[Federal Register Volume 88, Number 63 (Monday, April 3, 2023)]
[Notices]
[Pages 19694-19704]
[FR Doc No: 2023-06783]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97210; File No. SR-MEMX-2023-06]

Self-Regulatory Organizations; MEMX LLC; Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change To Amend and Restate
the Limited Liability Company Agreement of MEMX Holdings LLC

March 28, 2023.
    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 March 17, 2023, MEMX LLC (``MEMX'' or the ``Exchange'') filed
with the Securities and Exchange Commission (the ``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Exchange filed the proposal as
a ``non-controversial'' proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange is filing with the Commission a proposed rule change
to amend and restate the Sixth Amended and Restated Limited Liability
Company Agreement (the ``Sixth Amended LLC Agreement'') of MEMX
Holdings LLC (``Holdco'') as the Seventh Amended and Restated Limited
Liability Company Agreement of Holdco (the ``Seventh Amended LLC
Agreement'') to reflect certain amendments, as further described below.
Holdco is the parent company of the Exchange and directly or indirectly
owns all of the limited liability company membership interests in the
Exchange. The text of the proposed rule change is provided in Exhibit
5.

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 aspects of such
statements.

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

1. Purpose
    The Exchange proposes to amend and restate the Holdco LLC Agreement
\5\ to reflect: (i) amendments related to the creation of the Class D
Units \6\ in connection with the sale by Holdco of Class D Units to
certain new and existing Members \7\ in a capital raise transaction
(the ``Transaction''); (ii) amendments related to certain changes with
respect to the Holdco Board in connection with the Transaction; (iii)
an amendment to the definition of ``Company Related Party''; (iv) an
amendment to the provision relating to the preparation and delivery of
Holdco's annual budget; and (v) various clarifying, updating,
conforming, and other non-substantive amendments. Each of these
amendments is discussed below.
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    \5\ References herein to the ``Holdco LLC Agreement'' refer to
the Sixth Amended LLC Agreement or the Seventh Amended LLC
Agreement, as appropriate in the context. All section references
herein are to sections of the Holdco LLC Agreement unless indicated
otherwise. Capitalized terms used but not defined herein shall have
the meanings ascribed to such terms in the Holdco LLC Agreement.
    \6\ As proposed, the term ``Class D Units'' means the Class D-1
Units and the Class D-2 Units; the term ``Class D-1 Units'' means
the Units having the privileges, preference, duties, liabilities,
obligations and rights specified with respect to ``Class D-1 Units''
in the Holdco LLC Agreement; and the term ``Class D-2 Units'' means
the Units having the privileges, preference, duties, liabilities,
obligations and rights specified with respect to ``Class D-2 Units''
in the Holdco LLC Agreement. The term ``Unit'' means a unit
representing a fractional part of the membership interests of the
members of Holdco. See Section 1.1 for the full definition of Unit.
    \7\ The term ``Member'' refers to a person (i.e., an individual
or entity) that owns one or more Units and is admitted as a limited
liability company member of Holdco.
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Background
    The primary purpose of the Exchange's proposal to amend and restate
the Holdco LLC Agreement is to create a new class of membership
interest in Holdco, the Class D Units, which are the exact same type of
membership interest (i.e., have the same privileges, preference,
duties, liabilities, obligations and rights) as the existing Class C
Units except for the original purchase price of such Units, and

effectuate the sale by Holdco of Class D Units to certain new and
existing Members pursuant to the Transaction.
    The proceeds resulting from the sale of Class D Units pursuant to
the Transaction will be paid to Holdco by the new and existing Members
participating in the Transaction as purchasers of Class D Units (the
``Participating Members''), and such proceeds will be used by Holdco
for general corporate expenses, including to support the operations and
regulation of the Exchange, which is a subsidiary of Holdco. Although
each Member's proportionate ownership of Holdco will change as a result
of the Transaction, no Member will exceed any ownership or voting
limitations applicable to the Members set forth in the Holdco LLC
Agreement after giving effect to the Transaction and the amendments to
the Holdco LLC Agreement proposed herein.\8\
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    \8\ See Section 3.5, which sets forth certain limitations with
respect to the ownership and voting of Units. The Exchange notes
that the proposal contains an amendment to Section 3.5, which is
described below.
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    Additionally, in connection with the Transaction, one new Member,
Optiver PSI B1 LLC (``Optiver''), will receive the right to nominate a
Director, thereby increasing the size of the Holdco Board from fourteen
(14) to fifteen (15) Directors. Other than this change to the
composition of the Holdco Board, a proposed change to the definition of
``Supermajority Board Vote'' to maintain the current affirmative vote
threshold and the addition of an ``Options Market Structure
Committee,'' each as further described below, the governance of Holdco
would continue under its existing structure. None of the amendments to
the Holdco LLC Agreement proposed herein would impact the governance of
the Exchange.
    The Transaction and all amendments to the Holdco LLC Agreement
proposed herein were previously approved by the Holdco Board on March
8, 2023, in accordance with the Holdco LLC Agreement. The Exchange
expects the Transaction to be completed pursuant to one or more
closings that would occur within ninety (90) days of the initial
closing. The Exchange expects the initial closing to occur on or
shortly after the date on which the amendments to the Holdco LLC
Agreement proposed herein become effective.
Amendments Related to the Creation of the Class D Units
    In connection with the Transaction, the proposal would amend the
Holdco LLC Agreement to create a new class of Units, the Class D Units,
in order to effectuate the sale by Holdco of Class D Units to the
Participating Members. As proposed, the Class D Units are the exact
same type of membership interest (i.e., have the same privileges,
preference, duties, liabilities, obligations and rights) as the
existing Class C Units except that the Class D Units are being sold at
a different price per Unit than which the Class C Units were previously
sold, which results in the need for Holdco to create a new class of
Units (i.e., the Class D Units) to facilitate the Transaction. Other
than the original purchase price of such Units being different, the
Class D Units are the exact same security in every respect and are
functionally equivalent to the Class C Units.
Authorization and Issuance of the Class D Units
    Section 3.2 currently contains provisions related to the
authorization and issuance of the Class A Units, the Class C Units, and
the Common Units and that specify the voting rights associated with
such Units. The proposal would amend Section 3.2 to similarly reflect
the creation of the Class D Units, including to add new paragraph (f),
which contains provisions related to the authorization and issuance of
the Class D Units (comprised of the Class D-1 Units and the Class D-2
Units, as described below) and that specifies the voting rights
associated with such Units by reference to the applicable paragraphs of
Section 4.7, which prescribes the actions on which holders of Units are
entitled to vote.
Voting Construct Applicable to Class D Units
    The Exchange notes that previous amendments to the Holdco LLC
Agreement changed the governance structure of Holdco from a construct
in which the Members had no voting or management rights (except in very
limited circumstances) and the authority to manage and control the
business and affairs of Holdco was otherwise vested in the Holdco Board
to a construct in which the Class A Units, the Class C Units, and the
Common Units were divided into ``voting'' and ``non-voting'' series and
the Members holding Class A Units, Class C Units and/or Common Units
were granted certain voting rights associated with the ownership of
such Units, with different voting rights associated with the ``voting''
series and the ``non-voting'' series of such classes of Units.\9\ The
sole purpose of this prior change to Holdco's governance structure was
to facilitate certain Members' compliance with requirements and
restrictions under the United States Bank Holding Company Act of 1956,
as amended (``BHCA''), in light of amendments to the BHCA regulations
issued by the Board of Governors of the Federal Reserve System
regarding the framework for determining ``control'' under the BHCA as
well as interpretations of such amendments by certain Members that are
subject to the BHCA.\10\
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    \9\ See Securities Exchange Act Release No. 93452 (October 28,
2021), 86 FR 60683 (November 3, 2021) (SR-MEMX-2021-15). The
Exchange notes that the voting rights of holders of Class A Units,
Class C Units, and/or Common Units remain very limited and relate
only to voting on significant corporate matters related to the
administration, ownership, capital, or dissolution of Holdco or any
Holdco subsidiary (other than the Exchange), and the authority to
manage and control the business and affairs of Holdco, including the
right to amend or modify the Holdco LLC Agreement, remains otherwise
vested in the Holdco Board. See Section 4.6(a).
    \10\ Id.
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    Under the current proposal, the Class D Units would similarly be
divided into a ``voting'' series (i.e., the Class D-1 Units), with
certain voting rights as prescribed in Section 4.7 that mirror those of
the Class C-1 Units, and a ``non-voting'' series (i.e., the Class D-2
Units), with more limited voting rights as prescribed in Section 4.7
that mirror those of the Class C-2 Units. Like the creation of the
``voting'' and ``non-voting'' series of the Class C Units, the Class A
Units, and the Common Units, the sole purpose of the proposal to create
separate ``voting'' and ``non-voting'' series of Class D Units is to
maintain a voting construct that facilitates certain Members'
compliance with the BHCA.
    Under the proposal, Section 4.7 would be amended to reflect the
creation of the Class D Units and provide for the voting rights
associated with the ownership of the Class D-1 Units and the Class D-2
Units. Specifically, the Class D-1 Units and/or the Class D-2 Units, as
applicable, would vote together with the Class C-1 Units and/or the
Class C-2 Units, as applicable, on all matters on which the Class C-1
and/or the Class C-2 Units are currently entitled to vote, subject to
two exceptions set forth in amended Section 4.7(d) and proposed new
Section 4.7(f), which are described below, and the voting construct
applicable to the Class D Units would exactly mirror the voting
construct applicable to the Class C Units since, as noted above, they
are intended to be the exact same type of membership interest with all
of the same privileges, preference, duties, liabilities,

obligations and rights under the Holdco LLC Agreement.
    The only actions on which the Class D Units would vote on their
own, and not together with the Class C Units, are set forth in: (i)
amended Section 4.7(d), which provides that any waiver or amendment of
any provision of the Holdco LLC Agreement which would significantly and
adversely affect the rights, preferences, powers or privileges of the
Class D-1 Units shall not be effected without the approval of a
majority of the then-outstanding Class D-1 Units; and (ii) proposed new
Section 4.7(f), which provides that any exchange, reclassification or
cancellation (whether by merger, consolidation or otherwise) or
modification of the terms of all or part of the Class D Units which
exchange, reclassification, cancellation or modification, as
applicable, significantly and adversely affects the rights or
preferences of the Class D Units shall not be effected without the
approval of the majority of the then-outstanding Class D-1 Units and
Class D-2 Units, voting together as a single class. These exceptions to
the general principle that the Class D Units vote together with the
Class C Units are rooted in common corporate law principles and are
intended to safeguard the Class D Units against actions that
significantly and adversely affect the Class D Units specifically, and
such provisions mirror existing provisions that confer the same voting
rights associated with the Class C Units with respect to actions that
significantly and adversely affect the Class C Units specifically. In
connection with these proposed amendments to Section 4.7, the proposal
would further amend Section 4.7 to renumber the existing paragraphs
after proposed new paragraph (g) and update relevant section references
throughout the Holdco LLC Agreement accordingly.
    The proposal would also amend Section 4.6, which also relates to
the voting rights of the Members, in a manner that conforms and is
consistent with the proposed amendments to Section 4.7 providing for
certain voting rights associated with the ownership of Class D Units,
as described above, and to otherwise reflect the creation of the Class
D Units.
    Additionally, the proposal would amend Section 3.10, which contains
provisions that permit a Class A Member and/or Class C Member to elect
to specify the maximum voting percentage that such Member may have with
respect to its Voting Class A Units and/or Class C-1 Units (any such
election, a ``Restricted Voting Election'') and that provide for the
conversion of Voting Class A Units and/or Class C-1 Units into
Nonvoting Class A Units and/or Class C-2 Units, respectively, and vice
versa, in certain circumstances to maintain such Member's specified
maximum voting percentage with respect to such Units. Section 3.10 is
primarily in place in its current form to provide a mechanism for Class
A Members and/or Class C Members to manage any potential deemed voting
interests attributable to the Voting Class A Units and/or Class C-1
Units for BHCA and/or other regulatory purposes, although any Member
holding Voting Class A Units and/or Class C-1 Units is able to make a
Restricted Voting Election with respect to such Units for any purpose.
    Currently, Section 3.10 provides that a Class A Member may notify
Holdco of a Restricted Voting Election with respect to its Voting Class
A Units (``Maximum Voting Class A Voting Percentage''), and a Class C
Member may notify Holdco of a Restricted Voting Election with respect
to its Class C-1 Units (``Maximum Class C-1 Voting Percentage''). The
proposal would amend Section 3.10 to reflect the creation of the Class
D Units and group the Class D-1 Units together with the Class C-1 Units
for purposes of Section 3.10 in a manner consistent with the harmonized
voting structure with respect to such Units described above, such that
a Member holding Class C-1 Units and/or Class D-1 Units would now be
permitted to notify Holdco of a Restricted Voting Election with respect
to its Class C-1 Units and/or Class D-1 Units (``Maximum Class C-1/D-1
Voting Percentage''). In connection with this change, the proposal
would also amend the following defined terms to reflect that the Class
D-1 Units are now grouped together with the Class C-1 Units for
purposes of Section 3.10: ``Class C-1 Voting Percentage'' would become
``Class C-1/D-1 Voting Percentage''; \11\ ``Maximum Class C-1 Voting
Percentage'' would become ``Maximum Class C-1/D-1 Voting Percentage'';
\12\ and ``Prior Class C-1 Voting Percentage'' would become ``Prior
Class C-1/D-1 Voting Percentage.'' \13\ Similarly, the proposal would
amend Exhibit F, which is a Restricted Voting Election Notice form used
by Members to notify Holdco of a Restricted Voting Election, to reflect
that a Class C Member and/or Class D Member would now elect to specify
a Maximum Class C-1/D-1 Voting Percentage rather than a Maximum Class
C-1 Voting Percentage. The provisions in Section 3.10 regarding the
conversion of Voting Class A Units and/or Class C-1 Units into
Nonvoting Class A Units and/or Class C-2 Units, respectively, and vice
versa, in certain circumstances to maintain such Member's specified
maximum voting percentage with respect to such Units would also be
amended to include provisions relating to the conversion of Class D-1
Units into Class D-2 Units, and vice versa, in the same circumstances
and on the same terms that are currently specified with respect to the
Class A Units and Class C Units. Additionally, the other provisions of
Section 3.10 would similarly be amended to reflect the creation of the
Class D Units, including to add references to Class D Units and Class
D-1 Units, as applicable, alongside references to Class C Units and
Class C-1 Units, as applicable.
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    \11\ As proposed, the term ``Class C-1/D-1 Voting Percentage''
would be defined in Section 1.1 and would mean at any time of
calculation, a fraction, expressed as a percentage, (i) the
numerator of which is the number of then issued and outstanding
Class C-1 Units and Class D-1 Units held by a Member and (ii) the
denominator of which is the number of then issued and outstanding
Class C-1 Units and Class D-1 Units held by all Members.
    \12\ As proposed, the term ``Maximum Class C-1/D-1 Voting
Percentage'' would be defined in Section 3.10(a) and would refer to
a Class C Member's or a Class D Member's maximum Class C-1/D-1
Voting Percentage.
    \13\ As proposed, the term ``Prior Class C-1/D-1 Voting
Percentage'' would be defined in Section 3.10(e)(ii) and would refer
to a Class C Member's or a Class D Member's Class C-1/D-1 Voting
Percentage immediately prior to the issuance of any new Units or
Unit Equivalents.
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Convertibility and Conversion of Class D Units
    As the Class D Units are the exact same type of membership interest
as the Class C Units, which are convertible into Common Units as set
forth in Section 3.11 (which references additional conversion terms set
forth in Exhibit G--Conversion Rights of Class C Units), as proposed,
the Class D Units are also convertible into Common Units under the same
terms applicable to the Class C Units. Accordingly, the proposal would
amend Section 3.11 and Exhibit G to reflect the creation of the Class D
Units, include references to the Class D Units where appropriate, and
include conversion provisions applicable to the Class D Units that
mirror those applicable to the Class C Units. Proposed new Section
3.11(d) provides that in the event of any conversion to Common Units of
any Class D Units, Class D-1 Units shall be converted into Voting
Common Units, and Class D-2 Units shall be converted into Nonvoting
Common Units. This conversion structure mirrors that applicable to the

Class C Units (i.e., Class C-1 Units are convertible into Voting Common
Units, and Class C-2 Units are convertible into Nonvoting Common Units)
and is similarly designed to keep the same voting construct in place
with respect to the Common Units that are issued upon the conversion of
any Class D Units (i.e., Converted Common Units) in a manner consistent
with the BHCA considerations described above. The Exchange notes that
current Section 3.2(f), which would be renumbered as Section 3.2(g) to
account for proposed new paragraph (f) described above, contains
provisions relating to the Common Units and specifically provides that
Common Units shall only be issuable in connection with an investment in
the Company or upon conversion of Class C Units. As the Class D Units
are also convertible into Common Units on the same terms as the Class C
Units, as described above, the proposal would amend Section 3.2(g) to
reflect that Common Units would also be issuable upon the conversion of
Class D Units.
Amendment to Definitions and Other References To Reflect the Creation
of the Class D Units
    In connection with the creation of the Class D Units, the proposal
would add definitions of the following terms in Section 1.1 (i.e., the
``Definitions'' section of the Holdco LLC Agreement): Class D Member;
\14\ Class D-1 Units; \15\ Class D-2 Units; \16\ Class D Unit Original
Purchase Price; \17\ and Class D Units.\18\ The proposal would also add
references to Class D Units and/or Class D Members alongside references
to Class C Units and/or Class C Members, as applicable, where
appropriate throughout the Holdco LLC Agreement. Additionally, the
proposal would amend the definitions of ``Converted Common Units'';
``Pro Rata Portion''; and ``Units'' in Section 1.1 to reflect the
creation of, and include references to, the Class D Units.
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    \14\ As proposed, the term ``Class D Member'' means a Member
holding Class D-1 Units or Class D-2 Units, as applicable, in its
capacity as such, together with its Affiliates that hold Class D-1
Units or Class D-2 Units, as applicable (for the sake of clarity,
such Member and such Affiliates shall be considered to be one (1)
Class D Member).
    \15\ See supra note 4 for the proposed definition of the term
``Class D-1 Units''.
    \16\ See supra note 4 for the proposed definition of the term
``Class D-2 Units''.
    \17\ As proposed, the term ``Class D Unit Original Purchase
Price'' means the purchase price per Class D Unit set forth in the
Members Schedule as of the Effective Date.
    \18\ See supra note 4 for the proposed definition of the term
``Class D Units''.
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Priority of Distributions of the Class D Units
    Like the Class C Units, the primary distinction between the Class D
Units and the Common Units, as well as the primary purpose of providing
for the convertibility of Class D Units into Common Units, is the
respective priority of Distributions \19\ made to the Members with
respect to such Units, which is the main economic consequence of a
Member's ownership of such Units. The respective priority of
Distributions made to the Members with respect to the different classes
of Units is currently set forth in Section 7.3 with respect to
Distributions other than of proceeds in the event of a liquidation of
Holdco, and in Section 13.3 with respect to Distributions of proceeds
in the event of a liquidation of Holdco. The proposal would amend
Sections 7.3 and 13.3 to reflect the priority of Distributions with
respect to the Class D Units, which, as the Class D Units are the exact
same type of membership interest as the Class C Units, is the same in
each case for the Class D Units as for the Class C Units (i.e., the
Class D Units and the Class C Units are effectively treated as the same
class of membership interest for such purposes and receive shares of
Distributions together at the same times and on the same terms on a pro
rata basis).
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    \19\ See Section 1.1 for the definition of Distribution.
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Rights and Obligations of the Class D Units
    There are currently several provisions in the Holdco LLC Agreement
related to the rights and obligations associated with the Class C Units
and the Class C Members, and thus, make specific reference to ``Class C
Units'' and/or ``Class C Members.'' As noted above, under the proposal,
the Class D Units are the exact same type of membership interest and
therefore have the same rights and obligations as the Class C Units,
and thus, a Member's ownership of Class D Units would confer the same
rights and obligations with respect to such Units as a Member's
ownership of Class C Units. Accordingly, the proposal would make
several amendments throughout the Holdco LLC Agreement to reflect that
the Class D Units have such rights and obligations and to otherwise
reflect the creation of the Class D Units, including to add references
to Class D Units and/or Class D Member alongside references to Class C
Units and/or Class C Member, as applicable, where appropriate for this
purpose. Such changes include amendments to reflect that the Class D
Units are subject to the same terms as the Class C Units regarding the
Member meeting rights set forth in Sections 4.7(j) and (o) (renumbered
from (h) and (m) due to the other amendments to Section 4.7 described
above), the pre-emptive rights set forth in Section 9.1, the Director
nomination rights set forth in Section 8.10, the Board Observer
appointment rights set forth in Section 8.13, the Exchange Board
Observer appointment rights set forth in Section 8.18(g), the right of
first offer set forth in Section 10.3, the drag-along rights set forth
in Section 10.4, the tag-along rights set forth in Section 10.5, the
regulatory hardship transfer and surrender rights set forth in Section
10.6, the information rights set forth in Section 12.1, and the waiver
consent rights set forth in Section 15.10.
Amendment to Section 3.5 Related to the Treatment of Class C Units,
Class D Units, and Common Units as a Single Class for Purposes of
Sections 3.5 and 3.8
    Section 3.5 sets forth certain limitations with respect to the
ownership and voting of Units, which are intended to prevent the
concentration of voting power and control of Holdco, and, in turn, the
Exchange, above certain specified thresholds. Specifically, Section
3.5(a) provides that for so long as Holdco controls the Exchange,
subject to certain limited exceptions: (i) no Person, either alone or
together with its Related Persons, may own, directly or indirectly, of
record or beneficially, Units constituting more than forty percent
(40%) of any class of Units; (ii) no Exchange Member, either alone or
together with its Related Persons, may own, directly or indirectly, of
record or beneficially, Units constituting more than twenty percent
(20%) of any class of Units; and (iii) no Person, either alone or
together with its Related Persons, at any time may, directly,
indirectly or pursuant to any voting trust, agreement, plan or other
arrangement, vote or cause the voting of Units or give any consent or
proxy with respect to Units representing more than twenty percent (20%)
of the voting power of the then issued and outstanding Units, nor may
any Person, either alone or together with its Related Persons, enter
into any agreement, plan or other arrangement with any other Person,
either alone or together with its Related Persons, under circumstances
that would result in the Units that are subject to such agreement, plan
or other arrangement not being voted on any matter or matters or any
proxy relating thereto being withheld, where the effect

of such agreement, plan or other arrangement would be to enable any
Person, either alone or together with its Related Persons, to vote,
possess the right to vote or cause the voting of Units which would
represent more than twenty percent (20%) of such voting power.
    The Exchange notes that while the Class D Units and the Class C
Units may be considered separate classes of Units due to the naming
convention of such Units (i.e., being referred to as Class C vs. Class
D) and for certain general corporate law purposes (i.e., entitled to
vote separately on any matters that affect such Units specifically), as
discussed above, the Class D Units are the exact same type of
membership interest (i.e., have the same privileges, preference,
duties, liabilities, obligations and rights) as the Class C Units and
also vote together with, and in the same manner as, the Class C Units
pursuant to Section 4.7 on all actions on which such Units are entitled
to vote (other than actions that significantly and adversely affect the
Class C Units or the Class D Units specifically). Thus, as noted above,
such Units are functionally equivalent with the only difference between
such Units being the original purchase price paid by the applicable
purchasing Members, which difference is the sole reason for the
creation of the new Class D Units. Therefore, the Exchange and the
Holdco Board believe that the Class C Units and the Class D Units
should generally be treated as a single class of Units for most
purposes, as evidenced by the proposed amendments described above that
reflect the identical treatment under the Holdco LLC Agreement.
Additionally, as noted above, the Class C Units and the Class D Units
are both convertible into Common Units on the same terms, and, once
converted, such Common Units retain the same voting construct, rights,
and obligations as the Class C Units and/or Class D Units from which
they were converted (other than the priority of Distributions, as
described above), and Common Units vote together with the Class C Units
and the Class D Units and in the same manner pursuant to Sections
4.7(c) and (j) on all actions on which Class C Units and Class D Units
are entitled to vote (other than actions that significantly and
adversely affect the Class C Units and/or the Class D Units
specifically). As such, ownership of Class C Units, Class D Units, and/
or Common Units effectively confer the same ownership rights to the
holders of any such Units as relates to voting and governance of Holdco
(i.e., other than economic consequences resulting from priority of
Distributions).
    Accordingly, the proposal would amend Section 3.5, which sets forth
certain limitations with respect to the ownership and voting of Units,
to include a new paragraph (e), which provides that notwithstanding
anything in the Holdco LLC Agreement to the contrary, the provisions of
the Holdco LLC Agreement shall be construed in a manner such that the
Class C Units, the Class D Units, and the Common Units together shall
be treated as a single class of securities for purposes of Sections 3.5
and 3.8.
    The Exchange reiterates that Members have limited control through
ownership of Units, which is comprised of voting power associated with
Units with respect to the limited actions prescribed in Section 4.7 and
a Nominating Member's ability to nominate a Director to the Holdco
Board, and, accordingly, the authority to manage and control the
business and affairs of Holdco remains generally vested in the Holdco
Board.\20\ The Exchange further notes that Member representation on the
Holdco Board is limited to one (1) Director per Nominating Member
regardless of the amount/class of Units held by such Member, and the
proposed change to treat the Class C Units, the Class D Units, and the
Common Units together as a single class of securities for purposes of
Sections 3.5 and 3.8 does not change this fact. In turn, Directors each
have one vote, and thus, the general control of Holdco is widely
dispersed (i.e., as amended, there will be fifteen (15) Directors with
one vote each, so each Director (and each Member that they represent)
has less than seven percent (7%) of the voting power on the majority of
matters related to the governance of Holdco).
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    \20\ See supra note 7.
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    The Exchange also notes that combining Class C Units, Class D
Units, and Common Units does not increase the relative voting power or
control of any Members, including the holders of Class A Units, as
holders of Class A Units still vote as a separate class pursuant to
Section 4.7(a) in the same manner as today. Rather, the only impact to
voting power or control is dilution to Members holding Class C Units
because the Exchange is bringing in new investors that will have voting
power due to their holding Class D Units that will vote together with
such Class C Units, as well as dilution to Members holding Class A
Units in the sole event that the Class A Units vote together with the
Class C Units and Class D Units with respect to the liquidation,
dissolution or winding up of Holdco pursuant to Section 4.7(j). The
only impact to ownership values is similarly dilutive, for both Members
holding Class A Units and those holding Class C Units. However, the
Holdco LLC Agreement contains provisions that permit such Members
holding Class A Units and/or Class C Units to purchase Class D Units in
the Transaction to retain their current proportionate ownership (and,
in turn, control and voting power) to the extent they are concerned
about any such dilution, and none of the proposed changes will impair
the ability of the Exchange to carry out its functions and
responsibilities as an ``exchange'' under the Exchange Act, and the
rules and regulations promulgated thereunder, nor does it impair the
ability of the SEC to enforce the Exchange Act and the rules and
regulations promulgated thereunder with respect to the Exchange.
    The Exchange notes that the proposed new Section 3.5(e) does not
seek to treat Class A Units as a single class along with Class C Units,
Class D Units, and Common Units for this purpose because Class A Units
are economically distinct, as they are best characterized as
participating preferred securities and are not convertible into Common
Units, and because the Class A Units vote as a separate class (i.e.,
not together with the Class C Units and Common Units) pursuant to
Section 4.7(a). However, the Exchange also notes that in connection
with any investment in Holdco it reviews the ownership of Units in the
aggregate (i.e., not based on class) and considers such aggregated
ownership as the most meaningful way to consider the ownership and
voting limitations for purposes of assessing relative control.
    The Exchange notes that Section 3.8, which would remain unchanged,
contains provisions allowing an Exchange Member that (together with its
Related Persons) owns, directly or indirectly, of record or
beneficially, Units constituting more than twenty percent (20%) of any
class of Units to transfer the number of Units which account for the
excess over such twenty percent (20%) ownership limitation, so the
proposed new Section 3.5(e) makes clear that the same rule applying to
the treatment of ownership of Class C Units, Class D Units, and Common
Units for purposes of Section 3.5 described above would also apply to
Section 3.8, as such section also contains a provision related to an
ownership threshold, for purposes of which the Exchange and the Holdco
Board believes Class C Units, Class D Units, and Common Units are
functionally equivalent and appropriately treated as a single class.

Amendments Related to Certain Changes With Respect to the Holdco Board
in Connection With the Transaction
    In connection with the Transaction, Optiver will become a Member
with the right to nominate a Director to the Holdco Board (i.e., a
Nominating Member). Therefore, the size of the Holdco Board will
increase from fourteen (14) to fifteen (15) Directors, as of the
Effective Date. To reflect this change, the proposal would amend the
Holdco LLC Agreement to add a definition of ``Optiver'' in Section 1.1
that reflects Optiver as a Class D Member and is consistent with the
definitions of other Nominating Members with similar rights as Optiver;
amend the definition of ``Market Maker Member'' \21\ in Section 1.1 to
include a reference to Optiver as a designated Market Maker Member;
amend Section 8.3(a) to reflect the increased size of the Holdco Board
at fifteen (15) Directors; and amend Section 8.3(b) to reference
Optiver as a Member with the right to nominate a Director.
---------------------------------------------------------------------------

    \21\ The term ``Market Maker Member'' refers to each of Citadel,
Virtu, Jane Street and any other Member that is specifically
designated as a Market Maker Member, in each case, together with
each of their respective Affiliates. See Section 1.1. The Exchange
notes that the only consequence of designation as a Market Maker
Member under the Holdco LLC Agreement is that at least one Director
nominated by any Market Maker Member (i.e., a Market Maker Director)
is generally required to establish a quorum for the transaction of
business of the Holdco Board. See Section 8.6(a).
---------------------------------------------------------------------------

    In addition, the proposal would amend the definition of
``Supermajority Board Vote'' in Section 1.1, as further described
below. Currently, the term Supermajority Board Vote means the
affirmative vote of at least seventy-seven percent (77%) of the votes
of all Directors then entitled to vote on the matter under
consideration and who have not recused themselves, whether or not
present at the applicable meeting of the Board; provided that if such
affirmative vote threshold results in the necessity of the affirmative
vote of eight (8) such Directors or fewer, an affirmative vote of all
but two (2) of such Directors shall be required instead with respect to
such matter. As the size of the Holdco Board will increase as a result
of the Transaction, as described above, the proposal seeks to amend the
definition of ``Supermajority Board Vote'' in Section 1.1 to change the
affirmative vote threshold from seventy-seven percent (77%) of the
votes of all Directors then entitled to vote to seventy-three percent
(73%) of the votes of all Directors then entitled to vote, which would
maintain the current voting structure in that the affirmative vote of
the same number of Directors would be required assuming that all
Directors are entitled to vote on a matter and none have recused
themselves. Specifically, under the current structure with fourteen
(14) Directors, assuming all such Directors are entitled to vote on a
matter and none have recused themselves, a matter would be approved as
an affirmative Supermajority Board Vote if eleven (11) Directors vote
in favor of a matter, and under the proposed structure with fifteen
(15) Directors a matter would similarly be approved as an affirmative
Supermajority Board Vote if eleven (11) Directors vote in favor of a
matter. Accordingly, the Holdco Board and the Exchange believe it is
appropriate to maintain this voting structure which results in an
affirmative Supermajority Board Vote if eleven (11) Directors vote in
favor of a particular matter. The proposal would not change any other
aspect of the definition.
    The proposal also would amend Section 8.9 to establish an Options
Market Structure Committee and to restructure such Section in
connection with this addition. Currently, Section 8.9 addresses
committees of the Holdco Board, including the right of the Holdco Board
to establish one or more committees of the Holdco Board that have the
authority to make recommendations to the Holdco Board, but not to act
for or on behalf of, or to bind Holdco. Section 8.9 also states that
the Holdco Board shall establish a market structure committee and that
so long as BlackRock remains a Nominating Member, (a) BlackRock shall
have the right, but not the obligation, to designate one of its
representatives to serve on such market structure committee at all
times, and (b) if BlackRock so requests, a representative of BlackRock
shall be the chairperson of such market structure committee. The
Exchange proposes to establish paragraph (a) to Section 8.9, which
would maintain the existing general language regarding committees and
to entitle such paragraph ``Board Advisory Committees'', and to
establish paragraph (b) to Section 8.9, which would describe Market
Structure Committees generally and restate much of the language from
paragraph (a), including that such Market Structure Committees shall
have the power to make recommendations to, but not act for or on behalf
of, or to bind the Holdco Board.
    Proposed paragraph (b)(i) would describe the existing Market
Structure Committee (which would be renamed as the Equities Market
Structure Committee) and would provide that such committee shall be
composed of Directors, Alternate Directors, Board Observers and/or
other representatives of Nominating Members. Further, paragraph (b)(i)
would include the existing language providing that so long as BlackRock
remains a Nominating Member, (A) BlackRock shall have the right, but
not the obligation, to designate one of its representatives to serve on
the Equities Market Structure Committee at all times, and (B) if
BlackRock so requests, a representative of BlackRock shall be the
chairperson of the Equities Market Structure Committee.
    Proposed paragraph (b)(ii) would mirror paragraph (b)(i), as
described above, and would describe the new Options Market Structure
Committee. Paragraph (b)(ii) would provide that the Options Market
Structure Committee shall be composed of Directors, Alternate
Directors, Board Observers and/or other representatives of Members.
Further, paragraph (b)(ii) would provide similar rights to Optiver as
those currently provided to BlackRock, and state that so long as
Optiver remains a Nominating Member, (A) Optiver shall have the right,
but not the obligation, to designate one of its representatives to
serve on the Options Market Structure Committee at all times, and (B)
if Optiver so requests, a representative of Optiver shall be the
chairperson of the Options Market Structure Committee.
    The Exchange notes that the Board currently has the right to
establish committees by Supermajority Board Vote, and the codification
of the existence, composition and details regarding the Market
Structure Committees does not impact the governance of Holdco. Rather,
the purpose of codifying the Market Structure Committees is in
recognition of their importance to Holdco in providing advice to Holdco
regarding developments in market structure applicable to these asset
classes, namely equities and options. As noted above, neither Market
Structure Committee will have the power to act for or on behalf of, or
to bind, the Holdco Board. The Exchange also notes that it believes it
is appropriate to make clear that it will allow other representatives
of Nominating Members of Holdco (in the case of the Equities Market
Structure Committee) and Members of Holdco (in the case of the Options
Market Structure Committee), and not just Directors, Alternate
Directors and Observers, to sit on such Market Structure Committees
because many of Holdco's Members have representatives with particular
expertise on market structure that can

be valuable to Holdco but who do not sit on the Holdco Board.
Amendment to the Definition of ``Company Related Party''
    The proposal seeks to amend the definition of ``Company Related
Party'' in the Holdco LLC Agreement.\22\ Specifically, the proposal
would amend this term to also include any Person Controlled \23\ by one
or more Persons already listed in the current definition. The Exchange
and the Holdco Board believe it is appropriate to designate any such
Person as a Company Related Party, and therefore subject any contract,
arrangement or transaction between such Person, on the one hand, and
Holdco or any Holdco subsidiary, on the other hand (i.e., a Company
Related Party Transaction \24\), to the Holdco LLC Agreement's specific
procedures for the Holdco Board's evaluation and approval of a Company
Related Party Transaction, as the Exchange and the Holdco Board believe
such Persons have a sufficient affiliation with Holdco to warrant the
applicability of the Company Related Party Transaction procedures,
which are designed to mitigate the potential conflicts of interest
inherent in such transactions.\25\
---------------------------------------------------------------------------

    \22\ As set forth in Section 1.1, the term ``Company Related
Party'' currently means (a) any manager, officer, director,
employee, independent contractor and/or consultant of Holdco or any
Holdco subsidiary, (b) (i) any Member or holder of equity interests
of Holdco or any Holdco subsidiary, (ii) any Affiliate or any
manager, officer, director, employee, independent contractor and/or
consultant of any Member or holder of equity interests of Holdco or
any Holdco subsidiary or (iii) any manager, officer, director,
employee, independent contractor and/or consultant of any Affiliate
of a Member or holder of equity interests of Holdco or any Holdco
subsidiary, and (c) any Immediate Family Member of any Person
specified in clause (a).
    \23\ The term ``Control'' means, when used with respect to any
specified Person, the power, direct or indirect, to direct or cause
the direction of the management and policies of such Person, whether
through ownership of voting securities or partnership or other
ownership interests, by contract or otherwise. See Section 1.1.
    \24\ See Section 1.1 for the definition of Company Related Party
Transaction.
    \25\ See Section 8.16 for the procedures relating to the Holdco
Board's evaluation and approval of Company Related Party
Transactions.
---------------------------------------------------------------------------

Amendment to the Provision Relating to the Preparation and Delivery of
the Annual Budget
    The proposal seeks to amend the Holdco LLC Agreement's provision
relating to the preparation and delivery of Holdco's annual budget.
Currently, Section 12.4(a) provides that at least forty-five (45)
calendar days prior to the start of any fiscal year (beginning with the
fiscal year starting on January 1, 2020), Holdco shall prepare and
deliver to the Holdco Board an annual budget setting forth all
reasonably anticipated expenses of Holdco and its subsidiaries on a
consolidated basis during the course of the upcoming Fiscal Year (the
``Annual Budget''). The proposal would amend Section 12.4(a) to delete
the requirement that the Annual Budget must be prepared and delivered
to the Holdco Board at least forty-five (45) calendar days prior to the
start of the fiscal year. Instead, as proposed, Holdco would be
required to prepare and deliver the Annual Budget to the Holdco Board
on any date prior to the start of the fiscal year. The Exchange and the
Holdco Board believe this change is appropriate because it would permit
Holdco to deliver the Annual Budget, and seek the Holdco Board's
approval of such Annual Budget, at the Holdco Board's fourth quarter
meeting, which is typically scheduled on a date in December that is
within forty-five (45) calendar days of the start of the fiscal year.
The Annual Budget would therefore still be required to be prepared and
delivered before the start of the fiscal year, but with greater
flexibility on the timing.
Clarifying, Updating, Conforming, and Other Non-Substantive Amendments
    Finally, the proposal would make various clarifying, updating,
conforming, and other non-substantive amendments to the Holdco LLC
Agreement, each of which is discussed below.
Amendments To Delete Obsolete Provisions and Language
    The proposal would make the following amendments to the Holdco LLC
Agreement to delete provisions and language that are now obsolete due
to the passage of time:
     Deletion of Sections 10.1(a)(ii) and (iii). The proposal
would amend Section 10.1(a) to delete paragraphs (ii) and (iii)
thereunder, as such paragraphs contain provisions relating to certain
restrictions on the transfer of Units, which by their terms only apply
prior to September 5, 2022. As this date has already passed, these
provisions are now obsolete, and the proposal would therefore delete
such provisions and replace such provisions with a ``Reserved.''
placeholder to maintain the paragraph numbering.
     Deletion of certain defined terms in Section 1.1. The
proposal would delete the following defined terms ``Released Class A
Member''; ``Released Class A Units''; ``Released Class C Member''; and
``Released Class C Units'' in Section 1.1, as such terms are only used
in Section 10.1(a)(ii), which section would itself be entirely deleted
under the proposal as it is now obsolete, as described immediately
above.
     Deletion of language in Section 2.5(a). The proposal would
delete language in Section 2.5(a) that requires prior approval of the
Holdco Board by Supermajority Board Vote of any expansion of the
business of Holdco or any Holdco subsidiary into an options exchange
and/or global equities exchange prior to December 14, 2021, as such
date has already passed, and therefore, this language is now obsolete.
Clarifying Amendment to Section 4.6(b)
    Currently, Section 4.6(b) provides that if applicable law requires
that the Members vote on a particular matter, Members shall vote
together as a single class (other than the Class B Members, the Class A
Members (including the holders of Class A-1 Units and the holders of
Class A-2 Units), the holders of Class C-2 Units, and the holders of
Nonvoting Common Units (if any) which shall nevertheless not vote
unless applicable law, as applicable, requires that they also vote).
This provision is intended to reflect the ``voting'' and ``non-voting''
Units distinction under Holdco's governance structure, as described
above, and as such, the ``non-voting'' Units are intended to not vote
even if the Members are required to vote together as a single class
under applicable law unless applicable law requires that such non-
voting Units vote. However, the reference in this section to ``the
Class A Members (including the holders of Class A-1 Units and the
holders of Class A-2 Units)'' was made inadvertently, and instead, this
section should only reference the ``non-voting'' series of the Class A
Units (i.e., the Nonvoting Class A-1 Units and the Nonvoting Class A-2
Units). Thus, the proposal would correct this inadvertent drafting
error and make clear that the ``holders of Nonvoting Class A Units''
(which includes the Nonvoting Class A-1 Units and the Nonvoting Class
A-2 Units) are included in this provision rather than all of the Class
A Members. The Exchange notes that this proposed change is intended to
merely correct an inadvertent drafting error and clarify the original
intent of this provision rather than to make a substantive change.
Technical and Conforming Amendments To Reflect the Amendment and
Restatement of the Holdco LLC Agreement
    The proposal would make various technical and conforming amendments
to the cover page, table of contents,

lead-in, recitals, and exhibits of the Holdco LLC Agreement to reflect
that it is being amended and restated as the Seventh Amended LLC
Agreement. Additionally, the proposal would amend the definition of
``Agreement'' to reference the Seventh Amended LLC Agreement; add
``Sixth Amended LLC Agreement'' as a defined term; replace references
to ``Fifth Amended LLC Agreement'' with references to ``Sixth Amended
LLC Agreement'' throughout the Holdco LLC Agreement where appropriate
(i.e., when referencing the prior version of the Holdco LLC Agreement);
and update the certificate legend set forth in Section 3.12(b) to
include a reference to the Seventh Amended LLC Agreement. Each of these
proposed amendments is a conforming change intended to reflect the
amendment and restatement of the Holdco LLC Agreement.
Clean-Up Amendments
    Lastly, the proposal would make various non-substantive ``clean-
up'' amendments throughout the Holdco LLC Agreement to correct minor
drafting errors, update section references (i.e., to reflect
appropriate sections/paragraphs that were renumbered as a result of the
proposed changes described herein), make minor grammatical and
punctuational edits, and make other clarification and ministerial
changes to clarify existing language or modify such language to conform
with the other proposed amendments described above.
2. Statutory Basis
    The Exchange believes that the proposed amendments to the Holdco
LLC Agreement are consistent with Section 6(b) of the Act,\26\ in
general, and further the objectives of Section 6(b)(1) of the Act,\27\
in particular, in that such amendments enable 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 with the provisions of the Act, the rules and
regulations thereunder, and the rules of the Exchange. The Exchange
also believes that the proposed amendments are consistent with Section
6(b)(5) of the Act,\28\ which requires the rules of an exchange to be
designed 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.
---------------------------------------------------------------------------

    \26\ 15 U.S.C. 78f(b).
    \27\ 15 U.S.C. 78f(b)(1).
    \28\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

Amendments Related to the Creation of the Class D Units
    The Exchange believes that the creation of the Class D Units is
consistent with the Act, as it would facilitate additional investment
and funding into Holdco resulting from the sale of Class D Units
pursuant to the Transaction, and such proceeds could be used by Holdco
for general corporate expenses, including to support the operations and
regulation of the Exchange, which would enable the Exchange to be
organized as to have the capacity to carry out the purposes of the Act
and to comply with the provisions of the Act, the rules and regulations
thereunder, and the rules of the Exchange, and, in turn, would protect
investors and the public interest. Further, the Exchange believes that
the proposal for the Class D Units to be the exact same type of
membership interest as the existing Class C Units (only with a
different purchase price for such Units, as described above) is
consistent with the Act because, as described above, the Class D Units
would have the same privileges, preference, duties, liabilities,
obligations and rights, and be subject to the same voting construct, as
the Class C Units under the current Holdco LLC Agreement, which
facilitates certain Members' compliance with the BHCA and provides for
a governance structure of Holdco that is consistent with the structure
currently in place, which was previously approved by the
Commission.\29\ As the Class D Units are the same type of membership
interest as the Class C Units and do not otherwise impact the
governance of Holdco or any Holdco subsidiary (including the Exchange),
the Exchange believes that the creation of the Class D Units and
related amendments to the Holdco LLC Agreement associated with the
Class D Units relate solely to the administration of Holdco and the
Transaction, and that such amendments would not impact the governance
or operations of the Exchange. Accordingly, the Exchange does not
believe the creation of the Class D Units or the Transaction would in
any way restrict the Exchange's ability to be organized as to have the
capacity to carry out the purposes of the Act and to comply with the
provisions of the Act, the rules and regulations thereunder, and the
rules of the Exchange.
---------------------------------------------------------------------------

    \29\ See supra note 7.
---------------------------------------------------------------------------

    As noted above, although each Member's proportionate ownership of
Holdco will change as a result of the Transaction, no Member will
exceed any ownership or voting limitations applicable to the Members
set forth in the Holdco LLC Agreement after giving effect to the
Transaction and the proposed amendments to the Holdco LLC Agreement
(including the amendment to Section 3.5 to treat the Class C Units, the
Class D Units, and the Common Units as a single class of securities for
purposes of such section). As described above, while the Class D Units
and the Class C Units may be considered separate classes of Units due
to the naming convention of such Units (i.e., being referred to as
Class C vs. Class D) and for certain general corporate law purposes
(i.e., entitled to vote separately on any matters that affect such
Units specifically), the Class D Units are the exact same type of
membership interest (i.e., have the same privileges, preference,
duties, liabilities, obligations and rights) as the Class C Units and
also vote together with, and in the same manner as, the Class C Units
pursuant to Section 4.7 on all actions on which such Units are entitled
to vote (other than actions that significantly and adversely affect the
Class C Units or the Class D Units specifically), and thus, such Units
are functionally equivalent with the only difference between such Units
being the original purchase price paid by the applicable purchasing
Members, which difference is the sole reason for the creation of the
new Class D Units. Additionally, as noted above, the Class C Units and
the Class D Units are both convertible into Common Units on the same
terms, and, once converted, such Common Units retain the same voting
construct, rights, and obligations as the Class C Units and/or Class D
Units from which they were converted (other than the priority of
Distributions, as described above), and Common Units vote together with
the Class C Units and the Class D Units and in the same manner pursuant
to Section 4.7 on all actions on which Class C Units and Class D Units
are entitled to vote (other than actions that significantly and
adversely affect the Class C Units and/or the Class D Units
specifically). As such, as noted above, ownership of Class C Units,
Class D Units, and/or Common Units effectively confer the same
ownership rights to the holders of any such Units as relates to voting
and governance of Holdco (i.e., other than economic consequences
resulting from priority of Distributions).
    Additionally, as discussed above, the proposal to treat the Class C
Units, the Class D Units, and the Common Units as a single class for
purposes of Sections

3.5 and 3.8 does not impact a Member's representation on the Holdco
Board (which is limited to one (1) Director per Nominating Director
regardless of the amount/class of Units held by such Member), does not
increase the relative voting power or control of any Members, and is in
fact dilutive to all Members' voting power and control to the extent
that Class D Units now vote together with Class C Units generally and
also with Class A Units solely with respect to the liquidation,
dissolution or winding up of Holdco pursuant to Section 4.7(j).
Therefore, the Exchange believes the amendment to treat the Class C
Units, the Class D Units, and the Common Units together as a single
class of securities for purposes of the ownership limitations and
related provisions set forth in Sections 3.5 and 3.8 is appropriate and
consistent Section 6(b)(1) of the Act,\30\ in that such amendments
enable 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 with the
provisions of the Act, the rules and regulations thereunder, and the
rules of the Exchange, and because such amendments will not impair the
ability of the Exchange to carry out its functions and responsibilities
as an ``exchange'' under the Exchange Act, and the rules and
regulations promulgated thereunder, nor do such amendments impair the
ability of the SEC to enforce the Exchange Act and the rules and
regulations promulgated thereunder with respect to the Exchange.
---------------------------------------------------------------------------

    \30\ 15 U.S.C. 78f(b)(1).
---------------------------------------------------------------------------

Amendments Related to Certain Changes With Respect to the Holdco Board
in Connection With the Transaction
    As described above, in connection with the Transaction, Optiver
will receive the right to nominate a Director and the size of the
Holdco Board will increase from fourteen (14) to fifteen (15)
Directors, as of the Effective Date. The Exchange believes the proposed
amendments to reflect these changes are appropriate and consistent with
the Act, as such amendments would update and clarify the relevant
provisions of the Holdco LLC Agreement to reflect changes with respect
to the Holdco Board that will result from the Transaction, as described
above.
    Similarly, the Exchange believes the proposed amendment to the
definition of Supermajority Board Vote to change the affirmative vote
threshold from seventy-seven percent (77%) of the votes of all
Directors then entitled to vote to seventy-three percent (73%) of the
votes of all Directors then entitled to vote is appropriate and
consistent with the Act, as the resulting voting structure is
consistent with the current voting structure which results in an
affirmative Supermajority Board Vote if eleven (11) Directors vote in
favor of a particular matter assuming that all Directors are entitled
to vote on a matter and none have recused themselves, as described
above. The Exchange believes that updating the Holdco LLC Agreement to
reflect these changes with respect to the Holdco Board would ensure
clarity with respect to the corporate documents of the Exchange's
parent company, thereby enabling the Exchange to be so organized as to
have the capacity to carry out the purposes of the Act and to comply
with the provisions of the Act, the rules and regulations thereunder,
and the rules of the Exchange, promoting just and equitable principles
of trade, removing impediments to and perfect the mechanism of a free
and open market, and protecting investors and the public interest.
    Lastly, the Exchange believes the proposed amendment to the Section
8.9 to separate Board Advisory Committees generally from Market
Structure Committees and establish the Options Market Structure
Committee is appropriate and consistent with the Act, as the
codification of these committees does not impact the governance of
Holdco, as described above, but rather reflects the existence of such
committees and their importance to Holdco in providing advice to Holdco
regarding developments in market structure applicable to each asset
class. As noted above, neither Market Structure Committee has the power
to act for or on behalf of, or to bind, Holdco. The Exchange believes
that updating the Holdco LLC Agreement to reflect these changes with
respect to the Holdco Board would ensure clarity with respect to the
corporate documents of the Exchange's parent company, thereby enabling
the Exchange to be so organized as to have the capacity to carry out
the purposes of the Act and to comply with the provisions of the Act,
the rules and regulations thereunder, and the rules of the Exchange,
promoting just and equitable principles of trade, removing impediments
to and perfect the mechanism of a free and open market, and protecting
investors and the public interest.
Amendment to the Definition of ``Company Related Party''
    The Exchange believes the proposed amendment to the definition of
``Company Related Party'' is consistent with the Act, as it would
broaden the definition of such term and designate additional Persons
that have an affiliation with Holdco (i.e., Persons that are Controlled
by one or more Persons that are currently deemed Company Related
Parties) as Company Related Parties, thereby subjecting any contract,
arrangement or transaction between any such Person, on the one hand,
and Holdco or any Holdco subsidiary, on the other hand (i.e., a Company
Related Party Transaction), to the Holdco LLC Agreement's specific
procedures for the Holdco Board's evaluation and approval of a Company
Related Party Transaction. The Exchange notes that the proposed
amendment would not remove any Person currently included in the
definition of Company Related Party from such definition. As the Holdco
LLC Agreement's Company Related Party Transaction procedures are
designed to mitigate the potential conflicts of interest inherent in
such transactions, the Exchange believes the proposed amendment to
broaden the definition of Company Related Party and thereby subject
transactions with additional Persons that have an affiliation with
Holdco to such procedures would enable the Exchange and its parent
company to be so organized as to have the capacity to be able to carry
out the purposes of the Act and to comply with the provisions of the
Act, the rules and regulations thereunder, and the rules of the
Exchange, promote just and equitable principles of trade, and protect
investors and the public interest.
Amendment to the Provision Relating to the Preparation and Delivery of
the Annual Budget
    As described above, the proposal would amend Section 12.4(a) to
delete the requirement that the Annual Budget must be prepared and
delivered to the Holdco Board at least forty-five (45) calendar days
prior to the start of the fiscal year. Instead, as proposed, Holdco
would be required to prepare and deliver the Annual Budget to the
Holdco Board on any date prior to the start of the fiscal year. The
Exchange believes the proposed amendment to the Annual Budget provision
is appropriate and consistent with the Act, as such amendment would
permit Holdco to deliver the Annual Budget, and seek the Holdco Board's
approval of such Annual Budget, at the Holdco Board's fourth quarter
meeting, which is typically scheduled on a date in December that is
within forty-five (45) calendar days of the start of the fiscal year.
The Annual Budget would therefore still be required to be prepared

and delivered before the start of the fiscal year, but with greater
flexibility on the timing, as described above. The Exchange believes
that such change is related solely to the administration of Holdco and
thus would not have any impact on the Exchange's ability to be so
organized as to have the capacity to carry out the purposes of the Act
and to comply with the provisions of the Act, the rules and regulations
thereunder, and the rules of the Exchange, and therefore, such change
is consistent with the Act.
Clarifying, Updating, Conforming, and Other Non-Substantive Amendments
    The Exchange believes the proposed amendments to make
clarifications, correct inadvertent drafting errors, delete obsolete
language, make conforming changes consistent with the other proposed
amendments to the Holdco LLC Agreement described above, and make other
technical and conforming changes to reflect that the Holdco LLC
Agreement is being amended and restated from the Sixth Amended LLC
Agreement to the Seventh Amended LLC Agreement are consistent with the
Act, as such amendments would update and clarify the Holdco LLC
Agreement, thereby increasing transparency and helping to avoid any
potential confusion resulting from retaining outdated, obsolete, or
unclear provisions.
    The Exchange believes the proposed amendments to the Holdco LLC
Agreement described in this proposal are consistent with, and will not
interfere with, the self-regulatory obligations of the Exchange. The
Exchange importantly notes that it is not proposing to amend any of the
provisions within the Holdco LLC Agreement or the Exchange's LLC
Agreement dealing with the availability or protection of information,
books and records, undue influence, conflicts of interest (other than
to broaden the definition of Company Related Party and subject
additional transactions to the Holdco LLC Agreement's procedures
designed to mitigate conflicts of interest), unfair control by an
affiliate, or regulatory independence of the Exchange.
    For these reasons, the Exchange believes such amendments would
enable the Exchange to be so organized as to have the capacity to carry
out the purposes of the Act and to comply with the provisions of the
Act, the rules and regulations thereunder, and the rules of the
Exchange, promote just and equitable principles of trade, remove
impediments to and perfect the mechanism of a free and open market, and
protect investors and the public interest.

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

    The Exchange does not believe that the proposal will impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. The proposal is not intended to
address competitive issues but rather is concerned with the creation of
an additional class of Units in connection with the Transaction as well
as updates and other changes to the corporate documents of Holdco
related to the administration and governance of Holdco, as described
above.

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

    The Exchange neither solicited nor received comments on the
proposed rule change.

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

    Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \31\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\32\
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    \31\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \32\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative prior to 30 days after the date of filing. Rule
19b-4(f)(6)(iii), however, permits the Commission to designate a
shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the 30-day operative delay contained in Rule 19b-
4(f)(6)(iii) so that the Exchange may amend the Holdco LLC Agreement to
create an additional class of Units in order to facilitate the closing
of the Transaction as soon as possible. The Commission finds that
waiver of the operative delay is consistent with the protection of
investors and the public interest because the proposed changes to the
Holdco LLC Agreement do not materially alter Holdco's existing
governance framework or raise novel issues as the new Class D Units are
functionally equivalent to the Class C Units other than the original
purchase price of such Units being different. Accordingly, the
Commission hereby waives the operative delay and designates the
proposal operative upon filing. 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: (i) necessary or appropriate in the public
interest; (ii) for the protection of investors; or (iii) otherwise in
furtherance of the purposes of the Act.\33\ If the Commission takes
such action, the Commission shall institute proceedings to determine
whether the proposed rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \33\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(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 protected]. Please include
File Number SR-MEMX-2023-06 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-MEMX-2023-06. 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 website (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 website viewing and
printing in the Commission's Public Reference Room, 100 F Street NE,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change. Persons submitting
comments are cautioned that we do not redact or edit personal
identifying information from comment submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-MEMX-2023-06 and should be
submitted on or before April 24, 2023.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\34\
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    \34\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-06783 Filed 3-31-23; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 82, Number 248 (Thursday, December 28, 2017)]
[Notices]
[Pages 61558-61559]
[FR Doc No: 2017-28087]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. CP18-31-000]

Dominion Energy Questar Pipeline, LLC; Notice of Request Under
Blanket Authorization

    Take notice that on December 15, 2017, Dominion Energy Questar
Pipeline, LLC (Dominion Energy), 333 South State Street, Salt Lake
City, Utah 84111, filed a prior notice application pursuant to sections
157.205, 157.208(c) and 157.213(b) of the Federal Energy Regulatory
Commission's (Commission) regulations under the Natural Gas Act (NGA),
and Dominion Energy's blanket certificate issued in Docket No. CP82-
491-000,\1\ to modify existing facilities and install surface and
subsurface facilities located at its existing Clay Basin storage
facility, in Daggett County, Utah (the Clay Basin Delivery Project),
all as more fully set forth in the application which is on file with
the Commission and open to public inspection. The filing may also be
viewed on the web at http://www.ferc.gov using the eLibrary link. Enter
the docket number excluding the last three digits in the docket number
field to access the document. For assistance, contact FERC at
[email protected] or call toll-free,<PHONE_NUMBER> or TTY,
(202) 502-8659.
---------------------------------------------------------------------------

    \1\ Mountain Fuel Resources, Inc., 20 FERC 62,580 (1982).
---------------------------------------------------------------------------

    Specifically, Dominion Energy proposes to modify two previously
certificated storage injection/withdrawal wells (an existing
operational storage-injection well and an existing inactive storage-
injection/withdrawal well), and to install limited surface and
subsurface facilities within the previously disturbed (non-vegetated)
well-pad sites to restore functional service of the wells. Dominion
Energy states that the project will enable it to convert 1.1 billion
cubic feet (Bcf) of the existing 2.7 Bcf of interruptible storage
capacity into firm storage capacity, with an associated

increase of 9.2 million cubic feet per day in the minimum required
deliverability (MRD) without increasing the overall storage capacity of
the field. Dominion Energy states that the project will not affect the
contracted firm capacity and MRD rights held by existing firm storage
customers at Clay Basin. Dominion Energy estimates that the cost of the
proposed project is approximately $3.6 million.
    Any questions regarding this application should be directed L.
Bradley Burton, Director-Regulatory, Rates, Certificates and Tariffs
Dominion Energy Questar Corporation, 333 South State Street, P.O. Box
45360, Salt Lake City, Utah 84145-0360, by telephone at<PHONE_NUMBER>,
by fax at<PHONE_NUMBER>, or by email at
[email protected].
    Any person or the Commission's staff may, within 60 days after
issuance of the instant notice by the Commission, file pursuant to Rule
214 of the Commission's Procedural Rules (18 CFR 385.214) a motion to
intervene or notice of intervention and pursuant to Section 157.205 of
the regulations under the NGA (18 CFR 157.205), a protest to the
request. If no protest is filed within the time allowed therefore, the
proposed activity shall be deemed to be authorized effective the day
after the time allowed for filing a protest. If a protest is filed and
not withdrawn within 30 days after the allowed time for filing a
protest, the instant request shall be treated as an application for
authorization pursuant to section 7 of the NGA.
    Pursuant to section 157.9 of the Commission's rules, 18 CFR 157.9,
within 90 days of this Notice the Commission staff will either:
complete its environmental assessment (EA) and place it into the
Commission's public record (eLibrary) for this proceeding, or issue a
Notice of Schedule for Environmental Review. If a Notice of Schedule
for Environmental Review is issued, it will indicate, among other
milestones, the anticipated date for the Commission staff's issuance of
the final environmental impact statement (FEIS) or EA for this
proposal. The filing of the EA in the Commission's public record for
this proceeding or the issuance of a Notice of Schedule for
Environmental Review will serve to notify federal and state agencies of
the timing for the completion of all necessary reviews, and the
subsequent need to complete all federal authorizations within 90 days
of the date of issuance of the Commission staff's FEIS or EA.
    Persons who wish to comment only on the environmental review of
this project should submit an original and two copies of their comments
to the Secretary of the Commission. Environmental commenters will be
placed on the Commission's environmental mailing list, will receive
copies of the environmental documents, and will be notified of meetings
associated with the Commission's environmental review process.
Environmental commenters will not be required to serve copies of filed
documents on all other parties. However, the non-party commenter will
not receive copies of all documents filed by other parties or issued by
the Commission (except for the mailing of environmental documents
issued by the Commission) and will not have the right to seek court
review of the Commission's final order.
    The Commission strongly encourages electronic filings of comments,
protests and interventions in lieu of paper using the eFiling link at
http://www.ferc.gov. Persons unable to file electronically should
submit an original and 5 copies of the protest or intervention to the
Federal Energy Regulatory Commission, 888 First Street NE, Washington,
DC 20426.

    Dated: December 21, 2017.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2017-28087 Filed 12-27-17; 8:45 am]
 BILLING CODE 6717-01-P