Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Approval of Proposed Rule Change Amending Its Rules To Reflect the Merger of Archipelago Holdings, Inc. (“Archipelago Holdings”), An Intermediate Holding Company, Into and With NYSE Group, Inc., Thereby Eliminating Archipelago Holdings From the Ownership Structure of the Exchange, 42533-42535 [2012-17549]

Download as PDF Federal Register / Vol. 77, No. 139 / Thursday, July 19, 2012 / Notices Exchange cannot set unreasonable fees, or fees that are unreasonably discriminatory, when vendors and subscribers can elect these alternatives. Accordingly, the Exchange believes that the acceptance of datafeed products in the marketplace demonstrates the consistency of these fees with applicable statutory standards. 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 foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A) 21 of the Act and subparagraph (f)(2) of Rule 19b–4 22 thereunder, because it establishes a due, fee, or other charge imposed by the NYSE Arca. At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File Number SR–NYSEArca–2012–73 on the subject line. emcdonald on DSK67QTVN1PROD with NOTICES Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEArca–2012–73. This file number should be included on the subject line if email is used. To help the 21 15 22 17 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 Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal offices 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– NYSEArca–2012–73, and should be submitted on or before August 9, 2012. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.23 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–17550 Filed 7–18–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–67435; File No. SR– NYSEArca–2012–45] Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Approval of Proposed Rule Change Amending Its Rules To Reflect the Merger of Archipelago Holdings, Inc. (‘‘Archipelago Holdings’’), An Intermediate Holding Company, Into and With NYSE Group, Inc., Thereby Eliminating Archipelago Holdings From the Ownership Structure of the Exchange July 13, 2012. I. Introduction On May 14, 2012, NYSE Arca, Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed with the Securities and Exchange U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). VerDate Mar<15>2010 15:07 Jul 18, 2012 23 17 Jkt 226001 PO 00000 CFR 200.30–3(a)(12). Frm 00052 Fmt 4703 Sfmt 4703 42533 Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 proposed rule changes to reflect the merger of Archipelago Holdings, Inc. (‘‘Archipelago Holdings’’), an intermediate holding company, into and with NYSE Group, Inc. (‘‘NYSE Group’’), thereby eliminating Archipelago Holdings from the ownership structure of the Exchange (the ‘‘Merger’’). The proposed rule changes were published for comment in the Federal Register on May 31, 2012.3 The Commission received no comment letters on the proposal. The Commission has reviewed carefully the proposed rule changes and finds that the proposed rule changes are consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.4 This order approves the proposed rule changes. II. Description NYSE Euronext intends to merge Archipelago Holdings with and into NYSE Group, effective following approval of the proposed rule change.5 According to the Exchange, the reason for the Merger is to eliminate an unnecessary intermediate holding company.6 Following the Merger, the Exchange would continue to be whollyowned by NYSE Arca Holdings, which in turn would be wholly-owned by NYSE Group, which in turn would be wholly-owned by NYSE Euronext. The Exchange has submitted its proposal to (i) Amend and restate the Amended and Restated Certificate of Incorporation of NYSE Arca Holdings, Inc. (the ‘‘NYSE Arca Holdings Certificate’’), (ii) amend and restate the NYSE Arca Holdings, Inc. Bylaws (‘‘NYSE Arca Holdings Bylaws’’) as required by the NYSE Arca Holdings Certificate, (iii) amend the rules of NYSE Arca and NYSE Arca Equities, Inc., (iv) delete in its entirety the Amended and Restated Certificate of Archipelago Holdings (‘‘Archipelago 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 67058 (May 31, 2012), 77 FR 32155 (‘‘Notice’’). 4 In approving the proposed rule changes, the Commission has considered their impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 5 Currently, NYSE Arca Holdings, Inc. (‘‘NYSE Arca Holdings’’) owns all of the equity interest of the Exchange. Archipelago Holdings owns all of the equity interest of NYSE Arca Holdings, and NYSE Group owns all of the equity interest of Archipelago Holdings. NYSE Euronext owns all of the equity interest of NYSE Group. 6 See Notice, 77 FR at 32156. 2 17 E:\FR\FM\19JYN1.SGM 19JYN1 42534 Federal Register / Vol. 77, No. 139 / Thursday, July 19, 2012 / Notices Holdings Certificate’’), (v) delete in its entirety the Amended and Restated Bylaws of Archipelago Holdings (‘‘Archipelago Holdings Bylaws’’) and (vi) file the resolution (the ‘‘Resolution’’) of the Board of Directors of NYSE Arca Holdings (the ‘‘Board’’) in connection with the Merger. Section 19(b) of the Act and Rule 19b–4 thereunder require a selfregulatory organization (‘‘SRO’’) to file proposed rule changes with the Commission. Although NYSE Arca Holdings and Archipelago Holdings are not SROs, the NYSE Arca Holdings Certificate, NYSE Arca Holdings Bylaws, Archipelago Holdings Certificate, and Archipelago Holdings Bylaws, along with other corporate documents, are rules of the Exchange 7 and must be filed with the Commission pursuant to Section 19(b)(4) of the Act and Rule 19b–4 thereunder. Accordingly, the Exchange filed the NYSE Arca Holdings Certificate and NYSE Arca Holdings Bylaws with the Commission, along with other corporate governance documents.8 emcdonald on DSK67QTVN1PROD with NOTICES A. Waiver of the NYSE Arca Holdings Ownership and Voting Limits The NYSE Arca Holdings Certificate imposes certain ownership and voting restrictions on the shares of NYSE Arca Holdings. Specifically, Article 9, Section 1(b)(i) of the NYSE Arca Holdings Certificate provides that for so long as NYSE Arca Holdings directly or indirectly controls the Exchange, no Person either alone or together with its Related Persons,9 may own, directly or indirectly, of record or beneficially shares of the capital stock (whether common or preferred stock) of NYSE Arca Holdings constituting more than 40% of the outstanding shares of any class of capital stock of NYSE Arca Holdings (the ‘‘Ownership Limit’’) unless the Board has adopted an amendment to the NYSE Arca Holdings 7 See Section 3(a)(27) of the Act, 15 U.S.C. 78c(a)(27). 8 See proposed Second Amended and Restated Certificate of Incorporation of NYSE Arca Holdings, attached as Exhibit A to the Notice; proposed Amended and Restated Bylaws of NYSE Arca Holdings, attached as Exhibit B to the Notice. The Exchange also filed the proposed rule changes to its rules as well as the rules of NYSE Arca Equities, Inc., attached as Exhibit C to the Notice. The Exchange also proposes to delete the entirety of the Amended and Restated Certificate of Incorporation of Archipelago Holdings and the Amended and Restated Bylaws of Archipelago Holdings, attached as Exhibit D and Exhibit E, respectively, to the Notice. The Exchange also filed the Resolution made by the Board as Exhibit F to the Notice. These exhibits are available on the Commission’s Web site (https://www.sec.gov/rules/sro.shtml) and at the Commission’s Public Reference Room. 9 The terms ‘‘Person’’ and ‘‘Related Persons’’ are defined in the NYSE Arca Holdings Certificate. VerDate Mar<15>2010 15:07 Jul 18, 2012 Jkt 226001 Bylaws waiving such a restriction. In connection with such amendment, the Board must adopt resolutions stating that: such amendment will not impair the ability of the Exchange to carry out its functions and responsibilities under the Securities Exchange Act of 1934, as amended (the ‘‘Act’’), and the rules thereunder; is otherwise in the best interests of NYSE Arca Holdings, its stockholders, and the Exchange; and will not impair the ability of the Commission to enforce the Act. Such amendment is not effective until approved by the Commission. The Board also must find that no such Person or Related Person is subject to a statutory disqualification under Section 3(a)(39) of the Act. Similarly, Article 9, Section 1(c) of the NYSE Arca Holdings Certificate provides that no Person, either alone or together with its Related Persons, may directly or indirectly vote more than 20% of the shares of NYSE Arca Holdings (the ‘‘Voting Limit’’) unless the Board adopts an amendment to the NYSE Arca Holdings Bylaws waiving such a restriction and, in connection with such amendment, adopts resolutions and makes a determination with respect to statutory disqualification substantially the same as those described above for the Ownership Limit.10 The Board made these findings as set forth in the Resolution. The Board found, in pertinent part, that (1) The Merger will not impair the ability of the Exchange to carry out its functions and responsibilities as an ‘‘exchange’’ under the Act and the rules promulgated thereunder; (2) the Merger will not impair the ability of the Commission to enforce the Act; (3) neither NYSE Group nor any of its Related Persons is subject to any applicable ‘‘statutory disqualification’’ within the meaning of Section 3(a)(39) of the Act; and (4) neither NYSE Group nor any of its Related Persons is an ETP Holder of NYSE Arca Equities, Inc. or an OTP Firm of the Exchange, except as permitted by Article 9, Section 4 of the NYSE Arca Holdings Certificate. The Exchange also proposes to amend the NYSE Arca Holdings Bylaws by adding a new Article 11 that sets forth the waiver of the Ownership and Voting Limits, as required by the NYSE Arca Holdings Certificate, solely for purposes of the Merger. 10 Article 9, Section 4 of the NYSE Arca Holdings Certificate currently provides certain exceptions to these ownership and voting restrictions for Archipelago Holdings. PO 00000 Frm 00053 Fmt 4703 Sfmt 4703 B. Changes in Corporate Structure and Deletion of Duplicative or Obsolete Text The proposed rule changes reflect the elimination of Archipelago Holdings from the Exchange’s ownership structure and delete duplicative or obsolete text. For example, the Exchange proposes to replace references to Archipelago Holdings in Article 9, Section 4 of the NYSE Arca Holdings Certificate with references to NYSE Group. In addition, the Exchange proposes to delete the last sentence of that section, which relates to certain voting and ownership restrictions that were put in place when the Exchange combined with the New York Stock Exchange in 2005 but have been superseded by other requirements.11 The Exchange proposes to delete in its entirety the text of the Archipelago Holdings Certificate and the Archipelago Holdings Bylaws because Archipelago Holdings will no longer exist upon consummation of the Merger. Accordingly, these documents will no longer be rules of the Exchange.12 Discussion The Commission finds that the proposed rule changes are consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities 11 See Notice, 77 FR at 32156; see also Securities Exchange Act Release No. 55294 (Feb. 14, 2007), 72 FR 8046 (Feb. 22, 2007) (SR–NYSEArca–2007–05); see also Securities Exchange Act Release No. 55293 (Feb. 14, 2007), 72 FR 8033 (Feb. 22, 2007) (SR– NYSE–2006–120). 12 Other changes include amending the NYSE Arca Holdings Bylaws to change references to the Pacific Exchange, Inc. to NYSE Arca, Inc.; changing references to PCX Holdings, Inc. to NYSE Arca Holdings; and deleting obsolete references to trading in minimum lots. The Exchange also proposes to delete NYSE Arca Rule 1.1(cc) and (gg), which set forth the definitions for Archipelago Holdings and Related Person, and to delete NYSE Arca Rule 3.4, which sets forth ownership and voting restrictions for Archipelago Holdings. Upon the elimination of Archipelago Holdings, NYSE Group would be the next holding company, and voting and ownership restrictions are currently set forth in its Second Amended and Restated Certificate of Incorporation of NYSE Group, Inc. (‘‘NYSE Group Certificate’’) in Article IV, Section 4(b). NYSE Arca Equities Rule 14.3(b) provides that all officers and directors of Archipelago Holdings shall be deemed to be officers and directors of the Exchange and NYSE Arca Equities for purposes of, and subject to oversight pursuant to, the Act. NYSE Arca Equities Rule 14.3(d) provides that Archipelago Holdings must maintain all books and records related to the Exchange within the United States. The Exchange proposes to delete this text and make a conforming change to NYSE Arca Equities Rule 14.3(c). Comparable provisions are already contained in NYSE Group’s governing documents. The Exchange notes that, under Article IX of the NYSE Group Certificate, NYSE Group’s directors and officers already are subject to the jurisdiction of the Commission, and under Article X, NYSE Group’s books and records relating to the Exchange must be maintained within the United States. See Notice, 77 FR at 32156. E:\FR\FM\19JYN1.SGM 19JYN1 Federal Register / Vol. 77, No. 139 / Thursday, July 19, 2012 / Notices emcdonald on DSK67QTVN1PROD with NOTICES exchange.13 Specifically, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act,14 which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The proposal would accommodate the merger of Archipelago Holdings, an intermediate holding company, into and with NYSE Group, thereby eliminating Archipelago Holdings from the ownership structure of the Exchange. The Commission notes that the proposed rule changes would otherwise have no substantive impact on other rules of the Exchange, including those concerning the voting and ownership restrictions that currently apply to the Exchange and its affiliates.15 The Exchange would continue as an indirect wholly-owned subsidiary of NYSE Euronext. In addition, the Commission notes that the Board made certain findings set forth in the Resolution that the direct ownership of NYSE Arca Holdings by NYSE Group as contemplated by the Merger is in the best interests of NYSE Arca Holdings, its shareholders, and the Exchange. In addition, the Board found that neither NYSE Group, nor any of its Related Persons, is (1) An ETP Holder of NYSE Arca Equities, Inc. (except as otherwise permitted by the NYSE Arca Holdings Certificate) (2) an OTP Holder of the Exchange (except as otherwise permitted by the NYSE Arca Holdings Certificate); or (3) subject to any ‘‘statutory disqualification.’’ 16 In light of these representations and findings, the Commission believes that the proposed rule changes are consistent with the Act and will not impair the ability of the Commission or the Exchange to discharge their respective responsibilities under the Act. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,17 that the 13 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 14 15 U.S.C. 78f(b)(5). 15 See supra note 11. 16 See Resolution. 17 15 U.S.C. 78s(b)(2). VerDate Mar<15>2010 15:07 Jul 18, 2012 Jkt 226001 proposed rule change (SR–NYSEArca– 2012–45) be, and it hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–17549 Filed 7–18–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–67438; File No. SR– NYSEMKT–2012–19] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Establishing a Fee for Television Distribution of the NYSE MKT Trades Data Product July 13, 2012. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on July 3, 2012, NYSE MKT LLC (the ‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to establish a fee for television distribution of the NYSE MKT Trades data product. The text of the proposed rule change is available on the Exchange’s Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. PO 00000 18 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 Frm 00054 Fmt 4703 Sfmt 4703 42535 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 proposes to establish a fee for television distribution of the NYSE MKT Trades data product. In 2010, the Commission approved the NYSE MKT Trades data product and its fees.4 NYSE MKT Trades is a NYSE MKT-only market data service that allows a vendor to redistribute on a realtime basis the same last sale information that the Exchange reports under the Consolidated Tape Association (‘‘CTA’’) Plan and the NASDAQ Unlisted Trading Privileges Plan (‘‘NASDAQ UTP Plan’’) for including in those plans’ consolidated data streams and certain other related data elements (‘‘NYSE MKT Last Sale Information’’). The Exchange currently charges the datafeed recipients (a) an access fee of $750 per month (the ‘‘Access Fee’’),5 and (b) at the election of the vendor, either (i) a device fee for professional subscribers of $10.00 per month or (ii) a fee based on the number of ‘‘Subscriber Entitlements’’ (the latter two fees together, ‘‘User Fees’’). The Exchange proposes to add a new fee category for NYSE MKT Trades to provide television broadcasters 6 with an alternative enterprise fee (the ‘‘Broadcast Fee’’). For the receipt of access to and the ability to display the datafeeds of the NYSE MKT Trades service by a television broadcaster, the Exchange proposes to charge a flat fee of $5,000 per month.7 Broadcasters will not be required to track the number of viewers. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the 4 See Securities Exchange Act Release No. 62187 (May 27, 2010); 75 FR 31500 (Jun. 3, 2010) (SR– NYSEAmex–2010–35) (the ‘‘2010 Release’’). Since that filing, the Exchange has changed its name from NYSE Amex LLC to NYSE MKT LLC. See Securities Exchange Act Release No. 67037 (May 21, 2012), 77 FR 31415 (May 25, 2012) (SR–NYSEAmex–2012– 32). 5 The Access Fee also covers the NYSE MKT BBO service. See the 2010 Release at 31501. 6 Television broadcast can be through cable, satellite, or traditional means. 7 Although the Broadcast Fee will not vary based on the amount of time that the datafeed is displayed during the day or the number of channels the broadcaster utilizes, it will be prorated if a television broadcaster initiates the service during the middle of a month. E:\FR\FM\19JYN1.SGM 19JYN1

Agencies

[Federal Register Volume 77, Number 139 (Thursday, July 19, 2012)]
[Notices]
[Pages 42533-42535]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-17549]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67435; File No. SR-NYSEArca-2012-45]


Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting 
Approval of Proposed Rule Change Amending Its Rules To Reflect the 
Merger of Archipelago Holdings, Inc. (``Archipelago Holdings''), An 
Intermediate Holding Company, Into and With NYSE Group, Inc., Thereby 
Eliminating Archipelago Holdings From the Ownership Structure of the 
Exchange

 July 13, 2012.

I. Introduction

    On May 14, 2012, 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 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ proposed rule changes to 
reflect the merger of Archipelago Holdings, Inc. (``Archipelago 
Holdings''), an intermediate holding company, into and with NYSE Group, 
Inc. (``NYSE Group''), thereby eliminating Archipelago Holdings from 
the ownership structure of the Exchange (the ``Merger''). The proposed 
rule changes were published for comment in the Federal Register on May 
31, 2012.\3\ The Commission received no comment letters on the 
proposal. The Commission has reviewed carefully the proposed rule 
changes and finds that the proposed rule changes are consistent with 
the requirements of the Act and the rules and regulations thereunder 
applicable to a national securities exchange.\4\ This order approves 
the proposed rule changes.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 67058 (May 31, 
2012), 77 FR 32155 (``Notice'').
    \4\ In approving the proposed rule changes, the Commission has 
considered their impact on efficiency, competition, and capital 
formation. See 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

II. Description

    NYSE Euronext intends to merge Archipelago Holdings with and into 
NYSE Group, effective following approval of the proposed rule 
change.\5\ According to the Exchange, the reason for the Merger is to 
eliminate an unnecessary intermediate holding company.\6\ Following the 
Merger, the Exchange would continue to be wholly-owned by NYSE Arca 
Holdings, which in turn would be wholly-owned by NYSE Group, which in 
turn would be wholly-owned by NYSE Euronext.
---------------------------------------------------------------------------

    \5\ Currently, NYSE Arca Holdings, Inc. (``NYSE Arca Holdings'') 
owns all of the equity interest of the Exchange. Archipelago 
Holdings owns all of the equity interest of NYSE Arca Holdings, and 
NYSE Group owns all of the equity interest of Archipelago Holdings. 
NYSE Euronext owns all of the equity interest of NYSE Group.
    \6\ See Notice, 77 FR at 32156.
---------------------------------------------------------------------------

    The Exchange has submitted its proposal to (i) Amend and restate 
the Amended and Restated Certificate of Incorporation of NYSE Arca 
Holdings, Inc. (the ``NYSE Arca Holdings Certificate''), (ii) amend and 
restate the NYSE Arca Holdings, Inc. Bylaws (``NYSE Arca Holdings 
Bylaws'') as required by the NYSE Arca Holdings Certificate, (iii) 
amend the rules of NYSE Arca and NYSE Arca Equities, Inc., (iv) delete 
in its entirety the Amended and Restated Certificate of Archipelago 
Holdings (``Archipelago

[[Page 42534]]

Holdings Certificate''), (v) delete in its entirety the Amended and 
Restated Bylaws of Archipelago Holdings (``Archipelago Holdings 
Bylaws'') and (vi) file the resolution (the ``Resolution'') of the 
Board of Directors of NYSE Arca Holdings (the ``Board'') in connection 
with the Merger.
    Section 19(b) of the Act and Rule 19b-4 thereunder require a self-
regulatory organization (``SRO'') to file proposed rule changes with 
the Commission. Although NYSE Arca Holdings and Archipelago Holdings 
are not SROs, the NYSE Arca Holdings Certificate, NYSE Arca Holdings 
Bylaws, Archipelago Holdings Certificate, and Archipelago Holdings 
Bylaws, along with other corporate documents, are rules of the Exchange 
\7\ and must be filed with the Commission pursuant to Section 19(b)(4) 
of the Act and Rule 19b-4 thereunder. Accordingly, the Exchange filed 
the NYSE Arca Holdings Certificate and NYSE Arca Holdings Bylaws with 
the Commission, along with other corporate governance documents.\8\
---------------------------------------------------------------------------

    \7\ See Section 3(a)(27) of the Act, 15 U.S.C. 78c(a)(27).
    \8\ See proposed Second Amended and Restated Certificate of 
Incorporation of NYSE Arca Holdings, attached as Exhibit A to the 
Notice; proposed Amended and Restated Bylaws of NYSE Arca Holdings, 
attached as Exhibit B to the Notice. The Exchange also filed the 
proposed rule changes to its rules as well as the rules of NYSE Arca 
Equities, Inc., attached as Exhibit C to the Notice. The Exchange 
also proposes to delete the entirety of the Amended and Restated 
Certificate of Incorporation of Archipelago Holdings and the Amended 
and Restated Bylaws of Archipelago Holdings, attached as Exhibit D 
and Exhibit E, respectively, to the Notice. The Exchange also filed 
the Resolution made by the Board as Exhibit F to the Notice. These 
exhibits are available on the Commission's Web site (https://www.sec.gov/rules/sro.shtml) and at the Commission's Public 
Reference Room.
---------------------------------------------------------------------------

A. Waiver of the NYSE Arca Holdings Ownership and Voting Limits

    The NYSE Arca Holdings Certificate imposes certain ownership and 
voting restrictions on the shares of NYSE Arca Holdings. Specifically, 
Article 9, Section 1(b)(i) of the NYSE Arca Holdings Certificate 
provides that for so long as NYSE Arca Holdings directly or indirectly 
controls the Exchange, no Person either alone or together with its 
Related Persons,\9\ may own, directly or indirectly, of record or 
beneficially shares of the capital stock (whether common or preferred 
stock) of NYSE Arca Holdings constituting more than 40% of the 
outstanding shares of any class of capital stock of NYSE Arca Holdings 
(the ``Ownership Limit'') unless the Board has adopted an amendment to 
the NYSE Arca Holdings Bylaws waiving such a restriction. In connection 
with such amendment, the Board must adopt resolutions stating that: 
such amendment will not impair the ability of the Exchange to carry out 
its functions and responsibilities under the Securities Exchange Act of 
1934, as amended (the ``Act''), and the rules thereunder; is otherwise 
in the best interests of NYSE Arca Holdings, its stockholders, and the 
Exchange; and will not impair the ability of the Commission to enforce 
the Act. Such amendment is not effective until approved by the 
Commission. The Board also must find that no such Person or Related 
Person is subject to a statutory disqualification under Section 
3(a)(39) of the Act. Similarly, Article 9, Section 1(c) of the NYSE 
Arca Holdings Certificate provides that no Person, either alone or 
together with its Related Persons, may directly or indirectly vote more 
than 20% of the shares of NYSE Arca Holdings (the ``Voting Limit'') 
unless the Board adopts an amendment to the NYSE Arca Holdings Bylaws 
waiving such a restriction and, in connection with such amendment, 
adopts resolutions and makes a determination with respect to statutory 
disqualification substantially the same as those described above for 
the Ownership Limit.\10\
---------------------------------------------------------------------------

    \9\ The terms ``Person'' and ``Related Persons'' are defined in 
the NYSE Arca Holdings Certificate.
    \10\ Article 9, Section 4 of the NYSE Arca Holdings Certificate 
currently provides certain exceptions to these ownership and voting 
restrictions for Archipelago Holdings.
---------------------------------------------------------------------------

    The Board made these findings as set forth in the Resolution. The 
Board found, in pertinent part, that (1) The Merger will not impair the 
ability of the Exchange to carry out its functions and responsibilities 
as an ``exchange'' under the Act and the rules promulgated thereunder; 
(2) the Merger will not impair the ability of the Commission to enforce 
the Act; (3) neither NYSE Group nor any of its Related Persons is 
subject to any applicable ``statutory disqualification'' within the 
meaning of Section 3(a)(39) of the Act; and (4) neither NYSE Group nor 
any of its Related Persons is an ETP Holder of NYSE Arca Equities, Inc. 
or an OTP Firm of the Exchange, except as permitted by Article 9, 
Section 4 of the NYSE Arca Holdings Certificate.
    The Exchange also proposes to amend the NYSE Arca Holdings Bylaws 
by adding a new Article 11 that sets forth the waiver of the Ownership 
and Voting Limits, as required by the NYSE Arca Holdings Certificate, 
solely for purposes of the Merger.

B. Changes in Corporate Structure and Deletion of Duplicative or 
Obsolete Text

    The proposed rule changes reflect the elimination of Archipelago 
Holdings from the Exchange's ownership structure and delete duplicative 
or obsolete text. For example, the Exchange proposes to replace 
references to Archipelago Holdings in Article 9, Section 4 of the NYSE 
Arca Holdings Certificate with references to NYSE Group. In addition, 
the Exchange proposes to delete the last sentence of that section, 
which relates to certain voting and ownership restrictions that were 
put in place when the Exchange combined with the New York Stock 
Exchange in 2005 but have been superseded by other requirements.\11\
---------------------------------------------------------------------------

    \11\ See Notice, 77 FR at 32156; see also Securities Exchange 
Act Release No. 55294 (Feb. 14, 2007), 72 FR 8046 (Feb. 22, 2007) 
(SR-NYSEArca-2007-05); see also Securities Exchange Act Release No. 
55293 (Feb. 14, 2007), 72 FR 8033 (Feb. 22, 2007) (SR-NYSE-2006-
120).
---------------------------------------------------------------------------

    The Exchange proposes to delete in its entirety the text of the 
Archipelago Holdings Certificate and the Archipelago Holdings Bylaws 
because Archipelago Holdings will no longer exist upon consummation of 
the Merger. Accordingly, these documents will no longer be rules of the 
Exchange.\12\
---------------------------------------------------------------------------

    \12\ Other changes include amending the NYSE Arca Holdings 
Bylaws to change references to the Pacific Exchange, Inc. to NYSE 
Arca, Inc.; changing references to PCX Holdings, Inc. to NYSE Arca 
Holdings; and deleting obsolete references to trading in minimum 
lots. The Exchange also proposes to delete NYSE Arca Rule 1.1(cc) 
and (gg), which set forth the definitions for Archipelago Holdings 
and Related Person, and to delete NYSE Arca Rule 3.4, which sets 
forth ownership and voting restrictions for Archipelago Holdings. 
Upon the elimination of Archipelago Holdings, NYSE Group would be 
the next holding company, and voting and ownership restrictions are 
currently set forth in its Second Amended and Restated Certificate 
of Incorporation of NYSE Group, Inc. (``NYSE Group Certificate'') in 
Article IV, Section 4(b). NYSE Arca Equities Rule 14.3(b) provides 
that all officers and directors of Archipelago Holdings shall be 
deemed to be officers and directors of the Exchange and NYSE Arca 
Equities for purposes of, and subject to oversight pursuant to, the 
Act. NYSE Arca Equities Rule 14.3(d) provides that Archipelago 
Holdings must maintain all books and records related to the Exchange 
within the United States. The Exchange proposes to delete this text 
and make a conforming change to NYSE Arca Equities Rule 14.3(c). 
Comparable provisions are already contained in NYSE Group's 
governing documents. The Exchange notes that, under Article IX of 
the NYSE Group Certificate, NYSE Group's directors and officers 
already are subject to the jurisdiction of the Commission, and under 
Article X, NYSE Group's books and records relating to the Exchange 
must be maintained within the United States. See Notice, 77 FR at 
32156.
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Discussion

    The Commission finds that the proposed rule changes are consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities

[[Page 42535]]

exchange.\13\ Specifically, the Commission finds that the proposal is 
consistent with Section 6(b)(5) of the Act,\14\ which requires, among 
other things, that the rules of a national securities exchange be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in facilitating transactions in 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest.
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    \13\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \14\ 15 U.S.C. 78f(b)(5).
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    The proposal would accommodate the merger of Archipelago Holdings, 
an intermediate holding company, into and with NYSE Group, thereby 
eliminating Archipelago Holdings from the ownership structure of the 
Exchange. The Commission notes that the proposed rule changes would 
otherwise have no substantive impact on other rules of the Exchange, 
including those concerning the voting and ownership restrictions that 
currently apply to the Exchange and its affiliates.\15\ The Exchange 
would continue as an indirect wholly-owned subsidiary of NYSE Euronext. 
In addition, the Commission notes that the Board made certain findings 
set forth in the Resolution that the direct ownership of NYSE Arca 
Holdings by NYSE Group as contemplated by the Merger is in the best 
interests of NYSE Arca Holdings, its shareholders, and the Exchange. In 
addition, the Board found that neither NYSE Group, nor any of its 
Related Persons, is (1) An ETP Holder of NYSE Arca Equities, Inc. 
(except as otherwise permitted by the NYSE Arca Holdings Certificate) 
(2) an OTP Holder of the Exchange (except as otherwise permitted by the 
NYSE Arca Holdings Certificate); or (3) subject to any ``statutory 
disqualification.'' \16\
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    \15\ See supra note 11.
    \16\ See Resolution.
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    In light of these representations and findings, the Commission 
believes that the proposed rule changes are consistent with the Act and 
will not impair the ability of the Commission or the Exchange to 
discharge their respective responsibilities under the Act.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\17\ that the proposed rule change (SR-NYSEArca-2012-45) be, and it 
hereby is, approved.
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    \17\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
Kevin M. O'Neill,
Deputy Secretary.
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    \18\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2012-17549 Filed 7-18-12; 8:45 am]
BILLING CODE 8011-01-P
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