Self-Regulatory Organizations; NYSE National, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Certificate of Incorporation and Bylaws, 15492-15495 [2023-05039]

Download as PDF 15492 Federal Register / Vol. 88, No. 48 / Monday, March 13, 2023 / Notices 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 a.m. and 3 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– NYSECHX–2023–10, and should be submitted on or before April 3, 2023. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.28 Sherry R. Haywood, Assistant Secretary. BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–97059; File No. SR– NYSENAT–2023–08] Self-Regulatory Organizations; NYSE National, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Certificate of Incorporation and Bylaws March 7, 2023. ddrumheller on DSK120RN23PROD with NOTICES1 Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on February 23, 2023, NYSE National, Inc. (‘‘NYSE National’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the 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 certificate of incorporation and bylaws to provide that the board of directors of its ultimate parent, or that board’s CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 19:32 Mar 10, 2023 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change [FR Doc. 2023–05036 Filed 3–10–23; 8:45 am] 28 17 compensation committee, may fix the compensation of the board of directors of the Exchange, and make certain 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. 1. Purpose The Exchange proposes to amend its Amended and Restated Certificate of Incorporation (‘‘Certificate’’) and the Seventh Amended and Restated By-laws of the Exchange (‘‘Exchange Bylaws’’) to (a) provide that the board of directors of its ultimate parent, Intercontinental Exchange, Inc. (‘‘ICE,’’ and its board of directors, the ‘‘ICE Board’’), or the compensation committee of the ICE Board (the ‘‘ICE Compensation Committee’’), may fix the compensation of the Board of Directors of the Exchange (the ‘‘Exchange Board’’), and (b) make certain clarifying, technical and conforming changes. The changes described herein would become operative upon the Certificate becoming effective pursuant to its filing with the Secretary of State of the State of Delaware. Proposed Compensation Amendments Currently, pursuant to Exchange Bylaws Article III, Section 3.15 (Compensation), the sole stockholder of the Exchange, NYSE Group Inc. (‘‘NYSE Group’’), has the authority to fix the compensation of all directors for services to the Exchange.4 Through the deletion of Exchange Bylaws Section 3.15 and additions to Certificate Section FIFTH, the Exchange proposes to move the compensation provision to the Certificate and have the ICE Board or 4 See Jkt 259001 PO 00000 Bylaws, Article III, Section 3.15. Frm 00124 Fmt 4703 Sfmt 4703 ICE Compensation Committee set director compensation instead of NYSE Group.5 NYSE Group is wholly owned by NYSE Holdings LLC, which is a wholly owned subsidiary of Intercontinental Exchange Holdings, Inc. Intercontinental Exchange Holdings, Inc. is in turn wholly owned by ICE, a public company listed on the New York Stock Exchange LLC (‘‘NYSE’’).6 The Exchange proposes to amend Section FIFTH of the Certificate as follows: • The Exchange proposes to add the following sentence to the end of Section FIFTH(a): Notwithstanding anything herein to the contrary, as set forth below, the Board of Directors of Intercontinental Exchange, Inc. (‘‘ICE’’) or the compensation committee thereof shall have the authority to fix the compensation of directors of the Corporation. • The Exchange proposes to add a new Section FIFTH(c), which would read as follows: (c) Compensation. The Board of Directors of ICE or the compensation committee thereof shall have the authority to fix the compensation of directors of the Corporation. The directors of the Corporation may be paid their expenses, if any, of attendance at each meeting of the Board of Directors of the Corporation and may be paid a fixed sum for attendance at each meeting of the Board of Directors of the Corporation or a stated salary as director (which amounts may be paid in cash or such other form as the Board of Directors of ICE or the compensation committee thereof may from time to time authorize). No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. The Exchange proposes to delete Exchange Bylaws Article III, Section 3.15 in its entirety. As a result of the proposed change, compensation for the Exchange Board 5 Under the Delaware General Corporation Law (‘‘DGCL’’), the terms of the certificate of incorporation of a corporation supersede any inconsistent bylaw provisions. See DGCL Section 109(b); see also Sinchareonkul v. Fahnemann, 2015 WL 292314, at *6 (Del.Ch., 2015) (stating that ‘‘when evaluating corporate action for legal compliance, a court examines whether the action contravenes the entity-specific corporate contract. The components of that contract form a hierarchy, comprising from top to bottom (i) the Delaware General Corporation Law (the ‘DGCL’), (ii) the certificate of incorporation, and (iii) the bylaws. Each of the lower components of the contractual hierarchy must conform to the higher components.’’). 6 See Exchange Act Release No. 79902 (January 30, 2017), 82 FR 9258 (February 3, 2017) (SR–NSX– 2016–16) (Order Approving Proposed Rule Change, as Modified by Amendment No. 1, in Connection With a Proposed Acquisition of the Exchange by NYSE Group, Inc.). E:\FR\FM\13MRN1.SGM 13MRN1 Federal Register / Vol. 88, No. 48 / Monday, March 13, 2023 / Notices ddrumheller on DSK120RN23PROD with NOTICES1 members would be fixed by a body that is required to have at least a majority of its members be independent. Currently, the board of directors of NYSE Group is not required to be independent. This was not always true: when the New York Stock Exchange, Inc. combined with Archipelago Holdings, Inc. under NYSE Group in 2006, NYSE Group was publicly traded, required to have an independent board of directors, and subject to an independence policy.7 That changed when NYSE Group combined with Euronext N.V. After that combination, NYSE Euronext, the publicly traded parent company, had an independent board of directors subject to an independence policy, and the board of directors of NYSE Group, which became a subsidiary of NYSE Euronext, did not.8 When ICE acquired NYSE Euronext, the requirement to have a majority of independent directors moved to ICE.9 7 See Securities Exchange Act Release No. 53382 (February 27, 2006), 71 FR 11251 (March 6, 2006) (SR–NYSE–2005–77) (Order Granting Approval of Proposed Rule Change and Amendment Nos. 1, 3, and 5 Thereto and Notice of Filing and Order Granting Accelerated Approval to Amendment Nos. 6 and 8 Relating to the NYSE’s Business Combination With Archipelago Holdings, Inc.). The NYSE Group was expected to fix the compensation of the Exchange Board through a compensation committee. Id. at 11256. 8 See Securities Exchange Act Release No. 55293 (February 14, 2007), 72 FR 8033 (February 22, 2007) (SR–NYSE–2006–120) (Order Granting Approval of Proposed Rule Change and Notice of Filing and Order Granting Accelerated Approval to Amendment No. 1 Regarding the Proposed Combination Between NYSE Group, Inc. and Euronext N.V.). See also Exhibit 5E to SR–NYSE– 2006–120, Section 3.2 (deleting the independence requirements for the NYSE Group board of directors). 9 See Securities Exchange Act Release No. 70210 (August 15, 2013), 78 FR 51758 (August 21, 2013) (SR–NYSE–2013–42; SR–NYSEMKT–2013–50; SR– NYSEArca–2013–62) (Order Granting Approval of Proposed Rule Change Relating to a Corporate Transaction in which NYSE Euronext Will Become a Wholly-Owned Subsidiary of IntercontinentalExchange Group, Inc.). IntercontinentalExchange Group, Inc., subsequently changed its name to IntercontinentalExchange, Inc. 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, IntercontinentalExchange Group, Inc., and Its Indirect Parents, IntercontinentalExchange, Inc. and NYSE Euronext Holdings LLC). The ICE Board is subject to the requirements of the Independence Policy of the Board of Directors of Intercontinental Exchange, Inc., available at https://s2.q4cdn.com/ 154085107/files/doc_downloads/governance_docs/ ICE-Independence-Policy.pdf. The bylaws of ICE require that the members of the ICE Board take into consideration the effect that ICE’s actions would have on the ability of the Exchange to carry out its responsibility under Exchange Act. See Ninth Amended and Restated Bylaws of Intercontinental Exchange, Inc. (‘‘ICE Bylaws’’), Article III, Section 3.14. The ICE Bylaws are available at https:// s2.q4cdn.com/154085107/files/doc_downloads/ VerDate Sep<11>2014 19:32 Mar 10, 2023 Jkt 259001 The requirement is in accordance with NYSE listing requirements, which require that listed companies have a majority of independent directors.10 Accordingly, if the ICE Board fixed the compensation of the Exchange Board, the decision would be made by a body that required to have at least a majority of its members be independent. If the ICE Compensation Committee fixed the Exchange Board compensation,11 compensation decisions would be made by a body that is made up of independent members. As a company listed on the NYSE, ICE is required to have a compensation committee that is composed entirely of independent directors that satisfy the additional independence requirements specific to compensation committee members.12 The proposed rule text is more comprehensive than the Exchange Bylaws provision it would replace since, unlike Exchange Bylaws Section 3.15, it would provide that directors may receive compensation on a permeeting basis or as a salary and clarify the form of compensation that may be granted. As a result of the proposed change, the provision governing director compensation would move from the Exchange Bylaws to the Certificate, which would result in a change to what body can approve changes to the relevant provision. More specifically, Bylaw Section 3.15 may be amended by the Board or by action of NYSE Group, as the stockholder of the Exchange. By contrast, the Certificate can be amended by the Corporation but first must be approved by the Board. Accordingly, any change proposed to the compensation provision would require Board approval and could no longer be amended by action of the NYSE Group. governance_docs/2022/ICE-Ninth-Amended-andRestated-Bylaws.pdf. 10 See NYSE Listed Company Manual Sections 303A.01 (Independent Directors) and 303A.02(a)(ii) (Independence Tests), and ICE Bylaws, Article III, Section 3.4. 11 Pursuant to its Charter, the Compensation Committee of the ICE Board is charged with, among other things, reviewing and approving compensation for the members of the board of directors of any ICE subsidiary, which includes the Exchange. See Charter of the Compensation Committee of the Board of Directors of ICE, at https://s2.q4cdn.com/154085107/files/doc_ downloads/governance_docs/2022/IntercontinentalExchange-Inc.-Compensation-Committee-CharterMarch-3-2022.pdf. See also NYSE Listed Company Manual Section 303A.05(b). 12 See NYSE Listed Company Manual Section 303A.05(a) (Compensation Committee). See also NYSE Listed Company Manual Section 303A.02(a)(ii) and ICE annual report on Form 10– K for the fiscal year ended December 31, 2021, at 19, available at https://www.sec.gov/ix?doc=/ Archives/edgar/data/1571949/ 000157194922000006/ice-20211231.htm. PO 00000 Frm 00125 Fmt 4703 Sfmt 4703 15493 The Exchange operates as a separate self-regulatory organization and has rules, and membership rosters distinct from the rules, membership rosters and listings of its affiliates the NYSE, NYSE American LLC, NYSE Arca, Inc., and NYSE Chicago, Inc. (collectively with the Exchange, the ‘‘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.13 To that end, each of the NYSE Group Exchanges is proposing a substantially similar change to its governing documents.14 The proposed amendment is based on Article III, Section 3.13 (Compensation of Directors) of the ICE Bylaws.15 Additional Proposed Amendments The Exchange proposes to make the following non-substantive technical and conforming changes to the Certificate: 16 • In the first paragraph, change ‘‘NYSE NATIONAL, INC.’’ to ‘‘NYSE National, Inc.’’ • In Sections EIGHTH and ELEVENTH, add ‘‘Amended and Restated’’ before ‘‘Certificate of Incorporation.’’ • Update the date in the signature line. In a non-substantive change, the Exchange proposes to update the title of the Exchange Bylaws to make them the ‘‘Eighth Amended and Restated By-laws of NYSE National, Inc.’’ 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Exchange Act,17 in general, and furthers the objectives of 13 See Exchange Act Release No. 84644 (November 21, 2018), 83 FR 61177 (November 28, 2018) (SR–NYSENAT–2018–24) (Notice of Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Certificate of Incorporation and Bylaws). 14 See SR–NYSE–2023–13; SR–NYSEAmer–2023– 15, SR–NYSEArca–2023–18, and SR–NYSECHX– 2023–10. Presently, three different entities fix the compensation of the boards of directors of the NYSE Group Exchanges: NYSE Group fixes the compensation of the directors of NYSE National, the NYSE, and NYSE American LLC; NYSE Chicago Holdings, Inc. fixes the compensation of the directors of NYSE Chicago, Inc.; and the board of directors of NYSE Arca, Inc. fixes its own compensation. 15 See ICE Bylaws, Article III, Section 3.13. 16 See 83 FR 61177, note 13, supra (proposing to make conforming and non-substantive changes to the title, cover page, and table of contents of the Fifth Amended and Restated Bylaws of the Exchange and Amended and Restated Certificate of Incorporation of the Exchange). 17 15 U.S.C. 78f(b). E:\FR\FM\13MRN1.SGM 13MRN1 15494 Federal Register / Vol. 88, No. 48 / Monday, March 13, 2023 / Notices Section 6(b)(1) 18 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,19 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 change would allow 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, because the Exchange Board would no longer have its compensation fixed by a body whose members are not subject to independence requirements. The Exchange believes that it is more advisable to have compensation determinations made by a body that is required to have at least a majority of its members be independent, like the ICE Board or ICE Compensation Committee. Otherwise, the compensation could be fixed by a body that is made up of employees or persons related to the Exchange. Indeed, the change would be consistent with prior practice, as immediately after the combination between New York Stock Exchange, Inc. and Archipelago Holdings, Inc., the members of the board of directors of NYSE Group were both subject to independence requirements and expected to fix the compensation of the Exchange Board through a compensation committee.20 For the same reason, the Exchange believes that the change would contribute to the ddrumheller on DSK120RN23PROD with NOTICES1 18 15 U.S.C. 78f(b)(1). 19 15 U.S.C. 78f(b)(5). 20 71 FR 11251, supra note 7, at 11256 (‘‘It is expected that, upon completion of the Merger, the NYSE Group board of directors will have [a] . . . compensation committee’’) and 11257 (‘‘[T]he board of directors of New York Stock Exchange LLC is not expected to have its own committees and that any necessary functions with respect to . . . compensation . . . will be performed by the relevant committee[ ] of the NYSE Group board of directors’’). VerDate Sep<11>2014 19:32 Mar 10, 2023 Jkt 259001 orderly operation of the Exchange and would promote the maintenance of a fair and orderly market, the protection of investors and the protection of the public interest. The Exchange believes that, because at least a majority of the members of the ICE Board and all of the ICE Compensation Committee must be independent, there is no substantial likelihood of a potential conflict of interest. Indeed, the Exchange believes that the proposal lessens the potential for conflicts of interest by eliminating the fixing of compensation by an entity that is not subject to any independence requirements. Further, the governing documents of ICE require that the members of the ICE Board take into consideration the effect that ICE’s actions—including actions by the ICE Board or ICE Compensation Committee—would have on the ability of the Exchange ‘‘to carry out [its] responsibilities under the Exchange Act’’ and ‘‘to engage in conduct that fosters and does not interfere with the ability of the Exchange[ ] . . . to remove impediments to and perfect the mechanisms of a free and open market in securities and a U.S. national securities market system; and . . . to protect investors and the public interest.’’ 21 For the foregoing reasons, the Exchange believes that the proposed change would allow 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, and would contribute to the orderly operation of the Exchange and would promote the maintenance of a fair and orderly market, the protection of investors and the protection of the public interest. The Exchange believes that moving the provision governing director compensation from the Exchange Bylaws to the Certificate would allow 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, and would contribute to the orderly operation of the Exchange and would promote the maintenance of a fair and orderly market, the protection of investors and the protection of the 21 See ICE Bylaws, Article III, Section 3.14(a). Although it is not currently a listing market, the Exchange has adopted a rule prohibiting the listing of affiliate securities and setting forth additional reporting requirements. See Rule 3.1 (Additional Requirements for Listed Securities Issued by Intercontinental Exchange, Inc. or its Affiliates). PO 00000 Frm 00126 Fmt 4703 Sfmt 4703 public interest, because any change proposed to the compensation provision would require Board approval. As a result, any change to the compensation provision in the Certificate would have to be approved by a body subject to the requirements that at least half of the directors of the Exchange be independent and at least 20% of them must be individuals nominated by the permit holders of the Exchange.22 The provision would not be able to be amended by NYSE Group alone, whose directors are not subject to independence requirements. Moreover, the Exchange believes that the proposal would promote greater consistency in the compensation philosophy and director compensation structure across affiliated exchanges, thereby promoting the maintenance of a fair and orderly markets, the protection of investors and the public interest. As noted above, the other NYSE Group Exchanges are filing similar proposed changes to their governing documents. By locating the authority to fix compensation in the hands of the ICE Board or the ICE Compensation Committee, the proposed change would permit compensation for each board of directors of an NYSE Group Exchange to be set centrally and with greater uniformity and consistency across affiliated exchanges. The Exchange believes that such conformity would streamline the NYSE Group Exchanges’ corporate processes and create more equivalent compensation processes among them, to the benefit of both investors and the public interest. The proposal also reflects the fact that, no matter the size or role of the relevant NYSE Group Exchange, every NYSE Group Exchange board of directors must manage its business while considering the government of the exchange as an ‘‘exchange’’ within the meaning of the Exchange Act.23 The Exchange believes that the more comprehensive provision would remove impediments to and perfect the mechanism of a free and open market, as it would make the provision relating to director compensation more comprehensive and transparent for market participants, making it so that 22 See Exchange Bylaws, Article III, Section 3.2(a) (General Composition). 23 See By-laws, Article III, Section 3.1 (Powers) and Article X, Section 10.1 (Management of the Exchange); Thirteenth Amended and Restated Operating Agreement of NYSE, Article II, Section 2.03(k); Twelfth Amended and Restated Operating Agreement of NYSE American, Inc., Article II, Section 2.03(k) (Board); Bylaws of NYSE Arca, Inc., Article III, Section 3.01 (Powers); and Second Amended and Restated Bylaws of NYSE Chicago, Inc., Article II, Section 1 (Powers) and Article IX, Sec. 1 (Management of the Corporation). E:\FR\FM\13MRN1.SGM 13MRN1 Federal Register / Vol. 88, No. 48 / Monday, March 13, 2023 / Notices they can more easily navigate and understand the governing documents. As noted, the proposed text is more comprehensive than the provision it would replace and would set forth additional detail regarding the compensation that directors may receive, such as whether directors may receive compensation on a per-meeting basis or as a salary and what form of compensation may be granted. The Exchange believes that the greater additional detail would add transparency and clarity to the Exchange’s governing documents and 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. Finally, the proposed 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 proposed non-substantive amendments also 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 of the Exchange. ddrumheller on DSK120RN23PROD 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 Because the foregoing 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 for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has VerDate Sep<11>2014 19:32 Mar 10, 2023 Jkt 259001 become effective pursuant to Section 19(b)(3)(A) of the Act 24 and Rule 19b– 4(f)(6) thereunder.25 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) 26 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– NYSENAT–2023–08 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–NYSENAT–2023–08. 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 24 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and 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. The Exchange has satisfied this requirement. 26 15 U.S.C. 78s(b)(2)(B). 25 17 PO 00000 Frm 00127 Fmt 4703 Sfmt 4703 15495 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–NYSENAT–2023–08, and should be submitted on or before April 3, 2023. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.27 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2023–05039 Filed 3–10–23; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–97053; File No. SR– NYSEARCA–2023–20] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change To Adopt New NYSE Arca Rule 5.3–E(p) To Establish Listing Standards Related to Recovery of Erroneously Awarded Incentive-Based Executive Compensation March 7, 2023. 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 February 24, 2023, NYSE Arca, Inc. (‘‘NYSE Arca’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 27 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 E:\FR\FM\13MRN1.SGM 13MRN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 88, Number 48 (Monday, March 13, 2023)]
[Notices]
[Pages 15492-15495]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-05039]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97059; File No. SR-NYSENAT-2023-08]


Self-Regulatory Organizations; NYSE National, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its 
Certificate of Incorporation and Bylaws

March 7, 2023.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on February 23, 2023, NYSE National, Inc. (``NYSE 
National'' or the ``Exchange'') filed with the Securities and Exchange 
Commission (the ``Commission'') the proposed rule change as described 
in Items I and II below, which Items have been prepared by the 
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\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its certificate of incorporation and 
bylaws to provide that the board of directors of its ultimate parent, 
or that board's compensation committee, may fix the compensation of the 
board of directors of the Exchange, and make certain 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.

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

1. Purpose
    The Exchange proposes to amend its Amended and Restated Certificate 
of Incorporation (``Certificate'') and the Seventh Amended and Restated 
By-laws of the Exchange (``Exchange Bylaws'') to (a) provide that the 
board of directors of its ultimate parent, Intercontinental Exchange, 
Inc. (``ICE,'' and its board of directors, the ``ICE Board''), or the 
compensation committee of the ICE Board (the ``ICE Compensation 
Committee''), may fix the compensation of the Board of Directors of the 
Exchange (the ``Exchange Board''), and (b) make certain clarifying, 
technical and conforming changes.
    The changes described herein would become operative upon the 
Certificate becoming effective pursuant to its filing with the 
Secretary of State of the State of Delaware.
Proposed Compensation Amendments
    Currently, pursuant to Exchange Bylaws Article III, Section 3.15 
(Compensation), the sole stockholder of the Exchange, NYSE Group Inc. 
(``NYSE Group''), has the authority to fix the compensation of all 
directors for services to the Exchange.\4\ Through the deletion of 
Exchange Bylaws Section 3.15 and additions to Certificate Section 
FIFTH, the Exchange proposes to move the compensation provision to the 
Certificate and have the ICE Board or ICE Compensation Committee set 
director compensation instead of NYSE Group.\5\
---------------------------------------------------------------------------

    \4\ See Bylaws, Article III, Section 3.15.
    \5\ Under the Delaware General Corporation Law (``DGCL''), the 
terms of the certificate of incorporation of a corporation supersede 
any inconsistent bylaw provisions. See DGCL Section 109(b); see also 
Sinchareonkul v. Fahnemann, 2015 WL 292314, at *6 (Del.Ch., 2015) 
(stating that ``when evaluating corporate action for legal 
compliance, a court examines whether the action contravenes the 
entity-specific corporate contract. The components of that contract 
form a hierarchy, comprising from top to bottom (i) the Delaware 
General Corporation Law (the `DGCL'), (ii) the certificate of 
incorporation, and (iii) the bylaws. Each of the lower components of 
the contractual hierarchy must conform to the higher components.'').
---------------------------------------------------------------------------

    NYSE Group is wholly owned by NYSE Holdings LLC, which is a wholly 
owned subsidiary of Intercontinental Exchange Holdings, Inc. 
Intercontinental Exchange Holdings, Inc. is in turn wholly owned by 
ICE, a public company listed on the New York Stock Exchange LLC 
(``NYSE'').\6\
---------------------------------------------------------------------------

    \6\ See Exchange Act Release No. 79902 (January 30, 2017), 82 FR 
9258 (February 3, 2017) (SR-NSX-2016-16) (Order Approving Proposed 
Rule Change, as Modified by Amendment No. 1, in Connection With a 
Proposed Acquisition of the Exchange by NYSE Group, Inc.).
---------------------------------------------------------------------------

    The Exchange proposes to amend Section FIFTH of the Certificate as 
follows:
     The Exchange proposes to add the following sentence to the 
end of Section FIFTH(a):
    Notwithstanding anything herein to the contrary, as set forth 
below, the Board of Directors of Intercontinental Exchange, Inc. 
(``ICE'') or the compensation committee thereof shall have the 
authority to fix the compensation of directors of the Corporation.
     The Exchange proposes to add a new Section FIFTH(c), which 
would read as follows:

    (c) Compensation. The Board of Directors of ICE or the 
compensation committee thereof shall have the authority to fix the 
compensation of directors of the Corporation. The directors of the 
Corporation may be paid their expenses, if any, of attendance at 
each meeting of the Board of Directors of the Corporation and may be 
paid a fixed sum for attendance at each meeting of the Board of 
Directors of the Corporation or a stated salary as director (which 
amounts may be paid in cash or such other form as the Board of 
Directors of ICE or the compensation committee thereof may from time 
to time authorize). No such payment shall preclude any director from 
serving the Corporation in any other capacity and receiving 
compensation therefor.

    The Exchange proposes to delete Exchange Bylaws Article III, 
Section 3.15 in its entirety.
    As a result of the proposed change, compensation for the Exchange 
Board

[[Page 15493]]

members would be fixed by a body that is required to have at least a 
majority of its members be independent.
    Currently, the board of directors of NYSE Group is not required to 
be independent. This was not always true: when the New York Stock 
Exchange, Inc. combined with Archipelago Holdings, Inc. under NYSE 
Group in 2006, NYSE Group was publicly traded, required to have an 
independent board of directors, and subject to an independence 
policy.\7\ That changed when NYSE Group combined with Euronext N.V. 
After that combination, NYSE Euronext, the publicly traded parent 
company, had an independent board of directors subject to an 
independence policy, and the board of directors of NYSE Group, which 
became a subsidiary of NYSE Euronext, did not.\8\
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 53382 (February 27, 
2006), 71 FR 11251 (March 6, 2006) (SR-NYSE-2005-77) (Order Granting 
Approval of Proposed Rule Change and Amendment Nos. 1, 3, and 5 
Thereto and Notice of Filing and Order Granting Accelerated Approval 
to Amendment Nos. 6 and 8 Relating to the NYSE's Business 
Combination With Archipelago Holdings, Inc.). The NYSE Group was 
expected to fix the compensation of the Exchange Board through a 
compensation committee. Id. at 11256.
    \8\ See Securities Exchange Act Release No. 55293 (February 14, 
2007), 72 FR 8033 (February 22, 2007) (SR-NYSE-2006-120) (Order 
Granting Approval of Proposed Rule Change and Notice of Filing and 
Order Granting Accelerated Approval to Amendment No. 1 Regarding the 
Proposed Combination Between NYSE Group, Inc. and Euronext N.V.). 
See also Exhibit 5E to SR-NYSE-2006-120, Section 3.2 (deleting the 
independence requirements for the NYSE Group board of directors).
---------------------------------------------------------------------------

    When ICE acquired NYSE Euronext, the requirement to have a majority 
of independent directors moved to ICE.\9\ The requirement is in 
accordance with NYSE listing requirements, which require that listed 
companies have a majority of independent directors.\10\ Accordingly, if 
the ICE Board fixed the compensation of the Exchange Board, the 
decision would be made by a body that required to have at least a 
majority of its members be independent.
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release No. 70210 (August 15, 
2013), 78 FR 51758 (August 21, 2013) (SR-NYSE-2013-42; SR-NYSEMKT-
2013-50; SR-NYSEArca-2013-62) (Order Granting Approval of Proposed 
Rule Change Relating to a Corporate Transaction in which NYSE 
Euronext Will Become a Wholly-Owned Subsidiary of 
IntercontinentalExchange Group, Inc.). IntercontinentalExchange 
Group, Inc., subsequently changed its name to 
IntercontinentalExchange, Inc. 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, 
IntercontinentalExchange Group, Inc., and Its Indirect Parents, 
IntercontinentalExchange, Inc. and NYSE Euronext Holdings LLC). The 
ICE Board is subject to the requirements of the Independence Policy 
of the Board of Directors of Intercontinental Exchange, Inc., 
available at https://s2.q4cdn.com/154085107/files/doc_downloads/governance_docs/ICE-Independence-Policy.pdf. The bylaws of ICE 
require that the members of the ICE Board take into consideration 
the effect that ICE's actions would have on the ability of the 
Exchange to carry out its responsibility under Exchange Act. See 
Ninth Amended and Restated Bylaws of Intercontinental Exchange, Inc. 
(``ICE Bylaws''), Article III, Section 3.14. The ICE Bylaws are 
available at https://s2.q4cdn.com/154085107/files/doc_downloads/governance_docs/2022/ICE-Ninth-Amended-and-Restated-Bylaws.pdf.
    \10\ See NYSE Listed Company Manual Sections 303A.01 
(Independent Directors) and 303A.02(a)(ii) (Independence Tests), and 
ICE Bylaws, Article III, Section 3.4.
---------------------------------------------------------------------------

    If the ICE Compensation Committee fixed the Exchange Board 
compensation,\11\ compensation decisions would be made by a body that 
is made up of independent members. As a company listed on the NYSE, ICE 
is required to have a compensation committee that is composed entirely 
of independent directors that satisfy the additional independence 
requirements specific to compensation committee members.\12\
---------------------------------------------------------------------------

    \11\ Pursuant to its Charter, the Compensation Committee of the 
ICE Board is charged with, among other things, reviewing and 
approving compensation for the members of the board of directors of 
any ICE subsidiary, which includes the Exchange. See Charter of the 
Compensation Committee of the Board of Directors of ICE, at https://s2.q4cdn.com/154085107/files/doc_downloads/governance_docs/2022/Intercontinental-Exchange-Inc.-Compensation-Committee-Charter-March-3-2022.pdf. See also NYSE Listed Company Manual Section 303A.05(b).
    \12\ See NYSE Listed Company Manual Section 303A.05(a) 
(Compensation Committee). See also NYSE Listed Company Manual 
Section 303A.02(a)(ii) and ICE annual report on Form 10-K for the 
fiscal year ended December 31, 2021, at 19, available at https://www.sec.gov/ix?doc=/Archives/edgar/data/1571949/000157194922000006/ice-20211231.htm.
---------------------------------------------------------------------------

    The proposed rule text is more comprehensive than the Exchange 
Bylaws provision it would replace since, unlike Exchange Bylaws Section 
3.15, it would provide that directors may receive compensation on a 
per-meeting basis or as a salary and clarify the form of compensation 
that may be granted.
    As a result of the proposed change, the provision governing 
director compensation would move from the Exchange Bylaws to the 
Certificate, which would result in a change to what body can approve 
changes to the relevant provision. More specifically, Bylaw Section 
3.15 may be amended by the Board or by action of NYSE Group, as the 
stockholder of the Exchange. By contrast, the Certificate can be 
amended by the Corporation but first must be approved by the Board. 
Accordingly, any change proposed to the compensation provision would 
require Board approval and could no longer be amended by action of the 
NYSE Group.
    The Exchange operates as a separate self-regulatory organization 
and has rules, and membership rosters distinct from the rules, 
membership rosters and listings of its affiliates the NYSE, NYSE 
American LLC, NYSE Arca, Inc., and NYSE Chicago, Inc. (collectively 
with the Exchange, the ``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.\13\ To that end, each of 
the NYSE Group Exchanges is proposing a substantially similar change to 
its governing documents.\14\
---------------------------------------------------------------------------

    \13\ See Exchange Act Release No. 84644 (November 21, 2018), 83 
FR 61177 (November 28, 2018) (SR-NYSENAT-2018-24) (Notice of Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Its Certificate of Incorporation and Bylaws).
    \14\ See SR-NYSE-2023-13; SR-NYSEAmer-2023-15, SR-NYSEArca-2023-
18, and SR-NYSECHX-2023-10. Presently, three different entities fix 
the compensation of the boards of directors of the NYSE Group 
Exchanges: NYSE Group fixes the compensation of the directors of 
NYSE National, the NYSE, and NYSE American LLC; NYSE Chicago 
Holdings, Inc. fixes the compensation of the directors of NYSE 
Chicago, Inc.; and the board of directors of NYSE Arca, Inc. fixes 
its own compensation.
---------------------------------------------------------------------------

    The proposed amendment is based on Article III, Section 3.13 
(Compensation of Directors) of the ICE Bylaws.\15\
---------------------------------------------------------------------------

    \15\ See ICE Bylaws, Article III, Section 3.13.
---------------------------------------------------------------------------

Additional Proposed Amendments
    The Exchange proposes to make the following non-substantive 
technical and conforming changes to the Certificate: \16\
---------------------------------------------------------------------------

    \16\ See 83 FR 61177, note 13, supra (proposing to make 
conforming and non-substantive changes to the title, cover page, and 
table of contents of the Fifth Amended and Restated Bylaws of the 
Exchange and Amended and Restated Certificate of Incorporation of 
the Exchange).
---------------------------------------------------------------------------

     In the first paragraph, change ``NYSE NATIONAL, INC.'' to 
``NYSE National, Inc.''
     In Sections EIGHTH and ELEVENTH, add ``Amended and 
Restated'' before ``Certificate of Incorporation.''
     Update the date in the signature line.
    In a non-substantive change, the Exchange proposes to update the 
title of the Exchange Bylaws to make them the ``Eighth Amended and 
Restated By-laws of NYSE National, Inc.''
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Exchange Act,\17\ in general, and furthers the 
objectives of

[[Page 15494]]

Section 6(b)(1) \18\ 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,\19\ 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.
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78f(b).
    \18\ 15 U.S.C. 78f(b)(1).
    \19\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed change would allow 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, 
because the Exchange Board would no longer have its compensation fixed 
by a body whose members are not subject to independence requirements. 
The Exchange believes that it is more advisable to have compensation 
determinations made by a body that is required to have at least a 
majority of its members be independent, like the ICE Board or ICE 
Compensation Committee. Otherwise, the compensation could be fixed by a 
body that is made up of employees or persons related to the Exchange. 
Indeed, the change would be consistent with prior practice, as 
immediately after the combination between New York Stock Exchange, Inc. 
and Archipelago Holdings, Inc., the members of the board of directors 
of NYSE Group were both subject to independence requirements and 
expected to fix the compensation of the Exchange Board through a 
compensation committee.\20\ For the same reason, the Exchange believes 
that the change would contribute to the orderly operation of the 
Exchange and would promote the maintenance of a fair and orderly 
market, the protection of investors and the protection of the public 
interest.
---------------------------------------------------------------------------

    \20\ 71 FR 11251, supra note 7, at 11256 (``It is expected that, 
upon completion of the Merger, the NYSE Group board of directors 
will have [a] . . . compensation committee'') and 11257 (``[T]he 
board of directors of New York Stock Exchange LLC is not expected to 
have its own committees and that any necessary functions with 
respect to . . . compensation . . . will be performed by the 
relevant committee[ ] of the NYSE Group board of directors'').
---------------------------------------------------------------------------

    The Exchange believes that, because at least a majority of the 
members of the ICE Board and all of the ICE Compensation Committee must 
be independent, there is no substantial likelihood of a potential 
conflict of interest. Indeed, the Exchange believes that the proposal 
lessens the potential for conflicts of interest by eliminating the 
fixing of compensation by an entity that is not subject to any 
independence requirements. Further, the governing documents of ICE 
require that the members of the ICE Board take into consideration the 
effect that ICE's actions--including actions by the ICE Board or ICE 
Compensation Committee--would have on the ability of the Exchange ``to 
carry out [its] responsibilities under the Exchange Act'' and ``to 
engage in conduct that fosters and does not interfere with the ability 
of the Exchange[ ] . . . to remove impediments to and perfect the 
mechanisms of a free and open market in securities and a U.S. national 
securities market system; and . . . to protect investors and the public 
interest.'' \21\ For the foregoing reasons, the Exchange believes that 
the proposed change would allow 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, and would contribute to the orderly 
operation of the Exchange and would promote the maintenance of a fair 
and orderly market, the protection of investors and the protection of 
the public interest.
---------------------------------------------------------------------------

    \21\ See ICE Bylaws, Article III, Section 3.14(a). Although it 
is not currently a listing market, the Exchange has adopted a rule 
prohibiting the listing of affiliate securities and setting forth 
additional reporting requirements. See Rule 3.1 (Additional 
Requirements for Listed Securities Issued by Intercontinental 
Exchange, Inc. or its Affiliates).
---------------------------------------------------------------------------

    The Exchange believes that moving the provision governing director 
compensation from the Exchange Bylaws to the Certificate would allow 
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, and 
would contribute to the orderly operation of the Exchange and would 
promote the maintenance of a fair and orderly market, the protection of 
investors and the protection of the public interest, because any change 
proposed to the compensation provision would require Board approval. As 
a result, any change to the compensation provision in the Certificate 
would have to be approved by a body subject to the requirements that at 
least half of the directors of the Exchange be independent and at least 
20% of them must be individuals nominated by the permit holders of the 
Exchange.\22\ The provision would not be able to be amended by NYSE 
Group alone, whose directors are not subject to independence 
requirements.
---------------------------------------------------------------------------

    \22\ See Exchange Bylaws, Article III, Section 3.2(a) (General 
Composition).
---------------------------------------------------------------------------

    Moreover, the Exchange believes that the proposal would promote 
greater consistency in the compensation philosophy and director 
compensation structure across affiliated exchanges, thereby promoting 
the maintenance of a fair and orderly markets, the protection of 
investors and the public interest. As noted above, the other NYSE Group 
Exchanges are filing similar proposed changes to their governing 
documents. By locating the authority to fix compensation in the hands 
of the ICE Board or the ICE Compensation Committee, the proposed change 
would permit compensation for each board of directors of an NYSE Group 
Exchange to be set centrally and with greater uniformity and 
consistency across affiliated exchanges. The Exchange believes that 
such conformity would streamline the NYSE Group Exchanges' corporate 
processes and create more equivalent compensation processes among them, 
to the benefit of both investors and the public interest. The proposal 
also reflects the fact that, no matter the size or role of the relevant 
NYSE Group Exchange, every NYSE Group Exchange board of directors must 
manage its business while considering the government of the exchange as 
an ``exchange'' within the meaning of the Exchange Act.\23\
---------------------------------------------------------------------------

    \23\ See By-laws, Article III, Section 3.1 (Powers) and Article 
X, Section 10.1 (Management of the Exchange); Thirteenth Amended and 
Restated Operating Agreement of NYSE, Article II, Section 2.03(k); 
Twelfth Amended and Restated Operating Agreement of NYSE American, 
Inc., Article II, Section 2.03(k) (Board); Bylaws of NYSE Arca, 
Inc., Article III, Section 3.01 (Powers); and Second Amended and 
Restated Bylaws of NYSE Chicago, Inc., Article II, Section 1 
(Powers) and Article IX, Sec. 1 (Management of the Corporation).
---------------------------------------------------------------------------

    The Exchange believes that the more comprehensive provision would 
remove impediments to and perfect the mechanism of a free and open 
market, as it would make the provision relating to director 
compensation more comprehensive and transparent for market 
participants, making it so that

[[Page 15495]]

they can more easily navigate and understand the governing documents. 
As noted, the proposed text is more comprehensive than the provision it 
would replace and would set forth additional detail regarding the 
compensation that directors may receive, such as whether directors may 
receive compensation on a per-meeting basis or as a salary and what 
form of compensation may be granted. The Exchange believes that the 
greater additional detail would add transparency and clarity to the 
Exchange's governing documents and 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.
    Finally, the proposed 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 proposed non-
substantive amendments also 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 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

    Because the foregoing 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 for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \24\ and Rule 19b-
4(f)(6) thereunder.\25\
---------------------------------------------------------------------------

    \24\ 15 U.S.C. 78s(b)(3)(A).
    \25\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and 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. 
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    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) \26\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \26\ 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-NYSENAT-2023-08 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-NYSENAT-2023-08. 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-NYSENAT-2023-08, and should be submitted 
on or before April 3, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\27\
---------------------------------------------------------------------------

    \27\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-05039 Filed 3-10-23; 8:45 am]
BILLING CODE 8011-01-P

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.