[Federal Register: April 14, 2010 (Volume 75, Number 71)]
[Notices]
[Page 19391-19392]
[DOCID:fr14ap10-65]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OPP-2008-0842; FRL-8820-6]

Methamidophos; Registration Review Proposed Decision; Notice of
Availability

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: This notice announces the availability of EPA's proposed
registration review decision for the pesticide methamidophos and opens
a public comment period on the proposed decision. Registration review
is EPA's periodic review of pesticide registrations to ensure that each
pesticide continues to satisfy the statutory standard for registration,
that is, that the pesticide can perform its intended function without
unreasonable adverse effects on human health or the environment.
Through this program, EPA is ensuring that each pesticide's
registration is based on current scientific and other knowledge,
including its effects on human health and the environment.

DATES: Comments must be received on or before June 14, 2010.

ADDRESSES: Submit your comments, identified by docket identification
(ID) number EPA-HQ-OPP-2008-0842, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov.
Follow the on-line instructions for submitting comments.
     Mail: Office of Pesticide Programs (OPP) Regulatory Public
Docket (7502P), Environmental Protection Agency, 1200 Pennsylvania
Ave., NW., Washington, DC 20460-0001.
     Delivery: OPP Regulatory Public Docket (7502P),
Environmental Protection Agency, Rm. S-4400, One Potomac Yard (South
Bldg.), 2777 S. Crystal Dr., Arlington, VA. Deliveries are only
accepted during the Docket Facility's normal hours of operation (8:30
a.m. to 4 p.m., Monday through Friday, excluding legal holidays).
Special arrangements should be made for deliveries of boxed
information. The Docket Facility telephone number is<PHONE_NUMBER>.
    Instructions: Direct your comments to docket identification (ID)
number EPA-HQ-OPP-2008-0842. EPA's policy is that all comments received
will be included in the docket without change and may be made available
on-line at http://www.regulations.gov, including any personal
information provided, unless the comment includes information claimed
to be Confidential Business Information (CBI) or other information
whose disclosure is restricted by statute. Do not submit information
that you consider to be CBI or otherwise protected through
regulations.gov or e-mail. The regulations.gov website is an
``anonymous access'' system, which means EPA will not know your
identity or contact information unless you provide it in the body of
your comment. If you send an e-mail comment directly to EPA without
going through regulations.gov, your e-mail address will be
automatically captured and included as part of the comment that is
placed in the docket and made available on the Internet. If you submit
an electronic comment, EPA recommends that you include your name and
other contact information in the body of your comment and with any disk
or CD-ROM you submit. If EPA cannot read your comment due to technical
difficulties and cannot contact you for clarification, EPA may not be
able to consider your comment. Electronic files should avoid the use of
special characters, any form of encryption, and be free of any defects
or viruses.
    Docket: All documents in the docket are listed in the docket index
available at http://www.regulations.gov. Although listed in the index,
some information is not publicly available, e.g., CBI or other
information whose disclosure is restricted by statute. Certain other
material, such as copyrighted material, is not placed on the Internet
and will be publicly available only in hard copy form. Publicly
available docket materials are available either in the electronic
docket at http://www.regulations.gov, or, if only available in hard
copy, at the OPP Regulatory Public Docket in Rm. S-4400, One Potomac
Yard (South Bldg.), 2777 S. Crystal Dr., Arlington, VA. The hours of
operation of this Docket Facility are from 8:30 a.m. to 4 p.m., Monday
through Friday, excluding legal holidays. The Docket Facility telephone
number is<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: For pesticide specific information,
contact: Joy Schnackenbeck, Chemical Review Manager, Pesticide Re-
evaluation Division (7508P), Office of Pesticide Programs,
Environmental Protection Agency, 1200 Pennsylvania Ave., NW.,
Washington, DC 20460-0001; telephone number:<PHONE_NUMBER>; fax
number:<PHONE_NUMBER>; e-mail address<EMAIL_ADDRESS>    For general information on the registration review program,
contact: Kevin Costello, Pesticide Re-evaluation Division (7508P),
Office of Pesticide Programs, Environmental Protection Agency, 1200
Pennsylvania Ave., NW., Washington, DC 20460-0001; telephone number:
(703) 305-5026; fax number:<PHONE_NUMBER>; e-mail address:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this Action Apply to Me?

    This action is directed to the public in general, and may be of
interest to a wide range of stakeholders including environmental; human
health; farm worker; and agricultural advocates; the chemical industry;
pesticide users; and members of the public interested in the sale,
distribution, or use of pesticides. Since others also may be
interested, the Agency has not attempted to describe all the specific
entities that may be affected by this action. If you have any questions
regarding the applicability of this action to a particular entity,
consult the chemical review manager listed under FOR FURTHER
INFORMATION CONTACT.

B. What Should I Consider as I Prepare My Comments for EPA?

    1. Submitting CBI. Do not submit this information to EPA through
regulations.gov or e-mail. Clearly mark the part or all of the
information that you claim to be CBI. For CBI information in a disk or
CD-ROM that you mail to EPA, mark the outside of the disk or CD-ROM as
CBI and then identify electronically within the disk or CD-ROM the
specific information that is claimed as CBI. In addition to one
complete version of the comment that includes information claimed as
CBI, a copy of the comment that does not contain the information
claimed as CBI must be submitted for inclusion in the public docket.
Information so marked will not be disclosed except in accordance with
procedures set forth in 40 CFR part 2.
    2. Tips for preparing your comments. When submitting comments,
remember to:
    i. Identify the document by docket ID number and other identifying
information (subject heading, Federal Register date and page number).
    ii. Follow directions. The Agency may ask you to respond to
specific questions or organize comments by referencing a

Code of Federal Regulations (CFR) part or section number.
    iii. Explain why you agree or disagree; suggest alternatives and
substitute language for your requested changes.
    iv. Describe any assumptions and provide any technical information
and/or data that you used.
    v. If you estimate potential costs or burdens, explain how you
arrived at your estimate in sufficient detail to allow for it to be
reproduced.
    vi. Provide specific examples to illustrate your concerns and
suggest alternatives.
    vii. Explain your views as clearly as possible, avoiding the use of
profanity or personal threats.
    viii. Make sure to submit your comments by the comment period
deadline identified.

II. Background

A. What Action is the Agency Taking?

    Pursuant to 40 CFR 155.58, this notice announces the availability
of EPA's proposed registration review decision for the pesticide shown
in the following table, and opens a 60-day public comment period on the
proposed decision. Methamidophos is an organophosphate insecticide,
which in 2009 was registered for use on potato, cotton, tomato, and
alfalfa grown for seed.

                                  Table--Registration Review Proposed Decision
----------------------------------------------------------------------------------------------------------------
                                                                                Chemical Review
  Registration Review Case Name and Number       Pesticide Docket ID Number        Manager,Telephone Number, E-
                                                                                mail Address
----------------------------------------------------------------------------------------------------------------
Methamidophos; Case Number 0043                            EPA-HQ-OPP-2008-0842  Joy Schnackenbeck,
<PHONE_NUMBER>,
<EMAIL_ADDRESS>----------------------------------------------------------------------------------------------------------------

    The registration review docket for a pesticide includes earlier
documents related to the registration review of the case. For example,
the review opened with the posting of a Summary Document, containing a
Preliminary Work Plan for public comment. A Final Work Plan was posted
to the docket following public comment on the initial docket.
    As stated in the Methamidophos Preliminary and Final Work Plan for
registration review, the Agency had intended to revise the existing
risk assessments for methamidophos. However, after the publication of
the Methamidophos Final Work Plan, pursuant to Section 6(f)(1) of the
Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), as
amended, the Agency announced receipt of requests to voluntarily cancel
all methamidophos product registrations and then granted the voluntary
cancellation requests, establishing December 31, 2009, as the effective
cancellation date as published in the Federal Register on September 23,
2009 (74 FR 48551; FRL-8437-1) for all of the products registered for
use in the United States containing the active ingredient
methamidophos. Due to the cancellation order issued affecting all
methamidophos product registrations in the United States, the Agency
has found that it is not necessary to conduct new risk assessments for
methamidophos and is therefore issuing a proposed decision pursuant to
40 CFR 155.53(c)(2) and 40 CFR 155.58. The Agency believes that
mitigation measures put into effect on product labeling through the re-
registration process are adequate to protect human health and the
environment until existing stocks of methamidophos are exhausted. This
proposed registration review decision is described in more detail in
the Methamidophos Proposed Registration Review Decision, available in
the methamidophos docket.
    Following public comment, the Agency will issue a registration
review decision for products containing methamidophos.
    The registration review program is being conducted under
congressionally mandated time frames, and EPA recognizes the need both
to make timely decisions and to involve the public. Section 3(g) of
FIFRA, as amended, required EPA to establish by regulation procedures
for reviewing pesticide registrations, originally, with a goal of
reviewing each pesticide's registration every 15 years to ensure that a
pesticide continues to meet the FIFRA standard for registration. The
Agency's final rule to implement this program was issued in August 2006
and became effective in October 2006, and appears at 40 CFR part 155,
subpart C. The Pesticide Registration Improvement Act of 2003 (PRIA)
was amended and extended in September 2007. FIFRA, as amended by PRIA
in 2007, requires EPA to complete registration review decisions by
October 1, 2022, for all pesticides registered as of October 1, 2007.
    The registration review final rule at 40 CFR 155.58(a) provides for
a minimum 60-day public comment period on all proposed registration
review decisions. This comment period is intended to provide an
opportunity for public input and a mechanism for initiating any
necessary amendments to the proposed decision. All comments should be
submitted using the methods in ADDRESSES, and must be received by EPA
on or before the closing date. These comments will become part of the
docket for methamidophos. Comments received after the close of the
comment period will be marked ``late.'' EPA is not required to consider
these late comments.
    The Agency will carefully consider all comments received by the
closing date and will provide a ``Response to Comments Memorandum'' in
the docket. The registration review decision will explain the effect
that any comments had on the decision and provide the Agency's response
to significant comments.
    Background on the registration review program is provided at:
http://www.epa.gov/oppsrrd1/registration_review. A link to earlier
documents related to the registration review of methamidophos is
provided at: http://www.epa.gov/oppsrrd1/registration_review/reg_
review_status.htm.

B. What is the Agency's Authority for Taking this Action?

    Section 3(g) of FIFRA and 40 CFR part 155, subpart C, provides
authority for this action.

List of Subjects

    Environmental protection, Administrative practice and procedure,
Pesticides and pests, Methamidophos.

    Dated: April 5, 2010.
Richard P. Keigwin, Jr.,
Director, Pesticide Re-evaluation Division, Office of Pesticide
Programs.

[FR Doc. 2010-8403 Filed 4-13-10; 8:45 am]
BILLING CODE 6560-50-S


[Federal Register Volume 83, Number 139 (Thursday, July 19, 2018)]
[Notices]
[Pages 34182-34190]
[FR Doc No: 2018-15370]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83635; File No. SR-CHX-2018-004]

Self-Regulatory Organizations; Chicago Stock Exchange, Inc.;
Notice of Filing of Amendment Nos. 2 and 3 and Order Granting
Accelerated Approval of a Proposed Rule Change, as Modified by
Amendments Nos. 1, 2, and 3 Thereto, in Connection With a Proposed
Transaction Involving CHX Holdings, Inc. and the Intercontinental
Exchange, Inc.

July 13, 2018.

I. Introduction

    On May 8, 2018, the Chicago Stock Exchange, Inc. (``CHX'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Exchange

Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change in
connection with a transaction (``Transaction'') whereby a wholly-owned
subsidiary of NYSE Group, Inc. (``NYSE Group'') would merge with and
into the Exchange's parent, CHX Holdings, Inc. (``CHX Holdings''), with
CHX Holdings continuing as the surviving corporation. Pursuant to the
Transaction, the Exchange and CHX Holdings would become indirect
subsidiaries of Intercontinental Exchange, Inc. (``ICE''). On May 17,
2018, the Exchange filed Amendment No. 1 to the proposal.\3\ The
proposed rule change, as modified by Amendment No. 1, was published for
comment in the Federal Register on May 29, 2018.\4\ On June 11, 2018,
the Exchange filed Amendment No. 2 to the proposal.\5\ On June 26,
2018, the Exchange filed Amendment No. 3 to the proposal.\6\ The
Commission received no comments on the proposal.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, the Exchange proposed to: (1) Add new
CHX Article 22, Rule 28, relating to requirements for trading
securities issued by ICE or its affiliates; and (2) amend proposed
CHX Article 19, Rule 2(b), relating to certain requirements with
respect to a wholly-owned subsidiary of NYSE Group that would act as
an inbound router to the Exchange. Amendment No. 1 was reflected in
the notice of filing of proposed rule change that was published in
the Federal Register. See infra note 4.
    \4\ See Securities Exchange Act Release No. 83303 (May 22,
2018), 83 FR 24517 (``Notice'').
    \5\ In Amendment No. 2, the Exchange proposed to amend Article
FIFTH, Paragraph (g) of the CHX certificate of incorporation (``CHX
Certificate'') and Article II, Section 6 of the CHX bylaws (``CHX
Bylaws'') to provide that a vacancy in the CHX board of directors
would be filled either by the remaining director(s) or stockholder
action. Amendment No. 2 is available at: https://www.sec.gov/comments/sr-chx-2018-004/chx2018004-3818683-162751.pdf.
    \6\ In Amendment No. 3, the Exchange proposed technical changes
to the CHX Certificate so that the date the original certificate of
incorporation was filed and the original name of the Exchange appear
in the preamble instead of Article FIRST, and to delete ``the'' from
the title of the CHX Certificate. Amendment No. 3 is available at:
https://www.sec.gov/comments/sr-chx-2018-004/chx2018004-3918683-166986.pdf.
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    After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Exchange Act and the
rules and regulations thereunder applicable to a national securities
exchange.\7\ In particular, the Commission finds that the proposed rule
change is consistent with Sections 6(b)(1) and (3) of the Exchange
Act,\8\ which, among other things, require a national securities
exchange to be so organized and have the capacity to be able to carry
out the purposes of the Exchange Act, and to enforce compliance by its
members and persons associated with its members with the provisions of
the Exchange Act, the rules and regulations thereunder, and the rules
of the exchange, and assure the fair representation of its members in
the selection of its directors and administration of its affairs, and
provide that one or more directors shall be representative of issuers
and investors and not be associated with a member of the exchange,
broker, or dealer. The Commission also finds that the proposal is
consistent with Section 6(b)(5) of the Exchange Act,\9\ which requires
that the rules of the exchange 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.
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    \7\ In approving the proposed rule changes, the Commission has
considered their impact on efficiency, competition and capital
formation. See 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b)(1) and (b)(3).
    \9\ 15 U.S.C. 78f(b)(5).
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II. Discussion

A. Current and Proposed Ownership of the Exchange

    Currently, the Exchange is a wholly-owned subsidiary of CHX
Holdings, and CHX Holdings is beneficially owned by 197 firms or
individuals, including Participants \10\ or affiliates of Participants.
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    \10\ A ``Participant'' is considered a ``member'' of the
Exchange for purposes of the Exchange Act. See CHX Article 1, Rule
1(s) (Definitions).
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    Pursuant to the terms of a Merger Agreement, dated April 4, 2018,
by and among CHX Holdings, ICE, and Kondor Merger Sub, Inc., a wholly-
owned subsidiary of NYSE Group (``Merger Sub''), Merger Sub would merge
with and into CHX Holdings, and CHX Holdings would be the entity
surviving the merger. Current holders of the common and preferred stock
of CHX Holdings would receive cash in exchange for their shares.
    Upon closing of the Transaction (``Closing''), NYSE Group would
hold all of the outstanding and issued shares of CHX Holdings. NYSE
Group is a wholly-owned subsidiary of NYSE Holdings, which is in turn
wholly owned by ICE Holdings. ICE Holdings is wholly-owned by ICE
(together, with NYSE Group, NYSE Holdings, and ICE, the ``ICE Holding
Companies'').\11\ CHX Holdings would continue to be the record and
beneficial owner of all of the issued and outstanding shares of capital
stock of CHX and the sole member of the Exchange's affiliated routing
broker dealer, CHXBD, LLC (``CHXBD''). Closing is subject to
satisfaction of customary conditions for a transaction of this nature,
including approval of this proposed rule change by the Commission.
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    \11\ ICE is a public company listed on the NYSE. ICE, ICE
Holdings, and NYSE Group are Delaware corporations and NYSE Holdings
is a Delaware limited liability corporation.
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    Following the Transaction, the Exchange would continue to be
registered as a national securities exchange and as a separate self-
regulatory organization (``SRO''). As such, the Exchange would continue
to have separate rules, membership rosters, and listings that would be
distinct from the rules, membership rosters, and listings of the four
other registered national securities exchanges and SROs owned by NYSE
Group, namely, the New York Stock Exchange LLC (``NYSE''), NYSE
American LLC (``NYSE American''), NYSE Arca, Inc. (``NYSE Arca''), and
NYSE National, Inc. (``NYSE National'' and together with NYSE, NYSE
American and NYSE Arca, the ``NYSE Exchanges'').

B. Proposed Rule Changes

    Section 19(b) of the Exchange Act and Rule 19b-4 thereunder require
an SRO to file proposed rule changes with the Commission. To effectuate
the change in the ownership structure in connection with the proposed
Transaction, the Exchange has proposed to amend the CHX Certificate,
the CHX Bylaws, the CHX Holdings certificate of incorporation (``CHX
Holdings Certificate''), CHX Holdings bylaws (``CHX Holdings Bylaws''),
and the Exchange's rules. Although CHX Holdings, NYSE Group, NYSE
Holdings, ICE Holdings, and ICE are not SROs, certain provisions of
their proposed certificates of incorporation and bylaws, along with
other corporate documents, are rules of the Exchange, if they are
stated policies, practices, or interpretations, as defined in Rule 19b-
4 under the Exchange Act, and must be filed with the Commission
pursuant to Section 19(b)(1) of the Exchange Act and Rule 19b-4
thereunder.\12\ Accordingly, the Exchange has filed, and has proposed
to adopt, as rules of the Exchange: (1) The certificate of
incorporation of NYSE Group (``NYSE Group Certificate''); (2) the
bylaws of NYSE Group (``NYSE Group Bylaws''); (3) the limited liability
company agreement of NYSE Holdings LLC (``NYSE Holdings Agreement'');
(4) the certificate of incorporation of ICE Holdings (``ICE Holdings
Certificate''); (5) the bylaws of ICE Holdings (``ICE Holdings
Bylaws''); (6) the certificate of

incorporation of ICE (``ICE Certificate''); (7) the bylaws of ICE
(``ICE Bylaws''); and (8) the independence policy of the board of
directors of ICE. In addition, the Exchange has filed with the
Commission the text of a proposed resolution of CHX Holdings' board of
directors to waive certain ownership and voting limitations to permit
the Transaction.
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    \12\ See Section 3(a)(27) of the Exchange Act, 15 U.S.C.
78c(a)(27).
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1. Proposed Rule Changes To Waive the Ownership and Voting Limitations
    The current CHX Holdings certificate of incorporation (``Current
CHX Holdings Certificate'') provides that that no Person,\13\ either
alone or together with its Related Persons,\14\ may, directly or
indirectly: (1) Own shares of stock of CHX Holdings representing more
than 40 percent of the then outstanding votes entitled to be cast on
any matter; (2) if it is a Participant, own shares of stock of CHX
Holdings representing more than 20 percent of the then outstanding
votes entitled to be cast on any matter; or (3) pursuant to any voting
trust, agreement, plan or other arrangement, vote or cause the voting
of shares of the stock of CHX Holdings or give any consent or proxy
with respect to shares representing more than 20 percent of the voting
power of the then issued and outstanding capital stock of CHX Holdings;
or enter into any agreement, plan or other arrangement
(``Arrangement'') with any other Person, either alone or together with
its Related Persons, under circumstances that would result in the
subject shares of CHX Holdings not being voted on any matter or matters
or any proxy relating thereto being withheld, where the effect of such
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 shares of CHX Holdings which would represent more than 20
percent of such voting power.\15\
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    \13\ Current CHX Holdings Certificate, Article FIFTH, Paragraph
(a)(i) defines ``Person'' as ``an individual, partnership (general
or limited), joint stock company, corporation, limited liability
company, trust or unincorporated organization, or any governmental
entity or agency or political subdivision thereof.''
    \14\ Current CHX Holdings Certificate, Article FIFTH, Paragraph
(a)(ii) defines ``Related Persons'' as ``(A) with respect to any
Person, all `affiliates' and `associates' of such Person (as such
terms are defined in Rule 12b-2 under the . . . Act . . .); (B) with
respect to any Person that holds a permit issued by the . . .
Exchange . . . to trade securities on the . . . Exchange (a
`Participant'), any broker or dealer with which a Participant is
associated; and (C) any two or more Persons that have any agreement,
arrangement or understanding (whether or not in writing) to act
together for the purpose of acquiring, voting, holding or disposing
of shares of the capital stock of'' CHX Holdings.
    \15\ Article FIFTH, Paragraph (b)(ii) of the Current CHX
Holdings Certificate. Article FIFTH includes provisions to address
violations of the current ownership and voting limitations. See
Article FIFTH, Paragraphs (d) and (e) of the Current CHX Holdings
Certificate.
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    The CHX Holdings Certificate provides that the first and third
ownership and voting limitations set forth above may be waived by the
CHX Holdings board of directors by adopting an amendment to the bylaws,
if, in connection with the adoption of such amendment, the board of
directors also adopts certain resolutions.\16\ In addition, the CHX
Holdings Certificate provides that, notwithstanding the first and
second ownership and voting limitations, a proposed sale, assignment or
transfer of CHX Holdings stock above the percentage limitations shall
not become effective until the board of directors of CHX Holdings has
determined, by resolution, that such purchaser and its Related Persons
are not subject to any applicable statutory disqualification.\17\
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    \16\ Article FIFTH, Paragraph (b)(iii)(B) of the Current CHX
Holdings Certificate, which provides that any such resolution must
state that the board of director's determination is that such
amendment (a) 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 under the Exchange Act; (b) is otherwise
in the best interests of CHX Holdings and its stockholders and the
Exchange; (c) will not impair the ability of the Commission to
enforce the Exchange Act, and (d) such amendment shall not be
effective until approved by the Commission.
    \17\ See Article FIFTH, Paragraph (b)(iv) of the Current CHX
Holdings Certificate, which provides that, notwithstanding the first
and second ownership and voting limitations, ``in any case where a
Person, either alone or together with its Related Persons, would own
or vote more than the above percentage limitations upon consummation
of any proposed sale, assignment or transfer of'' CHX Holdings'
stock, ``such sale, assignment or transfer shall not become
effective until the Board of Directors'' of CHX Holdings ``shall
have determined, by resolution, that such Person and its Related
Persons are not subject to any applicable `statutory
disqualification' (within the meaning of Section 3(a)(39)'' of the
Exchange Act.
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    Waiver of the ownership and voting limitations must be filed with
and approved by the Commission pursuant to Section 19 of the Exchange
Act.\18\ Furthermore, such Person seeking the waiver must deliver to
the CHX Holdings board of directors not less than 45 days prior to any
vote or acquisition, as appropriate, a notice of the intent to exceed
the ownership and voting restrictions.\19\
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    \18\ See Article FIFTH, Paragraph (b)(v) of the Current CHX
Holdings Certificate.
    \19\ Id.
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    Because NYSE Group's acquisition of all of the shares of CHX
Holdings at Closing would violate these ownership and voting
limitations, the CHX Holdings board of directors determined that in
order to effect the Transaction, a waiver of the ownership and voting
limitations with respect to the ICE Holding Companies would be
required. To do so, the board of directors adopted resolutions
(``Resolutions''), making certain determinations with respect to the
ICE Holding Companies and the Transaction that are necessary to waive
the ownership and voting limits. Specifically, the board of directors
of CHX Holdings made the following determinations: (1) The acquisition
of the proposed ownership by the ICE Holdings Companies 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 thereunder; are otherwise in the best interests of CHX Holdings
and its stockholders and the Exchange; and will not impair the ability
of the Commission to enforce the Exchange Act; and (2) none of the ICE
Holding Companies, nor any of its Related Persons, is subject to
``statutory disqualification'' within the meaning of Section 3(a)(39)
of the Exchange Act.
    Article IV, Section 2(a) of the proposed CHX Holdings Certificate
would ensure that any change in ownership of CHX Holdings would be
subject to Commission approval, by providing that NYSE Group may not
transfer or assign any stock unless such transfer or assignment is
filed with and approved by the Commission under Section 19 of the
Exchange Act.\20\ The governing documents of NYSE Group, NYSE Holdings,
and ICE Holdings also provide that any transfer or assignment of stock
must be filed with or approved by the Commission under Section 19 of
the Exchange Act.\21\ Each of the NYSE Group Certificate, NYSE Holdings
Agreement, and ICE Holdings Certificate provides that any changes to
the provisions of such agreement must either be filed with and approved
by the Commission pursuant to Section 19 of the Exchange Act or must be
submitted to the Exchange's board of directors, and if the board so
decides, the changes must be filed with and approved by the
Commission.\22\
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    \20\ 15 U.S.C. 78s(b)(1).
    \21\ See NYSE Group Certificate Article IV, Section 4(a), NYSE
Holdings Agreement Article VII, Section 7.2, and ICE Holdings
Certificate Article IV.C.
    \22\ See NYSE Group Certificate Article XII, NYSE Holdings
Agreement Article XVI, Section 16.1, and ICE Holdings Certificate
Article X.
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    The Commission believes that it is consistent with the Exchange Act
to allow the ICE Holding Companies to wholly-own and vote all of the
outstanding common stock of CHX Holdings. The Commission notes that

ICE, the new top-level holding company for the Exchanges, currently
owns other national securities exchanges and is subject to governance
documents that restrict concentration of ownership and voting
rights.\23\ As discussed below, CHX Holdings has also included in its
corporate documents certain provisions designed to maintain the
independence of the Exchange's regulatory functions.\24\ Accordingly,
the Commission does not believe that the Transaction 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, or the ability of the Commission to enforce the
Exchange Act and the rules and regulations promulgated thereunder.
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    \23\ See Article V of the ICE Certificate. See infra Section
II.B.2.
    \24\ See Article XI of the proposed CHX Holdings Certificate and
Article III of the proposed CHX Holdings Bylaws.
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2. Ownership and Voting Limitations
    In connection with the Transaction, upon Closing, ICE will become
the indirect owner (through ICE Holdings, NYSE Holdings, NYSE Group,
and CHX Holdings) of the Exchange.\25\ The ICE Certificate includes
restrictions on the ability to own and vote shares of capital stock of
ICE. These limitations are designed to prevent any stockholder from
exercising undue control over the operation of the Exchange and to
assure that the Exchange and the Commission are able to carry out their
regulatory obligations under the Exchange Act.
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    \25\ Because the governing documents of CHX Holdings, NYSE
Group, NYSE Holdings, and ICE Holdings provide that any transfer or
assignment of stock must be filed with or approved by the Commission
under Section 19 of the Exchange Act, any change in control of such
ICE Holding Companies would be subject to Commission approval. See
supra notes 19-22 and accompanying text.
---------------------------------------------------------------------------

    Specifically, the ICE Certificate includes restrictions on the
ability to vote and own shares of stock of ICE. For so long as ICE
directly or indirectly controls a national securities exchange, the ICE
Certificate provides that no person, either alone or together with its
related persons, shall be: (1) Entitled to vote or cause the voting of
more than 10 percent of the then outstanding votes entitled to be cast
on a matter, or (2) permitted to own shares of stock of ICE
representing in the aggregate more than 20 percent of the then
outstanding votes entitled to be cast on any matter. The ICE
Certificate provides that ICE will be required to disregard any votes
purported to be cast in excess of the voting restriction. The ICE
Certificate also provides that in the event that any person(s) exceeds
the ownership restrictions, it will be obligated to sell promptly, and
ICE will be obligated to purchase promptly, at a price equal to the par
value of such shares and to the extent funds are legally available for
such purchase, the number of shares of ICE necessary so that such
person, together with its related persons, will beneficially own shares
of ICE representing in the aggregate no more than 20 percent of the
then outstanding votes entitled to be cast on any matter, after taking
into account that such repurchased shares will become treasury shares
and will no longer be deemed to be outstanding. The ICE board of
directors may waive the ownership and voting restrictions if it makes
certain determinations and expressly resolves to permit the ownership
and voting that is subject to such restrictions, and such resolutions
have been filed with, and approved by, the Commission under Section
19(b) of the Exchange Act. The ICE Certificate further provides that
the board of directors may not approve either voting or ownership
rights in excess of a 20 percent threshold with respect to any person
that is a member of an exchange controlled by ICE or who is subject to
any statutory disqualification.
    The Commission believes that ICE's ownership and voting limitations
are reasonably designed to prevent any stockholder from exercising
undue control over the operation of ICE, and in turn, over the
operation of the Exchange. The Commission also notes that these
ownership and voting limitations have previously been approved by the
Commission \26\ and are consistent with those approved by the
Commission for other SROs \27\ and believes that they are reasonably
designed to assure that the Exchange and the Commission are able to
carry out their regulatory obligations under the Exchange Act and in
administering and complying with the requirements of the Exchange Act.
Moreover, the Commission believes that the ownership and voting limits
are reasonably designed to eliminate the potential that the control of
the Exchange by one or few stockholders would improperly interfere with
or impair the ability of the Commission or the Exchange to effectively
carry out their regulatory oversight responsibilities under the
Exchange Act.
---------------------------------------------------------------------------

    \26\ See, e.g., Securities Exchange Act Release No. 71721 (March
13, 2014), 79 FR 15367 (March 19, 2014) (SR-NYSE-2014-04; SR-
NYSEMKT-2014-10; SR-NYSEArca-2014-08).
    \27\ See, e.g., Securities Exchange Act Release Nos. 79585
(December 16, 2016), 81 FR 93988 (December 22, 2016) (SR-BatsBZX-
2016-68) (approving similar restrictions in connection with the
merger of Bats Global Markets, Inc. and CBOE Holdings, Inc.)
(``BATS-CBOE Approval Order''); 78119 (June 21, 2016), 81 FR 41611
(June 27, 2016) (SR-ISE-2016-11, SR-ISE Gemini-2016-05, SR-ISE
Mercury-2016-10) (approving similar restrictions proposed in
connection with Nasdaq, Inc. becoming the indirect parent of
International Securities Exchange, ISE Gemini, LLC, and ISE Mercury,
LLC); 74270 (February 13, 2015), 80 FR 9286 (February 20, 2015) (SR-
NSX-2014-017) (approving similar restrictions in connection with
National Stock Exchange, Inc. becoming a wholly-owned subsidiary of
National Stock Exchange Holdings, Inc.); 71449 (January 30, 2014),
79 FR 6961 (February 5, 2014) (SR-EDGA-2013-34; SR-EDGX-2013-43)
(approving similar restrictions in connection with the merger of
BATS Global Markets, Inc. and Direct Edge Holdings LLC); 71375
(January 23, 2014), 79 FR 4771 (January 29, 2014) (SR-BATS-2013-059,
SR-BYX-2013-039) (approving similar restrictions in connection with
the merger of BATS Global Markets, Inc. and Direct Edge Holdings
LLC); 70210 (August 15, 2013), 78 FR 62716 (August 13, 2010), 75 FR
51295 (August 19, 2010) (File No. 10-198) (approving similar
restrictions in connection with the registration Bats BYX Exchange,
Inc. as a national securities exchange); 61698 (March 12, 2010), 75
FR 13151 (March 18, 2010) (File Nos. 10-194 and 10-196) (approving
similar restrictions in connection with the registrations of EDGX
Exchange, Inc. and EDGA Exchange, Inc. as national securities
exchanges); 58375 (August 18, 2008), 73 FR 49498 (August 21, 2008)
(File No. 10-182) (approving similar restrictions in connection with
the registration of BATS Exchange, Inc. as a national securities
exchange); 56955 (December 13, 2007), 72 FR 71979, 71982-84
(December 19, 2007) (SR-ISE-2007-101) (approving similar
restrictions in connection with International Securities Exchange
Holdings, Inc. becoming a wholly-owned indirect subsidiary of Eurex
Frankfurt AG); 55293 (February 14, 2007); 53382 (February 27, 2006),
71 FR 11251 (March 6, 2006) (SR-NYSE-2005-77) (approving similar
restrictions in connection with the merger of New York Stock
Exchange, Inc. and Archipelago); 53963 (June 8, 2006), 71 FR 34660
(June 15, 2006) (File No. SR-NSX-2006-03) (approving similar
restrictions in connection with the demutualization of the National
Stock Exchange); 53128 (January 13, 2006), 71 FR 3550 (January 23,
2006) (File No. 10-131) (approving similar restrictions in
connection with the registration the Nasdaq Stock Market LLC as a
national securities exchange); 51149 (February 8, 2005), 70 FR 7531
(February 14, 2005) (SR-CHX-2004-26) (approving similar restrictions
in connection with the demutualization of CHX); and 49098 (January
16, 2004), 69 FR 3974 (January 27, 2004) (SR-Phlx-2003-73)
(approving similar restrictions in connection with the
demutualization of the Philadelphia Stock Exchange, Inc.).
---------------------------------------------------------------------------

    In addition to being designed to eliminate the potential of any
stockholder from exercising undue control over the Exchange, the
Commission also notes that the restrictions applicable to members of an
exchange are designed to address the conflicts of interests that might
result from a member of a national securities exchange owning interests
in the exchange. As the Commission has noted in the past, a member's
interest in an exchange could become so large as to cast doubts on
whether the exchange may fairly and objectively exercise its self-
regulatory responsibilities with

respect to such member.\28\ A member that is a controlling stockholder
of an exchange could seek to exercise that controlling influence by
directing the exchange to refrain from, or the exchange may hesitate
to, diligently monitor and conduct surveillance of the member's conduct
or diligently enforce the exchange's rules and the federal securities
laws with respect to conduct by the member that violates such
provisions. As such, these restrictions on Exchange members' ownership
and voting of ICE stock are expected to minimize the potential that a
person or entity can improperly interfere with or restrict the ability
of CHX to effectively carry out its regulatory oversight
responsibilities under the Exchange Act.
---------------------------------------------------------------------------

    \28\ See, e.g., BATS-CBOE Order, supra note 27, at 93990.
---------------------------------------------------------------------------

3. Jurisdiction; Books and Records; Due Regard
    As described above, following the Closing, ICE will remain the sole
stockholder of ICE Holdings, ICE Holdings will remain the sole
stockholder of NYSE Holdings, NYSE Holdings will remain the sole member
of NYSE Group, NYSE Group will become the sole stockholder of CHX
Holdings, and CHX Holdings will remain the sole stockholder of the
Exchange. Although ICE, ICE Holdings, NYSE Holdings, NYSE Group, and
CHX Holdings will not carry out any regulatory functions, their
activities with respect to the operation of the Exchange must be
consistent with, and must not interfere with, the self-regulatory
obligations of the Exchange. The ICE Bylaws,\29\ ICE Holdings
Bylaws,\30\ NYSE Holdings Agreement,\31\ NYSE Group Certificate,\32\
and CHX Holdings Certificate \33\ therefore 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 federal securities laws, including the objectives of
Sections 6(b) \34\ and 19(g) \35\ of the Exchange Act, and facilitate
the ability of the Exchange and the Commission to fulfill their
regulatory and oversight obligations under the Exchange Act.
---------------------------------------------------------------------------

    \29\ See Articles VII, VIII, IX, and IX of the ICE Bylaws.
    \30\ See Articles VII, VIII, IX, and XI of the ICE Holdings
Bylaws.
    \31\ See Articles XII, XIII, XIV, and Article XVI, Section 16.1
of the NYSE Holdings Agreement.
    \32\ See Articles IX, X, XI, and XII of the NYSE Group
Certificate.
    \33\ See Articles IX, X, XI, and XII of the proposed CHX
Holdings Certificate.
    \34\ 15 U.S.C. 78f(b).
    \35\ 15 U.S.C. 78s(g).
---------------------------------------------------------------------------

    For example, under the CHX Holdings Certificate, CHX Holdings, its
directors, officers, and employees, must give due regard to the
preservation of the independence of the self-regulatory function of the
Exchange (to the extent of the Exchange's self-regulatory function), as
well as to its obligations to investors and the general public and must
not take any actions that would interfere with the effectuation of any
decisions by the board of directors of the Exchange relating to its
regulatory functions (including disciplinary matters), or which would
interfere with the ability of the Exchange to carry out its
responsibilities under the Exchange Act.\36\
---------------------------------------------------------------------------

    \36\ Article XI, Section 3 of the proposed CHX Holdings
Certificate.
---------------------------------------------------------------------------

    The CHX Holdings Certificate would further require that CHX
Holdings complies with the U.S. federal securities laws and rules and
regulations thereunder and shall cooperate with the Commission and the
Exchange, pursuant to and to the extent of their respective regulatory
authority, and shall take reasonable steps necessary to cause its
agents to cooperate with the Commission and, where applicable, the
Exchange, pursuant to their regulatory authority.\37\ The CHX Holdings
Certificate also provides that CHX Holdings shall take reasonable steps
necessary to cause its officers, directors and employees, prior to
accepting their positions, to consent to the applicability of Section 7
of Article V (``Considerations of the Board''), Article IX
(``Jurisdiction''), Article X (``Confidential Information''), and
Section 3 of Article XI of the CHX Holdings Certificate (relating to
giving due regard to the independence of the self-regulatory function
of the Exchange) with respect to their activities related to the
Exchange.\38\ In addition, the CHX Holdings Certificate provides that
in discharging his or her responsibilities as a member of the board or
as an officer or employee of CHX Holdings, each such director, officer,
or employee shall (1) comply with the federal securities laws and the
rules and regulations thereunder, (2) cooperate with the Commission,
and (3) cooperate with the Exchange pursuant to and to the extent of
its regulatory authority.\39\ Furthermore, CHX Holdings, its directors
and officers, and those of its employees whose principal place of
business and residence is outside of the United States, shall be deemed
to irrevocably submit to the jurisdiction of the United States federal
courts and the Commission for the purposes of any suit, action, or
proceeding pursuant to the United States federal securities laws and
the rules and regulations thereunder, commenced or initiated by the
Commission arising out of, or relating to, the activities of the
Exchange.\40\
---------------------------------------------------------------------------

    \37\ Article XI, Section 1 of the proposed CHX Holdings
Certificate.
    \38\ Article XI, Section 2 of the proposed CHX Holdings
Certificate.
    \39\ Article V, Section 7 of the proposed CHX Holdings
Certificate.
    \40\ Article IX of the proposed CHX Holdings Certificate.
---------------------------------------------------------------------------

    The CHX Holdings Certificate also provides that as long as CHX
Holdings directly or indirectly controls any national securities
exchange, the books, records, premises, officers, directors, and
employees of CHX Holdings shall be deemed to be the books, records,
premises, officers, directors, and employees of the Exchange for
purposes of and subject to oversight pursuant to the Exchange Act.\41\
---------------------------------------------------------------------------

    \41\ Article X of the proposed CHX Holdings Certificate.
---------------------------------------------------------------------------

    The CHX Holdings Certificate also provides that all confidential
information pertaining to the self-regulatory function of the Exchange
(including but not limited to disciplinary matters, trading data,
trading practices, and audit information) contained in the books and
records of the Exchange that shall come into the possession of CHX
Holdings, shall not be made available to any persons other than to
those officers, directors, employees, and agents of CHX Holdings, that
have a reasonable need to know the contents thereof, and shall be
retained in confidence by CHX Holdings, and the officers, directors,
employees, and agents of CHX Holdings, and not used for any commercial
purposes.\42\ The CHX Holdings Certificate, however, specifies that the
CHX Holdings Certificate (including these confidentiality provisions)
shall not be interpreted so as to limit or impede the rights of the
Commission or the Exchange to access and examine such confidential
information pursuant to the federal securities laws and the rules and
regulations thereunder, or to limit or impede the ability of any
officers, directors, employees, or agents of CHX Holdings to disclose
such confidential information to the Commission or the Exchange.\43\ In
addition, the CHX Holdings Certificate provides that CHX Holdings'
books and records shall be subject at all times to inspection and

copying by the Commission and the Exchange.\44\
---------------------------------------------------------------------------

    \42\ Article X of the proposed CHX Holdings Certificate.
    \43\ Article X of the proposed CHX Holdings Certificate.
    \44\ Article X of the proposed CHX Holdings Certificate.
---------------------------------------------------------------------------

    The CHX Holdings Certificate and CHX Holdings Bylaws provide that
as long as CHX Holdings controls, directly or indirectly, a registered
national securities exchange, before any amendment to, or repeal of,
any provision of the CHX Holdings Certificate and CHX Holdings Bylaws,
as the case may be, may be effective, those changes must be either
filed with or filed with and approved by the Commission under Section
19 of the Exchange Act and the rules promulgated thereunder or
submitted to the board of directors of each such exchange, and if the
amendment is required to be filed with, or filed with and approved by
the Commission pursuant to Section 19(b) of the Exchange Act, such
change shall not be effective until filed with, or filed with and
approved by, the Commission.\45\
---------------------------------------------------------------------------

    \45\ Article XII of the proposed CHX Holdings Certificate and
Section 7.9(b) of the proposed CHX Holdings Bylaws.
---------------------------------------------------------------------------

    The Commission finds that these provisions are consistent with the
Exchange Act, and that they are intended to assist the Exchange in
fulfilling its self-regulatory obligations and in administering and
complying with the requirements of the Exchange Act. The Commission
also notes that, even in the absence of these provisions, under Section
20(a) of the Exchange Act,\46\ any person with a controlling interest
in the Exchange shall be jointly and severally liable with and to the
same extent that the Exchange is liable under any provision of the
Exchange Act, unless the controlling person acted in good faith and did
not directly or indirectly induce the act or acts constituting the
violation or cause of action. In addition, Section 20(e) of the
Exchange Act \47\ creates aiding and abetting liability for any person
who knowingly provides substantial assistance to another person in
violation of any provision of the Exchange Act or rule thereunder.
Further, Section 21C of the Exchange Act \48\ authorizes the Commission
to enter a cease-and-desist order against any person who has been ``a
cause of'' a violation of any provision of the Exchange Act through an
act or omission that the person knew or should have known would
contribute to the violation.
---------------------------------------------------------------------------

    \46\ 15 U.S.C. 78t(a).
    \47\ 15 U.S.C. 78t(e).
    \48\ 15 U.S.C. 78u-3.
---------------------------------------------------------------------------

4. CHX Board of Directors
    As noted above, the Exchange will become part of a corporate family
including five separate registered national securities exchanges
following consummation of the Transaction. The Exchange represented
that it is important for each of such exchanges to have a consistent
approach to corporate governance in certain matters; therefore, to
simplify complexity and create greater consistency among the NYSE
Exchanges, CHX proposed to revise the provisions of the CHX Bylaws and
CHX Certificate to mirror the comparable provisions in the certain of
the NYSE Exchanges.\49\ Specifically, as discussed below, the Exchange
proposed to make the number, composition, term of office and
qualifications of the Exchange board of directors (``Board'')
consistent with the make-up of the boards of directors of the NYSE
Exchanges.
---------------------------------------------------------------------------

    \49\ See Notice, supra note 4, at 24520.
---------------------------------------------------------------------------

    Currently, the CHX Bylaws generally provide that the Board shall be
composed of between 10 and 16 directors, the exact number to be
determined by the Board; the CHX Bylaws also set forth the
compositional requirements for the Board. The Exchange proposed to
amend the CHX Bylaws to provide that the number of directors would be
determined from time to time by the stockholders subject to the
compositional requirements for the Board, which require that at least
50 percent of the directors on the Exchange's Board be persons from the
public and not be, or be affiliated with, a broker-dealer in securities
or employed by, or involved in any material business relationship with,
the Exchange or its affiliates (``Public Directors''); and at least 20
percent of the directors consist of individuals nominated by the
trading permit holders who are permitted to trade on the Exchange's
facilities for the trading of equities that are securities as covered
by the Exchange Act (collectively, ``Permit Holders'') (such directors,
the ``STP Participant Directors'').\50\ The Exchange also proposed that
for purposes of calculating the minimum number of STP Participant
Directors, if 20 percent of the directors is not a whole number, such
number of directors to be nominated and selected by the Permit Holders
be rounded up to the next whole number, and that the term of office of
a director not be affected by any decrease in the authorized number of
directors.\51\ The revised provisions also would require the nominees
for a director position to provide to the Secretary of the Exchange
such information as is reasonably necessary to serve as the basis for a
determination of the nominee's qualifications as a director, and that
the Secretary make such determination concerning the nominee's
qualifications.\52\
---------------------------------------------------------------------------

    \50\ See proposed CHX Bylaws, Article II, Section 2(a).
    \51\ Id.
    \52\ See proposed CHX Bylaws, Article II, Section 2(b). The
Exchange noted that proposed Article II, Sections 2(a) and (b) would
be consistent with the NYSE National Bylaws and NYSE Arca Bylaws.
See Notice, supra note 4, at 24521.
---------------------------------------------------------------------------

    The Exchange also proposed to amend Article II, Section 2(c) of the
CHX Bylaws, which sets forth the structure of the Board. Currently, the
Board is divided into three classes serving three-year terms, with the
term of office of one class expiring each year, and directors continue
in office after the expiration of their terms until their successors
are elected or appointed and qualified, except in the event of early
resignation, removal, or disqualification. The Exchange proposed to
replace this provision to provide that at each annual meeting of the
stockholders, the stockholders will elect directors to serve until the
next annual meeting or until their successors are elected and
qualified.\53\ The Exchange also proposed that the Board shall appoint
the Chairman of the Board by majority vote, and that each director
shall hold office for a term that expires at the annual meeting of the
stockholders next following his or her election, provided that if he or
she is not re-elected and his or her successor is not elected and
qualified at the meeting and there remains a vacancy on the Board, he
or she shall continue to serve until his or her successor is elected
and qualified or until his or her earlier death, resignation, or
removal.\54\ The CHX Bylaws also would provide that a director may
serve for any number of terms, consecutive or otherwise.\55\ The
Exchange represented that the change from a three-class board with
staggered terms to a board with one class of directors elected annually
would make the organization of the Board consistent with those of all
of the NYSE Exchanges.\56\
---------------------------------------------------------------------------

    \53\ See proposed CHX Bylaws, Article II, Section 2(c).
    \54\ See proposed CHX Bylaws, Article II, Section 2(d).
    \55\ Id.
    \56\ See Notice, supra note 4, at 24522.
---------------------------------------------------------------------------

    The Exchange proposed that except as otherwise provided in the CHX
Bylaws or the Exchange's rules, the shareholder shall nominate
directors for election at the annual meeting of the shareholder, which
nominations shall comply with

the Exchange's rules and the CHX Bylaws.\57\
---------------------------------------------------------------------------

    \57\ See proposed CHX Bylaws, Article II, Section 2(f).
According to the Exchange, this provision would be consistent with
the NYSE National Bylaws and NYSE Arca Bylaws. See Notice, supra
note 4, at 24522.
---------------------------------------------------------------------------

    The Exchange also proposed to amend the CHX Bylaw provisions
relating to the nomination and election of the Board to make these
provisions similar to the provisions in the NYSE Arca and NYSE National
Bylaws, subject to certain terms specific to the Exchange.\58\
Currently, the Nominating and Governance Committee (``NGC'') of the
Exchange consists of two Public Directors and two Original STP
Participant Directors, one of whom must not be a representative of a
firm that is a holder of Series A Preferred Stock of CHX Holdings. The
NGC also is currently appointed by the Board. The Exchange proposed
that the Nominating Committee be composed solely of STP Participant
Directors and/or Permit Holder representatives, and proposed to rename
the NGC to the ``Nominating Committee.'' \59\
---------------------------------------------------------------------------

    \58\ See Notice, supra note 4, at 24522.
    \59\ See proposed CHX Bylaws, Article II, Section 3(a).
---------------------------------------------------------------------------

    The Exchange also proposed to amend the provisions relating to the
process for nominating candidates to the Board. Currently, the Bylaws
provide that each year the NGC shall nominate persons who will qualify
as Participant Directors pursuant to the procedures set forth in the
Bylaws. The Exchange proposed to adopt a new process for nominating
nominees to the Board. Specifically, pursuant to Article II, Section
3(b) of the CHX Bylaws, CHX proposed that the Nominating Committee
shall publish the name(s) of one or more Participants as its nominee(s)
for STP Participant Directors of the Board. The Nominating Committee
would name sufficient nominees so that at least 20 percent of the
directors consist of STP Participant Directors, and the names of the
nominees shall be published on a date in each year sufficient to
accommodate the process described (``Announcement Date''). After the
name of the proposed nominee(s) is published, the CHX Bylaws allow
Permit Holders in good standing to submit a petition to the Exchange in
writing to nominate additional eligible candidate(s) to fill STP
Participant Director position(s) during the next term. If a written
petition of at least 10 percent of Permit Holders in good standing is
submitted to the Nominating Committee within two weeks after the
Announcement Date, such person(s) would also be nominated by the
Nominating Committee, provided, however, that no Permit Holder, either
alone or together with other Permit Holders that are deemed its
affiliates, may account for more than 50 percent of the signatories to
the petition endorsing a particular petition nominee for the STP
Participant Director position(s) on the Board. Article 2, Section 3(b)
of the CHX Bylaws would stipulate that each petition for a petition
candidate must include a completed questionnaire used to gather
information concerning director candidates, with the form of the
questionnaire provided by the Exchange upon the request of any Permit
Holder. The same provision also provides that, notwithstanding anything
to the contrary, the Nominating Committee shall determine whether any
petition candidate is eligible to serve on the Board (including whether
such person is free of any statutory disqualification), and such
determination shall be final and conclusive.
    In Article II, Section 3(c) of the CHX Bylaws, the Exchange also
proposed a petition election process in the event that the number of
nominees exceeds the number of available seats. In this case, the
Nominating Committee shall submit the contested nomination to the
Permit Holders for selection. Permit Holders would be afforded a
confidential voting procedure and be given no less than 20 calendar
days to submit their votes. A Permit Holder in good standing may select
one nominee for the contested seat on the Board; provided, however that
no Permit Holder, either alone or together with other Permit Holders
who are deemed its affiliates, may account for more than 20 percent of
the votes cast for a particular nominee for the STP Participant
Director position(s) on the Board. With respect to the contested
position, the Exchange proposed that the nominee for the Board
receiving the most votes of Permit Holders shall be submitted by the
Nominating Committee to the Board and that the Nominating Committee
shall also submit uncontested nominees to the Board, and tie votes
shall be decided by the Board at its first meeting following the
election. Finally, the Exchange proposed that the Board shall appoint
the Nominating Committee.\60\
---------------------------------------------------------------------------

    \60\ See proposed CHX Bylaws, Article II, Section 3(d).
---------------------------------------------------------------------------

    The Exchange also proposed to amend Article II, Section 6 of the
current CHX Bylaws, which addresses how vacancies on the Board shall be
filled. Currently, this provision provides that any vacancy on the
Board due to ``the death, retirement, resignation, disqualification or
removal of a director'' or to an increase in the number of directors
between annual meetings ``shall be filled only with a person nominated
by the Chairman and Vice Chairman of the Corporation and elected by a
majority of the directors then in office, though less than a quorum or
by a sole remaining director,'' with the caveat that, when stockholders
remove a director from office for cause, the stockholders may fill the
vacancy at the same meeting.
    The Exchange proposed to revise this provision to also provide that
vacancies also may be filled by action taken by the stockholders of the
Exchange.\61\ Therefore, pursuant to the CHX Bylaws, vacancies on the
Board may be filled (i) with a person nominated by the Chairman and
Vice Chairman of the Exchange and elected by a majority of the
directors then in office, though less than a quorum or by a sole
remaining director, or (ii) by action taken by the stockholders of the
Exchange. As a result, CHX Holdings, as the stockholder of the
Exchange, would be able to fill vacancies on the Board, include any
that exist following the Transaction. The Exchange represented that
this provision would be consistent with the bylaws of NYSE Arca and
NYSE National, as well as the bylaws of other SROs, such as CBOE
Exchange, Inc. and CBOE BYX Exchange, Inc.\62\
---------------------------------------------------------------------------

    \61\ See Amendment No. 2, supra note 5, at 4.
    \62\ See Amendment No. 2, supra note 5, at 3.
---------------------------------------------------------------------------

    Finally, the Exchange proposed to restructure and amend Article
FIFTH of the CHX Certificate governing the composition, nomination and
election of its Board to more closely align with the proposed amended
CHX Bylaws and the relevant provisions of the other NYSE Exchanges, to
make certain administrative and conforming changes.\63\
---------------------------------------------------------------------------

    \63\ See Notice, supra note 4, at 24523-24.
---------------------------------------------------------------------------

    In addition, the Exchange has proposed to amend CHX Article 2,
Rules 2, 3, 4, and 11, to conform with proposed changes to the CHX
Bylaws and CHX Certificate related to the Exchange Board, which are
discussed above, and to reduce the minimum size of the Board's
Executive, Finance, and Regulatory Oversight Committees to three
members, conforming the committee size to the governing documents of
the NYSE Exchanges, all of which provide that their respective
regulatory oversight committees consist of three directors.
    The Commission believes that the proposed changes to the CHX Bylaws
and CHX Certificate related to the number, composition, term of office,
and qualifications of the Board are

consistent with Section 6(b)(3) of the Exchange Act in that they assure
the fair representation of CHX members on the CHX Board, and provide
that one or more directors shall be representative of issuers and
investors and not be associated with a member of the exchange, broker,
or dealer. In particular, the Commission finds that the requirements
that at least 20 percent of the Board be comprised of STP Participant
Directors and 50 percent of the Board be comprised of Public Directors
are consistent with the requirements of Section 6(b)(3). In addition,
the Commission finds that the proposed provisions of the CHX Bylaws and
CHX Certificate relating to the number, term of office, and
qualifications of the Board are consistent with Section 6(b)(1) of the
Exchange Act in that they are designed to assist the Exchange in
fulfilling its self-regulatory obligations and administering and
complying with the requirements of the Exchange Act.
5. Miscellaneous Changes to Organizational Document
    The Exchange has proposed to make non-substantive technical and
conforming changes throughout the CHX Certificate and CHX Bylaws to
reflect the Exchange's new ownership, including updating corporate
names, defined terms, and cross-references. In addition, the Exchange
has proposed to amend the ICE Independence Policy to reflect the change
in ownership of the Exchange and to provide similar protections to the
Exchange as are currently provided to the NYSE Exchanges by the policy.
In addition, the Exchange has proposed to remove outdated or obsolete
references.
    The Commission believes that these amendments are consistent with
the Exchange Act as they are technical in nature. They do not alter any
of the restrictions contained in CHX Certificate or CHX Bylaws. The
amendments merely update such governing documents to reflect the new
ownership of the Exchange.
6. Inbound Router
    The Exchange states that upon Closing, Archipelago Securities, LLC
(``ArcaSec''), a Participant of the Exchange and wholly-owned
subsidiary of NYSE Group, will become an affiliate of the Exchange. CHX
Article 3, Rule 20 provides that a Participant shall not be or become
an affiliate of the Exchange, or an affiliate of any affiliate of the
Exchange, in the absence of an effective filing under Section 19(b) of
the Exchange Act.\64\ The Exchange represents that the Exchange and
ArcaSec will each operate in essentially the same manner upon Closing
as it operates today, and that therefore, upon the Closing, ArcaSec
will not operate as a ``facility'' of the Exchange, as defined under
Section 3(a)(2) of the Exchange Act,\65\ and will continue to act, and
be regulated by the Exchange, as a Participant on the same terms as any
other Participant, apart from CHXBD.
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    \64\ 15 U.S.C. 78s(b).
    \65\ 15 U.S.C. 78c(a)(2).
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    The Exchange has proposed to add a new subparagraph (b) to CHX
Article 19, Rule 2 to provide that ArcaSec may act as an inbound
router, and to impose certain limitations and conditions to ArcaSec's
affiliation with the Exchange to permit the Exchange to accept inbound
orders that ArcaSec routes. Specifically, proposed Rule 2(b)(1) would
provide that, for so long as the Exchange is affiliated with the NYSE
Exchanges and ArcaSec, in its capacity as a facility of the NYSE
Exchanges, is utilized for the routing of any approved types of orders
from those exchanges to the Exchange (such function of ArcaSec is
referred to as the ``Inbound Router''), each of the Exchange and
ArcaSec shall undertake as follows: (1) The Exchange shall maintain an
agreement pursuant to Rule 17d-2 under the Exchange Act (``Rule 17d-2
Plan'') with a non-affiliated SRO to relieve the Exchange of regulatory
responsibilities for ArcaSec with respect to rules that are common
rules between the Exchange and the non-affiliated SRO; \66\ (2) the
Exchange shall maintain a regulatory services agreement (``RSA'') with
a non-affiliated SRO to perform regulatory responsibilities for ArcaSec
for unique Exchange rules; (3) the RSA shall require the Exchange and
the non-affiliated SRO to monitor ArcaSec for compliance with the
Exchange's trading rules, and collect and maintain, in an easily
accessible manner, all alerts, complaints, investigations and
enforcement actions (collectively ``Exceptions'') in which ArcaSec (in
routing orders to the Exchange) is identified as a participant that has
potentially violated applicable Exchange or Commission rules. The RSA
shall require that the non-affiliated SRO provide a report, at least
quarterly, to the Chief Regulatory Officer of the Exchange quantifying
all Exceptions; (4) the Exchange, on behalf of the holding company
owning both the Exchange and ArcaSec, shall establish and maintain
procedures and internal controls reasonably designed to prevent ArcaSec
from receiving any benefit, taking any action or engaging in any
activity based on non-public information regarding planned changes to
Exchange systems, obtained as a result of its affiliation with the
Exchange, until such information is available generally to similarly
situated Participants of the Exchange in connection with the provision
of inbound order routing to the Exchange; and (5) the Exchange may
furnish to ArcaSec the same information on the same terms that the
Exchange makes available in the normal course of business to any other
Participant. Proposed Rule 2(b)(2) would state that, provided the above
conditions are complied with, ArcaSec may provide inbound routing
services to the Exchange from the NYSE Exchanges.\67\
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    \66\ ``Common rules'' would be defined in the Rule 17d-2 Plan.
    \67\ The Exchange will ensure a Rule 17d-2 Plan is in place and
comply with the other listed conditions prior to ArcaSec acting as
an Inbound Router of the Exchange.
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    In the past, the Commission has expressed concern that the
affiliation of an exchange with one of its members raises potential
conflicts of interest and the potential for unfair competitive
advantage.\68\ Although the Commission continues to be concerned about
potential unfair competition and conflicts of interest between an
exchange's self-regulatory obligations and its commercial interest when
the exchange is affiliated with one of its members, the Commission
believes that it is consistent with the Exchange Act to permit ArcaSec,
in its capacity as a facility of each of the NYSE Exchanges, to route
orders inbound to the Exchange, subject to the limitations and
conditions described above.\69\ The Commission believes that the
limitations and conditions in CHX Article 19, Rule 2(b) will mitigate
its concerns about potential conflicts of interest and unfair
competitive advantage. In particular, the

Commission believes that the Rule 17d-2 Plan, RSA, and Exception
reporting requirements, procedures, and internal controls would help
protect the independence of the Exchange's self-regulatory function
with respect to ArcaSec. The Commission also believes that the proposed
rule is designed to prevent ArcaSec from acting on non-public
information obtained as a result of its affiliation with the Exchange,
and that the proposed changes are consistent with the Exchange Act.
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    \68\ See, e.g., Securities Exchange Act Release Nos. 53382
(February 27, 2006), 71 FR 11251 (March 6, 2006) (SR-NYSE-2005-77)
(order approving the combination of the New York Stock Exchange,
Inc. and Archipelago Holdings, Inc.); 58673 (September 29, 2008), 73
FR 57707 (October 3, 2008) (SR-Amex-2008-62 and SR-NYSE-2008-60)
(order approving the combination of NYSE Euronext and the American
Stock Exchange LLC); 59281 (January 22, 2009), 74 FR 5014 (January
28, 2009) (SR-NYSE-2008-120) (order approving a joint venture
between NYSE and BIDS Holdings L.P.); 61698 (March 12, 2010), 75 FR
13151 (March 18, 2010) (File Nos. 10-194 and 10-196) (order granting
the exchange registration of EDGX Exchange, Inc. and EDGA Exchange,
Inc.); and 62716 (August 13, 2010), 75 FR 51295 (August 19, 2010)
(File No. 10-198) (order granting the exchange registration of BATS-
Y Exchange, Inc.).
    \69\ The Commission notes that the proposed conditions are
similar to those of other NYSE Exchanges. See NYSE Arca Rule 7.45-
E(c), NYSE Rule 17(c)(2), and NYSE American Rule 7.45E(c).
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III. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the Amendment
Nos. 2 and 3 to the proposed rule change is consistent with the
Exchange 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-CHX-2018-004 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-CHX-2018-004. 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-CHX-2018-004, and should be submitted on
or before August 9, 2018.

IV. Accelerated Approval of Proposed Rule Change, as Modified by
Amendment Nos. 1, 2, and 3

    The Commission finds good cause to approve the proposed rule
change, as modified by Amendment Nos. 1, 2, and 3 prior to the 30th day
after the date of publication of notice of Amendments Nos. 2 and 3 in
the Federal Register. As noted above, Amendment Nos. 2 and 3 do not
change the structure or purpose of the proposed rule change as it was
previously published for notice and comment.\70\ The Commission
believes that an additional notice and comment period for Amendment
Nos. 2 and 3 before approval of the proposed rule change would not be
in furtherance of the public interest or the protection of investors.
Accordingly, the Commission finds good cause, pursuant to Section
19(b)(2) of the Exchange Act,\71\ to approve the proposed rule change,
as modified by Amendment Nos. 1, 2, and 3, on an accelerated basis.
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    \70\ See supra notes 5 and 6.
    \71\ 15 U.S.C. 78s(b)(2).
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V. Conclusion

    For the foregoing reasons, the Commission finds that the proposed
rule change, as modified by Amendments Nos. 1, 2, and 3 is consistent
with the Exchange Act and the rules and regulations thereunder
applicable to a national securities exchange.
    It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act \72\ that the proposed rule change (SR-CHX-2018-004), as
modified by Amendments Nos. 1, 2, and 3, be, and hereby is, approved on
an accelerated basis.
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    \72\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\73\
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    \73\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-15370 Filed 7-18-18; 8:45 am]
BILLING CODE 8011-01-P