board “considers diversity in
   identifying nominees for director.” Id. If the committee or board “has a
   policy with regard to the consideration of diversity in identifying director
   nominees,” it must “describe how this policy is implemented, as well as how
   [it] assesses the effectiveness of its policy.” Id. Disclosure rules, including
   those related to diversity, are business as usual for the SEC, and there is
   nothing “unheralded,” Util. Air Regul. Grp. v. EPA, 573 U.S. 302, 324
   (2014), or “unprecedented,” Ala. Ass’n of Realtors v. Dep’t of Health & Hum.
   Servs., 141 S. Ct. 2485, 2489 (2021) (per curiam), about the SEC’s Approval
   Order here.
           Further, the SEC’s approval of a rule requiring disclosures of board
   diversity information is not economically and politically significant enough to
   trigger the major questions doctrine. Compare the SEC’s Approval Order to
   agency action that the Supreme Court has found sufficiently significant. The
   Court has held that the Food and Drug Administration lacked statutory
   authority “to regulate, and even ban, tobacco products,” that the Centers for
   Disease Control and Prevention lacked statutory authority to “institute a
   nationwide eviction moratorium,” and that the Environmental Protection
   Agency lacked statutory authority to regulate greenhouse gas emissions from
   “millions of small sources, such as hotels and office buildings, that had never
   before been subject to [permitting] requirements.” West Virginia, 142 S. Ct.
   at 2608 (summarizing FDA v. Brown & Williamson Tobacco Corp., 529 U.S.
   120, 126–27 (2000); Ala. Ass’n of Realtors, 141 S. Ct. at 2488-90; and Util.
   Air. Regul. Grp., 573 U.S. at 324). In contrast with these assertions of agency
   power over daily life across America, Nasdaq’s proposal requires companies
   that voluntarily list on Nasdaq to disclose information about board member
   diversity—a small step from disclosures about board diversity policies that
   the SEC already requires. It is more than a stretch to say that these new
   disclosures “affect[] every member of society in the profoundest of ways,”

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   BST Holdings, L.L.C. v. OSHA, 17 F.4th 604, 611 (5th Cir. 2021), as NCPPR
   implies. 25
           Finally, even if this were an unheralded exercise of SEC authority with
   sufficient economic and political significance, neither the SEC nor Nasdaq
   asks us to “read into ambiguous statutory text” a delegation of authority to
   the SEC to approve Nasdaq’s proposal. Id. That authorization is plain on
   the face of the Exchange Act: the SEC “shall” approve Nasdaq’s disclosure-
   based framework if it is “consistent with the requirements of [the Exchange
   Act].” 15 U.S.C. § 78s(b)(2)(C)(i).
          To find a major-questions hook in the text, NCPPR argues that the
   Exchange Act “does not contain a single phrase explicitly or even implicitly
   granting [the] SEC or SROs power to impose any demographic quota . . . on
   corporate boards.” The premise of this argument is wrong because the
   SEC’s finding that Nasdaq’s proposal is a disclosure-based framework is
   conclusive. See supra Section III.A.3.a.
           NCPPR also argues that the Exchange Act “does not contain a single
   phrase explicitly or even implicitly granting [the] SEC or SROs power to
   impose any . . . disclosure requirements on corporate boards.” This is wrong,
   too. See, e.g., supra Section III.A.3.b. The text of the statute says that if a
   disclosure rule is consistent with the requirements of the Exchange Act—
   which is a disclosure statute, see, e.g., Affiliated Ute Citizens of Utah, 406 U.S.
   at 151; Levinson, 485 U.S. at 230—the SEC must approve it. See 15 U.S.C.
   § 78s(b)(2)(C)(i). In turn, § 78f(b)(5) requires that a proposed rule be
           _____________________
           25
             This is especially true because companies that reject Nasdaq’s disclosure-based
   framework can list on a different exchange. And NCPPR’s conjecture that other exchanges
   or the SEC could propose identical rules is irrelevant. We review agency action, including
   SEC approval of proposed rules and SEC rulemaking, on a case-by-case basis, not
   wholesale. Although we hold that the major questions doctrine does not prevent SEC
   approval of Nasdaq’s proposal in this case, we decline NCPPR’s invitation to speculate
   about how other yet-to-be proposed rules or future agency action subject to other statutory
   standards, like SEC promulgation of rules for SROs, might fare.

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   designed to meet one of several objectives. See 15 U.S.C. § 78f(b)(5). These
   objectives are not, as NCPPR argues, “grants [of] authority for Nasdaq to
   issue and for SEC to approve rules.” If the SEC “determines that” a
   proposed rule is designed to meet one of those objectives, id. § 78f(b), and if
   all other statutory requirements are met, the SEC must approve the rule, id.
   § 78s(b)(2)(C)(i). So the question is not, as NCPPR posits, whether
   “[s]pecific authority to impose . . . disclosure requirements can[] be found
   in” those objectives. Properly understood, the question is whether the
   SEC’s determination that Nasdaq’s proposed rule is designed to meet one of
   those objectives complies with the APA. We consider this question next. See
   infra Section III.B.1.
          In short, this is not a case where the SEC has asserted “highly
   consequential power beyond what Congress could reasonably be understood
   to have granted.” West Virginia, 142 S. Ct. at 2609. We hold that the SEC’s
   Approval Order fell within its statutory authority under the Exchange Act.
                                         B.
         Finally, the SEC’s Approval Order is not arbitrary and capricious.
   5 U.S.C. § 706(2)(A).
           Under the “arbitrary and capricious” standard, the SEC “must
   examine the relevant data and articulate a satisfactory explanation for its
   action including a rational connection between the facts found and the choice
   made.” Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S.
   29, 43 (1983) (internal quotation marks omitted). In reviewing agency action,
   we do not “substitute [our] judgment for that of the agency” but rather
   “consider[] whether the decision was based on a consideration of the relevant
   factors and whether there has been a clear error of judgment.” Sierra Club v.
   U.S. Dep’t of Interior, 990 F.3d 898, 904 (5th Cir. 2021) (cleaned up). “The
   petitioner has the burden of proving that the agency’s determination was
   arbitrary and capricious.” Medina Cnty. Env’t Action Ass’n v. Surface Transp.
   Bd., 602 F.3d 687, 699 (5th Cir. 2010) (citation omitted).

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          Petitioners offer five reasons that the SEC acted arbitrarily and
   capriciously. They argue that the SEC: (1) improperly decided that the
   Disclosure Rule is designed to accomplish at least one objective listed in
   § 78f(b)(5); (2) improperly decided that the Disclosure Rule is not designed
   to permit unfair discrimination among issuers; (3) improperly assessed the
   costs of the Disclosure Rule; (4) failed to conduct an independent review of
   the record; and (5) failed to adequately analyze the content of the Recruiting
   Rule. None of these contentions has merit.
                                               1.
          Petitioners agree that an SRO rule need only be designed to meet one
   of the enumerated statutory objectives. The SEC concluded that the
   Disclosure Rule is “designed to . . . remove impediments to and perfect the
   mechanism of a free and open market and a national market system,” among
   other objectives, because the Disclosure Rule would “contribute to the
   maintenance of fair and orderly markets.” 26 86 Fed. Reg. at 44,425. AFBR
   argues that this determination is not supported by substantial evidence.
          The statutory objective to “remove impediments to and perfect the
   mechanism of a free and open market and a national market system,” 15
   U.S.C. § 78f(b)(5), concerns the “maintenance of fair and orderly markets.”
   15 U.S.C. § 78k-1(a)(1)(C); see NASDAQ OMX Grp., Inc. v. UBS Secs., LLC,
           _____________________
           26
                Although the SEC found that the Recruiting Rule was consistent with
   § 78f(b)(5), see 86 Fed. Reg. at 44,425, 44,444, the SEC’s Approval Order does not identify
   which of the statutory objectives the Recruiting Rule is designed to meet. Instead, the SEC
   found the Recruiting Rule would help Nasdaq “compete to attract and retain listings” and
   “reflects the current competitive environment for listings among national securities
   exchanges.” Id. at 44,444. AFBR does not contend that the SEC failed to support these
   findings as to the Recruiting Rule with substantial evidence. And AFBR does not appear
   to argue that the Recruiting Rule is inconsistent with § 78f(b)(5), so any challenge to the
   Recruiting Rule on this ground is forfeited. In any event, AFBR recognizes that promoting
   fair competition in the exchange market is an adequate basis for the SEC to conclude that
   a rule is designed to “remove impediments to and perfect the mechanism of a free and open
   market and a national market system.”

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   770 F.3d 1010, 1021 (2d Cir. 2014) (explaining that the Exchange Act “makes
   plain that maintenance of fair and orderly markets is the animating goal of
   federal securities law” and that the “remov[ing] impediments” is a means to
   “this end” (internal quotation marks and citation omitted)). 27 As AFBR
   acknowledges, fair and orderly markets assure economically efficient
   securities transactions and fair competition among market participants. See
   15 U.S.C. § 78k-1(a)(1)(C)(i)-(ii).
           The SEC’s finding that the Disclosure Rule would “contribute to the
   maintenance of fair and orderly markets” and is therefore “designed to . . .
   remove impediments to and perfect the mechanism of a free and open market
   and a national market system,” 86 Fed. Reg. at 44,425, is supported by
   substantial evidence. The SEC found that “[b]oard-level diversity statistics
   are currently not widely available on a consistent and comparable basis, even
   though [Nasdaq] and many commenters argue that this type of information
   is important to investors.” Id. In making this finding, the SEC relied on
   numerous comments from market participants. See, e.g., id. at 44,429 nn.72
   & 79. Indeed, the record is full of evidence that the status quo deprives
   market participants of fair access to information about board composition,
   impeding efficiency. For example, one commenter explained that current
   disclosures “are insufficient and noncomparable” because some companies
   report composition “using broad groupings” like “minority” while others
   “report by specific racial or ethnic groups.” 28 In light of this “opacity,” the
   commenter stated, current disclosures “provide little actionable or decision-
   useful information for investors.” 29 Another asserted that “[m]any investors

           _____________________
           27
         The “fair and orderly market” that Nasdaq operates is the exchange itself. See
   NASDAQ OMX Grp., Inc. v. UBS Secs., LLC, 770 F.3d 1010, 1021 (2d Cir. 2014).
           28
            Aron Szapiro & Michael Jantzi, Morningstar, Inc., RE: Release No. 34-90574 (Jan.
   13, 2021), https://www.sec.gov/comments/sr-nasdaq-2020-081/srnasdaq2020081-
   8262444-227960.pdf.
           29
                Id.

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   are left to consult board data that has been ‘assessed’ by third parties for
   commercial purposes rather than collected directly from company reporting,
   which raises concerns about accuracy, objectivity and consistency.” 30 A
   third said that “a lack of standardization” in “the current reporting
   environment” “creates a lack of consistency, comparability and
   transparency” and that this environment “generates information
   asymmetry, disorder and inefficiency.” 31 Because the Disclosure Rule
   standardizes disclosures of board diversity information, including the format
   and timing of disclosures, 32 the SEC reasonably found that the Disclosure
   Rule “would make it more efficient and less costly for investors to collect,
   use, and compare information on board diversity” and would “mitigate any
   concerns regarding unequal access to information that may currently exist
   between certain (likely larger and more resourceful) investors who could
   obtain the information and other (likely smaller) investors who may not be
   able to do so.” 86 Fed. Reg. at 44,430. Thus, based on substantial evidence,
   the SEC concluded that the Disclosure Rule would “contribute to the

           _____________________
           30
             Roger W. Ferguson, Jr. & Jose Minaya, Teachers Ins. & Annuity Ass’n of Am.,
   Re: The Nasdaq Stock Market LLC; Notice of Filing of Proposed Rule Change to Adopt
   Listing Rules Related to Board Diversity; File No. SR-NASDAQ-2020-081 (Dec. 31, 2020)
   at 2, https://www.sec.gov/comments/sr-nasdaq-2020-081/srnasdaq2020081-8198333-
   227346.pdf.
           31
             Michael W. Frerichs, Off. of the Ill. State Treasurer, Re: SR-NASDAQ-2020-
   081 – Proposed Rule Change to Adopt Listing Rules Related to Board Diversity (Dec. 31, 2020),
   https://www.sec.gov/comments/sr-nasdaq-2020-081/srnasdaq2020081-8198331-
   227345.pdf.
           32
              As the SEC explained, under the Disclosure Rule, companies must “make board-
   level diversity disclosures in a substantially similar format”; “following the first year of
   disclosure, disclose the current year and immediately prior year” information; provide the
   information “in a searchable format”; and “provide the required disclosures in a proxy
   statement or information statement . . . in advance of the company’s annual shareholders
   meeting or provide the required disclosures on the company’s website concurrently with
   the filing of the company’s proxy statement or information statement.” 86 Fed. Reg. at
   44,430 n.90.

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   maintenance of fair and orderly markets,” id. at 44,425, and satisfied
   § 78f(b)(5). 33
                                                2.
          AFBR also argues that because the Disclosure Rule imposes different
   disclosure requirements on domestic and foreign issuers, the SEC erred in
   concluding that the rule is not designed to permit unfair discrimination
   among issuers. See 86 Fed. Reg. at 44,426 n.26 (defining “foreign issuer”).
          The Disclosure Rule operates differently for foreign issuers than other
   Nasdaq-listed companies. Nasdaq-listed companies must generally list the
   number of directors based on “gender identity (female, male, or non-
   binary),” “race and ethnicity (African American or Black, Alaskan Native or
   Native American, Asian, Hispanic or Latinx, Native Hawaiian or Pacific
   Islander, White, or Two or More Races or Ethnicities), disaggregated by
   gender identity,” and “self-identif[ication] as LGBTQ+,” as well as the
   number of directors who did not disclose information in these categories. Id.
   at 44,426-27. In contrast with these requirements, a foreign issuer must state
   “whether disclosure is prohibited under its home country law,” “the number

           _____________________
           33
             AFBR also argues that employment decisions for corporate boards have nothing
   to do with a fair and orderly exchange. But the Disclosure Rule does not regulate
   employment decisions for corporate boards; the SEC conclusively found that the rule is a
   disclosure-based framework, not a quota. See supra Section III.A.3.a. The question then is
   whether such a disclosure-based framework is designed to “remove impediments to and
   perfect the mechanism of a free and open market and a national market system.” 15 U.S.C.
   § 78f(b)(5). For the reasons stated above, substantial evidence shows that it is.
            Relatedly, petitioners argue that the SEC erred in determining that the Rules are
   not designed to “regulate . . . matters not related to the purposes of [the Exchange Act],”
   15 U.S.C. § 78f(b)(5), because “favoring certain people because of their race, sex, or sexual
   orientation . . . is far removed from the purposes of the Exchange Act.” This argument,
   too, rests on the mistaken premise that the Disclosure Rule imposes a quota on listed
   companies. As the SEC conclusively determined, the Disclosure Rule does not regulate
   the composition of corporate boards, thereby favoring certain people over others, but rather
   requires companies to disclose information about board members’ identities.

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   of directors based on gender identity (female, male, or non-binary),” “the
   number of directors who self-identify as [u]nderrepresented [i]ndividuals in
   its home country jurisdiction,” “the number of directors who self-identify as
   LGBTQ+,” and the number of directors who did not disclose information in
   these categories. Id. at 44,427.
           The definitions of diversity for foreign issuers and non-foreign issuers
   correspond with these disclosure requirements. For foreign issuers, a diverse
   board member is defined as an individual “who self-identifies as one or more
   of the following: Female, LGBTQ+, or an underrepresented individual based
   on national, racial, ethnic, indigenous, cultural, religious, or linguistic
   identity in the country of the company’s principal executive offices.” Id. at
   44,426 n.26. For domestic issuers, a diverse board member is defined as “an
   individual who self-identifies in one or more of the following categories: (i)
   Female, (ii) Underrepresented Minority, or (iii) LGBTQ+.” Id. at 44,425
   n.18. “Underrepresented Minority” means “an individual who self-
   identifies as one or more of the following: Black or African American,
   Hispanic or Latinx, Asian, Native American or Alaska Native, Native
   Hawaiian or Pacific Islander, or Two or More Races or Ethnicities.” Id.
          Both foreign issuers and non-foreign issuers without at least two
   diverse board members must explain why. Foreign issuers must provide an
   explanation if the board does not have at least two diverse directors, including
   one who self-identifies as “Female.” Id. at 44,426 n.26. The second diverse
   director “may include an individual who self-identifies as one or more of the
   following: Female, LGBTQ+, or an [u]nderrepresented i]ndividual.” Id.
   Most other issuers must provide an explanation if the board does not have at
   least two diverse members, including one who self-identifies as “Female”
   and one who self-identifies as “an Underrepresented Minority or
   LGBTQ+.” Id. at 44,426.
         In designing these standards, Nasdaq relied on evidence that women
   are “underrepresented in boardrooms across the globe,” and that there “is
   no internationally agreed definition as to which groups constitute

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   minorities.” 34 So, to craft a definition of underrepresented individuals
   applicable to foreign issuers, Nasdaq borrowed from the United Nations
   Declaration on the Rights of Persons Belonging to National or Ethnic,
   Religious and Linguistic Minorities and the United Nations Declaration on
   the Rights of Indigenous Peoples. 35 See 86 Fed. Reg. at 44,434 n.144
   (explaining the origin of this standard).
          The SEC gave a satisfactory explanation for its conclusion that the
   different requirements that apply to foreign issuers are not “unfairly
   discriminatory.” Id. at 44,435; see State Farm, 463 U.S. at 43. The SEC
   explained:
          [I]t is not unreasonable for [Nasdaq], in crafting board diversity
          disclosures, to recognize that the proposed definition of
          “Underrepresented Minority” for domestic companies may
          not be as effective in identifying underrepresented board
          members in foreign countries that have differing ethnic and
          racial compositions, and may therefore result in disclosures
          that are less useful for investors who seek board diversity
          information for Foreign Issuers.           It is therefore not
          unreasonable for [Nasdaq] to require Foreign Issuers to
          provide disclosures relating to underrepresented individuals
          based on national, racial, ethnic, indigenous, cultural, religious,
          or linguistic identity in the country of the issuer’s principal
          executive offices. Similarly, to the extent Foreign Issuers
          choose to meet the proposed diversity objectives, it is not
          unreasonable for [Nasdaq] to take into account the differing
          demographic compositions of foreign countries and to provide
          Foreign Issuers flexibility in recognition of the different
          _____________________
          34
               Davis, supra note 3, Notice of Filing of Amendment No. 1, at 82, 140 (citation
   omitted).
          35
               See Davis, supra note 3, Notice of Filing of Amendment No. 1, at 140-41.

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          circumstances associated with Foreign Issuers hiring Diverse
          directors. Moreover, investors would still have access to a
          Foreign Issuer’s Board Diversity Matrix and any disclosures
          explaining why it does not meet the applicable diversity
          objective, and this information may still be important to
          investors’ investment and voting decisions notwithstanding
          the flexibility provided to Foreign Issuers.
   86 Fed. Reg. at 44,435. To sum up, the SEC’s point is that because the
   meaning of diversity varies globally, it is fair and desirable to let foreign
   issuers report diversity information according to nationally appropriate
   standards.
          AFBR’s attacks on the SEC’s analysis are unavailing. AFBR asserts
   that separate standards for foreign issuers undercut uniformity in disclosures
   without explaining why these standards are “designed to permit unfair
   discrimination.” 15 U.S.C. § 78f(b)(5) (emphasis added). Moreover, the
   SEC rationally found that the disclosure-based framework would provide
   investors with information that would influence investment and voting
   decisions and would mitigate market inefficiencies, regardless of variations
   in the standards for those disclosures. AFBR also speculates that foreign
   issuers should have been treated more stringently because “the political and
   economic marginalization of underrepresented minorities in many foreign
   countries around the world is probably worse, not better, than in the United
   States.” But AFBR ignores that the foreign issuers must still disclose the
   number of board members who self-identify as underrepresented individuals
   and may count underrepresented individuals for purposes of determining
   whether an explanation is required.
                                         3.
          Next, AFBR objects that the SEC failed to adequately consider
   “tremendous costs for firms that dare to defy the quotas” and failed to show
   “that the asserted benefits of the diversity rule outweigh the costs.”

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          AFBR misunderstands what the Exchange Act requires. The SEC
   must consider whether proposed rules “impose any burden on competition
   not necessary or appropriate in furtherance of the purposes of [the Exchange
   Act].” 15 U.S.C. § 78f(b)(8) (emphasis added). So the SEC must analyze
   burdens on competition, and then decide whether those burdens are
   “necessary or appropriate” to further the purposes of the Exchange Act. Id.
   These purposes include implementing a philosophy of full disclosure in the
   securities industry, see, e.g., Affiliated Ute Citizens, 406 U.S. at 151, and
   relatedly, maintaining fair and orderly markets, see NASDAQ OMX Grp., 770
   F.3d at 1021.
          Moreover, in fulfilling its duty under § 78f(b)(8), the SEC need not
   “measure the immeasurable.” Lindeen v. SEC, 825 F.3d 646, 658 (D.C. Cir.
   2016) (citation omitted). We must “be mindful of the many problems
   inherent in considering costs and uphold a reasonable effort made by the
   [SEC].” Huawei Techs., 2 F.4th at452 (cleaned up). In deciding whether
   “any burden on competition” imposed by a rule is “necessary or
   appropriate” to further the purposes of the Exchange Act, 15 U.S.C. §
   78f(b)(8), the SEC’s “discussion of unquantifiable benefits” is sufficient so
   long as the SEC articulates “a satisfactory explanation” for its analysis,
   “including a rational connection between the facts found and the choice
   made,” Lindeen, 825 F.3d at 658 (cleaned up); see Huawei Techs., 2 F.4th at
   454 (holding that the agency “was not required to support its analysis with
   hard data where it reasonably relied on difficult-to-quantify, intangible
   benefits”).
           The SEC adequately considered potential burdens on competition.
   The SEC noted AFBR’s concerns that the Disclosure Rule “would create a
   target for activist divestment campaigns or shareholder lawsuits,” and “that
   companies will need to spend limited resources to hire communications
   consultants and attorneys to evaluate the marketing and legal risks of
   providing an explanation,” along with concerns raised by other commenters
   regarding pressure campaigns and harassment. 86 Fed. Reg. at 44,436 n.175.

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   But on the other side of the ledger, the SEC found that Nasdaq’s proposed
   rule changes “may promote competition for listings among exchanges by
   allowing [Nasdaq] to update its disclosure rules and related listing services in
   a way that better attracts and retains the listings of companies that prefer to
   be listed on an exchange that provides investors with the information
   required by the [Disclosure Rule].” Id. at 44,437. The SEC recognized that
   some companies that are concerned about cost exposure might choose not to
   list on Nasdaq or might leave Nasdaq. Id. at 44,437-38. Still, the SEC
   observed that the Disclosure Rule allows for “[f]lexibility in formulating an
   explanation for not meeting the diversity objectives,” flexibility for foreign
   issuers, smaller companies, and companies with smaller boards, flexibility
   about where the disclosures are filed, and phase-in periods for newly listed
   companies. Id. at 44,437. Companies that do not have at least two diverse
   board members can provide a minimal explanation or list on a different
   exchange. Id. at 44,436. And given evidence of “interest shown in
   comparable and consistent board diversity information,” the SEC explained
   that the Disclosure Rule may spur some companies to list on Nasdaq,
   benefiting investors “by increasing the number of publicly listed
   companies.” Id. at 44,438.
           In addition, the SEC reasonably weighed burdens on competition
   against the “difficult-to-quantify, intangible benefits” of the Disclosure Rule
   in furthering the purposes of the Exchange Act. Huawei Techs., 2 F.4th at
   454. To recap, the SEC found that the Disclosure Rule “would provide
   widely available, consistent, and comparable information that would
   contribute to investors’ investment and voting decisions,” making “it more
   efficient and less costly for investors to collect, use, and compare information
   on board diversity.” 86 Fed. Reg. at 44,430. And the SEC found that the
   Disclosure Rule would mitigate information asymmetries in the market. Id.
   Based on this analysis, the SEC decided that the Disclosure Rule contributes
   to the maintenance of fair and orderly markets. And given these benefits, the
   SEC reasonably concluded that the Disclosure Rule “would not impose a

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   burden on competition between issuers that is not necessary or appropriate
   in furtherance of the purposes of the Act.” Id. at 44,435.
          AFBR does not explain how the SEC acted arbitrarily and capriciously
   in weighing burdens on competition against the purposes of the Exchange
   Act. Instead, AFBR argues that the SEC ignored “tremendous costs for
   firms that dare to defy the quotas.” The crux of AFBR’s argument is that
   the SEC underestimated the costs of non-compliance to Nasdaq-listed
   companies. 36 However, as we explained, in conducting the § 78f(b)(8)
   analysis, the SEC did account for the costs that AFBR asserted in its
   comment letter. See, e.g., 86 Fed. Reg. at 44,436-38 & 44,436 n.175
   (summarizing portions of AFBR’s comment letter cited by AFBR in its brief
   on appeal). And the SEC made a rational decision that those burdens on
   competition were “necessary or appropriate” to further the purposes of the
   Exchange Act. Therefore, AFBR has failed to meet its burden to show that
   the SEC’s Approval Order is arbitrary and capricious on this basis. Medina
   Cnty. Env’t Action Ass’n, 602 F.3d at 699.

           _____________________
           36
              None of AFBR’s evidence quantifies costs from non-compliance or estimates the
   magnitude of those costs in concrete terms. See, e.g., All. for Fair Bd. Recruitment, supra
   note 4, Ex. B, Aff. of James R. Copland ¶¶ 20 (“In my expert opinion, firms that opt to
   publicly explain their reasons for non-compliance with Nasdaq’s diversity rule will be
   subject to an increased risk of reputational harm.”), 21 (“Negative news coverage and
   diversity activist campaigns . . . could impair a firm’s reputation . . . and result in a higher
   cost of capital, reduced profitability, and lower share prices, even if such effects might be
   mitigated in the long run.”). The SEC “was not required to conduct or commission its
   own empirical or statistical studies” to determine whether these costs would be
   “tremendous,” as AFBR asserts on appeal. Huawei Techs., 2 F.4th at 454 (cleaned up).
   AFBR also argues that the SEC “did not directly respond to [this] expert affidavit.” But
   the SEC cited to the relevant part of AFBR’s comment letter, 86 Fed. Reg. at 44,436 &
   n.175, and then considered whether the resulting burdens on competition were necessary
   and appropriate. AFBR cites no authority that this response was inadequate, nor does
   AFBR explain why this is so. In any event, the SEC “clearly thought about the
   commenters’ objections and offered reasoned replies—all the APA requires.” Huawei
   Techs., 2 F.4th at 450 (cleaned up).

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                                          4.
           In approving a proposed rule, “the SEC cannot simply accept what
   [an SRO] has done but rather is obligated to make an independent review.”
   Susquehanna, 866 F.3d at 446 (cleaned up). Petitioners argue that the SEC
   failed in this regard. Specifically, they claim that the SEC did not
   independently analyze “whether disclosures and quotas would be outside the
   purposes of the Exchange Act,” “whether significant numbers of investors
   in fact base their voting and investment decisions on the race, gender, and
   sexual preferences of company directors,” and whether “preference for
   directors with certain racial, gender, and sexuality characteristics originate[s]
   from investors’ rational . . . desire for improved corporate governance.”
           The SEC independently reviewed the record. Throughout the
   Approval Order, the SEC documented Nasdaq’s position regarding the
   proposal’s effects and compliance with the Exchange Act. See, e.g., 86 Fed.
   Reg. at 44,427, 44,429, 44,431. And the SEC considered supporting and
   contrary evidence in the record. See, e.g., id. at 44,431, 44,436. For example,
   in finding that the Disclosure Rule is designed to accomplish the purposes of
   the Exchange Act, the SEC reviewed, summarized, and synthesized
   numerous comments regarding investor demand for board diversity
   information. See, e.g., id. at 44,429-30 & nn.72-80. The SEC juxtaposed that
   evidence against comments arguing that demand is overstated. See id. at
   44,430 & n.82. Faced with this body of evidence, the agency thought for itself
   and reached a reasonable conclusion. See Citadel Secs. LLC v. SEC, 45 F.4th
   27, 34 (D.C. Cir. 2022) (holding that the SEC did not make a Susquehanna
   error where the SEC took “data, analyzed it for itself,” and reached a
   reasonable conclusion). The agency did the same with respect to the
   question whether the proposal is a disclosure-based framework or a quota.
   See id. at 44,427-28 & 44,427 nn.43-48.
         The extent to which the SEC did not “simply accept what [Nasdaq]
   has done,” Susquehanna, 866 F.3d at 446 (citation omitted), is apparent from
   the SEC’s rejection of one of Nasdaq’s reasons for adopting the proposal.

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   Nasdaq concluded that “an extensive body of empirical research
   demonstrates that diverse boards are positively associated with improved
   corporate governance and company performance.” 86 Fed. Reg. at 44,431.
   But the SEC reviewed the studies cited by Nasdaq, as well as studies that the
   comments referenced, and found that the results were “mixed.” Id. at
   44,432. “Taken together, studies of the effects of board diversity are
   generally inconclusive,” the SEC determined, “and suggest that the effects
   of even mandated changes remain the subject of reasonable debate.” Id.
   Further, the SEC found that studies of board diversity mandates were not “a
   reliable basis for evaluating the likely overall effects of the [Disclosure Rule],
   which does not mandate any particular board composition.” Id. This is not
   the work of an agency taking an SRO’s “word for it.” Susquehanna, 866 F.3d
   at 447 (faulting the SEC for taking a clearing agency’s “word for it” in
   determining whether a dividend level was reasonable).
          For those reasons, we cannot agree that the SEC abdicated its
   statutory obligation to independently review the proposed rule.
                                           5.
           Finally, NCPPR poses a list of questions that the SEC purportedly
   failed to consider in approving the Recruiting Rule. These questions include,
   who will compile a list of board-ready diverse candidates and how will the list
   be compiled, where will recommended candidates be posted, will the service
   be available to companies at a fee, and if so, what will the fees be used for?
           Many of these questions were answered in the SEC’s Approval Order.
   The SEC noted that, according to Nasdaq, the proposed provider of the
   board recruiting service is Equilar. 86 Fed. Reg. at 44,444. And Nasdaq’s
   partnership with Equilar would not generate any revenue for Nasdaq. Id.
   NCPPR argues that because these questions concern “operations, hiring,
   duties, or mechanics” of the recruiting service, they concern “important
   aspect[s] of the problem,” State Farm, 463 U.S. at 43. However, NCPPR
   identifies no requirement of the Exchange Act to which these questions are

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                                   No. 21-60626

   “important” or even relevant. And it is not apparent why the SEC needed
   to know how Equilar sources candidates, or any other granular information
   about Equilar’s systems, to conclude that Nasdaq’s provision of an optional,
   free network of diverse candidates to eligible listed companies would help
   Nasdaq “compete to attract and retain listings.” 86 Fed. Reg. at 44,444.
   NCPPR has not shown that any open question renders the Approval Order
   arbitrary and capricious.
                                       IV.
          AFBR and NCPPR have given us no reason to conclude that the
   SEC’s Approval Order violates the Exchange Act or the APA. The petitions
   for review are DENIED.

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