Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Cboe BZX Exchange, Inc.; Cboe EDGA Exchange, Inc.; Cboe EDGX Exchange, Inc.; Order Granting Accelerated Approval of a Proposed Rule Change Relating to Its Director Nomination and Committee Appointment Process and Its Nominating and Governance Committee, 60649-60651 [2017-27466]
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Federal Register / Vol. 82, No. 244 / Thursday, December 21, 2017 / Notices
19(b)(3)(A) of the Act 14 and Rule 19b–
4(f)(6) thereunder.15
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii), the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest. The
Exchange has asked the Commission to
waive the 30-day operative delay so that
the proposal may become operative
immediately upon filing. As noted
above, the proposed amendments to
NYSE American Rule 8.700E relating to
Managed Trust Securities are
substantially identical to amendments
to NYSE Arca Rule 8.700E previously
approved by the Commission. The
proposal raises no new or novel issues.
Therefore, the Commission designates
the proposed rule change to be operative
upon filing.16
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number
SR–NYSEAMER–2017–37 on the subject
line.
All submissions should refer to File
Number SR–NYSEAMER–2017–37. 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 website (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 website 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.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–NYSEAMER–2017–37 and
should be submitted on or before
January 11, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017–27467 Filed 12–20–17; 8:45 am]
BILLING CODE 8011–01–P
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). As required under Rule
19b–4(f)(6)(iii), the Exchange provided the
Commission with written notice of its intent to file
the proposed rule change, along with a brief
description and the text of the proposed rule
change, at least five business days prior to the date
of filing of the proposed rule change, or such
shorter time as designated by the Commission.
16 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
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20:57 Dec 20, 2017
Jkt 244001
[Release No. 34–82337; File No. SR–
CboeBYX–2017–001; SR–CboeBZX–2017–
001; SR–CboeEDGA–2017–001; SR–
CboeEDGX–2017–001]
Self-Regulatory Organizations; Cboe
BYX Exchange, Inc.; Cboe BZX
Exchange, Inc.; Cboe EDGA Exchange,
Inc.; Cboe EDGX Exchange, Inc.; Order
Granting Accelerated Approval of a
Proposed Rule Change Relating to Its
Director Nomination and Committee
Appointment Process and Its
Nominating and Governance
Committee
December 15, 2017.
I. Introduction
On November 14, 2017, each of Cboe
BYX Exchange, Inc. (‘‘Cboe BYX’’), Cboe
BZX Exchange, Inc. (‘‘Cboe BZX’’), Cboe
EDGA Exchange, Inc. (‘‘Cboe EDGA’’),
Cboe EDGX Exchange, Inc. (‘‘Cboe
EDGX’’) (each an ‘‘Exchange’’ and
collectively, ‘‘Exchanges’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
eliminate its Nominating and
Governance Committee (‘‘N&G
Committee’’) and amend the process by
which (i) directors are elected, (ii)
committee appointments are made, and
(iii) vacancies are filled.3 The proposed
rule changes were published for
comment in the Federal Register on
November 27, 2017.4 The Commission
received no comments on the proposals.
This order approves the proposed rule
changes on an accelerated basis.
II. Description of the Proposal
First, the Exchanges propose to
eliminate their N&G Committees and
provide that the sole stockholder of the
Exchanges (Cboe Global Markets, Inc.)
shall nominate and elect directors at the
annual meetings of the sole stockholder,
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 In addition, the Exchanges propose to make
several formatting changes throughout the Bylaws
as well as to change their names in the title and
signature lines in their Certificates of Incorporation
(‘‘Certificates’’) to reflect recent changes to their
legal names.
4 See Securities Exchange Act Release Nos. 82122
(November 20, 2017), 82 FR 53076 (November 27,
2017) (SR–CboeBYX–2017–001) (‘‘CboeBYX
Notice’’); 82123 (November 20, 2017), 82 FR 56065
(November 27, 2017) (SR–CboeBZX–2017–001)
(‘‘CboeBZX Notice’’); 82125 (November 20, 2017),
82 FR 56079 (November 27, 2017) (SR–CboeEDGA–
2017–001) (‘‘CboeEDGA Notice’’); 82126 (November
20, 2017), 82 FR 56072 (SR–CboeEDGX–2017–001)
(‘‘CboeEDGX Notice’’) (collectively, the ‘‘Notices’’).
2 17
15 17
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14 15
17 17
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Federal Register / Vol. 82, No. 244 / Thursday, December 21, 2017 / Notices
except with respect to fairrepresentation directors
(‘‘Representative Directors’’).5 As a
consequence of the elimination of the
N&G Committee, the Exchanges propose
conforming changes to reallocate its
responsibility. Specifically, the
Exchanges propose to amend the
definition of ‘‘Representative Director
Nominating Body’’ to provide that if an
Exchange’s Board of Directors (‘‘Board’’)
has two or more Industry Directors,
excluding directors that are Exchange
employees, those Industry Directors
shall act as the Representative Director
Nominating Body. If there are fewer
than two Industry Directors on the
Board (excluding directors that are
employees of the Exchange), then the
Exchange Member Subcommittee of the
Advisory Board shall act as the
Representative Director Nominating
Body. The Exchanges further propose to
amend their Bylaws and Certificates to
provide that the sole stockholder is
bound to nominate and elect the
Representative Directors nominees
recommended by the Representative
Director Nominating Body or, in the
event of a petition candidate, the
Representative Director nominees who
receive the most votes pursuant to a
Run-off Election. Lastly, the Exchanges
each propose to amend Section 3.1 of
their Bylaws to provide that the Board
is responsible for determining whether
a director candidate satisfies the
applicable qualifications for election as
a director.
Second, the Exchanges propose to
transfer the N&G Committee’s current
authority with respect to committee
appointments to their Boards (or
appropriate subcommittee of the
Board).6 Specifically, the Exchanges
propose to amend Section 4.2 and 6.1 of
their Bylaws to state that members of
the Executive Committee and Advisory
Board will now be appointed by the
Board. The Exchanges also propose to
amend Section 4.4 of their Bylaws to
state that members of the Regulatory
Oversight Committee (‘‘ROC’’) will be
appointed by the Board on the
recommendation of the Non-Industry
Directors of the Board.
Third, the Exchanges propose to
amend their Bylaws to alter the process
for filling director vacancies.7
Specifically, the Exchanges propose to
amend Section 3.4 of their Bylaws to
provide that in the event any Industry
or Non-Industry Director fails to
5 See id. at 56077; 56065; 56080; and 56072,
respectively.
6 See id. at 56077; 56066; 56080; and 56073,
respectively.
7 See id. at 56077; 56066; 56080–81 and 56073,
respectively.
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20:57 Dec 20, 2017
Jkt 244001
maintain the required qualifications and
the director’s term is accordingly
terminated, the sole stockholder, instead
of the Board, shall be able to fill the
vacancy.8 The Exchanges also propose
to amend Section 3.5 of their Bylaws to
provide the sole stockholder with
authority to fill vacancies so long as the
elected Director qualifies for the
position. Additionally, with respect to
vacancies among the Representative
Directors, the Representative Director
Nominating Body will recommend an
individual, or provide a list of
recommended individuals, to the sole
stockholder who shall select and fill the
position.
Finally, the Exchanges propose to
change their names in the title and
signature lines in their Certificates to
reflect recent changes to their legal
names.9
III. Discussion and Commission
Findings
After careful review, the Commission
finds that the proposed rule changes are
consistent with the requirements of
Section 6 of the Act 10 and the rules and
regulations thereunder applicable to a
national securities exchange.11 In
particular, the Commission finds that
the proposed rule changes are consistent
with Sections 6(b)(1) the Act,12 which
require a national securities exchange to
be so organized and have the capacity
to be able to carry out the purposes of
the Act, and to comply and to enforce
compliance by its members and persons
associated with its members with the
provisions of the Act, the rules and
regulations thereunder, and the rules of
the Exchange. The Commission also
finds that the proposed rule changes are
consistent with Section 6(b)(3) of the
Act,13 which requires that the rules of
a national securities exchange assure the
fair representation of its members in the
selection of its directors and
administration of its affairs, and provide
that one or more directors shall be
representative of issuers and investors
8 Amended Section 3.4 would also provide that
if such terminated director requalified, the sole
stockholder would have discretion to reappoint
such director, including by increasing the size of
the Board, should that be necessary.
9 Other technical formatting changes occur
throughout the Bylaws as a result of the Exchanges
proposed changes. See Notices, supra note 4 at
56077; 56066; 56081 and 56073, respectively.
10 15 U.S.C. 78f(b).
11 In approving these proposed rule changes, the
Commission has considered the proposed rules’
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
12 15 U.S.C. 78f(b)(1).
13 15 U.S.C. 78f(b)(3).
PO 00000
Frm 00073
Fmt 4703
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and not be associated with a member of
the exchange, broker, or dealer.
The Commission believes that the
Exchanges’ proposals to eliminate their
N&G Committees and reassign the N&G
Committees’ responsibilities are
consistent with the Act. In particular,
with respect to vesting the authority to
nominate and elect directors in the sole
stockholder, the Exchanges cite to the
rules of another Exchange that similarly
does not maintain an exchange-level
nominating committee and instead
provides that the sole stockholder of the
Exchange nominates and elects their
non-fair representation directors.14
Importantly, the Commission notes that
the proposed rule changes do not
substantively impact the provisions
concerning the nomination and
selection of fair representation directors
that currently apply to the Exchanges.
The sole stockholder will continue to be
bound to nominate and elect the
Representative Director nominees
recommended by the Representative
Director Nominating Body and there are
no other changes to the process for the
nomination and selection of
Representative Directors. Accordingly,
the Commission believes that members
of the Exchanges should continue to
have a voice in the governance of the
Exchanges through Board representation
and thus will have a voice in the
Exchanges’ exercise of their selfregulatory authority. The Exchanges
represent that they are not proposing to
amend any of the compositional
requirements currently set forth in the
Bylaws and that such existing
compositional requirements must
continue to be satisfied, including the
provision relating to the fair
representation of members.15
In addition, with respect to providing
the Board, as opposed to the N&G
Committee, with the authority to
recommend and approve members of
the Executive Committee, Advisory
Board, and ROC, the Commission notes
that other exchanges provide that their
Boards, without input from a
nominating committee, may appoint
members to committees.16 While the
internal Exchange delegations of the
authority relating to the (i) nomination
and election of directors, (ii) nominating
body for Representative Directors, (iii)
14 See Section 3.02(f) of the Amended and
Restated NYSE Arca, Inc. Bylaws. See also Notices,
supra note 4 at 56078; 56066–67; 56081; and 56074,
respectively.
15 See Notices, supra note 4 at 56078; 56067;
56081 and 56074, respectively.
16 See e.g., Eleventh Amended and Restated
Operating Agreement of New York Stock Exchange,
LLC, Section 2.03(h) and By-Laws of Nasdaq Phlx
LLC, Section 5–3.
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Federal Register / Vol. 82, No. 244 / Thursday, December 21, 2017 / Notices
filling of director vacancies and (iv)
appointment of committees are being
amended, the Exchanges represent that
the substantive requirements of the
Exchanges applicable to those items will
remain the same.17
Finally, the Commission believes that
the proposals to update the exchanges’
names in their Certificates are consistent
with the Act as they may also serve to
reduce potential confusion by ensuring
the Exchanges’ corporate documents
reflect their recent name changes.
IV. Accelerated Approval of the
Proposal
The Commission finds good cause,
pursuant to Section 19(b)(2) of the
Act,18 for approving the proposed rule
changes, prior to the 30th day after
publication of the Notices in the Federal
Register.19 The Commission believes
that the proposed rule changes do not
raise novel regulatory issues and are
substantively similar to the existing
rules of other national securities
exchanges.20 In particular, the
Commission notes that the proposed
rule changes do not substantively
impact the provisions concerning the
nomination and selection of fair
representation directors that currently
apply to the Exchanges. Members of the
Exchanges should continue to have an
opportunity to participate in the
selection of Board representation and
have input into the Exchanges’ exercise
of self-regulatory authority. In addition,
the Commission did not receive any
comment on the proposed changes.
Accordingly, the Commission finds that
good cause exists to approve the
proposed rule changes on an accelerated
basis.
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act 21 that the
proposed rule changes (SR–CboeBYX–
2017–001; SR–CboeBZX–2017–001; SR–
CboeEDGA–2017–001; SR–CboeEDGX–
2017–001), be, and hereby are, approved
on an accelerated basis.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.22
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017–27466 Filed 12–20–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82341; File No. SR–Phlx–
2017–79]
Self-Regulatory Organizations; Nasdaq
PHLX LLC; Notice of Filing of
Amendment No. 2, Order Approving a
Proposed Rule Change, as Modified by
Amendment No. 1 and Granting
Accelerated Approval of Amendment
No. 2, of a Proposed Rule Change To
Establish a Nonstandard Expirations
Pilot Program
December 15, 2017.
I. Introduction
On October 12, 2017, Nasdaq PHLX
LLC (‘‘Phlx’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’ or ‘‘SEC’’),
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a
proposed rule change to establish a
Nonstandard Expirations Pilot Program.
On October 26, 2017, the Exchange filed
Amendment No.1 to the proposal to
amend and replace the original filing in
its entirety. The proposed rule change
was published for comment in the
Federal Register on November 2, 2017.3
On December 6, 2017, the Exchange
filed a partial amendment to the
proposed rule change (‘‘Amendment No.
2’’).4 The Commission received no
comments on the proposed rule change.
This order provides notice of filing of
Amendment No. 2, approves the
proposal, as modified by Amendment
No. 1, and approves Amendment No. 2
on an accelerated basis, for a pilot
period of twelve months.
22 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 81975
(Oct. 27, 2017), 82 FR 50921.
4 In Amendment No. 2, the Exchange proposes to
provide to the Commission, to the extent that data
on other weekly or monthly p.m.-settled products
from other exchanges is publicly available, a time
series analysis of open interest in weekly expiration
(‘‘Weekly Expiration’’) and end of month (‘‘EOM’’)
series compared to open interest in weekly or
monthly p.m.-settled products of other exchanges in
order to determine whether users are shifting
positions from other weekly or monthly p.m.-settled
products to the Weekly Expiration and EOM series.
1 15
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17 See
Notices, supra note 4 at 56078; 56067;
56081 and 56074, respectively.
18 15 U.S.C. 78s(b)(2).
19 As noted above, the Notices were published for
comment in the Federal Register on November 27,
2017 and the comment period closed on December
12, 2017. Accordingly, the 30th day after
publication of the Notices is December 27, 2017.
20 See notes 15 and 17, supra.
21 15 U.S.C. 78s(b)(2).
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20:57 Dec 20, 2017
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60651
II. Description of the Amended
Proposal
The Exchange proposes to permit the
listing and trading, on a pilot basis, of
p.m.-settled options on broad-based
indexes with nonstandard expiration
dates for a period of twelve months (the
‘‘Nonstandard Expirations Pilot
Program’’ or ‘‘Pilot Program’’) from the
date of approval of this proposed rule
change. The Pilot Program would permit
both Weekly Expirations and EOM
expirations similar to those of the a.m.settled broad-based index options,
except that the exercise settlement value
will be based on the index value derived
from the closing prices of component
stocks. The proposal is substantially
similar to Chicago Board Options
Exchange (‘‘CBOE’’) Rule 24.9(e),
Nonstandard Expirations Pilot
Program.5
A. Weekly Expirations
The Exchange proposes to add new
subsection (b)(vii)(1), Weekly
Expirations, to Rule 1101A, Terms of
Options Contracts. Under the proposed
new rule the Exchange would be
permitted to open for trading Weekly
Expirations on any broad-based index
eligible for standard options trading to
expire on any Monday, Wednesday, or
Friday (other than the third Friday-ofthe-month or days that coincide with an
EOM expiration). Weekly Expirations
would be subject to all provisions of
Rule 1101A and would be treated the
same as options on the same underlying
index that expire on the third Friday of
the expiration month. Unlike the
standard monthly options, however,
Weekly Expirations would be p.m.settled. New series in Weekly
Expirations could be added up to and
including on the expiration date for an
expiring Weekly Expiration.
The maximum number of expirations
that could be listed for each Weekly
Expiration (i.e., a Monday expiration,
Wednesday expiration, or Friday
expiration, as applicable) in a given
class would be the same as the
maximum number of expirations
permitted for standard options on the
same broad-based index. Weekly
Expirations would not need to be for
consecutive Monday, Wednesday, or
5 See Securities Exchange Act Release Nos. 78531
(August 10, 2016), 81 FR 54643 (August 16, 2016)
(SR–CBOE–2016–046) (Order approving expansion
of CBOE’s Nonstandard Expirations Pilot Program
to include Monday Expirations); 76909 (January 14,
2016), 81 FR 3512 (January 21, 2016) (SR–CBOE–
2015–106) (Order approving expansion of CBOE’s
Nonstandard Expirations Pilot Program to include
Wednesday Expirations); 62911 (September 14,
2010), 75 FR 57539 (September 21, 2010) (SR–
CBOE–2009–075) (Order approving CBOE’s
Nonstandard Expirations Pilot Program).
E:\FR\FM\21DEN1.SGM
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]]>Agencies
[Federal Register Volume 82, Number 244 (Thursday, December 21, 2017)]
[Notices]
[Pages 60649-60651]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-27466]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-82337; File No. SR-CboeBYX-2017-001; SR-CboeBZX-2017-
001; SR-CboeEDGA-2017-001; SR-CboeEDGX-2017-001]
Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Cboe BZX
Exchange, Inc.; Cboe EDGA Exchange, Inc.; Cboe EDGX Exchange, Inc.;
Order Granting Accelerated Approval of a Proposed Rule Change Relating
to Its Director Nomination and Committee Appointment Process and Its
Nominating and Governance Committee
December 15, 2017.
I. Introduction
On November 14, 2017, each of Cboe BYX Exchange, Inc. (``Cboe
BYX''), Cboe BZX Exchange, Inc. (``Cboe BZX''), Cboe EDGA Exchange,
Inc. (``Cboe EDGA''), Cboe EDGX Exchange, Inc. (``Cboe EDGX'') (each an
``Exchange'' and collectively, ``Exchanges'') filed with the Securities
and Exchange Commission (``Commission''), pursuant to Section 19(b)(1)
of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to eliminate its Nominating and
Governance Committee (``N&G Committee'') and amend the process by which
(i) directors are elected, (ii) committee appointments are made, and
(iii) vacancies are filled.\3\ The proposed rule changes were published
for comment in the Federal Register on November 27, 2017.\4\ The
Commission received no comments on the proposals. This order approves
the proposed rule changes on an accelerated basis.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ In addition, the Exchanges propose to make several
formatting changes throughout the Bylaws as well as to change their
names in the title and signature lines in their Certificates of
Incorporation (``Certificates'') to reflect recent changes to their
legal names.
\4\ See Securities Exchange Act Release Nos. 82122 (November 20,
2017), 82 FR 53076 (November 27, 2017) (SR-CboeBYX-2017-001)
(``CboeBYX Notice''); 82123 (November 20, 2017), 82 FR 56065
(November 27, 2017) (SR-CboeBZX-2017-001) (``CboeBZX Notice'');
82125 (November 20, 2017), 82 FR 56079 (November 27, 2017) (SR-
CboeEDGA-2017-001) (``CboeEDGA Notice''); 82126 (November 20, 2017),
82 FR 56072 (SR-CboeEDGX-2017-001) (``CboeEDGX Notice'')
(collectively, the ``Notices'').
---------------------------------------------------------------------------
II. Description of the Proposal
First, the Exchanges propose to eliminate their N&G Committees and
provide that the sole stockholder of the Exchanges (Cboe Global
Markets, Inc.) shall nominate and elect directors at the annual
meetings of the sole stockholder,
[[Page 60650]]
except with respect to fair-representation directors (``Representative
Directors'').\5\ As a consequence of the elimination of the N&G
Committee, the Exchanges propose conforming changes to reallocate its
responsibility. Specifically, the Exchanges propose to amend the
definition of ``Representative Director Nominating Body'' to provide
that if an Exchange's Board of Directors (``Board'') has two or more
Industry Directors, excluding directors that are Exchange employees,
those Industry Directors shall act as the Representative Director
Nominating Body. If there are fewer than two Industry Directors on the
Board (excluding directors that are employees of the Exchange), then
the Exchange Member Subcommittee of the Advisory Board shall act as the
Representative Director Nominating Body. The Exchanges further propose
to amend their Bylaws and Certificates to provide that the sole
stockholder is bound to nominate and elect the Representative Directors
nominees recommended by the Representative Director Nominating Body or,
in the event of a petition candidate, the Representative Director
nominees who receive the most votes pursuant to a Run-off Election.
Lastly, the Exchanges each propose to amend Section 3.1 of their Bylaws
to provide that the Board is responsible for determining whether a
director candidate satisfies the applicable qualifications for election
as a director.
---------------------------------------------------------------------------
\5\ See id. at 56077; 56065; 56080; and 56072, respectively.
---------------------------------------------------------------------------
Second, the Exchanges propose to transfer the N&G Committee's
current authority with respect to committee appointments to their
Boards (or appropriate subcommittee of the Board).\6\ Specifically, the
Exchanges propose to amend Section 4.2 and 6.1 of their Bylaws to state
that members of the Executive Committee and Advisory Board will now be
appointed by the Board. The Exchanges also propose to amend Section 4.4
of their Bylaws to state that members of the Regulatory Oversight
Committee (``ROC'') will be appointed by the Board on the
recommendation of the Non-Industry Directors of the Board.
---------------------------------------------------------------------------
\6\ See id. at 56077; 56066; 56080; and 56073, respectively.
---------------------------------------------------------------------------
Third, the Exchanges propose to amend their Bylaws to alter the
process for filling director vacancies.\7\ Specifically, the Exchanges
propose to amend Section 3.4 of their Bylaws to provide that in the
event any Industry or Non-Industry Director fails to maintain the
required qualifications and the director's term is accordingly
terminated, the sole stockholder, instead of the Board, shall be able
to fill the vacancy.\8\ The Exchanges also propose to amend Section 3.5
of their Bylaws to provide the sole stockholder with authority to fill
vacancies so long as the elected Director qualifies for the position.
Additionally, with respect to vacancies among the Representative
Directors, the Representative Director Nominating Body will recommend
an individual, or provide a list of recommended individuals, to the
sole stockholder who shall select and fill the position.
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\7\ See id. at 56077; 56066; 56080-81 and 56073, respectively.
\8\ Amended Section 3.4 would also provide that if such
terminated director requalified, the sole stockholder would have
discretion to reappoint such director, including by increasing the
size of the Board, should that be necessary.
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Finally, the Exchanges propose to change their names in the title
and signature lines in their Certificates to reflect recent changes to
their legal names.\9\
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\9\ Other technical formatting changes occur throughout the
Bylaws as a result of the Exchanges proposed changes. See Notices,
supra note 4 at 56077; 56066; 56081 and 56073, respectively.
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III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
changes are consistent with the requirements of Section 6 of the Act
\10\ and the rules and regulations thereunder applicable to a national
securities exchange.\11\ In particular, the Commission finds that the
proposed rule changes are consistent with Sections 6(b)(1) the Act,\12\
which require a national securities exchange to be so organized and
have the capacity to be able to carry out the purposes of the Act, and
to comply and to enforce compliance by its members and persons
associated with its members with the provisions of the Act, the rules
and regulations thereunder, and the rules of the Exchange. The
Commission also finds that the proposed rule changes are consistent
with Section 6(b)(3) of the Act,\13\ which requires that the rules of a
national securities exchange assure the fair representation of its
members in the selection of its directors and administration of its
affairs, and provide that one or more directors shall be representative
of issuers and investors and not be associated with a member of the
exchange, broker, or dealer.
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\10\ 15 U.S.C. 78f(b).
\11\ In approving these proposed rule changes, the Commission
has considered the proposed rules' impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
\12\ 15 U.S.C. 78f(b)(1).
\13\ 15 U.S.C. 78f(b)(3).
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The Commission believes that the Exchanges' proposals to eliminate
their N&G Committees and reassign the N&G Committees' responsibilities
are consistent with the Act. In particular, with respect to vesting the
authority to nominate and elect directors in the sole stockholder, the
Exchanges cite to the rules of another Exchange that similarly does not
maintain an exchange-level nominating committee and instead provides
that the sole stockholder of the Exchange nominates and elects their
non-fair representation directors.\14\ Importantly, the Commission
notes that the proposed rule changes do not substantively impact the
provisions concerning the nomination and selection of fair
representation directors that currently apply to the Exchanges. The
sole stockholder will continue to be bound to nominate and elect the
Representative Director nominees recommended by the Representative
Director Nominating Body and there are no other changes to the process
for the nomination and selection of Representative Directors.
Accordingly, the Commission believes that members of the Exchanges
should continue to have a voice in the governance of the Exchanges
through Board representation and thus will have a voice in the
Exchanges' exercise of their self-regulatory authority. The Exchanges
represent that they are not proposing to amend any of the compositional
requirements currently set forth in the Bylaws and that such existing
compositional requirements must continue to be satisfied, including the
provision relating to the fair representation of members.\15\
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\14\ See Section 3.02(f) of the Amended and Restated NYSE Arca,
Inc. Bylaws. See also Notices, supra note 4 at 56078; 56066-67;
56081; and 56074, respectively.
\15\ See Notices, supra note 4 at 56078; 56067; 56081 and 56074,
respectively.
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In addition, with respect to providing the Board, as opposed to the
N&G Committee, with the authority to recommend and approve members of
the Executive Committee, Advisory Board, and ROC, the Commission notes
that other exchanges provide that their Boards, without input from a
nominating committee, may appoint members to committees.\16\ While the
internal Exchange delegations of the authority relating to the (i)
nomination and election of directors, (ii) nominating body for
Representative Directors, (iii)
[[Page 60651]]
filling of director vacancies and (iv) appointment of committees are
being amended, the Exchanges represent that the substantive
requirements of the Exchanges applicable to those items will remain the
same.\17\
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\16\ See e.g., Eleventh Amended and Restated Operating Agreement
of New York Stock Exchange, LLC, Section 2.03(h) and By-Laws of
Nasdaq Phlx LLC, Section 5-3.
\17\ See Notices, supra note 4 at 56078; 56067; 56081 and 56074,
respectively.
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Finally, the Commission believes that the proposals to update the
exchanges' names in their Certificates are consistent with the Act as
they may also serve to reduce potential confusion by ensuring the
Exchanges' corporate documents reflect their recent name changes.
IV. Accelerated Approval of the Proposal
The Commission finds good cause, pursuant to Section 19(b)(2) of
the Act,\18\ for approving the proposed rule changes, prior to the 30th
day after publication of the Notices in the Federal Register.\19\ The
Commission believes that the proposed rule changes do not raise novel
regulatory issues and are substantively similar to the existing rules
of other national securities exchanges.\20\ In particular, the
Commission notes that the proposed rule changes do not substantively
impact the provisions concerning the nomination and selection of fair
representation directors that currently apply to the Exchanges. Members
of the Exchanges should continue to have an opportunity to participate
in the selection of Board representation and have input into the
Exchanges' exercise of self-regulatory authority. In addition, the
Commission did not receive any comment on the proposed changes.
Accordingly, the Commission finds that good cause exists to approve the
proposed rule changes on an accelerated basis.
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\18\ 15 U.S.C. 78s(b)(2).
\19\ As noted above, the Notices were published for comment in
the Federal Register on November 27, 2017 and the comment period
closed on December 12, 2017. Accordingly, the 30th day after
publication of the Notices is December 27, 2017.
\20\ See notes 15 and 17, supra.
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V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the Act
\21\ that the proposed rule changes (SR-CboeBYX-2017-001; SR-CboeBZX-
2017-001; SR-CboeEDGA-2017-001; SR-CboeEDGX-2017-001), be, and hereby
are, approved on an accelerated basis.
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\21\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
Robert W. Errett,
Deputy Secretary.
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\22\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2017-27466 Filed 12-20-17; 8:45 am]
BILLING CODE 8011-01-P
