Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing of Proposed Rule Change To Amend the BX Equities LLC Operating Agreement, 62229-62231 [2021-24412]
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Federal Register / Vol. 86, No. 214 / Tuesday, November 9, 2021 / Notices
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–ICEEU–2021–021. 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 such
filings will also be available for
inspection and copying at the principal
office of ICE Clear Europe and on ICE
Clear Europe’s website at https://
www.theice.com/clear-credit/regulation.
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–ICEEU–2021–021
and should be submitted on or before
November 30, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–24414 Filed 11–8–21; 8:45 am]
jspears on DSK121TN23PROD with NOTICES1
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93514; File No. SR–BX–
2021–050]
Self-Regulatory Organizations; Nasdaq
BX, Inc.; Notice of Filing of Proposed
Rule Change To Amend the BX
Equities LLC Operating Agreement
November 3, 2021.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on October
22, 2021, Nasdaq BX, Inc. (‘‘BX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
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 amend its
rules to reflect that Nasdaq, Inc.
(‘‘Nasdaq HoldCo’’), the Exchange’s sole
stockholder, will transfer its entire
ownership interest in the Exchange’s
subsidiary Nasdaq BX Equities LLC
(‘‘BX Equities’’) to the Exchange,
thereby resulting in the Exchange
becoming the 100% direct owner and
sole LLC member of BX Equities.
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/bx/rules, 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
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
1 15
17 17
CFR 200.30–3(a)(12).
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of the proposed rule
change is to amend the Exchange’s rules
to reflect that Nasdaq HoldCo, the
Exchange’s sole stockholder, will
transfer its entire ownership interest in
the Exchange’s subsidiary BX Equities
to the Exchange (the ‘‘Transfer’’),
thereby resulting in the Exchange
becoming the 100% direct owner and
sole LLC member of BX Equities. The
Exchange notes that the proposed
Transfer is the first part of a two-step
process, the second part of which is the
upstream merger of BX Equities with
and into the Exchange (the ‘‘Merger’’
and together with the Transfer, the
‘‘Transactions’’).3 The Transactions will
ultimately result in the elimination of
BX Equities. The Transactions are
designed to simplify the corporate
structure of Nasdaq HoldCo’s
subsidiaries, specifically the Exchange
and BX Equities. The Transactions will
not have any effect on Nasdaq HoldCo’s
direct ownership of the Exchange.
Background
BX Equities was acquired by Nasdaq
HoldCo in 2008,4 and established as a
facility of and controlled subsidiary
owned and operated by the Exchange
for the listing and trading of cash equity
securities.5 Today, Nasdaq HoldCo
directly owns 100% of the Exchange.
The Exchange directly owns 53.21% of
BX Equities, and Nasdaq HoldCo
directly owns the remaining 46.79% of
3 The proposed Merger is the subject of a separate
rule filing to be filed by the Exchange with the
Commission concurrent with this filing.
Specifically, the Transfer filing would amend the
BX Equities Operating Agreement to reflect Nasdaq
HoldCo’s transfer of ownership interest in BX
Equities to the Exchange. The Merger filing would
then delete the BX Equities Operating Agreement
that was amended in the Transfer filing and delete
the Delegation Agreement to reflect the Merger. See
SR–BX–2021–051 (not yet published).
4 See Securities Exchange Act Release No. 58324
(August 7, 2008), 73 FR 46936 (August 12, 2008)
(SR–BSE–2008–02; –23; –25; SR–BSECC–2008–01)
(‘‘2008 Acquisition Approval Order’’). At the time
of the acquisition, the Exchange already owned
53.21% of BX Equities, with the remaining 46.79%
owned by several investors. Following the 2008
Acquisition Approval Order, Nasdaq HoldCo
purchased and as a result, became the direct owner
of the 46.79% interest in BX Equities that was
previously held by those investors. See 2008
Acquisition Approval Order at 46950.
5 See Securities Exchange Act Release No. 59154
(December 23, 2008), 73 FR 80468 (December 31,
2008) (SR–BSE–2008–48) (‘‘BX Equities Approval
Order’’). The NASDAQ OMX Group, Inc. (as
referenced in both the 2008 Acquisition Approval
Order and the BX Equities Approval Order) is now
Nasdaq, Inc.
E:\FR\FM\09NON1.SGM
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Federal Register / Vol. 86, No. 214 / Tuesday, November 9, 2021 / Notices
BX Equities.6 The Fifth Amended and
Restated Operating Agreement of BX
Equities (‘‘Operating Agreement’’)
reflects that the Exchange and Nasdaq
HoldCo are the only owners and LLC
members of BX Equities. Under Section
8.1 of the Operating Agreement, the
Exchange must obtain Commission
approval for transfers of ownership
interests in BX Equities, including the
proposed Transfer. Subject to the
Commission’s approval of this proposed
rule change, the Exchange and Nasdaq
HoldCo will enter into a contribution
and assignment agreement
(‘‘Contribution Agreement’’) pursuant to
which Nasdaq HoldCo will transfer its
entire 46.79% ownership interest in BX
Equities to the Exchange. As a result of
the Transfer, the Exchange will directly
own 100% of BX Equities. In addition,
the Exchange will continue to be 100%
owned by Nasdaq HoldCo.
jspears on DSK121TN23PROD with NOTICES1
Proposal
As discussed above, BX Equities is
currently governed by the Operating
Agreement, which provides that the
Exchange and Nasdaq HoldCo are the
only owners and LLC members of BX
Equities. Management of BX Equities,
however, is vested solely in the
Exchange. Nasdaq HoldCo has no direct
management role in the operation of the
entity, with the exception of its limited
role as ‘‘tax matters Member’’ under
Sections 10.9 and 12.6 and in the
definitions of ‘‘Capital Account’’ and
‘‘Tax Amount,’’ and its limited rights
with regard to dissolution of the entity
under Article 11 and capital
contributions under Section 7.4.7
To effectuate the proposed Transfer,
the Exchange and Nasdaq HoldCo will
enter into the Contribution Agreement
pursuant to which Nasdaq HoldCo will
transfer its entire ownership interest in
BX Equities, and all of its other rights
and obligations arising thereunder
(including, without limitation, as tax
matters Member of BX Equities), to the
Exchange. Accordingly, the Exchange
proposes to amend the Operating
Agreement to reflect the foregoing, and
to remove references throughout to
Nasdaq HoldCo. Notably, the Exchange
is proposing to make the following
amendments:
• The introductory paragraphs, the
definition of ‘‘Agreement’’ in Section
1.1, and Section 2.8(e) will be amended
6 See
supra note 4.
stated in the BX Equities Approval Order,
Nasdaq HoldCo remained an LLC member of BX
Equities to avoid certain adverse tax consequences
that would be associated with contributing its
ownership interest to the Exchange. See BX Equities
Approval Order at 80469–70. Those tax
considerations have since expired.
7 As
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17:00 Nov 08, 2021
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to reflect the most recent version of the
Operating Agreement.
• The recitals will also be amended to
add language regarding the Contribution
Agreement.
• The definitions of ‘‘Capital
Account’’ and ‘‘Tax Amount’’ in Section
1.1, and Sections 10.9 and 12.6 will be
amended to replace Nasdaq HoldCo
with the Exchange in order to reflect
that Nasdaq HoldCo will no longer be
the tax matters Member of BX Equities.
• Section 7.4 will be amended to
reflect that Nasdaq HoldCo will no
longer have limited rights with respect
to capital contributions in BX Equities.
The Exchange will also correct a typo in
this section.
• Section 11.1(a)(i) will be amended
to reflect that Nasdaq HoldCo will no
longer have limited rights regarding the
dissolution of BX Equities. The
Exchange will also correct a typo in this
section.
• Section 18.6(a), which relates to
oversight pursuant to the Exchange Act
over the books, records, premises,
officers, directors, agents, and
employees of Nasdaq HoldCo, will be
deleted in its entirety and Section 18.6
will be renumbered accordingly. Section
18.6(a) will no longer be necessary upon
Nasdaq HoldCo’s withdrawal as an LLC
member of BX Equities. Furthermore,
Nasdaq HoldCo’s By-Laws at Section
12.1(c) currently also contain similar
oversight provisions.
• Lastly, the introductory paragraphs,
the definition of ‘‘Member’’ in Section
1.1, Section 7.2, Schedule 1, and
Schedule 2 will be amended to remove
references to Nasdaq HoldCo as an LLC
member of BX Equities.
Subject to Commission approval, the
amended Operating Agreement will be
operative immediately upon the
Transfer. As noted above, the Exchange
is concurrently filing a separate rule
change to further amend the Operating
Agreement by deleting it in its entirety
upon the Merger and elimination of BX
Equities.8 The Exchange intends to
implement the Transactions by the end
of Q4 2021. The Exchange anticipates
that the Merger will occur immediately
after the Transfer.
2. Statutory Basis
The Exchange believes that this
proposal is consistent with Section 6(b)
of the Act,9 in general, and furthers the
objectives of Section 6(b)(1) of the Act,10
in particular, in that it enables the
Exchange to be so organized as to have
the capacity to be able to carry out the
8 See
supra note 3.
U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(1).
purposes of the Act and to comply, and
to enforce compliance by its exchange
members and persons associated with
its exchange members, with the
provisions of the Act, the rules and
regulations thereunder, and the rules of
the Exchange. The proposed rule change
merely seeks to simplify the corporate
structure of BX Equities, and the
Exchange will operate in a substantially
similar manner following the Transfer
as it operates today, with the addition
of the Exchange’s role as the tax matters
Member of BX Equities. This is a
corporate change, and will have no
impact on how the Exchange operates
its equities market.
The Exchange also believes that its
proposal furthers the objectives of
Section 6(b)(5) of the Act,11 in
particular, in that it is designed to
promote just and equitable principles of
trade, 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.
Specifically, the proposed rule change
would result in the Operating
Agreement correctly reflecting the
ownership structure of its subsidiary BX
Equities upon completion of the
Transfer. The Exchange reiterates that it
will continue to operate its equities
market in the same manner as today
following the Transfer.
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 not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed rule change is not designed to
address any competitive issues but
rather is concerned solely with the
corporate structure of BX Equities.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
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
9 15
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U.S.C. 78f(b)(5).
09NON1
Federal Register / Vol. 86, No. 214 / Tuesday, November 9, 2021 / Notices
the self-regulatory organization
consents, the Commission will:
(A) By order approve or disapprove
such 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:
jspears on DSK121TN23PROD with NOTICES1
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–
BX–2021–050 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–BX–2021–050. 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–BX–2021–050 and should
VerDate Sep<11>2014
17:00 Nov 08, 2021
Jkt 256001
be submitted on or before November 30,
2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–24412 Filed 11–8–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[OMB Control No. 3235–0627]
Proposed Collection; Comment
Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA
Services,100 F Street NE, Washington,
DC 20549–2736
Extension:
Rule 17g–4
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.) (‘‘PRA’’), the
Securities and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the existing collection of information
provided for in Rule 17g–4 (17 CFR
240.17g–4) under the Securities
Exchange Act of 1934 (15 U.S.C. 78a et
seq.) (‘‘Exchange Act’’). The
Commission plans to submit this
existing collection of information to the
Office of Management and Budget
(‘‘OMB’’) for extension and approval.
The Credit Rating Agency Reform Act
of 2006 added a new section 15E,
‘‘Registration of Nationally Recognized
Statistical Rating Organizations,’’ 1 to
the Exchange Act. Pursuant to the
authority granted under section 15E of
the Exchange Act, the Commission
adopted Rule 17g–4, which requires that
a nationally recognized statistical rating
organization (‘‘NRSRO’’) establish,
maintain, and enforce written policies
and procedures to prevent the misuse of
material nonpublic information,
including policies and procedures
reasonably designed to prevent: (a) The
inappropriate dissemination of material
nonpublic information obtained in
connection with the performance of
credit rating services; (b) a person
within the NRSRO from trading on
material nonpublic information; and (c)
the inappropriate dissemination of a
pending credit rating action.2
CFR 200.30–3(a)(12).
U.S.C. 78o–7.
2 See 17 CFR 240.17g–4; Release No. 34–55231
(Feb. 2, 2007), 72 FR 6378 (Feb. 9, 2007); Release
No. 34–55857 (June 5, 2007), 72 FR 33564 (June 18,
2007).
62231
There are 9 credit rating agencies
registered with the Commission as
NRSROs under section 15E of the
Exchange Act, which have already
established the policies and procedures
required by Rule 17g–4. Based on staff
experience, an NRSRO is estimated to
spend an average of approximately 10
hours per year reviewing its policies
and procedures regarding material
nonpublic information and updating
them (if necessary), resulting in an
average industry-wide annual hour
burden of approximately 90 hours.3
Written comments are invited on: (a)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
Commission, including whether the
information shall have practical utility;
(b) the accuracy of the Commission’s
estimates of the burden of the proposed
collection of information; (c) ways to
enhance the quality, utility, and clarity
of the information on respondents; and
(d) ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
Consideration will be given to
comments and suggestions submitted in
writing within 60 days of this
publication.
The Commission may not conduct or
sponsor a collection of information
unless it displays a currently valid
control number. No person shall be
subject to any penalty for failing to
comply with a collection of information
subject to the PRA that does not display
a valid Office of Management and
Budget (OMB) control number.
Please direct your written comments
to: Dave Bottom, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o John R.
Pezzullo, 100 F St. NE, Washington, DC
20549 or send an email to: PRA_
Mailbox@sec.gov.
Dated: November 3, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–24424 Filed 11–8–21; 8:45 am]
BILLING CODE 8011–01–P
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]]>Agencies
[Federal Register Volume 86, Number 214 (Tuesday, November 9, 2021)]
[Notices]
[Pages 62229-62231]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-24412]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93514; File No. SR-BX-2021-050]
Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing
of Proposed Rule Change To Amend the BX Equities LLC Operating
Agreement
November 3, 2021.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on October 22, 2021, Nasdaq BX, Inc. (``BX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 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 its rules to reflect that Nasdaq,
Inc. (``Nasdaq HoldCo''), the Exchange's sole stockholder, will
transfer its entire ownership interest in the Exchange's subsidiary
Nasdaq BX Equities LLC (``BX Equities'') to the Exchange, thereby
resulting in the Exchange becoming the 100% direct owner and sole LLC
member of BX Equities.
The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/bx/rules, 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 Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to amend the Exchange's
rules to reflect that Nasdaq HoldCo, the Exchange's sole stockholder,
will transfer its entire ownership interest in the Exchange's
subsidiary BX Equities to the Exchange (the ``Transfer''), thereby
resulting in the Exchange becoming the 100% direct owner and sole LLC
member of BX Equities. The Exchange notes that the proposed Transfer is
the first part of a two-step process, the second part of which is the
upstream merger of BX Equities with and into the Exchange (the
``Merger'' and together with the Transfer, the ``Transactions'').\3\
The Transactions will ultimately result in the elimination of BX
Equities. The Transactions are designed to simplify the corporate
structure of Nasdaq HoldCo's subsidiaries, specifically the Exchange
and BX Equities. The Transactions will not have any effect on Nasdaq
HoldCo's direct ownership of the Exchange.
---------------------------------------------------------------------------
\3\ The proposed Merger is the subject of a separate rule filing
to be filed by the Exchange with the Commission concurrent with this
filing. Specifically, the Transfer filing would amend the BX
Equities Operating Agreement to reflect Nasdaq HoldCo's transfer of
ownership interest in BX Equities to the Exchange. The Merger filing
would then delete the BX Equities Operating Agreement that was
amended in the Transfer filing and delete the Delegation Agreement
to reflect the Merger. See SR-BX-2021-051 (not yet published).
---------------------------------------------------------------------------
Background
BX Equities was acquired by Nasdaq HoldCo in 2008,\4\ and
established as a facility of and controlled subsidiary owned and
operated by the Exchange for the listing and trading of cash equity
securities.\5\ Today, Nasdaq HoldCo directly owns 100% of the Exchange.
The Exchange directly owns 53.21% of BX Equities, and Nasdaq HoldCo
directly owns the remaining 46.79% of
[[Page 62230]]
BX Equities.\6\ The Fifth Amended and Restated Operating Agreement of
BX Equities (``Operating Agreement'') reflects that the Exchange and
Nasdaq HoldCo are the only owners and LLC members of BX Equities. Under
Section 8.1 of the Operating Agreement, the Exchange must obtain
Commission approval for transfers of ownership interests in BX
Equities, including the proposed Transfer. Subject to the Commission's
approval of this proposed rule change, the Exchange and Nasdaq HoldCo
will enter into a contribution and assignment agreement (``Contribution
Agreement'') pursuant to which Nasdaq HoldCo will transfer its entire
46.79% ownership interest in BX Equities to the Exchange. As a result
of the Transfer, the Exchange will directly own 100% of BX Equities. In
addition, the Exchange will continue to be 100% owned by Nasdaq HoldCo.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 58324 (August 7,
2008), 73 FR 46936 (August 12, 2008) (SR-BSE-2008-02; -23; -25; SR-
BSECC-2008-01) (``2008 Acquisition Approval Order''). At the time of
the acquisition, the Exchange already owned 53.21% of BX Equities,
with the remaining 46.79% owned by several investors. Following the
2008 Acquisition Approval Order, Nasdaq HoldCo purchased and as a
result, became the direct owner of the 46.79% interest in BX
Equities that was previously held by those investors. See 2008
Acquisition Approval Order at 46950.
\5\ See Securities Exchange Act Release No. 59154 (December 23,
2008), 73 FR 80468 (December 31, 2008) (SR-BSE-2008-48) (``BX
Equities Approval Order''). The NASDAQ OMX Group, Inc. (as
referenced in both the 2008 Acquisition Approval Order and the BX
Equities Approval Order) is now Nasdaq, Inc.
\6\ See supra note 4.
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Proposal
As discussed above, BX Equities is currently governed by the
Operating Agreement, which provides that the Exchange and Nasdaq HoldCo
are the only owners and LLC members of BX Equities. Management of BX
Equities, however, is vested solely in the Exchange. Nasdaq HoldCo has
no direct management role in the operation of the entity, with the
exception of its limited role as ``tax matters Member'' under Sections
10.9 and 12.6 and in the definitions of ``Capital Account'' and ``Tax
Amount,'' and its limited rights with regard to dissolution of the
entity under Article 11 and capital contributions under Section 7.4.\7\
---------------------------------------------------------------------------
\7\ As stated in the BX Equities Approval Order, Nasdaq HoldCo
remained an LLC member of BX Equities to avoid certain adverse tax
consequences that would be associated with contributing its
ownership interest to the Exchange. See BX Equities Approval Order
at 80469-70. Those tax considerations have since expired.
---------------------------------------------------------------------------
To effectuate the proposed Transfer, the Exchange and Nasdaq HoldCo
will enter into the Contribution Agreement pursuant to which Nasdaq
HoldCo will transfer its entire ownership interest in BX Equities, and
all of its other rights and obligations arising thereunder (including,
without limitation, as tax matters Member of BX Equities), to the
Exchange. Accordingly, the Exchange proposes to amend the Operating
Agreement to reflect the foregoing, and to remove references throughout
to Nasdaq HoldCo. Notably, the Exchange is proposing to make the
following amendments:
The introductory paragraphs, the definition of
``Agreement'' in Section 1.1, and Section 2.8(e) will be amended to
reflect the most recent version of the Operating Agreement.
The recitals will also be amended to add language
regarding the Contribution Agreement.
The definitions of ``Capital Account'' and ``Tax Amount''
in Section 1.1, and Sections 10.9 and 12.6 will be amended to replace
Nasdaq HoldCo with the Exchange in order to reflect that Nasdaq HoldCo
will no longer be the tax matters Member of BX Equities.
Section 7.4 will be amended to reflect that Nasdaq HoldCo
will no longer have limited rights with respect to capital
contributions in BX Equities. The Exchange will also correct a typo in
this section.
Section 11.1(a)(i) will be amended to reflect that Nasdaq
HoldCo will no longer have limited rights regarding the dissolution of
BX Equities. The Exchange will also correct a typo in this section.
Section 18.6(a), which relates to oversight pursuant to
the Exchange Act over the books, records, premises, officers,
directors, agents, and employees of Nasdaq HoldCo, will be deleted in
its entirety and Section 18.6 will be renumbered accordingly. Section
18.6(a) will no longer be necessary upon Nasdaq HoldCo's withdrawal as
an LLC member of BX Equities. Furthermore, Nasdaq HoldCo's By-Laws at
Section 12.1(c) currently also contain similar oversight provisions.
Lastly, the introductory paragraphs, the definition of
``Member'' in Section 1.1, Section 7.2, Schedule 1, and Schedule 2 will
be amended to remove references to Nasdaq HoldCo as an LLC member of BX
Equities.
Subject to Commission approval, the amended Operating Agreement
will be operative immediately upon the Transfer. As noted above, the
Exchange is concurrently filing a separate rule change to further amend
the Operating Agreement by deleting it in its entirety upon the Merger
and elimination of BX Equities.\8\ The Exchange intends to implement
the Transactions by the end of Q4 2021. The Exchange anticipates that
the Merger will occur immediately after the Transfer.
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\8\ See supra note 3.
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2. Statutory Basis
The Exchange believes that this proposal is consistent with Section
6(b) of the Act,\9\ in general, and furthers the objectives of Section
6(b)(1) of the Act,\10\ 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 Act and to comply, and to enforce compliance by its
exchange members and persons associated with its exchange members, with
the provisions of the Act, the rules and regulations thereunder, and
the rules of the Exchange. The proposed rule change merely seeks to
simplify the corporate structure of BX Equities, and the Exchange will
operate in a substantially similar manner following the Transfer as it
operates today, with the addition of the Exchange's role as the tax
matters Member of BX Equities. This is a corporate change, and will
have no impact on how the Exchange operates its equities market.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(1).
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The Exchange also believes that its proposal furthers the
objectives of Section 6(b)(5) of the Act,\11\ in particular, in that it
is designed to promote just and equitable principles of trade, 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. Specifically, the proposed rule
change would result in the Operating Agreement correctly reflecting the
ownership structure of its subsidiary BX Equities upon completion of
the Transfer. The Exchange reiterates that it will continue to operate
its equities market in the same manner as today following the Transfer.
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\11\ 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 not necessary or appropriate in
furtherance of the purposes of the Act. The proposed rule change is not
designed to address any competitive issues but rather is concerned
solely with the corporate structure of BX Equities.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
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
[[Page 62231]]
the self-regulatory organization consents, the Commission will:
(A) By order approve or disapprove such 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 [email protected]. Please include
File Number SR-BX-2021-050 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-BX-2021-050. 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-BX-2021-050 and should be submitted on
or before November 30, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-24412 Filed 11-8-21; 8:45 am]
BILLING CODE 8011-01-P
