Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Accelerated Approval of Proposed Rule Change and Notice of Filing and Order Granting Accelerated Approval to Amendment No. 1 Regarding a Proposed Combination Between NYSE Group, Inc. and Euronext N.V., 8046-8050 [E7-2910]
Download as PDF
8046
Federal Register / Vol. 72, No. 35 / Thursday, February 22, 2007 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55294; File No. SR–
NYSEArca–2007–05]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Order Granting Accelerated
Approval of Proposed Rule Change
and Notice of Filing and Order
Granting Accelerated Approval to
Amendment No. 1 Regarding a
Proposed Combination Between NYSE
Group, Inc. and Euronext N.V.
February 14, 2007.
I. Introduction
On January 12, 2007, NYSE Arca, Inc.
(‘‘NYSE Arca’’ or ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934, as amended,
(‘‘Exchange Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change
regarding the proposed business
combination (‘‘Combination’’) between
NYSE Group, Inc. (‘‘NYSE Group’’) and
Euronext N.V. (‘‘Euronext’’). The
proposed rule change was published for
comment in the Federal Register on
January 19, 2007.3 The Commission
received no comments on the proposal.
On February 13, 2007, the Exchange
filed Amendment No. 1 to the proposed
rule change.4 This order grants
accelerated approval to the proposed
rule change, grants accelerated approval
to Amendment No. 1, and solicits
comments from interested persons on
Amendment No. 1.
The Commission has reviewed
carefully the proposed rule change and
finds that the proposed rule change is
consistent with the requirements of the
Exchange Act and the rules and
regulations thereunder applicable to a
national securities exchange.5 In
particular, the Commission finds that
the proposed rule change is consistent
with Section 6(b) of the Exchange Act,6
which, among other things, requires a
national securities exchange to be so
1 15
U.S.C. 78s(b)(l).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 55109
(January 16, 2007), 72 FR 2578 (‘‘Notice’’).
4 See Partial Amendment dated February 13, 2007
(‘‘Amendment No. 1’’). The text of Amendment No.
1 and Exhibits 5C, 5D, 5G, and 5H, which set forth
certain governing documents as proposed to be
amended, are available on the Commission’s Web
site (http://www.sec.gov/rules/sro.shtml), at the
Commission’s Public Reference Room, at the
Exchange, and on the Exchange’s Web site (http://
www.nysearca.com).
5 In approving the proposed rule change, the
Commission has considered its impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
6 15 U.S.C. 78f(b).
rwilkins on PROD1PC63 with NOTICES
2 17
VerDate Aug<31>2005
14:11 Feb 21, 2007
Jkt 211001
organized and have the capacity to be
able to carry out the purposes of the
Exchange Act and to enforce
compliance by its members and persons
associated with its members with the
provisions of the Exchange Act, the
rules and regulations thereunder, and
the rules of the exchange, and assure the
fair representation of its members in the
selection of its directors and
administration of its affairs, and provide
that one or more directors shall be
representative of issuers and investors
and not be associated with a member of
the exchange, broker, or dealer. Section
6(b) of the Exchange Act 7 also requires
that the rules of the exchange be
designed to promote just and equitable
principles of trade, to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest.
The Commission finds good cause for
approving this proposed rule change
before the thirtieth day after the
publication of notice thereof in the
Federal Register. This proposed rule
change seeks to make changes to the
following documents: The Amended
and Restated Certificate of Incorporation
of NYSE Euronext (‘‘NYSE Euronext
Certificate of Incorporation’’); the
Amended and Restated Bylaws of NYSE
Euronext (‘‘NYSE Euronext Bylaws’’);
the NYSE Euronext Director,
Independence Policy (‘‘Independence
Policy’’), which policy will replace the
current NYSE Group Director
Independence Policy; the proposed
Amended and Restated Certificate of
Incorporation of NYSE Group (‘‘NYSE
Group Certificate of Incorporation’’); the
proposed Amended and Restated
Bylaws of NYSE Group (‘‘NYSE Group
Bylaws’’); the resolutions of the board of
directors of NYSE Group; and the
proposed Trust Agreement for the
Delaware Trust (‘‘Trust Agreement’’).
All of the proposed changes to these
documents were published for comment
in connection with the proposed rule
change submitted by the New York
Stock Exchange LLC (‘‘NYSE LLC’’) in
connection with the Combination.8 In
addition to these changes, the Exchange
has proposed changes to the proposed
Amended and Restated Certificate of
Incorporation of Archipelago Holdings,
Inc. (‘‘Arca Holdings’’) to allow for the
ownership and voting of shares of Arca
Holdings by the Delaware Trust
7 Id.
8 See Securities Exchange Act Release No. 55026
(December 29, 2006), 72 FR 814 (January 8, 2007)
(‘‘NYSE LLC Rule Filing’’).
PO 00000
Frm 00096
Fmt 4703
Sfmt 4703
(‘‘Trust’’).9 The Commission has
received no comment letters on this
proposal. The Commission finds good
cause to accelerate approval of this
proposal to allow the timing of this
approval to coincide with the approval
of the corresponding filing by the NYSE
LLC.10
A. Accelerated Approval of Amendment
No. 1
The Commission also finds good
cause for approving Amendment No. 1
prior to the thirtieth day after
publishing notice of Amendment No. 1
in the Federal Register pursuant to
Section 19(b)(2) of the Exchange Act.11
In Amendment No. 1, the Exchange
made technical revisions to proposed
Article VII, Section 2 of the proposed
NYSE Group Certificate of Incorporation
relating to quorum requirements for
each meeting of stockholders.12 These
changes are necessary to clarify the
proposal. The Commission finds good
cause to accelerate approval of these
changes prior to the thirtieth day after
publication in the Federal Register
because they clarify the Exchange’s
rules, which should facilitate the
Exchange’s compliance with its rules,
and the Commission’s ability to ensure
compliance with such rules, and assist
members and investors in
understanding the application and
scope of the rules.
In addition, the Exchange made
certain clarifying, conforming,
technical, non-material, and nonsubstantive changes to the proposed
Amended and Restated Certificate of
Incorporation of Arca Holdings (‘‘Arca
Holdings Certificate of Incorporation’’),
the proposed NYSE Group Certificate of
Incorporation, the Independence Policy,
and the proposed Trust Agreement,
which raise no new or novel issues.
These changes are non-substantive and
technical in nature and are necessary to
reflect the changes from the current
rules of the Exchange and clarify the
proposal. The Commission finds good
cause exists to accelerate approval of
these changes prior to the thirtieth day
9 Similar changes have been proposed for NYSE
Group. See proposed NYSE Group Certificate of
Incorporation, Article IV, Section 4.
10 See Securities Exchange Act Release No. 55293
(February 14, 2007) (approval order for SR–NYSE–
2006–120 (‘‘NYSE LLC Approval Order’’)).
11 15 U.S.C. 78s(b)(2). Pursuant to Section 19(b)(2)
of the Exchange Act, the Commission may not
approve any proposed rule change, or amendment
thereto, prior to the thirtieth day after the date of
publication of the notice thereof, unless the
Commission finds good cause for so doing.
12 In the Notice, the Exchange mistakenly showed
proposed deletions to the current quorum
requirements. The Exchange is not proposing to
change the quorum requirements that exist in the
current NYSE Group Certificate of Incorporation.
E:\FR\FM\22FEN1.SGM
22FEN1
Federal Register / Vol. 72, No. 35 / Thursday, February 22, 2007 / Notices
after publication in the Federal Register
because they clarify the Exchange’s
rules, which should facilitate the
Exchange’s compliance with its rules,
the Commission’s ability to ensure
compliance with such rules, and assist
members and investors in
understanding the application and
scope of the rules.
The Commission finds that the
changes proposed in Amendment No. 1
are consistent with the Exchange Act
and therefore finds good cause to
accelerate approval of Amendment No.
1, pursuant to Section 19(b)(2) of the
Exchange Act.13
B. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning Amendment No.
1, including whether Amendment No. 1
is consistent with the Exchange Act.
Comments may be submitted by any of
the following methods:
rwilkins on PROD1PC63 with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (http://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.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
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 (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 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
13 15
U.S.C. 78s(b)(2).
VerDate Aug<31>2005
14:11 Feb 21, 2007
Jkt 211001
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 Amendment
No. 1 of File Number SR–NYSEArca–
2007–05 and should be submitted on or
before March 15, 2007.
II. Discussion
The Exchange has submitted the
proposed rule change in connection
with the Combination of NYSE Group
with Euronext. As a result of the
Combination, the businesses of NYSE
Group (including the businesses of the
Exchange and NYSE LLC (a New York
limited liability company, registered
national securities exchange and selfregulatory organization)), and Euronext
will be held under a single, publicly
traded holding company named NYSE
Euronext, a Delaware corporation
(‘‘NYSE Euronext’’). Following the
Combination, each of NYSE Group and
Euronext will be a separate subsidiary of
NYSE Euronext, and their respective
businesses and assets will continue to
be held as they are currently held
(subject to any post-closing corporate
reorganization of Euronext). The
proposed rule change is necessary to
effectuate the consummation of the
Combination and will not be operative
until the consummation of the
Combination.
A. Corporate Structure
After the Combination, Arca
Holdings, a Delaware corporation, 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. (‘‘NYSE Arca
Equities’’), a Delaware corporation
formerly known as PCX Equities, Inc.,
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. NYSE
LLC will remain a wholly owned
subsidiary of NYSE Group. NYSE
Market, Inc. (‘‘NYSE Market’’), a
Delaware corporation, and NYSE
Regulation, Inc. (‘‘NYSE Regulation’’), a
New York Type A not-for-profit
PO 00000
Frm 00097
Fmt 4703
Sfmt 4703
8047
corporation, will remain wholly owned
subsidiaries of NYSE LLC.14
The Exchange represents that the
Combination will also have no effect on
the ability of any party to trade
securities on NYSE Arca, NYSE Arca
Equities, or NYSE Market. Euronext and
its subsidiaries will continue to operate
their business and operations in
substantially the same manner as they
are conducted currently, with any
changes subject to the approval of the
European Regulators to the extent
required.
1. NYSE Euronext
Following the Combination, NYSE
Euronext will be a for-profit, publicly
traded stock corporation and will act as
a holding company for the businesses of
NYSE Group and Euronext. NYSE
Euronext will own all of the equity
interests in NYSE Group and its
subsidiaries, including the Exchange
and NYSE Arca, and a majority (if not
all) of the equity interests in Euronext
and its respective subsidiaries. Section
19(b) of the Exchange Act and rule 19b–
4 thereunder require a self-regulatory
organization (‘‘SRO’’) to file proposed
rule changes with the Commission.
Although NYSE Euronext is not an SRO,
certain provisions of the NYSE Euronext
Certificate of Incorporation and NYSE
Euronext Bylaws are rules of an
exchange 15 if they are stated policies,
practice, or interpretations, as defined
in rule 19b–4 under the Exchange Act,
14 For a description of the Combination and
related rule changes regarding NYSE Euronext,
NYSE Group, and the Trust, see the NYSE LLC
Approval Order, supra note 10. See also NYSE LLC
Rule Filing, supra note 8. The Combination
involves certain modifications to the organizational
documents of NYSE Group and of NYSE Euronext,
which upon consummation of the Combination will
be the new indirect parent company of NYSE LLC
and of the Exchange. Provisions of the
organizational documents of NYSE Group and
NYSE Euronext and the Trust Agreement constitute
rules of NYSE LLC and of the Exchange. The
resolutions of the board of directors of NYSE Group
are also rules of NYSE LLC and of the Exchange
requiring Commission approval. Accordingly,
NYSE LLC and the Exchange have each submitted
proposed rule changes to reflect the rule changes to
be implemented in connection with the
Combination.
15 See section 3(a)(27) of the Exchange Act, 15
U.S.C. 78c(a)(27). If NYSE Euronext decides to
change its Amended and Restated Certificate of
Incorporation or Amended and Restated Bylaws,
NYSE Euronext must submit such change to the
board of directors of NYSE LLC, NYSE Market,
NYSE Regulation, NYSE Arca, and NYSE Arca
Equities, and if any or all of such board of directors
shall determine that such amendment or repeal
must be filed with or filed with and approved by
the Commission pursuant to section 19 of the
Exchange Act and the rules thereunder, such
change shall not be effective until filed with or filed
with and approved by the Commission, as
applicable. See proposed NYSE Euronext Certificate
of Incorporation, Article X and proposed NYSE
Euronext Bylaws, Article X, section 10.10(C).
E:\FR\FM\22FEN1.SGM
22FEN1
8048
Federal Register / Vol. 72, No. 35 / Thursday, February 22, 2007 / Notices
of the exchange, and must be filed with
the Commission pursuant to section
19(b)(4) of the Exchange Act and rule
19b–4 thereunder. Accordingly, the
Exchange has filed the NYSE Euronext
Certificate of Incorporation and NYSE
Euronext Bylaws with the Commission.
a. Board of Directors
It is currently contemplated that
immediately after the Combination, the
NYSE Euronext board of directors will
consist of twenty-two directors.16 Each
member of the NYSE Euronext board of
directors (other than the chief executive
officer and deputy chief executive
officer of NYSE Euronext if they are
members of the board of directors) must
satisfy the independence requirements
set forth in the Independence Policy, as
amended from time to time. This
Independence Policy, however, is not
referenced in the organizational
documents of the Exchange or NYSE
Arca Equities,17 and is therefore not
relevant to the Commission’s
consideration of whether the boards of
directors of the Exchange or NYSE Arca
Equities are consistent with the
Exchange Act.
controlling shareholder of an exchange
might be tempted to exercise that
controlling influence by directing the
exchange to refrain from, or the
exchange may hesitate to, diligently
monitor and surveil the member’s
conduct or diligently enforce its rules
and the federal securities laws with
respect to conduct by the member that
violates such provisions.
The Commission finds the ownership
and voting restrictions in the NYSE
Euronext Certificate of Incorporation are
consistent with the Exchange Act. These
requirements should minimize the
potential that a person could improperly
interfere with or restrict the ability of
the Commission, the Exchange, or its
subsidiaries to effectively carry out their
regulatory oversight responsibilities
under the Exchange Act.
2. NYSE Group
The NYSE Euronext Certificate of
Incorporation includes restrictions on
the ability to vote and own shares of
stock of NYSE Euronext.18 Members
that trade on an exchange traditionally
have ownership interests in such
exchange. As the Commission has noted
in the past, however, a member’s
interest in an exchange could become so
large as to cast doubt on whether the
exchange can fairly and objectively
exercise its self-regulatory
responsibilities with respect to that
member.19 A member that is a
Following the Combination, NYSE
Group will merge with a wholly owned
subsidiary of NYSE Euronext and the
surviving corporation will be a wholly
owned subsidiary of NYSE Euronext.
Section 19(b) of the Exchange Act and
Rule 19b–4 thereunder require an SRO
to file proposed rule changes with the
Commission. Although NYSE Group is
not an SRO, certain provisions of its
Amended and Restated Certificate of
Incorporation and Amended and
Restated Bylaws are rules of an
exchange 20 if they are stated policies,
practices, or interpretations, as defined
in Rule 19b–4 of the Exchange Act, of
the exchange, and must be filed with the
Commission pursuant to Section
19(b)(4) of the Exchange Act and Rule
19b–4 thereunder. Accordingly, the
Exchange has filed the proposed NYSE
Group Certificate of Incorporation and
proposed NYSE Group Bylaws with the
Commission.
16 For a detailed description of the provisions
regarding the composition of, and the selection
process for, the NYSE Euronext board of directors,
see NYSE LLC Approval Order, supra note 10.
17 The organizational documents of the Exchange
and NYSE Arca Equities (unlike the organizational
documents of NYSE LLC, NYSE Market and NYSE
Regulation) do not require that any of the members
of the board of directors of the Exchange and NYSE
Arca Equities be members of the board of directors
of NYSE Euronext. See Bylaws of NYSE Arca,
Article III, Section 3.02, and Bylaws of NYSE Arca
Equities, Article III, Section 3.02.
18 See NYSE LLC Approval Order, supra note 10,
for a detailed description of the provisions
regarding restrictions on the ability to vote and own
shares of stock of NYSE Euronext.
19 See Securities Exchange Act Release Nos.
53382 (February 27, 2006), 71 FR 11251 (March 6,
2006) (SR–NYSE–2005–77) (order approving merger
of New York Stock Exchange, Inc. and Archipelago,
and demutualization of New York Stock Exchange,
Inc. (‘‘NYSE Inc.-Archipelago Merger Order’’));
53128 (January 13, 2006), 71 FR 3550 (January 23,
2006) (File No. 10–131); 51149 (February 8, 2005),
70 FR 7531 (February 14, 2005) (SR–CHX–2004–
26); 49718 (May 17, 2004), 69 FR 29611 (May 24,
2004) (SR–PCX–2004–08); 49098 (January 16, 2004),
69 FR 3974 (January 27, 2004) (SR–Phlx–2003–73);
and 49067 (January 13, 2004), 69 FR 2761
(January 20, 2004) (SR–BSE–2003–19).
20 See Section 3(a)(27) of the Exchange Act, 15
U.S.C. 78c(a)(27). If NYSE Group decides to change
its Amended and Restated Certificate of
Incorporation or Amended and Restated Bylaws,
NYSE Group must submit such change to the board
of directors of NYSE LLC, NYSE Market, NYSE
Regulation, NYSE Arca, and NYSE Arca Equities,
and if any or all of such board of directors shall
determine that such amendment or repeal is
required by law or regulation to be filed with or
filed with and approved by the Commission
pursuant to Section 19 of the Exchange Act and the
rules thereunder, such change shall not be effective
until filed with or filed with and approved by the
Commission, as applicable. See proposed NYSE
Group Certificate of Incorporation, Article XII and
proposed Amended and Restated Bylaws of NYSE
Group (‘‘NYSE Group Bylaws’’), Article VII, Section
7.9(b).
rwilkins on PROD1PC63 with NOTICES
b. Voting and Ownership Limitations;
Changes in Control of the Exchange
VerDate Aug<31>2005
14:11 Feb 21, 2007
Jkt 211001
PO 00000
Frm 00098
Fmt 4703
Sfmt 4703
The Exchange has proposed to change
the voting and ownership limitations of
NYSE Group to include a statement that
such limitations will not be applicable
so long as NYSE Euronext and the Trust
collectively own all of the capital stock
of NYSE Group. Instead, while NYSE
Group is a wholly owned subsidiary of
NYSE Euronext, or as provided for in
the Trust Agreement, there shall be no
transfer of the shares of NYSE Group
held by NYSE Euronext without the
approval of the Commission.21 If NYSE
Group ceases to be wholly owned by
NYSE Euronext or the Trust, the current
voting and ownership limitations will
apply.22
The Commission finds the changes to
the ownership and voting restrictions in
the proposed NYSE Group Certificate of
Incorporation are consistent with the
Exchange Act. These requirements
should minimize the potential that a
person could improperly interfere with
or restrict the ability of the Commission
or the ability of the Exchange, NYSE
Market, NYSE Regulation, NYSE Arca
LLC, NYSE Arca, and NYSE Arca
Equities (together, the ‘‘U.S. Regulated
Subsidiaries’’) to effectively carry out
their regulatory oversight
responsibilities under the Exchange Act.
The Exchange requested that the
Commission allow NYSE Euronext to
wholly own and vote all of the
outstanding common stock of NYSE
Group.23 The Commission believes it is
consistent with the Exchange Act to
allow NYSE Euronext to wholly own
and vote all of the outstanding common
stock of NYSE Group.24 The
Commission notes that NYSE Euronext
represents that neither NYSE Euronext
nor any of its related persons is subject
to any statutory disqualification (as
defined in Section 3(a)(39) of the
Exchange Act), or is an ETP Holder of
NYSE Arca Equities, OTP Holder or
OTP Firm of NYSE Arca or member or
member organization of NYSE LLC.
Moreover, NYSE Euronext has
comparable voting and ownership
limitations to NYSE Group. NYSE
Euronext has also included in its
corporate documents certain provisions
designed to maintain the independence
of the U.S. Regulated Subsidiaries’ self21 See proposed NYSE Group Certificate of
Incorporation, Article IV, Section 4(a).
22 See proposed NYSE Group Certificate of
Incorporation, Article IV, Section 4(b).
23 The Exchanged clarified in Amendment No. 1
that NYSE Euronext alone be permitted to wholly
own and vote such shares. See Amendment No. 1
supra note 4.
24 See NYSE LLC Approval Order, supra note 10,
for a description of the proposal that NYSE
Euronext wholly own and vote all of the
outstanding stock of NYSE Group upon the
consummation of the Combination.
E:\FR\FM\22FEN1.SGM
22FEN1
Federal Register / Vol. 72, No. 35 / Thursday, February 22, 2007 / Notices
regulatory functions from NYSE
Euronext and NYSE Group.
Accordingly, the Commission believes
that the acquisition of ownership and
exercise of voting rights of NYSE Group
common stock by NYSE Euronext will
not impair the ability of the Commission
or any of the U.S. Regulated
Subsidiaries to discharge their
respective responsibilities under the
Exchange Act.
rwilkins on PROD1PC63 with NOTICES
3. The Exchange and NYSE Arca
Equities
Following the Combination, NYSE
Arca, which is registered as a national
securities exchange and is an SRO, will
remain a wholly owned subsidiary of
NYSE Arca Holdings, and NYSE Arca
Equities will remain a wholly owned
subsidiary of NYSE Arca. The
Combination will have no effect on the
ability of any party to trade securities on
NYSE Arca or NYSE Arca Equities.
Pursuant to a regulatory services
agreement, NYSE Regulation will
continue to 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 as a result of the Combination.
Article Fourth of the proposed Arca
Holdings Certificate of Incorporation
will be amended to provide for voting
or ownership of the shares of stock of
Arca Holdings by the 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.25 The Commission finds that
these changes to the ownership and
voting restrictions in the proposed Arca
Holdings Certificate of Incorporation are
consistent with the Exchange Act. These
requirements should minimize the
potential that a person could improperly
interfere with or restrict the ability of
the Commission or the U.S. Regulated
Subsidiaries to effectively carry out
their regulatory oversight
responsibilities under the Exchange Act.
B. Relationship of NYSE Euronext,
NYSE Group, and the U.S. Regulated
Subsidiaries; Jurisdiction Over NYSE
Euronext
Although NYSE Euronext itself will
not carry out regulatory functions, its
activities with respect to the operation
of any of the U.S. Regulated
Subsidiaries must be consistent with,
and not interfere with, the U.S.
25 See proposed Arca Holdings Certificate of
Incorporation, Article Fourth (C)(1) and (D)(1).
VerDate Aug<31>2005
14:11 Feb 21, 2007
Jkt 211001
Regulated Subsidiaries’ self-regulatory
obligations. The NYSE Euronext
corporate documents include certain
provisions that are designed to maintain
the independence of the U.S. Regulated
Subsidiaries’ self-regulatory functions
from NYSE Euronext and NYSE Group,
enable the U.S. Regulated Subsidiaries
to operate in a manner that complies
with the federal securities laws,
including the objectives of Sections 6(b)
and 19(g) of the Exchange Act,26 and
facilitate the ability of the U.S.
Regulated Subsidiaries and the
Commission to fulfill their regulatory
and oversight obligations under the
Exchange Act.27
The Commission finds that the
provisions proposed by the Exchange
are consistent with the Exchange Act,
and that they will assist the Exchange in
fulfilling its self-regulatory obligations
and in administering and complying
with the requirements of the Exchange
Act. With respect to the maintenance of
books and records of NYSE Euronext,
the Commission notes that while NYSE
Euronext has the discretion to maintain
books and records that relate to both the
U.S. Regulated Subsidiaries and the
European Market Subsidiaries (each
such book and record, an ‘‘Overlapping
Record’’) in either the United States or
the home jurisdiction of one or more of
the European Market Subsidiaries,
NYSE Euronext has represented to the
Commission that it will maintain in the
United States originals or copies of
Overlapping Records covered by Rule
17a–1(b) under the Exchange Act 28
promptly after creation of such
Overlapping Records.29 The
Commission believes that such actions
by NYSE Euronext with respect to its
books and records are necessary to
ensure that the U.S. Regulated
Subsidiaries comply with the
requirements of Section 17 of the
Exchange Act 30 and Rule 17a–1(b)
thereunder.
Under Section 20(a) of the Exchange
Act,31 any person with a controlling
26 15
U.S.C. 78f(b) and 15 U.S.C. 78s(g).
NYSE LLC Approval Order, Section II.B.,
supra note 10, for a detailed discussion of proposed
provisions in the NYSE Euronext Bylaws regarding
NYSE Euronext compliance with U.S. federal
securities laws; NYSE Euronext books and records;
jurisdiction of the U.S. federal courts and the
Commission; confidential information pertaining to
self-regulation; and responsibilities of NYSE
Euronext directors with respect to the ability of U.S.
Regulated Subsidiaries, NYSE Euronext, and NYSE
Group to carry out their responsibilities under the
Exchange Act, including referring rule violations
and providing funding to NYSE Regulation.
28 17 CFR 240.17a–1(b).
29 See NYSE LLC Rule Filing, supra note 8, at
822.
30 15 U.S.C. 78q.
31 15 U.S.C. 78t(a).
27 See
PO 00000
Frm 00099
Fmt 4703
Sfmt 4703
8049
interest in NYSE LLC or NYSE Arca
shall be jointly and severally liable with
and to the same extent that NYSE LLC
and NYSE Arca are liable under any
provision of the Exchange Act, unless
the controlling person acted in good
faith and did not directly or indirectly
induce the act or acts constituting the
violation or cause of action. In addition,
Section 20(e) of the Exchange Act 32
creates aiding and abetting liability for
any person who knowingly provides
substantial assistance to another person
in violation of any provision of the Act
or rules thereunder. Further, Section
21C of the Exchange Act 33 authorizes
the Commission to enter a cease-anddesist order against any person who has
been ‘‘a cause of’’ a violation of any
provision of the Exchange Act through
an act or omission that the person knew
or should have known would contribute
to the violation. These provisions are
applicable to NYSE Euronext’s and
NYSE Group’s dealings with the U.S.
Regulated Subsidiaries.
C. Trust
NYSE Euronext will operate several
regulated entities located in the United
States and in various jurisdictions in
Europe. In connection with obtaining
regulatory approval of the Combination,
NYSE Euronext proposed to implement
two standby structures, one involving a
Delaware trust and one involving a
Dutch foundation (‘‘Dutch
Foundation’’).34 Pursuant to the terms of
the Trust Agreement,35 the Trust will be
empowered to take actions to mitigate
the effects of any material adverse
change in European law that has an
‘‘extraterritorial’’ impact on the nonEuropean issuers listed on NYSE Group
securities exchanges, non-European
financial services firms that are
members of any NYSE Group securities
exchange, or any NYSE Group securities
exchange.
Upon the occurrence of a material
adverse change of law that continues
after the designated cure periods, the
Trust may exercise certain remedies that
result in a total or partial loss by NYSE
Euronext of operating control over some
of its securities exchanges. The Trust
may require that NYSE Euronext
transfer control over a substantial
portion of its business and assets to the
direction of the Trust. As a result,
32 15
U.S.C. 78t(e).
U.S.C. 78u–3.
34 See NYSE LLC Approval Order, supra note 10,
for a detailed discussion of the Delaware Trust and
Dutch Foundation.
35 See proposed Trust Agreement, by and among
NYSE Euronext, NYSE Group, the Delaware trustee
and the trustees, attached as Exhibit H to
Amendment No. 1.
33 15
E:\FR\FM\22FEN1.SGM
22FEN1
8050
Federal Register / Vol. 72, No. 35 / Thursday, February 22, 2007 / Notices
control of NYSE Group of any NYSE
Group securities exchange may be
assumed by the Trust. As discussed
above, Section 19(b) of the Exchange
Act and Rule 19b–4 thereunder require
an SRO to file a proposed rule change
with the Commission. Although the
Trust is not an SRO, certain provisions
of the Trust Agreement are rules of an
exchange 36 if they are stated policies,
practices, or interpretations, as defined
in Rule 19b–4 under the Exchange
Act,37 of the exchange, and must be
filed with the Commission pursuant to
Section 19(b)(4) of the Exchange Act 38
and Rule 19b–4 thereunder.
Accordingly, the Exchange has filed the
Trust Agreement with the Commission.
The Trust Agreement contains
detailed provisions with respect to
governance of the Trust; remedies that
may be exercised by trustees upon the
occurrence of a material adverse change
in law; the relationship of the Trust,
NYSE Group, and the U.S. Regulated
Subsidiaries; and jurisdiction over the
Trust.39 The Commission finds that the
Trust Agreement’s provisions are
designed to enable the U.S. Regulated
Subsidiaries to operate in a manner that
complies with the federal securities
laws, including the objectives and
requirements of Sections 6(b) and 19(g)
of the Exchange Act,40 and to facilitate
the ability of the U.S. Regulated
Subsidiaries and the Commission to
fulfill their regulatory and oversight
obligations under the Exchange Act,41
and are consistent with the provisions
other entities that directly or indirectly
own or control an SRO have instituted
and that have been approved by the
Commission.42 The Commission finds
that the Trust’s provisions are consistent
with the Exchange Act, and that they are
intended to assist the Exchange in
fulfilling its self-regulatory obligations
and in administering and complying
with the requirements of the Exchange
Act.
Under Section 20(a) of the Exchange
Act,43 any person with a controlling
interest in NYSE LLC and NYSE Arca
shall be jointly and severally liable with
and to the same extent that NYSE LLC
and NYSE Arca are liable under any
provision of the Exchange Act, unless
the controlling person acted in good
faith and did not directly or indirectly
induce the act or acts constituting the
violation or cause of action. In addition,
Section 20(e) of the Exchange Act 44
creates aiding and abetting liability for
any person who knowingly provides
substantial assistance to another person
in violation of any provision of the
Exchange Act or rule thereunder.
Further, Section 21C of the Exchange
Act 45 authorizes the Commission to
enter a cease-and-desist order against
any person who has been ‘‘a cause of’’
a violation of any provision of the
Exchange Act through an act or
omission that the person knew or
should have known would contribute to
the violation. These provisions are
applicable to the Trust and all other
entities controlling the U.S. Regulated
Subsidiaries.
or indirect controlling interest in
Euronext or in one or more subsidiaries
of Euronext that, taken together,
represent a substantial portion of
Euronext’s business, then certain
provisions of the NYSE Euronext
Bylaws and the NYSE Euronext
Certificate of Incorporation shall be
revoked.47 In addition, any officer or
director of NYSE Euronext who is a
European Person shall resign or be
removed from his or her office.
The Commission finds the suspension
or repeal of the above described
provisions of the NYSE Euronext
Bylaws and the NYSE Euronext
Certificate of Incorporation under
circumstances in which the Dutch
Foundation controls a substantial
portion of Euronext’s business, is
consistent with the Exchange Act.
D. Automatic Suspension and Repeal of
Certain Provisions in the NYSE
Euronext Organizational Documents
III. Conclusion
Under the organizational documents
of NYSE Euronext, immediately
following the exercise of a call option
over a substantial portion of Euronext’s
business (a ‘‘Euronext call option’’),
whereby the priority shares or ordinary
shares of Euronext are transferred from
NYSE Euronext to the Dutch
Foundation, and for so long as the
Dutch Foundation shall continue to
hold any priority shares or ordinary
shares of Euronext, or the voting
securities of one or more of the
subsidiaries of Euronext that, taken
together, represent a substantial portion
of Euronext’s business, then certain
provisions of the NYSE Euronext
Bylaws shall be suspended.46
In addition, if after a period of six
months following the exercise of a
Euronext call option, the Dutch
Foundation shall continue to hold any
ordinary or priority shares of Euronext
or any ordinary or priority shares or
similar voting securities of one or more
subsidiaries of Euronext that, taken
together, represent a substantial portion
of Euronext’s business, or if at any time,
NYSE Euronext no longer holds a direct
44 15
U.S.C. 78t(e).
U.S.C. 78u–3.
46 These include the requirement that European
Persons are represented in a certain proportion on
the NYSE Euronext board of directors and the
nominating and governance committee of the NYSE
Euronext board of directors; the requirement of
supermajority board or shareholder approval for
certain extraordinary transactions; the provisions
granting jurisdiction to European regulators over
certain actions of NYSE Euronext and the NYSE
Euronext board of directors; and references to
European regulators, European market subsidiaries
and European disqualified persons appearing in the
NYSE Euronext Bylaws.
rwilkins on PROD1PC63 with NOTICES
45 15
36 See Section 3(a)(27) of the Exchange Act, 15
U.S.C. 78c(a)(27).
37 17 CFR 240.19b–4.
38 15 U.S.C. 78s(b).
39 See NYSE LLC Approval Order, Sections II.C
and II.D, supra note 10, for a detailed description
of the provisions contained in the Trust Agreement.
40 15 U.S.C. 78f(b) and 15 U.S.C. 78s(g).
41 See Trust Agreement, Articles V, VI, and VIII.
42 See, e.g., NYSE Inc.-Archipelago Merger Order,
supra note 19.
43 15 U.S.C. 78t(a).
VerDate Aug<31>2005
14:11 Feb 21, 2007
Jkt 211001
PO 00000
Frm 00100
Fmt 4703
Sfmt 4703
For the foregoing reasons, the
Commission finds that the proposed
rule change is consistent with the
Exchange Act and the rules and
regulations thereunder applicable to a
national securities exchange.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Exchange Act 48
that the proposed rule change (SR–
NYSEArca–2007–05), as amended by
Amendment No. 1, is approved on an
accelerated basis.
By the Commission.
Nancy M. Morris,
Secretary.
[FR Doc. E7–2910 Filed 2–21–07; 8:45 am]
BILLING CODE 8011–01–P
47 These include the provisions of the NYSE
Euronext Bylaws subject to suspension; the
references in the NYSE Euronext Certificate of
Incorporation and NYSE Euronext Bylaws to
European regulators, European exchange
regulations, European market subsidiaries,
European regulated markets, Europe and European
disqualified persons; the provisions in the NYSE
Euronext Certificate of Incorporation and NYSE
Euronext Bylaws requiring that amendments to
such certificate of incorporation or bylaws be
submitted to the European market subsidiaries and,
if applicable, filed with and approved by a
European regulator; and the provisions in the NYSE
Euronext Bylaws requiring approval of either twothirds or more of the NYSE Euronext directors or
80% of the votes entitled to be cast by the holders
of the then-outstanding shares of capital stock of
NYSE Euronext entitled to vote generally in the
election of directors to amend certain bylaw
provisions.
48 15 U.S.C. 78s(b)(2).
E:\FR\FM\22FEN1.SGM
22FEN1
Agencies
[Federal Register Volume 72, Number 35 (Thursday, February 22, 2007)]
[Notices]
[Pages 8046-8050]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-2910]
[[Page 8046]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55294; File No. SR-NYSEArca-2007-05]
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting
Accelerated Approval of Proposed Rule Change and Notice of Filing and
Order Granting Accelerated Approval to Amendment No. 1 Regarding a
Proposed Combination Between NYSE Group, Inc. and Euronext N.V.
February 14, 2007.
I. Introduction
On January 12, 2007, NYSE Arca, Inc. (``NYSE Arca'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934, as amended, (``Exchange Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change regarding the proposed business
combination (``Combination'') between NYSE Group, Inc. (``NYSE Group'')
and Euronext N.V. (``Euronext''). The proposed rule change was
published for comment in the Federal Register on January 19, 2007.\3\
The Commission received no comments on the proposal. On February 13,
2007, the Exchange filed Amendment No. 1 to the proposed rule
change.\4\ This order grants accelerated approval to the proposed rule
change, grants accelerated approval to Amendment No. 1, and solicits
comments from interested persons on Amendment No. 1.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(l).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 55109 (January 16,
2007), 72 FR 2578 (``Notice'').
\4\ See Partial Amendment dated February 13, 2007 (``Amendment
No. 1''). The text of Amendment No. 1 and Exhibits 5C, 5D, 5G, and
5H, which set forth certain governing documents as proposed to be
amended, are available on the Commission's Web site (http://
www.sec.gov/rules/sro.shtml), at the Commission's Public Reference
Room, at the Exchange, and on the Exchange's Web site (http://
www.nysearca.com).
---------------------------------------------------------------------------
The Commission has reviewed carefully the proposed rule change and
finds that the proposed rule change is consistent with the requirements
of the Exchange Act and the rules and regulations thereunder applicable
to a national securities exchange.\5\ In particular, the Commission
finds that the proposed rule change is consistent with Section 6(b) of
the Exchange Act,\6\ which, among other things, requires a national
securities exchange to be so organized and have the capacity to be able
to carry out the purposes of the Exchange Act and to enforce compliance
by its members and persons associated with its members with the
provisions of the Exchange Act, the rules and regulations thereunder,
and the rules of the exchange, and assure the fair representation of
its members in the selection of its directors and administration of its
affairs, and provide that one or more directors shall be representative
of issuers and investors and not be associated with a member of the
exchange, broker, or dealer. Section 6(b) of the Exchange Act \7\ also
requires that the rules of the exchange be designed to promote just and
equitable principles of trade, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest.
---------------------------------------------------------------------------
\5\ In approving the proposed rule change, the Commission has
considered its impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
\6\ 15 U.S.C. 78f(b).
\7\ Id.
---------------------------------------------------------------------------
The Commission finds good cause for approving this proposed rule
change before the thirtieth day after the publication of notice thereof
in the Federal Register. This proposed rule change seeks to make
changes to the following documents: The Amended and Restated
Certificate of Incorporation of NYSE Euronext (``NYSE Euronext
Certificate of Incorporation''); the Amended and Restated Bylaws of
NYSE Euronext (``NYSE Euronext Bylaws''); the NYSE Euronext Director,
Independence Policy (``Independence Policy''), which policy will
replace the current NYSE Group Director Independence Policy; the
proposed Amended and Restated Certificate of Incorporation of NYSE
Group (``NYSE Group Certificate of Incorporation''); the proposed
Amended and Restated Bylaws of NYSE Group (``NYSE Group Bylaws''); the
resolutions of the board of directors of NYSE Group; and the proposed
Trust Agreement for the Delaware Trust (``Trust Agreement''). All of
the proposed changes to these documents were published for comment in
connection with the proposed rule change submitted by the New York
Stock Exchange LLC (``NYSE LLC'') in connection with the
Combination.\8\ In addition to these changes, the Exchange has proposed
changes to the proposed Amended and Restated Certificate of
Incorporation of Archipelago Holdings, Inc. (``Arca Holdings'') to
allow for the ownership and voting of shares of Arca Holdings by the
Delaware Trust (``Trust'').\9\ The Commission has received no comment
letters on this proposal. The Commission finds good cause to accelerate
approval of this proposal to allow the timing of this approval to
coincide with the approval of the corresponding filing by the NYSE
LLC.\10\
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release No. 55026 (December 29,
2006), 72 FR 814 (January 8, 2007) (``NYSE LLC Rule Filing'').
\9\ Similar changes have been proposed for NYSE Group. See
proposed NYSE Group Certificate of Incorporation, Article IV,
Section 4.
\10\ See Securities Exchange Act Release No. 55293 (February 14,
2007) (approval order for SR-NYSE-2006-120 (``NYSE LLC Approval
Order'')).
---------------------------------------------------------------------------
A. Accelerated Approval of Amendment No. 1
The Commission also finds good cause for approving Amendment No. 1
prior to the thirtieth day after publishing notice of Amendment No. 1
in the Federal Register pursuant to Section 19(b)(2) of the Exchange
Act.\11\ In Amendment No. 1, the Exchange made technical revisions to
proposed Article VII, Section 2 of the proposed NYSE Group Certificate
of Incorporation relating to quorum requirements for each meeting of
stockholders.\12\ These changes are necessary to clarify the proposal.
The Commission finds good cause to accelerate approval of these changes
prior to the thirtieth day after publication in the Federal Register
because they clarify the Exchange's rules, which should facilitate the
Exchange's compliance with its rules, and the Commission's ability to
ensure compliance with such rules, and assist members and investors in
understanding the application and scope of the rules.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78s(b)(2). Pursuant to Section 19(b)(2) of the
Exchange Act, the Commission may not approve any proposed rule
change, or amendment thereto, prior to the thirtieth day after the
date of publication of the notice thereof, unless the Commission
finds good cause for so doing.
\12\ In the Notice, the Exchange mistakenly showed proposed
deletions to the current quorum requirements. The Exchange is not
proposing to change the quorum requirements that exist in the
current NYSE Group Certificate of Incorporation.
---------------------------------------------------------------------------
In addition, the Exchange made certain clarifying, conforming,
technical, non-material, and non-substantive changes to the proposed
Amended and Restated Certificate of Incorporation of Arca Holdings
(``Arca Holdings Certificate of Incorporation''), the proposed NYSE
Group Certificate of Incorporation, the Independence Policy, and the
proposed Trust Agreement, which raise no new or novel issues. These
changes are non-substantive and technical in nature and are necessary
to reflect the changes from the current rules of the Exchange and
clarify the proposal. The Commission finds good cause exists to
accelerate approval of these changes prior to the thirtieth day
[[Page 8047]]
after publication in the Federal Register because they clarify the
Exchange's rules, which should facilitate the Exchange's compliance
with its rules, the Commission's ability to ensure compliance with such
rules, and assist members and investors in understanding the
application and scope of the rules.
The Commission finds that the changes proposed in Amendment No. 1
are consistent with the Exchange Act and therefore finds good cause to
accelerate approval of Amendment No. 1, pursuant to Section 19(b)(2) of
the Exchange Act.\13\
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------
B. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning Amendment No. 1, including whether Amendment No. 1
is consistent with the Exchange Act. Comments may be submitted by any
of the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
Send an 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, 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 (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 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
Amendment No. 1 of File Number SR-NYSEArca-2007-05 and should be
submitted on or before March 15, 2007.
II. Discussion
The Exchange has submitted the proposed rule change in connection
with the Combination of NYSE Group with Euronext. As a result of the
Combination, the businesses of NYSE Group (including the businesses of
the Exchange and NYSE LLC (a New York limited liability company,
registered national securities exchange and self-regulatory
organization)), and Euronext will be held under a single, publicly
traded holding company named NYSE Euronext, a Delaware corporation
(``NYSE Euronext''). Following the Combination, each of NYSE Group and
Euronext will be a separate subsidiary of NYSE Euronext, and their
respective businesses and assets will continue to be held as they are
currently held (subject to any post-closing corporate reorganization of
Euronext). The proposed rule change is necessary to effectuate the
consummation of the Combination and will not be operative until the
consummation of the Combination.
A. Corporate Structure
After the Combination, Arca Holdings, a Delaware corporation, 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. (``NYSE Arca Equities''), a Delaware corporation
formerly known as PCX Equities, Inc., 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. NYSE LLC will remain a wholly owned
subsidiary of NYSE Group. NYSE Market, Inc. (``NYSE Market''), a
Delaware corporation, and NYSE Regulation, Inc. (``NYSE Regulation''),
a New York Type A not-for-profit corporation, will remain wholly owned
subsidiaries of NYSE LLC.\14\
---------------------------------------------------------------------------
\14\ For a description of the Combination and related rule
changes regarding NYSE Euronext, NYSE Group, and the Trust, see the
NYSE LLC Approval Order, supra note 10. See also NYSE LLC Rule
Filing, supra note 8. The Combination involves certain modifications
to the organizational documents of NYSE Group and of NYSE Euronext,
which upon consummation of the Combination will be the new indirect
parent company of NYSE LLC and of the Exchange. Provisions of the
organizational documents of NYSE Group and NYSE Euronext and the
Trust Agreement constitute rules of NYSE LLC and of the Exchange.
The resolutions of the board of directors of NYSE Group are also
rules of NYSE LLC and of the Exchange requiring Commission approval.
Accordingly, NYSE LLC and the Exchange have each submitted proposed
rule changes to reflect the rule changes to be implemented in
connection with the Combination.
---------------------------------------------------------------------------
The Exchange represents that the Combination will also have no
effect on the ability of any party to trade securities on NYSE Arca,
NYSE Arca Equities, or NYSE Market. Euronext and its subsidiaries will
continue to operate their business and operations in substantially the
same manner as they are conducted currently, with any changes subject
to the approval of the European Regulators to the extent required.
1. NYSE Euronext
Following the Combination, NYSE Euronext will be a for-profit,
publicly traded stock corporation and will act as a holding company for
the businesses of NYSE Group and Euronext. NYSE Euronext will own all
of the equity interests in NYSE Group and its subsidiaries, including
the Exchange and NYSE Arca, and a majority (if not all) of the equity
interests in Euronext and its respective subsidiaries. Section 19(b) of
the Exchange Act and rule 19b-4 thereunder require a self-regulatory
organization (``SRO'') to file proposed rule changes with the
Commission. Although NYSE Euronext is not an SRO, certain provisions of
the NYSE Euronext Certificate of Incorporation and NYSE Euronext Bylaws
are rules of an exchange \15\ if they are stated policies, practice, or
interpretations, as defined in rule 19b-4 under the Exchange Act,
[[Page 8048]]
of the exchange, and must be filed with the Commission pursuant to
section 19(b)(4) of the Exchange Act and rule 19b-4 thereunder.
Accordingly, the Exchange has filed the NYSE Euronext Certificate of
Incorporation and NYSE Euronext Bylaws with the Commission.
---------------------------------------------------------------------------
\15\ See section 3(a)(27) of the Exchange Act, 15 U.S.C.
78c(a)(27). If NYSE Euronext decides to change its Amended and
Restated Certificate of Incorporation or Amended and Restated
Bylaws, NYSE Euronext must submit such change to the board of
directors of NYSE LLC, NYSE Market, NYSE Regulation, NYSE Arca, and
NYSE Arca Equities, and if any or all of such board of directors
shall determine that such amendment or repeal must be filed with or
filed with and approved by the Commission pursuant to section 19 of
the Exchange Act and the rules thereunder, such change shall not be
effective until filed with or filed with and approved by the
Commission, as applicable. See proposed NYSE Euronext Certificate of
Incorporation, Article X and proposed NYSE Euronext Bylaws, Article
X, section 10.10(C).
---------------------------------------------------------------------------
a. Board of Directors
It is currently contemplated that immediately after the
Combination, the NYSE Euronext board of directors will consist of
twenty-two directors.\16\ Each member of the NYSE Euronext board of
directors (other than the chief executive officer and deputy chief
executive officer of NYSE Euronext if they are members of the board of
directors) must satisfy the independence requirements set forth in the
Independence Policy, as amended from time to time. This Independence
Policy, however, is not referenced in the organizational documents of
the Exchange or NYSE Arca Equities,\17\ and is therefore not relevant
to the Commission's consideration of whether the boards of directors of
the Exchange or NYSE Arca Equities are consistent with the Exchange
Act.
---------------------------------------------------------------------------
\16\ For a detailed description of the provisions regarding the
composition of, and the selection process for, the NYSE Euronext
board of directors, see NYSE LLC Approval Order, supra note 10.
\17\ The organizational documents of the Exchange and NYSE Arca
Equities (unlike the organizational documents of NYSE LLC, NYSE
Market and NYSE Regulation) do not require that any of the members
of the board of directors of the Exchange and NYSE Arca Equities be
members of the board of directors of NYSE Euronext. See Bylaws of
NYSE Arca, Article III, Section 3.02, and Bylaws of NYSE Arca
Equities, Article III, Section 3.02.
---------------------------------------------------------------------------
b. Voting and Ownership Limitations; Changes in Control of the Exchange
The NYSE Euronext Certificate of Incorporation includes
restrictions on the ability to vote and own shares of stock of NYSE
Euronext.\18\ Members that trade on an exchange traditionally have
ownership interests in such exchange. As the Commission has noted in
the past, however, a member's interest in an exchange could become so
large as to cast doubt on whether the exchange can fairly and
objectively exercise its self-regulatory responsibilities with respect
to that member.\19\ A member that is a controlling shareholder of an
exchange might be tempted to exercise that controlling influence by
directing the exchange to refrain from, or the exchange may hesitate
to, diligently monitor and surveil the member's conduct or diligently
enforce its rules and the federal securities laws with respect to
conduct by the member that violates such provisions.
---------------------------------------------------------------------------
\18\ See NYSE LLC Approval Order, supra note 10, for a detailed
description of the provisions regarding restrictions on the ability
to vote and own shares of stock of NYSE Euronext.
\19\ See Securities Exchange Act Release Nos. 53382 (February
27, 2006), 71 FR 11251 (March 6, 2006) (SR-NYSE-2005-77) (order
approving merger of New York Stock Exchange, Inc. and Archipelago,
and demutualization of New York Stock Exchange, Inc. (``NYSE Inc.-
Archipelago Merger Order'')); 53128 (January 13, 2006), 71 FR 3550
(January 23, 2006) (File No. 10-131); 51149 (February 8, 2005), 70
FR 7531 (February 14, 2005) (SR-CHX-2004-26); 49718 (May 17, 2004),
69 FR 29611 (May 24, 2004) (SR-PCX-2004-08); 49098 (January 16,
2004), 69 FR 3974 (January 27, 2004) (SR-Phlx-2003-73); and 49067
(January 13, 2004), 69 FR 2761 (January 20, 2004) (SR-BSE-2003-19).
---------------------------------------------------------------------------
The Commission finds the ownership and voting restrictions in the
NYSE Euronext Certificate of Incorporation are consistent with the
Exchange Act. These requirements should minimize the potential that a
person could improperly interfere with or restrict the ability of the
Commission, the Exchange, or its subsidiaries to effectively carry out
their regulatory oversight responsibilities under the Exchange Act.
2. NYSE Group
Following the Combination, NYSE Group will merge with a wholly
owned subsidiary of NYSE Euronext and the surviving corporation will be
a wholly owned subsidiary of NYSE Euronext. Section 19(b) of the
Exchange Act and Rule 19b-4 thereunder require an SRO to file proposed
rule changes with the Commission. Although NYSE Group is not an SRO,
certain provisions of its Amended and Restated Certificate of
Incorporation and Amended and Restated Bylaws are rules of an exchange
\20\ if they are stated policies, practices, or interpretations, as
defined in Rule 19b-4 of the Exchange Act, of the exchange, and must be
filed with the Commission pursuant to Section 19(b)(4) of the Exchange
Act and Rule 19b-4 thereunder. Accordingly, the Exchange has filed the
proposed NYSE Group Certificate of Incorporation and proposed NYSE
Group Bylaws with the Commission.
---------------------------------------------------------------------------
\20\ See Section 3(a)(27) of the Exchange Act, 15 U.S.C.
78c(a)(27). If NYSE Group decides to change its Amended and Restated
Certificate of Incorporation or Amended and Restated Bylaws, NYSE
Group must submit such change to the board of directors of NYSE LLC,
NYSE Market, NYSE Regulation, NYSE Arca, and NYSE Arca Equities, and
if any or all of such board of directors shall determine that such
amendment or repeal is required by law or regulation to be filed
with or filed with and approved by the Commission pursuant to
Section 19 of the Exchange Act and the rules thereunder, such change
shall not be effective until filed with or filed with and approved
by the Commission, as applicable. See proposed NYSE Group
Certificate of Incorporation, Article XII and proposed Amended and
Restated Bylaws of NYSE Group (``NYSE Group Bylaws''), Article VII,
Section 7.9(b).
---------------------------------------------------------------------------
The Exchange has proposed to change the voting and ownership
limitations of NYSE Group to include a statement that such limitations
will not be applicable so long as NYSE Euronext and the Trust
collectively own all of the capital stock of NYSE Group. Instead, while
NYSE Group is a wholly owned subsidiary of NYSE Euronext, or as
provided for in the Trust Agreement, there shall be no transfer of the
shares of NYSE Group held by NYSE Euronext without the approval of the
Commission.\21\ If NYSE Group ceases to be wholly owned by NYSE
Euronext or the Trust, the current voting and ownership limitations
will apply.\22\
---------------------------------------------------------------------------
\21\ See proposed NYSE Group Certificate of Incorporation,
Article IV, Section 4(a).
\22\ See proposed NYSE Group Certificate of Incorporation,
Article IV, Section 4(b).
---------------------------------------------------------------------------
The Commission finds the changes to the ownership and voting
restrictions in the proposed NYSE Group Certificate of Incorporation
are consistent with the Exchange Act. These requirements should
minimize the potential that a person could improperly interfere with or
restrict the ability of the Commission or the ability of the Exchange,
NYSE Market, NYSE Regulation, NYSE Arca LLC, NYSE Arca, and NYSE Arca
Equities (together, the ``U.S. Regulated Subsidiaries'') to effectively
carry out their regulatory oversight responsibilities under the
Exchange Act.
The Exchange requested that the Commission allow NYSE Euronext to
wholly own and vote all of the outstanding common stock of NYSE
Group.\23\ The Commission believes it is consistent with the Exchange
Act to allow NYSE Euronext to wholly own and vote all of the
outstanding common stock of NYSE Group.\24\ The Commission notes that
NYSE Euronext represents that neither NYSE Euronext nor any of its
related persons is subject to any statutory disqualification (as
defined in Section 3(a)(39) of the Exchange Act), or is an ETP Holder
of NYSE Arca Equities, OTP Holder or OTP Firm of NYSE Arca or member or
member organization of NYSE LLC. Moreover, NYSE Euronext has comparable
voting and ownership limitations to NYSE Group. NYSE Euronext has also
included in its corporate documents certain provisions designed to
maintain the independence of the U.S. Regulated Subsidiaries' self-
[[Page 8049]]
regulatory functions from NYSE Euronext and NYSE Group. Accordingly,
the Commission believes that the acquisition of ownership and exercise
of voting rights of NYSE Group common stock by NYSE Euronext will not
impair the ability of the Commission or any of the U.S. Regulated
Subsidiaries to discharge their respective responsibilities under the
Exchange Act.
---------------------------------------------------------------------------
\23\ The Exchanged clarified in Amendment No. 1 that NYSE
Euronext alone be permitted to wholly own and vote such shares. See
Amendment No. 1 supra note 4.
\24\ See NYSE LLC Approval Order, supra note 10, for a
description of the proposal that NYSE Euronext wholly own and vote
all of the outstanding stock of NYSE Group upon the consummation of
the Combination.
---------------------------------------------------------------------------
3. The Exchange and NYSE Arca Equities
Following the Combination, NYSE Arca, which is registered as a
national securities exchange and is an SRO, will remain a wholly owned
subsidiary of NYSE Arca Holdings, and NYSE Arca Equities will remain a
wholly owned subsidiary of NYSE Arca. The Combination will have no
effect on the ability of any party to trade securities on NYSE Arca or
NYSE Arca Equities. Pursuant to a regulatory services agreement, NYSE
Regulation will continue to 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 as a result
of the Combination.
Article Fourth of the proposed Arca Holdings Certificate of
Incorporation will be amended to provide for voting or ownership of the
shares of stock of Arca Holdings by the 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.\25\ The
Commission finds that these changes to the ownership and voting
restrictions in the proposed Arca Holdings Certificate of Incorporation
are consistent with the Exchange Act. These requirements should
minimize the potential that a person could improperly interfere with or
restrict the ability of the Commission or the U.S. Regulated
Subsidiaries to effectively carry out their regulatory oversight
responsibilities under the Exchange Act.
---------------------------------------------------------------------------
\25\ See proposed Arca Holdings Certificate of Incorporation,
Article Fourth (C)(1) and (D)(1).
---------------------------------------------------------------------------
B. Relationship of NYSE Euronext, NYSE Group, and the U.S. Regulated
Subsidiaries; Jurisdiction Over NYSE Euronext
Although NYSE Euronext itself will not carry out regulatory
functions, its activities with respect to the operation of any of the
U.S. Regulated Subsidiaries must be consistent with, and not interfere
with, the U.S. Regulated Subsidiaries' self-regulatory obligations. The
NYSE Euronext corporate documents include certain provisions that are
designed to maintain the independence of the U.S. Regulated
Subsidiaries' self-regulatory functions from NYSE Euronext and NYSE
Group, enable the U.S. Regulated Subsidiaries to operate in a manner
that complies with the federal securities laws, including the
objectives of Sections 6(b) and 19(g) of the Exchange Act,\26\ and
facilitate the ability of the U.S. Regulated Subsidiaries and the
Commission to fulfill their regulatory and oversight obligations under
the Exchange Act.\27\
---------------------------------------------------------------------------
\26\ 15 U.S.C. 78f(b) and 15 U.S.C. 78s(g).
\27\ See NYSE LLC Approval Order, Section II.B., supra note 10,
for a detailed discussion of proposed provisions in the NYSE
Euronext Bylaws regarding NYSE Euronext compliance with U.S. federal
securities laws; NYSE Euronext books and records; jurisdiction of
the U.S. federal courts and the Commission; confidential information
pertaining to self-regulation; and responsibilities of NYSE Euronext
directors with respect to the ability of U.S. Regulated
Subsidiaries, NYSE Euronext, and NYSE Group to carry out their
responsibilities under the Exchange Act, including referring rule
violations and providing funding to NYSE Regulation.
---------------------------------------------------------------------------
The Commission finds that the provisions proposed by the Exchange
are consistent with the Exchange Act, and that they will assist the
Exchange in fulfilling its self-regulatory obligations and in
administering and complying with the requirements of the Exchange Act.
With respect to the maintenance of books and records of NYSE Euronext,
the Commission notes that while NYSE Euronext has the discretion to
maintain books and records that relate to both the U.S. Regulated
Subsidiaries and the European Market Subsidiaries (each such book and
record, an ``Overlapping Record'') in either the United States or the
home jurisdiction of one or more of the European Market Subsidiaries,
NYSE Euronext has represented to the Commission that it will maintain
in the United States originals or copies of Overlapping Records covered
by Rule 17a-1(b) under the Exchange Act \28\ promptly after creation of
such Overlapping Records.\29\ The Commission believes that such actions
by NYSE Euronext with respect to its books and records are necessary to
ensure that the U.S. Regulated Subsidiaries comply with the
requirements of Section 17 of the Exchange Act \30\ and Rule 17a-1(b)
thereunder.
---------------------------------------------------------------------------
\28\ 17 CFR 240.17a-1(b).
\29\ See NYSE LLC Rule Filing, supra note 8, at 822.
\30\ 15 U.S.C. 78q.
---------------------------------------------------------------------------
Under Section 20(a) of the Exchange Act,\31\ any person with a
controlling interest in NYSE LLC or NYSE Arca shall be jointly and
severally liable with and to the same extent that NYSE LLC and NYSE
Arca are liable under any provision of the Exchange Act, unless the
controlling person acted in good faith and did not directly or
indirectly induce the act or acts constituting the violation or cause
of action. In addition, Section 20(e) of the Exchange Act \32\ creates
aiding and abetting liability for any person who knowingly provides
substantial assistance to another person in violation of any provision
of the Act or rules thereunder. Further, Section 21C of the Exchange
Act \33\ authorizes the Commission to enter a cease-and-desist order
against any person who has been ``a cause of'' a violation of any
provision of the Exchange Act through an act or omission that the
person knew or should have known would contribute to the violation.
These provisions are applicable to NYSE Euronext's and NYSE Group's
dealings with the U.S. Regulated Subsidiaries.
---------------------------------------------------------------------------
\31\ 15 U.S.C. 78t(a).
\32\ 15 U.S.C. 78t(e).
\33\ 15 U.S.C. 78u-3.
---------------------------------------------------------------------------
C. Trust
NYSE Euronext will operate several regulated entities located in
the United States and in various jurisdictions in Europe. In connection
with obtaining regulatory approval of the Combination, NYSE Euronext
proposed to implement two standby structures, one involving a Delaware
trust and one involving a Dutch foundation (``Dutch Foundation'').\34\
Pursuant to the terms of the Trust Agreement,\35\ the Trust will be
empowered to take actions to mitigate the effects of any material
adverse change in European law that has an ``extraterritorial'' impact
on the non-European issuers listed on NYSE Group securities exchanges,
non-European financial services firms that are members of any NYSE
Group securities exchange, or any NYSE Group securities exchange.
---------------------------------------------------------------------------
\34\ See NYSE LLC Approval Order, supra note 10, for a detailed
discussion of the Delaware Trust and Dutch Foundation.
\35\ See proposed Trust Agreement, by and among NYSE Euronext,
NYSE Group, the Delaware trustee and the trustees, attached as
Exhibit H to Amendment No. 1.
---------------------------------------------------------------------------
Upon the occurrence of a material adverse change of law that
continues after the designated cure periods, the Trust may exercise
certain remedies that result in a total or partial loss by NYSE
Euronext of operating control over some of its securities exchanges.
The Trust may require that NYSE Euronext transfer control over a
substantial portion of its business and assets to the direction of the
Trust. As a result,
[[Page 8050]]
control of NYSE Group of any NYSE Group securities exchange may be
assumed by the Trust. As discussed above, Section 19(b) of the Exchange
Act and Rule 19b-4 thereunder require an SRO to file a proposed rule
change with the Commission. Although the Trust is not an SRO, certain
provisions of the Trust Agreement are rules of an exchange \36\ if they
are stated policies, practices, or interpretations, as defined in Rule
19b-4 under the Exchange Act,\37\ of the exchange, and must be filed
with the Commission pursuant to Section 19(b)(4) of the Exchange Act
\38\ and Rule 19b-4 thereunder. Accordingly, the Exchange has filed the
Trust Agreement with the Commission.
---------------------------------------------------------------------------
\36\ See Section 3(a)(27) of the Exchange Act, 15 U.S.C.
78c(a)(27).
\37\ 17 CFR 240.19b-4.
\38\ 15 U.S.C. 78s(b).
---------------------------------------------------------------------------
The Trust Agreement contains detailed provisions with respect to
governance of the Trust; remedies that may be exercised by trustees
upon the occurrence of a material adverse change in law; the
relationship of the Trust, NYSE Group, and the U.S. Regulated
Subsidiaries; and jurisdiction over the Trust.\39\ The Commission finds
that the Trust Agreement's provisions are designed to enable the U.S.
Regulated Subsidiaries to operate in a manner that complies with the
federal securities laws, including the objectives and requirements of
Sections 6(b) and 19(g) of the Exchange Act,\40\ and to facilitate the
ability of the U.S. Regulated Subsidiaries and the Commission to
fulfill their regulatory and oversight obligations under the Exchange
Act,\41\ and are consistent with the provisions other entities that
directly or indirectly own or control an SRO have instituted and that
have been approved by the Commission.\42\ The Commission finds that the
Trust's provisions are consistent with the Exchange Act, and that they
are intended to assist the Exchange in fulfilling its self-regulatory
obligations and in administering and complying with the requirements of
the Exchange Act.
---------------------------------------------------------------------------
\39\ See NYSE LLC Approval Order, Sections II.C and II.D, supra
note 10, for a detailed description of the provisions contained in
the Trust Agreement.
\40\ 15 U.S.C. 78f(b) and 15 U.S.C. 78s(g).
\41\ See Trust Agreement, Articles V, VI, and VIII.
\42\ See, e.g., NYSE Inc.-Archipelago Merger Order, supra note
19.
---------------------------------------------------------------------------
Under Section 20(a) of the Exchange Act,\43\ any person with a
controlling interest in NYSE LLC and NYSE Arca shall be jointly and
severally liable with and to the same extent that NYSE LLC and NYSE
Arca are liable under any provision of the Exchange Act, unless the
controlling person acted in good faith and did not directly or
indirectly induce the act or acts constituting the violation or cause
of action. In addition, Section 20(e) of the Exchange Act \44\ creates
aiding and abetting liability for any person who knowingly provides
substantial assistance to another person in violation of any provision
of the Exchange Act or rule thereunder. Further, Section 21C of the
Exchange Act \45\ authorizes the Commission to enter a cease-and-desist
order against any person who has been ``a cause of'' a violation of any
provision of the Exchange Act through an act or omission that the
person knew or should have known would contribute to the violation.
These provisions are applicable to the Trust and all other entities
controlling the U.S. Regulated Subsidiaries.
---------------------------------------------------------------------------
\43\ 15 U.S.C. 78t(a).
\44\ 15 U.S.C. 78t(e).
\45\ 15 U.S.C. 78u-3.
---------------------------------------------------------------------------
D. Automatic Suspension and Repeal of Certain Provisions in the NYSE
Euronext Organizational Documents
Under the organizational documents of NYSE Euronext, immediately
following the exercise of a call option over a substantial portion of
Euronext's business (a ``Euronext call option''), whereby the priority
shares or ordinary shares of Euronext are transferred from NYSE
Euronext to the Dutch Foundation, and for so long as the Dutch
Foundation shall continue to hold any priority shares or ordinary
shares of Euronext, or the voting securities of one or more of the
subsidiaries of Euronext that, taken together, represent a substantial
portion of Euronext's business, then certain provisions of the NYSE
Euronext Bylaws shall be suspended.\46\
---------------------------------------------------------------------------
\46\ These include the requirement that European Persons are
represented in a certain proportion on the NYSE Euronext board of
directors and the nominating and governance committee of the NYSE
Euronext board of directors; the requirement of supermajority board
or shareholder approval for certain extraordinary transactions; the
provisions granting jurisdiction to European regulators over certain
actions of NYSE Euronext and the NYSE Euronext board of directors;
and references to European regulators, European market subsidiaries
and European disqualified persons appearing in the NYSE Euronext
Bylaws.
---------------------------------------------------------------------------
In addition, if after a period of six months following the exercise
of a Euronext call option, the Dutch Foundation shall continue to hold
any ordinary or priority shares of Euronext or any ordinary or priority
shares or similar voting securities of one or more subsidiaries of
Euronext that, taken together, represent a substantial portion of
Euronext's business, or if at any time, NYSE Euronext no longer holds a
direct or indirect controlling interest in Euronext or in one or more
subsidiaries of Euronext that, taken together, represent a substantial
portion of Euronext's business, then certain provisions of the NYSE
Euronext Bylaws and the NYSE Euronext Certificate of Incorporation
shall be revoked.\47\ In addition, any officer or director of NYSE
Euronext who is a European Person shall resign or be removed from his
or her office.
---------------------------------------------------------------------------
\47\ These include the provisions of the NYSE Euronext Bylaws
subject to suspension; the references in the NYSE Euronext
Certificate of Incorporation and NYSE Euronext Bylaws to European
regulators, European exchange regulations, European market
subsidiaries, European regulated markets, Europe and European
disqualified persons; the provisions in the NYSE Euronext
Certificate of Incorporation and NYSE Euronext Bylaws requiring that
amendments to such certificate of incorporation or bylaws be
submitted to the European market subsidiaries and, if applicable,
filed with and approved by a European regulator; and the provisions
in the NYSE Euronext Bylaws requiring approval of either two-thirds
or more of the NYSE Euronext directors or 80% of the votes entitled
to be cast by the holders of the then-outstanding shares of capital
stock of NYSE Euronext entitled to vote generally in the election of
directors to amend certain bylaw provisions.
---------------------------------------------------------------------------
The Commission finds the suspension or repeal of the above
described provisions of the NYSE Euronext Bylaws and the NYSE Euronext
Certificate of Incorporation under circumstances in which the Dutch
Foundation controls a substantial portion of Euronext's business, is
consistent with the Exchange Act.
III. Conclusion
For the foregoing reasons, the Commission finds that the proposed
rule change is consistent with the Exchange Act and the rules and
regulations thereunder applicable to a national securities exchange.
It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act \48\ that the proposed rule change (SR-NYSEArca-2007-05),
as amended by Amendment No. 1, is approved on an accelerated basis.
---------------------------------------------------------------------------
\48\ 15 U.S.C. 78s(b)(2).
By the Commission.
Nancy M. Morris,
Secretary.
[FR Doc. E7-2910 Filed 2-21-07; 8:45 am]
BILLING CODE 8011-01-P