Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Article II, Section 2.03(h)(ii) and Article VI of Its Operating Agreement, 60924-60927 [2018-25737]

Download as PDF 60924 Federal Register / Vol. 83, No. 228 / Tuesday, November 27, 2018 / Notices Commission to waive the 30-day operative delay so that the proposed rule change may become effective and operative on November 29, 2018. The Exchange states that waiver of the operative delay will provide Users with additional flexibility to manage and display their orders and provide additional control over their executions on the Exchange as soon as possible. The Exchange further states that waiver of the operative delay will allow the Exchange to continue to strive towards a complete technology integration of the Cboe Affiliated Exchanges, with gradual roll-outs of new functionality to ensure the stability of the System. The Exchange notes that the proposed rule change is generally intended to codify and to add certain system functionality to the Exchange’s System in order to provide a consistent technology offering for the Cboe Affiliated Exchanges. The Exchange further notes that a consistent technology offering will simplify the technology implementation changes and maintenance by Trading Permit Holders of the Exchange that are also participants on Cboe Affiliated Exchanges. The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. Therefore, the Commission hereby waives the 30-day operative delay and designates the proposed rule change as operative on November 29, 2018.20 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: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. amozie on DSK3GDR082PROD with NOTICES1 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: Jkt 247001 Paper Comments [Release No. 34–84635; File No. SR–NYSE– 2018–56] • 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-CboeBZX–2018–082. 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–CboeBZX–2018–082 and should be submitted on or before December 18,2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.21 Eduardo A. Aleman, Assistant Secretary. BILLING CODE 8011–01–P 20 For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 17:45 Nov 26, 2018 SECURITIES AND EXCHANGE COMMISSION [FR Doc. 2018–25733 Filed 11–26–18; 8:45 am] Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or VerDate Sep<11>2014 • Send an email to rule-comments@ sec.gov. Please include File Number SR– CboeBZX–2018–082 on the subject line. Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Article II, Section 2.03(h)(ii) and Article VI of Its Operating Agreement November 20, 2018. 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 November 14, 2018, New York Stock Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. 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 agreement [sic] to harmonize certain provisions with similar provisions in the governing documents of the Exchange’s national securities exchange affiliates and parent companies, as well as make clarifying, technical and conforming changes. The proposed rule change is available on the Exchange’s website at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. 1 15 U.S.C.78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 21 17 PO 00000 CFR 200.30–3(a)(12). Frm 00104 Fmt 4703 Sfmt 4703 E:\FR\FM\27NON1.SGM 27NON1 Federal Register / Vol. 83, No. 228 / Tuesday, November 27, 2018 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose (1) Generally The Exchange proposes to amend Article II, Section 2.03(h)(ii) (Board) and Article VI (Indemnification and Exculpation) of the Eleventh Amended and Restated Operating Agreement of the Exchange (‘‘Operating Agreement’’) to harmonize certain provisions with similar provisions in the governing documents of the Exchange’s national securities exchange affiliates 4 and parent companies, as well as make clarifying, technical and conforming changes. The Exchange is owned by NYSE Group, Inc., which in turn is indirectly wholly owned by NYSE Holdings LLC (‘‘NYSE Holdings’’). NYSE Holdings is a wholly owned subsidiary of Intercontinental Holdings, Inc. (‘‘ICE Holdings’’), which is in turn wholly owned by the Intercontinental Exchange, Inc. (‘‘ICE’’).5 The Exchange operates as a separate self-regulatory organization and has rules, membership rosters and listings distinct from the rules, membership rosters and listings of the other NYSE Group Exchanges. At the same time, however, the Exchange believes it is important for each of the NYSE Group Exchanges to have a consistent approach to corporate governance in certain matters, to simplify complexity and create greater consistency among the NYSE Group Exchanges.6 The proposed amendments to the Operating amozie on DSK3GDR082PROD with NOTICES1 4 The Exchange has four registered national securities exchange affiliates: NYSE America [sic] LLC (‘‘NYSE American’’), NYSE Arca, Inc. (‘‘NYSE Arca’’), NYSE National, Inc. (‘‘NYSE National’’), and Chicago Stock Exchange, Inc. (‘‘CHX’’ and together with the Exchange, NYSE American, NYSE Arca, and NYSE National, the ‘‘NYSE Group Exchanges’’). CHX has filed to change its name to NYSE Chicago, Inc. See Exchange Act Release No. 84494 (October 26, 2018), 83 FR 54953 (November 1, 2018) (SR–CHX–2018–05) (‘‘NYSE Chicago Release’’) (notice of filing and immediate effectiveness of proposal to reflect name changes of the Exchange and its direct parent company and to amend certain corporate governance provisions). The rule changes set forth in the NYSE Chicago Release will become operative upon the Second Amended and Restated Certificate of Incorporation of Chicago Stock Exchange, Inc. (‘‘NYSE Chicago Certificate’’) becoming effective pursuant to its filing with the Secretary of State of the State of Delaware. 5 See Exchange Act Release No. 72158 (May 13, 2014), 79 FR 28784 (May 19, 2014) (SR–NYSE– 2014–23) (notice of filing and immediate effectiveness of proposed rule change relating to name changes of its ultimate parent and its indirect parents). 6 See NYSE Chicago Release, supra note 4, at 54953. VerDate Sep<11>2014 17:45 Nov 26, 2018 Jkt 247001 Agreement reflect the expectation that the Exchange will continue to be operated with a governance structure substantially similar to that of other NYSE Group Exchanges. The proposed amendment to Article II, Section 2.03(h)(ii) is based on the Second Amended and Restated By-Laws of NYSE Chicago, Inc. (‘‘NYSE Chicago Bylaws’’).7 The proposed amendments to Article VI are based on the Eighth Amended and Restated Bylaws of Intercontinental Exchange, Inc. (‘‘ICE Bylaws’’) and the Sixth Amended and Restated Bylaws of Intercontinental Exchange Holdings, Inc. (‘‘ICE Holdings Bylaws’’). The Exchange proposes to amend the Operating Agreement as follows. Article II, Section 2.03(h)(ii) Article II, Section 2.03(h)(ii) establishes the powers and responsibilities of the Regulatory Oversight Committee (‘‘ROC’’), and is substantially the same as the related provisions in the governing documents of the other NYSE Group Exchanges. 8 Among other things, the provision states that ‘‘[t]he Board may, on affirmative vote of a majority of directors, at any time remove a member of the ROC for cause.’’ The Exchange proposes to add language clarifying that the majority affirmative vote requirement is based on the ‘‘directors then in office,’’ as opposed to total number of seats on the Board. The change would be consistent with Article IV, Section 6 of the NYSE Chicago Bylaws.9 Article VI Section 6.02 (Indemnification) Current Section 6.02 includes provisions related to indemnification by the Exchange. As a wholly-owned subsidiary of ICE, the Exchange believes it appropriate to harmonize the Exchange’s indemnification provisions with those of ICE and the Exchange’s intermediate holding company, ICE Holdings.10 The same change was made 7 The NYSE Chicago Bylaws will become operative when the NYSE Chicago Certificate becomes effective pursuant to its filing with the Secretary of State of the State of Delaware. Id. 8 See Eleventh Amended and Restated Operating Agreement of NYSE American LLC, Article II, Section 2.03(h)(ii); NYSE Arca Rule 3.3; Fifth Amended and Restated Bylaws of NYSE National, Inc., Article V, Section 5.6; NYSE Chicago Bylaws, Article IV, Section 6. 9 See NYSE Chicago Release, supra note 4, at 54961. The Exchange understands that NYSE American, NYSE National and NYSE Arca propose to file similar changes to their respective ROC provisions. 10 See ICE Bylaws, Article X, Section 10.6, and ICE Holdings Bylaws, Article X, Section 10.6. PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 60925 to Article VI of the NYSE Chicago Bylaws.11 Accordingly, the Exchange proposes to delete the text of Section 6.02 in its entirety and replace it with proposed text that is substantially similar to the CHX, ICE and ICE Holdings provisions, with the exception of changes to be consistent with the Operating Agreement’s terminology 12 and, in Section 6.02(e), references to the New York Business Corporation Law, rather than the General Corporation Law of the State of Delaware.13 The proposed text follows: (a) The Company shall, to the fullest extent permitted by Law (as defined below), as such Law may be amended and supplemented from time to time, indemnify any director or officer made, or threatened to be made, a party to any action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of being a director or officer of the Company or a predecessor company or, at the Company’s request, a director, officer, partner, member, employee or agent of another entity; provided, however, that the Company shall indemnify any director or officer in connection with a proceeding initiated by such person only if such proceeding was authorized in advance by the Board of Directors of the Company. The indemnification provided for in this Section 6.02 shall: (i) Not be deemed exclusive of any other rights to which those indemnified may be entitled under any bylaw, agreement or vote of stockholders or disinterested directors or otherwise, both as to action in their official capacities and as to action in another capacity while holding such office; (ii) continue as to a person who has ceased to be a director or officer; and (iii) inure to the benefit of the heirs, executors and administrators of an indemnified person. (b) Expenses incurred by any such person in defending a civil or criminal action, suit or proceeding by reason of the fact that he is or was a director or officer of the Company (or was serving at the Company’s request as a director, officer, partner, member, employee or agent of another entity) shall be paid by the Company in advance of the final disposition of such action, suit or 11 See NYSE Chicago Release, supra note 4, at 54962–54963. The Exchange understands that NYSE American, NYSE National and NYSE Arca propose to file similar changes to their respective indemnification provisions. 12 For example, proposed Section 6.02 uses ‘‘officer’’ instead of ‘‘Senior Officers,’’ ‘‘Company’’ instead of ‘‘Corporation,’’ and ‘‘Section 6.02’’ instead of ‘‘Section 10.6.’’ 13 The NYSE is a New York limited liability company. CHX, ICE, and ICE Holdings are all organized under the laws of the State of Delaware. E:\FR\FM\27NON1.SGM 27NON1 amozie on DSK3GDR082PROD with NOTICES1 60926 Federal Register / Vol. 83, No. 228 / Tuesday, November 27, 2018 / Notices proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the Company as authorized by Law. Notwithstanding the foregoing, the Company shall not be required to advance such expenses to a person who is a party to an action, suit or proceeding brought by the Company and approved by a majority of the Board of Directors of the Company that alleges willful misappropriation of corporate assets by such person, disclosure of confidential information in violation of such person’s fiduciary or contractual obligations to the Company or any other willful and deliberate breach in bad faith of such person’s duty to the Company or its stockholders. (c) The foregoing provisions of this Section 6.02 shall be deemed to be a contract between the Company and each director or officer who serves in such capacity at any time while this bylaw is in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any state of facts then or theretofore existing or any action, suit or proceeding theretofore or thereafter brought based in whole or in part upon any such state of facts. The rights provided to any person by this bylaw shall be enforceable against the Company by such person, who shall be presumed to have relied upon it in serving or continuing to serve as a director or officer or in such other capacity as provided above. (d) The Board of Directors in its discretion shall have power on behalf of the Company to indemnify any person, other than a director or officer, made or threatened to be made a party to any action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that such person, or his or her testator or intestate, is or was an officer, employee or agent of the Company or, at the Company’s request, is or was serving as a director, officer, partner, member, employee or agent of another company or other entity. (e) For purposes of this Section 6.02, ‘‘Law’’ shall mean the laws governing the indemnification of, and advancement of expenses to, directors, officers, employees and agents of New York corporations, including Section 722 of the New York Business Corporation Law (‘‘Section 722’’), with such laws being applicable to the Exchange as if the Exchange were a New York corporation. To assure indemnification under this Section 6.02 of all directors, officers, employees and VerDate Sep<11>2014 17:45 Nov 26, 2018 Jkt 247001 agents who are determined by the Company or otherwise to be or to have been ‘‘fiduciaries’’ of any employee benefit plan of the Company that may exist from time to time, Section 722 shall, for the purposes of this Section 6.02, be interpreted as follows: An ‘‘other enterprise’’ shall be deemed to include such an employee benefit plan, including without limitation, any plan of the Company that is governed by the Act of Congress entitled ‘‘Employee Retirement Income Security Act of 1974,’’ as amended from time to time; the Company shall be deemed to have requested a person to serve an employee benefit plan where the performance by such person of his duties to the Company also imposes duties on, or otherwise involves services by, such person to the plan or participants or beneficiaries of the plan; excise taxes assessed on a person with respect to an employee benefit plan pursuant to such Act of Congress shall be deemed ‘‘fines.’’ Section 6.03 (Non Exclusivity of Rights) Current Section 6.03 states that the rights to indemnification and the payment of expenses conferred are not exclusive of any other right a person has. Because the non-exclusivity of rights would now be addressed in the final sentence of proposed Section 6.02(a), the Exchange proposes to delete Section 6.03 in its entirety. The deletion would be consistent with the indemnity provisions of the ICE, ICE Holdings and NYSE Chicago Bylaws, which do not have separate provisions regarding the non-exclusivity of rights.14 The remaining sections of Article VI would be renumbered accordingly. Additional Proposed Amendments The Exchange proposes to make technical and conforming changes to the title, recitals and signature page of the Operating Agreement. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Exchange Act,15 in general, and furthers the objectives of Section 6(b)(1) 16 in particular, in that it enables the Exchange to be so organized as to have the capacity to be able to carry out the purposes of the Exchange Act and to comply, and to enforce compliance by its exchange members and persons associated with its exchange members, with the provisions 14 See ICE Bylaws, Article X; ICE Holdings Bylaws, Article X; and NYSE Chicago Bylaws, Article VI. 15 15 U.S.C. 78f(b). 16 15 U.S.C. 78f(b)(1). PO 00000 Frm 00106 Fmt 4703 Sfmt 4703 of the Exchange Act, the rules and regulations thereunder, and the rules of the Exchange. The Exchange also believes that the proposed rule change is consistent with Section 6(b)(5) of the Exchange Act,17 in that it 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 facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest. The Exchange believes that the proposed amendments to the Operating Agreement would contribute to the orderly operation of the Exchange and would enable the Exchange to be so organized as to have the capacity to carry out the purposes of the Exchange Act and comply with the provisions of the Exchange Act by its members and persons associated with members. The proposed changes would create greater conformity between the ROC and indemnification provisions of the Operating Agreement and those of the governing documents of CHX, ICE and ICE Holdings. The Exchange believes that such conformity would streamline the NYSE Group Exchanges’ corporate processes, create more equivalent governance processes among them, and also provide clarity to the Exchange’s members, which is beneficial to both investors and the public interest. At the same time, the Exchange will continue to operate as a separate self-regulatory organization and to have rules, membership rosters and listings distinct from the rules, membership rosters and listings of the other NYSE Group Exchanges. For the same reason, the Exchange believes that the greater consistency among the governing documents of the NYSE Group Exchanges, ICE and ICE Holdings would promote the maintenance of a fair and orderly market, the protection of investors and the protection of the public interest. Indeed, the proposed amendments would make the corporate requirements and administrative processes relating to the Board and ROC more similar to those of CHX, which have been established as fair and designed to protect investors and the public interest.18 17 15 U.S.C. 78f(b)(5). e.g. NYSE Chicago Release, supra note 4; and Exchange Act Release Nos. 83303 (May 22, 2018), 83 FR 24517 (May 29, 2018) (SR–CHX–2018– 004). 18 See, E:\FR\FM\27NON1.SGM 27NON1 Federal Register / Vol. 83, No. 228 / Tuesday, November 27, 2018 / Notices The proposed amendments to effect non-substantive technical and conforming changes would remove impediments to and perfect the mechanism of a free and open market by ensuring that persons subject to the Exchange’s jurisdiction, regulators, and the investing public can more easily navigate and understand the governing documents. The Exchange further believes that the proposed amendments would not be inconsistent with the public interest and the protection of investors because investors will not be harmed and in fact would benefit from increased transparency and clarity, thereby reducing potential confusion. 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 intended to address competitive issues but rather is concerned solely with the corporate governance and administration of the Exchange. amozie on DSK3GDR082PROD with NOTICES1 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 19 and Rule 19b–4(f)(6) thereunder.20 Because the proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b–4(f)(6)(iii) thereunder. 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 U.S.C. 78s(b)(3)(A)(iii). 20 17 CFR 240.19b–4(f)(6). 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) 21 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–2018–56 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–NYSE–2018–56. 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 19 15 VerDate Sep<11>2014 17:45 Nov 26, 2018 submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NYSE–2018–56 and should be submitted on or before December 18, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.22 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018–25737 Filed 11–26–18; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–84630; File No. SR–MSRB– 2018–07] Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Order Granting Approval of a Proposed Rule Change To Amend MSRB Rule G–3, on Professional Qualification Requirements, To Require Municipal Advisor Principals To Become Appropriately Qualified by Passing the Municipal Advisor Principal Qualification Examination November 20, 2018. I. Introduction On September 19, 2018, the Municipal Securities Rulemaking Board (the ‘‘MSRB’’ or ‘‘Board’’) filed with the Securities and Exchange Commission (the ‘‘SEC’’ or ‘‘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 to amend Rule G–3, on professional qualification requirements, to (i) require persons who meet the definition of a municipal advisor principal, as defined under Rule G–3(e)(i), to pass the Municipal Advisor Principal Qualification Examination (‘‘Series 54 examination’’) in order to become appropriately qualified as a municipal advisor principal; (ii) specify that such persons who cease to be associated with a municipal advisor for two or more years at any time after having qualified as a municipal advisor principal must requalify by examination unless a waiver is granted; (iii) add the Series 54 examination to the list of qualification examinations for which a waiver can be sought; (iv) provide that municipal advisor representatives may function as a principal for 120 calendar days without being qualified with the Series 54 examination; and (v) make a 22 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 21 15 Jkt 247001 PO 00000 U.S.C. 78s(b)(2)(B). Frm 00107 Fmt 4703 Sfmt 4703 60927 E:\FR\FM\27NON1.SGM 27NON1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 83, Number 228 (Tuesday, November 27, 2018)]
[Notices]
[Pages 60924-60927]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-25737]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84635; File No. SR-NYSE-2018-56]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Article II, Section 2.03(h)(ii) and Article VI of Its Operating 
Agreement

November 20, 2018.
    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 November 14, 2018, New York Stock Exchange LLC (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to agreement [sic] to harmonize certain 
provisions with similar provisions in the governing documents of the 
Exchange's national securities exchange affiliates and parent 
companies, as well as make clarifying, technical and conforming 
changes. The proposed rule change is available on the Exchange's 
website at www.nyse.com, at the principal office of the Exchange, and 
at the Commission's Public Reference Room.

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

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

[[Page 60925]]

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

1. Purpose
(1) Generally
    The Exchange proposes to amend Article II, Section 2.03(h)(ii) 
(Board) and Article VI (Indemnification and Exculpation) of the 
Eleventh Amended and Restated Operating Agreement of the Exchange 
(``Operating Agreement'') to harmonize certain provisions with similar 
provisions in the governing documents of the Exchange's national 
securities exchange affiliates \4\ and parent companies, as well as 
make clarifying, technical and conforming changes.
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    \4\ The Exchange has four registered national securities 
exchange affiliates: NYSE America [sic] LLC (``NYSE American''), 
NYSE Arca, Inc. (``NYSE Arca''), NYSE National, Inc. (``NYSE 
National''), and Chicago Stock Exchange, Inc. (``CHX'' and together 
with the Exchange, NYSE American, NYSE Arca, and NYSE National, the 
``NYSE Group Exchanges''). CHX has filed to change its name to NYSE 
Chicago, Inc. See Exchange Act Release No. 84494 (October 26, 2018), 
83 FR 54953 (November 1, 2018) (SR-CHX-2018-05) (``NYSE Chicago 
Release'') (notice of filing and immediate effectiveness of proposal 
to reflect name changes of the Exchange and its direct parent 
company and to amend certain corporate governance provisions). The 
rule changes set forth in the NYSE Chicago Release will become 
operative upon the Second Amended and Restated Certificate of 
Incorporation of Chicago Stock Exchange, Inc. (``NYSE Chicago 
Certificate'') becoming effective pursuant to its filing with the 
Secretary of State of the State of Delaware.
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    The Exchange is owned by NYSE Group, Inc., which in turn is 
indirectly wholly owned by NYSE Holdings LLC (``NYSE Holdings''). NYSE 
Holdings is a wholly owned subsidiary of Intercontinental Holdings, 
Inc. (``ICE Holdings''), which is in turn wholly owned by the 
Intercontinental Exchange, Inc. (``ICE'').\5\
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    \5\ See Exchange Act Release No. 72158 (May 13, 2014), 79 FR 
28784 (May 19, 2014) (SR-NYSE-2014-23) (notice of filing and 
immediate effectiveness of proposed rule change relating to name 
changes of its ultimate parent and its indirect parents).
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    The Exchange operates as a separate self-regulatory organization 
and has rules, membership rosters and listings distinct from the rules, 
membership rosters and listings of the other NYSE Group Exchanges. At 
the same time, however, the Exchange believes it is important for each 
of the NYSE Group Exchanges to have a consistent approach to corporate 
governance in certain matters, to simplify complexity and create 
greater consistency among the NYSE Group Exchanges.\6\ The proposed 
amendments to the Operating Agreement reflect the expectation that the 
Exchange will continue to be operated with a governance structure 
substantially similar to that of other NYSE Group Exchanges.
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    \6\ See NYSE Chicago Release, supra note 4, at 54953.
---------------------------------------------------------------------------

    The proposed amendment to Article II, Section 2.03(h)(ii) is based 
on the Second Amended and Restated By-Laws of NYSE Chicago, Inc. 
(``NYSE Chicago Bylaws'').\7\ The proposed amendments to Article VI are 
based on the Eighth Amended and Restated Bylaws of Intercontinental 
Exchange, Inc. (``ICE Bylaws'') and the Sixth Amended and Restated 
Bylaws of Intercontinental Exchange Holdings, Inc. (``ICE Holdings 
Bylaws'').
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    \7\ The NYSE Chicago Bylaws will become operative when the NYSE 
Chicago Certificate becomes effective pursuant to its filing with 
the Secretary of State of the State of Delaware. Id.
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    The Exchange proposes to amend the Operating Agreement as follows.
Article II, Section 2.03(h)(ii)
    Article II, Section 2.03(h)(ii) establishes the powers and 
responsibilities of the Regulatory Oversight Committee (``ROC''), and 
is substantially the same as the related provisions in the governing 
documents of the other NYSE Group Exchanges. \8\ Among other things, 
the provision states that ``[t]he Board may, on affirmative vote of a 
majority of directors, at any time remove a member of the ROC for 
cause.'' The Exchange proposes to add language clarifying that the 
majority affirmative vote requirement is based on the ``directors then 
in office,'' as opposed to total number of seats on the Board. The 
change would be consistent with Article IV, Section 6 of the NYSE 
Chicago Bylaws.\9\
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    \8\ See Eleventh Amended and Restated Operating Agreement of 
NYSE American LLC, Article II, Section 2.03(h)(ii); NYSE Arca Rule 
3.3; Fifth Amended and Restated Bylaws of NYSE National, Inc., 
Article V, Section 5.6; NYSE Chicago Bylaws, Article IV, Section 6.
    \9\ See NYSE Chicago Release, supra note 4, at 54961. The 
Exchange understands that NYSE American, NYSE National and NYSE Arca 
propose to file similar changes to their respective ROC provisions.
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Article VI
Section 6.02 (Indemnification)
    Current Section 6.02 includes provisions related to indemnification 
by the Exchange. As a wholly-owned subsidiary of ICE, the Exchange 
believes it appropriate to harmonize the Exchange's indemnification 
provisions with those of ICE and the Exchange's intermediate holding 
company, ICE Holdings.\10\ The same change was made to Article VI of 
the NYSE Chicago Bylaws.\11\
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    \10\ See ICE Bylaws, Article X, Section 10.6, and ICE Holdings 
Bylaws, Article X, Section 10.6.
    \11\ See NYSE Chicago Release, supra note 4, at 54962-54963. The 
Exchange understands that NYSE American, NYSE National and NYSE Arca 
propose to file similar changes to their respective indemnification 
provisions.
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    Accordingly, the Exchange proposes to delete the text of Section 
6.02 in its entirety and replace it with proposed text that is 
substantially similar to the CHX, ICE and ICE Holdings provisions, with 
the exception of changes to be consistent with the Operating 
Agreement's terminology \12\ and, in Section 6.02(e), references to the 
New York Business Corporation Law, rather than the General Corporation 
Law of the State of Delaware.\13\ The proposed text follows:
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    \12\ For example, proposed Section 6.02 uses ``officer'' instead 
of ``Senior Officers,'' ``Company'' instead of ``Corporation,'' and 
``Section 6.02'' instead of ``Section 10.6.''
    \13\ The NYSE is a New York limited liability company. CHX, ICE, 
and ICE Holdings are all organized under the laws of the State of 
Delaware.
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    (a) The Company shall, to the fullest extent permitted by Law (as 
defined below), as such Law may be amended and supplemented from time 
to time, indemnify any director or officer made, or threatened to be 
made, a party to any action, suit or proceeding, whether criminal, 
civil, administrative or investigative, by reason of being a director 
or officer of the Company or a predecessor company or, at the Company's 
request, a director, officer, partner, member, employee or agent of 
another entity; provided, however, that the Company shall indemnify any 
director or officer in connection with a proceeding initiated by such 
person only if such proceeding was authorized in advance by the Board 
of Directors of the Company. The indemnification provided for in this 
Section 6.02 shall: (i) Not be deemed exclusive of any other rights to 
which those indemnified may be entitled under any bylaw, agreement or 
vote of stockholders or disinterested directors or otherwise, both as 
to action in their official capacities and as to action in another 
capacity while holding such office; (ii) continue as to a person who 
has ceased to be a director or officer; and (iii) inure to the benefit 
of the heirs, executors and administrators of an indemnified person.
    (b) Expenses incurred by any such person in defending a civil or 
criminal action, suit or proceeding by reason of the fact that he is or 
was a director or officer of the Company (or was serving at the 
Company's request as a director, officer, partner, member, employee or 
agent of another entity) shall be paid by the Company in advance of the 
final disposition of such action, suit or

[[Page 60926]]

proceeding upon receipt of an undertaking by or on behalf of such 
director or officer to repay such amount if it shall ultimately be 
determined that he or she is not entitled to be indemnified by the 
Company as authorized by Law. Notwithstanding the foregoing, the 
Company shall not be required to advance such expenses to a person who 
is a party to an action, suit or proceeding brought by the Company and 
approved by a majority of the Board of Directors of the Company that 
alleges willful misappropriation of corporate assets by such person, 
disclosure of confidential information in violation of such person's 
fiduciary or contractual obligations to the Company or any other 
willful and deliberate breach in bad faith of such person's duty to the 
Company or its stockholders.
    (c) The foregoing provisions of this Section 6.02 shall be deemed 
to be a contract between the Company and each director or officer who 
serves in such capacity at any time while this bylaw is in effect, and 
any repeal or modification thereof shall not affect any rights or 
obligations then existing with respect to any state of facts then or 
theretofore existing or any action, suit or proceeding theretofore or 
thereafter brought based in whole or in part upon any such state of 
facts. The rights provided to any person by this bylaw shall be 
enforceable against the Company by such person, who shall be presumed 
to have relied upon it in serving or continuing to serve as a director 
or officer or in such other capacity as provided above.
    (d) The Board of Directors in its discretion shall have power on 
behalf of the Company to indemnify any person, other than a director or 
officer, made or threatened to be made a party to any action, suit or 
proceeding, whether criminal, civil, administrative or investigative, 
by reason of the fact that such person, or his or her testator or 
intestate, is or was an officer, employee or agent of the Company or, 
at the Company's request, is or was serving as a director, officer, 
partner, member, employee or agent of another company or other entity.
    (e) For purposes of this Section 6.02, ``Law'' shall mean the laws 
governing the indemnification of, and advancement of expenses to, 
directors, officers, employees and agents of New York corporations, 
including Section 722 of the New York Business Corporation Law 
(``Section 722''), with such laws being applicable to the Exchange as 
if the Exchange were a New York corporation. To assure indemnification 
under this Section 6.02 of all directors, officers, employees and 
agents who are determined by the Company or otherwise to be or to have 
been ``fiduciaries'' of any employee benefit plan of the Company that 
may exist from time to time, Section 722 shall, for the purposes of 
this Section 6.02, be interpreted as follows: An ``other enterprise'' 
shall be deemed to include such an employee benefit plan, including 
without limitation, any plan of the Company that is governed by the Act 
of Congress entitled ``Employee Retirement Income Security Act of 
1974,'' as amended from time to time; the Company shall be deemed to 
have requested a person to serve an employee benefit plan where the 
performance by such person of his duties to the Company also imposes 
duties on, or otherwise involves services by, such person to the plan 
or participants or beneficiaries of the plan; excise taxes assessed on 
a person with respect to an employee benefit plan pursuant to such Act 
of Congress shall be deemed ``fines.''
Section 6.03 (Non Exclusivity of Rights)
    Current Section 6.03 states that the rights to indemnification and 
the payment of expenses conferred are not exclusive of any other right 
a person has. Because the non-exclusivity of rights would now be 
addressed in the final sentence of proposed Section 6.02(a), the 
Exchange proposes to delete Section 6.03 in its entirety. The deletion 
would be consistent with the indemnity provisions of the ICE, ICE 
Holdings and NYSE Chicago Bylaws, which do not have separate provisions 
regarding the non-exclusivity of rights.\14\
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    \14\ See ICE Bylaws, Article X; ICE Holdings Bylaws, Article X; 
and NYSE Chicago Bylaws, Article VI.
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    The remaining sections of Article VI would be renumbered 
accordingly.
Additional Proposed Amendments
    The Exchange proposes to make technical and conforming changes to 
the title, recitals and signature page of the Operating Agreement.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Exchange Act,\15\ in general, and furthers the 
objectives of Section 6(b)(1) \16\ in particular, in that it enables 
the Exchange to be so organized as to have the capacity to be able to 
carry out the purposes of the Exchange Act and to comply, and to 
enforce compliance by its exchange members and persons associated with 
its exchange members, with the provisions of the Exchange Act, the 
rules and regulations thereunder, and the rules of the Exchange. The 
Exchange also believes that the proposed rule change is consistent with 
Section 6(b)(5) of the Exchange Act,\17\ in that it 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 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.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(1).
    \17\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed amendments to the Operating 
Agreement would contribute to the orderly operation of the Exchange and 
would enable the Exchange to be so organized as to have the capacity to 
carry out the purposes of the Exchange Act and comply with the 
provisions of the Exchange Act by its members and persons associated 
with members. The proposed changes would create greater conformity 
between the ROC and indemnification provisions of the Operating 
Agreement and those of the governing documents of CHX, ICE and ICE 
Holdings. The Exchange believes that such conformity would streamline 
the NYSE Group Exchanges' corporate processes, create more equivalent 
governance processes among them, and also provide clarity to the 
Exchange's members, which is beneficial to both investors and the 
public interest. At the same time, the Exchange will continue to 
operate as a separate self-regulatory organization and to have rules, 
membership rosters and listings distinct from the rules, membership 
rosters and listings of the other NYSE Group Exchanges.
    For the same reason, the Exchange believes that the greater 
consistency among the governing documents of the NYSE Group Exchanges, 
ICE and ICE Holdings would promote the maintenance of a fair and 
orderly market, the protection of investors and the protection of the 
public interest. Indeed, the proposed amendments would make the 
corporate requirements and administrative processes relating to the 
Board and ROC more similar to those of CHX, which have been established 
as fair and designed to protect investors and the public interest.\18\
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    \18\ See, e.g. NYSE Chicago Release, supra note 4; and Exchange 
Act Release Nos. 83303 (May 22, 2018), 83 FR 24517 (May 29, 2018) 
(SR-CHX-2018-004).

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[[Page 60927]]

    The proposed amendments to effect non-substantive technical and 
conforming changes would remove impediments to and perfect the 
mechanism of a free and open market by ensuring that persons subject to 
the Exchange's jurisdiction, regulators, and the investing public can 
more easily navigate and understand the governing documents. The 
Exchange further believes that the proposed amendments would not be 
inconsistent with the public interest and the protection of investors 
because investors will not be harmed and in fact would benefit from 
increased transparency and clarity, thereby reducing potential 
confusion.

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 intended to address competitive issues but rather is 
concerned solely with the corporate governance and administration of 
the Exchange.

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

    No written comments were solicited or received with respect to the 
proposed rule change.

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \19\ and Rule 19b-4(f)(6) thereunder.\20\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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    \19\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \20\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    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) \21\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \21\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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 [email protected]. Please include 
File Number SR-NYSE-2018-56 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-NYSE-2018-56. 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-NYSE-2018-56 and should be submitted on 
or before December 18, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-25737 Filed 11-26-18; 8:45 am]
 BILLING CODE 8011-01-P

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