Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change Regarding a Proposed Combination Between NYSE Group, Inc. and Euronext N.V., 2578-2581 [E7-754]
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Federal Register / Vol. 72, No. 12 / Friday, January 19, 2007 / Notices
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to eliminate,
effective January 1, 2007, the exemption
from equity trading fees applicable to
principal transactions by a member
organization in conjunction with
‘‘facilitating’’ a customer order of at
least 10,000 shares.5 The elimination of
this exemption is consistent with the
Exchange’s policy of simplifying its fee
structure by eliminating exemptions and
implementing a single-tier flat fee
structure.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the objectives of Section 6 of the Act 6
in general and furthers the objectives of
Section 6(b)(4) 7 in particular, in that it
is designed to provide for the equitable
allocation of reasonable dues, fees and
other charges among its members and
other persons using its facilities.
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 Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
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The foregoing proposed rule change
has become effective upon filing
pursuant to Section 19(b)(3)(A) of the
Act 8 and Rule 19b–4(f)(2) 9 thereunder
because it establishes or changes a due,
5 For this purpose ‘‘facilitating’’ refers to taking
the other side of a customer’s order, or acquiring/
liquidating inventory to buy/sell to a customer at
an agreed-upon price.
6 15 U.S.C. 78f.
7 15 U.S.C. 78f(b)(4).
8 15 U.S.C. 78s(b)(3)(A).
9 17 CFR 19b–4(f)(2).
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fee, or other charge imposed by the
Exchange.
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
No. SR–NYSE–2006–117 on the subject
line.
Number SR–NYSE–2006–117 and
should be submitted on or before
February 9, 2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.10
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 07–139 Filed 1–18–07; 8:45 am]
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55109; File No. SR–
NYSEArca–2007–05]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing of Proposed
Rule Change Regarding a Proposed
Combination Between NYSE Group,
Inc. and Euronext N.V.
January 16, 2007.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934, as
amended, (‘‘Exchange Act’’) 1 and Rule
19b–4 thereunder,2 notice is hereby
given that on January 12, 2007, NYSE
Paper Comments
Arca, Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’)
• Send paper comments in triplicate
filed with the Securities and Exchange
to Nancy M. Morris, Secretary,
Commission (‘‘Commission’’) the
Securities and Exchange Commission,
proposed rule change as described in
100 F Street, NE., Washington, DC
Items I, II, and III below, which Items
20549–1090.
have been substantially prepared by the
Exchange. The Commission is
All submissions should refer to File
publishing this notice to solicit
Number SR–NYSE–2006–117. This file
comments on the proposed rule change
number should be included on the
subject line if e-mail is used. To help the from interested persons.
Commission process and review your
I. Self-Regulatory Organization’s
comments more efficiently, please use
Statement of the Terms of Substance of
only one method. The Commission will the Proposed Rule Change
post all comments on the Commissions
NYSE Arca is submitting the
Internet Web site (https://www.sec.gov/
proposed rule change to the
rules/sro.shtml). Copies of the
Commission in connection with the
submission, all subsequent
proposed business combination (the
amendments, all written statements
‘‘Combination’’) of NYSE Group, Inc., a
with respect to the proposed rule
Delaware corporation (‘‘NYSE Group’’),
change that are filed with the
with Euronext N.V., a company
Commission, and all written
organized under the laws of The
communications relating to the
Netherlands (‘‘Euronext’’). As a result of
proposed rule change between the
Commission and any person, other than the Combination, the businesses of
NYSE Group (including that of NYSE
those that may be withheld from the
Arca) and Euronext will be held under
public in accordance with the
a single, publicly traded holding
provisions of 5 U.S.C. 552, will be
company named NYSE Euronext, a
available for inspection and copying in
Delaware corporation (‘‘NYSE
the Commission’s Public Reference
Room. Copies of such filing also will be Euronext’’). The Combination involves
certain modifications to the
available for inspection and copying at
organizational documents of NYSE
the principal office of the NYSE. All
Group,3 the current indirect parent
comments received will be posted
without change; the Commission does
10 17 CFR 200.30–3(a)(12).
not edit personal identifying
1 15 U.S.C. 78s(b)(l).
information from submissions. You
2 17 CFR 240.19b–4.
should submit only information that
3 Upon the consummation of the Combination,
you wish to make available publicly. All NYSE Group will be merged with and into Jefferson
Merger Sub, Inc. and the name of Jefferson Merger
submissions should refer to File
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Federal Register / Vol. 72, No. 12 / Friday, January 19, 2007 / Notices
company of NYSE Arca, and of NYSE
Euronext, which upon completion of the
Combination will be the new indirect
parent company of NYSE Arca. The
organizational documents and
independence policies of NYSE Group
and NYSE Euronext and the trust
documents constitute rules of the
Exchange. The resolutions of the board
of directors of NYSE Group and the
changes to the Certificate of
Incorporation of Archipelago Holdings,
Inc., current direct parent of NYSE Arca
are also rules of the Exchange requiring
Commission approval. Accordingly,
NYSE Arca submits this proposed rule
change to reflect the rule changes to be
implemented in connection with the
Combination.
The text of the proposed rule change
and Exhibits 5A through 5H 4 are
available at the Exchange, the
Commission’s Public Reference Room,
and https://www.nysearca.com.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
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In its filing with the Commission, the
Exchange included statements
concerning the purpose of, and basis for,
the proposed rule change. The text of
these statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in Sections A, B, and C below,
of the most significant aspects of such
statements.
Sub, Inc. will be changed to NYSE Group, Inc. The
changes to the NYSE Group organizational
documents refer to changes from the current NYSE
Group organizational documents. Technically,
however, the Amended and Restated Certificate of
Incorporation and Amended and Restated Bylaws of
NYSE Group that will be operative upon the
consummation of the Combination will be amended
and restated forms of the Certificate of
Incorporation and Bylaws of Jefferson Merger Sub,
Inc.
4 The proposed Amended and Restated Certificate
of Incorporation of NYSE Euronext is Exhibit 5A;
the proposed Amended and Restated Bylaws of
NYSE Euronext are Exhibit 5B; the proposed NYSE
Euronext Director Independence Policy, which
policy will replace the current NYSE Group
Director Independence Policy, is Exhibit 5C; the
proposed Amended and Restated Certificate of
Incorporation of NYSE Group is Exhibit 5D; the
proposed Amended and Restated Bylaws of NYSE
Group are Exhibit 5E; the resolutions of the board
of directors of NYSE Group are Exhibit 5F; the
proposed Amended and Restated Certificate of
Incorporation of Archipelago Holdings, Inc. (‘‘Arca
Holdings’’) is Exhibit 5G and the proposed Trust
Agreement for the Delaware Trust is Exhibit 5H.
Each of these Exhibits will be operative as of the
consummation of the Combination.
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
NYSE Arca is submitting the
proposed rule change to the
Commission in connection with the
Combination of NYSE Group with
Euronext. As a result of the
Combination, the businesses of NYSE
Group (including that of NYSE Arca)
and Euronext will be held under a
single, publicly traded holding company
named NYSE Euronext. The
Combination involves certain
modifications to the organizational
documents of NYSE Group, the current
indirect parent company of NYSE Arca,
and of NYSE Euronext, which upon
completion of the Combination will be
the new indirect parent company of
NYSE Arca. The organizational
documents and independence policies
of NYSE Group and NYSE Euronext and
the trust documents constitute rules of
the Exchange. The resolutions of the
board of directors of NYSE Group and
the changes to the Certificate of
Incorporation of Archipelago Holdings,
Inc., current direct parent of NYSE Arca
are also rules of the Exchange requiring
Commission approval. Accordingly,
NYSE Arca submits this proposed rule
change to reflect the rule changes to be
implemented in connection with the
Combination.
For a description of the Combination
and related rule changes regarding
NYSE Euronext, NYSE Group, and the
Delaware Trust, see the rule filing
submitted by the New York Stock
Exchange LLC (‘‘NYSE’’) relating to the
Combination (File Number SR–NYSE–
2006–120) (the ‘‘NYSE Rule Filing’’).5
As a self-regulatory organization also
owned by NYSE Group, the Exchange is
making reference in this proposed rule
change to the applicable matters
described in the NYSE Rule Filing. In
particular, the NYSE Rule Filing
describes the following matters:
• Corporate structure of NYSE
Euronext following the Combination. In
particular, Arca Holdings will remain a
wholly owned subsidiary of NYSE
Group. NYSE Arca Holdings, Inc., a
Delaware corporation (‘‘NYSE Arca
Holdings’’), and NYSE Arca L.L.C., a
Delaware limited liability company
(‘‘NYSE Arca LLC’’), will remain wholly
owned subsidiaries of Arca Holdings.
NYSE Arca will remain a wholly owned
subsidiary of NYSE Arca Holdings and
NYSE Arca Equities, Inc., a Delaware
5 See Securities Exchange Act Release No. 55026
(December 29, 2006), 72 FR 814 (January 8, 2007).
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corporation formerly known as PCX
Equities, Inc. (‘‘NYSE Arca Equities’’),
will remain a wholly owned subsidiary
of NYSE Arca. NYSE Arca will continue
to maintain its status as a registered
national securities exchange and selfregulatory organization. Arca Holdings’
businesses and assets will continue to
be held by it and its subsidiaries.
Pursuant to a services agreement, NYSE
Regulation will perform many of the
regulatory functions of NYSE Arca.
There will be no change to the current
manner of election or appointment of
the directors and officers of Arca
Holdings, NYSE Arca Holdings, NYSE
Arca LLC, NYSE Arca or NYSE Arca
Equities (or of the Euronext exchanges)
as a result of the Combination. The
Combination will have no effect on the
ability of any party to trade securities on
NYSE Arca or NYSE Arca Equities.
• Board of directors and board
committees of NYSE Euronext.
Specifically, in contrast to the current
independence policy of NYSE Group,
the independence policy of NYSE
Euronext will not provide as a
categorical matter that a person fails to
be independent if he or she is an
executive officer of a foreign private
issuer of securities listed on the NYSE
or NYSE Arca. The Exchange believes
that this change is important because
NYSE Euronext will be a multinational
company, with European Persons
comprising half of its initial directors,
most of whom will initially be former
directors of Euronext. Euronext does not
prohibit executive officers of companies
listed on Euronext exchanges from
serving as directors of Euronext because
Euronext does not (and NYSE Euronext
will not) regulate these companies in
the way that the Exchange regulates its
listed companies. The Exchange
therefore believes that a categorical
requirement prohibiting all executive
officers of foreign private issuers listed
on the NYSE on NYSE Arca could
preclude a large pool of otherwise
highly qualified director candidates
from serving on the NYSE Euronext
board of directors and is not necessary.
In addition, the director
independence policy will contain a
transition period so that the
independence requirements will not
apply to the European Persons on the
NYSE Euronext board of directors until
the annual meeting of NYSE Euronext
stockholders in 2008.
Finally, in contrast to the current
independence policy of NYSE Group,
the independence policy of NYSE
Euronext will not provide as a
categorical matter that a person fails to
be independent if he or she is a director
of an affiliate of a member organization
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(which includes member organizations
of NYSE (as defined in paragraph (b) of
Rule 2 of NYSE), OTP Firms of NYSE
Arca (as defined in Rules 1.1(r) of NYSE
Arca) and ETP Holders of NYSE Arca
Equities, Inc. (as defined in Rule 1.1(n)
of NYSE Arca Equities, Inc.)).
The independence policy of NYSE
Euronext will require, however, that (1)
Executive officers of foreign private
issuers (including, for the avoidance of
doubt, companies whose securities are
listed on a Euronext exchange), (2)
executive officers of NYSE Euronext, (3)
any European Person on the NYSE
Euronext board of directors who would
not satisfy the independence
requirements in the independence
policy but for the transition period, and
(4) any director of an affiliate of a
member organization, taken together,
shall constitute no more than a minority
of the total number of directors of NYSE
Euronext. In addition, none of (1) An
executive officer of an issuer whose
securities are listed on the NYSE or
NYSE Arca (regardless of whether such
issuer is a foreign private issuer), (2) a
European Person on the NYSE Euronext
board of directors who would not satisfy
the independence requirements in the
independence policy but for the
transition period, or (3) any director of
an affiliate of a member organization
can qualify as an independent director
of the NYSE, NYSE Market or NYSE
Regulation. Consequently, the Exchange
believes that the proposed changes,
when taken together, do not present
significant concerns regarding the
independence of the board of NYSE
Euronext.
• Management of NYSE Euronext.
• Voting and ownership limitations
on the shares of NYSE Euronext.
• Protection of the self-regulatory
functions and oversight.6
The Exchange understands that the
Commission is also concerned about
potential unfair competition and
conflicts of interest between a U.S.
exchange’s self-regulatory obligations
and its commercial interests that could
exist if such exchange were to become
affiliated with one of its members, as
well as the potential for unfair
competitive advantage that the affiliated
member could have by virtue of
informational or operational advantages,
or the ability to receive preferential
6 In particular, to facilitate compliance with the
requirements of Rule 17a–1(b) under the Exchange
Act, NYSE Euronext shall maintain in the United
States originals or copies of Overlapping Records
(as defined in the NYSE Rule Filing) covered by
Rule 17a–1(b) promptly after creation of such
Overlapping Records.
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treatment.7 The Exchange acknowledges
that ownership of, or a control
relationship with, a member
organization by NYSE Euronext or any
of its subsidiaries would necessitate that
the foregoing concerns be first
addressed with, and to the satisfaction
of, the Commission 8 and/or, as
appropriate, the European Regulators.
• Provisions relating to the Delaware
Trust and Dutch Foundation, including:
• Administration of the Delaware
Trust and Dutch Foundation,
• Material adverse changes in law,
• Remedies of the Dutch Foundation
and Delaware Trust,
• Unwinding of remedies,
• Consequences of the exercise of
remedies,
• Automatic suspension and repeal of
certain provisions in the NYSE Euronext
organizational documents,
• Transfer of Foundation and Trust
property,
• Submission to jurisdiction,
• Other duties,
• Initiatives by the Board of Trustees
of the Delaware Trust and the Board of
Directors of the Foundation,
• Duration of the Dutch Foundation,
and
• Term of the Delaware Trust.
• NYSE Group waiver of its
ownership and voting limitations.
In this regard, an extract with the
relevant resolutions is attached to this
rule filing as Exhibit 5F.
The Exchange hereby requests that the
Commission allow NYSE Euronext to
wholly own and vote all of the
outstanding common stock of NYSE
Group, either alone or with its related
persons, except for any related person of
NYSE Euronext which is an ETP Holder
of NYSE Arca Equities, OTP Holder or
OTP Firm of NYSE Arca, or member or
member organization of the NYSE, upon
the consummation of the Combination.
• Regulation following the
Combination.
• Changes to the organizational
documents of NYSE Group.
In addition, Article Fourth of the
Certificate of Incorporation of Arca
Holdings is being amended to provide
for voting or ownership of the shares of
stock of Arca Holdings by the Delaware
Trust pursuant to the terms and
conditions of the Trust Agreement by
7 See Securities Exchange Act Release No. 52497
(September 22, 2005), 70 FR 56949 (September 29,
2005) (File Number SR–PCX–2005–90); and
Securities Exchange Act Release No. 53382
(February 27, 2006), 71 FR 11251 (March 6, 2006)
(File Number SR–NYSE–2005–77).
8 We note that the Commission has specifically
approved the ownership and operation of the
outbound router function of Archipelago Securities
by Archipelago, subject to the conditions specified
in Securities Exchange Act Release No. 52497.
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and among NYSE Euronext, Inc., NYSE
Group, Inc. and the trustees and
Delaware trustee thereto.9
The proposed rule change, if
approved by the Commission, will not
be operative until the consummation of
the Combination.
2. Statutory Basis
The Exchange believes that this filing
is consistent with Section 6(b)(1) of the
Exchange Act,10 in general, and furthers
the objectives of Section 6(b)(1) 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. The
Exchange also believes that this filing
furthers the objectives of Section 6(b)(5)
of the Exchange Act 11 because the rules
summarized herein would create a
governance and regulatory structure that
is designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to 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.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change would impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Exchange Act.
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 35 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
As the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the self-regulatory
9 See proposed Amended and Restated Certificate
of Incorporation of Arca Holdings., Article Fourth
(C)(1) and (D)(1).
10 15 U.S.C. 78f(b)(1).
11 15 U.S.C. 78f(b)(5).
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organization consents, the Commission
will:
(A) By order approve such proposed
rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.12
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–754 Filed 1–18–07; 8:45 am]
BILLING CODE 8011–01–P
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:
SELECTIVE SERVICE SYSTEM
Senior Executive Service: Performance
Review Board Members
AGENCY:
Selective Service System.
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSEArca–2007–05 on the
subject line.
ACTION:
SUMMARY: This notice announces the
appointment of members of the
Selective Service System (SSS)
Performance Review Board (PRB).
sroberts on PROD1PC70 with NOTICES
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSEArca–2007–05. This
file number should be included on the
subject line if e-mail 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 (https://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 inspection and copying in
the Commission’s Public Reference
Room. Copies of such filing also will be
available for inspection and copying at
the principal office of the Exchange. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–NYSE–2007–05 and should
be submitted on or before February 5,
2007.
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Notice.
FOR FURTHER INFORMATION CONTACT:
Verona C. Ballard, Human Resources
Division, Selective Service System, 1515
Wilson Blvd., Arlington, VA 22207,
703–605–4040.
5 CFR
430.310 requires each agency to
establish, in accordance with
regulations prescribed by the Office of
Personnel Management, one or more
Senior Executive Service (SES)
performance review boards. The board
reviews and evaluates the initial
appraisal of a senior executive’s
performance by the supervisor, and
considers recommendations to the
appointing authority regarding the
performance of the senior executive.
Because the SSS is a small independent
Federal agency, the members of the
SSS’s PRB are being drawn from other
Federal agencies.
The following executives have been
appointed to the SSS Performance
Review Board:
SUPPLEMENTARY INFORMATION:
Lawrence Roffee, Executive Director, US
Access Board;
Gary Thatcher, Associate Director,
International Broadcast Bureau;
Debra Carr, Associate Deputy Staff
Director, US Commission on Civil
Rights.
Dated: January 16, 2007.
William A. Chatfield,
Director.
[FR Doc. 07–208 Filed 1–18–07; 8:45 am]
BILLING CODE 8015–01–M
12 17
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DEPARTMENT OF STATE
[Public Notice 5671]
Revised Notice of Meeting of the
Advisory Committee on International
Law
A meeting of the Advisory Committee
on International Law will take place on
Friday, January 26, 2007, from 10 a.m.
to approximately 4 p.m., in Room 1105
of the United States Department of
State, 2201 C Street, NW., Washington,
DC. The meeting will be chaired by the
Legal Adviser of the Department of
State, John B. Bellinger, III, and will be
open to the public up to the capacity of
the meeting room. Participants at the
meeting will discuss a range of issues
relating to current international legal
topics, including the effectiveness of
international trade law and
international human rights law; issues
related to the Geneva Conventions; the
legal framework for detention and trial
of international terrorists; issues relating
to the practice of the United Nations
Security Council, and issues relating to
the immunities of foreign states and
international organizations and their
respective officials.
Entry to the building is controlled and
will be facilitated by advance
arrangements. Members of the public
who wish to attend the session should,
by Wednesday, January 24, 2007, notify
the Office of the Assistant Legal Adviser
for Claims and Investment Disputes
(telephone: 202–776–8351) of their
name, date of birth; citizenship
(country); ID number, i.e., U.S.
government ID (agency), U.S. military ID
(branch), passport (country) or driver’s
license (state); professional affiliation,
address and telephone number in order
to arrange admittance. This includes
admittance for government employees
as well as others. All attendees must use
the ‘‘C’’ Street entrance. One of the
following valid IDs will be required for
admittance: any U.S. driver’s license
with photo, a passport, or a U.S.
government agency ID. Because an
escort is required at all times, attendees
should expect to remain in the meeting
for the entire morning or afternoon
session.
Dated: January 17, 2007.
Karin L. Kizer,
Attorney Adviser, Office of Claims and
Investment Disputes, Office of the Legal
Adviser, Executive Director, Advisory
Committee on International Law, Department
of State.
[FR Doc. E7–828 Filed 1–18–07; 8:45 am]
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]]>Agencies
[Federal Register Volume 72, Number 12 (Friday, January 19, 2007)]
[Notices]
[Pages 2578-2581]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-754]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55109; File No. SR-NYSEArca-2007-05]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change Regarding a Proposed Combination Between NYSE
Group, Inc. and Euronext N.V.
January 16, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of
1934, as amended, (``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\
notice is hereby given that on January 12, 2007, NYSE Arca, Inc.
(``NYSE Arca'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been substantially
prepared by the Exchange. 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)(l).
\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
NYSE Arca is submitting the proposed rule change to the Commission
in connection with the proposed business combination (the
``Combination'') of NYSE Group, Inc., a Delaware corporation (``NYSE
Group''), with Euronext N.V., a company organized under the laws of The
Netherlands (``Euronext''). As a result of the Combination, the
businesses of NYSE Group (including that of NYSE Arca) and Euronext
will be held under a single, publicly traded holding company named NYSE
Euronext, a Delaware corporation (``NYSE Euronext''). The Combination
involves certain modifications to the organizational documents of NYSE
Group,\3\ the current indirect parent
[[Page 2579]]
company of NYSE Arca, and of NYSE Euronext, which upon completion of
the Combination will be the new indirect parent company of NYSE Arca.
The organizational documents and independence policies of NYSE Group
and NYSE Euronext and the trust documents constitute rules of the
Exchange. The resolutions of the board of directors of NYSE Group and
the changes to the Certificate of Incorporation of Archipelago
Holdings, Inc., current direct parent of NYSE Arca are also rules of
the Exchange requiring Commission approval. Accordingly, NYSE Arca
submits this proposed rule change to reflect the rule changes to be
implemented in connection with the Combination.
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\3\ Upon the consummation of the Combination, NYSE Group will be
merged with and into Jefferson Merger Sub, Inc. and the name of
Jefferson Merger Sub, Inc. will be changed to NYSE Group, Inc. The
changes to the NYSE Group organizational documents refer to changes
from the current NYSE Group organizational documents. Technically,
however, the Amended and Restated Certificate of Incorporation and
Amended and Restated Bylaws of NYSE Group that will be operative
upon the consummation of the Combination will be amended and
restated forms of the Certificate of Incorporation and Bylaws of
Jefferson Merger Sub, Inc.
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The text of the proposed rule change and Exhibits 5A through 5H \4\
are available at the Exchange, the Commission's Public Reference Room,
and https://www.nysearca.com.
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\4\ The proposed Amended and Restated Certificate of
Incorporation of NYSE Euronext is Exhibit 5A; the proposed Amended
and Restated Bylaws of NYSE Euronext are Exhibit 5B; the proposed
NYSE Euronext Director Independence Policy, which policy will
replace the current NYSE Group Director Independence Policy, is
Exhibit 5C; the proposed Amended and Restated Certificate of
Incorporation of NYSE Group is Exhibit 5D; the proposed Amended and
Restated Bylaws of NYSE Group are Exhibit 5E; the resolutions of the
board of directors of NYSE Group are Exhibit 5F; the proposed
Amended and Restated Certificate of Incorporation of Archipelago
Holdings, Inc. (``Arca Holdings'') is Exhibit 5G and the proposed
Trust Agreement for the Delaware Trust is Exhibit 5H. Each of these
Exhibits will be operative as of the consummation of the
Combination.
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of, and basis for, the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
NYSE Arca is submitting the proposed rule change to the Commission
in connection with the Combination of NYSE Group with Euronext. As a
result of the Combination, the businesses of NYSE Group (including that
of NYSE Arca) and Euronext will be held under a single, publicly traded
holding company named NYSE Euronext. The Combination involves certain
modifications to the organizational documents of NYSE Group, the
current indirect parent company of NYSE Arca, and of NYSE Euronext,
which upon completion of the Combination will be the new indirect
parent company of NYSE Arca. The organizational documents and
independence policies of NYSE Group and NYSE Euronext and the trust
documents constitute rules of the Exchange. The resolutions of the
board of directors of NYSE Group and the changes to the Certificate of
Incorporation of Archipelago Holdings, Inc., current direct parent of
NYSE Arca are also rules of the Exchange requiring Commission approval.
Accordingly, NYSE Arca submits this proposed rule change to reflect the
rule changes to be implemented in connection with the Combination.
For a description of the Combination and related rule changes
regarding NYSE Euronext, NYSE Group, and the Delaware Trust, see the
rule filing submitted by the New York Stock Exchange LLC (``NYSE'')
relating to the Combination (File Number SR-NYSE-2006-120) (the ``NYSE
Rule Filing'').\5\
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\5\ See Securities Exchange Act Release No. 55026 (December 29,
2006), 72 FR 814 (January 8, 2007).
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As a self-regulatory organization also owned by NYSE Group, the
Exchange is making reference in this proposed rule change to the
applicable matters described in the NYSE Rule Filing. In particular,
the NYSE Rule Filing describes the following matters:
Corporate structure of NYSE Euronext following the
Combination. In particular, Arca Holdings will remain a wholly owned
subsidiary of NYSE Group. NYSE Arca Holdings, Inc., a Delaware
corporation (``NYSE Arca Holdings''), and NYSE Arca L.L.C., a Delaware
limited liability company (``NYSE Arca LLC''), will remain wholly owned
subsidiaries of Arca Holdings. NYSE Arca will remain a wholly owned
subsidiary of NYSE Arca Holdings and NYSE Arca Equities, Inc., a
Delaware corporation formerly known as PCX Equities, Inc. (``NYSE Arca
Equities''), will remain a wholly owned subsidiary of NYSE Arca. NYSE
Arca will continue to maintain its status as a registered national
securities exchange and self-regulatory organization. Arca Holdings'
businesses and assets will continue to be held by it and its
subsidiaries. Pursuant to a services agreement, NYSE Regulation will
perform many of the regulatory functions of NYSE Arca.
There will be no change to the current manner of election or
appointment of the directors and officers of Arca Holdings, NYSE Arca
Holdings, NYSE Arca LLC, NYSE Arca or NYSE Arca Equities (or of the
Euronext exchanges) as a result of the Combination. The Combination
will have no effect on the ability of any party to trade securities on
NYSE Arca or NYSE Arca Equities.
Board of directors and board committees of NYSE Euronext.
Specifically, in contrast to the current independence policy of NYSE
Group, the independence policy of NYSE Euronext will not provide as a
categorical matter that a person fails to be independent if he or she
is an executive officer of a foreign private issuer of securities
listed on the NYSE or NYSE Arca. The Exchange believes that this change
is important because NYSE Euronext will be a multinational company,
with European Persons comprising half of its initial directors, most of
whom will initially be former directors of Euronext. Euronext does not
prohibit executive officers of companies listed on Euronext exchanges
from serving as directors of Euronext because Euronext does not (and
NYSE Euronext will not) regulate these companies in the way that the
Exchange regulates its listed companies. The Exchange therefore
believes that a categorical requirement prohibiting all executive
officers of foreign private issuers listed on the NYSE on NYSE Arca
could preclude a large pool of otherwise highly qualified director
candidates from serving on the NYSE Euronext board of directors and is
not necessary.
In addition, the director independence policy will contain a
transition period so that the independence requirements will not apply
to the European Persons on the NYSE Euronext board of directors until
the annual meeting of NYSE Euronext stockholders in 2008.
Finally, in contrast to the current independence policy of NYSE
Group, the independence policy of NYSE Euronext will not provide as a
categorical matter that a person fails to be independent if he or she
is a director of an affiliate of a member organization
[[Page 2580]]
(which includes member organizations of NYSE (as defined in paragraph
(b) of Rule 2 of NYSE), OTP Firms of NYSE Arca (as defined in Rules
1.1(r) of NYSE Arca) and ETP Holders of NYSE Arca Equities, Inc. (as
defined in Rule 1.1(n) of NYSE Arca Equities, Inc.)).
The independence policy of NYSE Euronext will require, however,
that (1) Executive officers of foreign private issuers (including, for
the avoidance of doubt, companies whose securities are listed on a
Euronext exchange), (2) executive officers of NYSE Euronext, (3) any
European Person on the NYSE Euronext board of directors who would not
satisfy the independence requirements in the independence policy but
for the transition period, and (4) any director of an affiliate of a
member organization, taken together, shall constitute no more than a
minority of the total number of directors of NYSE Euronext. In
addition, none of (1) An executive officer of an issuer whose
securities are listed on the NYSE or NYSE Arca (regardless of whether
such issuer is a foreign private issuer), (2) a European Person on the
NYSE Euronext board of directors who would not satisfy the independence
requirements in the independence policy but for the transition period,
or (3) any director of an affiliate of a member organization can
qualify as an independent director of the NYSE, NYSE Market or NYSE
Regulation. Consequently, the Exchange believes that the proposed
changes, when taken together, do not present significant concerns
regarding the independence of the board of NYSE Euronext.
Management of NYSE Euronext.
Voting and ownership limitations on the shares of NYSE
Euronext.
Protection of the self-regulatory functions and
oversight.\6\
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\6\ In particular, to facilitate compliance with the
requirements of Rule 17a-1(b) under the Exchange Act, NYSE Euronext
shall maintain in the United States originals or copies of
Overlapping Records (as defined in the NYSE Rule Filing) covered by
Rule 17a-1(b) promptly after creation of such Overlapping Records.
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The Exchange understands that the Commission is also concerned
about potential unfair competition and conflicts of interest between a
U.S. exchange's self-regulatory obligations and its commercial
interests that could exist if such exchange were to become affiliated
with one of its members, as well as the potential for unfair
competitive advantage that the affiliated member could have by virtue
of informational or operational advantages, or the ability to receive
preferential treatment.\7\ The Exchange acknowledges that ownership of,
or a control relationship with, a member organization by NYSE Euronext
or any of its subsidiaries would necessitate that the foregoing
concerns be first addressed with, and to the satisfaction of, the
Commission \8\ and/or, as appropriate, the European Regulators.
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\7\ See Securities Exchange Act Release No. 52497 (September 22,
2005), 70 FR 56949 (September 29, 2005) (File Number SR-PCX-2005-
90); and Securities Exchange Act Release No. 53382 (February 27,
2006), 71 FR 11251 (March 6, 2006) (File Number SR-NYSE-2005-77).
\8\ We note that the Commission has specifically approved the
ownership and operation of the outbound router function of
Archipelago Securities by Archipelago, subject to the conditions
specified in Securities Exchange Act Release No. 52497.
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Provisions relating to the Delaware Trust and Dutch
Foundation, including:
Administration of the Delaware Trust and Dutch Foundation,
Material adverse changes in law,
Remedies of the Dutch Foundation and Delaware Trust,
Unwinding of remedies,
Consequences of the exercise of remedies,
Automatic suspension and repeal of certain provisions in
the NYSE Euronext organizational documents,
Transfer of Foundation and Trust property,
Submission to jurisdiction,
Other duties,
Initiatives by the Board of Trustees of the Delaware Trust
and the Board of Directors of the Foundation,
Duration of the Dutch Foundation, and
Term of the Delaware Trust.
NYSE Group waiver of its ownership and voting limitations.
In this regard, an extract with the relevant resolutions is
attached to this rule filing as Exhibit 5F.
The Exchange hereby requests that the Commission allow NYSE
Euronext to wholly own and vote all of the outstanding common stock of
NYSE Group, either alone or with its related persons, except for any
related person of NYSE Euronext which is an ETP Holder of NYSE Arca
Equities, OTP Holder or OTP Firm of NYSE Arca, or member or member
organization of the NYSE, upon the consummation of the Combination.
Regulation following the Combination.
Changes to the organizational documents of NYSE Group.
In addition, Article Fourth of the Certificate of Incorporation of
Arca Holdings is being amended to provide for voting or ownership of
the shares of stock of Arca Holdings by the Delaware Trust pursuant to
the terms and conditions of the Trust Agreement by and among NYSE
Euronext, Inc., NYSE Group, Inc. and the trustees and Delaware trustee
thereto.\9\
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\9\ See proposed Amended and Restated Certificate of
Incorporation of Arca Holdings., Article Fourth (C)(1) and (D)(1).
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The proposed rule change, if approved by the Commission, will not
be operative until the consummation of the Combination.
2. Statutory Basis
The Exchange believes that this filing is consistent with Section
6(b)(1) of the Exchange Act,\10\ in general, and furthers the
objectives of Section 6(b)(1) 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. The Exchange
also believes that this filing furthers the objectives of Section
6(b)(5) of the Exchange Act \11\ because the rules summarized herein
would create a governance and regulatory structure that is designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, to remove impediments to, and
perfect the mechanism of a free and open market and a national market
system and, in general, to protect investors and the public interest.
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\10\ 15 U.S.C. 78f(b)(1).
\11\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change would
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Exchange Act.
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 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) As the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory
[[Page 2581]]
organization consents, the Commission will:
(A) By order approve such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NYSEArca-2007-05 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEArca-2007-05. This
file number should be included on the subject line if e-mail 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 (https://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 inspection
and copying in the Commission's Public Reference Room. Copies of such
filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NYSE-2007-05 and should be submitted on or before
February 5, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-754 Filed 1-18-07; 8:45 am]
BILLING CODE 8011-01-P
