Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of Proposed Rule Change Amending and Restating the Fifth Amended and Restated Bylaws of the Exchange's Ultimate Parent Company, Intercontinental Exchange, Inc., To Implement Proxy Access, 15366-15371 [2016-06364]
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Federal Register / Vol. 81, No. 55 / Tuesday, March 22, 2016 / Notices
executions puts significant pressure on
an exchange to maintain both execution
and data fees at reasonable levels.
In addition, in the case of products
that are also redistributed through
market data vendors, such as Bloomberg
and Thompson Reuters, the vendors
themselves provide additional price
discipline for proprietary data products
because they control the primary means
of access to certain end users. These
vendors impose price discipline based
upon their business models. For
example, vendors that assess a
surcharge on data they sell are able to
refuse to offer proprietary products that
their end users do not or will not
purchase in sufficient numbers. Vendors
will not elect to make available NYSE
BBO or NYSE Trades in the legacy
format unless their customers request it,
and customers will not elect to pay the
proposed fees unless NYSE BBO and
NYSE Trades can provide value in the
legacy formats by sufficiently increasing
revenues or reducing costs in the
customer’s business in a manner that
will offset the fees. The Exchange has
provided customers with adequate
notice that it intends to discontinue
dissemination of the data feeds in the
legacy format. Therefore, the proposed
Decommission Extension Fee would
only be applicable to those customers
who have a need or desire to continue
to take the data feeds in the legacy
format beyond the period provided for
migration to the XDP format. Customers
who timely migrate to the XDP format
to receive the data feeds would not need
to receive the data feeds in the legacy
format and therefore would not be
subject to the Decommission Extension
Fee at all. All of these factors operate as
constraints on pricing proprietary data
products.
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.
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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) 14 of the Act and
subparagraph (f)(2) of Rule 19b–4 15
thereunder, because it establishes a due,
fee, or other charge imposed by the
Exchange.
14 15
15 17
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
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17:34 Mar 21, 2016
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. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 16 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSE–2016–21 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–2016–22. 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 (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 the
filing also will be available for
inspection and copying at the principal
16 15
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U.S.C. 78s(b)(2)(B).
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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–
2016–21 and should be submitted on or
before April 12, 2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–06408 Filed 3–21–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–77386; File No. SR–
NYSEMKT–2016–20]
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing of Proposed
Rule Change Amending and Restating
the Fifth Amended and Restated
Bylaws of the Exchange’s Ultimate
Parent Company, Intercontinental
Exchange, Inc., To Implement Proxy
Access
March 17, 2016.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on March 2,
2016, NYSE MKT LLC (the ‘‘Exchange’’
or ‘‘NYSE MKT’’) 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 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 amend and
restate the Fifth Amended and Restated
Bylaws of the Exchange’s ultimate
parent company, Intercontinental
Exchange, Inc. (‘‘ICE’’), to implement
proxy access. 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.
17 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
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Federal Register / Vol. 81, No. 55 / Tuesday, March 22, 2016 / Notices
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
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1. Purpose
The Exchange proposes to amend and
restate the Fifth Amended and Restated
Bylaws of ICE (‘‘ICE Bylaws’’). The
proposed amendments to the ICE
Bylaws would (1) add a new Section
2.15 that permits a stockholder, or
stockholders, that meet specific
requirements to nominate director
nominees for the board of directors of
ICE (‘‘ICE Board’’), provided that the
nominating stockholder(s) and
nominee(s) satisfy the proposed
requirements, and (2) amend the
advance notice provisions in Section
2.13 to account for proxy access.4
ICE owns 100% of the equity interest
in Intercontinental Exchange Holdings,
Inc. (‘‘ICE Holdings’’), which in turn
owns 100% of the equity interest in
NYSE Holdings LLC (‘‘NYSE
Holdings’’). NYSE Holdings owns 100%
of the equity interest of NYSE Group,
Inc., which in turn directly owns 100%
of the equity interest of the Exchange
and its affiliates New York Stock
Exchange LLC and NYSE Arca, Inc.5
The proposed amendments to the ICE
Bylaws have been approved by the ICE
Board, subject to Securities and
Exchange Commission (‘‘Commission’’)
approval. Under Section 11.1 of the ICE
Bylaws, no stockholder approval is
required for amendment of the ICE
Bylaws. ICE filed a Form 8–K setting
4 In November 2015, the Comptroller of the City
of New York, on behalf of certain city retirement
systems that are stockholders of ICE, requested that
ICE include a proxy access proposal in its 2016
proxy statement. After discussions with the
Comptroller’s office, ICE management determined
to recommend the amendment reflected in the
proposed rule change to the ICE Board and, on that
basis, the Comptroller’s request was withdrawn.
5 The Exchange’s affiliates have each submitted
proposed rule changes to propose the changes
described in this filing. See SR–NYSE–2016–14 and
SR–NYSEArca–2016–25.
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17:34 Mar 21, 2016
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forth the proposed amendments on
January 22, 2016 after approval by the
ICE Board, and will file a further Form
8–K when the amendments are adopted.
Bylaw Section 2.15
The proposed rule change would add
new Section 2.15 to the ICE Bylaws.
Section 2.15 would permit a
stockholder, or group of up to 20
stockholders, to nominate director
nominees for the ICE Board, so long as
the stockholder(s) have owned at least
three percent of ICE’s outstanding
shares of common stock continuously
for at least three years. The director
nominees would be included in ICE’s
annual meeting proxy materials. The
proposed provision would limit the
number of proposed director nominees
to a number equal to twenty percent of
the number of directors then serving on
the ICE Board (rounded down to the
nearest whole number, but no less than
two) provided that the stockholder(s)
and nominee(s) satisfy the other
conditions specified in the ICE Bylaws.
A candidate would be nominated by
a nomination notice (‘‘Nomination
Notice’’). Subject to satisfaction of the
conditions of Section 2.15, described
below, as determined by the ICE Board,
ICE would include in its proxy
statement for the next annual meeting of
stockholders the following information:
• The names of any person or persons
nominated for election;
• disclosure about each nominee and
the nominating stockholder required
under the rules of the Commission or
other applicable law to be included in
the proxy statement;
• any statement in support of the
nominee’s (or nominees’, as applicable)
election, subject to a limit of 500 words
and subject to compliance with Section
14 of the Exchange Act 6 and the rules
thereunder, including Rule 14a–9; 7 and
• any other information that ICE
management or the ICE Board
determines, in their discretion, to
include relating to the nomination of the
nominee(s), including, without
limitation, any statement in opposition
to the nomination.8
ICE Bylaw 2.15 would permit
stockholder nominees to constitute up
to twenty percent of the number of
directors then serving on the ICE Board,
subject to the following:
• If twenty percent of the current
number of directors is not a whole
number, the number of permitted
stockholder nominees would be
6 15
U.S.C. 78n.
CFR 240.14a–9.
8 Proposed ICE Bylaw 2.15(a).
7 17
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rounded down to the nearest whole
number, but no less than two.
• The number of permitted
stockholder nominees would be further
reduced by (a) the number of any
stockholder nominees who are
withdrawn or who are instead
nominated by the ICE Board and (b) the
number of directors, if any, who were
stockholder nominees at the preceding
annual meeting and whose re-election is
recommended by the ICE Board. In the
event that one or more vacancies for any
reason were to occur on the ICE Board
after the deadline for submitting a
Nomination Notice, but before the date
of the annual meeting, and the ICE
Board resolved to reduce the size of the
ICE Board, the number of permitted
stockholder nominees would be
calculated based on the number of
directors in office as so reduced. If, after
receipt of a Nomination Notice and
following the deadline for receipt of
such notices, either the nominating
stockholder becomes ineligible or
withdraws the nomination, or the
nominee becomes ineligible or
unwilling or unable to serve, such
nominee will be disregarded.
• Bylaw 2.15(b) would provide a
mechanism for pro rata reduction of the
number of nominees nominated by
different stockholders if the total
number of permitted stockholder
nominees exceeded the maximum
permitted. Each nominating stockholder
would select one of its nominees to be
included in the proxy statement, with
the nominees to be included selected
from nominating stockholders going in
the order of the largest stockholdings to
the smallest, until the available number
of nominees has been selected, with this
process to be repeated if the maximum
number of nominees has not been
selected in the first round.
As a result of these potential
reductions in the number of stockholder
nominees, the number of stockholder
nominees in any year could be fewer
than two.
Each person or group of up to 20
persons desiring to nominate a
candidate would be required to either
(1) be a record holder of shares of ICE
common stock used to satisfy the
eligibility requirements for a
stockholder nominee continuously for
the three-year period, or (2) provide to
the secretary of ICE evidence of
continuous ownership of the minimum
number of shares for such three-year
period from one or more securities
intermediaries in a form that the ICE
Board determines would be acceptable
for purposes of a shareholder proposal
under Rule 14a–8(b)(2) under the
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Federal Register / Vol. 81, No. 55 / Tuesday, March 22, 2016 / Notices
Exchange Act 9 (or any successor rule).
The minimum number of shares would
be determined as three percent of the
outstanding shares as of the most recent
date for which the total number of
outstanding shares of common stock
was included by ICE in a filing with the
Commission prior to the submission of
the Nomination Notice. Such shares
would be required to be held
continuously throughout the three-year
period preceding and including the date
of submission of the Nomination Notice,
and through the date of the annual
meeting. The proposed rule change
includes provisions relating to how the
members of a group would be counted
and the consequences of withdrawal of
a member from a group.10
A person (or member of a group of
persons) whose nominee has been
elected as a director at an annual
meeting would not be eligible to
nominate or participate in the
nomination of a nominee for the
following two annual meetings other
than the nomination of such previously
elected nominee.11
The proposed rule change would also
specify that shares may be counted as
‘‘owned’’ only if the person making the
nomination possess both the full voting
and investment rights pertaining to the
shares and the full economic interest in
(including the opportunity for profit and
risk of loss on) such shares. Shares that
have been sold, borrowed or hedged are
excluded. Loaned shares are included,
provided they are recallable within five
business days, and are recalled by the
record date.12
No person would be permitted to be
in more than one group nominating a
nominee. A person who appears as a
member of more than one group would
be deemed to be a member of the group
that has the largest ownership position
as reflected in the Nomination Notice.13
A Nomination Notice would be
required to be submitted to the secretary
of ICE at ICE’s principal executive
office, no earlier than the close of
business 150 calendar days, and no later
than the close of business 120 calendar
days, before the anniversary of the date
that ICE mailed its proxy statement for
the prior year’s annual meeting of
stockholders. If an annual meeting were
not scheduled to be held within a
period that commences 30 days before
and ends 30 days after such anniversary
date, a Nomination Notice would be
required to be given by the later of the
CFR 240.14a–8(b)(2).
10 Proposed ICE Bylaw 2.15(c).
11 Proposed ICE Bylaw 2.15(c)(i).
12 Proposed ICE Bylaw 2.15(c)(iv).
13 Proposed ICE Bylaw 2.15(c)(v).
17:34 Mar 21, 2016
14 Proposed
ICE Bylaw 2.15(d).
Exchange notes that having the chairman
of the annual meeting make such determination is
consistent with the procedure in Section 2.13(f) of
the ICE Bylaws with respect to non-proxy access
nominations.
16 17 CFR 240.14n–101.
15 The
9 17
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close of business on the date that is 120
days prior to the date of such annual
meeting or the tenth day following the
date on which such annual meeting date
is first publicly announced or
disclosed.14
ICE Bylaw 2.15 would provide that
any determination to be made by the
ICE Board may be made by the ICE
Board, a committee of the ICE Board or
any officer of ICE designated by the ICE
Board or a committee of the ICE Board
and that any such determination shall
be final and binding on ICE, any Eligible
Holder (as defined in ICE Bylaw 2.15),
any nominating stockholder, any
nominee and any other person so long
as made in good faith. The chairman of
any annual meeting of stockholders
shall have the power and duty to
determine whether a Nominee has been
nominated in accordance with the
requirements of proposed Section 2.15
and, if not so nominated, shall direct
and declare at the annual meeting that
such Nominee shall not be
considered.15
The proposed rule change specifies
information that would be required in a
Nomination Notice, including:
• A Schedule 14N 16 (or any
successor form) relating to the
nomination, completed and filed with
the Commission;
• a written notice, in a form deemed
satisfactory by the ICE Board, of the
nomination of such nominee that
includes additional information,
agreements, representations and
warranties by the nominating
stockholder (including, in the case of a
group, each group member),
Æ the information otherwise required
with respect to the nomination of
directors by the ICE Bylaws;
Æ the details of any relationship that
existed within the past three years and
that would have been described
pursuant to Item 6(e) of Schedule 14N
(or any successor item) if it existed on
the date of submission of the Schedule
14N;
Æ a representation and warranty that
the nominating stockholder did not
acquire, and is not holding, securities of
ICE for the purpose or with the effect of
influencing or changing control of ICE;
Æ a representation and warranty that
the nominee’s candidacy or, if elected,
membership on the ICE Board would
not violate applicable state or federal
law or the rules of the principal national
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securities exchange on which ICE’s
securities are traded;
Æ a representation and warranty that
the nominee:
D Does not have any direct or indirect
relationship with ICE that will cause the
nominee to be deemed not independent
pursuant to the ICE Board’s
Independence Policy 17 as most recently
published on its Web site and otherwise
qualifies as independent under the rules
of the principal national securities
exchange on which ICE’s common stock
is traded; 18
D meets the audit committee
independence requirements under the
rules of the principal national securities
exchange on which ICE’s common stock
is traded; 19
D is a ‘‘non-employee director’’ for the
purposes of Rule 16b–3 under the
Exchange Act 20 (or any successor rule);
D is an ‘‘outside director’’ for the
purposes of Section 162(m) of the
Internal Revenue Code 21 (or any
successor provision); and
D is not and has not been subject to
any event specified in Rule 506(d)(1) of
Regulation D 22 (or any successor rule)
under the Securities Act of 1933 or Item
401(f) of Regulation S–K 23 (or any
successor rule) under the Exchange Act,
without reference to whether the event
is material to an evaluation of the ability
or integrity of the nominee;
Æ a representation and warranty that
the nominating stockholder satisfies the
eligibility requirements set forth in
Bylaw 2.15 and has provided evidence
of ownership to the extent required by
Bylaw 2.15(c)(i);
Æ a representation and warranty that
the nominating stockholder intends to
continue to satisfy the eligibility
requirements described in Bylaw 2.15(c)
through the date of the annual meeting;
Æ a representation and warranty that
the nominating stockholder will not
engage in a ‘‘solicitation’’ within the
meaning of Rule 14a–1(l) 24 (without
17 The Commission notes that the Independence
Policy can be found at the following Web site:
https://ir.theice.com/∼/media/Files/I/Ice-IR/
documents/corporate-governance-documents/
board-independence-policy.pdf.
18 The Commission notes the independent
director standards of New York Stock Exchange
LLC (‘‘NYSE’’), which is the principal market for
ICE’s common stock, are set forth in NYSE’s Listed
Company Manual in Sections 303A.00, 303A.01
and 303A.02.
19 The Commission notes that the audit
committee independence requirements of NYSE,
the principle market for ICE’s common stock, are set
forth in NYSE’s Listed Company Manual under
Sections 303A.06 and 303A.07.
20 17 CFR 240.16b–3.
21 26 U.S.C. 162(m).
22 17 CFR 230.506(d).
23 17 CFR 229.401(f).
24 17 CFR 240.14a–1(l).
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reference to the exception in Rule 14a–
(l)(l)(2)(iv) 25) (or any successor rules)
under the Exchange Act in support of
the election of any individual as a
director at the applicable annual
meeting, other than its nominee(s) or
any nominee of the ICE Board;
Æ a representation and warranty that
the nominating stockholder will not use
any proxy card other than ICE’s proxy
card in soliciting stockholders in
connection with the election of a
nominee at the annual meeting;
Æ if desired, a statement in support of
the nominee meeting the standards
identified above; and
Æ in the case of a nomination by a
group, the designation by all group
members of one group member that is
authorized to act on behalf of all group
members with respect to matters
relating to the nomination, including
withdrawal of the nomination;
• an executed agreement, in a form
deemed satisfactory by the ICE Board,
pursuant to which the nominating
stockholder (including each group
member) agrees:
Æ to comply with all applicable laws,
rules and regulations in connection with
the nomination, solicitation and
election of a nominee;
Æ to file any written solicitation or
other communication with ICE’s
stockholders relating to one or more of
ICE’s directors or director nominees or
any stockholder nominee with the
Commission, regardless of whether any
such filing is required under any rule or
regulation or whether any exemption
from filing is available for such
materials under any rule or regulation;
Æ to assume all liability stemming
from an action, suit or proceeding
concerning any actual or alleged legal or
regulatory violation arising out of any
communication by the nominating
stockholder or any of its nominees with
ICE, its stockholders or any other person
in connection with the nomination or
election of directors, including, without
limitation, the Nomination Notice;
Æ to indemnify and hold harmless
(jointly with all other group members,
in the case of a group member) ICE and
each of its directors, officers and
employees individually against any
liability, loss, damages, expenses or
other costs (including attorneys’ fees)
incurred in connection with any
threatened or pending action, suit or
proceeding, whether legal,
administrative or investigative, against
ICE or any of its directors, officers or
employees arising out of or relating to
a failure or alleged failure of the
nominating stockholder or any of its
25 17
CFR 240.14a–1(l)(2)(iv).
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17:34 Mar 21, 2016
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nominees to comply with, or any breach
or alleged breach of, its respective
obligations, agreements or
representations under Bylaw 2.15; and
Æ in the event that (1) any
information included in the Nomination
Notice or any other communication by
the nominating stockholder (including
with respect to any group member) with
ICE, its stockholders or any other person
in connection with the nomination or
election of a nominee ceases to be true
and accurate in all material respects (or
omits a material fact necessary to make
the statements made not misleading) or
(2) the nominating stockholder
(including any group member) has
failed to continue to satisfy the
eligibility requirements described in
Bylaw 2.15(c), to promptly (and in any
event within 48 hours of discovering
such misstatement, omission or failure)
notify ICE and any other recipient of
such communication of (1) the
misstatement or omission in such
previously provided information and of
the information that is required to
correct the misstatement or omission or
(2) of such failure; and
• an executed agreement, in a form
deemed satisfactory by the ICE Board,
by the nominee:
Æ to provide to ICE such other
information and certifications,
including completion of ICE’s director
questionnaire, as it may reasonably
request;
Æ that the nominee has read and
agrees, if elected, to serve as a member
of the ICE Board, to adhere to ICE’s
Corporate Governance Guidelines and
Global Code of Business Conduct and
any other policies and guidelines
applicable to directors; and
Æ that the nominee is not and will not
become a party to (i) any compensatory,
payment or other financial agreement,
arrangement or understanding with any
person or entity other than ICE in
connection with service or action as a
director of ICE that has not been
disclosed to ICE, (ii) any agreement,
arrangement or understanding with any
person or entity as to how the nominee
would vote or act on any issue or
question as a director (a ‘‘Voting
Commitment’’) that has not been
disclosed to ICE or (iii) any Voting
Commitment that could reasonably be
expected to limit or interfere with the
nominee’s ability to comply, if elected
as a director of ICE, with its fiduciary
duties under applicable law.
ICE Bylaw 2.15 would specify that the
information and documents required to
be provided by the nominating
stockholder must be: (i) Provided with
respect to and executed by each group
member, in the case of information
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applicable to group members; and (ii)
provided with respect to the persons
specified in Instruction 1 to Items 6(c)
and (d) of Schedule 14N (or any
successor item) in the case of a
nominating stockholder or group
member that is an entity. A Nomination
Notice would be deemed submitted on
the date on which all of the information
and documents required by ICE Bylaw
2.15 (other than such information and
documents contemplated to be provided
after the date the Nomination Notice is
provided) have been delivered to or, if
sent by mail, received by the Secretary
of ICE.
Access to ICE’s proxy statement for
stockholder nominations under ICE
Bylaw 2.15(e)(i) would not be available
in any year in which ICE has received
advance notice under ICE Bylaw Section
2.13 that a stockholder intends to
nominate a director. In addition,
nominations would be disregarded
under ICE Bylaw 2.15(e)(i) if
• the nominating stockholder or its
representative fails to appear at the
annual meeting to present the
nomination or withdraws its
nomination;
• the nomination or election of the
nominee would be in violation of ICE’s
certificate of incorporation or bylaws, or
applicable law, rule or regulation,
including those of stock exchanges;
• the nominee was nominated
pursuant to ICE Bylaw 2.15 at one of the
past two annual meetings and either
withdrew or became ineligible, or failed
to receive 20% of the vote;
• the nominee is, or has within the
last three years been, an officer or
director of a competitor of ICE or is a
U.S. Disqualified Person as defined in
ICE’s certificate of incorporation; or
• ICE is notified, or the ICE Board
determines, that a nominating
stockholder has failed to continue to
satisfy the eligibility requirements, any
of the representations and warranties
made in the Nomination Notice ceases
to be true and accurate in all material
respects (or omits a material fact
necessary to make the statements made
not misleading), the nominee becomes
unwilling or unable to serve on the ICE
Board or any material violation or
breach occurs of the obligations,
agreements, representations or
warranties of the nominating
stockholder or the nominee under ICE
Bylaw Section 2.15.
In addition, Bylaw 2.15(e)(ii) would
permit ICE to omit from its proxy
statement, or supplement or correct, any
information, including all or any
portion of the statement in support of
the Nominee included in the
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Federal Register / Vol. 81, No. 55 / Tuesday, March 22, 2016 / Notices
Nomination Notice, if the ICE Board
determines that:
• Such information is not true in all
material respects or omits a material
statement necessary to make the
statements made not misleading;
• Such information directly or
indirectly impugns the character,
integrity or personal reputation of, or
directly or indirectly makes charges
concerning improper, illegal or immoral
conduct or associations, without factual
foundation, with respect to, any person;
or
• The inclusion of such information
in the proxy statement would otherwise
violate the federal proxy rules or any
other applicable law, rule or regulation.
Bylaw Section 2.13
The proposed rule change also would
amend the existing advance notice
provisions in Bylaw 2.13 to extend their
application to stockholder nominations
under the proxy access provision in
Bylaw 2.15.
• Bylaw 2.13(b) would be amended to
provide that stockholder nominations
would be subject to inclusion in the ICE
Board’s notice of annual meeting, and
that the timing and notice requirements
of the existing advance notice bylaw
would not apply to stockholder
nominations, which have different
timing and notice requirements as
described above.
• Bylaw 2.13(d) would be amended to
specify that the definition therein of
‘‘publicly announced or disclosed’’
would also apply in Bylaw 2.15.
Conforming Changes
Finally, the Exchange proposes to
make conforming changes to the title of
the Bylaws.
asabaliauskas on DSK3SPTVN1PROD with NOTICES
2. Statutory Basis
The Exchange believes that this filing
is consistent with Section 6(b) of the
Exchange Act,26 in general, and Section
6(b)(1) of the Exchange Act,27 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 believes that, by permitting a
stockholder, or a group of up to twenty
stockholders, of ICE that meet the stated
requirements to nominate and have
included in ICE’s annual meeting proxy
26 15
27 15
U.S.C. 78f(b).
U.S.C. 78f(b)(1).
VerDate Sep<11>2014
17:34 Mar 21, 2016
materials director nominees, the
proposed rule change strengthens the
corporate governance of the Exchange’s
ultimate parent company and is thus
consistent with Section 6(b)(1).
For similar reasons, the Exchange also
believes that this filing furthers the
objectives of Section 6(b)(5) of the
Exchange Act,28 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 by expanding the ability of
stockholders to nominate directors that
could constitute a significant percent
(20%) of the number of directors
currently serving on the ICE Board, the
proposed rule change would ensure
better corporate governance and
accountability to stockholders, thereby
protecting 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.
The proposed rule change is not
designed to address any competitive
issue in the U.S. or European securities
markets or have any impact on
competition in those markets; rather,
adoption of a proxy access bylaw by ICE
is intended to enhance corporate
governance and accountability to
stockholders.
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 45 days of the date of
publication of this notice in the Federal
Register or within such longer period
28 15
Jkt 238001
PO 00000
U.S.C. 78f(b)(5).
Frm 00151
Fmt 4703
Sfmt 4703
up to 90 days (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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSEMKT–2016–20 on the subject line.
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–NYSEMKT–2016–20. 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 (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 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
E:\FR\FM\22MRN1.SGM
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Federal Register / Vol. 81, No. 55 / Tuesday, March 22, 2016 / Notices
available publicly. All submissions
should refer to File Number SR–
NYSEMKT–2016–20 and should be
submitted on or before April 12,2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.29
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–06364 Filed 3–21–16; 8:45 am]
BILLING CODE 8011–01–P
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–77384; File No. SR–NYSE–
2016–14]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing of Proposed Rule Change
Amending and Restating the Fifth
Amended and Restated Bylaws of the
Exchange’s Ultimate Parent Company,
Intercontinental Exchange, Inc., To
Implement Proxy Access
March 17, 2016.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on March 2,
2016, New York Stock Exchange LLC
(‘‘NYSE’’ or the ‘‘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 prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
asabaliauskas on DSK3SPTVN1PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend and
restate the Fifth Amended and Restated
Bylaws of the Exchange’s ultimate
parent company, Intercontinental
Exchange, Inc. (‘‘ICE’’), to implement
proxy access. 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
29 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
VerDate Sep<11>2014
17:34 Mar 21, 2016
Jkt 238001
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.
1. Purpose
The Exchange proposes to amend and
restate the Fifth Amended and Restated
Bylaws of ICE (‘‘ICE Bylaws’’). The
proposed amendments to the ICE
Bylaws would (1) add a new Section
2.15 that permits a stockholder, or
stockholders, that meet specific
requirements to nominate director
nominees for the board of directors of
ICE (‘‘ICE Board’’), provided that the
nominating stockholder(s) and
nominee(s) satisfy the proposed
requirements, and (2) amend the
advance notice provisions in Section
2.13 to account for proxy access.4
ICE owns 100% of the equity interest
in Intercontinental Exchange Holdings,
Inc. (‘‘ICE Holdings’’), which in turn
owns 100% of the equity interest in
NYSE Holdings LLC (‘‘NYSE
Holdings’’). NYSE Holdings owns 100%
of the equity interest of NYSE Group,
Inc., which in turn directly owns 100%
of the equity interest of the Exchange
and its affiliates NYSE Arca, Inc. and
NYSE MKT LLC.5
The proposed amendments to the ICE
Bylaws have been approved by the ICE
Board, subject to Securities and
Exchange Commission (‘‘Commission’’)
approval. Under Section 11.1 of the ICE
Bylaws, no stockholder approval is
required for amendment of the ICE
Bylaws. ICE filed a Form 8–K setting
forth the proposed amendments on
January 22, 2016 after approval by the
ICE Board, and will file a further Form
8–K when the amendments are adopted.
4 In November 2015, the Comptroller of the City
of New York, on behalf of certain city retirement
systems that are stockholders of ICE, requested that
ICE include a proxy access proposal in its 2016
proxy statement. After discussions with the
Comptroller’s office, ICE management determined
to recommend the amendment reflected in the
proposed rule change to the ICE Board and, on that
basis, the Comptroller’s request was withdrawn.
5 The Exchange’s affiliates have each submitted
proposed rule changes to propose the changes
described in this filing. See SR–NYSEMKT–2016–
20 and SR–NYSEArca–2016–25.
PO 00000
Frm 00152
Fmt 4703
Sfmt 4703
15371
Bylaw Section 2.15
The proposed rule change would add
new Section 2.15 to the ICE Bylaws.
Section 2.15 would permit a
stockholder, or group of up to 20
stockholders, to nominate director
nominees for the ICE Board, so long as
the stockholder(s) have owned at least
three percent of ICE’s outstanding
shares of common stock continuously
for at least three years. The director
nominees would be included in ICE’s
annual meeting proxy materials. The
proposed provision would limit the
number of proposed director nominees
to a number equal to twenty percent of
the number of directors then serving on
the ICE Board (rounded down to the
nearest whole number, but no less than
two) provided that the stockholder(s)
and nominee(s) satisfy the other
conditions specified in the ICE Bylaws.
A candidate would be nominated by
a nomination notice (‘‘Nomination
Notice’’). Subject to satisfaction of the
conditions of Section 2.15, described
below, as determined by the ICE Board,
ICE would include in its proxy
statement for the next annual meeting of
stockholders the following information:
• The names of any person or persons
nominated for election;
• disclosure about each nominee and
the nominating stockholder required
under the rules of the Commission or
other applicable law to be included in
the proxy statement;
• any statement in support of the
nominee’s (or nominees’, as applicable)
election, subject to a limit of 500 words
and subject to compliance with Section
14 of the Exchange Act 6 and the rules
thereunder, including Rule 14a–9; 7 and
• any other information that ICE
management or the ICE Board
determines, in their discretion, to
include relating to the nomination of the
nominee(s), including, without
limitation, any statement in opposition
to the nomination.8
ICE Bylaw 2.15 would permit
stockholder nominees to constitute up
to twenty percent of the number of
directors then serving on the ICE Board,
subject to the following:
• If twenty percent of the current
number of directors is not a whole
number, the number of permitted
stockholder nominees would be
rounded down to the nearest whole
number, but no less than two.
• The number of permitted
stockholder nominees would be further
reduced by (a) the number of any
stockholder nominees who are
6 15
U.S.C. 78n.
CFR 240.14a–9.
8 Proposed ICE Bylaw 2.15(a).
7 17
E:\FR\FM\22MRN1.SGM
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]]>Agencies
[Federal Register Volume 81, Number 55 (Tuesday, March 22, 2016)]
[Notices]
[Pages 15366-15371]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-06364]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-77386; File No. SR-NYSEMKT-2016-20]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of
Proposed Rule Change Amending and Restating the Fifth Amended and
Restated Bylaws of the Exchange's Ultimate Parent Company,
Intercontinental Exchange, Inc., To Implement Proxy Access
March 17, 2016.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on March 2, 2016, NYSE MKT LLC (the ``Exchange'' or ``NYSE MKT'')
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 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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend and restate the Fifth Amended and
Restated Bylaws of the Exchange's ultimate parent company,
Intercontinental Exchange, Inc. (``ICE''), to implement proxy access.
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.
[[Page 15367]]
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 proposes to amend and restate the Fifth Amended and
Restated Bylaws of ICE (``ICE Bylaws''). The proposed amendments to the
ICE Bylaws would (1) add a new Section 2.15 that permits a stockholder,
or stockholders, that meet specific requirements to nominate director
nominees for the board of directors of ICE (``ICE Board''), provided
that the nominating stockholder(s) and nominee(s) satisfy the proposed
requirements, and (2) amend the advance notice provisions in Section
2.13 to account for proxy access.\4\
---------------------------------------------------------------------------
\4\ In November 2015, the Comptroller of the City of New York,
on behalf of certain city retirement systems that are stockholders
of ICE, requested that ICE include a proxy access proposal in its
2016 proxy statement. After discussions with the Comptroller's
office, ICE management determined to recommend the amendment
reflected in the proposed rule change to the ICE Board and, on that
basis, the Comptroller's request was withdrawn.
---------------------------------------------------------------------------
ICE owns 100% of the equity interest in Intercontinental Exchange
Holdings, Inc. (``ICE Holdings''), which in turn owns 100% of the
equity interest in NYSE Holdings LLC (``NYSE Holdings''). NYSE Holdings
owns 100% of the equity interest of NYSE Group, Inc., which in turn
directly owns 100% of the equity interest of the Exchange and its
affiliates New York Stock Exchange LLC and NYSE Arca, Inc.\5\
---------------------------------------------------------------------------
\5\ The Exchange's affiliates have each submitted proposed rule
changes to propose the changes described in this filing. See SR-
NYSE-2016-14 and SR-NYSEArca-2016-25.
---------------------------------------------------------------------------
The proposed amendments to the ICE Bylaws have been approved by the
ICE Board, subject to Securities and Exchange Commission
(``Commission'') approval. Under Section 11.1 of the ICE Bylaws, no
stockholder approval is required for amendment of the ICE Bylaws. ICE
filed a Form 8-K setting forth the proposed amendments on January 22,
2016 after approval by the ICE Board, and will file a further Form 8-K
when the amendments are adopted.
Bylaw Section 2.15
The proposed rule change would add new Section 2.15 to the ICE
Bylaws. Section 2.15 would permit a stockholder, or group of up to 20
stockholders, to nominate director nominees for the ICE Board, so long
as the stockholder(s) have owned at least three percent of ICE's
outstanding shares of common stock continuously for at least three
years. The director nominees would be included in ICE's annual meeting
proxy materials. The proposed provision would limit the number of
proposed director nominees to a number equal to twenty percent of the
number of directors then serving on the ICE Board (rounded down to the
nearest whole number, but no less than two) provided that the
stockholder(s) and nominee(s) satisfy the other conditions specified in
the ICE Bylaws.
A candidate would be nominated by a nomination notice (``Nomination
Notice''). Subject to satisfaction of the conditions of Section 2.15,
described below, as determined by the ICE Board, ICE would include in
its proxy statement for the next annual meeting of stockholders the
following information:
The names of any person or persons nominated for election;
disclosure about each nominee and the nominating
stockholder required under the rules of the Commission or other
applicable law to be included in the proxy statement;
any statement in support of the nominee's (or nominees',
as applicable) election, subject to a limit of 500 words and subject to
compliance with Section 14 of the Exchange Act \6\ and the rules
thereunder, including Rule 14a-9; \7\ and
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78n.
\7\ 17 CFR 240.14a-9.
---------------------------------------------------------------------------
any other information that ICE management or the ICE Board
determines, in their discretion, to include relating to the nomination
of the nominee(s), including, without limitation, any statement in
opposition to the nomination.\8\
---------------------------------------------------------------------------
\8\ Proposed ICE Bylaw 2.15(a).
---------------------------------------------------------------------------
ICE Bylaw 2.15 would permit stockholder nominees to constitute up
to twenty percent of the number of directors then serving on the ICE
Board, subject to the following:
If twenty percent of the current number of directors is
not a whole number, the number of permitted stockholder nominees would
be rounded down to the nearest whole number, but no less than two.
The number of permitted stockholder nominees would be
further reduced by (a) the number of any stockholder nominees who are
withdrawn or who are instead nominated by the ICE Board and (b) the
number of directors, if any, who were stockholder nominees at the
preceding annual meeting and whose re-election is recommended by the
ICE Board. In the event that one or more vacancies for any reason were
to occur on the ICE Board after the deadline for submitting a
Nomination Notice, but before the date of the annual meeting, and the
ICE Board resolved to reduce the size of the ICE Board, the number of
permitted stockholder nominees would be calculated based on the number
of directors in office as so reduced. If, after receipt of a Nomination
Notice and following the deadline for receipt of such notices, either
the nominating stockholder becomes ineligible or withdraws the
nomination, or the nominee becomes ineligible or unwilling or unable to
serve, such nominee will be disregarded.
Bylaw 2.15(b) would provide a mechanism for pro rata
reduction of the number of nominees nominated by different stockholders
if the total number of permitted stockholder nominees exceeded the
maximum permitted. Each nominating stockholder would select one of its
nominees to be included in the proxy statement, with the nominees to be
included selected from nominating stockholders going in the order of
the largest stockholdings to the smallest, until the available number
of nominees has been selected, with this process to be repeated if the
maximum number of nominees has not been selected in the first round.
As a result of these potential reductions in the number of
stockholder nominees, the number of stockholder nominees in any year
could be fewer than two.
Each person or group of up to 20 persons desiring to nominate a
candidate would be required to either (1) be a record holder of shares
of ICE common stock used to satisfy the eligibility requirements for a
stockholder nominee continuously for the three-year period, or (2)
provide to the secretary of ICE evidence of continuous ownership of the
minimum number of shares for such three-year period from one or more
securities intermediaries in a form that the ICE Board determines would
be acceptable for purposes of a shareholder proposal under Rule 14a-
8(b)(2) under the
[[Page 15368]]
Exchange Act \9\ (or any successor rule). The minimum number of shares
would be determined as three percent of the outstanding shares as of
the most recent date for which the total number of outstanding shares
of common stock was included by ICE in a filing with the Commission
prior to the submission of the Nomination Notice. Such shares would be
required to be held continuously throughout the three-year period
preceding and including the date of submission of the Nomination
Notice, and through the date of the annual meeting. The proposed rule
change includes provisions relating to how the members of a group would
be counted and the consequences of withdrawal of a member from a
group.\10\
---------------------------------------------------------------------------
\9\ 17 CFR 240.14a-8(b)(2).
\10\ Proposed ICE Bylaw 2.15(c).
---------------------------------------------------------------------------
A person (or member of a group of persons) whose nominee has been
elected as a director at an annual meeting would not be eligible to
nominate or participate in the nomination of a nominee for the
following two annual meetings other than the nomination of such
previously elected nominee.\11\
---------------------------------------------------------------------------
\11\ Proposed ICE Bylaw 2.15(c)(i).
---------------------------------------------------------------------------
The proposed rule change would also specify that shares may be
counted as ``owned'' only if the person making the nomination possess
both the full voting and investment rights pertaining to the shares and
the full economic interest in (including the opportunity for profit and
risk of loss on) such shares. Shares that have been sold, borrowed or
hedged are excluded. Loaned shares are included, provided they are
recallable within five business days, and are recalled by the record
date.\12\
---------------------------------------------------------------------------
\12\ Proposed ICE Bylaw 2.15(c)(iv).
---------------------------------------------------------------------------
No person would be permitted to be in more than one group
nominating a nominee. A person who appears as a member of more than one
group would be deemed to be a member of the group that has the largest
ownership position as reflected in the Nomination Notice.\13\
---------------------------------------------------------------------------
\13\ Proposed ICE Bylaw 2.15(c)(v).
---------------------------------------------------------------------------
A Nomination Notice would be required to be submitted to the
secretary of ICE at ICE's principal executive office, no earlier than
the close of business 150 calendar days, and no later than the close of
business 120 calendar days, before the anniversary of the date that ICE
mailed its proxy statement for the prior year's annual meeting of
stockholders. If an annual meeting were not scheduled to be held within
a period that commences 30 days before and ends 30 days after such
anniversary date, a Nomination Notice would be required to be given by
the later of the close of business on the date that is 120 days prior
to the date of such annual meeting or the tenth day following the date
on which such annual meeting date is first publicly announced or
disclosed.\14\
---------------------------------------------------------------------------
\14\ Proposed ICE Bylaw 2.15(d).
---------------------------------------------------------------------------
ICE Bylaw 2.15 would provide that any determination to be made by
the ICE Board may be made by the ICE Board, a committee of the ICE
Board or any officer of ICE designated by the ICE Board or a committee
of the ICE Board and that any such determination shall be final and
binding on ICE, any Eligible Holder (as defined in ICE Bylaw 2.15), any
nominating stockholder, any nominee and any other person so long as
made in good faith. The chairman of any annual meeting of stockholders
shall have the power and duty to determine whether a Nominee has been
nominated in accordance with the requirements of proposed Section 2.15
and, if not so nominated, shall direct and declare at the annual
meeting that such Nominee shall not be considered.\15\
---------------------------------------------------------------------------
\15\ The Exchange notes that having the chairman of the annual
meeting make such determination is consistent with the procedure in
Section 2.13(f) of the ICE Bylaws with respect to non-proxy access
nominations.
---------------------------------------------------------------------------
The proposed rule change specifies information that would be
required in a Nomination Notice, including:
A Schedule 14N \16\ (or any successor form) relating to
the nomination, completed and filed with the Commission;
---------------------------------------------------------------------------
\16\ 17 CFR 240.14n-101.
---------------------------------------------------------------------------
a written notice, in a form deemed satisfactory by the ICE
Board, of the nomination of such nominee that includes additional
information, agreements, representations and warranties by the
nominating stockholder (including, in the case of a group, each group
member),
[cir] the information otherwise required with respect to the
nomination of directors by the ICE Bylaws;
[cir] the details of any relationship that existed within the past
three years and that would have been described pursuant to Item 6(e) of
Schedule 14N (or any successor item) if it existed on the date of
submission of the Schedule 14N;
[cir] a representation and warranty that the nominating stockholder
did not acquire, and is not holding, securities of ICE for the purpose
or with the effect of influencing or changing control of ICE;
[cir] a representation and warranty that the nominee's candidacy
or, if elected, membership on the ICE Board would not violate
applicable state or federal law or the rules of the principal national
securities exchange on which ICE's securities are traded;
[cir] a representation and warranty that the nominee:
[ssquf] Does not have any direct or indirect relationship with ICE
that will cause the nominee to be deemed not independent pursuant to
the ICE Board's Independence Policy \17\ as most recently published on
its Web site and otherwise qualifies as independent under the rules of
the principal national securities exchange on which ICE's common stock
is traded; \18\
---------------------------------------------------------------------------
\17\ The Commission notes that the Independence Policy can be
found at the following Web site: https://ir.theice.com/~/media/Files/
I/Ice-IR/documents/corporate-governance-documents/board-
independence-policy.pdf.
\18\ The Commission notes the independent director standards of
New York Stock Exchange LLC (``NYSE''), which is the principal
market for ICE's common stock, are set forth in NYSE's Listed
Company Manual in Sections 303A.00, 303A.01 and 303A.02.
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[ssquf] meets the audit committee independence requirements under
the rules of the principal national securities exchange on which ICE's
common stock is traded; \19\
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\19\ The Commission notes that the audit committee independence
requirements of NYSE, the principle market for ICE's common stock,
are set forth in NYSE's Listed Company Manual under Sections 303A.06
and 303A.07.
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[ssquf] is a ``non-employee director'' for the purposes of Rule
16b-3 under the Exchange Act \20\ (or any successor rule);
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\20\ 17 CFR 240.16b-3.
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[ssquf] is an ``outside director'' for the purposes of Section
162(m) of the Internal Revenue Code \21\ (or any successor provision);
and
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\21\ 26 U.S.C. 162(m).
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[ssquf] is not and has not been subject to any event specified in
Rule 506(d)(1) of Regulation D \22\ (or any successor rule) under the
Securities Act of 1933 or Item 401(f) of Regulation S-K \23\ (or any
successor rule) under the Exchange Act, without reference to whether
the event is material to an evaluation of the ability or integrity of
the nominee;
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\22\ 17 CFR 230.506(d).
\23\ 17 CFR 229.401(f).
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[cir] a representation and warranty that the nominating stockholder
satisfies the eligibility requirements set forth in Bylaw 2.15 and has
provided evidence of ownership to the extent required by Bylaw
2.15(c)(i);
[cir] a representation and warranty that the nominating stockholder
intends to continue to satisfy the eligibility requirements described
in Bylaw 2.15(c) through the date of the annual meeting;
[cir] a representation and warranty that the nominating stockholder
will not engage in a ``solicitation'' within the meaning of Rule 14a-
1(l) \24\ (without
[[Page 15369]]
reference to the exception in Rule 14a-(l)(l)(2)(iv) \25\) (or any
successor rules) under the Exchange Act in support of the election of
any individual as a director at the applicable annual meeting, other
than its nominee(s) or any nominee of the ICE Board;
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\24\ 17 CFR 240.14a-1(l).
\25\ 17 CFR 240.14a-1(l)(2)(iv).
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[cir] a representation and warranty that the nominating stockholder
will not use any proxy card other than ICE's proxy card in soliciting
stockholders in connection with the election of a nominee at the annual
meeting;
[cir] if desired, a statement in support of the nominee meeting the
standards identified above; and
[cir] in the case of a nomination by a group, the designation by
all group members of one group member that is authorized to act on
behalf of all group members with respect to matters relating to the
nomination, including withdrawal of the nomination;
an executed agreement, in a form deemed satisfactory by
the ICE Board, pursuant to which the nominating stockholder (including
each group member) agrees:
[cir] to comply with all applicable laws, rules and regulations in
connection with the nomination, solicitation and election of a nominee;
[cir] to file any written solicitation or other communication with
ICE's stockholders relating to one or more of ICE's directors or
director nominees or any stockholder nominee with the Commission,
regardless of whether any such filing is required under any rule or
regulation or whether any exemption from filing is available for such
materials under any rule or regulation;
[cir] to assume all liability stemming from an action, suit or
proceeding concerning any actual or alleged legal or regulatory
violation arising out of any communication by the nominating
stockholder or any of its nominees with ICE, its stockholders or any
other person in connection with the nomination or election of
directors, including, without limitation, the Nomination Notice;
[cir] to indemnify and hold harmless (jointly with all other group
members, in the case of a group member) ICE and each of its directors,
officers and employees individually against any liability, loss,
damages, expenses or other costs (including attorneys' fees) incurred
in connection with any threatened or pending action, suit or
proceeding, whether legal, administrative or investigative, against ICE
or any of its directors, officers or employees arising out of or
relating to a failure or alleged failure of the nominating stockholder
or any of its nominees to comply with, or any breach or alleged breach
of, its respective obligations, agreements or representations under
Bylaw 2.15; and
[cir] in the event that (1) any information included in the
Nomination Notice or any other communication by the nominating
stockholder (including with respect to any group member) with ICE, its
stockholders or any other person in connection with the nomination or
election of a nominee ceases to be true and accurate in all material
respects (or omits a material fact necessary to make the statements
made not misleading) or (2) the nominating stockholder (including any
group member) has failed to continue to satisfy the eligibility
requirements described in Bylaw 2.15(c), to promptly (and in any event
within 48 hours of discovering such misstatement, omission or failure)
notify ICE and any other recipient of such communication of (1) the
misstatement or omission in such previously provided information and of
the information that is required to correct the misstatement or
omission or (2) of such failure; and
an executed agreement, in a form deemed satisfactory by
the ICE Board, by the nominee:
[cir] to provide to ICE such other information and certifications,
including completion of ICE's director questionnaire, as it may
reasonably request;
[cir] that the nominee has read and agrees, if elected, to serve as
a member of the ICE Board, to adhere to ICE's Corporate Governance
Guidelines and Global Code of Business Conduct and any other policies
and guidelines applicable to directors; and
[cir] that the nominee is not and will not become a party to (i)
any compensatory, payment or other financial agreement, arrangement or
understanding with any person or entity other than ICE in connection
with service or action as a director of ICE that has not been disclosed
to ICE, (ii) any agreement, arrangement or understanding with any
person or entity as to how the nominee would vote or act on any issue
or question as a director (a ``Voting Commitment'') that has not been
disclosed to ICE or (iii) any Voting Commitment that could reasonably
be expected to limit or interfere with the nominee's ability to comply,
if elected as a director of ICE, with its fiduciary duties under
applicable law.
ICE Bylaw 2.15 would specify that the information and documents
required to be provided by the nominating stockholder must be: (i)
Provided with respect to and executed by each group member, in the case
of information applicable to group members; and (ii) provided with
respect to the persons specified in Instruction 1 to Items 6(c) and (d)
of Schedule 14N (or any successor item) in the case of a nominating
stockholder or group member that is an entity. A Nomination Notice
would be deemed submitted on the date on which all of the information
and documents required by ICE Bylaw 2.15 (other than such information
and documents contemplated to be provided after the date the Nomination
Notice is provided) have been delivered to or, if sent by mail,
received by the Secretary of ICE.
Access to ICE's proxy statement for stockholder nominations under
ICE Bylaw 2.15(e)(i) would not be available in any year in which ICE
has received advance notice under ICE Bylaw Section 2.13 that a
stockholder intends to nominate a director. In addition, nominations
would be disregarded under ICE Bylaw 2.15(e)(i) if
the nominating stockholder or its representative fails to
appear at the annual meeting to present the nomination or withdraws its
nomination;
the nomination or election of the nominee would be in
violation of ICE's certificate of incorporation or bylaws, or
applicable law, rule or regulation, including those of stock exchanges;
the nominee was nominated pursuant to ICE Bylaw 2.15 at
one of the past two annual meetings and either withdrew or became
ineligible, or failed to receive 20% of the vote;
the nominee is, or has within the last three years been,
an officer or director of a competitor of ICE or is a U.S. Disqualified
Person as defined in ICE's certificate of incorporation; or
ICE is notified, or the ICE Board determines, that a
nominating stockholder has failed to continue to satisfy the
eligibility requirements, any of the representations and warranties
made in the Nomination Notice ceases to be true and accurate in all
material respects (or omits a material fact necessary to make the
statements made not misleading), the nominee becomes unwilling or
unable to serve on the ICE Board or any material violation or breach
occurs of the obligations, agreements, representations or warranties of
the nominating stockholder or the nominee under ICE Bylaw Section 2.15.
In addition, Bylaw 2.15(e)(ii) would permit ICE to omit from its
proxy statement, or supplement or correct, any information, including
all or any portion of the statement in support of the Nominee included
in the
[[Page 15370]]
Nomination Notice, if the ICE Board determines that:
Such information is not true in all material respects or
omits a material statement necessary to make the statements made not
misleading;
Such information directly or indirectly impugns the
character, integrity or personal reputation of, or directly or
indirectly makes charges concerning improper, illegal or immoral
conduct or associations, without factual foundation, with respect to,
any person; or
The inclusion of such information in the proxy statement
would otherwise violate the federal proxy rules or any other applicable
law, rule or regulation.
Bylaw Section 2.13
The proposed rule change also would amend the existing advance
notice provisions in Bylaw 2.13 to extend their application to
stockholder nominations under the proxy access provision in Bylaw 2.15.
Bylaw 2.13(b) would be amended to provide that stockholder
nominations would be subject to inclusion in the ICE Board's notice of
annual meeting, and that the timing and notice requirements of the
existing advance notice bylaw would not apply to stockholder
nominations, which have different timing and notice requirements as
described above.
Bylaw 2.13(d) would be amended to specify that the
definition therein of ``publicly announced or disclosed'' would also
apply in Bylaw 2.15.
Conforming Changes
Finally, the Exchange proposes to make conforming changes to the
title of the Bylaws.
2. Statutory Basis
The Exchange believes that this filing is consistent with Section
6(b) of the Exchange Act,\26\ in general, and Section 6(b)(1) of the
Exchange Act,\27\ 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
believes that, by permitting a stockholder, or a group of up to twenty
stockholders, of ICE that meet the stated requirements to nominate and
have included in ICE's annual meeting proxy materials director
nominees, the proposed rule change strengthens the corporate governance
of the Exchange's ultimate parent company and is thus consistent with
Section 6(b)(1).
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\26\ 15 U.S.C. 78f(b).
\27\ 15 U.S.C. 78f(b)(1).
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For similar reasons, the Exchange also believes that this filing
furthers the objectives of Section 6(b)(5) of the Exchange Act,\28\
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 by expanding the ability of stockholders to
nominate directors that could constitute a significant percent (20%) of
the number of directors currently serving on the ICE Board, the
proposed rule change would ensure better corporate governance and
accountability to stockholders, thereby protecting investors and the
public interest.
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\28\ 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. The proposed rule
change is not designed to address any competitive issue in the U.S. or
European securities markets or have any impact on competition in those
markets; rather, adoption of a proxy access bylaw by ICE is intended to
enhance corporate governance and accountability to stockholders.
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 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NYSEMKT-2016-20 on the subject line.
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-NYSEMKT-2016-20. 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 (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 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
[[Page 15371]]
available publicly. All submissions should refer to File Number SR-
NYSEMKT-2016-20 and should be submitted on or before April 12, 2016.
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\29\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\29\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-06364 Filed 3-21-16; 8:45 am]
BILLING CODE 8011-01-P
