Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change in Connection With the Proposed Termination of the Amended and Restated Trust Agreement, Dated as of November 13, 2013 and Amended on June 2, 2014 by and Among NYSE Holdings LLC, a Delaware Limited Liability Company, NYSE Group, Inc., a Delaware Corporation, Wilmington Trust Company, as Delaware Trustee, and Each of Jacques de Larosière de Champfeu, Alan Trager and John Shepard Reed, as Trustees, 63191-63194 [2014-25079]

Download as PDF Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Notices only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR– NYSEArca–2014–112 and should be submitted on or before November 12, 2014. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–25080 Filed 10–21–14; 8:45 am] mstockstill on DSK4VPTVN1PROD with NOTICES BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–73373; File No. SR–NYSE– 2014–53] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change in Connection With the Proposed Termination of the Amended and Restated Trust Agreement, Dated as of November 13, 2013 and Amended on June 2, 2014 by and Among NYSE Holdings LLC, a Delaware Limited Liability Company, NYSE Group, Inc., a Delaware Corporation, Wilmington Trust Company, as Delaware Trustee, ` and Each of Jacques de Larosiere de Champfeu, Alan Trager and John Shepard Reed, as Trustees October 16, 2014. 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 October 8, 2014, New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes this rule filing in connection with the proposed termination of the Amended and Restated Trust Agreement, dated as of November 13, 2013 and amended on June 2, 2014 (the ‘‘Trust Agreement’’), by and among NYSE Holdings LLC, a Delaware limited liability company (‘‘NYSE Holdings’’), NYSE Group, Inc., a Delaware corporation (‘‘NYSE Group’’), Wilmington Trust Company, as Delaware Trustee, and each of ` Jacques de Larosiere de Champfeu, Alan Trager and John Shepard Reed, as Trustees. 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. 1 15 U.S.C. 78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 18 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 18:22 Oct 21, 2014 Jkt 235001 PO 00000 Frm 00114 Fmt 4703 Sfmt 4703 63191 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange seeks approval for its 100% direct parent, NYSE Group, and its 100% indirect parent, NYSE Holdings, to terminate the Trust Agreement.4 The Exchange believes that the regulatory considerations that led to the implementation of the Trust Agreement in 2007 are now moot as a result of the sale by Intercontinental Exchange, Inc., a Delaware corporation (‘‘ICE’’), of Euronext N.V. (‘‘Euronext’’) in June 2014 and certain changes in the corporate governance of ICE, ICE Holdings and NYSE Holdings that occurred upon such sale.5 Background In 2007, NYSE Group, which is the 100% owner of the Exchange, combined with Euronext (the ‘‘Combination’’). The new parent company formed in the Combination, NYSE Euronext, operated several regulated entities in the United States and various jurisdictions in Europe. In the Commission’s notice 4 ICE, a public company listed on the Exchange, owns 100% of Intercontinental Exchange Holdings, Inc., a Delaware corporation (‘‘ICE Holdings’’), which in turn owns 100% of NYSE Holdings. Through ICE Holdings, NYSE Holdings and NYSE Group, ICE indirectly owns (1) 100% of the equity interest of three registered national securities exchanges and self-regulatory organizations (together, the ‘‘NYSE Exchanges’’)—the Exchange, NYSE Arca, Inc. (‘‘NYSE Arca’’) and NYSE MKT LLC (‘‘NYSE MKT’’)—and (2) 100% of the equity interest of NYSE Market (DE), Inc. (‘‘NYSE Market’’), NYSE Regulation, Inc. (‘‘NYSE Regulation’’), NYSE Arca L.L.C., NYSE Arca Equities, Inc. and NYSE Amex Options LLC. See Exchange Act Release No. 70210 (August 15, 2013) (SR–NYSE–2013–42), 78 FR 51758 (August 21, 2013) (approving proposed rule change relating to a corporate transaction in which NYSE Euronext will become a wholly owned subsidiary of IntercontinentalExchange Group, Inc.). 5 The Exchange’s affiliates NYSE Arca and NYSE MKT have also submitted the same proposed rule change to terminate the Trust Agreement. See SR– NYSEMKT–2014–83 and SR–NYSEArca–2014–112. E:\FR\FM\22OCN1.SGM 22OCN1 63192 Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Notices relating to the proposed Combination, the Exchange emphasized the importance of continuing to regulate marketplaces locally: mstockstill on DSK4VPTVN1PROD with NOTICES A core aspect of the structure of the Combination is continued local regulation of the marketplaces. Accordingly, the Combination is premised on the notion that . . . [c]ompanies listing their securities only on markets operated by Euronext and its subsidiaries will not become newly subject to U.S. laws or regulation by the SEC as a result of the Combination, and companies listing their securities only on the Exchange or NYSE Arca, will not become newly subject to European rules or regulation as a result of the Combination.6 In connection with obtaining regulatory approval of the Combination, NYSE Euronext implemented certain special arrangements consisting of two standby structures, one involving a Dutch foundation (Stichting) and one involving a Delaware trust. The Dutch foundation was empowered to take actions to mitigate the effects of any material adverse change in U.S. law that had an ‘‘extraterritorial’’ impact on nonU.S. issuers listed on Euronext markets, non-U.S. financial services firms that were members of Euronext markets or holders of exchange licenses with respect to the Euronext markets. The Delaware trust was empowered to take actions to mitigate the effects of any material adverse change in European law that had an ‘‘extraterritorial’’ impact on the non-European issuers listed on NYSE Group securities exchanges, nonEuropean financial services firms that were members of any NYSE Group securities market or holders of exchange licenses with respect to the NYSE Group securities exchanges. The current form of the Trust Agreement is attached as Exhibit 5A, and a form of unanimous written consent of all parties to, or otherwise bound by, the Trust Agreement resolving that the Delaware trust be terminated is attached as Exhibit 5B. The terms of the Dutch foundation and the Delaware trust are complex. An explanation of the terms is included in the NYSE Euronext Notice. Subsequent modifications to the arrangements, to the extent relevant to the proposed rule change, are described herein. The Dutch foundation and the Delaware trust remained in effect after the merger of ICE Holdings (then known as IntercontinentalExchange, Inc.) and NYSE Euronext in 2013 under ICE (then known as IntercontinentalExchange 6 See Exchange Act Release No. 55026 (Dec. 29, 2006) (SR–NYSE–2006–120), 72 FR 814, 816–817 (January 8, 2007) (the ‘‘NYSE Euronext Notice’’). NYSE Euronext acquired NYSE MKT, the third of the NYSE Exchanges, in 2008. VerDate Sep<11>2014 18:22 Oct 21, 2014 Jkt 235001 Group, Inc.) as a new public holding company. However, in connection with ICE’s announced plan to sell the Euronext securities exchanges in an initial public offering, the Dutch Ministry of Finance permitted modifications of the terms of the governing document of the Dutch foundation under which the powers of the Dutch foundation would cease to apply to ICE and its affiliates at such time as ICE ceased to hold a ‘‘controlling interest’’ in Euronext, with ‘‘controlling interest’’ defined by reference to the definition of ‘‘control’’ under Rule 10 of the International Financial Reporting Standards (‘‘IFRS 10’’).7 In June 2014 ICE announced that it had sold all but approximately 6% of the ownership interest in Euronext in an underwritten public offering outside the United States.8 Upon application by ICE, the Dutch Ministry of Finance confirmed on July 16, 2014 that the conditions to the cessation of the application of the Dutch foundation to ICE had been satisfied or waived.9 As a result, ICE and its subsidiaries are no longer subject to the provisions of the Dutch foundation. In the 2013 merger, NYSE Euronext was succeeded by the entity now known as NYSE Holdings, which is currently a party to the Trust Agreement. At that time, references to the nominating and governance committee of the board of directors of NYSE Euronext, which selected the Trustees of the Delaware trust, were replaced by references to the nominating and governance committee of the board of directors of ICE.10 Other provisions of the Trust Agreement are substantially unchanged.11 In connection with the Combination of NYSE Group and Euronext in 2007 and the establishment of the Dutch foundation and the Delaware trust, the Certificate of Incorporation and Bylaws of NYSE Euronext included several provisions relating to representation of 7 Excerpts from the Further Amended and Restated Governance and Option Agreement, dated March 21, 2014, among the Dutch foundation, Euronext Group N.V. and ICE are attached as Exhibit 5C. 8 ICE’s press release dated June 24, 2014 is available at the following link: http://ir.theice.com/ investors-and-media/press/press-releases/pressrelease-details/2014/Intercontinental-ExchangeAnnounces-Closing-of-Euronext-Initial-PublicOffering/default.aspx. 9 An English translation of the Dutch Ministry of Finance’s letter is attached as Exhibit 5D. 10 See note 4, supra. 11 See Exchange Act Release No. 72158 (May 13, 2014) (SR–NYSE–2014–23), 79 FR 28784 (May 19, 2014) (notice of filing and immediate effectiveness of proposed rule change relating to name changes of the Exchange’s ultimate parent) (revising Trust Agreement to reflect name changes of ICE and ICE Holdings). PO 00000 Frm 00115 Fmt 4703 Sfmt 4703 European interests on the board of directors and other provisions requiring the board to give due consideration to European regulatory requirements and the interests of identified categories of European stakeholders. These provisions are summarized in the NYSE Euronext Notice. Each such provision was subject to automatic revocation in the event that NYSE Euronext no longer held a controlling interest in Euronext or certain of its subsidiaries. For this purpose, ‘‘controlling interest’’ was defined to mean 50% or more of the outstanding shares of each class of voting securities and of the combined voting power of outstanding voting securities entitled to vote generally in the election of directors. Substantially identical provisions were added to the Certificate of Incorporation and Bylaws of ICE and ICE Holdings, and were retained in the Operating Agreement of NYSE Holdings, when ICE acquired NYSE Euronext in 2013, except that the ‘‘controlling interest’’ test was modified to become a ‘‘control’’ test under IFRS 10, as described above with respect to the Dutch foundation. As a result of the initial public offering of Euronext, ICE has established that it no longer controls Euronext within the meaning of IFRS 10, and the provisions of the constituent documents of ICE, ICE Holdings and NYSE Holdings have automatically and without further action become void and are of no further force and effect. Proposed Rule Change The Exchange requests approval to terminate the Delaware trust because it believes that the regulatory considerations that led to the implementation of the Trust Agreement in 2007 have been mooted by the sale of Euronext in June 2014, the automatic revocation of corporate governance provisions applicable to ICE, ICE Holdings and NYSE Holdings that occurred upon such sale, and the fact that the Dutch foundation which functioned as a European analog to the Delaware trust, ceased to have any authority over ICE and its subsidiaries upon the closing of the sale of Euronext.12 The Exchange believes that the prospect for any material adverse change in European law that would have an ‘‘extraterritorial’’ impact on the non-European issuers listed on NYSE Group securities exchanges, nonEuropean financial services firms that are members of any NYSE Group securities market or holders of exchange 12 As noted above, this has been confirmed by the Dutch Ministry of Finance. E:\FR\FM\22OCN1.SGM 22OCN1 mstockstill on DSK4VPTVN1PROD with NOTICES Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Notices licenses with respect to the NYSE Group securities exchanges is now remote. Continuance of the Trust Agreement when it no longer furthers the purposes of Section 6(b) of the Exchange Act 13 also imposes certain administrative burdens and costs upon the Exchange and its affiliates, and may cause investor uncertainty, that create impediments to a free and open market. Specifically, the Trust Agreement imposes administrative burdens on ICE and the nominating and governance committee of its board of directors, such as the need to periodically consider and vote on Trustees; the need to consider whether any proposed action requires approval under the Trust Agreement and, if so, the obligation to prepare materials for consideration and vote by the Trustees; and the need to consider whether any proposed action requires an amendment to the Trust Agreement and, if so, the additional obligation to submit such amendment to the Commission for approval under Rule 19b–4.14 The Trust Agreement results in out-of-pocket costs to the Exchange and its affiliates including the fees of the individual Trustees and the Delaware Trustee as well as fees of counsel incurred in connection with review of proposed amendments and assistance with the SEC approval process. The Exchange also believes that some analysts and institutional investors may not fully understand the purpose of the Delaware trust and may not have appreciated that, even when ICE controlled Euronext and European regulatory considerations played a substantial role in ICE’s corporate governance, the likelihood of the Delaware trust’s substantive provisions ever being invoked was, by design, extremely remote. In light of the sale of Euronext, the revocation of the governance provisions relating to European considerations, and the cessation of application of the Dutch foundation to ICE and its affiliates, ICE believes it appropriate to terminate the Delaware trust in order to avoid any future need to reassure analysts and investors that the trust does not impact the daily operations or valuations of ICE’s national securities exchanges. Termination of the Delaware trust would be implemented through a unanimous written consent of all parties to, or otherwise bound by, the Trust Agreement in the form attached as Exhibit 5B. References to the Delaware trust also would be deleted from, and related conforming changes would be made to, 13 15 14 17 U.S.C. 78f(b). CFR 240.19b–4. VerDate Sep<11>2014 18:22 Oct 21, 2014 the constituent documents of NYSE Holdings, NYSE Group, the Exchange, NYSE MKT, NYSE Market and NYSE Regulation. In particular: NYSE Holdings. The Fifth Amended and Restated Limited Liability Company Agreement of NYSE Holdings would be further amended and restated to eliminate the definition of the term ‘‘Trust’’ in Section 1.1 and the references to the Delaware trust in Section 7.2. See Exhibit 5E. NYSE Group. The Third Amended and Restated Certificate of Incorporation of NYSE Group would be further amended and restated to eliminate references to the Delaware trust in Article IV, Section 4(a) and (b). See Exhibit 5F. The Exchange. The Sixth Amended and Restated Operating Agreement of the Exchange would be further amended and restated to eliminate references to the Delaware trust in Section 3.03. See Exhibit 5G. NYSE MKT. The Fifth Amended and Restated Operating Agreement of NYSE MKT would be further amended and restated to eliminate references to the Delaware trust in Section 3.03. See Exhibit 5H. NYSE Market. The Second Amended and Restated Certificate of Incorporation of NYSE Market would be further amended and restated to eliminate references to the Delaware trust in Article IV, Section 2. See Exhibit 5I. NYSE Regulation. The Restated Certificate of Incorporation of NYSE Regulation would be further amended and restated to eliminate references to the Delaware trust in Article V. See Exhibit 5J. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Exchange Act 15 in general, and with Section 6(b)(1) 16 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 Delaware trust was implemented in response to potential concerns arising under non-U.S. law and regulation at a time when the Exchange was owned by a company with substantial holdings of non-U.S. securities exchanges, substantial non-U.S. board 15 15 16 15 Jkt 235001 PO 00000 U.S.C. 78f(b). U.S.C. 78f(b)(1). Frm 00116 Fmt 4703 representation, and explicit obligations on the part of its board to give due consideration to matters of non-U.S. law and the interests of non-U.S. stakeholders. In light of the elimination of these concerns as discussed above, the Exchange believes that termination of the Delaware trust is consistent with Section 6(b)(1). The Exchange also believes that this filing furthers the objectives of Section 6(b)(5) of the Exchange Act 17 because the proposed rule change would be consistent with and facilitate 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 foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to, and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest. As discussed above, the Exchange believes that termination of the Delaware trust will remove impediments to the operation of the Exchange by eliminating certain expenses and administrative burdens as well as the potential for uncertainty among analysts and investors as to the practical implications of the Delaware trust on the Exchange as a marketplace and as a significant asset of ICE. For the same reasons, the proposed rule change is also designed to protect investors as well as 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. Indeed, the proposed rule change would eliminate an earlier arrangement intended in part to address potential competitive issues in the European securities markets that have abated as a result of ICE’s sale of the Euronext securities exchanges in June 2014. The proposed rule change results in no concentration or other changes of ownership of exchanges. 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. 17 15 Sfmt 4703 63193 E:\FR\FM\22OCN1.SGM U.S.C. 78f(b)(5). 22OCN1 63194 Federal Register / Vol. 79, No. 204 / Wednesday, October 22, 2014 / Notices III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days after publication (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve or disapprove the proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSE–2014–53 on the subject line. mstockstill on DSK4VPTVN1PROD with NOTICES Paper Comments • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSE–2014–53. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the 18:22 Oct 21, 2014 Jkt 235001 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–25079 Filed 10–21–14; 8:45 am] BILLING CODE 8011–01–P IV. Solicitation of Comments VerDate Sep<11>2014 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– 2014–53 and should be submitted on or before November 12, 2014. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–73370; File No. SR–CME– 2014–41] Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to CME Rule 816 October 16, 2014. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder 2 notice is hereby given that, on October 7, 2014, Chicago Mercantile Exchange Inc. (‘‘CME’’) 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 prepared primarily by CME. CME filed the proposal pursuant to Section 19(b)(3)(A) of the Act,3 and Rule 19b–4(f)(4)(ii) 4 thereunder, so that the proposal was effective upon filing with the Commission. 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 CME is proposing to make certain changes to CME Rule 816 which governs guaranty fund deposits. More specifically, the proposed changes would amend CME Rule 816 (Guaranty Fund Deposit) to establish CME risk management staff as responsible for 18 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(4)(ii). 1 15 PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 determining one of the two alternative minimum amounts for clearing members’ Base Guaranty Fund deposits. The proposed changes would only impact the CME Base Guaranty Fund and would not impact the CME CDS Guaranty Fund. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, CME 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 these statements may be examined at the places specified in Item IV below. CME has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of these statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change CME is registered as a derivatives clearing organization with the Commodity Futures Trading Commission (‘‘CFTC’’) and operates a substantial business clearing futures and swaps contracts subject to the jurisdiction of the CFTC. CME is proposing to make certain changes to CME Rule 816 which governs guaranty fund deposits. The proposed changes would only impact the CME Base Guaranty Fund and would not impact the CME CDS Guaranty Fund. More specifically, the proposed changes would amend CME Rule 816 (Guaranty Fund Deposit) to establish CME risk management staff as responsible for determining one of the two alternative minimum amounts for clearing members’ Base Guaranty Fund deposits. Under current Rule 816, the minimum Base Guaranty Fund deposit of each clearing member is calculated as the greater of (a) a minimum amount specified by the Clearing House Risk Committee (‘‘CHRC’’) or (b) the clearing member’s proportionate share of the ‘‘Aggregate Guaranty Fund Deposit,’’ an amount which is also determined by the CHRC. Revised Rule 816 would empower CME risk management staff rather than the CHRC to determine the Aggregate Guaranty Fund Deposit, thus enabling risk management staff to adjust the minimum Base Guaranty Fund deposit as necessary to remain in compliance with CME’s financial resource requirements under applicable Commodity Futures Trading Commission (‘‘CFTC’’) regulations. The E:\FR\FM\22OCN1.SGM 22OCN1

Agencies

[Federal Register Volume 79, Number 204 (Wednesday, October 22, 2014)]
[Notices]
[Pages 63191-63194]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-25079]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73373; File No. SR-NYSE-2014-53]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change in Connection With the 
Proposed Termination of the Amended and Restated Trust Agreement, Dated 
as of November 13, 2013 and Amended on June 2, 2014 by and Among NYSE 
Holdings LLC, a Delaware Limited Liability Company, NYSE Group, Inc., a 
Delaware Corporation, Wilmington Trust Company, as Delaware Trustee, 
and Each of Jacques de Larosi[egrave]re de Champfeu, Alan Trager and 
John Shepard Reed, as Trustees

October 16, 2014.
    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 October 8, 2014, New York Stock Exchange LLC (``NYSE'' 
or the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I 
and II below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes this rule filing in connection with the 
proposed termination of the Amended and Restated Trust Agreement, dated 
as of November 13, 2013 and amended on June 2, 2014 (the ``Trust 
Agreement''), by and among NYSE Holdings LLC, a Delaware limited 
liability company (``NYSE Holdings''), NYSE Group, Inc., a Delaware 
corporation (``NYSE Group''), Wilmington Trust Company, as Delaware 
Trustee, and each of Jacques de Larosi[egrave]re de Champfeu, Alan 
Trager and John Shepard Reed, as Trustees. 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. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

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

1. Purpose
    The Exchange seeks approval for its 100% direct parent, NYSE Group, 
and its 100% indirect parent, NYSE Holdings, to terminate the Trust 
Agreement.\4\ The Exchange believes that the regulatory considerations 
that led to the implementation of the Trust Agreement in 2007 are now 
moot as a result of the sale by Intercontinental Exchange, Inc., a 
Delaware corporation (``ICE''), of Euronext N.V. (``Euronext'') in June 
2014 and certain changes in the corporate governance of ICE, ICE 
Holdings and NYSE Holdings that occurred upon such sale.\5\
---------------------------------------------------------------------------

    \4\ ICE, a public company listed on the Exchange, owns 100% of 
Intercontinental Exchange Holdings, Inc., a Delaware corporation 
(``ICE Holdings''), which in turn owns 100% of NYSE Holdings. 
Through ICE Holdings, NYSE Holdings and NYSE Group, ICE indirectly 
owns (1) 100% of the equity interest of three registered national 
securities exchanges and self-regulatory organizations (together, 
the ``NYSE Exchanges'')--the Exchange, NYSE Arca, Inc. (``NYSE 
Arca'') and NYSE MKT LLC (``NYSE MKT'')--and (2) 100% of the equity 
interest of NYSE Market (DE), Inc. (``NYSE Market''), NYSE 
Regulation, Inc. (``NYSE Regulation''), NYSE Arca L.L.C., NYSE Arca 
Equities, Inc. and NYSE Amex Options LLC. See Exchange Act Release 
No. 70210 (August 15, 2013) (SR-NYSE-2013-42), 78 FR 51758 (August 
21, 2013) (approving proposed rule change relating to a corporate 
transaction in which NYSE Euronext will become a wholly owned 
subsidiary of IntercontinentalExchange Group, Inc.).
    \5\ The Exchange's affiliates NYSE Arca and NYSE MKT have also 
submitted the same proposed rule change to terminate the Trust 
Agreement. See SR-NYSEMKT-2014-83 and SR-NYSEArca-2014-112.
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Background

    In 2007, NYSE Group, which is the 100% owner of the Exchange, 
combined with Euronext (the ``Combination''). The new parent company 
formed in the Combination, NYSE Euronext, operated several regulated 
entities in the United States and various jurisdictions in Europe. In 
the Commission's notice

[[Page 63192]]

relating to the proposed Combination, the Exchange emphasized the 
importance of continuing to regulate marketplaces locally:

    A core aspect of the structure of the Combination is continued 
local regulation of the marketplaces. Accordingly, the Combination 
is premised on the notion that . . . [c]ompanies listing their 
securities only on markets operated by Euronext and its subsidiaries 
will not become newly subject to U.S. laws or regulation by the SEC 
as a result of the Combination, and companies listing their 
securities only on the Exchange or NYSE Arca, will not become newly 
subject to European rules or regulation as a result of the 
Combination.\6\
---------------------------------------------------------------------------

    \6\ See Exchange Act Release No. 55026 (Dec. 29, 2006) (SR-NYSE-
2006-120), 72 FR 814, 816-817 (January 8, 2007) (the ``NYSE Euronext 
Notice''). NYSE Euronext acquired NYSE MKT, the third of the NYSE 
Exchanges, in 2008.

    In connection with obtaining regulatory approval of the 
Combination, NYSE Euronext implemented certain special arrangements 
consisting of two standby structures, one involving a Dutch foundation 
(Stichting) and one involving a Delaware trust. The Dutch foundation 
was empowered to take actions to mitigate the effects of any material 
adverse change in U.S. law that had an ``extraterritorial'' impact on 
non-U.S. issuers listed on Euronext markets, non-U.S. financial 
services firms that were members of Euronext markets or holders of 
exchange licenses with respect to the Euronext markets. The Delaware 
trust was empowered to take actions to mitigate the effects of any 
material adverse change in European law that had an 
``extraterritorial'' impact on the non-European issuers listed on NYSE 
Group securities exchanges, non-European financial services firms that 
were members of any NYSE Group securities market or holders of exchange 
licenses with respect to the NYSE Group securities exchanges.
    The current form of the Trust Agreement is attached as Exhibit 5A, 
and a form of unanimous written consent of all parties to, or otherwise 
bound by, the Trust Agreement resolving that the Delaware trust be 
terminated is attached as Exhibit 5B. The terms of the Dutch foundation 
and the Delaware trust are complex. An explanation of the terms is 
included in the NYSE Euronext Notice. Subsequent modifications to the 
arrangements, to the extent relevant to the proposed rule change, are 
described herein.
    The Dutch foundation and the Delaware trust remained in effect 
after the merger of ICE Holdings (then known as 
IntercontinentalExchange, Inc.) and NYSE Euronext in 2013 under ICE 
(then known as IntercontinentalExchange Group, Inc.) as a new public 
holding company. However, in connection with ICE's announced plan to 
sell the Euronext securities exchanges in an initial public offering, 
the Dutch Ministry of Finance permitted modifications of the terms of 
the governing document of the Dutch foundation under which the powers 
of the Dutch foundation would cease to apply to ICE and its affiliates 
at such time as ICE ceased to hold a ``controlling interest'' in 
Euronext, with ``controlling interest'' defined by reference to the 
definition of ``control'' under Rule 10 of the International Financial 
Reporting Standards (``IFRS 10'').\7\ In June 2014 ICE announced that 
it had sold all but approximately 6% of the ownership interest in 
Euronext in an underwritten public offering outside the United 
States.\8\ Upon application by ICE, the Dutch Ministry of Finance 
confirmed on July 16, 2014 that the conditions to the cessation of the 
application of the Dutch foundation to ICE had been satisfied or 
waived.\9\ As a result, ICE and its subsidiaries are no longer subject 
to the provisions of the Dutch foundation.
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    \7\ Excerpts from the Further Amended and Restated Governance 
and Option Agreement, dated March 21, 2014, among the Dutch 
foundation, Euronext Group N.V. and ICE are attached as Exhibit 5C.
    \8\ ICE's press release dated June 24, 2014 is available at the 
following link: http://ir.theice.com/investors-and-media/press/press-releases/press-release-details/2014/Intercontinental-Exchange-Announces-Closing-of-Euronext-Initial-Public-Offering/default.aspx.
    \9\ An English translation of the Dutch Ministry of Finance's 
letter is attached as Exhibit 5D.
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    In the 2013 merger, NYSE Euronext was succeeded by the entity now 
known as NYSE Holdings, which is currently a party to the Trust 
Agreement. At that time, references to the nominating and governance 
committee of the board of directors of NYSE Euronext, which selected 
the Trustees of the Delaware trust, were replaced by references to the 
nominating and governance committee of the board of directors of 
ICE.\10\ Other provisions of the Trust Agreement are substantially 
unchanged.\11\
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    \10\ See note 4, supra.
    \11\ See Exchange Act Release No. 72158 (May 13, 2014) (SR-NYSE-
2014-23), 79 FR 28784 (May 19, 2014) (notice of filing and immediate 
effectiveness of proposed rule change relating to name changes of 
the Exchange's ultimate parent) (revising Trust Agreement to reflect 
name changes of ICE and ICE Holdings).
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    In connection with the Combination of NYSE Group and Euronext in 
2007 and the establishment of the Dutch foundation and the Delaware 
trust, the Certificate of Incorporation and Bylaws of NYSE Euronext 
included several provisions relating to representation of European 
interests on the board of directors and other provisions requiring the 
board to give due consideration to European regulatory requirements and 
the interests of identified categories of European stakeholders. These 
provisions are summarized in the NYSE Euronext Notice. Each such 
provision was subject to automatic revocation in the event that NYSE 
Euronext no longer held a controlling interest in Euronext or certain 
of its subsidiaries. For this purpose, ``controlling interest'' was 
defined to mean 50% or more of the outstanding shares of each class of 
voting securities and of the combined voting power of outstanding 
voting securities entitled to vote generally in the election of 
directors. Substantially identical provisions were added to the 
Certificate of Incorporation and Bylaws of ICE and ICE Holdings, and 
were retained in the Operating Agreement of NYSE Holdings, when ICE 
acquired NYSE Euronext in 2013, except that the ``controlling 
interest'' test was modified to become a ``control'' test under IFRS 
10, as described above with respect to the Dutch foundation. As a 
result of the initial public offering of Euronext, ICE has established 
that it no longer controls Euronext within the meaning of IFRS 10, and 
the provisions of the constituent documents of ICE, ICE Holdings and 
NYSE Holdings have automatically and without further action become void 
and are of no further force and effect.
Proposed Rule Change
    The Exchange requests approval to terminate the Delaware trust 
because it believes that the regulatory considerations that led to the 
implementation of the Trust Agreement in 2007 have been mooted by the 
sale of Euronext in June 2014, the automatic revocation of corporate 
governance provisions applicable to ICE, ICE Holdings and NYSE Holdings 
that occurred upon such sale, and the fact that the Dutch foundation 
which functioned as a European analog to the Delaware trust, ceased to 
have any authority over ICE and its subsidiaries upon the closing of 
the sale of Euronext.\12\ The Exchange believes that the prospect for 
any material adverse change in European law that would have an 
``extraterritorial'' impact on the non-European issuers listed on NYSE 
Group securities exchanges, non-European financial services firms that 
are members of any NYSE Group securities market or holders of exchange

[[Page 63193]]

licenses with respect to the NYSE Group securities exchanges is now 
remote.
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    \12\ As noted above, this has been confirmed by the Dutch 
Ministry of Finance.
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    Continuance of the Trust Agreement when it no longer furthers the 
purposes of Section 6(b) of the Exchange Act \13\ also imposes certain 
administrative burdens and costs upon the Exchange and its affiliates, 
and may cause investor uncertainty, that create impediments to a free 
and open market. Specifically, the Trust Agreement imposes 
administrative burdens on ICE and the nominating and governance 
committee of its board of directors, such as the need to periodically 
consider and vote on Trustees; the need to consider whether any 
proposed action requires approval under the Trust Agreement and, if so, 
the obligation to prepare materials for consideration and vote by the 
Trustees; and the need to consider whether any proposed action requires 
an amendment to the Trust Agreement and, if so, the additional 
obligation to submit such amendment to the Commission for approval 
under Rule 19b-4.\14\ The Trust Agreement results in out-of-pocket 
costs to the Exchange and its affiliates including the fees of the 
individual Trustees and the Delaware Trustee as well as fees of counsel 
incurred in connection with review of proposed amendments and 
assistance with the SEC approval process. The Exchange also believes 
that some analysts and institutional investors may not fully understand 
the purpose of the Delaware trust and may not have appreciated that, 
even when ICE controlled Euronext and European regulatory 
considerations played a substantial role in ICE's corporate governance, 
the likelihood of the Delaware trust's substantive provisions ever 
being invoked was, by design, extremely remote.
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    \13\ 15 U.S.C. 78f(b).
    \14\ 17 CFR 240.19b-4.
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    In light of the sale of Euronext, the revocation of the governance 
provisions relating to European considerations, and the cessation of 
application of the Dutch foundation to ICE and its affiliates, ICE 
believes it appropriate to terminate the Delaware trust in order to 
avoid any future need to reassure analysts and investors that the trust 
does not impact the daily operations or valuations of ICE's national 
securities exchanges.
    Termination of the Delaware trust would be implemented through a 
unanimous written consent of all parties to, or otherwise bound by, the 
Trust Agreement in the form attached as Exhibit 5B.
    References to the Delaware trust also would be deleted from, and 
related conforming changes would be made to, the constituent documents 
of NYSE Holdings, NYSE Group, the Exchange, NYSE MKT, NYSE Market and 
NYSE Regulation. In particular:
    NYSE Holdings. The Fifth Amended and Restated Limited Liability 
Company Agreement of NYSE Holdings would be further amended and 
restated to eliminate the definition of the term ``Trust'' in Section 
1.1 and the references to the Delaware trust in Section 7.2. See 
Exhibit 5E.
    NYSE Group. The Third Amended and Restated Certificate of 
Incorporation of NYSE Group would be further amended and restated to 
eliminate references to the Delaware trust in Article IV, Section 4(a) 
and (b). See Exhibit 5F.
    The Exchange. The Sixth Amended and Restated Operating Agreement of 
the Exchange would be further amended and restated to eliminate 
references to the Delaware trust in Section 3.03. See Exhibit 5G.
    NYSE MKT. The Fifth Amended and Restated Operating Agreement of 
NYSE MKT would be further amended and restated to eliminate references 
to the Delaware trust in Section 3.03. See Exhibit 5H.
    NYSE Market. The Second Amended and Restated Certificate of 
Incorporation of NYSE Market would be further amended and restated to 
eliminate references to the Delaware trust in Article IV, Section 2. 
See Exhibit 5I.
    NYSE Regulation. The Restated Certificate of Incorporation of NYSE 
Regulation would be further amended and restated to eliminate 
references to the Delaware trust in Article V. See Exhibit 5J.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Exchange Act \15\ in general, and with Section 
6(b)(1) \16\ 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 Delaware trust was 
implemented in response to potential concerns arising under non-U.S. 
law and regulation at a time when the Exchange was owned by a company 
with substantial holdings of non-U.S. securities exchanges, substantial 
non-U.S. board representation, and explicit obligations on the part of 
its board to give due consideration to matters of non-U.S. law and the 
interests of non-U.S. stakeholders. In light of the elimination of 
these concerns as discussed above, the Exchange believes that 
termination of the Delaware trust is consistent with Section 6(b)(1).
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    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(1).
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    The Exchange also believes that this filing furthers the objectives 
of Section 6(b)(5) of the Exchange Act \17\ because the proposed rule 
change would be consistent with and facilitate 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 foster cooperation and coordination with 
persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities, to remove impediments to, and perfect the mechanism of a 
free and open market and a national market system and, in general, to 
protect investors and the public interest. As discussed above, the 
Exchange believes that termination of the Delaware trust will remove 
impediments to the operation of the Exchange by eliminating certain 
expenses and administrative burdens as well as the potential for 
uncertainty among analysts and investors as to the practical 
implications of the Delaware trust on the Exchange as a marketplace and 
as a significant asset of ICE. For the same reasons, the proposed rule 
change is also designed to protect investors as well as the public 
interest.
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    \17\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Exchange Act. Indeed, the 
proposed rule change would eliminate an earlier arrangement intended in 
part to address potential competitive issues in the European securities 
markets that have abated as a result of ICE's sale of the Euronext 
securities exchanges in June 2014. The proposed rule change results in 
no concentration or other changes of ownership of exchanges.

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.

[[Page 63194]]

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days after 
publication (i) as the Commission may designate if it finds such longer 
period to be appropriate and publishes its reasons for so finding or 
(ii) as to which the self-regulatory organization consents, the 
Commission will:
    (A) By order approve or disapprove 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 is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSE-2014-53 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2014-53. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSE-2014-53 and should be 
submitted on or before November 12, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-25079 Filed 10-21-14; 8:45 am]
BILLING CODE 8011-01-P