[Federal Register Volume 81, Number 251 (Friday, December 30, 2016)]
[Notices]
[Pages 96552-96565]
[FR Doc No: 2016-31676]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79684; File No. SR-NSX-2016-16]

Self-Regulatory Organizations; National Stock Exchange, Inc.;
Notice of Filing of Proposed Rule Change in Connection With the
Proposed Acquisition of the Exchange by NYSE Group, Inc.

December 23, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Exchange Act'' or ``Act'') \1\ and Rule 19b-4 thereunder,\2\
notice is hereby given that, on December 22, 2016, National Stock
Exchange, Inc. (``NSX[supreg]'' 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 self-regulatory organization. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    Pursuant to the provisions of Section 19(b)(1) of the Securities
Exchange Act of 1934 (the ``Exchange Act'') \3\ and Rule 19b-4
thereunder,\4\ National Stock Exchange, Inc. (``NSX'' or the
``Exchange'') proposes, in connection with the proposed acquisition of
the Exchange by NYSE Group, Inc. (``NYSE Group''), to: (1) Amend the
Amended and Restated Certificate of Incorporation of National Stock
Exchange, Inc. (``Certificate of Incorporation''), and the Third
Amended and Restated Bylaws of National Stock Exchange, Inc.
(``Bylaws'') and make certain conforming amendments to the cover page,
Table of Contents and first page of the Exchange's rulebook as well as
Rules 2.10, 5.7, and the Schedule of Fees and Rebates; and (2) amend
certain organizational documents of NYSE Group, NYSE Holdings LLC
(``NYSE Holdings''), Intercontinental Exchange Holdings, Inc. (``ICE
Holdings''), and Intercontinental Exchange, Inc. (``ICE'').
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    \3\ 15 U.S.C. 78s(b)(1).
    \4\ 17 CFR 240.19b-4.
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    The text of the proposed rule change is available on the Exchange's
Web site at www.nsx.com, at the Exchange's principal office, and at the
Commission's public reference room.

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

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

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

1. Purpose
    On December 14, 2016, ICE entered into an agreement with the
Exchange pursuant to which its wholly-owned subsidiary NYSE Group would
acquire all of the outstanding capital stock of the Exchange (the
``Acquisition''). As a result of the Acquisition, the Exchange would be
renamed NYSE National, Inc. (``NYSE National'') and would be operated
as a wholly-owned subsidiary of NYSE Group. NYSE Group is a wholly-
owned subsidiary of NYSE Holdings, which is in turn 100% owned by ICE
Holdings. ICE, a public company listed on the New York Stock Exchange
LLC (the ``NYSE''), owns 100% of ICE Holdings.
    Following the Acquisition, 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 three
other registered national securities exchanges and SROs owned by NYSE
Group, namely, the NYSE, NYSE MKT LLC (``NYSE MKT''), and NYSE Arca,
Inc. (``NYSE Arca'') (together, the ``NYSE Exchanges'').
    In connection with the Acquisition and as discussed more fully
below, the Exchange proposes to amend its Certificate of Incorporation
and Bylaws and make certain conforming amendments to the headings on
the cover page, Table of Contents and first page of the Exchange's
rulebook as well as Rules 2.10, 5.7, and the Schedule of Fees and
Rebates. Generally, the amendments would reflect the Exchange's
proposed new ownership and, in certain cases, align the Exchange's
governance provisions to those of other NYSE Exchanges that the
Commission has already approved, as described in greater detail below.
    The Exchange also proposes amendments to the following
organizational documents of NYSE Group and its intermediary and
ultimate parent entities:
     ICE bylaws and director independence policy,
     ICE Holdings bylaws and certificate of incorporation,
     NYSE Holdings operating agreement, and
     NYSE Group bylaws and certificate of incorporation.
    These proposed changes would reflect the proposed new ownership of
the Exchange by the NYSE Group, and, indirectly, ICE.\5\
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    \5\ The NYSE Exchanges describe these proposed revisions in the
NYSE, NYSE MKT and NYSE Arca companion rule filings related to the
Acquisition. See SR-NYSE-2016-90; SR-NYSEMKT-2016-122; SR-NYSEArca-
2016-167.
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    The Exchange would effect the changes described herein following
approval of this rule filing no later than February 28, 2017, on a date
determined by its Board.

Amendments to Exchange Certificate of Incorporation and Bylaws
    In connection with the Acquisition, the Exchange proposes to make
various revisions to its Certificate of Incorporation and Bylaws.
Following consummation of the transaction, the Exchange would become
part of a corporate family that would include four separate exchanges.
Accordingly, the Exchange believes that it is important for each of the
four exchanges to have a consistent approach to corporate governance.
Therefore, to simplify and create greater consistency with the
organizational documents and governance practices of the NYSE
Exchanges, the Exchange proposes to revise certain provisions of its
Certificate of Incorporation and Bylaws.\6\
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    \6\ Because NYSE Arca, a non-stock corporation organized under
Delaware law, is the most similar to the Exchange in corporate
organization and in its use of ``permit holders,'' as opposed to
``members,'' the Exchange has primarily relied on NYSE Arca as a
precedent. The New York Stock Exchange and NYSE MKT are limited
liability companies.
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    The Exchange believes that the proposed changes to the Certificate
of Incorporation and Bylaws are consistent with the requirements of the
Exchange Act. Finally, in proposing these revisions to the Certificate
of Incorporation and Bylaws, the Exchange emphasizes that it also
believes that the proposed rule change is not inconsistent with the
Order Instituting Administrative and Cease-and-Desist Proceedings
Pursuant to Sections 19(h) and 21C of the Securities Exchange Act of
1934, Making Findings, and Imposing Remedial Sanctions and Cease-and-
Desist Order, entered by the Commission on May 19, 2005 (the ``2005
Order'').\7\
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    \7\ See Securities Exchange Act Release No. 51714 (May 19,
2005).
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    Set forth below are the specific proposed changes to the
Certificate of Incorporation and Bylaws.
Certificate of Incorporation
    The Exchange proposes to make the following amendments to its
Certificate of Incorporation.
     To reflect the Exchange's name change, it proposes to
replace ``National Stock Exchange'' with ``NYSE National'' before the
word ``Inc.'' in the heading, the preamble, Article First and in the
signature block.
     In the preamble, the Exchange proposes to add (a) ``, and
February 18, 2015'' following ``December 30, 2011'' to reflect the last
time the Certificate of Incorporation was restated, (b) a reference to
Section 228 of the General Corporation Law of the State of Delaware.
    The Exchange proposes to restructure and augment Article Third to
conform the ``Purpose'' section to Article 3 of the certificate of
incorporation of NYSE Arca.\8\ Accordingly, under the ``Purpose''
heading following the word ``Third,'' the phrase ``purpose or'' before
``purposes'' would be replaced with ``nature of the business or'' and
the phrase ``of the Corporation is'' would be replaced with ``to be
conducted or promoted are:''. New sections (a) through (d), based on
Article 3(a)-(d) of the certificate of incorporation of NYSE Arca,
would also be added to the ``Purpose'' section to reflect the nature of
the Exchange's business to be conducted or promoted.
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    \8\ See Certificate of Incorporation of NYSE Arca, Article 3.
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    Proposed subsection (a) would describe the first purpose of the
Corporation as being to conduct and carry on the functions of an
``exchange,'' as that term is defined in the Exchange Act, and state
that, in connection with managing the business and affairs of the
Exchange, the Exchange Board shall consider applicable requirements for
registration as a national securities exchange under Section 6(b) of
the Exchange Act, including, without limitation, the requirements that
(i) the rules of the Exchange shall be designed to protect investors
and the public interest, and (ii) the Exchange shall be so organized
and have the capacity to carry out the purposes of the Exchange Act and
to enforce compliance by its members, as that term is defined in
Section 3 of the Exchange Act (such statutory members being hereinafter
referred to as the ``ETP Holders''), and persons associated with its
ETP Holders, with the provisions of the Exchange Act, the rules and
regulations thereunder, and the rules of the Exchange. In addition,
proposed subsection (a) would state that the rules of the Exchange may
set forth provisions for the regulation of the conduct of ETP Holders,
the dues and assessments payable by ETP Holders, the grounds for and
the method of expulsion from the status as an ETP Holder and other
termination of trading permits held by ETP Holders, the limitations
upon or qualifications of the voting power of ETP Holders and such
other matters pertaining to the ETP Holders, including the transfer of
trading permits, as the Board shall from time to time determine.
    Proposed subsection (b) would describe the second purpose as to
maintain high standards of commercial honor and integrity among the
Exchange's ETP Holders.
    Proposed subsection (c) would describe the third purpose as to
promote and inculcate just and equitable principles of trade and
business.
    Finally, proposed subsection (d) would reflect the current text of
the ``Purpose'' section except that the ``t'' in ``to'' would be
capitalized. Proposed subsection (d) would describe the fourth purpose
as to engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of Delaware.
     The Exchange proposes to amend the ``Authorized Stock''
section of the Certificate of Incorporation to indicate that NYSE Group
would be the shareholder. Accordingly, the Exchange would delete the
phrase ``At all times, a'' in the second sentence and begin the
sentence with ``All.'' The Exchange would add ``issued and'' before
``outstanding'' and ``shares of'' after ``outstanding'' and before
``stock'' and replace the phrase ``owned by National Stock Exchange
Holdings, Inc., a Delaware corporation.'' with ``held by NYSE Group,
Inc., a corporation organized and existing under the Delaware General
Corporation Law (``NYSE Group'').''
     The Exchange proposes to amend the ``Board of Directors''
section of the Certificate of Incorporation to replace ``ETP Holder
Director'' with ``Non-Affiliated Director'' to reflect changes proposed
in Section 3.2 of the Bylaws, which are described below.
     The Exchange proposes to amend the ``Bylaws'' section of
the Certificate of Incorporation. In describing the effectiveness of
changes to the Bylaws that require a rule filing, the Exchange proposes
to replace the current formulation ``approved by or filed with'' with
``filed with or filed with and approved by,'' to reflect the fact that,
while all changes to the Bylaws must be filed with the Commission, not
all rule filings are approved by the Commission. Because ``Exchange
Act'' would be defined in the new text in Article Third, the Exchange
proposes to remove the definition in Article Seventh by deleting
``Securities'' before ``Exchange [sic] and the phrase ``Act of 1934, as
amended (the `Act').''
Bylaws
    The Exchange proposes to make the following amendments to the
Bylaws.
General
    ``Third'' would be changed to ``Fourth'' and ``National Stock
Exchange'' would be replaced with ``NYSE National'' on the cover page

heading, the Table of Contents, and on the first page of the Bylaws.
Section 1.1 (Definitions)
    The Exchange proposes to add and remove certain definitions. Most
of the changes to the definitions relate to the proposed amendments to
the composition of the Exchange Board in proposed Section 3.2,
discussed below, to make the composition of the Board consistent with
the make-up of the board of directors of NYSE Arca.\9\ As part of these
changes, the definitions of ``ETP Permit Holder Director,''
``Independent Director,'' ``Industry Director'' and ``Non-Industry
Director'' would be deleted, and definitions of ``Public Directors''
and ``Non-Affiliated Directors'' would be added to Section 1.1.
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    \9\ See Section 3.02(a) the NYSE Arca Bylaws.
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    Currently, subsections F-H and J-M are marked ``reserved.'' Because
under the proposed revision subsection (I) would be reserved, the
Exchange proposes to amend the list of reserved subsections to read
``F.-M. Reserved.''. In current Section 1.1(E)(4), which defines
``Exchange'', ``NYSE National'' would replace ``National Stock
Exchange.''
Article III (Board of Directors)
    The Exchange proposes to restructure and amend Article III of the
Bylaws governing the powers, composition, nomination and election of
its Board to more closely align the Bylaws with those of the other NYSE
Exchanges. To effect these changes, the Exchange proposes to
restructure Article III, Section 3.2 (General Composition) of the
Bylaws, as follows.
    The Bylaws currently provide that the Board is composed of between
7 and 25 directors, the exact number of which is determined by the
Board. The Exchange proposes to amend Section 3.2 so that the number of
directors would be determined from time to time by the stockholders,
provided that the Board must meet the composition requirements in the
Bylaws. This change would be consistent with the operating agreements
of the NYSE and NYSE MKT, which both provide that the number of
directors is determined by the member, provided that the boards of
directors meet the composition requirements set out in the operating
agreement.\10\
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    \10\ See Section 2.03(a) of the Eleventh Amended and Restated
Operating Agreement of New York Stock Exchange LLC and Section
2.03(a) of the Tenth Amended and Restated Operating Agreement of
NYSE MKT LLC. See also Securities Exchange Act Release Nos. 79115
(October 18, 2016), 81 FR 73187 (October 24, 2016) (SR-NYSE-2016-66)
and 79114 (October 18, 2016), 81 FR 73177 (October 24, 2016) (SR-
NYSEMKT-2016-93).
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    In addition, the Exchange proposes to make the composition of the
Board consistent with the make-up of the board of directors of NYSE
Arca and its subsidiary NYSE Arca Equities, Inc. (``NYSE Arca
Equities'').\11\ Accordingly, the Exchange proposes to replace Section
3.2(a), (b) and (c) with new subsections (a)-(d), which are
substantially similar to Section 3.02(a)-(c) and (f) of the NYSE Arca
Bylaws.
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    \11\ See Section 3.02(a) the NYSE Arca Bylaws and Section
3.02(a) of the NYSE Arca Equities Bylaws.
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    New paragraph (a) would require that the Board be made up as
follows:
    (1) At least fifty percent (50%) of the directors would be persons
from the public and would 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
    (2) at least twenty percent (20%) of the directors would consist of
individuals nominated by the ETP Holders of the Exchange (``Non-
Affiliated Directors'').
    The Exchange proposes that subsection (a) retain the provision from
current subsection (b) that the term of office of a director shall not
be affected by any decrease in the authorized number of directors.
    Proposed new subsection (b) would provide that nominees for a
director position shall provide 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 shall make such
determination concerning the nominee's qualifications.
    Proposed subsection (c) would provide that at the first annual
meeting and at each subsequent annual meeting of the stockholders,
except as otherwise provided by the Bylaws, the stockholders would
elect directors to serve until the next annual meeting or until their
successors are elected and qualified.
    Proposed new subsection (d) would specify that, except as otherwise
provided in the Bylaws or its Rules, the stockholders shall nominate
directors for election at the annual meeting of the stockholders and
that such nominations shall comply with the Rules and the Bylaws.
    Current subsection (d) would become new proposed subsection
(e).\12\
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    \12\ The Exchange notes that it did not incorporate text from
Section 3.02(d) of the NYSE Arca Bylaws, as the appointment of the
chair of the Board is addressed in current Section 3.5.
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    Second, the Exchange proposes to replace current Article III,
Section 3.4 with text from Section 3.02(e) of the NYSE Arca Bylaws. The
proposed provision would be renumbered as Section 3.3, which is
currently marked ``Reserved.'' Proposed Section 3.3 would provide 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. Proposed Section 3.3 would also provide that a
director may serve for any number of terms, consecutive or otherwise.
It would replace the current Section 3.4, which breaks out the term
provision by category of director.
    Third, current Article III, Section 3.5 (Nomination and Election)
would become new Section 3.4, and would incorporate the NYSE Arca
process for nominating Non-Affiliate Directors.\13\
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    \13\ See NYSE Arca Rule 3.2(b)(2)(C)(i) and (ii). The Exchange
notes that because it only has one category of permit holder, it did
not incorporate the NYSE Arca provisions for electing Non-Affiliated
Directors from the two categories of NYSE Arca permit holders, ETP
Holders and OTP Holders. See also NYSE Arca Equities Rule
3.2(b)(2)(C).
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    The Exchange proposes to retain current subsection (a), but because
it proposes to consolidate the ETP Holder Director Nominating Committee
and Governance and Nominating Committee into one committee, the
``Nominating Committee,'' it would accordingly delete ``Governance
and'' from proposed Article III, Section 3.4(a).
    The Exchange proposes to delete the remaining subsections (b)
through (f) of current Article III, Section 3.5. In their place, the
Exchange proposes two new subsections (b) and (c), based on NYSE Arca
Rule 3.2(b)(2)(C)(i) and (ii).
    Proposed Article III, Section 3.4(b) would provide that the
Nominating Committee shall publish the name(s) of one or more ETP
Holders or Persons Associated with an ETP Holder (in any combination)
as its nominee(s) for Non-Affiliated Directors of the Board of
Directors of the Exchange. The Nominating Committee would name
sufficient nominees so that at least twenty percent of the directors
consist of Non-Affiliated Directors. The proposal would further provide
that the names of the nominees shall be published on a date in each
year sufficient to accommodate the process described. The date would be
known as the ``Announcement Date.''

    Further, proposed Section 3.4(b) would provide that, after the name
of proposed nominee(s) is published, ETP Holders in good standing may
submit a petition to the Exchange in writing to nominate additional
eligible candidate(s) to fill Non-Affiliated Director position(s)
during the next term. Further, if a written petition of at least 10
percent of ETP Holders in good standing were 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 ETP Holder, either alone or together with
other ETP Holders that are deemed its affiliates, may account for more
than 50% of the signatories to the petition endorsing a particular
petition nominee for the Non-Affiliated Director position(s) on the
Board.\14\ The proposed Section would further stipulate that each
petition for a petition candidate must include a completed
questionnaire used to gather information concerning director
candidates, which form of questionnaire would be provided by the
Exchange upon the request of any ETP Holder. Finally, proposed Section
3.4(b) would provide 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 (as defined in section 3(a)(39)
of the Exchange Act)), and such determination shall be final and
conclusive.
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    \14\ The Exchange notes that NYSE Arca Rule 3.2(b)(2)(C)(ii) and
(iii) imposes voting limits on OTP Holders from the same OTP Firm.
Because NYSE Arca Equities, like the Exchange, does not have ``ETP
Firms,'' the Exchange has followed the model of NYSE Arca Equities
and referred to ``ETP Holders who are deemed its affiliates,''
instead. See NYSE Arca Rule 3.2(b)(2)(C); NYSE Arca Equities Rule
3.2(b)(2)(C).
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    Proposed Article III, Section 3.5(c) would set forth the petition
election process, providing that, in the event that the number of
nominees exceeds the number of available seats, the Nominating
Committee shall submit the contested nomination to the ETP Holders for
selection. The proposed Section contemplates that ETP Holders shall be
afforded a confidential voting procedure and shall be given no less
than 20 calendar days to submit their votes. Under the proposed
Section, each ETP Holder in good standing may select one nominee for
the contested seat on the Board of Directors; provided, however that no
ETP Holder, either alone or together with other ETP Holders who are
deemed its affiliates, may account for more than 20% of the votes cast
for a particular nominee for the Non-Affiliated Director position(s) on
the Board of Directors of the Exchange. With respect to the contested
position, the proposed Section would provide that the nominee for the
Board receiving the most votes of ETP Holders shall be submitted by the
Nominating Committee to the Board and that the Nominating Committee
shall also submit uncontested nominees to the Board. Under the proposed
Section, tie votes shall be decided by the Board of Directors at its
first meeting following the election.
    Current Section 3.6 describes the election and role of the Board
Chairman. The Exchange proposes to renumber Section 3.6 as new Section
3.5. The Exchange would delete the second sentence of the current
Section 3.6 in its entirety, which currently provides that the Chairman
may also serve as the CEO and/or President of the Exchange, but may
hold no other offices in the Exchange and that unless the Chairman of
the Board also serves as the Exchange CEO, the Board shall elect the
Chairman from among the Non-Industry Directors. The proposed Section
3.5 would be consistent with the Bylaws of NYSE Arca, which provide
that the board of directors appoints the Chairman by majority vote.\15\
None of the three NYSE Exchanges limits which category of director can
serve as Chairman, and so the Exchange proposes to remove the
limitation in its Bylaws.
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    \15\ See Article III, Section 3.02(d) of the NYSE Arca Bylaws.
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    Current Section 3.7 describes the process for filling Board
vacancies. The Exchange proposes to renumber Section 3.7 as new Section
3.6, and to make changes to the text to be consistent with Section 3.03
of the NYSE Arca Bylaws.
    Current Section 3.7(a)(i) provides that, notwithstanding any
provision in the Bylaws to the contrary, any vacancy in the Board,
however occurring, including a vacancy resulting from an increase in
the number of the directors, may be filled by vote of a majority of the
directors then in office, although less than a quorum, or by a sole
remaining director, provided such new director qualifies for the
category in which the vacancy exists. The Exchange proposes to provide
that vacancies would be filled by the Chairman of the Board, subject to
approval by a vote of a majority of directors, as is provided in
Section 3.03 of the NYSE Arca Bylaws. To effect this change, the phrase
``the Chairman of the Board, subject to approval by'' would be added
after ``filled by'' and ``vote of'' immediately following the proposed
insertion and before ``a majority'' would be deleted. The Exchange also
proposes to add a new second sentence that would provide that any
vacancy will be filled with a person who satisfies the classification
(e.g., public) associated with the vacant seat. Finally, the Exchange
would add a sentence to the end of the proposed Section providing that,
in the case of a vacancy in the office of the Chairman of the Board,
the Board of Directors may designate an Acting Chairman among the
directors then in office, in accordance with Section 3.03 of the NYSE
Arca Bylaws.
    Current Section 3.7(a)(ii) governs the filling of a vacancy
resulting from an ETP Holder Director position becoming vacant prior to
the expiration of such ETP Holder Director's term, or resulting from
the creation of an additional ETP Holder Director position. The
Exchange proposes conforming changes to replace ``ETP Holder'' Director
with ``Non-Affiliated'' Director throughout proposed Section 3.6(a)(ii)
and to delete ``ETP Holder Director'' in two instances before
``Nominating Committee.'' The Exchange would also delete the
parenthetical in current Section 3.7(b) referring to subsection (c),
which as noted below would be deleted. References to Section 3.7
throughout the section would be updated with references to proposed
Section 3.6.
    The Exchange proposes to delete the remaining subsections of
current Article III, Section 3.7. Subsection (c) allows the Board in
its discretion to provide a director with a grace period for re-
qualification, and subsection (d) would allow an ETP Holder Director
not to lose his or her qualification as a director by reason of a
suspension. The governing documents of the NYSE Exchanges do not have
similar provisions, and so the Exchange proposes to remove them from
the Bylaws.
    Current Article III, Section 3.8 governs the removal of directors.
The Exchange proposes to renumber it Section 3.7 and replace one
reference to ``ETP Holder Director'' with ``Non-Affiliated Director.''
    Current Article III, Sections 3.9 through 3.15 would be renumbered
Section 3.8 through 3.14, respectively. No further changes to these
Sections are proposed.
    Current Article III, Section 3.16, governing compensation of
directors, would be amended to provide that the shareholders, rather
than the Board, would have authority to fix compensation of all
directors. The change would be consistent with the operating agreements
of the New York Stock Exchange and NYSE MKT, which

provide that the member sets director compensation.\16\ In connection
with this change, the Exchange would also delete the clause
``irrespective of any personal interest of any of its members,'' from
proposed new Section 3.15.
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    \16\ See Section 2.03(b) of the Eleventh Amended and Restated
Operating Agreement of New York Stock Exchange LLC and Section
2.03(b) of the Tenth Amended and Restated Operating Agreement of
NYSE MKT LLC. The NYSE Arca bylaws are silent regarding director
compensation.
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    Current Article III, Section 3.17, governing the Board's power to
interpret the Bylaws, would be deleted in its entirety. The governing
documents of the NYSE Exchanges do not have similar provisions, and so
the Exchange proposes to remove them from the Bylaws.
Article V (Committees) \17\
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    \17\ The Exchange is not proposing any changes to current
Article IV (Stockholders).
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    The Exchange proposes to reduce the number of Board committees
following the Acquisition. The Exchange would retain the disciplinary
committees (i.e., the Business Conduct Committee and Appeals Committee)
and the Regulatory Oversight Committee (``ROC''). Rather than have two
nominating committees, the Exchange proposes to have one Nominating
Committee, whose role would be as set forth in proposed Section 3.4.
The Exchange proposes to eliminate the Executive Compensation
Committee, Executive Committee, and Audit Committee, none of which the
NYSE Exchanges have. To effectuate these changes, the Exchange proposes
to update the list of committees in the first sentence of Article V,
Section 5.1 and delete current Sections 5.8, 5.9 and 5.10, relating to
the Executive Compensation Committee, Audit Committee, and Governance &
Nominating Committee, respectively.
    Article V, Section 5.2 governs appointment, vacancies, and removal
of Board committee members. Currently, these functions are undertaken
by the Chairman of the Board with Board approval. The Exchange proposes
that, consistent with the NYSE Exchanges,\18\ the Board shall appoint
the members of all committees of the Board. Present Section 5.2
provides that the chairman may, at any time, with or without cause,
remove any member of a committee, with the approval of the Board. The
Exchange proposes to amend the statement to provide that the Board may,
at any time, with or without cause, remove any member of a committee so
appointed, unless the Bylaws otherwise provide. To effect this change,
the Exchange proposes to make the first sentence of Article V, Section
5.2 governing appointments and removal of committee members new
subsection (a); delete the following text: ``Chairman of the Board,
with the approval of the''; a comma after ``Board'' and before
``shall''; ``Chairman'' before ``Board may'' and the clause ``with the
approval of the Board''; and add ``unless otherwise provided herein''
after ``so appointed,''.
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    \18\ See NYSE Arca Rules 3.2(a)(1) and 3.3, Section 2.03(h) of
the Eleventh Amended and Restated Operating Agreement of New York
Stock Exchange LLC; and Section 2.03(h) of the Tenth Amended and
Restated Operating Agreement of NYSE MKT LLC.
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    The Exchange proposes that the Exchange CEO, rather than the
Chairman of the Board, would fill any committee vacancies, consistent
with NYSE Arca Rule 3.2(a)(5). To effect this change, the remaining
current text of Section 5.2 governing vacancies would form new
subsection (b), and the Exchange would replace ``Chairman of the
Board'' in the existing text with ``Chief Executive Officer of the
Exchange'' after ``filled by the.''
    Proposed new Article V, Section 5.3 would set forth general
provisions applicable to Board committees. The Exchange proposes that
the last two sentences of current Section 5.2 would become new Section
5.3(a). The existing text would be amended to reflect that, in
appointing new members to Board committees, the Board and not the
Chairman of the Board would be responsible for determining that any
such committee meets the composition requirements of Article V.
    The Exchange also proposes to add subsections (b) through (e) of
Section 5.3, which are substantially the same as NYSE Arca Rules
3.2(a)(2)-(4) and (10).
    Proposed Section 5.3(b) would provide that the presence of a
majority of the members of a committee shall be necessary to constitute
a quorum for the transaction of business at a meeting of a committee.
    Proposed Section 5.3(c) would provide that the act of a majority of
the members present at any meeting at which there is a quorum shall be
the act of such committee, except as may be otherwise specifically
required by the Bylaws, Exchange Rules, or applicable law.
    Proposed Section 5.3(d) would provide that, unless otherwise
restricted by the Bylaws, the Rules, applicable law, or rules of the
particular committee, members of a committee or of any subcommittee
thereof may participate in meetings by means of conference call or
similar communications equipped [sic] by means of which all persons
participating in the meeting can hear each other, and such
participation shall constitute presence in person at the meeting.
    Finally, proposed subsection (e) of Section 5.3 would provide that
no member of a committee shall participate in the adjudication of any
matter in which he or she is personally interested, although his or her
presence at a meeting at which such matter is considered shall count
toward the quorum requirements for the meeting.
    The Exchange proposes to change current Section 5.3 (Powers and
Duties of Committees) to Section 5.4. Current Section 5.4 (Conduct of
Proceedings) would be renumbered Section 5.5.
    The Exchange proposes to recast current Section 5.6 governing the
ROC to make it more consistent with the ROCs established by the NYSE
Exchanges, as follows.\19\ Currently, Section 5.6 of the Bylaws
provides that the ROC shall be responsible to oversee all of the
Exchange's regulatory functions and responsibilities and to advise
regularly the Board about the Exchange's regulatory matters. The ROC
shall at all times be comprised entirely of Non-Industry Directors.
---------------------------------------------------------------------------

    \19\ See NYSE Arca Rule 3.3(a)(1); Section 2.03(h)(ii) of the
Eleventh Amended and Restated Operating Agreement of New York Stock
Exchange LLC; and Section 2.03(h)(ii) of the Tenth Amended and
Restated Operating Agreement of NYSE MKT LLC.
---------------------------------------------------------------------------

    The Exchange proposes a new subsection (a) that would provide that
the Board shall, on an annual basis, appoint the ROC. The existing text
of current Section 5.6, with certain minor exceptions, would be
deleted.
    The Exchange proposes two new subsections (b) and (c) to proposed
Section 5.6. First, proposed Section 5.6(b) would describe the ROC
composition as consisting of at least three members, each of whom shall
be a Public Director of the Exchange.\20\ Further, proposed subsection
(b) would provide that the Board, on affirmative vote of a majority of
directors, may, at any time remove a member of the ROC for cause.
Similar authority is found in the rules and bylaws governing the ROCs
of the NYSE Exchanges and other SROs.\21\ In addition, proposed Section

5.6(b) would provide that a failure of the member to qualify as a
Public Director shall constitute a basis to remove a member of the ROC
for cause. Finally, proposed Section 5.6(b) would provide that if the
term of office of a ROC committee member terminates under this section,
and the remaining term of office of such committee member at the time
of termination is not more than three months, during the period of
vacancy the relevant committee shall not be deemed to be in violation
of the compositional requirements by virtue the such vacancy. Once
again, this is consistent with the rules and bylaws of the NYSE
Exchanges and other SROs.\22\
---------------------------------------------------------------------------

    \20\ See e.g., NYSE Arca Rule 3.3(a)(1)(B).
    \21\ See e.g., NYSE Arca Rule 3.3(a)(1)(B) (``The Board, on
affirmative vote of a majority of directors, may, at any time remove
a member of the ROC for cause.''); Section 2.03(h)(ii) of the
Eleventh Amended and Restated Operating Agreement of New York Stock
Exchange LLC (``The Board may, on affirmative vote of a majority of
directors, at any time remove a member of the ROC for cause.'');
Section 2.03(h)(ii) of the Tenth Amended and Restated Operating
Agreement of NYSE MKT LLC (same); BATS Bylaws, Article V, Section
2(a) (``the Chairman may, at any time, with or without cause, remove
any member of a committee so appointed, with the approval of the
Board.'').
    \22\ See e.g., NYSE Arca Rule 3.3(a)(1)(B); Section 2.03(h)(ii)
of the Eleventh Amended and Restated Operating Agreement of New York
Stock Exchange LLC; Section 2.03(h)(ii) of the Tenth Amended and
Restated Operating Agreement of NYSE MKT LLC; NASDAQ Bylaws, Article
III, Section 2(b).
---------------------------------------------------------------------------

    Second, proposed Section 5.6(c) would set forth the proposed ROC's
responsibilities, which would be to:
     oversee the Exchange's regulatory and self-regulatory
organization responsibilities;
     evaluate the adequacy and effectiveness of the Exchange's
regulatory and self-regulatory organization responsibilities;
     assess the Exchange's regulatory performance; and
     advise and make recommendations to the Board or other
committees of the Board about the Exchange's regulatory compliance,
effectiveness and plans.
    These three [sic] core responsibilities of the proposed ROC would
be substantially similar to those of the ROCs of other SROs.\23\
---------------------------------------------------------------------------

    \23\ See Securities Exchange Act Release Nos. 75991 (September
28, 2015), 80 FR 59837 (October 2, 2015) (SR-NYSE-2015-27) (order
approving establishment of NYSE ROC) (``NYSE ROC Approval Order'');
75148 (June 11, 2015), 80 FR 34751 (June 17, 2015) (SR-NYSEMKT-2015-
27) (order approving establishment of NYSE MKT ROC); 75155 (June 11,
2015), 80 FR 34744 (June 17, 2015) (SR-NYSEArca-2015-29) (order
approving establishment of NYSE Arca ROC); Securities Exchange Act
Release No. 58375 (August 18, 2008), 73 FR 49498, 49502 (August 21,
2008) (File No. 10-182) (approving application of BATS Exchange,
Inc. (``BATS'') seeking registration as a national securities
exchange); Securities Exchange Act Release No. 61698 (March 10
[sic], 2010), 75 FR 13151, 13161 (March 12 [sic], 2010) (approving
application of EDGX Exchange, Inc. and EDGA Exchange, Inc., seeking
registration as a national securities exchange); and Amended and
Restated Bylaws of Miami International Securities Exchange, LLC,
Article IV, Section 4.5(c).
---------------------------------------------------------------------------

    In furtherance of these functions, proposed new subsection (c) of
Section 5.6 would provide the ROC with the authority and obligation to
review the regulatory budget of the Exchange and specifically inquire
into the adequacy of resources available in the budget for regulatory
activities. Under the proposed amendment, the ROC would be charged with
meeting regularly with the Chief Regulatory Officer (``CRO'') in
executive session and, in consultation with the Exchange's CEO,
establish the goals, assess the performance, and recommend the CRO's
compensation. Finally, under the proposed rule, the ROC would be
responsible for keeping the Board informed with respect to the
foregoing matters.\24\
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    \24\ The obligations of the proposed ROC would be substantially
similar to those of other SROs' ROCs. See, e.g., NYSE Arca
3.3(a)(1)(C); Section 2.03(h)(ii) of the Eleventh Amended and
Restated Operating Agreement of New York Stock Exchange LLC; Section
2.03(h)(ii) of the Tenth Amended and Restated Operating Agreement of
NYSE MKT LLC; NASDAQ Bylaws, Article III, Section 5; Bylaws of
NASDAQ OMX PHLX LLC, Article V, Section 5-2; Third Amended and
Restated Bylaws of BATS-Exchange, Inc., Article V, Section 6(c).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change governing the
ROC's authority and responsibility to oversee the adequacy and
effectiveness of the Exchange's performance of its self-regulatory
responsibilities is consistent with previously approved rule changes
for other SROs and would enable the Exchange to discharge its
regulatory responsibilities under a corporate governance structure that
is consistent with its affiliates and industry peers.\25\ Moreover, the
Exchange believes that the proposed changes would ensure the continued
independence of the Exchange's regulatory process. In particular,
integral to the proposal is that the oversight of the Exchange's self-
regulatory responsibilities and regulatory performance, including
review of the regulatory plan, programs, budget and staffing would be
by a ROC composed of individuals independent of Exchange management and
a CRO having general supervision of the regulatory operations of the
Exchange that meets regularly with the ROC.\26\
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    \25\ See NYSE, NYSE MKT and NYSE Arca approval orders in note
23, supra. See also NASDAQ Bylaws, Article III, Section 5(c); BATS
Bylaws, Article V, Section 6(c).
    \26\ See, e.g., NYSE ROC Approval Order, 80 FR at 59838-39.
---------------------------------------------------------------------------

    Section 5.7 describes the current ETP Holder Director Nominating
Committee. Consistent with the Exchange's proposal to have only one
Nominating Committee to nominate Non-Affiliated Directors, as described
above, ``ETP Holder Director'' would be deleted before ``Nominating
Committee'' and ``Non-Affiliated'' substituted for ``ETP Holder''
before ``Directors'' in proposed Section 5.7.
    Current Section 5.11 governing the Appeals Committee would be
retained and renumbered Section 5.8. The proposed amendments to Section
5.8 would reflect the proposed changes in the makeup of the Board.
Specifically, it would provide that the Appeals Committee shall consist
of at least one Public Director and at least one Non-Affiliated
Director.\27\ Further, the proposed Section would provide that if the
Public Director recuses himself or herself from an appeal, such Public
Director may be replaced by a Non-Affiliated Director for purposes of
the applicable appeal if no other Public Director [sic] able to serve
as the replacement. To effectuate these changes, the Exchange proposes
to add ``at least'' before ``one'' in two places; replace
``Independent'' with ``Public'' before ``Director'' in three places;
replace ``ETP Holder'' with ``Non-Affiliated'' and ``Non-Industry''
with ``Non-Affiliated'' before ``Director''; and delete ``one Industry
Director'' from the sentence describing the composition of the Appeals
Committee. Finally, current Section 5.12, which describes the Business
Conduct Committee, would also be retained, and renumbered Section 5.9.
Consistent with the changes in proposed Section 5.2(a), the Exchange
would delete ``Chairman with the approval of the'' before ``Board'' in
the last sentence to specify that the Board shall appoint the Business
Conduct Committee members.
---------------------------------------------------------------------------

    \27\ See NYSE Arca Rule 3.3(a)(2) (providing that the Committee
for Review, the appeals committee of NYSE Arca, will be composed of
the non-affiliated directors (the OTP Directors and ETP Directors)
and public directors of NYSE Arca and NYSE Arca Equities). The
Bylaws would retain the current requirement that all committees,
including the Appeals Committee, be comprised of at least three
people and may include persons that are not members of the Board.
See Article V, Section 5.3.
---------------------------------------------------------------------------

Article VI (Officers)
    Article VI, Section 6.1 describes the officers of the Exchange. The
Exchange proposes that, rather than require that certain officers be
appointed, the Board shall elect officers of the Exchange as it deems
appropriate, which may include a CEO, President, CRO, Secretary,
Treasurer, and such other officers as the Board may determine. The
proposed change would be consistent with Section 5.01 of the NYSE Arca
Bylaws. To effect this change, the Exchange proposes to add ``Board
shall elect'' before ``officers'' in the first sentence and add ``as it
deems appropriate, which may include'' in place of ``shall consist
of.''
    The Exchange would delete the text of current Section 6.2 governing
compensation and the next heading such that current Section 6.3
regarding tenure and appointment would become proposed Section 6.2.
Current Section 6.2 provides that the Board or a Board committee shall
fix the compensation of

all the officers of the Exchange. The Exchange does not propose to
retain the current provision. Indeed, none of the NYSE Exchanges has
provisions requiring that the Board determine the compensation of the
relevant exchange's officers.
    Current Section 6.3 governing removal and vacancies would become
new Section 6.4.
    Current Section 6.5 governing powers and duties would become new
Section 6.4.
    Current Section 6.6 governing appointment of an arbitration
director would be deleted, as there is no similar provision in the
governing documents of the NYSE Exchanges.
Article VII (Indemnification)
    The Exchange proposes to restructure its indemnification policies
to align with those of its affiliates. Accordingly, the Exchange has
amended Article VII to be substantially the same as Article VII of the
NYSE Arca bylaws.\28\
---------------------------------------------------------------------------

    \28\ References in Article VII of the NYSE Arca bylaws to
``Holding Member'' and ``Permit Holder Committee member'' are
revised to ``stockholders'' and ``ETP Holder committee member'' in
proposed Section 7.1. Because the Exchange does not have a separate
category of committee called ``Permit Holder Committee,'' a
reference to such committees has been deleted.
---------------------------------------------------------------------------

    Current Section 7.1 would be renamed ``Indemnification'' and
``Extent of'' in the heading deleted.
    Subsection (a) of Article VII, Section 7.1 would be amended to
remove the reference to maximum not prohibited by the Delaware General
Corporation Law and clarify that the Exchange will indemnify employees
and agents, and not solely directors or officers in actions other than
those by or in the right of the Exchange. These proposed changes would
conform the formulations in current subsection (a) to those in Article
VII of the NYSE Arca bylaws.
    To effect these changes, the Exchange would delete ``shall, to the
maximum extent not prohibited by the General Corporation Law of
Delaware or any other applicable laws as'' and ``from time to time be
in effect'' in the first sentence and the reference to ``hold
harmless'' after ``indemnify''. References to ``director'' would be
replaced by ``an employee'' and references to ``officer'' would be
replaced by ``agent'' throughout. The parenthetical clause ``other than
an action by or in the right of the Exchange'' would also be added in
the place of a comma after ``investigative.'' Additional text would be
added to the penultimate sentence, to provide that a person indemnified
under Section 7.1(a) would be indemnified if he or she acted in good
faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the Exchange and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his
or her conduct was unlawful. Further, the paragraph would provide that
the termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent shall not, of itself, create a presumption that such person
did not act in good faith and in a manner which they reasonably
believed to be in or not opposed to the best interests of the Exchange,
and, with respect to any criminal action or proceeding, had reasonable
cause to believe that their conduct was unlawful. The last sentence of
the first full paragraph of subsection (a) providing that the Exchange
shall be required to indemnify an Indemnified Person in connection with
an action, suit or proceeding initiated by such person only if such
action, suit or proceeding was authorized by the Board, would be
deleted.
    The Exchange also proposes the following non-substantive changes to
Section 7.1(a): replacing a reference to ``corporation'' with
``Exchange''; deleting ``all'' before ``expenses'' and adding ``and
expenses'' after ``attorneys' fees''; and replacing ``such Indemnified
Person'' with ``him or her.''
    The Exchange also proposes to delete the entire second full
paragraph of current Section 7.1(a).
    The following Sections would be deleted in their entirety: Section
7.2. (Expenses), Section 7.3 (Contract), Section 7.4 (Discretionary
Indemnification Coverage), Section 7.5 (Continuity of Indemnification
and Non-Exclusivity), Section 7.6 (Insurance), and Section 7.7
(Exchange Not Liable).
    The Exchange proposes to add new subsections (b) through (j) to
Section 7.1, as follows, to align the Exchange's indemnification policy
with Article VII of the NYSE Arca bylaws.
    Proposed subsection (b) would specify that the Exchange may
indemnify any person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action or suit by or in
the right of the Exchange to procure a judgment in its favor by reason
of the fact that he or she is or was an employee or agent of the
Exchange, or is or was serving at the request of the Exchange as an
employee or agent of another Exchange, partnership, joint venture,
trust or other enterprise against expenses (including attorneys' fees
and expenses) actually or reasonably incurred by him or her in
connection with the defense or settlement of such action or suit if he
or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Exchange.
The proposed subsection would also specify that no indemnification
shall be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to the Exchange unless the
Court of Chancery of the State of Delaware or the court in which such
action or suit was brought shall determine, despite the adjudication of
liability but in view of all the circumstances of the case, that such
person is fairly and reasonably entitled to indemnity for such expenses
the court deems proper.
    Proposed subsection (c) would provide that, to the extent that an
employee or agent of the Exchange has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in
proposed subsections (a) and (b), or in defense of any claim, issue or
matter therein, they shall be indemnified by the Exchange against
expenses (including attorneys' fees and expenses) actually and
reasonably incurred by them in connection therewith.
    Proposed subsection (d) would specify that any indemnification
under proposed subsections (a) and (b) (unless ordered by a court)
shall be made by the Exchange only as authorized in the specific case
upon a determination that indemnification of the employee or agent is
proper in the circumstances because he or she has met the applicable
standard of conduct set forth in proposed subsections (a) and (b) and
under applicable law. Proposed subsection (d) would further provide
that such determination shall be made, with respect to a person who is
a director or officer at the time of such determination (1) by a
majority vote of the directors who are not parties to such action, suit
or proceeding, even though less than a quorum, or (2) by a committee of
such directors designated by majority vote of such directors, even
though less than a quorum, or (3) if there are no such directors, or,
if such directors so direct, by independent legal counsel in a written
opinion, or (4) by the stockholders.
    Proposed subsection (e) would provide that the Exchange shall
indemnify, to the fullest extent permitted by applicable law as such
may be amended from time to time, any person who was or is a party or
is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil,

criminal, administrative or investigative by reason of the fact that he
or she is or was an officer, a floor official or a member of the Board
of Directors or any committee thereof, or is or was serving at the
request of the Exchange as an officer or member of the board of
directors or any committee thereof of another Exchange, partnership,
joint venture, trust or other enterprise, against expenses (including
attorneys' fees and expenses), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him or her in connection
with such action, suit or proceeding. Proposed subsection (d) would
further provide that the Exchange is not authorized to provide
indemnification of any officer, floor official, director, or ETP Holder
committee member for any acts or omissions or transactions from which a
director may not be relieved of liability as set forth in Section
102(b)(7) of the General Corporation Law of the State of Delaware.
    Proposed subsection (f) would provide that the indemnification
provided by Section 7.1 as proposed shall not be deemed exclusive of
any other rights to which those seeking indemnification may be entitled
under any Bylaw, agreement, vote of the stockholders or disinterested
directors or otherwise.
    Proposed subsection (h) would clarify that for purposes of proposed
Section 7.1, references to ``the Exchange'' shall include, in addition
to the resulting Exchange, any constituent Exchange (including any
constituent of a constituent) absorbed in a consolidation or merger
which, if its separate existence had continued, would have had power
and authority to indemnify its officers, floor officials, directors,
ETP Holder committee members and employees or agents.
    Proposed subsection (i) would clarify that for purposes of proposed
Section 7.1, references to ``other enterprises'' shall include employee
benefit plans; references to ``fines'' shall include any excise taxes
assessed on a person with respect to an employee benefit plan; and
references to ``serving at the request of the Exchange'' shall include
any service as a director, officer, employee or agent of the Exchange
which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit plan,
its participants or beneficiaries; and a person who acted in good faith
and in a manner he reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner ``not opposed to the best interests of
the Exchange'' as referred to in proposed Section 7.1.
    Finally, proposed subsection (j) would provide that if any
provision or provisions of proposed Section 7.1 shall be held to be
invalid, illegal or unenforceable for any reason whatsoever, the
validity, legality and enforceability of the remaining provisions shall
not be affected or impaired and that, to the fullest extent possible,
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable.
Article VIII (Amendments)
    Article VIII, Section 8.1 describes the Board's power to adopt,
amend or repeal the Bylaws. The Exchange proposes to update the cross
references to Sections 3.1 through 3.8, Section 3.12, and Section 4.5,
to reflect the proposed changes to Article III discussed above.
Accordingly, the cross references would be updated to read ``Sections
3.1 through 3.7, Section 3.11, or Section 4.5 of these By-Laws.''
    In addition, the Exchange proposes to delete the last three
sentences of current Section 8.2, which governs amendment or repeal of
Exchange Rules. Such sentences provide that all proposals to adopt,
alter or amend any rule shall be presented in writing to the Board by
the Chairman of the Board, and that the Board shall act on the
proposal. The Exchange proposes to align its processes to adopt, alter
or amend any rule with those of the NYSE Exchanges, which provide that
senior management may approve proposed rule changes pursuant to
authority delegated to it by the relevant board of directors.
Article X (Self-Regulatory Function of the Exchange) \29\
---------------------------------------------------------------------------

    \29\ The Exchange is not proposing any changes to current
Article IX (Certificates of Stock and their Transfer) or Article XI
(General Provisions).
---------------------------------------------------------------------------

    Article X, Section 8.1 describes certain considerations relevant to
the Exchange's SRO function.
    The Exchanges proposes to revise current Section 10.2 governing
participation in Board and committee meetings. The Section would be
amended to require that all Board and committee meetings relating to
the structure of the market which the Exchange regulates (in addition
to meetings pertaining to the Exchange's SRO function) shall also be
closed to all persons other than members of the Board and officers,
staff, counsel or other advisors. To effect this change, the Exchange
would add ``or relating to the structure of the market which the
Exchange regulates'' in two places. The Exchange would also replace a
reference to ``National Stock Exchange Holdings'' with ``NYSE Group.''
The changes will make Section 10.2 consistent with Section 3.13 of the
NYSE Arca bylaws.
    The current text of Section 10.4, which governs Exchange use of
regulatory fees and penalties would also be deleted and replaced with a
statement that any regulatory assets or any regulatory fees, fines or
penalties collected by the Exchange's regulatory staff will be applied
to fund the legal, regulatory and surveillance operations of the
Exchange, and the Exchange shall not distribute such assets, fees fines
or penalties to pay dividends or be distributed to any other entity.
This language is substantially similar to the formulation recently
approved for the NYSE and NYSE MKT.\30\
---------------------------------------------------------------------------

    \30\ See Section 4.05 of the Eleventh Amended and Restated
Operating Agreement of New York Stock Exchange LLC and Section 4.05
of the Tenth Amended and Restated Operating Agreement of NYSE MKT
LLC. Reflecting the Exchange's status as a stock corporation rather
than a limited liability corporation, the proposed text replaces
``to the Member or any other entity'' with ``pay dividends or be
distributed to any other entity.'' The proposed text also replaces
``Company'' with ``Exchange'' throughout. See also Securities
Exchange Act Release Nos. 79115 (October 18, 2016), 81 FR 73187
(October 24, 2016) (SR-NYSE-2016-66); and 79114 (October 18, 2016),
81 FR 73177 (October 24, 2016) (SR-NYSEMKT-2016-93).
---------------------------------------------------------------------------

Rule Amendments
    The Exchange proposes to make the following conforming amendments
to Rules 2.10 and 5.7 and to the Schedule of Fees and Rebates:
     The Exchange proposes to amend the cover page of the
Rules, the Table of Contents and the first page of the Rules above the
heading ``CHAPTER I. Adoption, Interpretation and Application of Rules,
and Definitions'' to replace ``National Stock Exchange'' with ``NYSE
National,'' before the word ``Inc.'' The cover page would also be
amended to replace ``November 8'' following ``Updated through'' and the
number 6 in ``2016'' with placeholders for the effective date of the
new rules.
     Rule 2.10 (No Affiliation between Exchange and any ETP
Holder) prohibits the Exchange or any affiliated entity from acquiring
or maintaining an ownership interest in an ETP Holder but does not
prohibit any ETP Holder from being or becoming an affiliate of the
Exchange, or an affiliate of any affiliate of the Exchange, solely by
reason of such ETP Holder or any officer, director, manager, managing
member, partner or affiliate of such ETP Holder being or becoming
either (a) an ETP Holder Director or an At-Large Director pursuant to
the bylaws, or (b) a member

of the Board of Directors of NSX Holdings, Inc.
    To reflect the proposed amendment to Section 3.2 of the Bylaws as
discussed above, the Exchange proposes to replace the phrase ``ETP
Holder Director or an At-Large Director'' with ``Non-Affiliated
Director.'' \31\ In the immediately following parenthetical, the
Exchange proposes to delete ``such terms are'' to reflect that the term
``Non-Affiliated Director'' would be the only term defined in the
Bylaws. Finally, the Exchange proposes to replace three references to
``NSX Holdings'' with ``ICE'' before the word ``Inc.''
---------------------------------------------------------------------------

    \31\ The Exchange notes that the term ``At-Large Director'' is
not used in the Bylaws, Certificate of Incorporation or rules of the
Exchange.
---------------------------------------------------------------------------

     Rule 5.7 (Annual Certification of Compliance and
Supervisory Processes) requires the chief executive officer of each ETP
Holder to provide an annual certification regarding certain of its
processes. The Exchange proposes to replace two references in the Rule
to ``National Stock Exchange'' with ``NYSE National'' before the word
``Inc.'' The Exchange proposes to replace two references in the Rule to
``National Stock Exchange'' with ``NYSE National'' before the word
``Inc.''
     The Exchange proposes to amend the heading and first
sentence of the Schedule of Fees and Rebates to add ``NYSE'' before
``National'' and to delete ``Stock Exchange'' and the defined term
``NSX.'' The Exchange would also replace ``NSX'' before ``Depth of Book
feed'' in the Market Data section of the price list with ``NYSE
National''.
Amendment of ICE, ICE Holdings and NYSE Group Governing Documents
    The Exchange proposes that, in connection with the Acquisition, the
Commission approve the organizational documents of ICE and its wholly-
owned subsidiaries ICE Holdings and NYSE Group and the Independence
Policy of the Board of Directors of Intercontinental Exchange, Inc.
(``ICE Independence Policy''), all of which are to be amended
concurrently with the Acquisition to reflect ownership of the Exchange.
    The current organizational documents of ICE and its wholly-owned
subsidiaries provide certain protections to the NYSE Exchanges that are
designed to protect and facilitate their self-regulatory functions,
including certain restrictions on the ability to vote and own shares of
ICE.\32\ In general, the organizational documents of ICE and its
wholly-owned subsidiaries are being amended to provide similar
protections to the Exchange as are currently provided to the NYSE
Exchanges under those documents.
---------------------------------------------------------------------------

    \32\ See Securities Exchange Release No. 70210 (August 15,
2013), 78 FR 51758 (August 21, 2013) (approving rule changes related
to NYSE Euronext becoming a wholly owned subsidiary of ICE (then
called IntercontinentalExchange Group, Inc.)).
---------------------------------------------------------------------------

    In addition, obsolete references to NYSE Market (DE), Inc.
(formerly NYSE Market, Inc.) (``NYSE Market (DE)''), and NYSE
Regulation, Inc. (``NYSE Regulation'') found in various documents are
proposed to be deleted.\33\
---------------------------------------------------------------------------

    \33\ NYSE Market (DE) and NYSE Regulation were previously
parties to a Delegation Agreement whereby the NYSE delegated certain
regulatory functions to NYSE Regulation and certain market functions
to NYSE Market (DE). The Delegation Agreement was terminated when
the NYSE re-integrated its regulatory and market functions. As a
result, the two entities ceased being regulated subsidiaries. See
Securities Exchange Act Release No. 75991 (September 28, 2015), 80
FR 59837 (October 2, 2015). NYSE Regulation has since been merged
out of existence.
---------------------------------------------------------------------------

Proposed Seventh Amended and Restated Bylaws of Intercontinental
Exchange, Inc. (``ICE Bylaws'')
    The ICE Bylaws would be amended to reflect the Acquisition and
incorporate the Exchange in the ICE Bylaws' existing voting and
ownership restrictions, provisions relating to the qualifications of
directors and officers and their submission to jurisdiction, compliance
with the federal securities laws, access to books and records, and
other matters related to its control of the U.S. Regulated
Subsidiaries.
    Specifically, the ICE Bylaws would be amended as follows:
     The definition of ``U.S. Regulated Subsidiaries'' in
Article III, Section 3.15, which currently includes the New York Stock
Exchange, NYSE Market (DE), NYSE Regulation, NYSE Arca, LLC, NYSE Arca,
NYSE Arca Equities, and NYSE MKT, would be amended to include the
Exchange. The obsolete references to NYSE Market (DE) and NYSE
Regulation would also be deleted.
     Article VIII (Confidential Information), Section 8.1,
would be amended to extend to the Exchange the same protection
regarding confidential information provided to the NYSE Exchanges and
NYSE Arca Equities, and to remove the obsolete references to NYSE
Market (DE) and NYSE Regulation.
     Article XI, Section 11.3, provides that, for so long as
ICE controls any of the U.S. Regulated Subsidiaries, any amendment to
or repeal of the ICE Bylaws must either be (i) filed with or filed with
and approved by the Commission under Section 19 of the Exchange Act and
the rules promulgated thereunder, or (ii) submitted to the boards of
directors of the U.S. Regulated Subsidiaries or the boards of directors
of their successors, in each case only to the extent that such entity
continues to be controlled directly or indirectly by ICE. Section 11.3
would be amended to include the Exchange, and to delete the obsolete
references to NYSE Market (DE) and NYSE Regulation.
    The ICE Bylaws would be further amended to add a new Article XII
(Voting and Ownership Limitations). New Section 12.1.a of Article XII
would provide that, subject to its fiduciary obligations under
applicable law, for so long as ICE directly or indirectly controls the
Exchange (or its successor), the board of directors of ICE shall not
adopt any resolution pursuant to clause (b) of Section A.2 of Article V
of the certificate of incorporation of ICE (which relates to ICE board
of directors approval of ownership of ICE capital stock by a person
together with its related persons in excess of 20%), unless the board
of directors of ICE shall have determined that:
     In the case of a resolution to approve the exercise of
voting rights in excess of 20% of the then outstanding votes entitled
to be cast on such matter, neither such person nor any of its related
persons is an ETP Holder of the Exchange;
     in the case of a resolution to approve the entering into
of an agreement, plan or other arrangement under circumstances that
would result in shares of stock of ICE that would be subject to such
agreement, plan or other arrangement not being voted on any matter, or
the withholding of any proxy relating thereto, where the effect of such
agreement, plan or other arrangement would be to enable any person, but
for Article V of the Certificate of Incorporation of ICE, either alone
or together with its related persons, to vote, possess the right to
vote or cause the voting of shares of stock of ICE that would exceed
20% of the then outstanding votes entitled to be cast on such matter
neither such person nor any of its related persons is, with respect to
the Exchange, an ETP Holder.
    New Section 12.1.b would provide that, subject to its fiduciary
obligations under applicable law, for so long as ICE directly or
indirectly controls the Exchange (or its successor), the Board of
Directors of ICE shall not adopt any resolution pursuant to clause (b)
of Section B(2) of Article V of ICE's Certificate of Incorporation,
unless the Board of Directors shall have determined that neither such
person nor any of its related persons is an ETP Holder.
    New Section 12.2 would provide that, for so long as ICE shall
control, directly

or indirectly, the Exchange (or its successor), the ICE board of
directors shall not adopt any resolution to repeal or amend any
provision of the certificate of incorporation of ICE unless such
amendment or repeal shall either be (a) filed with or filed with and
approved by the SEC under Section 19 of the Exchange Act and the rules
promulgated thereunder or (b) submitted to the board of directors of
the Exchange (or the board of directors of its successor), and if such
board of directors determines that such amendment or repeal must be
filed with or filed with and approved by the Commission under Section
19 of the Exchange Act and the rules promulgated thereunder before such
amendment or repeal may be effectuated, then such amendment or repeal
shall not be effectuated until filed with or filed with and approved by
the Commission, as the case may be.
Proposed Eighth Amended and Restated Certificate of Incorporation of
Intercontinental Exchange Holdings, Inc. (``ICE Holdings Certificate of
Incorporation'')
    The ICE Holdings Certificate of Incorporation is being amended as
follows:
     On the first page, add ``Eighth'' and delete ``Seventh''
before ``Amended and Restated Certificate of Incorporation'' in the
heading and update items (2)-(5) accordingly to reflect that this would
be the eighth amendment and restatement, including replacing an
incorrect reference to ``Sixth'' before ``Amended'' in item (3). The
date would also be updated in the preamble on the first page.
     To distinguish between the ETP Holders of NYSE Arca
Equities and those of the Exchange, subsection A.3.c.ii of Article V
(Limitations on Voting and Ownership) would be amended to define an ETP
Holder of NYSE Arca Equities as ``NYSE Arca Equities ETP Holder.''
Obsolete references to NYSE Market (DE) and NYSE Regulation, would also
be deleted.\34\
---------------------------------------------------------------------------

    \34\ See note 33, supra.
---------------------------------------------------------------------------

    Subsection A.3.c of Article V would be amended to add a new
subsection (v), similar to those in place for the other NYSE Exchanges,
which would provide that, for so long as the ICE Holdings directly or
indirectly controls NYSE National (or its successor), no person nor any
of its related persons (as those terms are defined therein) is an ETP
Holder (as proposed to be defined in the bylaws of NYSE National,
discussed above) of NYSE National.
     Subsection A.3.d of Article V would be amended to add
``NYSE Arca'' before ``ETP Holder'' in one place to distinguish between
the NYSE Arca Equities ETP Holders of and those of the Exchange.
    Subsection A.3.d would be further amended to add a new subsection
(v) similar to those in place for the other NYSE Exchanges. The new
subsection would incorporate NYSE National into the existing
restriction, such that the ICE Holdings Board of Directors would be
restricted from adopting a resolution to approve the exercise of voting
rights that would exceed 20% of the then outstanding votes entitled to
be cast on such matter, where neither such person nor any of its
related persons is, with respect to NYSE National, an NYSE National ETP
Holder.
     Subsection B.3 of Article V would be amended to add a new
subsection (g) similar to those in place for the other NYSE Exchanges,
incorporating NYSE National into the restriction on the ICE Holdings
board of directors adopting any resolution pursuant to clause (b) of
Section B.2 of Article V of the ICE Holdings Certificate of
Incorporation (which relates to ICE board of directors approval of
ownership of ICE capital stock by a person together with its related
persons in excess of 20%) unless the NYSE Holdings board of directors
determines that, for so long as ICE Holdings controls NYSE National,
neither such person nor any of its related persons is an NYSE National
ETP Holder.
Proposed Fifth Amended and Restated Bylaws of Intercontinental Exchange
Holdings, Inc. (``ICE Holdings Bylaws'')
    The ICE Holdings Bylaws are being amended as follows:
     The cover page and heading on the first page would be
amended to add ``Fifth'' and delete ``Fourth'' before ``Amended and
Restated Bylaws'' to reflect that this would be the fifth amendment and
restatement. The effective date on the cover page would also be
updated.
     Similar to the ICE Bylaws discussed above, the ICE
Holdings Bylaws would be amended to include ``NYSE National, Inc.'' in:
    [cir] The definition of ``U.S. Regulated Subsidiaries'' in Article
III, Section 3.15, which currently includes the NYSE, NYSE Market (DE),
NYSE Regulation, NYSE Arca, LLC, NYSE Arca, NYSE Arca Equities, and
NYSE MKT LLC, and to provide that the term ``U.S. Regulated
Subsidiaries'' includes those entities listed or their successors, but
only so long as they continue to be controlled, directly or indirectly,
by ICE Holdings. Obsolete references to NYSE Market (DE) and NYSE
Regulation in that section would also be deleted; \35\
---------------------------------------------------------------------------

    \35\ See note 33, supra.
---------------------------------------------------------------------------

    [cir] Article VIII (Confidential Information), Section 8.1, which
would be amended to extend the same protection to confidential
information relating to the self-regulatory function of the Exchange or
its successor; \36\ and
---------------------------------------------------------------------------

    \36\ Article VIII, Section 8.1 would also be amended to delete
obsolete references to NYSE Market (DE) and NYSE Regulation.
---------------------------------------------------------------------------

    [cir] Article XI (Amendment to the Bylaws), Section 11.3, which
provides that, for so long as ICE controls any of the U.S. Regulated
Subsidiaries, any amendment to or repeal of the ICE Bylaws must either
be (i) filed with or filed with and approved by the Commission under
section 19 of the Exchange Act and the rules promulgated thereunder, or
(ii) submitted to the boards of directors of the U.S. Regulated
Subsidiaries or the boards of directors of their successors, in each
case only to the extent that such entity continues to be controlled
directly or indirectly by ICE Holdings. Obsolete references to NYSE
Market (DE) and NYSE Regulation would also be deleted from Article VXI,
Section 11.3.\37\
---------------------------------------------------------------------------

    \37\ See note 33, supra. Conforming changes to delete and
replace connectors would also be made throughout.
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Proposed Independence Policy of the Board of Directors of
Intercontinental Exchange, Inc. (``ICE Director Independence Policy'')
    The ICE Director Independence Policy would be amended to add NYSE
National to the section describing ``Independence Qualifications.'' In
particular, NYSE National would be added to categories (1)(b) and (c)
that refer to ``members,'' as defined in section 3(a)(3)(A)(i),
3(a)(3)(A)(ii), 3(a)(3)(A)(iii) and 3(a)(3)(A)(iv) of the Exchange
Act.\38\ The clause ``and `Person Associated with an ETP Holder' (as
defined in Rule 1.5 of NYSE National, Inc.)'' would also be added to
category (1)(b) in reference to ``allied persons.'' NYSE National would
also be added to subsections (4) and (5) of the ``Independence
Qualifications'' section.\39\ Obsolete references to NYSE Market (DE)
and NYSE Regulation would also be deleted.\40\
---------------------------------------------------------------------------

    \38\ See 15 U.S.C. 78c(a)(3)(a).
    \39\ Conforming changes would also be made to delete and replace
connectors. The link in footnote 2 to the NYSE Listed Company Manual
and commentary would also be updated.
    \40\ See note 33, supra.

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

Proposed Eighth Amended and Restated Limited Liability Company
Agreement of NYSE Holdings LLC (``NYSE Holdings LLC Operating
Agreement'')
    The NYSE Holdings LLC Operating Agreement would be amended as
follows:
     The heading and preamble would be amended to add
``Eighth'' and delete ``Seventh'' before ``Amended and Restated Limited
Liability Agreement'' to reflect that this would be the eighth
amendment and restatement. The effective date would also be updated.
After ``This Agreement amends and restates in its entirety that'' in
the second full sentence would be added the clause ``certain Seventh
Amended and Restated Limited Liability Company Agreement, dated as of
May 22, 2015, which amended and restated in its entirety that.''
     The current penultimate whereas clause would be amended by
adding ``in May 2015'' before ``the Company'' and ``now desires to
amend and restate'' immediately following would be replaced with
``amended and restated.'' ``Have'' and ``are'' would be changed to the
past tense ``had'' and ``were'' in the final sentence.
     The following new whereas clause would be added
immediately above the current last whereas clause: ``WHEREAS, the
Company now desires to amend and restate the Seventh Amended and
Restated Agreement to reflect the acquisition of NYSE National, Inc. by
the Company's wholly-owned subsidiary NYSE Group, Inc.;''.
     The definition of ETP Holder in Article I
(Interpretation), Section 1.1 would be deleted and new definitions of
an NYSE Arca ETP Holder and NYSE National ETP Holder would be added.
The obsolete definition of NYSE Market (DE) would be deleted.\41\
---------------------------------------------------------------------------

    \41\ See note 33, supra.
---------------------------------------------------------------------------

     Article IX (Voting and Ownership Limitations), Section
9.1(a)(3)(C) would be amended to add ``NYSE Arca'' before ``ETP
Holder'' and the defined term ``NYSE Arca ETP Holder'' to distinguish
between the ETP Holders of NYSE Arca Equities and those of the
Exchange. An obsolete reference to NYSE Market (DE) would also be
deleted from Section 9.1(a)(3)(C).\42\
---------------------------------------------------------------------------

    \42\ See note 33, supra. Conforming changes to delete and
replace connectors would also be made throughout.
---------------------------------------------------------------------------

    Section 9.1(a)(3)(C) would be amended to add a new subsection (v)
similar to those in place for the other NYSE Exchanges. The new
subsection (v) would incorporate NYSE National into the existing
restriction, such that the ICE Holdings board of directors would be
restricted from adopting a resolution pursuant to clause (b) of Section
9.1(a)(2) unless the NYSE Holdings board of directors determines that,
for so long as NYSE Holdings directly or indirectly controls NYSE
National, Inc. (or its successor), neither such person nor any of its
related persons is an ETP Holder (as defined in the bylaws of NYSE
National, as such bylaws may be in effect from time to time) of NYSE
National (``NYSE National ETP Holder''). The clause would also provide
that any such person that is a related person of an ETP Holder shall
hereinafter also be deemed to be an ``NYSE National ETP Holder'' for
purposes of the agreement, as the context may require.
     Article IX, Section 9.1(a)(3)(D) would be amended to add
``NYSE Arca'' before ``ETP Holder.'' An outdated reference to NYSE
Market (DE) would also be deleted.
    Further, a new clause (v) would be added to Section 9.1(a)(3)(D) to
incorporate NYSE National into the existing restriction on the NYSE
Holdings Board of Directors, such that it would be restricted from
adopting a resolution to approve the exercise of voting rights that
would exceed 20% of the then outstanding votes entitled to be cast on
such matter for so long as NYSE Holdings controls NYSE National. The
clause would provide that ``for so long as the Corporation directly or
indirectly controls NYSE National, neither such person nor any of its
Related Persons is an NYSE National ETP Holder.''
     Article IX, Section 9.1(b)(3) would be amended to add a
new subpart (G) to incorporate NYSE National into the existing
restriction on the NYSE Holdings Board of Directors, so that it would
provide that, subject to its fiduciary obligations under applicable
law, for so long as NYSE Holdings directly or indirectly controls NYSE
National (or its successor), the board of directors of NYSE Holdings
shall not adopt any resolution pursuant to (b) of Section 9.1(b)(2) of
the NYSE Holdings LLC Operating Agreement, unless the board of
directors of NYSE Holdings shall have determined that neither such
person nor any of its related persons is an NYSE National ETP Holder.
Proposed Fifth Amended and Restated Certificate of Incorporation of
NYSE Group, Inc. (``NYSE Group Certificate of Incorporation'')
    The NYSE Group Certificate of Incorporation is being amended as
follows:
     On the first page, add ``Fifth'' and delete ``Fourth''
before ``Amended and Restated Certificate of Incorporation'' in the
heading. The Recitations would be amended to reflect that this would be
the fifth amendment and restatement. First, the Fifth Recitation would
be updated to reflect that a Fourth Amended and Restated Certificate of
Incorporation was filed with the Secretary of State of the State of
Delaware on December 29, 2014. A new Sixth Recitation would be updated
to reflect that the Fifth Amended and Restated Certificate of
Incorporation has been duly adopted. The current Sixth Recitation would
become the Seventh and would reflect that the Fourth Amended and
Restated Certificate of Incorporation is amended and restated in its
entirety.
     The Exchange would be added to the list of ``Regulated
Subsidiaries'' in Article 4 (Stock), Section 4(b)(1), which currently
includes the NYSE, NYSE Market (DE), NYSE Regulation, NYSE Arca, LLC,
NYSE Arca Equities, and NYSE MKT, and the obsolete references to NYSE
Market (DE) and NYSE Regulation would be deleted.
     To distinguish between the ETP Holders of NYSE Arca
Equities and those of the Exchange, Section 4(b)(1)(y) of Article IV
would be amended to define an ETP Holder of NYSE Arca Equities as an
``NYSE Arca Equities ETP Holder.'' An outdated reference to NYSE Market
(DE) would also be deleted.
    Section 4(b)(1)(y) would also be amended to add a provision to
similar to those in place for the other NYSE Exchanges providing that,
for so long as NYSE Group directly or indirectly controls NYSE National
(or its successor), neither such Person nor any of its related persons
is an ETP Holder (as defined in the rules of NYSE National, as such
rules may be in effect from time to time) of NYSE National (defined as
an ``NYSE National NYSE National ETP Holder'') and that any such person
that is a related person of an NYSE National ETP Holder shall
hereinafter also be deemed to be an ``NYSE National ETP Holder'' for
purposes of the certificate of incorporation, as the context may
require.
     Further, subsection 4(b)(1)(z) of Article IV would be
amended to define an ETP Holder of NYSE Arca Equities as an ``NYSE Arca
Equities ETP Holder'' and delete an outdated reference to NYSE Market
(DE).
    Subsection 4(b)(1)(z) would also be amended to incorporate NYSE
National into the existing restriction on the ICE Holdings Board of
Directors, such that it would be restricted from adopting a resolution
to approve the exercise of voting rights that would exceed 20% of the
then outstanding votes entitled to be

cast on such matter, where neither such person nor any of its related
persons is, with respect to NYSE National, an NYSE National ETP Holder.
     A new subpart (vii) would be added to subsection
4(b)(2)(C) of Article IV to incorporate NYSE National into the existing
restriction on the NYSE Group Board of Directors, such that it would be
restricted from adopting a resolution to approve the exercise of voting
rights that would exceed 20% of the then outstanding votes entitled to
be cast on such matter, where neither such person nor any of its
related persons is, with respect to NYSE National, an NYSE National ETP
Holder.\43\
---------------------------------------------------------------------------

    \43\ An obsolete reference to NYSE Market (DE) would also be
deleted from Article IV, 4(b)(2)(C)(v).
---------------------------------------------------------------------------

     Article X (Confidential Information) would be amended to
extend the same protection to confidential information relating to the
self-regulatory function of the Exchange or its successor and delete
obsolete references to NYSE Market (DE) and NYSE Regulation.
     Article XII (Amendments to Certificate of Incorporation)
provides that, for so long as NYSE Group controls the Regulated
Subsidiaries, before any amendment or repeal of any provision of the
Certificate of Incorporation shall be effective, such amendment or
repeal shall either (a) be filed with or filed with and approved by the
SEC under Section 19 of the Exchange Act and the rules promulgated
thereunder or (b) be submitted to the boards of directors of NYSE, NYSE
Market (DE), NYSE Regulation, NYSE Arca, NYSE Arca Equities, and NYSE
MKT or the boards of directors of their successors. Article XII would
be amended to add NYSE National to subsection (b) and delete references
to NYSE Market (DE) and NYSE Regulation.
Proposed Third Amended and Restated Bylaws of NYSE Group, Inc. (``NYSE
Group Bylaws'')
    The NYSE Group Bylaws are being amended as follows:
     Add ``Third'' and delete ``Second'' before ``Amended and
Restated Bylaws'' in the heading to reflect that this would be the
third amendment and restatement.
     Article VII (Miscellaneous), Section 7.9(A)(b) currently
provides that, for so long as NYSE Group controls any of the NYSE
Exchanges, any amendment to or repeal of the ICE Bylaws must either be
(i) filed with or filed with and approved by the Commission under
section 19 of the Exchange Act and the rules promulgated thereunder, or
(ii) submitted to the boards of directors of the NYSE, NYSE Market
(DE), NYSE Regulation, NYSE Arca, NYSE Arca Equities, and NYSE
Alternext US LLC or the boards of directors of their successors, in
each case only to the extent that such entity continues to be
controlled directly or indirectly by ICE. Section 7.9(A)(b) would be
amended to delete obsolete references to NYSE Market (DE) and NYSE
Regulation, replace the outdated reference to ``NYSE Alternext US LLC''
with ``NYSE MKT LLC,'' and add NYSE National.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Exchange Act \44\ in general, and with Section
6(b)(1) \45\ in particular, in that it enables the Exchange to be so
organized as to have the capacity to be able to carry out the purposes
of the Exchange Act and to comply, and to enforce compliance by its
exchange members and persons associated with its exchange members, with
the provisions of the Exchange Act, the rules and regulations
thereunder, and the rules of the Exchange. Following the Acquisition,
the Commission will continue to have the same plenary regulatory
authority over NYSE National as it currently has over the Exchange.
NYSE National would continue to be registered as a national securities
exchange and would continue to be a separate SRO with separate rules,
membership rosters, and listings distinct from its affiliates. The
proposed rule change is consistent with and will facilitate an
ownership structure that will provide the Commission with appropriate
oversight tools to ensure that the Commission will have the ability to
enforce the Exchange Act with respect to NYSE National and its
directors, officers, employees and agents to the extent they are
involved in its activities.
---------------------------------------------------------------------------

    \44\ 15 U.S.C. 78f(b).
    \45\ 15 U.S.C. 78f(b)(1).
---------------------------------------------------------------------------

    The proposed change would continue the requirement in the Bylaws
that an independent board committee oversee the adequacy and
effectiveness of the performance of the Exchange's self-regulatory
responsibilities. As proposed, the ROC would be similar in composition
and functions to the approved ROCs of other SROs, would be similarly
designed to ensure the adequacy and effectiveness of the Exchange's
regulatory and self-regulatory organization responsibilities; to assess
the Exchange's regulatory performance; and to assist the Board and any
other committees of the Board in reviewing the regulatory plan and the
overall effectiveness of the Exchange's regulatory functions.
Accordingly, the Exchange believes that the proposed amendment would
contribute to the orderly operation of the Exchange and would enable
the Exchange to be so organized as to have the capacity to carry out
the purposes of the Exchange Act and comply and enforce compliance with
the provisions of the Exchange Act by its members and persons
associated with its members. The Exchange therefore believes that
approval of the amendment to the Bylaws is consistent with Section
6(b)(1) and not inconsistent with the 2005 Order.\46\
---------------------------------------------------------------------------

    \46\ See Securities Exchange Act Release No. 51714 (May 19,
2005).
---------------------------------------------------------------------------

    The Exchange also believes that this filing furthers the objectives
of Section 6(b)(5) of the Exchange Act \47\ in that it would create a
governance and regulatory structure of NYSE National that is designed
to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, to foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, to remove impediments to, and perfect the mechanism of a
free and open market and a national market system and, in general, to
protect investors and the public interest. As described above,
following the Acquisition, NYSE National would continue to be
registered as a national securities exchange and as a separate SRO and,
as such, would continue to have separate rules, membership rosters, and
listings. Further, NYSE National's regulatory functions would be
carried out by the NYSE's regulatory department under the oversight of
the proposed ROC. The proposed changes are intended to protect and
maintain the self-regulatory functions of NYSE National and to allow it
to carry out its regulatory responsibilities under the Act. The
Exchange also believes that the proposed rule change provides
transparency and clarity, and promotes efficiency, with respect to the
governance and corporate structure of NYSE National. In so doing, the
proposed rule change promotes the maintenance of a fair and orderly
market, the protection of investors and the protection of the public
interest.
---------------------------------------------------------------------------

    \47\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    As discussed above, the Exchange believes that its proposal that
the ROC be comprised of independent directors would align the
Exchange's corporate governance practices with other SROs that have
adopted a ROC to monitor the adequacy and effectiveness of the

regulatory program, assessing regulatory performance, and assisting the
board of directors in reviewing the regulatory plan and the overall
effectiveness of the regulatory function. Moreover, the Exchange
believes that the proposed ROC structure would also sufficiently
insulate the regulatory functions from the Exchange's market and other
commercial interests in order for the Exchange to carry out its
regulatory obligations. The Exchange believes that the proposed rule
change is therefore consistent with and facilitates a governance and
regulatory structure that furthers the objectives of Section 6(b)(5) of
the Exchange Act. The independent oversight of the Exchange's
regulatory functions by the proposed ROC is also designed to protect
investors as well as the public interest.
    The Exchange further believes that making non-substantive technical
and conforming changes throughout its Certificate of Incorporation and
Bylaws to reflect the Exchange's proposed new ownership, including
updating corporate names, as well as the replacement of outdated or
obsolete references in the corporate documents of the NYSE Group and
its intermediary and ultimate parent entities, including the ICE bylaws
and director independence policy, ICE Holdings bylaws and certificate
of incorporation, NYSE Holdings operating agreement, and the NYSE Group
bylaws and certificate of incorporation, removes impediments to and
perfects the mechanism of a free and open market by removing confusion
that may result from having these references in the governing documents
following the Acquisition. The Exchange further believes that the
proposal removes impediments to and perfects the mechanism of a free
and open market by ensuring that persons subject to the Exchange's
jurisdiction, regulators, and the investing public can more easily
navigate and understand the governing documents. The Exchange further
believes that eliminating obsolete references would not be inconsistent
with the public interest and the protection of investors because
investors will not be harmed and in fact would benefit from increased
transparency, thereby reducing potential confusion. Removing such
obsolete references will also further the goal of transparency and add
clarity to the Exchange's rules.
    Finally, the proposal to retain, as modified, an Appeals Committee
which, among other things, would be charged with hearing appeals of
disciplinary determinations, complies with Section 6(b)(7) of the
Exchange Act,\48\ which, among other things, requires that the rules of
a national securities exchange provide a fair procedure for the
disciplining of members and persons associated with members. The
Exchange proposes that the Appeals Committee shall be made up of at
least one Public Director and at least one Non-Affiliated Director. The
Exchange believes that continued member participation on the proposed
Appeals Committee would be sufficient to provide for the fair
representation of members in the administration of the affairs of the
Exchange, including rulemaking and the disciplinary process, consistent
with Section 6(b)(3) of the Exchange Act.
---------------------------------------------------------------------------

    \48\ See 15 U.S.C. 78f(b)(7).
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Exchange Act. The proposed rule
change is not intended to address competitive issues but rather is
concerned solely with the Acquisition. Indeed, the Exchange believes
that providing a new corporate and governance structure, the Exchange
will be in a better position to improve its technology and engage in
value-enhancing transactions that will enable the Exchange to more
effectively participate and compete in the marketplace.

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

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

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NSX-2016-16 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-NSX-2016-16. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NSX-2016-16 and should be
submitted on or before January 20, 2017.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\49\
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    \49\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-31676 Filed 12-29-16; 8:45 am]
 BILLING CODE 8011-01-P