Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto in Connection With the Proposed Acquisition of The Amex Membership Corporation, 46117-46122 [E8-18146]

Download as PDF Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices 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 No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 7 and Rule 19b–4(f)(6) thereunder.8 Because the proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b–4(f)(6)(iii) thereunder.9 A proposed rule change filed under Rule 19b–4(f)(6) 10 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b–4(f)(6)(iii),11 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Exchange believes the waiver of this period will allow it to immediately conform NYSE Rule 431 to FINRA’s proposed amendments to its version of NYSE Rule 431, in furtherance of the consolidation of the member firm regulation functions of 7 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). 9 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 19b–4(f)(6)(iii) requires the Exchange to give the Commission written notice of the Exchange’s intent to file the proposed rule change along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has requested and the Commission has agreed waive this pre-filing requirement. 10 17 CFR 240.19b–4(f)(6). 11 17 CFR 240.19b–4(f)(6)(iii). sroberts on PROD1PC70 with NOTICES 8 17 VerDate Aug<31>2005 16:49 Aug 06, 2008 Jkt 214001 46117 NYSE Regulation and NASD. As provided in paragraph 2(b) of the Agreement, FINRA and NYSE will, absent a disagreement about the substance of a proposed rule change to one of the Common Rules, promptly propose conforming changes to ensure that such rules continue to be Common Rules under the Agreement. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because such waiver will allow the customer portfolio margining program to continue uninterrupted as it would otherwise expire on July 31, 2008.12 Accordingly, the Commission designates the proposed rule change effective upon filing with the Commission. 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. 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 Section, 100 F Street, NE., Washington, DC 20549–1090 on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing will also be available for inspection and copying at the NYSE’s principal office and on its Internet Web site at www.nyse.com. 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–2008–66 and should be submitted on or before August 28, 2008. 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: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Florence E. Harmon, Acting Secretary. [FR Doc. E8–18075 Filed 8–6–08; 8:45 am] 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–NYSE–2008–66 on the subject line. SECURITIES AND EXCHANGE COMMISSION Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSE–2008–66. 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 12 For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition and capital formation. See 15 U.S.C. 78c(f). PO 00000 Frm 00181 Fmt 4703 Sfmt 4703 BILLING CODE 8010–01–P [Release No. 34–58285; File No. SR–NYSE– 2008–60] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto in Connection With the Proposed Acquisition of The Amex Membership Corporation August 1, 2008. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on July 23, 2008, the New York Stock Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’), a New York limited liability company and registered national securities 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 13 17 CFR 200.30–3(a)(12). U.S.C.78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\07AUN1.SGM 07AUN1 46118 Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices Exchange. On July 30, 2008, the NYSE filed Amendment No. 1 to the proposed rule change. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The NYSE is submitting this proposed rule change to the Commission in connection with the proposed acquisition of The Amex Membership Corporation (‘‘MC’’), a New York notfor-profit corporation that owns 100% (99% directly and 1% indirectly through a wholly owned subsidiary) of American Stock Exchange LLC, a Delaware limited liability company and registered national securities exchange (‘‘Amex’’), by NYSE Euronext, the Delaware corporation that indirectly owns 100% of the Exchange. The text of the proposed rule change is available on the Exchange’s Web site at https://www.nyse.com, at the Exchange’s principal office, and at the Commission’s Public Reference Room. The text of Exhibits 5A through 5G is also available on the Commission’s Web site (https://www.sec.gov/rules/ sro.shtml). II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change sroberts on PROD1PC70 with NOTICES 1. Purpose The Exchange is submitting this proposed rule change to the Commission in connection with the proposed acquisition of MC, a New York not-for-profit corporation that owns 100% of Amex, by NYSE Euronext. The proposed acquisition will occur pursuant to the terms of the Agreement and Plan of Merger, dated as of January 17, 2008 (as it may be amended from time to time, the ‘‘Merger Agreement’’), by and among NYSE Euronext, VerDate Aug<31>2005 16:49 Aug 06, 2008 Jkt 214001 Amsterdam Merger Sub, LLC, a Delaware limited liability company and a wholly owned subsidiary of NYSE Euronext formed by NYSE Euronext in connection with the Mergers (‘‘Merger Sub’’), MC, AMC Acquisition Sub, Inc., a Delaware corporation and a wholly owned subsidiary of MC (‘‘AMCAS’’), American Stock Exchange Holdings, Inc., a Delaware corporation and a wholly owned subsidiary of MC created by MC in connection with the Mergers (‘‘Holdings’’), Amex, which is 99 percent owned by MC and 1 percent owned by AMCAS, and American Stock Exchange 2, LLC, a Delaware limited liability company and a wholly owned subsidiary of Holdings formed by Holdings in connection with the Mergers (‘‘Amex Merger Sub’’). Under the terms of the Merger Agreement, MC will demutualize and NYSE Euronext will acquire the business of MC and its subsidiaries through a series of mergers (the ‘‘Mergers’’). Following the Mergers, Merger Sub, a wholly owned subsidiary of NYSE Euronext and a successor to MC and AMCAS, will directly own 100% of Amex Merger Sub, which will be the successor to Amex and a registered national securities exchange. It is intended that Amex Merger Sub will be renamed ‘‘NYSE Alternext U.S. LLC’’ (and therefore is referred to in this document as ‘‘NYSE Alternext US’’). Corporate Structure Immediately following the NYSE/ Amex Merger, NYSE Euronext will contribute 100% of the limited liability company interest of Merger Sub to NYSE Group, Inc. (‘‘NYSE Group’’) (such contribution, the ‘‘Contribution’’), causing Merger Sub to become a direct wholly owned subsidiary of NYSE Group. Immediately following the Contribution, Merger Sub will merge with and into NYSE Alternext U.S. a direct wholly owned subsidiary of Merger Sub (‘‘Internal Merger’’). As a result of the Contribution and the Internal Merger, NYSE Alternext U.S. will become a direct wholly owned subsidiary of NYSE Group. The proposed rule change will be operative upon completion of the Internal Merger.3 Organizational Documents of NYSE Euronext Currently the NYSE Euronext organizational documents provide certain protections to the Exchange and NYSE Arca, Inc. that are designed to protect and facilitate their selfregulatory functions. In general, the 3 See PO 00000 Amendment No. 1. Frm 00182 Fmt 4703 Sfmt 4703 organizational documents of NYSE Euronext are being amended to provide similar protections to NYSE Alternext U.S. as are currently provided to the Exchange and NYSE Arca, Inc. under those documents. In addition, in the proposed new Director Independence Policy for NYSE Euronext directors, the three-year retrospective period (‘‘lookback period’’) over which directors’ relationships with members of the Exchange and NYSE Arca, Inc. are reviewed (which following the mergers will apply equally to NYSE Alternext US) has been reduced to one year. The Exchange believes that this reduction will be beneficial in expanding NYSE Euronext’s pool of eligible director candidates with knowledge of the exchange industry, while still maintaining sufficient director independence. The amended and restated bylaws of NYSE Euronext are being amended to: • Include NYSE Alternext U.S. in the definition of ‘‘U.S. Regulated Subsidiaries,’’ which currently includes the Exchange, NYSE Market, Inc., NYSE Regulation, Inc., NYSE Arca, L.L.C., NYSE Arca, Inc. and NYSE Arca Equities, Inc. and to provide that the term ‘‘U.S. Regulated Subsidiaries’’ includes those entities listed or their successors, but only so long as they continue to be controlled, directly or indirectly, by NYSE Euronext; • Provide that the provisions referencing the Exchange, NYSE Market, Inc., NYSE Regulation, Inc., NYSE Arca, L.L.C., NYSE Arca, Inc. and NYSE Arca Equities, Inc. apply with respect to those entities or their successors, but only so long as they or their successors continue to be controlled, directly or indirectly, by NYSE Euronext; • Provide the same protection to confidential information pertaining to the self regulatory function of NYSE Alternext U.S. or its successor (including but not limited to disciplinary matters, trading data, trading practices and audit information) contained in the books and records of any of the U.S. Regulated Subsidiaries, that shall come into the possession of NYSE Euronext, as is currently provided under the bylaws of NYSE Euronext with respect such confidential information pertaining to the self regulatory function of the Exchange, NYSE Market, Inc., NYSE Regulation, Inc., NYSE Arca, Inc. and NYSE Arca Equities, Inc., but only to the extent that NYSE Alternext U.S. and its successor continues to be controlled, directly or indirectly by NYSE Euronext; • Provide that, subject to its fiduciary obligations under applicable law, for so long as NYSE Euronext directly or E:\FR\FM\07AUN1.SGM 07AUN1 sroberts on PROD1PC70 with NOTICES Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices indirectly controls NYSE Alternext U.S. (or its successor), the board of directors of NYSE Euronext shall not adopt any resolution pursuant to clause (2) of section 1(B) of Article V of the certificate of incorporation of NYSE Euronext unless the board of Directors of NYSE Euronext shall have determined that: • In the case of a resolution to approve the exercise of voting rights in excess of 20% of the then outstanding votes entitled to be cast on such matter, neither such Person nor any of its Related Persons (as defined in the certificate of incorporation of NYSE Euronext) is, with respect to NYSE Alternext U.S. (or its successor), a ‘‘member,’’ as defined in sections 3(a)(3)(A)(i), 3(a)(3)(A)(ii), 3(a)(3)(A)(iii) and 3(a)(3)(A)(iv) of the Exchange Act 4) (a ‘‘NYSE Alternext Member’’) (any such person that is a ‘‘Related Person’’ (as defined in the Certificate of incorporation of NYSE Euronext) of such NYSE Alternext Member is also deemed to be a ‘‘NYSE Alternext Member’’ for the purposes of the proposed Second Amended and Restated Bylaws of NYSE Euronext, as the context may require); and • In the case of a resolution to approve the entering into of an agreement, plan or other arrangement under circumstances that would result in shares of stock of NYSE Euronext that would be subject to such agreement, plan or other arrangement not being voted on any matter, or the withholding of any proxy relating thereto, where the effect of such agreement, plan or other arrangement would be to enable any person, but for Article V of the certificate of incorporation of NYSE Euronext, either alone or together with its Related Persons, to vote, possess the right to vote or cause the voting of shares of stock of NYSE Euronext that would exceed 20% of the then outstanding votes entitled to be cast on such matter (assuming that all shares of stock of NYSE Euronext that are subject to such agreement, plan or other arrangement are not outstanding votes entitled to be cast on such matter), neither such Person nor any of its Related Persons is, with respect to NYSE Alternext U.S. (or its successor), a NYSE Alternext Member; • Provide that, subject to its fiduciary obligations under applicable law, for so long as NYSE Euronext directly or indirectly controls NYSE Alternext U.S. (or its successor), the board of directors of NYSE Euronext shall not adopt any resolution pursuant to clause (2) of Section 2(B) of Article V of the certificate of incorporation of NYSE Euronext (which relates to NYSE Euronext board of directors approval of ownership of NYSE Euronext capital stock in excess of 20%), unless the board of directors of NYSE Euronext shall have determined that neither such Person nor any of its Related Persons is, with respect to NYSE Alternext U.S. (or its successor), a NYSE Alternext Member; • Provide that, for so long as NYSE Euronext controls any of the U.S. Regulated Subsidiaries, any amendment to or repeal of the bylaws of NYSE Euronext must either be (i) filed with or filed with and approved by the Commission under section 19 of the Exchange Act 5 and the rules promulgated thereunder or (ii) submitted to the boards of directors of the Exchange, NYSE Market, Inc., NYSE Regulation, Inc., NYSE Arca, Inc., NYSE Arca Equities, Inc. and NYSE Alternext U.S. or the boards of directors of their successors, in each case only to the extent that such entity continues to be controlled directly or indirectly by the NYSE Euronext, and if any or all of such boards of directors shall determine that such amendment or repeal must be filed with or filed with and approved by the Commission under section 19 of the Exchange Act 6 and the rules promulgated thereunder before such amendment or repeal may be effectuated, then such amendment or repeal shall not be effectuated until filed with or filed with and approved by the Commission, as the case may be; • Provide that, for as long as NYSE Euronext controls any European Market Subsidiary (as defined in the bylaws of NYSE Euronext), any amendment to or repeal of the bylaws of NYSE Euronext must either be (i) filed with or filed with and approved by a European Regulator (as defined in the bylaws of NYSE Euronext) under European Exchange Regulations (as defined in the bylaws of NYSE Euronext) or (ii) submitted to the boards of directors of the European Market Subsidiaries and, if any or all of such boards of directors shall determine that such amendment or repeal must be filed with or filed with and approved by a European Regulator under European Exchange Regulations before such amendment or repeal may be effectuated, then such amendment or repeal shall not be effectuated until filed with or filed with and approved by the relevant European Regulator(s); • Provide that so long as NYSE Euronext shall control, directly or indirectly, NYSE Alternext U.S. (or its 5 15 4 15 U.S.C. 78c(a)(3)(A). VerDate Aug<31>2005 16:49 Aug 06, 2008 U.S.C. 78s. 6 Id. Jkt 214001 PO 00000 Frm 00183 Fmt 4703 Sfmt 4703 46119 successor), the board of directors of NYSE Euronext shall not adopt any resolution to repeal or amend any provision of the Certificate of Incorporation unless such amendment or repeal shall either (i) be filed with or filed with and approved by the Commission under section 19 of the Exchange Act 7 and the rules promulgated thereunder or (ii) be submitted to the board of directors of NYSE Alternext U.S. (or the board of directors of its successor), and if such board of directors determines that such amendment or repeal must be filed with or filed with and approved by the Commission under section 19 of the Exchange Act 8 and the rules promulgated thereunder before such amendment or repeal may be effectuated, then such amendment or repeal shall not be effectuated until filed with or filed with and approved by the Commission, as the case may be; and • Remove or update certain references to the Combination Agreement, dated as of June 1, 2006, as amended and restated as of November 24, 2006, by and among the NYSE Euronext, NYSE Group, Inc., Euronext N.V. and Jefferson Merger Sub, Inc. The proposed new independence policy of the NYSE Euronext board of directors will be substantially similar to the current Commission-approved independence policy of the NYSE Euronext board of directors,9 except that: • The independence policy provision relating to relationships with NYSE and NYSE Arca, Inc. market participants have been expanded to equally apply to relationships with NYSE Alternext U.S. market participants (or the market participants of its successor); • Instead of relying on the definition of ‘‘member’’ or ‘‘member organization’’ or similar terms in the rules of the individual exchanges, the proposed new independence policy relies on the definition of ‘‘member’’ in sections 3(a)(3)(A)(i), 3(a)(3)(A)(ii), 3(a)(3)(A)(iii) and 3(a)(3)(A)(iv) of the Exchange Act.10 This technical change is designed to harmonize the use of those terms in the proposed new independence policy with respect to each of the Exchange, NYSE Arca, Inc. and NYSE Alternext U.S. and to simplify the language of the policy; • Independence requirements for the NYSE Alternext U.S. board of directors 7 Id. 8 Id. 9 See Securities Exchange Act Release No. 55293 (February 14, 2007), 72 FR 8033 (February 22, 2007) (SR–NYSE–2006–120). 10 15 U.S.C. 78c(a)(3)(A). E:\FR\FM\07AUN1.SGM 07AUN1 46120 Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices sroberts on PROD1PC70 with NOTICES (or the board of directors of its successor) have been added that are the same as those for the Exchange’s board of directors; • The ‘‘look back period’’ with respect to directors’ relationships with members of the Exchange and NYSE Arca, Inc. (which following the mergers will apply equally to NYSE Alternext US) has been reduced from three years to one year; • All references to New York Stock Exchange LLC, NYSE Arca, Inc., NYSE Arca Equities, Inc. and NYSE Alternext U.S. shall mean each of those entities or its successor; and • The provision providing for a transition period so that the independence requirements of the NYSE Euronext director independence policy would not apply to the European Persons on the NYSE Euronext board of directors until the annual meeting of NYSE Euronext stockholders in 2008 has been deleted since the revised NYSE Euronext Independence Policy is expected to go into effect after the meeting of NYSE Euronext Stockholders in 2008. Organizational Documents of NYSE Group Currently the NYSE Group organizational documents provide certain protections to the Exchange and NYSE Arca, Inc. that are designed to protect and facilitate their selfregulatory functions. In general, the organizational documents of NYSE Group are being amended to provide similar protections to NYSE Alternext U.S. as are currently provided to the Exchange and NYSE Arca, Inc. under those documents. The amended and restated certificate of incorporation of NYSE Group is being amended to: • Provide that, subject to its fiduciary obligations under applicable law, for so long as NYSE Group directly or indirectly controls NYSE Alternext U.S. (or its successor), the board of directors of NYSE Group shall not adopt any resolution pursuant to clause (ii) of section 4(b)(1)(A) of Article IV of the certificate of incorporation of NYSE Group unless the board of Directors of NYSE Group shall have determined that: • In the case of a resolution to approve the exercise of voting rights in excess of 20% of the then outstanding votes entitled to be cast on such matter, neither such Person nor any of its Related Persons (as defined in the certificate of incorporation of NYSE Group) is, with respect to NYSE Alternext U.S. (or its successor), a ‘‘member,’’ as defined in sections VerDate Aug<31>2005 16:49 Aug 06, 2008 Jkt 214001 3(a)(3)(A)(i), 3(a)(3)(A)(ii), 3(a)(3)(A)(iii) and (3)(a)(A)(iv) of the Exchange Act 11 (a ‘‘NYSE Alternext Member’’) (any such person that is a Related Person (as defined in the Second Amended and Restated Certificate of Incorporation of NYSE Group) of such NYSE Alternext Member is also deemed to be an ‘‘NYSE Alternext Member’’ for purposes of the proposed Second Amended and Restated Certificate of Incorporation of NYSE Group, as the context may require); and • In the case of a resolution to approve the entering into of an agreement, plan or other arrangement under circumstances that would result in shares of stock of NYSE Group that would be subject to such agreement, plan or other arrangement not being voted on any matter, or the withholding of any proxy relating thereto, where the effect of such agreement, plan or other arrangement would be to enable any person, but for Article IV of the certificate of incorporation of NYSE Group, either alone or together with its Related Persons, to vote, possess the right to vote or cause the voting of shares of stock of NYSE Group that would exceed 20% of the then outstanding votes entitled to be cast on such matter (assuming that all shares of stock of NYSE Group that are subject to such agreement, plan or other arrangement are not outstanding votes entitled to be cast on such matter), neither such Person nor any of its Related Persons is, with respect to NYSE Alternext U.S. (or its successor), a NYSE Alternext Member; • Provide that, subject to its fiduciary obligations under applicable law, for so long as NYSE Group directly or indirectly controls NYSE Alternext U.S. (or its successor), the board of directors of NYSE Group shall not adopt any resolution pursuant to clause (ii) of section 4(b)(2)(B) of Article IV of the certificate of incorporation of NYSE Group (which relates to NYSE Group board of directors approval of ownership of NYSE Group capital stock in excess of 20%), unless the board of directors of NYSE Group shall have determined that neither such Person nor any of its Related Persons is, with respect to NYSE Alternext U.S. (or its successor), a NYSE Alternext Member; • Include NYSE Alternext U.S. in the definition of ‘‘Regulated Subsidiaries,’’ which currently includes the Exchange, NYSE Market, Inc., NYSE Regulation, Inc., NYSE Arca, L.L.C., NYSE Arca, Inc. and NYSE Arca Equities, Inc. and to provide that the term ‘‘Regulated Subsidiaries’’ includes those entities listed or their successors, but only so long as they continue to be controlled, directly or indirectly, by NYSE Group; • Provide the same protections to all confidential information pertaining to the self-regulatory function of NYSE Alternext U.S. as are currently provided under the Amended and Restated Certificate of Incorporation of NYSE Group to confidential information pertaining to the self regulatory function of the Exchange, NYSE Market, Inc., NYSE Regulation, Inc., NYSE Arca, Inc. and NYSE Arca Equities, Inc.; • Provide that any amendment to or repeal of the certificate of incorporation of NYSE Group must either be (i) filed with or filed with and approved by the Commission under section 19 of the Exchange Act 12 and the rules promulgated thereunder or (ii) submitted to the boards of directors of the Exchange, NYSE Market, Inc., NYSE Regulation, Inc., NYSE Arca, Inc., NYSE Arca Equities, Inc. and NYSE Alternext U.S. or the boards of directors of their successors, in each case only to the extent that such entity continues to be controlled directly or indirectly by the NYSE Group, and if any or all of such boards of directors shall determine that such amendment or repeal must be filed with or filed with and approved by the Commission under section 19 of the Exchange Act 13 and the rules promulgated thereunder before such amendment or repeal may be effectuated, then such amendment or repeal shall not be effectuated until filed with or filed with and approved by the Commission, as the case may be. The amended and restated bylaws of NYSE Group are being amended to: • Provide that any amendment to or repeal of the bylaws of NYSE Group must either be (i) filed with or filed with and approved by the Commission under section 19 of the Exchange Act and the rules promulgated thereunder or (ii) submitted to the boards of directors of the Exchange, NYSE Market, Inc., NYSE Regulation, Inc., NYSE Arca, Inc., NYSE Arca Equities, Inc. and NYSE Alternext U.S. or the boards of directors of their successors, in each case only to the extent that such entity continues to be controlled directly or indirectly by the NYSE Group, and if any or all of such boards of directors shall determine that such amendment or repeal must be filed with or filed with and approved by the Commission under section 19 of the Exchange Act and the rules promulgated thereunder before such amendment or repeal may be effectuated, then such amendment or repeal shall not be 12 15 11 15 PO 00000 U.S.C. 78c(a)(3)(A). Frm 00184 Fmt 4703 U.S.C. 78s. 13 Id. Sfmt 4703 E:\FR\FM\07AUN1.SGM 07AUN1 Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices effectuated until filed with or filed with and approved by the Commission, as the case may be. sroberts on PROD1PC70 with NOTICES Bylaws of NYSE Regulation The amended and restated bylaws of NYSE Regulation currently provide for the creation of a Committee for Review that is charged with performing certain functions with respect to the Exchange, including hearing appeals for disciplinary decisions, conducting reviews of staff delisting determinations and providing general advice to the NYSE Regulation Board of Directors in connection with disciplinary, listing and other regulatory matters. The Committee for Review is currently comprised of (i) directors of NYSE Regulation and (ii) at least three nondirector committee members associated with member organizations of the Exchange, at least one of whom is associated with a member organization of the Exchange that engages in a business involving substantial direct contact with securities customers, at least one of whom is associated with a member organization of the Exchange and registered as a specialist and spends a substantial part of his or her time on the trading floor of NYSE Market, Inc. and at least one of whom is associated with a member organization of the Exchange and spends a majority of his time on the trading floor of NYSE Market, Inc., and has as a substantial part of his business the execution of transactions on the trading floor of NYSE Market, Inc. for other than his own account or the account of his Exchange member organization, but is not registered as a specialist. Following the Mergers, the Committee for Review will also hear disciplinary appeals for NYSE Alternext U.S.14 In connection therewith, the amended and restated bylaws of NYSE Regulation are being amended to provide that the Committee for Review be expanded to include at least four individuals who are associated with member organizations of NYSE Alternext U.S. at least one of whom is associated with an member organization of NYSE Alternext U.S. that engages in a business involving substantial direct contact with securities customers; at least one of whom is associated with an member organization of NYSE Alternext U.S. and registered as a specialist and spends a substantial part of his or her time on the trading floor of NYSE Alternext US; at least one of whom is associated with a member 14 Reviews of delisting determinations will be heard by the same NYSE Alternext U.S. committee as has been reviewing such matters prior to the Mergers. VerDate Aug<31>2005 16:49 Aug 06, 2008 Jkt 214001 organization of NYSE Alternext U.S. and spends a majority of his or her time on the trading floor of NYSE Alternext U.S. and has as a substantial part of his business the execution of transactions on the trading floor of NYSE Alternext U.S. for other than his or her own account or the account of his NYSE Alternext U.S. member organization but is not registered as a specialist; and at least of whom is associated with a NYSE Alternext U.S. Member Organization and spends a majority of his or her time on the trading floor of NYSE Alternext U.S. and has as a substantial part of his or her business the execution of transactions on the trading floor of NYSE Alternext U.S. for his own account or the account of his or her NYSE Alternext U.S. Member Organization but is not registered as a specialist. Trust Agreement of the NYSE Group Trust I The Trust Agreement is being amended to make certain technical changes designed to better provide NYSE Alternext U.S. with the same protections against certain material adverse changes in European Law that it currently provides for the Exchange and NYSE Arca, Inc. Rules of the Exchange Solely for the purposes of section 1(L) of Article 5 of the certificate of incorporation of NYSE Euronext (which is the definition of ‘‘Related Person’’), as it may be in effect from time to time, the Exchange proposes to amend (1) the definition of ‘‘member’’ under Rule 2(a) of the Rules of the Exchange to include any ‘‘member’’ (as defined in section 3(a)(3)(A)(i) of the Exchange Act 15) of NYSE Alternext U.S. (or its successor), so long as NYSE Euronext continues to control, directly or indirectly, NYSE Alternext U.S. or its successor and (2) the definition of ‘‘Member Organization’’ under Rule 2(b) of the Exchange to include any ‘‘member’’ (as defined in section 3(a)(3)(A)(ii), 3(a)(3)(A)(iii) and 3(a)(3)(A)(iv) of the Exchange Act 16) of NYSE Alternext U.S. (or its successor), so long as NYSE Euronext continues to control, directly or indirectly, NYSE Alternext U.S. or its successor. 2. Statutory Basis The Exchange believes that this filing is consistent with section 6(b) of the Exchange Act,17 in general, and furthers U.S.C. 78c(a)(3)(A)(i). U.S.C. 78c(a)(3)(A)(ii)–(iv). 17 15 U.S.C. 78f(b). the objectives of section 6(b)(1),18 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 19 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 will 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 No written comments were solicited or received with respect to 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 organization consents, the Commission will: (A) By order approve the 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, as amended, is consistent with 15 15 16 15 PO 00000 Frm 00185 Fmt 4703 Sfmt 4703 46121 18 15 19 15 E:\FR\FM\07AUN1.SGM U.S.C. 78f(b)(1). U.S.C. 78f(b)(5). 07AUN1 46122 Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices the Exchange Act. Comments may be submitted by any of the following methods: SECURITIES AND EXCHANGE COMMISSION 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-NYSE–2008–60 on the subject line. [Release No. 34–58268; File No. SR–NYSE– 2008–67] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Reduce the Order Flow Sent to the Specialist Application Programmed Interface July 30, 2008. • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549. All submissions should refer to File Number SR-NYSE–2008–60. 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, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. 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–2008–60 and should be submitted on or before August 28, 2008. sroberts on PROD1PC70 with NOTICES Paper Comments Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on July 29, 2008, New York Stock Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by NYSE. NYSE filed the proposed rule change pursuant to section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6) thereunder,4 which renders it effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.20 Florence E. Harmon, Acting Secretary. [FR Doc. E8–18146 Filed 8–6–08; 8:45 am] BILLING CODE 8010–01–P 20 17CFR 16:49 Aug 06, 2008 NYSE proposes to reduce the order flow sent to the Specialist Application Programmed Interface (‘‘Specialist APISM’’ or ‘‘SAPI’’). The text of the proposed rule change is available at NYSE, the Commission’s Public Reference Room, and https:// www.nyse.com. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NYSE 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. NYSE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6). 2 17 200.30–3(a)(12) VerDate Aug<31>2005 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Jkt 214001 PO 00000 Frm 00186 Fmt 4703 Sfmt 4703 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1.Purpose NYSE proposes to reduce the information that is made available to specialists with respect to orders as they enter Exchange systems. The reduction of order information provided to the specialist is the Exchange’s way of gradually transitioning the specialists into their new role as Designated Market Makers (‘‘DMMs’’).5 The DMM on the Exchange will ultimately not be provided any order by order information as of the complete implementation of the Exchange’s enhancements to its trading model.6 Background Pursuant to NYSE Rule 104, Exchange specialists in their capacity as dealers for their assigned securities, maintain systems that use proprietary algorithms, based on predetermined parameters, to electronically participate in the Exchange market (‘‘Specialist Algorithm’’). The Specialist Algorithm communicates with the NYSE Display Book system 7 via an Exchange-owned external application program interface (the ‘‘API’’). The Specialist Algorithm is intended to replicate electronically some of the activities specialists are permitted to engage in on the Floor in the auction market and to facilitate the specialists’ ability to fulfill their obligation to maintain a fair and orderly market. Specialist Algorithms may generate quoting and trading messages as prescribed by Exchange Rule 104(b)(i). To that end, the Specialist Algorithm receives information via the API,8 5 See generally Securities Exchange Act Release No. 58184 (July 17, 2008), 73 FR 42853 (July 23, 2008) (SR–NYSE–2008–46). 6 Id. 7 The Display Book system is an order management and execution facility. The Display Book system receives and displays orders to the specialists, contains the Book, and provides a mechanism to execute and report transactions and publish the results to the Consolidated Tape. The Display Book system is connected to a number of other Exchange systems for the purposes of comparison, surveillance, and reporting information to customers and other market data and national market systems. 8 Exchange systems provide specialist algorithms with the following information: (1) Specialist dealer position; (2) quotes; (3) information about orders in the Display Book system such as limit orders, percentage orders (‘‘state of the book’’); (4) incoming orders as they are entering NYSE systems; and (5) information with respect to odd-lot executions to which the specialist was the contraside. In addition, a specialist firm may supply its algorithm with any publicly available information the specialist firm chooses. The Specialist Algorithm does not have access to: (1) Information E:\FR\FM\07AUN1.SGM 07AUN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 73, Number 153 (Thursday, August 7, 2008)]
[Notices]
[Pages 46117-46122]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-18146]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58285; File No. SR-NYSE-2008-60]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto in 
Connection With the Proposed Acquisition of The Amex Membership 
Corporation

August 1, 2008.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby 
given that on July 23, 2008, the New York Stock Exchange LLC (``NYSE'' 
or ``Exchange''), a New York limited liability company and registered 
national securities 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

[[Page 46118]]

Exchange. On July 30, 2008, the NYSE filed Amendment No. 1 to the 
proposed rule change. The Commission is publishing this notice to 
solicit comments on the proposed rule change, as amended, from 
interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C.78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The NYSE is submitting this proposed rule change to the Commission 
in connection with the proposed acquisition of The Amex Membership 
Corporation (``MC''), a New York not-for-profit corporation that owns 
100% (99% directly and 1% indirectly through a wholly owned subsidiary) 
of American Stock Exchange LLC, a Delaware limited liability company 
and registered national securities exchange (``Amex''), by NYSE 
Euronext, the Delaware corporation that indirectly owns 100% of the 
Exchange.
    The text of the proposed rule change is available on the Exchange's 
Web site at https://www.nyse.com, at the Exchange's principal office, 
and at the Commission's Public Reference Room. The text of Exhibits 5A 
through 5G is also available on the Commission's Web site (https://
www.sec.gov/rules/sro.shtml).

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

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

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

1. Purpose
    The Exchange is submitting this proposed rule change to the 
Commission in connection with the proposed acquisition of MC, a New 
York not-for-profit corporation that owns 100% of Amex, by NYSE 
Euronext. The proposed acquisition will occur pursuant to the terms of 
the Agreement and Plan of Merger, dated as of January 17, 2008 (as it 
may be amended from time to time, the ``Merger Agreement''), by and 
among NYSE Euronext, Amsterdam Merger Sub, LLC, a Delaware limited 
liability company and a wholly owned subsidiary of NYSE Euronext formed 
by NYSE Euronext in connection with the Mergers (``Merger Sub''), MC, 
AMC Acquisition Sub, Inc., a Delaware corporation and a wholly owned 
subsidiary of MC (``AMCAS''), American Stock Exchange Holdings, Inc., a 
Delaware corporation and a wholly owned subsidiary of MC created by MC 
in connection with the Mergers (``Holdings''), Amex, which is 99 
percent owned by MC and 1 percent owned by AMCAS, and American Stock 
Exchange 2, LLC, a Delaware limited liability company and a wholly 
owned subsidiary of Holdings formed by Holdings in connection with the 
Mergers (``Amex Merger Sub'').
    Under the terms of the Merger Agreement, MC will demutualize and 
NYSE Euronext will acquire the business of MC and its subsidiaries 
through a series of mergers (the ``Mergers''). Following the Mergers, 
Merger Sub, a wholly owned subsidiary of NYSE Euronext and a successor 
to MC and AMCAS, will directly own 100% of Amex Merger Sub, which will 
be the successor to Amex and a registered national securities exchange. 
It is intended that Amex Merger Sub will be renamed ``NYSE Alternext 
U.S. LLC'' (and therefore is referred to in this document as ``NYSE 
Alternext US'').
Corporate Structure
    Immediately following the NYSE/Amex Merger, NYSE Euronext will 
contribute 100% of the limited liability company interest of Merger Sub 
to NYSE Group, Inc. (``NYSE Group'') (such contribution, the 
``Contribution''), causing Merger Sub to become a direct wholly owned 
subsidiary of NYSE Group. Immediately following the Contribution, 
Merger Sub will merge with and into NYSE Alternext U.S. a direct wholly 
owned subsidiary of Merger Sub (``Internal Merger''). As a result of 
the Contribution and the Internal Merger, NYSE Alternext U.S. will 
become a direct wholly owned subsidiary of NYSE Group. The proposed 
rule change will be operative upon completion of the Internal 
Merger.\3\
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    \3\ See Amendment No. 1.
---------------------------------------------------------------------------

Organizational Documents of NYSE Euronext
    Currently the NYSE Euronext organizational documents provide 
certain protections to the Exchange and NYSE Arca, Inc. that are 
designed to protect and facilitate their self-regulatory functions. In 
general, the organizational documents of NYSE Euronext are being 
amended to provide similar protections to NYSE Alternext U.S. as are 
currently provided to the Exchange and NYSE Arca, Inc. under those 
documents. In addition, in the proposed new Director Independence 
Policy for NYSE Euronext directors, the three-year retrospective period 
(``look-back period'') over which directors' relationships with members 
of the Exchange and NYSE Arca, Inc. are reviewed (which following the 
mergers will apply equally to NYSE Alternext US) has been reduced to 
one year. The Exchange believes that this reduction will be beneficial 
in expanding NYSE Euronext's pool of eligible director candidates with 
knowledge of the exchange industry, while still maintaining sufficient 
director independence.
    The amended and restated bylaws of NYSE Euronext are being amended 
to:
     Include NYSE Alternext U.S. in the definition of ``U.S. 
Regulated Subsidiaries,'' which currently includes the Exchange, NYSE 
Market, Inc., NYSE Regulation, Inc., NYSE Arca, L.L.C., NYSE Arca, Inc. 
and NYSE Arca Equities, Inc. and to provide that the term ``U.S. 
Regulated Subsidiaries'' includes those entities listed or their 
successors, but only so long as they continue to be controlled, 
directly or indirectly, by NYSE Euronext;
     Provide that the provisions referencing the Exchange, NYSE 
Market, Inc., NYSE Regulation, Inc., NYSE Arca, L.L.C., NYSE Arca, Inc. 
and NYSE Arca Equities, Inc. apply with respect to those entities or 
their successors, but only so long as they or their successors continue 
to be controlled, directly or indirectly, by NYSE Euronext;
     Provide the same protection to confidential information 
pertaining to the self regulatory function of NYSE Alternext U.S. or 
its successor (including but not limited to disciplinary matters, 
trading data, trading practices and audit information) contained in the 
books and records of any of the U.S. Regulated Subsidiaries, that shall 
come into the possession of NYSE Euronext, as is currently provided 
under the bylaws of NYSE Euronext with respect such confidential 
information pertaining to the self regulatory function of the Exchange, 
NYSE Market, Inc., NYSE Regulation, Inc., NYSE Arca, Inc. and NYSE Arca 
Equities, Inc., but only to the extent that NYSE Alternext U.S. and its 
successor continues to be controlled, directly or indirectly by NYSE 
Euronext;
     Provide that, subject to its fiduciary obligations under 
applicable law, for so long as NYSE Euronext directly or

[[Page 46119]]

indirectly controls NYSE Alternext U.S. (or its successor), the board 
of directors of NYSE Euronext shall not adopt any resolution pursuant 
to clause (2) of section 1(B) of Article V of the certificate of 
incorporation of NYSE Euronext unless the board of Directors of NYSE 
Euronext shall have determined that:
     In the case of a resolution to approve the exercise of 
voting rights in excess of 20% of the then outstanding votes entitled 
to be cast on such matter, neither such Person nor any of its Related 
Persons (as defined in the certificate of incorporation of NYSE 
Euronext) is, with respect to NYSE Alternext U.S. (or its successor), a 
``member,'' as defined in sections 3(a)(3)(A)(i), 3(a)(3)(A)(ii), 
3(a)(3)(A)(iii) and 3(a)(3)(A)(iv) of the Exchange Act \4\) (a ``NYSE 
Alternext Member'') (any such person that is a ``Related Person'' (as 
defined in the Certificate of incorporation of NYSE Euronext) of such 
NYSE Alternext Member is also deemed to be a ``NYSE Alternext Member'' 
for the purposes of the proposed Second Amended and Restated Bylaws of 
NYSE Euronext, as the context may require); and
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78c(a)(3)(A).
---------------------------------------------------------------------------

     In the case of a resolution to approve the entering into 
of an agreement, plan or other arrangement under circumstances that 
would result in shares of stock of NYSE Euronext that would be subject 
to such agreement, plan or other arrangement not being voted on any 
matter, or the withholding of any proxy relating thereto, where the 
effect of such agreement, plan or other arrangement would be to enable 
any person, but for Article V of the certificate of incorporation of 
NYSE Euronext, either alone or together with its Related Persons, to 
vote, possess the right to vote or cause the voting of shares of stock 
of NYSE Euronext that would exceed 20% of the then outstanding votes 
entitled to be cast on such matter (assuming that all shares of stock 
of NYSE Euronext that are subject to such agreement, plan or other 
arrangement are not outstanding votes entitled to be cast on such 
matter), neither such Person nor any of its Related Persons is, with 
respect to NYSE Alternext U.S. (or its successor), a NYSE Alternext 
Member;
     Provide that, subject to its fiduciary obligations under 
applicable law, for so long as NYSE Euronext directly or indirectly 
controls NYSE Alternext U.S. (or its successor), the board of directors 
of NYSE Euronext shall not adopt any resolution pursuant to clause (2) 
of Section 2(B) of Article V of the certificate of incorporation of 
NYSE Euronext (which relates to NYSE Euronext board of directors 
approval of ownership of NYSE Euronext capital stock in excess of 20%), 
unless the board of directors of NYSE Euronext shall have determined 
that neither such Person nor any of its Related Persons is, with 
respect to NYSE Alternext U.S. (or its successor), a NYSE Alternext 
Member;
     Provide that, for so long as NYSE Euronext controls any of 
the U.S. Regulated Subsidiaries, any amendment to or repeal of the 
bylaws of NYSE Euronext must either be (i) filed with or filed with and 
approved by the Commission under section 19 of the Exchange Act \5\ and 
the rules promulgated thereunder or (ii) submitted to the boards of 
directors of the Exchange, NYSE Market, Inc., NYSE Regulation, Inc., 
NYSE Arca, Inc., NYSE Arca Equities, Inc. and NYSE Alternext U.S. or 
the boards of directors of their successors, in each case only to the 
extent that such entity continues to be controlled directly or 
indirectly by the NYSE Euronext, and if any or all of such boards of 
directors shall determine that such amendment or repeal must be filed 
with or filed with and approved by the Commission under section 19 of 
the Exchange Act \6\ and the rules promulgated thereunder before such 
amendment or repeal may be effectuated, then such amendment or repeal 
shall not be effectuated until filed with or filed with and approved by 
the Commission, as the case may be;
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78s.
    \6\ Id.
---------------------------------------------------------------------------

     Provide that, for as long as NYSE Euronext controls any 
European Market Subsidiary (as defined in the bylaws of NYSE Euronext), 
any amendment to or repeal of the bylaws of NYSE Euronext must either 
be (i) filed with or filed with and approved by a European Regulator 
(as defined in the bylaws of NYSE Euronext) under European Exchange 
Regulations (as defined in the bylaws of NYSE Euronext) or (ii) 
submitted to the boards of directors of the European Market 
Subsidiaries and, if any or all of such boards of directors shall 
determine that such amendment or repeal must be filed with or filed 
with and approved by a European Regulator under European Exchange 
Regulations before such amendment or repeal may be effectuated, then 
such amendment or repeal shall not be effectuated until filed with or 
filed with and approved by the relevant European Regulator(s);
     Provide that so long as NYSE Euronext shall control, 
directly or indirectly, NYSE Alternext U.S. (or its successor), the 
board of directors of NYSE Euronext shall not adopt any resolution to 
repeal or amend any provision of the Certificate of Incorporation 
unless such amendment or repeal shall either (i) be filed with or filed 
with and approved by the Commission under section 19 of the Exchange 
Act \7\ and the rules promulgated thereunder or (ii) be submitted to 
the board of directors of NYSE Alternext U.S. (or the board of 
directors of its successor), and if such board of directors determines 
that such amendment or repeal must be filed with or filed with and 
approved by the Commission under section 19 of the Exchange Act \8\ and 
the rules promulgated thereunder before such amendment or repeal may be 
effectuated, then such amendment or repeal shall not be effectuated 
until filed with or filed with and approved by the Commission, as the 
case may be; and
---------------------------------------------------------------------------

    \7\ Id.
    \8\ Id.
---------------------------------------------------------------------------

     Remove or update certain references to the Combination 
Agreement, dated as of June 1, 2006, as amended and restated as of 
November 24, 2006, by and among the NYSE Euronext, NYSE Group, Inc., 
Euronext N.V. and Jefferson Merger Sub, Inc.
    The proposed new independence policy of the NYSE Euronext board of 
directors will be substantially similar to the current Commission-
approved independence policy of the NYSE Euronext board of 
directors,\9\ except that:
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release No. 55293 (February 14, 
2007), 72 FR 8033 (February 22, 2007) (SR-NYSE-2006-120).
---------------------------------------------------------------------------

     The independence policy provision relating to 
relationships with NYSE and NYSE Arca, Inc. market participants have 
been expanded to equally apply to relationships with NYSE Alternext 
U.S. market participants (or the market participants of its successor);
     Instead of relying on the definition of ``member'' or 
``member organization'' or similar terms in the rules of the individual 
exchanges, the proposed new independence policy relies on the 
definition of ``member'' in sections 3(a)(3)(A)(i), 3(a)(3)(A)(ii), 
3(a)(3)(A)(iii) and 3(a)(3)(A)(iv) of the Exchange Act.\10\ This 
technical change is designed to harmonize the use of those terms in the 
proposed new independence policy with respect to each of the Exchange, 
NYSE Arca, Inc. and NYSE Alternext U.S. and to simplify the language of 
the policy;
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78c(a)(3)(A).
---------------------------------------------------------------------------

     Independence requirements for the NYSE Alternext U.S. 
board of directors

[[Page 46120]]

(or the board of directors of its successor) have been added that are 
the same as those for the Exchange's board of directors;
     The ``look back period'' with respect to directors' 
relationships with members of the Exchange and NYSE Arca, Inc. (which 
following the mergers will apply equally to NYSE Alternext US) has been 
reduced from three years to one year;
     All references to New York Stock Exchange LLC, NYSE Arca, 
Inc., NYSE Arca Equities, Inc. and NYSE Alternext U.S. shall mean each 
of those entities or its successor; and
     The provision providing for a transition period so that 
the independence requirements of the NYSE Euronext director 
independence policy would not apply to the European Persons on the NYSE 
Euronext board of directors until the annual meeting of NYSE Euronext 
stockholders in 2008 has been deleted since the revised NYSE Euronext 
Independence Policy is expected to go into effect after the meeting of 
NYSE Euronext Stockholders in 2008.
Organizational Documents of NYSE Group
    Currently the NYSE Group organizational documents provide certain 
protections to the Exchange and NYSE Arca, Inc. that are designed to 
protect and facilitate their self-regulatory functions. In general, the 
organizational documents of NYSE Group are being amended to provide 
similar protections to NYSE Alternext U.S. as are currently provided to 
the Exchange and NYSE Arca, Inc. under those documents.
    The amended and restated certificate of incorporation of NYSE Group 
is being amended to:
     Provide that, subject to its fiduciary obligations under 
applicable law, for so long as NYSE Group directly or indirectly 
controls NYSE Alternext U.S. (or its successor), the board of directors 
of NYSE Group shall not adopt any resolution pursuant to clause (ii) of 
section 4(b)(1)(A) of Article IV of the certificate of incorporation of 
NYSE Group unless the board of Directors of NYSE Group shall have 
determined that:
     In the case of a resolution to approve the exercise of 
voting rights in excess of 20% of the then outstanding votes entitled 
to be cast on such matter, neither such Person nor any of its Related 
Persons (as defined in the certificate of incorporation of NYSE Group) 
is, with respect to NYSE Alternext U.S. (or its successor), a 
``member,'' as defined in sections 3(a)(3)(A)(i), 3(a)(3)(A)(ii), 
3(a)(3)(A)(iii) and (3)(a)(A)(iv) of the Exchange Act \11\ (a ``NYSE 
Alternext Member'') (any such person that is a Related Person (as 
defined in the Second Amended and Restated Certificate of Incorporation 
of NYSE Group) of such NYSE Alternext Member is also deemed to be an 
``NYSE Alternext Member'' for purposes of the proposed Second Amended 
and Restated Certificate of Incorporation of NYSE Group, as the context 
may require); and
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78c(a)(3)(A).
---------------------------------------------------------------------------

     In the case of a resolution to approve the entering into 
of an agreement, plan or other arrangement under circumstances that 
would result in shares of stock of NYSE Group that would be subject to 
such agreement, plan or other arrangement not being voted on any 
matter, or the withholding of any proxy relating thereto, where the 
effect of such agreement, plan or other arrangement would be to enable 
any person, but for Article IV of the certificate of incorporation of 
NYSE Group, either alone or together with its Related Persons, to vote, 
possess the right to vote or cause the voting of shares of stock of 
NYSE Group that would exceed 20% of the then outstanding votes entitled 
to be cast on such matter (assuming that all shares of stock of NYSE 
Group that are subject to such agreement, plan or other arrangement are 
not outstanding votes entitled to be cast on such matter), neither such 
Person nor any of its Related Persons is, with respect to NYSE 
Alternext U.S. (or its successor), a NYSE Alternext Member;
     Provide that, subject to its fiduciary obligations under 
applicable law, for so long as NYSE Group directly or indirectly 
controls NYSE Alternext U.S. (or its successor), the board of directors 
of NYSE Group shall not adopt any resolution pursuant to clause (ii) of 
section 4(b)(2)(B) of Article IV of the certificate of incorporation of 
NYSE Group (which relates to NYSE Group board of directors approval of 
ownership of NYSE Group capital stock in excess of 20%), unless the 
board of directors of NYSE Group shall have determined that neither 
such Person nor any of its Related Persons is, with respect to NYSE 
Alternext U.S. (or its successor), a NYSE Alternext Member;
     Include NYSE Alternext U.S. in the definition of 
``Regulated Subsidiaries,'' which currently includes the Exchange, NYSE 
Market, Inc., NYSE Regulation, Inc., NYSE Arca, L.L.C., NYSE Arca, Inc. 
and NYSE Arca Equities, Inc. and to provide that the term ``Regulated 
Subsidiaries'' includes those entities listed or their successors, but 
only so long as they continue to be controlled, directly or indirectly, 
by NYSE Group;
     Provide the same protections to all confidential 
information pertaining to the self-regulatory function of NYSE 
Alternext U.S. as are currently provided under the Amended and Restated 
Certificate of Incorporation of NYSE Group to confidential information 
pertaining to the self regulatory function of the Exchange, NYSE 
Market, Inc., NYSE Regulation, Inc., NYSE Arca, Inc. and NYSE Arca 
Equities, Inc.;
     Provide that any amendment to or repeal of the certificate 
of incorporation of NYSE Group must either be (i) filed with or filed 
with and approved by the Commission under section 19 of the Exchange 
Act \12\ and the rules promulgated thereunder or (ii) submitted to the 
boards of directors of the Exchange, NYSE Market, Inc., NYSE 
Regulation, Inc., NYSE Arca, Inc., NYSE Arca Equities, Inc. and NYSE 
Alternext U.S. or the boards of directors of their successors, in each 
case only to the extent that such entity continues to be controlled 
directly or indirectly by the NYSE Group, and if any or all of such 
boards of directors shall determine that such amendment or repeal must 
be filed with or filed with and approved by the Commission under 
section 19 of the Exchange Act \13\ and the rules promulgated 
thereunder before such amendment or repeal may be effectuated, then 
such amendment or repeal shall not be effectuated until filed with or 
filed with and approved by the Commission, as the case may be.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s.
    \13\ Id.
---------------------------------------------------------------------------

    The amended and restated bylaws of NYSE Group are being amended to:
     Provide that any amendment to or repeal of the bylaws of 
NYSE Group must either be (i) filed with or filed with and approved by 
the Commission under section 19 of the Exchange Act and the rules 
promulgated thereunder or (ii) submitted to the boards of directors of 
the Exchange, NYSE Market, Inc., NYSE Regulation, Inc., NYSE Arca, 
Inc., NYSE Arca Equities, Inc. and NYSE Alternext U.S. or the boards of 
directors of their successors, in each case only to the extent that 
such entity continues to be controlled directly or indirectly by the 
NYSE Group, and if any or all of such boards of directors shall 
determine that such amendment or repeal must be filed with or filed 
with and approved by the Commission under section 19 of the Exchange 
Act and the rules promulgated thereunder before such amendment or 
repeal may be effectuated, then such amendment or repeal shall not be

[[Page 46121]]

effectuated until filed with or filed with and approved by the 
Commission, as the case may be.
Bylaws of NYSE Regulation
    The amended and restated bylaws of NYSE Regulation currently 
provide for the creation of a Committee for Review that is charged with 
performing certain functions with respect to the Exchange, including 
hearing appeals for disciplinary decisions, conducting reviews of staff 
delisting determinations and providing general advice to the NYSE 
Regulation Board of Directors in connection with disciplinary, listing 
and other regulatory matters. The Committee for Review is currently 
comprised of (i) directors of NYSE Regulation and (ii) at least three 
non-director committee members associated with member organizations of 
the Exchange, at least one of whom is associated with a member 
organization of the Exchange that engages in a business involving 
substantial direct contact with securities customers, at least one of 
whom is associated with a member organization of the Exchange and 
registered as a specialist and spends a substantial part of his or her 
time on the trading floor of NYSE Market, Inc. and at least one of whom 
is associated with a member organization of the Exchange and spends a 
majority of his time on the trading floor of NYSE Market, Inc., and has 
as a substantial part of his business the execution of transactions on 
the trading floor of NYSE Market, Inc. for other than his own account 
or the account of his Exchange member organization, but is not 
registered as a specialist.
    Following the Mergers, the Committee for Review will also hear 
disciplinary appeals for NYSE Alternext U.S.\14\ In connection 
therewith, the amended and restated bylaws of NYSE Regulation are being 
amended to provide that the Committee for Review be expanded to include 
at least four individuals who are associated with member organizations 
of NYSE Alternext U.S. at least one of whom is associated with an 
member organization of NYSE Alternext U.S. that engages in a business 
involving substantial direct contact with securities customers; at 
least one of whom is associated with an member organization of NYSE 
Alternext U.S. and registered as a specialist and spends a substantial 
part of his or her time on the trading floor of NYSE Alternext US; at 
least one of whom is associated with a member organization of NYSE 
Alternext U.S. and spends a majority of his or her time on the trading 
floor of NYSE Alternext U.S. and has as a substantial part of his 
business the execution of transactions on the trading floor of NYSE 
Alternext U.S. for other than his or her own account or the account of 
his NYSE Alternext U.S. member organization but is not registered as a 
specialist; and at least of whom is associated with a NYSE Alternext 
U.S. Member Organization and spends a majority of his or her time on 
the trading floor of NYSE Alternext U.S. and has as a substantial part 
of his or her business the execution of transactions on the trading 
floor of NYSE Alternext U.S. for his own account or the account of his 
or her NYSE Alternext U.S. Member Organization but is not registered as 
a specialist.
---------------------------------------------------------------------------

    \14\ Reviews of delisting determinations will be heard by the 
same NYSE Alternext U.S. committee as has been reviewing such 
matters prior to the Mergers.
---------------------------------------------------------------------------

Trust Agreement of the NYSE Group Trust I
    The Trust Agreement is being amended to make certain technical 
changes designed to better provide NYSE Alternext U.S. with the same 
protections against certain material adverse changes in European Law 
that it currently provides for the Exchange and NYSE Arca, Inc.
Rules of the Exchange
    Solely for the purposes of section 1(L) of Article 5 of the 
certificate of incorporation of NYSE Euronext (which is the definition 
of ``Related Person''), as it may be in effect from time to time, the 
Exchange proposes to amend (1) the definition of ``member'' under Rule 
2(a) of the Rules of the Exchange to include any ``member'' (as defined 
in section 3(a)(3)(A)(i) of the Exchange Act \15\) of NYSE Alternext 
U.S. (or its successor), so long as NYSE Euronext continues to control, 
directly or indirectly, NYSE Alternext U.S. or its successor and (2) 
the definition of ``Member Organization'' under Rule 2(b) of the 
Exchange to include any ``member'' (as defined in section 
3(a)(3)(A)(ii), 3(a)(3)(A)(iii) and 3(a)(3)(A)(iv) of the Exchange Act 
\16\) of NYSE Alternext U.S. (or its successor), so long as NYSE 
Euronext continues to control, directly or indirectly, NYSE Alternext 
U.S. or its successor.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78c(a)(3)(A)(i).
    \16\ 15 U.S.C. 78c(a)(3)(A)(ii)-(iv).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that this filing is consistent with section 
6(b) of the Exchange Act,\17\ in general, and furthers the objectives 
of section 6(b)(1),\18\ 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 \19\ 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.
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78f(b).
    \18\ 15 U.S.C. 78f(b)(1).
    \19\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Exchange Act.

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

    No written comments were solicited or received with respect to 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 organization consents, the Commission will:
    (A) By order approve the 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, as amended, is consistent with

[[Page 46122]]

the Exchange 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-NYSE-2008-60 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street, NE., Washington, DC 20549.
All submissions should refer to File Number SR-NYSE-2008-60. 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, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. 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-2008-60 and should be 
submitted on or before August 28, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
---------------------------------------------------------------------------

    \20\ 17CFR 200.30-3(a)(12)
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Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-18146 Filed 8-6-08; 8:45 am]
BILLING CODE 8010-01-P

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