[Federal Register Volume 81, Number 94 (Monday, May 16, 2016)]
[Notices]
[Pages 30386-30395]
[FR Doc No: 2016-11406]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77795; File No. SR-ISE Gemini-2016-05]

Self-Regulatory Organizations; ISE Gemini, LLC; Notice of Filing
of Proposed Rule Change Relating to a Corporate Transaction Involving
Its Indirect Parent

May 10, 2016.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on April 28, 2016 ISE Gemini, LLC (the ``Exchange'' or ``ISE
Gemini'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change, as described in Items I, II,
and III below, which items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

    The Exchange is hereby filing with the U.S. Securities and Exchange
Commission (``Commission'') a proposed rule change (the ``Proposed Rule
Change'') in connection with a proposed business transaction (the
``Transaction'') involving the Exchange's ultimate, indirect, non-U.S.
upstream owners, Deutsche B[ouml]rse AG (``Deutsche B[ouml]rse'') and
Eurex Frankfurt AG (``Eurex Frankfurt''), and Nasdaq, Inc.
(``Nasdaq''). Nasdaq is the parent company of The NASDAQ Stock Market
LLC (``NASDAQ Exchange''), NASDAQ PHLX LLC (``Phlx Exchange''), NASDAQ
BX, Inc. (``BX Exchange''), Boston Stock Exchange Clearing Corporation
(``BSECC'') and Stock Clearing Corporation of Philadelphia
(``SCCP'').\3\ Upon completion of the Transaction (the ``Closing''),
the Exchange's indirect parent company, U.S. Exchange Holdings, Inc.
(``U.S. Exchange Holdings''), will become a direct subsidiary of
Nasdaq. The Exchange will therefore become an indirect subsidiary of
Nasdaq and, in addition to the Exchange's current affiliation with
International Securities Exchange, LLC (``ISE'') and ISE Mercury, LLC
(``ISE Mercury''), an affiliate of NASDAQ Exchange, Phlx Exchange, BX
Exchange, BSECC and SCCP through common, ultimate ownership by Nasdaq.
Nasdaq will become the ultimate parent of the Exchange.\4\
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    \3\ See Securities Exchange Act Release Nos. 58179 (July 17,
2008), 73 FR 42874 (July 23, 2008) (SR-Phlx-2008-31); 58324 (August
7, 2008), 73 FR 46936 (August 12, 2008) (SR-BSE-2008-02; SR-BSE-
2008-23; SR-BSE-2008-25; SR-BSECC-2008-01).
    \4\ The Exchange's current affiliates, ISE and ISE Mercury, have
submitted nearly identical proposed rule changes. See SR-ISE-2016-11
and SR-ISEMercury-2016-10.
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    In order to effect the Transaction, the Exchange hereby seeks the
Commission's approval of the following: (i) That certain corporate
resolutions that were previously established by entities that will
cease to be non-U.S. upstream owners of the Exchange after the
Transaction will cease to be considered rules of the Exchange upon
Closing; (ii) that certain governing documents of Nasdaq will be
considered rules of the Exchange upon Closing; (iii) that the Third
Amended and Restated Trust Agreement (the ``Trust Agreement'') that
currently exists among International Securities Exchange Holdings, Inc.
(``ISE Holdings''), U.S. Exchange Holdings, and the Trustees (as
defined therein) with respect to the ``ISE Trust'' will cease to be
considered rules of the Exchange upon Closing and, thereafter, that the
parties to the Trust Agreement would be permitted to take the corporate
steps necessary to repeal the Trust Agreement and dissolve the ISE
Trust; (iv) to amend and restate the Second Amended and Restated
Certificate of Incorporation of ISE Holdings (``ISE Holdings COI'') to
eliminate provisions relating to the Trust Agreement and the ISE Trust
and, in this respect, to reinstate certain text of the ISE Holdings COI
that existed prior to Deutsche B[ouml]rse's ownership of ISE Holdings;
(v) to amend and restate the Second Amended and Restated Bylaws of ISE
Holdings (the ``ISE Holdings Bylaws'') to waive certain voting and
ownership restrictions in the ISE Holdings COI to permit Nasdaq to
indirectly own 100% of the outstanding

common stock of ISE Holdings as of and after Closing of the
Transaction; and (vi) to amend and restate the Third Amended and
Restated Certificate of Incorporation of U.S. Exchange Holdings (``U.S.
Exchange Holdings COI'') to eliminate references therein to the Trust
Agreement.
    The Exchange requests that the Proposed Rule Change become
operative at the Closing of the Transaction. The text of the proposed
rule change is available at the Commission's Public Reference Room and
on the Exchange's Internet Web site at http://www.ise.com.

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

    In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
has prepared summaries, set forth in sections A, B and C below, of the
most significant aspects of such statements.

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

1. Purpose
    The Exchange submits this Proposed Rule Change to seek the
Commission's approval of various changes to the organizational and
governance documents of the Exchange's current owners and related
actions that are necessary in connection with the Closing of the
Transaction, as described below. The Exchange will continue to conduct
its regulated activities (including operating and regulating its market
and Members) in the manner currently conducted and will not make any
changes to its regulated activities in connection with the Transaction.
The Exchange is not proposing any amendments to its trading or
regulatory rules at this time relating to the Transaction.\5\ The
Exchange would continue to be registered as a national securities
exchange, with separate rules, membership rosters, and listings,
distinct from the rules, membership rosters, and listings of NASDAQ
Exchange, Phlx Exchange and BX Exchange as well as from its current
affiliates, ISE and ISE Mercury. Neither the Exchange nor its current
affiliates engage in clearing securities transactions, nor would they
do so after the Transaction. Additionally, the Exchange would continue
to be a separate self-regulatory organization (``SRO'').
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    \5\ If the Exchange determines to make any such changes, it will
seek the approval of the Commission only after the approval of this
Proposed Rule Change to the extent required by the Securities
Exchange Act of 1934, as amended (``Act''), the Commission's rules
thereunder, or the Exchange's rules.
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1. Current Ownership Structure of the Exchange
    On December 17, 2007, ISE Holdings, the sole, direct parent of the
Exchange, became a direct, wholly-owned subsidiary of U.S. Exchange
Holdings.\6\ U.S. Exchange Holdings is 85% directly owned by Eurex
Frankfurt and 15% directly owned by Deutsche B[ouml]rse. Eurex
Frankfurt is a wholly-owned, direct subsidiary of Deutsche
B[ouml]rse.\7\ Deutsche B[ouml]rse therefore owns 100% of U.S. Exchange
Holdings through its aggregate direct and indirect ownership.
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    \6\ See Securities Exchange Act Release No. 56955 (December 13,
2007), 72 FR 71979 (December 19, 2007) (SR-ISE-2007-101).
    \7\ See Securities Exchange Act Release No. 66834 (April 19,
2012), 77 FR 24752 (April 25, 2012) (SR-ISE-2012-21). Each of
Deutsche B[ouml]rse and Eurex Frankfurt is referred to as a ``Non-
U.S. Upstream Owner'' and collectively as the ``Non-U.S. Upstream
Owners.''
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2. The Transaction
    On March 9, 2016, a Stock Purchase Agreement (the ``Agreement'')
was entered into among Deutsche B[ouml]rse, Eurex Frankfurt and Nasdaq.
Pursuant to and subject to the terms of the Agreement, at the Closing,
Deutsche B[ouml]rse and Eurex Frankfurt will sell, transfer and deliver
to Nasdaq, and Nasdaq will purchase, the capital stock of U.S. Exchange
Holdings.
3. Post-Closing Ownership Structure of the Exchange
    As a result of the Transaction, Nasdaq will directly own 100% of
the equity interest of U.S. Exchange Holdings. U.S. Exchange Holdings
will remain the sole, direct owner of ISE Holdings. ISE Holdings will
remain the sole, direct owner of the Exchange. The Exchange will
therefore become an indirect subsidiary of Nasdaq and Nasdaq will
become the ultimate parent of the Exchange. The Exchange will become an
affiliate of NASDAQ Exchange, Phlx Exchange, BX Exchange, BSECC and
SCCP through common, ultimate ownership by Nasdaq. As a result of the
Transaction, Deutsche B[ouml]rse and Eurex Frankfurt will cease to be
owners of the Exchange. The Exchange will therefore cease to have any
Non-U.S. Upstream Owners. The Transaction will not have any effect on
ISE Holdings' direct ownership of the Exchange. However, consummation
of the Transaction is subject to approval of this Proposed Rule Change
by the Commission, as described below.
4. Non-U.S. Upstream Owner Resolutions
    Deutsche B[ouml]rse and Eurex Frankfurt, as the Non-U.S. Upstream
Owners of the Exchange, have previously taken appropriate steps to
incorporate provisions regarding ownership, jurisdiction, books and
records, and other issues related to their control of the Exchange.
Specifically, each of such Non-U.S. Upstream Owners has adopted
resolutions (``Non-U.S. Upstream Owner Resolutions''), which were
previously approved by the Commission, to incorporate these concepts
with respect to itself, as well as its board members, officers,
employees, and agents (as applicable), to the extent that they are
involved in the activities of the Exchange.\8\ For example, the
resolution of each of such Non-U.S. Upstream Owners provides that it
shall comply with the U.S. federal securities laws and the rules and
regulations thereunder and shall cooperate with the Commission and with
the Exchange. In addition, the resolution of each of such Non-U.S.
Upstream Owners provides that the board members, including each person
who becomes a board member, would so consent to comply and cooperate
and the particular Non-U.S. Upstream Owner would take reasonable steps
to cause its officers, employees, and agents to also comply and
cooperate, to the extent that he or she is involved in the activities
of the Exchange.
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    \8\ See Securities Exchange Act Release No. 70050 (July 26,
2013), 78 FR 46622 (August 1, 2013) (File No. 10-209) (Order
Approving Topaz Exchange, LLC for Registration as a National
Securities Exchange). The Exchange was originally named ``Topaz
Exchange, LLC.''
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    Section 19(b) of the Act,\9\ and Rule 19b-4 thereunder,\10\ require
an SRO to file proposed rule changes with the Commission. Although the
Non-U.S. Upstream Owners are not SROs, the Non-U.S. Upstream Owner
Resolutions have previously been filed with the Commission as stated
policies, practices, or interpretations of the Exchange and therefore
are considered rules of the Exchange.\11\ As Deutsche B[ouml]rse and
Eurex Frankfurt will both cease to be Non-U.S. Upstream Owners of the
Exchange after the Transaction, the Exchange proposes that the
resolutions of Deutsche B[ouml]rse and Eurex

Frankfurt will cease to be stated policies, practices, or
interpretations of the Exchange and, therefore, will cease to be
considered rules of the Exchange as of a date that corresponds to the
Closing date of the Transaction.\12\
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    \9\ 15 U.S.C. 78s(b).
    \10\ 17 CFR 240.19b-4.
    \11\ See File No. 10-209, supra note 8.
    \12\ The ``Form of German Parent Corporate Resolutions'' is
attached hereto as Exhibit 5A. As referenced above, resolutions in
relation to board members, officers, employees, and agents (as
applicable) of Deutsche B[ouml]rse and Eurex Frankfurt also would
cease accordingly. Resolution 11 provides that, notwithstanding any
provision of the resolutions, before: (a) Any amendment to or repeal
of any provision of this or any of the resolutions; or (b) any
action that would have the effect of amending or repealing any
provision of the resolutions shall be effective, the same shall be
submitted to the board of directors of the Exchange, and if the same
must be filed with, or filed with and approved by, the Commission
before the same may be effective, under Section 19 of the Act and
the rules promulgated thereunder, then the same shall not be
effective until filed with, or filed with and approved by, the
Commission, as the case may be. In addition, Deutsche B[ouml]rse,
Eurex Frankfurt, U.S. Exchange Holdings, ISE Holdings, and ISE
previously became parties to an agreement to provide for adequate
funding for the Exchange's regulatory responsibilities. The Exchange
subsequently became a party to the agreement along with ISE Mercury.
This agreement will be terminated upon the Closing of the
Transaction.
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5. Nasdaq Governing Documents
    Nasdaq will become the ultimate parent of the Exchange upon the
Closing of the Transaction. As described above, section 19(b) of the
Act and Rule 19b-4 thereunder require an SRO to file proposed rule
changes with the Commission. Although the Exchange's existing U.S.
upstream owners are not SROs, their governing documents have previously
been filed with the Commission as stated policies, practices, or
interpretations of the Exchange and therefore are considered rules of
the Exchange.\13\ The Exchange proposes that the Nasdaq Amended and
Restated Certificate of Incorporation (``Nasdaq COI'') and the Nasdaq
Bylaws (``Nasdaq Bylaws, and together with the Nasdaq COI, the ``Nasdaq
governing documents'') will become stated policies, practices, or
interpretations of the Exchange as of the Closing and, therefore, will
be considered rules of the Exchange as of a date that corresponds to
the Closing date of the Transaction.\14\
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    \13\ See File No. 10-209, supra note 8.
    \14\ The Nasdaq COI dated January 24, 2014 is attached hereto as
Exhibit 5B along with subsequent amendments thereto dated November
17, 2014 and September 8, 2015 and the Certificate of Elimination of
the Series A Convertible Preferred Stock dated January 27, 2014. The
Nasdaq Bylaws are attached hereto as Exhibit 5C.
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    The Nasdaq Bylaws contain certain provisions regarding ownership,
jurisdiction, books and records, and other issues, with respect to
Nasdaq, as well as its board members, officers, employees, and agents
(as applicable), relating to Nasdaq's control of any ``Self-Regulatory
Subsidiary'' (i.e., any subsidiary of Nasdaq that is an SRO as defined
under section 3(a)(26) of the Act).\15\ The Exchange would be a ``Self-
Regulatory Subsidiary'' of Nasdaq upon the Closing of the Transaction.
The provisions in the Nasdaq Bylaws are comparable to the provisions of
the Non-U.S. Upstream Owners Resolutions, including in the following
manner:
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    \15\ 15 U.S.C. 78c(a)(26).
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     Giving due regard to the preservation of the independence
of the self-regulatory function of each of Nasdaq's Self-Regulatory
Subsidiaries.\16\
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    \16\ Nasdaq Bylaws Section 12.1(a) (Self-Regulatory Organization
Functions of the Self-Regulatory Subsidiaries).
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     Maintaining the confidentiality of all books and records
of each Self-Regulatory Subsidiary reflecting confidential information
pertaining to the self-regulatory function of such Self-Regulatory
Subsidiary (including but not limited to disciplinary matters, trading
data, trading practices and audit information) that comes into Nasdaq's
possession, which shall not be used for any non-regulatory purposes;
making such books and records available for inspection and copying by
the Commission; and maintaining such books and records relating to each
Self-Regulatory Subsidiary in the United States.\17\
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    \17\ Nasdaq Bylaws Section 12.1(b).
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     To the extent they are related to the activities of a
Self-Regulatory Subsidiary, the books, records, premises, officers,
Directors, and employees of Nasdaq shall be deemed to be the books,
records, premises, officers, directors, and employees of such Self-
Regulatory Subsidiary for the purposes of, and subject to oversight
pursuant to, the Act.\18\
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    \18\ Nasdaq Bylaws Section 12.1(c).
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     Compliance by Nasdaq with the U.S. federal securities laws
and the rules and regulations thereunder, cooperation by Nasdaq with
the Commission and Nasdaq's Self-Regulatory Subsidiaries, and
reasonable steps by Nasdaq necessary to cause its agents to cooperate
with the Commission and, where applicable, the Self-Regulatory
Subsidiaries pursuant to their regulatory authority.\19\
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    \19\ Nasdaq Bylaws section 12.2(a) (Cooperation with the
Commission). The officers, Directors, and employees of Nasdaq, by
virtue of their acceptance of such position, shall be deemed to
agree to cooperate with the Commission and each Self-Regulatory
Subsidiary in respect of the Commission's oversight responsibilities
regarding the Self-Regulatory Subsidiaries and the self-regulatory
functions and responsibilities of the Self-Regulatory Subsidiaries.
Nasdaq Bylaws Section 12.2(b).
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     Consent by Nasdaq and its officers, Directors, and
employees to the jurisdiction of the United States federal courts, the
Commission, and each Self-Regulatory Subsidiary for the purposes of any
suit, action or proceeding pursuant to the United States federal
securities laws, and the rules and regulations thereunder, arising out
of, or relating to, the activities of any Self-Regulatory
Subsidiary.\20\
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    \20\ Nasdaq Bylaws Section 12.3 (Consent to Jurisdiction).
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     Reasonable steps by Nasdaq necessary to cause its current
and future officers, Directors, and employees, to consent in writing to
the applicability to them of certain provisions of the Nasdaq Bylaws,
as applicable, with respect to their activities related to any Self-
Regulatory Subsidiary.\21\
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    \21\ Nasdaq Bylaws Section 12.4 (Further Assurances).
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     Approval by the Commission under section 19 of the Act
prior to any resolution of the Nasdaq Board to approve an exemption for
any person from the ownership limitations of the Nasdaq COI.\22\
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    \22\ Nasdaq Bylaws Section 12.5 (Board Action with Respect to
Voting Limitations of the Certificate of Incorporation).
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     Filing with, or filing with and approval by, the
Commission (as the case may be) under section 19 of the Act prior to
amending the Nasdaq COI or the Nasdaq Bylaws.\23\
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    \23\ Nasdaq Bylaws section 12.6 (Amendments to the Certificate
of Incorporation); Nasdaq Bylaws Section 11.3 (Review by Self-
Regulatory Subsidiaries).
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    The Exchange believes that the provisions in the Nasdaq Bylaws
should minimize the potential that a person could improperly interfere
with, or restrict the ability of, the Commission or the Exchange to
effectively carry out their regulatory oversight responsibilities under
the Act.\24\
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    \24\ The U.S. Exchange Holdings COI also includes similar
provisions, including that U.S. Exchange Holdings will take
reasonable steps necessary to cause ISE Holdings to be in compliance
with the ``Ownership Limit'' and the ``Voting Limit.'' See U.S.
Exchange Holdings COI, Articles TENTH through SIXTEENTH. The U.S.
Exchange Holdings COI provides that U.S. Exchange Holdings will
notify the Exchange's Board if any ``Person,'' either alone or
together with its ``Related Persons,'' at any time owns (whether by
acquisition or by a change in the number of shares outstanding) of
record or beneficially, whether directly or indirectly, 10%, 15%,
20%, 25%, 30%, 35%, or 40% or more of the then outstanding shares of
U.S. Exchange Holdings. See SR-ISE-2007-101, supra note 6, at 71981.
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    Additionally, and similar to the ISE Holdings COI, the Nasdaq COI
imposes limits on direct and indirect changes in control, which are
designed to prevent any shareholder from exercising undue control over
the operation of its SRO subsidiaries and to ensure that its SRO
subsidiaries and the Commission are

able to carry out their regulatory obligations under the Act.
Specifically, no person who beneficially owns shares of common stock,
preferred stock, or notes of Nasdaq in excess of 5% of the securities
generally entitled to vote may vote the shares in excess of 5%.\25\
This limitation would mitigate the potential for any Nasdaq shareholder
to exercise undue control over the operations of the Exchange, and it
facilitates the Exchange's and the Commission's ability to carry out
their regulatory obligations under the Act. The Nasdaq Board may
approve exemptions from the 5% voting limitation for any person that is
not a broker-dealer, an affiliate of a broker-dealer, or a person
subject to a statutory disqualification under section 3(a)(39) of the
Act,\26\ provided that the Nasdaq Board also determines that granting
such exemption would be consistent with the self-regulatory obligations
of its SRO subsidiary.\27\ Further, any such exemption from the 5%
voting limitation would not be effective until approved by the
Commission pursuant to section 19 of the Act.\28\
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    \25\ See Article FOURTH, Section C of the Nasdaq COI.
    \26\ 15 U.S.C. 78c(a)(39).
    \27\ See Article FOURTH, section C.6. of the Nasdaq COI.
Specifically, the Nasdaq Board must determine that granting such
exemption would (1) not reasonably be expected to diminish the
quality of, or public confidence in, Nasdaq or the other operations
of Nasdaq, on the ability to prevent fraudulent and manipulative
acts and practices and on investors and the public, and (2) promote
just and equitable principles of trade, foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to an facilitating transactions
in securities or assist in the removal of impediments to or
perfection of the mechanisms for a free and open market and a
national market system.
    \28\ See Section 12.5 of the Nasdaq Bylaws.
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6. Trust Agreement \29\
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    \29\ The Trust Agreement exists among ISE Holdings, U.S.
Exchange Holdings, and the Trustees (as defined therein). By its
terms, the Trust Agreement originally related solely to ISE
Holdings' ownership of ISE, and not to any other national securities
exchange that ISE Holdings might control, directly or indirectly. In
2010, the Commission approved proposed rule changes that revised the
Trust Agreement to replace references to ISE with references to any
Controlled National Securities Exchange. See Securities Exchange Act
Release Nos. 59135 (December 22, 2008), 73 FR 79954 (December 30,
2008) (SR-ISE-2008-85) and 61498 (February 4, 2010), 75 FR 7299
(February 18, 2010) (SR-ISE-2009-90); see also ISE Trust Agreement,
Articles I and II, Sections 1.1 and 2.6. Thus, the ISE Trust
Agreement also applies to ISE Gemini and ISE Mercury.
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    The ISE Holdings COI currently contains certain ownership limits
(``Ownership Limits'') and voting limits (``Voting Limits'') with
respect to the outstanding capital stock of ISE Holdings.\30\ The Trust
Agreement was entered into in 2007 to provide for an automatic transfer
of ISE Holdings shares to a trust (the ``ISE Trust'') if a Person \31\
were to obtain an ownership or voting interest in ISE Holdings in
excess of these Ownership Limits and Voting Limits, through ownership
of one of the Non-U.S. Upstream Owners, without obtaining the approval
of the Commission. In this regard, the Trust Agreement serves four
general purposes: (i) To accept, hold and dispose of Trust Shares \32\
on the terms and subject to the conditions set forth therein; (ii) to
determine whether a Material Compliance Event \33\ has occurred or is
continuing; (iii) to determine whether the occurrence and continuation
of a Material Compliance Event requires the exercise of the Call
Option; \34\ and (iv) to transfer Deposited Shares from the Trust to
the Trust Beneficiary \35\ as provided in section 4.2(h) therein. The
ISE Trust, and corresponding Trust Agreement, is the mechanism by which
the Ownership Limits and Voting Limits in the ISE Holdings COI
currently would be protected in the event that a Non-U.S. Upstream
Owner purportedly transfers any related ownership or voting rights
other than in accordance with the ISE Holdings COI.
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    \30\ See Article FOURTH, Section III of the ISE Holdings COI.
    \31\ See SR-ISE-2007-101, supra note 6. Under the Trust
Agreement, the term ``Person'' means any individual, corporation
(including not-for-profit), general or limited partnership, limited
liability company, joint venture, estate, trust, association,
organization, government or any agency or political subdivision
thereof, or any other entity of any kind or nature.
    \32\ Under the Trust Agreement, the term ``Trust Shares'' means
either Excess Shares or Deposited Shares, or both, as the case may
be. The term ``Excess Shares'' means that a Person obtained an
ownership or voting interest in ISE Holdings in excess of certain
ownership and voting restrictions pursuant to Article FOURTH of the
ISE Holdings COI, through, for example, ownership of one of the Non-
U.S. Upstream Owners or U.S. Exchange Holdings, without obtaining
the approval of the Commission. The term ``Deposited Shares'' means
shares that are transferred to the Trust pursuant to the Trust's
exercise of the Call Option.
    \33\ Under the Trust Agreement, the term ``Material Compliance
Event'' means, with respect to a Non-U.S. Upstream Owner, any state
of facts, development, event, circumstance, condition, occurrence or
effect that results in the failure of any of the Non-U.S. Upstream
Owners to adhere to their respective commitments under the
resolutions (i.e., as referenced in note 7) in any material respect.
    \34\ Under the Trust Agreement, the term ``Call Option'' means
the option granted by the Trust Beneficiary to the Trust to call the
Voting Shares as set forth in Section 4.2 therein.
    \35\ Under the Trust Agreement, the term ``Trust Beneficiary''
means U.S. Exchange Holdings.
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    As described above, section 19(b) of the Act and Rule 19b-4
thereunder require an SRO to file proposed rule changes with the
Commission. Although the ISE Trust is not an SRO, the Trust Agreement
has previously been filed with the Commission as stated policies,
practices, or interpretations of the Exchange and therefore is
considered rules of the Exchange.\36\ The purpose for which the ISE
Trust was formed will not be relevant after the Closing of the
Transaction, given that the Exchange will no longer have Non-U.S.
Upstream Owners and that the Exchange's current and resulting U.S.
upstream owners' governing documents provide for similar protections
(e.g., U.S. Exchange Holdings COI Article THIRTEENTH and Nasdaq Bylaws
Section 12.5). Accordingly, the Exchange proposes that the Trust
Agreement will cease to be stated policies, practices, or
interpretations of the Exchange and, therefore, will cease to be
considered rules of the Exchange as of a date that corresponds to the
Closing date of the Transaction.\37\ The Exchange also proposes that,
as of the Closing of the Transaction, the parties to the Trust
Agreement would be permitted to take the corporate steps necessary to
repeal the Trust Agreement and dissolve the ISE Trust.
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    \36\ See File No. 10-209, supra note 8.
    \37\ The current Trust Agreement is attached hereto as Exhibit
5D. Section 8.2 of the Trust Agreement provides, in part, that, for
so long as ISE Holdings controls, directly or indirectly, the
Exchange, before any amendment or repeal of any provision of the
Trust Agreement shall be effective, such amendment or repeal shall
be submitted to the board of directors of the Exchange, as
applicable, and if such amendment or repeal must be filed with or
filed with and approved by the Commission under Section 19 of the
Act and the rules promulgated thereunder before such amendment or
repeal may be effectuated, then such amendment or repeal shall not
be effectuated until filed with or filed with and approved by the
Commission, as the case may be. The Exchange notes that, according
to the terms of the Trust Agreement, sections 6.1 and 6.2 thereof,
which relate to limits on disclosure of confidential information and
certain permitted disclosure, will survive the termination of the
Trust Agreement for a period of ten years.
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7. ISE Holdings COI
    The ISE Holdings COI was amended in 2007 in relation to the
ownership of ISE by Deutsche B[ouml]rse.\38\ At that time, provisions
were added to the ISE Holdings COI relating to the ISE Trust to provide
for an automatic transfer of ISE Holdings' shares to the ISE Trust if a
Person were to obtain an ownership or voting interest in ISE Holdings
in excess of Voting Limits and Ownership Limits, without obtaining the
approval of the Commission.
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    \38\ See SR-ISE-2007-101, supra note 6.
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    As described above, the Exchange is proposing that the Trust
Agreement will cease to be considered rules of the Exchange as of a
date that corresponds to the Closing date of the Transaction.

Accordingly, the Exchange proposes to remove provisions relating to the
Trust Agreement and the ISE Trust from the ISE Holdings COI.\39\ The
Exchange proposes to reinstate certain provisions of the ISE Holdings
COI that existed prior to Deutsche B[ouml]rse's ownership of ISE
Holdings that were removed upon introduction of the provisions relating
to the ISE Trust and the Trust Agreement.\40\
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    \39\ The proposed, amended ISE Holdings COI is attached hereto
as Exhibit 5E. Capitalized terms used to describe the ISE Holdings
COI that are not otherwise defined herein shall have the meanings
prescribed in the ISE Holdings COI. Article FOURTEENTH of the ISE
Holdings COI provides that, for so long as U.S. Exchange Holdings
shall control, directly or indirectly, the Exchange, or facility
thereof, before any amendment to or repeal of any provision of the
ISE Holdings COI shall be effective, the same shall be submitted to
the board of directors of the Exchange, and if the same must be
filed with, or filed with and approved by, the Commission before the
same may be effective, under Section 19 of the Act and the rules
promulgated thereunder, then the same shall not be effective until
filed with, or filed with and approved by, the Commission, as the
case may be.
    \40\ See, e.g., Exhibit 5A to SR-ISE-2007-101, supra note 6. See
also Securities Exchange Act Release No. 51029 (January 12, 2005),
70 FR 3233 (January 21, 2005) (SR-ISE-2004-29), through which ISE,
which was organized as a corporation at that time (i.e., ``ISE,
Inc.''), amended its Certificate of Incorporation and Constitution
at that time in connection with ISE's then-contemplated initial
public offering. ISE subsequently reorganized into a holding company
structure, whereby it became a limited liability company, as it is
so organized currently, and whereby ISE Holdings became the sole
owner of ISE. See Securities Exchange Act Release No. 53705 (April
21, 2006), 71 FR 25260 (April 28, 2006) (SR-ISE-2006-04). As a
result, and at the time of the reorganization, ISE eliminated the
``ISE, Inc.'' Certificate of Incorporation and Constitution. The ISE
Holdings COI and ISE Holdings Bylaws were introduced at that time
and included substantially the same ownership and voting limitations
that had been contained in the ISE, Inc. Certificate of
Incorporation and Constitution.
---------------------------------------------------------------------------

    The changes to the ISE Holdings COI proposed herein would describe
the corrective treatment of ``Excess Shares'' (i.e., any sale,
transfer, assignment or pledge that, if effective would result in any
Person, either alone or together with its Related Persons, owning
shares in excess of any of the Ownership Limits). The proposed changes
would apply corrective procedures if any Person, alone or together with
its Related Persons, purports to sell, transfer, assign or pledge any
shares of ISE Holdings stock in violation of the Ownership Limits.
Specifically, any such sale, transfer, assignment or pledge would be
void, and that number of shares in excess of the Ownership Limits would
be deemed to have been transferred to ISE Holdings, as ``Special
Trustee'' of a ``Charitable Trust'' for the exclusive benefit of a
``Charitable Beneficiary'' to be determined by ISE Holdings.\41\ These
corrective procedures also would apply if there is any other event
causing any holder of ISE Holdings stock to exceed the Ownership
Limits, such as a repurchase of shares by ISE Holdings. The automatic
transfer would be deemed to be effective as of the close of business on
the business day prior to the date of the violative transfer or other
event. The Special Trustee of the Charitable Trust would be required to
sell the Excess Shares to a person whose ownership of shares is not
expected to violate the Ownership Limits, subject to the right of ISE
Holdings to repurchase those shares. The proposed changes to the ISE
Holdings COI are as follows: \42\
---------------------------------------------------------------------------

    \41\ ISE Holdings may also determine to appoint as ``Special
Trustee'' any entity that is unaffiliated with ISE Holdings and any
Person or its Related Persons owning Excess Shares, and any
successor trustee appointed by ISE Holdings. Currently, the ISE
Trust would hold capital stock of ISE Holdings in the event that a
person obtains ownership or voting interest in ISE Holdings in
excess of the Ownership Limits or Voting Limits or in the event of a
Material Compliance Event. See SR-ISE-2007-101, supra note 6, for a
discussion of the ISE Trust, including the operation thereof.
    \42\ The Exchange is not proposing any changes to the actual
Ownership Limits or Voting Limits specified in the current ISE
Holdings COI. See Article FOURTH, sections III(a) and III(b) of the
ISE Holdings COI. The Exchange proposes to delete certain defined
terms from the ISE Holdings COI, such as ``ISE Trust,'' ``Trust
Beneficiary'' and ``Trustee,'' and replace them with new defined
terms within the ISE Holdings COI, such as ``Charitable Trust,''
``Charitable Beneficiary'' and ``Special Trustee.'' The Exchange
also proposes to renumber certain sections of the ISE Holdings COI
to account for proposed new and deleted sections therein.
---------------------------------------------------------------------------

     The Exchange proposes to delete the current provisions in
Article Fourth, Sections III(a)(ii), III(a)(iii) and III(b)(i) of the
ISE Holdings COI that provide that the ISE Holdings Board of Directors
shall deliver to the ISE Trust copies of certain written notice and
updates thereto currently required under Sections III(a)(ii) and
III(a)(iii) of Article FOURTH (i.e., if any Person at any time owns, of
record or beneficially, whether directly or indirectly, five percent
(5%) or more of the then outstanding Voting Shares).
     The Exchange proposes to adopt new Article FOURTH, Section
III(b)(iii) of the ISE Holdings COI, which would provide that,
notwithstanding any other provisions contained in the ISE Holdings COI,
to the fullest extent permitted by applicable law, any shares of
capital stock of ISE Holdings (whether such shares are common stock or
preferred stock) not entitled to be voted due to the restrictions set
forth in Section III(b)(i) of Article FOURTH of the ISE Holdings COI
(and not waived by the ISE Holdings Board of Directors and approved by
the Commission pursuant to Section III(b)(i) of Article FOURTH of the
ISE Holdings COI), shall not be deemed to be outstanding for purposes
of determining a quorum or a minimum vote required for the transaction
of any business at any meeting of stockholders of ISE Holdings,
including, without limitation, when specified business is to be voted
on by a class or a series voting as a class.
     As a result of the addition of new Article FOURTH, Section
III(b)(iii) of the ISE Holdings COI, the Exchange proposes to renumber
current Article FOURTH, Section III(b)(iii) as resulting Article
FOURTH, section III(b)(iv).
     The Exchange proposes several changes to Article FOURTH,
section III(c) of the ISE Holdings COI, which relates to violations of
any Ownership Limits or Voting Limits and the treatment of Excess
Shares, including the following:
     Addition of new text relating to the designation as
``Excess Shares'' for any shares held in excess of the relevant
Ownership Limits; such designation and treatment being effective as of
the close of business on the business day prior to the date of the
purported transfer or other event leading to such Excess Shares.\43\
---------------------------------------------------------------------------

    \43\ See resulting Article FOURTH, section III(c).
---------------------------------------------------------------------------

     Deletion of current text requiring notification to the ISE
Trust upon the occurrence of certain events and the transfer of Voting
Shares to the ISE Trust.\44\
---------------------------------------------------------------------------

    \44\ Id.
---------------------------------------------------------------------------

     Addition of new text describing the treatment of ``Excess
Shares'' upon any sale, transfer, assignment or pledge that, if
effective would result in any Person, either alone or together with its
Related Persons, owning shares in excess of any of the Ownership
Limits. Specifically, the Exchange proposes within new Article FOURTH,
section III(c)(i) of the ISE Holdings COI that any such purported event
shall be void ab initio as to such Excess Shares, and the intended
transferee shall acquire no rights in such Excess Shares. Such Excess
Shares shall be deemed to have been transferred to ISE Holdings (or to
an entity appointed by ISE Holdings that is unaffiliated with ISE
Holdings and any Person or its Related Persons owning such Excess
Shares), as Special Trustee of the Charitable Trust for the exclusive
benefit of the Charitable Beneficiary or Beneficiaries.\45\
---------------------------------------------------------------------------

    \45\ See proposed Article FOURTH, section III(c)(ii). The
``Charitable Beneficiary'' would be one or more organizations
described in sections 170(b)(1)(A) or 170(c) of the Internal Revenue
Code of 1986, as amended from time to time. The ``Charitable Trust''
would be the trust established for the benefit of the Charitable
Beneficiary for which ISE Holdings is the trustee. The ``Special
Trustee'' would be ISE Holdings, in its capacity as trustee for the
Charitable Trust, any entity appointed by ISE Holdings that is
unaffiliated with ISE Holdings and any Person or its Related Persons
owning Excess Shares, and any successor trustee appointed by ISE
Holdings.

---------------------------------------------------------------------------

     Addition of new text describing the treatment of dividends
or other distributions paid with respect to Excess Shares.\46\
---------------------------------------------------------------------------

    \46\ See proposed Article FOURTH, section III(c)(iii).
---------------------------------------------------------------------------

     Addition of new text describing the handling of any
distribution of assets received in respect of the Excess Shares in any
liquidation, dissolution or winding up of, or any distribution of the
assets of ISE Holdings.\47\
---------------------------------------------------------------------------

    \47\ See proposed Article FOURTH, section III(c)(iv).
---------------------------------------------------------------------------

     Addition of new text describing the authority of the
Special Trustee with respect to rescinding as void any votes cast by a
purported transferee or holder of Excess Shares as well as recasting of
votes in accordance with the desires of the Special Trustee acting for
the benefit of ISE Holdings.\48\
---------------------------------------------------------------------------

    \48\ See proposed Article FOURTH, section III(c)(v).
---------------------------------------------------------------------------

     Addition of new text describing the sale by the Special
Trustee, to a Person or Persons designated by the Special Trustee whose
ownership of Voting Shares will not violate any Ownership Limit or
Voting Limit, of Excess Shares transferred to the Charitable Trust,
within 20 days of receiving notice from ISE Holdings that Excess Shares
have been so transferred.\49\ Existing text would be deleted that
requires the Trustees of the ISE Trust to use their commercially
reasonable efforts to sell the Excess Shares upon receipt of written
instructions from the ISE Trust Beneficiary. New text also would be
added describing the handling of any proceeds of such a sale.
---------------------------------------------------------------------------

    \49\ See proposed Article FOURTH, section III(c)(vi).
---------------------------------------------------------------------------

     Addition of new text describing that Excess Shares shall
be deemed to have been offered for sale to ISE Holdings on the date of
the transaction or event resulting in such Excess Shares.\50\
---------------------------------------------------------------------------

    \50\ See proposed Article FOURTH, section III(c)(vii).
---------------------------------------------------------------------------

     Deletion of current Article FOURTH, section III(c)(v),
which currently relates to the ISE Trust Beneficiary's right to
reacquire Excess Shares from the ISE Trust under certain circumstances.
    The Exchange is not proposing to reinstate all of the ISE Holdings
COI text that existed prior to Deutsche B[ouml]rse's ownership of ISE
Holdings, as certain of such text would continue to not be applicable,
even after the Transaction, given the Exchange's resulting ownership.
For example, prior to Deutsche B[ouml]rse's ownership of ISE Holdings,
the ISE Holdings COI contained certain provisions that dealt with the
publicly-traded nature of ISE Holdings' stock. This text was removed
from the ISE Holdings COI upon Deutsche B[ouml]rse's ownership of ISE
Holdings, as ISE Holdings' stock ceased to be publicly-traded.\51\
Therefore, the Exchange is not proposing to reinstate the following
provisions of the ISE Holdings COI that existed prior to Deutsche
B[ouml]rse's ownership of ISE Holdings relating to:
---------------------------------------------------------------------------

    \51\ See Exhibit 5A to SR-ISE-2007-101, supra note 6.
---------------------------------------------------------------------------

     Regulation 14A under the Act (pertaining to solicitations
of proxies).
     the treatment of transactions of ISE Holdings stock on or
through the facilities of any national securities exchange or national
securities association.
     inspection of the ISE Holdings accounts and records by ISE
Holdings stockholders.
     stockholder voting to amend, repeal or adopt provisions of
the ISE Holdings COI or the ISE Holdings Bylaws.
     stockholder action called at annual or special meetings of
stockholders.
     nominations for directors and the election thereof.
    The Exchange also is not proposing to reinstate the ISE Holdings
COI text that existed prior to Deutsche B[ouml]rse's ownership of ISE
Holdings that related to changes in terminology used throughout the ISE
Holdings COI.\52\ Additionally, provisions of the ISE Holdings COI that
authorize shares of capital stock of ISE Holdings have been amended
since Deutsche B[ouml]rse acquired ownership of ISE Holdings.\53\ The
Exchange does not propose to amend the text of the ISE Holdings COI
relating to share authorization. The Exchange also does not propose to
reinstate the location or specific wording of text of the ISE Holdings
COI that was adjusted or relocated upon Deutsche B[ouml]rse's ownership
of ISE Holdings, but that otherwise has the same practical effect and
meaning as it did prior to Deutsche B[ouml]rse's ownership of ISE
Holdings.
---------------------------------------------------------------------------

    \52\ For example, the ISE Holdings COI currently refers to
Delaware General Corporation Law as ``DGCL.'' The Exchange would not
reinstate the prior ``GCL'' term that was used in the ISE Holdings
COI.
    \53\ See, e.g., Securities Exchange Act Release No. 73860
(December 17, 2014), 79 FR 77066 (December 23, 2014) (SR-ISE-2014-
44).
---------------------------------------------------------------------------

7. U.S. Exchange Holdings COI
    The Exchange proposes to remove the reference to the Trust
Agreement in Article THIRTEENTH of the U.S. Exchange Holdings COI. As
proposed herein, the Trust Agreement will cease to be considered rules
of the Exchange as of the Closing of the Transaction and would be
repealed in connection with the Transaction. The Exchange also proposes
to retitle the document as the ``Fourth'' Amended and Restated
Certificate of Incorporation of U.S. Exchange Holdings and update the
effective date thereof.\54\
---------------------------------------------------------------------------

    \54\ The proposed, amended U.S. Exchange Holdings COI is
attached hereto as Exhibit 5F. Article SIXTEENTH of the U.S.
Exchange Holdings COI provides that, for so long as U.S. Exchange
Holdings shall control, directly or indirectly, the Exchange, or
facility thereof, before any amendment to or repeal of any provision
of the U.S. Exchange Holdings COI shall be effective, the same shall
be submitted to the board of directors of the Exchange, and if the
same must be filed with, or filed with and approved by, the
Commission before the same may be effective, under Section 19 of the
Act and the rules promulgated thereunder, then the same shall not be
effective until filed with, or filed with and approved by, the
Commission, as the case may be. The Exchange also proposes to amend
the U.S. Exchange Holdings COI to consistently refer to such
document as the ``Restated Certificate,'' which is a defined term
therein.
---------------------------------------------------------------------------

8. ISE Holdings Bylaws
    The ISE Holdings COI Voting Limits restrict any person, either
alone or together with its related persons, from having voting control,
either directly or indirectly, over more than 20% of the outstanding
capital stock of ISE Holdings. The ISE Holdings COI Ownership Limits
restrict any person, either alone or together with its related persons,
from directly or indirectly owning of record or beneficially more than
40% of the outstanding capital stock of ISE Holdings (or in the case of
any Exchange member, acting alone or together with its related persons,
from directly or indirectly owning of record or beneficially more than
20% of the outstanding capital stock of ISE Holdings).\55\
---------------------------------------------------------------------------

    \55\ See ISE Holdings COI, Article FOURTH, section III.
---------------------------------------------------------------------------

    The ISE Holdings COI and the ISE Holdings Bylaws provide that the
board of directors of ISE Holdings may waive these voting and ownership
restrictions in an amendment to the ISE Holdings Bylaws if the board
makes the following three findings: (1) The waiver will not impair the
ability of the Exchange to carry out its functions and responsibilities
as an exchange under the Act and the rules thereunder; (2) the waiver
is otherwise in the best interests of ISE Holdings, its stockholders,
and the Exchange; and (3) the waiver will not impair the ability of the
Commission to enforce the Act. However, the board of directors may not
waive these voting and ownership restrictions as they apply to Exchange
members. In

addition, the board of directors may not waive these voting and
ownership restrictions if such waiver would result in a person subject
to a ``statutory disqualification'' owning or voting shares above the
stated thresholds. Any waiver of these voting and ownership
restrictions must be by way of an amendment to the Bylaws approved by
the board of directors, which amendment must be approved by the
Commission.\56\
---------------------------------------------------------------------------

    \56\ See ISE Holdings COI, Article FOURTH, sections III(a)(i)
and III(b)(i). Such amendment to Holdings Bylaws must be filed with
and approved by the Commission under section 19(b) of the Act and
become effective thereunder. In this regard, section 10.1 of the
Bylaws provides that the Bylaws may be amended, added to, rescinded
or repealed at any meeting of the Board of Directors of ISE Holdings
or meeting of the stockholders. With respect to each national
securities exchange controlled, directly or indirectly, by ISE
Holdings (the ``Controlled National Securities Exchanges''), or
facility thereof, before any amendment to or repeal of any provision
of the Bylaws of ISE Holdings shall be effective, the same shall be
submitted to the board of directors of each Controlled National
Securities Exchange, and if the same must be filed with, or filed
with and approved by, the Commission before the same may be
effective, under section 19 of the Act and the rules promulgated
thereunder, then the same shall not be effective until filed with,
or filed with and approved by, the Commission, as the case may be.
---------------------------------------------------------------------------

    Acting pursuant to this waiver provision, the board of directors of
ISE Holdings has approved the amendment to the ISE Holdings Bylaws to
waive the Ownership Limits and Voting Limits in order to permit Nasdaq
to indirectly own 100% of the outstanding common stock of ISE Holdings
as of and after Closing of the Transaction.\57\ In adopting such
amendment, the board of directors of ISE Holdings made the necessary
determinations and approved the submission of the Proposed Rule Change
to the Commission. In so waiving the applicable voting and ownership
restrictions, the board of directors of ISE Holdings has determined,
with respect to Nasdaq, that: (i) Such waiver will not impair the
ability of ISE Holdings and each Controlled National Securities
Exchange, or facility thereof, to carry out its respective functions
and responsibilities under the Act and the rules promulgated
thereunder; \58\ (ii) such waiver is otherwise in the best interests of
ISE Holdings, its stockholders, and each Controlled National Securities
Exchange, or facility thereof; \59\ (iii) such waiver will not impair
the ability of the Commission to enforce the Act; \60\ (iv) neither
Nasdaq nor any of its Related Persons (as that term is defined in the
ISE Holdings COI) are subject to any applicable ``statutory
disqualification'' (within the meaning of section 3(a)(39) of the Act);
and (v) neither Nasdaq nor any of its Related Persons is a member (as
such term is defined in section 3(a)(3)(A) of the Act) of such
Controlled National Securities Exchange.
---------------------------------------------------------------------------

    \57\ The proposed, amended ISE Holdings Bylaws are attached
hereto as Exhibit 5G. The proposed amendment to the ISE Holdings
Bylaws would also clarify that Eurex Global Derivatives AG or
``EGD,'' which is referenced in section 11.2 of the ISE Holdings
Bylaws, ceased to be an Upstream Owner of the Exchange as a result
of a prior transaction that did not require an amendment to the ISE
Holdings Bylaws. See Securities Exchange Act Release No. 73530
(November 5, 2014), 79 FR 77066 (December 17, 2014) (SR-ISE-2014-
44).
    \58\ For example, the Exchange will continue to conduct its
regulated activities (including operating and regulating its market
and Members) in the manner currently conducted and will not make any
changes to its regulated activities in connection with the
Transaction. The Exchange is not proposing any amendments to its
trading or regulatory rules at this time relating to the
Transaction.
    \59\ For example, the Transaction will produce a stronger and
more efficient infrastructure that will have an improved ability to
provide innovative products and services.
    \60\ For example, the Commission will continue to have plenary
regulatory authority over the Exchange, as is currently the case, as
well as jurisdiction over the Exchange's direct and indirect owners
with respect to activities related to the Exchange. The Commission
will continue to have appropriate oversight tools to ensure that the
Commission will have the ability to enforce the Act with respect to
the Exchange, its direct and indirect owners and their directors
(where applicable), officers, employees and agents to the extent
they are involved in the activities of the Exchange.
---------------------------------------------------------------------------

    The Exchange will continue to conduct its regulated activities
(including operating and regulating its market and Members) in the
manner currently conducted and will not make any changes to its
regulated activities in connection with the Transaction. In addition,
the Transaction will not impair the ability of the Exchange's, or any
facility thereof, to carry out their respective functions and
responsibilities under the Act and will not impair the ability of the
Commission to enforce the Act. The Exchange therefore seeks approval of
the waiver described herein with respect to the Ownership Limits and
Voting Limits in order to permit Nasdaq to indirectly own 100% of the
outstanding common stock of ISE Holdings as of and after Closing of the
Transaction.
Summary
    The Exchange will continue to conduct its regulated activities
(including operating and regulating its market and Members) in the
manner currently conducted and will not make any changes to its
regulated activities in connection with the Transaction. The
Transaction will not impair the ability of ISE Holdings, the Exchange,
or any facility thereof, to carry out their respective functions and
responsibilities under the Act. Moreover, the Transaction will not
impair the ability of the Commission to enforce the Act with respect to
the Exchange. As such, the Commission's plenary regulatory authority
over the Exchange will not be affected by the approval of this Proposed
Rule Change. The Exchange is requesting approval by the Commission of
changes proposed herein in order to allow the Transaction to take
place.
2. Statutory Basis
    The Exchange believes that this proposal is consistent with section
6(b) of the Act,\61\ in general, and furthers the objectives of section
6(b)(1) of the Act,\62\ in particular, in that it enables the Exchange
to be so organized as to have the capacity to be able to carry out the
purposes of the Act and to comply, and to enforce compliance by its
exchange members and persons associated with its exchange members, with
the provisions of the Act, the rules and regulations thereunder, and
the rules of the Exchange. The Proposed Rule Change is designed to
enable the Exchange to continue to have the authority and ability to
effectively fulfill its self-regulatory duties pursuant to the Act and
the rules promulgated thereunder. The Exchange will continue to conduct
its regulated activities (including operating and regulating its market
and Members) in the manner currently conducted and will not make any
changes to its regulated activities in connection with the Transaction.
Thus, the Commission will continue to have plenary regulatory authority
over the Exchange, as is currently the case, as well as jurisdiction
over the Exchange's direct and indirect owners with respect to
activities related to the Exchange. The Proposed Rule Change is
consistent with and will facilitate an ownership structure that will
continue to provide the Commission with appropriate oversight tools to
ensure that the Commission will have the ability to enforce the Act
with respect to the Exchange, its direct and indirect owners and their
directors (where applicable), officers, employees and agents to the
extent they are involved in the activities of the Exchange.
---------------------------------------------------------------------------

    \61\ 15 U.S.C. 78s(b).
    \62\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------

    The Exchange also believes that this Proposed Rule Change furthers
the objectives of section 6(b)(5) \63\ of the Act because the Proposed
Rule Change would be consistent with and facilitate a governance and
regulatory structure that is designed to prevent fraudulent and
manipulative acts and practices, to

promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to, and perfect the
mechanism of a free and open market and a national market system and,
in general, to protect investors and the public interest. Specifically,
the Exchange believes that the Proposed Rule Change will continue to
provide the Commission and the Exchange with access to necessary
information that will allow the Exchange to efficiently and effectively
enforce compliance with the Act, as well as allow the Commission to
provide proper oversight, which will ultimately promote just and
equitable principles of trade and protect investors.
---------------------------------------------------------------------------

    \63\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Approval of this Proposed Rule Change will enable ISE Holdings to
continue its operations and the Exchange to continue its orderly
discharge of regulatory duties 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.
    In addition, the Exchange expects that the Transaction will
facilitate efficiencies and innovation for clients and efficient,
transparent and well-regulated markets for issuers and clients, thus
removing impediments to, and perfecting the mechanism of a free and
open market and a national market system. The Transaction will benefit
investors, the market as a whole, and shareholders by, among other
things, enhancing competition among securities venues and reducing
costs. In particular, the Transaction will contribute to streamlined
and efficient operations, thereby intensifying competition for
transaction order flow with other exchange and non-exchange trading
centers, as well as potentially in other areas, such as proprietary
market data products and listings. This enhanced level of competition
among trading centers will benefit investors through new or more
competitive product offerings and, ultimately, lower costs.
    Furthermore, the Exchange will continue to conduct its regulated
activities (including operating and regulating its market and Members)
in the manner currently conducted and will not make any changes to its
regulated activities in connection with the Transaction. Therefore, the
Exchange believes that it will continue to satisfy the requirements of
the Act and the rules and regulations thereunder that are applicable to
a national securities exchange.
    The Exchange believes it is consistent with the Act to allow Nasdaq
to become the ultimate parent of the Exchange. Neither Nasdaq nor any
of its related persons is subject to any statutory disqualification or
is a Member of the Exchange. Moreover, the Nasdaq governing documents
include certain provisions designed to maintain the independence of the
Exchange's self-regulatory functions. Accordingly, the Exchange
believes that Nasdaq's acquisition of ultimate ownership and exercise
of voting control of the Exchange will not impair the ability of the
Commission or the Exchange to discharge their respective
responsibilities under the Act.
    Although Nasdaq will not carry out regulatory functions, its
activities with respect to the operation of the Exchange must be
consistent with, and not interfere with, the Exchange's self-regulatory
obligations. Nasdaq's governing documents include certain provisions
that are designed to maintain the independence of the Exchange's self-
regulatory functions, enable the Exchange to operate in a manner that
complies with the U.S. federal securities laws, including the
objectives and requirements of sections 6(b) and 19(g) of the Act,\64\
and facilitate the ability of the Exchange and the Commission to
fulfill their regulatory and oversight obligations under the Act. For
example, the Nasdaq governing documents provide that Nasdaq will comply
with the U.S. federal securities laws and the rules and regulations
thereunder and shall cooperate with the Commission and the Exchange.
Also, each board member, officer, and employee of Nasdaq, in
discharging his or her responsibilities, shall comply with the U.S.
federal securities laws and the rules and regulations thereunder,
cooperate with the Commission, and cooperate with the Exchange. In
discharging his or her responsibilities as a board member of Nasdaq,
each such member must, to the fullest extent permitted by applicable
law, take into consideration the effect that Nasdaq's actions would
have on the ability of the Exchange to carry out its responsibilities
under the Act. In addition, Nasdaq, its board members, officers and
employees shall give due regard to the preservation of the independence
of the self-regulatory function of the Exchange.
---------------------------------------------------------------------------

    \64\ 15 U.S.C. 78f(b) and 15 U.S.C. 78s(g).
---------------------------------------------------------------------------

    Further, Nasdaq (along with its respective board members, officers,
and employees) and U.S. Exchange Holdings agree to keep confidential,
to the fullest extent permitted by applicable law, all confidential
information pertaining to the self-regulatory function of the Exchange,
including, but not limited to, confidential information regarding
disciplinary matters, trading data, trading practices, and audit
information, contained in the books and records of the Exchange and not
use such information for any non-regulatory purposes.
    In addition, Nasdaq's books and records relating to the activities
of the Exchange will at all times be made available for, and books and
records of U.S. Exchange Holdings will be subject at all times to,
inspection and copying by the Commission and the Exchange. Books and
records of U.S. Exchange Holdings related to the activities of the
Exchange also will continue to be maintained within the U.S. Moreover,
for so long as Nasdaq directly or indirectly controls the Exchange, the
books, records, officers, directors (or equivalent), and employees of
Nasdaq shall be deemed to be the books, records, officers, directors,
and employees of the Exchange.
    To the extent involved in the activities of the Exchange, Nasdaq,
its board members, officers, and employees irrevocably submit to the
jurisdiction of the U.S. federal courts and the Commission for purposes
of any action arising out of, or relating to, the activities of the
Exchange. Likewise, U.S. Exchange Holdings, its officers and directors,
and employees whose principal place of business and residence is
outside of the U.S., to the extent such directors, officers, or
employees are involved in the activities of the Exchange, irrevocably
submit to the jurisdiction of the U.S. federal courts and the
Commission for purposes of any action arising out of, or relating to,
the activities of the Exchange.
    The Nasdaq governing documents, the U.S. Exchange Holdings COI, and
the U.S. Exchange Holdings Bylaws require that any change thereto must
be submitted to the Exchange's Board. If such change must be filed
with, or filed with and approved by, the Commission under section 19 of
the Act and the rules thereunder, then such change shall not be
effective until filed with, or filed with and approved by, the
Commission. This requirement to submit changes to the Exchange's Board
continues for so long as Nasdaq or U.S. Exchange

Holdings, as applicable, directly or indirectly, control the Exchange.
    As Deutsche B[ouml]rse and Eurex Frankfurt will both cease to be
Non-U.S. Upstream Owners of the Exchange upon the Closing of the
Transaction, the Exchange believes that its proposal that the
resolutions of Deutsche B[ouml]rse and Eurex Frankfurt will cease to be
considered rules of the Exchange as of a date that corresponds to the
Closing date of the Transaction is consistent with the Act.
    The purpose for which the ISE Trust was formed will not be relevant
after the Closing of the Transaction, given that the Exchange will no
longer have Non-U.S. Upstream Owners and that the Exchange's current
and resulting U.S. upstream owners' governing documents provide for
similar protections (e.g., U.S. Exchange Holdings COI Article
THIRTEENTH and Nasdaq Bylaws section 12.5). Accordingly, the Exchange
believes that its proposal that the Trust Agreement will cease to be
considered rules of the Exchange as of a date that corresponds to the
Closing date of the Transaction is consistent with the Act.
    Given the Exchange's proposal to repeal the Trust Agreement and
dissolve the ISE Trust, the Exchange believes that the proposed changes
to the ISE Holdings COI are consistent with the Act. The proposed
changes would delete provisions of the ISE Holdings COI that will no
longer be relevant and would reinstate certain provisions of the ISE
Holdings COI that were removed upon introduction of the provisions
relating to the ISE Trust and the Trust Agreement.

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

    In accordance with section 6(b)(8) of the Act,\65\ the Exchange
believes that the Proposed Rule Change would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. Indeed, the Exchange believes that the Proposed
Rule Change will enhance competition among intermarket trading venues,
as the Exchange believes that the Transaction will produce a stronger
and more efficient infrastructure that will have an improved ability to
provide innovative products and services. Moreover, the Exchange will
continue to conduct regulated activities (including operating and
regulating its market and Members) of the type it currently conducts,
but will be able to do so in a more efficient manner to the benefit of
its Members.
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    \65\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    The Exchange's conclusion that the Proposed Rule Change would not
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act is consistent
with the Commission's prior conclusions about similar combinations
involving multiple exchanges in a single corporate family.\66\ In this
regard, the Exchange notes that the Exchange, and its affiliates ISE
and ISE Mercury, function only as options trading markets--they do not
function as equity trading markets or as clearing agencies, as do
certain of Nasdaq's existing subsidiaries.
---------------------------------------------------------------------------

    \66\ See, e.g., Securities Exchange Act Release No. 66071 (Dec.
29, 2011), 77 FR 521 (Jan. 05, 2012) (SR-CBOE-2011-107 and SR-NSX-
2011-14); Securities Exchange Act Release No. 58324 (Aug. 7, 2008),
73 FR 46936 (Aug. 12, 2008) (SR-BSE-2008-02; SR-BSE-2008-23; SR-BSE-
2008-25; SR-BSECC-2008-01); Securities Exchange Act Release No.
53382 (Feb. 27, 2006), 71 FR 11251 (Mar. 06, 2006) (SR-NYSE-2005-
77); Securities Exchange Act Release No. 71449 (Jan. 30, 2014), 79
FR 6961 (Feb. 05, 2014) (SR-EDGA-2013-34; SR-EDGX-2013-43);
Securities Exchange Act Release No. 66171 (January 17, 2012), 77 FR
3297 (January 23, 2012) (File Nos. SR-EDGA-2011-34; SR-EDGX-2011-33;
SR-ISE-2011-69; SR-NYSE-2011-51; SR-NYSEAmex-2011-78; SR-NYSEArca-
2011-72).
---------------------------------------------------------------------------

    The Exchange believes that there is considerable support for a
finding that the Transaction is consistent with the Act with respect to
competition. 14 exchanges currently compete for options trading
business. Exchanges compete on technology, market model, trading venue,
fees and fee structure. Additionally, low switching costs allow
customers to easily move to another exchange, which customers do
regularly, as reflected in constantly varying market shares among the
existing exchange operators. In addition, the Commission has approved
several, new registered options exchanges in recent history, which
highlights an increase in competition in the market for listed options
trading.\67\
---------------------------------------------------------------------------

    \67\ See, e.g., Securities Exchange Act Release Nos. 76998
(January 29, 2016), 81 FR 6066 (February 4, 2016) (Order approving
application for exchange registration of ISE Mercury, LLC); 75650
(August 7, 2015), 80 FR 48600 (August 13, 2015) (Order approving
rules governing the trading of options on the EDGX Options Market);
70050 (July 26, 2013), 78 FR 46622 (August 1, 2013) (Order approving
application for exchange registration of Topaz Exchange, LLC (n/k/a
ISE Gemini, LLC)); 68341 (December 3, 2012), 77 FR 73065 (December
7, 2012) (Order approving application for exchange registration of
Miami International Securities Exchange, LLC); 61419 (January 26,
2010), 75 FR 5157 (February 1, 2010) (Order approving rules
governing the trading of options on the BATS Options Exchange).
---------------------------------------------------------------------------

    The Exchange believes that the Transaction will not change the
competitive landscape for listed options trading and the changes
proposed herein are consistent with other recent Commission approvals.
For example, a similar proposed combination of Deutsche B[ouml]rse and
NYSE Euronext in 2011 received Commission approval and would have
resulted in a combined greater than 40% market share of listed options
volume among its three, respective options exchanges (based on 2010
data).\68\ Similarly, as a result of the Transaction, the options
exchanges owned by Nasdaq would account for approximately 41% aggregate
market share of listed options volume.
---------------------------------------------------------------------------

    \68\ See Securities Exchange Act Release No. 66171 (January 17,
2012), 77 FR 3297 (January 23, 2012) (File Nos. SR-EDGA-2011-34; SR-
EDGX-2011-33; SR-ISE-2011-69; SR-NYSE-2011-51; SR-NYSEAmex-2011-78;
SR-NYSEArca-2011-72).
---------------------------------------------------------------------------

    For these reasons, the Exchange believes that the proposal is
consistent with the Act.

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

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from members or other interested
parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Within 45 days of the publication date of this notice or within
such longer period (1) as the Commission may designate up to 45 days of
such date if it finds such longer period to be appropriate and
publishes its reasons for so finding or (2) as to which the self-
regulatory organization consents, the Commission will:
    (A) By order approve such Proposed Rule Change; or
    (B) institute proceedings to determine whether the Proposed Rule
Change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-ISEGemini-2016-05 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-ISEGemini-2016-05. This
file number should be included on the subject line if email is used.
    To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for Web site
viewing and printing in the Commission's Public Reference Room on
official business days between the hours of 10:00 a.m. and 3:00 p.m.
Copies of such filing also will be available for inspection and copying
at the principal offices of the Exchange. All comments received will be
posted without change; the Commission does not edit personal
identifying information from submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-ISEGemini-2016-05, and should be
submitted on or before June 6, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\69\
---------------------------------------------------------------------------

    \69\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-11406 Filed 5-13-16; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 81, Number 103 (Friday, May 27, 2016)]
[Notices]
[Pages 33718-33720]
[FR Doc No: 2016-12511]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77884; File No. SR-BatsBZX-2016-17]

Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Related to
Fees as They Apply to the Equity Options Platform

May 23, 2016.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on May 16, 2016, Bats BZX Exchange, Inc. (the ``Exchange'' or ``BZX'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------

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

    The Exchange filed a proposal to amend the fee schedule applicable
to Members \3\ and non-members of the Exchange pursuant to BZX Rules
15.1(a) and (c). Changes to the fee schedule pursuant to this proposal
are effective upon filing.
---------------------------------------------------------------------------

    \3\ The term ``Member'' is defined as ``any registered broker or
dealer that has been admitted to membership in the Exchange.'' See
Exchange Rule 1.5(n).
---------------------------------------------------------------------------

    The text of the proposed rule change is available at the Exchange's
Web site at www.batstrading.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant parts of such
statements.

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

1. Purpose
    The Exchange proposes to modify the fee schedule applicable to the
Exchange's options platform (``BZX Options'') effective immediately, in
order to: (i) Modify the fees for logical ports; and (ii) to no longer
provide for separate fees based upon the number of logical ports
utilized.
    A logical port represents a port established by the Exchange within
the Exchange's system for trading and billing purposes. Each logical
port established is specific to a Member or non-member and grants that
Member or non-member the ability to operate a specific application,
such as FIX order entry or PITCH data receipt. The Exchange's Multicast
PITCH data feed is available from two primary feeds, identified as the
``A feed'' and the ``C feed'', which contain the same information but
differ only in the way such feeds are received. The Exchange also
offers two redundant fees, identified as the ``B feed'' and the ``D
feed.'' The Exchange also offers a bulk-quoting interface which allows
Users \4\ of BZX Options to submit and update multiple bids and offers
in one message through logical ports enabled for bulk-quoting.\5\ The
bulk-quoting application for BZX Options is a particularly useful
feature for Users that provide quotations in many different options.
---------------------------------------------------------------------------

    \4\ A User on BZX Options is either a member of BZX Options or a
sponsored participant who is authorized to obtain access to the
Exchange's system pursuant to BZX Rule 11.3.
    \5\ See Securities Exchange Act Release Nos. 65133 (August 15,
2011), 76 FR 52032 (August 19, 2011) (SR-BATS-2011-029) and 65307
(September 9, 2011), 76 FR 57092 (September 15, 2011) (SR-BATS-2011-
034).
---------------------------------------------------------------------------

    The Exchange currently charges for logical ports (including
Multicast PITCH Spin Server and GRP ports) $550 per port per month for
the first five ports. Where a User subscribes to more than five ports,
the Exchange charges for each port in excess of five $650 per logical
port per month and $2,000 per month for logical ports with bulk quoting
capabilities. Logical port fees are limited to logical ports in the
Exchange's primary data center and no logical port fees are assessed
for redundant secondary data center ports. The Exchange assesses the
monthly per logical port fees for all of a Member and non-Member's
logical ports.
    The Exchange now proposes to amend the fee for logical ports,
Multicast PITCH Spin Server Ports for a set of primary ports (A or C
feed), and GRP Ports for a set of primary ports (A or C feed) to $650
per month. These fees would now be set and not vary based on the number
of ports purchased. The Exchange will continue to offer for free the
ports necessary to receive the Exchange's redundant Multicast ``B
feed'' and ``D feed'', as well as all ports made available in the
Exchange's secondary data center. The Exchange does not propose to
amend the monthly fee for ports with bulk quoting capabilities, other
than reorganizing the fee table to reflect the above changes.
Implementation Date
    The Exchange proposes to implement these amendments to its fee
schedule on June 1, 2016.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder that are applicable to a national securities exchange, and,
in particular, with the requirements of section 6 of the Act.\6\
Specifically, the Exchange believes that the proposed rule change is
consistent with section 6(b)(4) of the Act,\7\ in that it provides for
the equitable allocation of reasonable dues, fees and other charges
among members and other persons using any facility or system which the
Exchange operates or controls.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange operates in a highly competitive market in which
exchanges offer connectivity services as a means to facilitate the
trading activities of members and other participants. Accordingly, fees
charged for connectivity are constrained by the active competition for
the order flow of such participants as well as demand for market data
from the Exchange. If a particular exchange charges excessive fees for
connectivity, affected members will opt to terminate their connectivity
arrangements with that exchange, and adopt a possible range of
alternative strategies, including routing to the applicable exchange
through another participant or market center or taking that exchange's
data indirectly. Accordingly, the exchange charging excessive fees
would stand to lose not only connectivity revenues but also revenues
associated with the execution of orders routed to it by affected
members, and, to the extent applicable, market data revenues. The
Exchange believes that this competitive dynamic imposes powerful
restraints on the ability of any exchange to charge unreasonable fees
for connectivity.
    The Exchange believes that the proposed fees for logical ports are
equitably allocated, reasonable, and not unfairly discriminatory in
that the proposed fees will help the Exchange to cover increasing
infrastructure costs associated with offering and maintaining logical
ports connections. The Exchange also notes its proposed fees equal that
currently charged by the NASDAQ Stock Market LLC (``NASDAQ'').\8\
---------------------------------------------------------------------------

    \8\ See NASDAQ Options Pricing, chapter XV, section 3(b)
(charging a monthly fee of $650 order entry ports).
---------------------------------------------------------------------------

    Lastly, the Exchange also believes that the proposed amendments to
its fee schedule are non-discriminatory because they will apply
uniformly to all Members. All Members that voluntarily select various
service options will be charged the same amount for the same services.
All Members have the option to select any connectivity option, and
there is no differentiation among Members with regard to the fees
charged for the services offered by the Exchange.

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

    The Exchange believes its proposed amendments to its fee schedule
would not impose any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The Exchange
does not believe that the proposed change represents a significant
departure from previous pricing offered by the Exchange or pricing
offered by the Exchange's competitors. Additionally, Members may opt to
disfavor the Exchange's pricing if they believe that alternatives offer
them better value. Accordingly, the Exchange does not believe that the
proposed change will impair the ability of Members or competing venues
to maintain their competitive standing in the financial markets.
    The Exchange believes that fees for connectivity are constrained by
the robust competition for order flow among exchanges and non-exchange
markets. Further, excessive fees for connectivity, including logical
port fees, would serve to impair an exchange's ability to compete for
order flow rather than burdening competition. The Exchange also does
not believe the proposed rule change would impact intramarket
competition as it would apply to all Members and non-Members equally.

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

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any written comments from members or other interested parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The foregoing rule change has become effective pursuant to section
19(b)(3)(A) of the Act \9\ and paragraph (f) of Rule 19b-4
thereunder.\10\ At any time within 60 days of the filing of the
proposed rule change, the Commission summarily may temporarily suspend
such rule change if it appears to the Commission that such action is
necessary or appropriate in the public interest, for the protection of
investors, or otherwise in furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-BatsBZX-2016-17 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-BatsBZX-2016-17. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-BatsBZX-2016-17, and should
be submitted on or before June 17, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-12511 Filed 5-26-16; 8:45 am]
BILLING CODE 8011-01-P