Notice: Self-Regulatory Organizations Proposed Rule Changes: New York Stock Exchange, Inc.

2080 Federal Register / Vol. 71, No.
8 / Thursday, January 12, 2006 / Notices
Paper Comments SECURITIES AND EXCHANGE (‘‘NYSE Market’’), and NYSE

COMMISSION Regulation, Inc. (‘‘NYSE Regulation’’).
• Send paper comments in triplicate To effect the Merger, the NYSE
to Nancy M. Morris, Secretary, [Release No. 34–53073; File No. SR–NYSE–
2005–77]
proposes that the organizational
Securities and Exchange Commission, documents of NYSE Group and its
100 F Street, NE., Washington, DC Self-Regulatory Organizations; New subsidiaries as in effect immediately
20549–9303. York Stock Exchange, Inc.; Notice of prior to the effective time of the Merger
All submissions should refer to File Filing of Proposed Rule Change and will be amended and restated. In
Number SR–FICC–2005–20. This file Amendment Nos. 1, 2, 3, 4 and 5 addition, the NYSE proposes that New
number should be included on the Relating to the Exchange’s Business York Stock Exchange LLC, NYSE
subject line if e-mail is used. To help the Combination with Archipelago Regulation and NYSE Market will enter
Commission process and review your Holdings, Inc. into a delegation agreement, and the
comments more efficiently, please use Pacific Exchange, Inc. (‘‘Pacific
January 6, 2006. Exchange’’) and NYSE Regulation will
only one method. The Commission will Pursuant to section 19(b)(1) of the enter into a regulatory services
post all comments on the Commission’s Securities Exchange Act of 1934, as agreement (‘‘Pacific Exchange
Internet Web site (http://www.sec.gov/ amended, (‘‘Act’’) 1 and Rule 19b–4 Regulatory Services Agreement’’). In
rules/sro.shtml). Copies of the thereunder,2 notice is hereby given that addition, the NYSE proposes various
submission, all subsequent on November 3, 2005, the New York amendments to its rules to reflect the
amendments, all written statements Stock Exchange, Inc. (‘‘NYSE’’ or Merger, which, after the Merger, will be
with respect to the proposed rule ‘‘Exchange’’) filed with the Securities the rules of New York Stock Exchange
change that are filed with the and Exchange Commission LLC. The Exchange states that the
Commission, and all written (‘‘Commission’’) the proposed rule present Constitution of the NYSE will
communications relating to the change as described in Items I, II, and be eliminated and relevant provisions
proposed rule change between the III below, which Items have been thereof will be included in the rules of
Commission and any person, other than prepared by the Exchange. On December New York Stock Exchange LLC.
those that may be withheld from the 1, 2005, the Exchange filed Amendment The text of the Proposed Rule Change
public in accordance with the No. 1 to the proposed rule change. The is available on the Exchange’s Web site
provisions of 5 U.S.C. 552, will be Exchange filed Amendment No. 2 to the (http://www.nyse.com), at the
proposed rule change on December 12, Exchange’s Office of the Secretary, and
available for inspection and copying in
2005, and withdrew Amendment No. 2 at the Commission’s Public Reference
the Commission’s Public Reference
on December 12, 2005. On December 12, Room. The text of Exhibits 5A through
Section, 100 F Street, NE., Washington, 2005, the Exchange filed Amendment
DC 20549. Copies of such filings also 5K of the Proposed Rule Change and
No. 3.3 The Exchange filed Amendment Amendment No. 5 are also available on
will be available for inspection and No. 4 to the proposed rule change on
copying at the principal office of FICC the Commission’s Web site (http://
December 21, 2005, and withdrew www.sec.gov/rules/sro.shtml).
and on FICC’s Web site at http:// Amendment No. 4 on December 21,
www.ficc.com. All comments received 2005. On December 21, 2005, the II. Self-Regulatory Organization’s
will be posted without change; the Exchange filed Amendment No. 5.4 Statement of the Purpose of, and
Commission does not edit personal The Commission is publishing this Statutory Basis for, the Proposed Rule
identifying information from notice to solicit comments on the Change
submissions. You should submit only proposed rule change, as amended, from In its filing with the Commission, the
information that you wish to make interested persons. Exchange included statements
available publicly. All submissions I. Self-Regulatory Organization’s concerning the purpose of, and basis for,
should refer to File Number SR–FICC– Statement of the Terms of Substance of the proposed rule change, as amended.
2005–20 and should be submitted on or the Proposed Rule Change The text of these statements may be
before February 2, 2006. examined at the places specified in Item
The Exchange is submitting this rule
For the Commission by the Division of filing, as amended, (‘‘Proposed Rule IV below. The Exchange has prepared
Market Regulation, pursuant to delegated Change’’) in connection with its summaries, set forth in sections A, B,
authority.14 proposed merger (‘‘Merger’’) with and C below, of the most significant
Nancy M. Morris, Archipelago Holdings, Inc., a Delaware aspects of such statements.
Secretary. corporation (‘‘Archipelago’’), as a result A. Self-Regulatory Organization’s
[FR Doc. E6–215 Filed 1–11–06; 8:45 am] of which the businesses of the NYSE Statement of the Purpose of, and
and Archipelago will be held under a Statutory Basis for, the Proposed Rule
BILLING CODE 8010–01–P
single, publicly traded holding company Change
named NYSE Group, Inc. (‘‘NYSE
Group’’). Following the Merger, the 1. Purpose
NYSE’s current businesses and assets The Exchange is submitting the
will be held in three separate entities Proposed Rule Change to the
affiliated with NYSE Group—New York Commission in connection with the
Stock Exchange LLC, NYSE Market, Inc. Merger with Archipelago. Following the
Merger, the businesses of the NYSE and
1 15 U.S.C. 78s(b)(l). Archipelago will be held under a single,
erjones on PROD1PC68 with NOTICES
2 17 CFR 240.19b–4. publicly traded holding company

3 See Form 19b-4 dated December 12, 2005
named NYSE Group, a Delaware
(‘‘Amendment No. 3’’). Amendment No. 3 replaced
Amendment No. 1 in its entirety. corporation. The Merger will occur
4 See Partial Amendment dated December 21, pursuant to the terms of the Agreement
14 17 CFR 200.30–3(a)(12). 2005 (‘‘Amendment No. 5’’). and Plan of Merger, dated as of April 20,
VerDate Aug<31>2005 15:02 Jan 11, 2006 Jkt 208001 PO 00000 Frm 00068 Fmt 4703 Sfmt 4703 E:\FR\FM\12JAN1.SGM 12JAN1
Federal Register / Vol. 71, No. 8 / Thursday, January 12, 2006 / Notices 2081
2005, as amended and restated as of July the New York Stock Exchange LLC’s a for-profit entity will increase the
20, 2005 and as amended as of October registration as a national securities NYSE’s capability to invest in its growth
20, 2005 and as of November 2, 2005 (as exchange and other than the assets and both internally and through
amended from time to time, ‘‘Merger liabilities relating to the regulatory acquisitions, and increase its focus on
Agreement’’), by and among the NYSE, functions currently conducted by the efficiency and cost reduction. Further,
Archipelago, NYSE Group, NYSE NYSE. NYSE Market will be the entity as a public, listed company, NYSE
Merger Corporation Sub, Inc., a holding the assets and liabilities relating Group will have improved access to
Delaware corporation and a wholly to the current securities exchange capital, and the ability to engage in
owned subsidiary of the NYSE, NYSE business of the NYSE. future transactions using its stock as
Merger Sub LLC, a New York limited 3. NYSE Regulation, Inc. NYSE acquisition currency. The NYSE also
liability company and a wholly owned Regulation, a New York Type A not-for- expects that, after the Merger, NYSE
subsidiary of NYSE Group, and profit corporation, will perform the Group will have much greater flexibility
Archipelago Merger Sub, Inc., a regulatory responsibilities currently and ability to respond to competitive
Delaware corporation and a wholly conducted by NYSE for New York Stock pressures than the NYSE’s current
owned subsidiary of NYSE Group. The Exchange LLC and will contract to membership structure permits. In
Merger is subject to approval of the perform many of the regulatory addition, as a for-profit entity, NYSE
NYSE members and Archipelago functions of the Pacific Exchange for Group will have an increased
stockholders. The joint proxy statement/ Archipelago. NYSE Regulation’s sole transparency and a sharper focus on
prospectus sent to the NYSE members member under the New York Not-for- costs, efficiency, and growth.
and Archipelago stockholders in Profit Corporation Law and thereby sole The combination of the businesses of
connection with their consideration of voting equity holder will be New York the NYSE and Archipelago under a
the Merger has been filed with the Stock Exchange LLC.5 single holding company also has the
Commission. Following the Merger, Archipelago advantage of creating a diversified
The Merger will have the effect of will become a wholly owned subsidiary business model for the combined
‘‘demutualizing’’ the NYSE because of NYSE Group; PCX Holdings, Inc., a company. The combination provides
equity ownership in the NYSE will be Delaware corporation (‘‘PCX Holdings’’), opportunities for cost savings by
separated from trading privileges on the will remain a wholly owned subsidiary eliminating duplicative activities and
NYSE. In the Merger, NYSE members of Archipelago; and the Pacific realizing synergies between the business
will receive cash and/or shares of NYSE Exchange, a Delaware corporation, will of Archipelago and the NYSE, while at
Group common stock. (Archipelago remain a wholly owned subsidiary of the same time realizing revenue growth
stockholders will receive solely shares PCX Holdings. Archipelago’s businesses opportunities.
of NYSE Group common stock.) After and assets will continue to be held by As part of the Reorganization, NYSE
the Merger, trading privileges on the Archipelago and its subsidiaries. As Regulation will be a separate, not-for-
NYSE will be made available noted above, pursuant to a services profit entity. The NYSE believes that
exclusively through trading licenses, as agreement, NYSE Regulation will NYSE Regulation’s continued status as a
described in greater detail below. perform many of the regulatory not-for-profit entity will facilitate NYSE
The corporate structure and functions of the Pacific Exchange. Group and its subsidiaries in managing
governance that the Proposed Rule
Purpose of the Merger and conflicts between their business and
Change affects seek to preserve and
Reorganization regulatory objectives, maintaining
extend the functional separation, yet
regulatory standards and complying
pervasive communication, achieved The Merger will have the effect of (1) with the obligations of the exchange
under the NYSE’s comprehensive converting the NYSE from a not-for-
reforms to its governance architecture in subsidiaries as registered national
profit entity into a for-profit entity securities exchanges and self-regulatory
2003, and to insulate the NYSE’s self- (other than with respect to the
regulatory function from the additional organizations (‘‘SROs’’).
regulatory responsibilities currently
cross-currents created by conducted by the NYSE, which will be Corporate Structure
demutualization and public ownership. separated into a not-for-profit entity), (2) NYSE Group
In connection with the Merger, the demutualizing the NYSE by separating
NYSE proposes to engage in a equity ownership in the NYSE from Following the Merger, NYSE Group
reorganization (‘‘Reorganization’’) so trading privileges on the NYSE, and (3) will be a for-profit, publicly traded stock
that immediately after the Merger, its combining the businesses of the NYSE corporation and will act as a holding
businesses and assets are held in three and Archipelago. company for the businesses of the NYSE
separate entities: With the exception of NYSE and Archipelago. NYSE Group will hold
1. New York Stock Exchange LLC. Regulation, NYSE Group and its all of the equity interests in New York
New York Stock Exchange LLC, a New subsidiaries will be for-profit entities, Stock Exchange LLC and Archipelago.
York limited liability company, will be rather than not-for-profit entities. The NYSE Group Board of Directors
a wholly owned subsidiary of NYSE conversion from a not-for-profit entity to
Group and will be the entity registered The NYSE Group board of directors
as a national securities exchange. After 5 The New York Not-for-Profit Corporation Law,
will consist of a number of directors that
the Merger, New York Stock Exchange under which NYSE Regulation is incorporated, uses will be fixed from time to time by the
LLC is not expected to hold any assets the term ‘‘members’’ to describe those that have NYSE Group board of directors pursuant
other than all of the equity interests of rights to distribution on liquidation and to elect the to a resolution adopted by a majority of
board of directors, analogous to the rights of
NYSE Market and NYSE Regulation. stockholders as owners of a business corporation.
the board of directors. It is currently
2. NYSE Market, Inc. NYSE Market, a contemplated that the NYSE Group
New York Stock Exchange LLC will be the sole

Delaware corporation, will be a wholly ‘‘member’’ of NYSE Regulation within the meaning board of directors will consist of at least
owned subsidiary of New York Stock of the New York Not-for-Profit Corporation Law, but 11 directors, one of whom will be the
this term should not be confused with the concept
Exchange LLC. After the Merger, NYSE of a member or member organization of New York
chief executive officer of NYSE Group.
Market will hold all of the NYSE’s Stock Exchange LLC under its rules and for The initial term of directors will end
current assets and liabilities other than purposes of section 6 of the Act. with the first annual stockholders
2082 Federal Register / Vol. 71, No. 8 / Thursday, January 12, 2006 / Notices
meeting to be held by NYSE Group. and (3) any companies listed on New and its subsidiaries, and also will not be
Thereafter, the directors will serve one- York Stock Exchange LLC or the Pacific prohibited from meeting with
year terms. Nominees to the NYSE Exchange. The independence policy of management of NYSE Group and its
Group board of directors will be the NYSE Group board of directors subsidiaries. However, he or she will
recommended by the nominating and applicable to elected members of the not be an officer or employee of any
governance committee of the NYSE NYSE Group board of directors is part affiliated entity other than NYSE
Group board of directors. The of the Proposed Rule Change. This Regulation and will report solely to the
nominating and governance committee policy mirrors the NYSE’s current NYSE Regulation board of directors.
will consider shareholder and public independence policy,10 but has been Voting and Ownership Limitations of
investor recommendations for expanded to cover relationships with NYSE Group Stock
candidates for the NYSE Group board of the Pacific Exchange and its affiliates,
directors. and the member organizations and The proposed NYSE Group Certificate
The NYSE Group board of directors listed companies of the Pacific of Incorporation will place certain
will appoint the chairman of the board. Exchange. It also removes the reference restrictions on the ability to vote and
The chairman may be, but need not be, to lessor members, since there will be own shares of stock of NYSE Group.11
the chief executive officer of NYSE no such category after the Mergers, and Under the proposed Certificate of
Group. If the chairman is not the chief no look-back is intended to disqualify Incorporation of NYSE Group, no
executive officer, then he or she must individuals who were lessor members person (either alone or together with its
satisfy the board’s independence within the last three years. related persons12) will be entitled to
criteria.6 A director may serve for any
number of terms, consecutive or Committees of NYSE Group Board of 11 At the request of the Exchange, the Commission
otherwise. Directors need not be Directors staff replaced the phrase ‘‘common stock’’ with
‘‘stock.’’ Telephone conversation between James F.
stockholders of NYSE Group. After the Merger, the NYSE Group Duffy, Senior Vice President and Deputy General
Under section 3.2 of the proposed board of directors may create one or Counsel, NYSE, and Heather A. Seidel, Senior
NYSE Group Bylaws, all members of the more committees. It is expected that, Special Counsel, Commission, Division, on January
NYSE Group board of directors (other 3, 2006 (‘‘January 3 Telephone Conversation’’).
upon completion of the Merger, the 12 A ‘‘related person’’ means, with respect to any
than the chief executive officer of NYSE NYSE Group board of directors will person: (i) Any ‘‘affiliate’’ of such person (as such
Group) must satisfy the requirements for initially have the following three term is defined in Rule 12b–2 under the Act); (ii)
directors of NYSE Group for committees: (1) An audit committee; (2) any other person(s) with which such first person
independence from management, has any agreement, arrangement or understanding
a human resource and compensation (whether or not in writing) to act together for the
member organizations and listed committee; and (3) a nominating and purpose of acquiring, voting, holding or disposing
companies. The independent nature of governance committee. of shares of the stock of NYSE Group; (iii) in the
the NYSE Group board of directors will Each committee of the NYSE Group case of a person that is a company, corporation or
be modeled after the current similar entity, any executive officer (as defined
board of directors will consist solely of under Rule 3b–7 under the Act) or director of such
Commission-approved independence directors meeting the independence person and, in the case of a person that is a
structure of the NYSE board of requirements of NYSE Group. As a partnership or a limited liability company, any
directors.7 Specifically, each member of result, the chief executive officer of general partner, managing member or manager of
the NYSE Group board of directors, such person, as applicable; (iv) in the case of a
NYSE Group will not be permitted to person that is a ‘‘member organization’’ (as defined
other than the chief executive officer of serve on any of these committees. The in the rules of New York Stock Exchange LLC, as
NYSE Group, will be required to be NYSE Group board of directors will such rules may be in effect from time to time), any
independent from (1) NYSE Group and review and adopt a charter for each of ‘‘member’’ (as defined in the rules of New York
Stock Exchange LLC, as such rules may be in effect
its subsidiaries,8 (2) any member these committees annually. from time to time) that is associated with such
organizations of New York Stock person (as determined using the definition of
Exchange LLC or the Pacific Exchange,9 NYSE Group Management ‘‘person associated with a member’’ as defined
The officers of NYSE Group will under section 3(a)(21) of the Act); (v) in the case
of a person that is an OTP Firm, any OTP Holder
6 The current NYSE Constitution provides that
manage the business and affairs of that is associated with such person (as determined
the positions of chairman of the board and chief NYSE Group, subject to the oversight of
executive officer of the NYSE may be, but need not using the definition of ‘‘person associated with a
be, held by the same person. The current chairman the NYSE Group board of directors, and member’’ as defined under section 3(a)(21) of the
of the board of the NYSE is not the chief executive except as discussed below in relation to Act); (vi) in the case of a person that is a natural
person, any relative or spouse of such natural
officer of the NYSE, and is therefore required to NYSE Regulation. The only member of person, or any relative of such spouse who has the
satisfy the same independence criteria applicable to the senior management team of NYSE same home as such natural person or who is a
the other independent members of the board. Under
the current NYSE Constitution, if the chairman of Group who will also serve as a director director or officer of NYSE Group or any of its
of NYSE Group is the chief executive parents or subsidiaries; (vii) in the case of a person
the board is the chief executive officer, then such
that is an executive officer (as defined under Rule
individual is not an independent director and officer of NYSE Group. The chief 3b–7 under the Act), or a director of a company,
cannot participate in executive sessions of the executive officer of NYSE Regulation corporation or similar entity, such company,
independent directors.
7 See Securities Exchange Act Release No. 48946
will attend, as appropriate, meetings of corporation or entity, as applicable; (viii) in the case
the board of directors of NYSE Group of a person that is a general partner, managing
(December 17, 2003), 68 FR 74678 (December 24, member or manager of a partnership or limited
2003). liability company, such partnership or limited
8 At the request of the Exchange, the Commission engage in business involving substantial direct liability company, as applicable; (ix) in the case of
replaced ‘‘or its subsidiaries’’ with ‘‘and its contact with securities customers, as well as a person that is a ‘‘member’’ (as defined in the rules
subsidiaries.’’ Telephone conversation between members and allied members (as defined in of New York Stock Exchange LLC, as such rules
James F. Duffy, Senior Vice President and Deputy paragraphs (a) and (c), respectively, of Rule 2 of may be in effect from time to time), the ‘‘member
General Counsel, NYSE, et al., and Heather A. New York Stock Exchange LLC), and OTP Holders organization’’ (as defined in the rules of New York
Seidel, Senior Special Counsel, Commission, and ‘‘allied persons’’ (as defined, respectively, in Stock Exchange LLC, as such rules may be in effect
Division of Market Regulation (‘‘Division’’), et al., Rules 1.1(q) and 1.1(b) of the Pacific Exchange and
from time to time) with which such Person is

on December 14, 2005 (‘‘December 14 Telephone Rule 1.1(c) of PCX Equities, Inc.). associated (as determined using the definition of
Conversation’’). 10 The NYSE’s current independence policy was ‘‘person associated with a member’’ as defined
9 This would include member organizations of filed with and approved by the Commission. See under section 3(a)(21) of the Act); and (x) in the
New York Stock Exchange LLC and OTP Firms of Securities Exchange Act Release No. 51217 case of a person that is an OTP Holder, the OTP
the Pacific Exchange and ETP Holders of PCX (February 16, 2005), 70 FR 9688 (February 28, Firm with which such person is associated (as
Equities, Inc. or non-member broker-dealers that 2005). determined using the definition of ‘‘person
vote or cause the voting of shares of ‘‘Regulated Subsidiary’’ and together, requested of such person and its related
stock of NYSE Group representing in the the ‘‘Regulated Subsidiaries’’) to persons.16
aggregate more than 10% of the total discharge their respective
Protection of Self-Regulatory Functions
number of votes entitled to be cast on responsibilities under the Act and the
and Oversight
any matter, and no person (either alone rules and regulations thereunder and is
or together with its related persons) may otherwise in the best interests of NYSE The proposed NYSE Group Certificate
acquire the ability to vote more than Group, its stockholders and the of Incorporation will contain several
10% of the aggregate number of votes Regulated Subsidiaries; and other provisions designed to protect the
being cast on any matter by virtue of • The exercise of such voting rights or independence of the self-regulatory
agreements entered into with other ownership, as applicable, will not function of the Regulated Subsidiaries.
persons not to vote shares of NYSE impair the Commission’s ability to The proposed NYSE Group Certificate
Group’s outstanding capital stock. NYSE enforce the Act.15 of Incorporation requires that, in
Group shall disregard any such votes In making these determinations, the discharging his or her responsibilities as
purported to be cast in excess of this NYSE Group board of directors may a member of the board, each director of
limitation.13 impose conditions and restrictions on NYSE Group must, to the fullest extent
In addition, under the proposed NYSE the relevant stockholder or its related permitted by applicable law, take into
Group Certificate of Incorporation, no persons that it deems necessary, consideration the effect that NYSE
person (either alone or together with its appropriate or desirable in furtherance Group’s actions would have on the
related persons) may at any time of the objectives of the Act and its ability of the Regulated Subsidiaries to
beneficially own shares of stock of governance. Any such waiver would be carry out their responsibilities under the
NYSE Group representing in the tantamount to a proposed rule change Act and on the ability of the Regulated
aggregate more than 20% of the then subject to approval by the Commission. Subsidiaries and NYSE Group:
outstanding votes entitled to be cast on However, the NYSE Group board of • To engage in conduct that fosters
any matter.14 directors may not waive the voting and and does not interfere with the
In the event that a person, either alone ownership limits above the 20% Regulated Subsidiaries’ and NYSE
or together with its related persons, threshold for any person if such person Group’s ability to prevent fraudulent
beneficially owns shares of stock of or its related persons is: and manipulative acts and practices in
NYSE Group in excess of the 20% • For so long as NYSE Group directly the securities markets;
threshold, such person and its related or indirectly controls the New York • To promote just and equitable
persons will be obligated to sell Stock Exchange LLC or NYSE Market, a principles of trade in the securities
promptly, and NYSE Group will be ‘‘member’’ or ‘‘member organization’’ markets;
obligated to purchase promptly, at a (as defined in the rules of New York • To foster cooperation and
price equal to the par value of such Stock Exchange LLC, as such rules may coordination with persons engaged in
shares of stock and to the extent that be in effect from time to time); regulating, clearing, settling, processing
funds are legally available for such • For so long as NYSE Group directly information with respect to, and
purchase, that number of shares or indirectly controls the Pacific facilitating transactions in securities;
necessary to reduce the ownership level Exchange, PCX Equities or any facility • To remove impediments to and
of such person and its related persons of the Pacific Exchange, an ETP Holder perfect the mechanisms of a free and
to below the permitted threshold, after (as defined in the PCX Equities rules of open market in securities and a national
taking into account that such the Pacific Exchange), an OTP Holder or securities market system; and
repurchased shares will become an OTP Firm (each as defined in the • In general, to protect investors and
treasury shares and will no longer be rules of Pacific Exchange); or the public interest.17
deemed to be outstanding. • Subject to any statutory The proposed NYSE Group Certificate
The NYSE Group board of directors disqualification (as defined in section of Incorporation provides that, to the
will have the right to waive the 3(a)(39) of the Act). fullest extent permitted by applicable
provisions regarding voting and The proposed NYSE Group Certificate law, all confidential information
ownership limits applicable to any of Incorporation will also require any pertaining to the self-regulatory function
person by a resolution expressly stockholder that the NYSE Group board of the New York Stock Exchange LLC,
permitting this voting or ownership of directors reasonably believes to be NYSE Market, NYSE Regulation, Pacific
(which resolution must be filed with subject to the voting or ownership Exchange and PCX Equities (including
and approved by the Commission under restrictions summarized above, and any but not limited to disciplinary matters,
section 19 of the Act), subject to a person (either alone or together with its trading data, trading practices and audit
determination by the NYSE Group board related persons) that at any time information) contained in the books and
of directors that: beneficially owns 5% or more of NYSE records of any of the Regulated
• The exercise of such voting rights or Group’s outstanding capital stock Subsidiaries that shall come into the
ownership, as applicable, will not (which ownership has not been reported possession of NYSE Group shall:
impair the ability of either NYSE Group to NYSE Group), to provide to NYSE • Not be made available to any
or any of New York Stock Exchange Group, upon the request of the NYSE persons other than to those officers,
LLC, NYSE Market, NYSE Regulation, Group board of directors, complete directors, employees and agents of
Archipelago Exchange, L.L.C. information as to all shares of capital NYSE Group that have a reasonable
(‘‘ArcaEx’’), Pacific Exchange or PCX stock of NYSE Group beneficially need to know the contents thereof;
Equities, Inc. (‘‘PCX Equities’’) (each, a owned by such person and its related • Be retained in confidence by NYSE
persons, and any other factual matters Group and its officers, directors,
associated with a member’’ as defined under section relating to the applicability or effect of
3(a)(21) of the Act). See proposed NYSE Group employees and agents; and
Certificate of Incorporation, Article V, section 1(E). the voting and ownership limitations
13 See proposed NYSE Group Certificate of outlined above as may be reasonably 16 See proposed NYSE Group Certificate of
Incorporation, Article V, section 1(A). Incorporation, Article V, section 4.

14 See proposed NYSE Group Certificate of 15 See proposed NYSE Group Certificate of 17 See proposed NYSE Group Certificate of
Incorporation, Article V, section 2(A). Incorporation, Article V, sections 1(A) and 2(C). Incorporation, Article VI, section 8.
• Not be used for any commercial courts and the Commission for the function of the Regulated Subsidiaries
purposes.18 purposes of any suit, action or (to the extent of each Regulated
Notwithstanding the foregoing, proceeding pursuant to the U.S. Federal Subsidiary’s self-regulatory function)
nothing in the NYSE Group Certificate securities laws, and the rules and and to obligations to investors and the
of Incorporation shall be interpreted so regulations thereunder, commenced or general public and shall not take any
as to limit or impede the rights of the initiated by the Commission arising out actions that would interfere with the
Commission or any of the Regulated of, or relating to, the activities of the effectuation of any decisions by the
Subsidiaries to access and examine such Regulated Subsidiaries (and shall be board of directors or managers of the
confidential information pursuant to the deemed to agree that NYSE Group may Regulated Subsidiaries relating to their
Federal securities laws and the rules serve as U.S. agent for purposes of regulatory functions (including
and regulations thereunder, or to limit service of process in such suit, action or disciplinary matters) or that would
or impede the ability of any officers, proceeding). Further, NYSE Group, as interfere with the ability of the
directors, employees or agents of NYSE well as each such director, officer or Regulated Subsidiaries to carry out their
Group to disclose such confidential employee by virtue of acceptance of respective responsibilities under the
information to the Commission or the such position, shall be deemed to waive, Act.25
Regulated Subsidiaries.19 NYSE Group’s and agree not to assert by way of
books and records shall be subject at all motion, as a defense or otherwise in any Under the proposed NYSE Group
times to inspection and copying by (a) such suit, action or proceeding, any Certificate of Incorporation, NYSE
the Commission and (b) any Regulated claims that it or they are not personally Group shall take reasonable steps
Subsidiary; provided that, in the case of subject to the jurisdiction of the necessary to cause its officers, directors
(b), such books and records are related Commission, that the suit, action or and employees, prior to accepting a
to the operation or administration of proceeding is an inconvenient forum or position as an officer, director or
such Regulated Subsidiary or any other that the venue of the suit, action or employee, as applicable, of NYSE Group
Regulated Subsidiary over which such proceeding is improper, or that the to consent in writing to the applicability
Regulated Subsidiary has regulatory subject matter thereof may not be to them of certain of these provisions
authority or oversight. NYSE Group’s enforced in or by such courts or with respect to their activities related to
books and records related to Regulated agency.22 Moreover, the proposed NYSE any Regulated Subsidiary.26
Subsidiaries shall be maintained within Group Certificate of Incorporation The NYSE does not currently, nor
the United States. In addition, for so provides that each director, officer and after the Merger will it, own or control
long as NYSE Group directly or employee of NYSE Group, in any of its member organizations. To the
indirectly controls any Regulated discharging his or her responsibilities in extent that a member organization is the
Subsidiary, the books, records, such capacity, shall (1) comply with the owner of NYSE Group common stock,
premises, officers, directors and Federal securities laws and the rules the ownership limitations described
employees of NYSE Group shall be and regulations thereunder, (2) above are intended to deal with the
deemed to be the books, records, cooperate with the Commission, and (3) issues that might otherwise be
premises, officers, directors and cooperate with the Regulated presented. However, the NYSE
employees of the Regulated Subsidiaries Subsidiaries pursuant to their regulatory understands that the Commission is also
for purposes of and subject to oversight authority.23 concerned about potential unfair
pursuant to the Act.20 The proposed NYSE Group Certificate
The proposed NYSE Group Certificate competition and conflicts of interest
of Incorporation provides that, for so
of Incorporation provides that NYSE between an exchange’s self-regulatory
long as NYSE Group shall control,
Group shall comply with the Federal obligations and its commercial interests
directly or indirectly, any of the
securities laws and the rules and that could exist if an exchange were to
Regulated Subsidiaries, before any
regulations thereunder and shall amendment to the NYSE Group become affiliated with one of its
cooperate with the Commission and the Certificate of Incorporation shall be members, as well as the potential for
Regulated Subsidiaries pursuant to and effective, such amendment shall be unfair competitive advantage that the
to the extent of their respective submitted to the boards of directors of affiliated member could have by virtue
regulatory authority, and shall take the New York Stock Exchange LLC, of informational or operational
reasonable steps necessary to cause its NYSE Market, NYSE Regulation, Pacific advantages, or the ability to receive
agents to cooperate with the Exchange and PCX Equities, and if any preferential treatment.27 The NYSE
Commission and, where applicable, the or all of such boards of directors acknowledges that ownership of, or a
Regulated Subsidiaries pursuant to their determines that the amendment must be control relationship with, a member
regulatory authority.21 filed with or filed with and approved by organization by NYSE Group or any of
The proposed NYSE Group Certificate the Commission under section 19 of the its subsidiaries would necessitate that
of Incorporation also provides that Act, then such amendment shall not be the foregoing concerns be first
NYSE Group, its directors and officers, effectuated until filed with or filed with addressed with, and to the satisfaction
and those of its employees whose and approved by the Commission.24 of, the Commission.28
principal place of business and In addition, the proposed Certificate
residence is outside of the United States of Incorporation of NYSE Group 25 See proposed NYSE Group Certificate of
shall be deemed to irrevocably submit to provides that NYSE Group, its directors, Incorporation, Article XII.
26 See proposed NYSE Group Certificate of
the jurisdiction of the U.S. Federal officers and employees shall give due
Incorporation, Article XII.
regard to the preservation of the 27 See Securities Exchange Act Release No. 52497
18 See proposed NYSE Group Certificate of independence of the self-regulatory (September 22, 2005), 70 FR 56949 (September 29,
Incorporation, Article XI. 2005).
19 See proposed NYSE Group Certificate of 22 See proposed NYSE Group Certificate of 28 See proposed Rule 2B. The Exchange notes that
Incorporation, Article XI. Incorporation, Article X. the Commission has specifically approved the
20 See proposed NYSE Group Certificate of 23 See proposed NYSE Group Certificate of ownership and operation of the outbound router
Incorporation, Article XI. Incorporation, Article VI, section 8. function of Archipelago Securities by Archipelago,
21 See proposed NYSE Group Certificate of 24 See proposed NYSE Group Certificate of subject to the conditions specified in Securities
Incorporation, Article XII. Incorporation, Article XIII. Exchange Act Release No. 52497. See supra note 27.
New York Stock Exchange LLC with respect to audit, compensation, Market; (2) a majority of the directors of
As proposed, after the Merger, New nomination and governance will be NYSE Market will be NYSE Group
York Stock Exchange LLC will succeed performed by the relevant committees of Independent Directors; and (3) at least
to the registration of the NYSE as a the NYSE Group board of directors. twenty percent (20%), and not less than
national securities exchange under the two, of the NYSE Market directors will
Appointment of Non-Affiliated LLC be persons 31 who are not NYSE Group
Act. It will be a direct, wholly owned Directors
subsidiary of NYSE Group and the directors (‘‘Non-Affiliated Market
parent company of NYSE Market and NYSE Group, as the sole equity owner Directors’’).32 The Non-Affiliated
NYSE Regulation. It will not hold any of New York Stock Exchange LLC, shall Market Directors need not be
material assets other than the equity appoint or elect as the Non-Affiliated independent, and must meet any status
interests in NYSE Market and NYSE LLC Directors the candidates nominated or constituent affiliation qualifications
Regulation. Pursuant to the proposed by the nominating and governance prescribed by NYSE Market rule or
delegation agreement by and among committee of the NYSE Group board of policy filed with the Commission.
New York Stock Exchange LLC, NYSE directors (such candidates, ‘‘Non-
Committees of NYSE Market Board of
Market and NYSE Regulation (‘‘NYSE Affiliated LLC Director Candidates’’).
The nominating and governance Directors
Delegation Agreement’’) (described
committee of the NYSE Group board of The NYSE Market board of directors
below), the market functions of New
directors shall be obligated to designate may create one or more committees
York Stock Exchange LLC will be
as Non-Affiliated LLC Director comprised of NYSE Market directors. It
delegated to NYSE Market and the
Candidates those Fair Representation is expected that the committees of the
regulatory functions of New York Stock
Candidates (as hereinafter defined) who NYSE Group board of directors will
Exchange LLC will be delegated to
are recommended jointly by the director perform the board committee functions
NYSE Regulation.29
candidate recommendation committee relating to audit, governance and
New York Stock Exchange LLC Board of of NYSE Market (which committee is compensation. The NYSE Market board
Directors described below) and the director of directors may also create committees
The New York Stock Exchange LLC candidate recommendation committee comprised in whole or in part of
board of directors will consist of a of NYSE Regulation (which committee individuals who are not directors.
number of directors as determined by is described below), including those Upon completion of the Merger, the
NYSE Group, as the sole equity owner, who emerge from the petition process of NYSE Market board of directors will
from time to time; provided that (1) all New York Stock Exchange members, all establish one or more advisory
of the independent directors of the as described below under ‘‘Fair committees. The advisory committees
NYSE Group (‘‘NYSE Group Representation of Members.’’ will facilitate communication and
Independent Directors’’) shall be provide input to the board of directors,
New York Stock Exchange LLC management, and staff of NYSE Market
directors of New York Stock Exchange Management
LLC, and (2) at least twenty percent and its affiliated entities on policies,
(20%), and not less than two, of the The officers of New York Stock programs, products and services to
directors of New York Stock Exchange Exchange LLC will be appointed by the further strengthen the ability of NYSE
LLC will be persons who are not NYSE New York Stock Exchange LLC board of Market and its affiliated entities to
Group directors,30 but who otherwise directors as it deems appropriate. better serve their customers.
qualify as independent under the In addition, a Market Performance
NYSE Market, Inc. Committee and an Allocation
independence policy of the NYSE
Group board of directors (‘‘Non- NYSE Market will be a wholly owned Committee will be created by the board
Affiliated LLC Directors’’). subsidiary of New York Stock Exchange of directors of NYSE Market containing
LLC. NYSE Market will hold all of representatives of member
Committees of New York Stock NYSE’s current assets and liabilities organizations. These committees will
Exchange LLC Board of Directors other than the registration as a national have responsibilities specified in certain
The board of directors of New York securities exchange and other than the Exchange rules (see, for example,
Stock Exchange LLC is not expected to assets and liabilities relating to the proposed NYSE Rule 20(b) and NYSE
have its own committees. Rather, it is regulatory functions currently Rules 103A and 103B).
expected that any necessary functions conducted by the NYSE, which will be On an annual basis, the NYSE Market
held by NYSE Regulation. After the board of directors will appoint a
29 NYSE Market’s responsibilities include the Merger, NYSE Market will conduct the director candidate recommendation
operation of Market Watch, a unit whose functions exchange business that is currently committee (‘‘NYSE Market DCRC’’)
include, among others, coordination with listed comprised of representatives of upstairs
companies, floor officials, and regulatory staff of
conducted by the NYSE pursuant to the
NYSE Regulation with respect to dissemination of NYSE Delegation Agreement (described firms, specialists and floor brokers. The
news and trading halts. This unit is distinguished below), including the issuance of NYSE Market DCRC will be responsible
from the Stock Watch unit within NYSE Regulation, licenses to trade on NYSE Market for recommending to the nominating
whose functions include review of exception
reports, alerts and investigations. NYSE Market will
(‘‘Trading Licenses’’), which such and governance committee of the NYSE
establish the principles and policies under which Trading Licenses are described in
trading on NYSE Market will be conducted, and greater detail below. 31 At the request of the Exchange, the Commission
those principles and policies will be codified by staff replaced ‘‘directors’’ with ‘‘persons’’ to match
NYSE Regulation in the rules of New York Stock NYSE Market Board of Directors the language in the proposed Bylaws of NYSE
Exchange LLC. In addition, NYSE Market will be Market. December 14 Telephone Conversation.
responsible for referring to NYSE Regulation, for The NYSE Market board of directors 32 Note that the reference to ‘‘at least 20%, and
investigation and action as appropriate, any will consist of a number of directors as
not less than two’’ is keyed into the requirements

possible rule violations that come to its attention. determined from time to time by New outlined in the ‘‘Fair Representation of Members’’
30 At the request of the Exchange, the Commission section below. There may in fact be more Non-
York Stock Exchange LLC (as the sole
staff replaced ‘‘directors’’ with ‘‘persons’’ to match Affiliated Market Directors, but they would not be
the language in the proposed Operating Agreement
stockholder of NYSE Market); provided subject to the selection, recommendation and
of New York Stock Exchange LLC. December 14 that: (1) The chief executive officer of petition procedures described in the ‘‘Fair
Telephone Conversation. NYSE Group will be a director of NYSE Representation of Members’’ section.
Group board of directors Fair Independent Directors; and (3) at least ability of such committee members and
Representation Candidates for the Non- twenty percent (20%), and not less than Executive Floor Governors 35 to require
Affiliated Market Directors. two, of the NYSE Regulation directors review by the board of New York Stock
will be persons 33 who are not NYSE Exchange LLC of disciplinary decisions
Appointment of Non-Affiliated Market
Group directors, but who otherwise pursuant to NYSE Rules 476 and 476A,
Directors qualify as independent under the acceptability committee decisions
New York Stock Exchange LLC, as the independence policy of the NYSE pursuant to NYSE Rule 308, and
sole stockholder of NYSE Market, will Group board of directors (‘‘Non- decisions resulting from summary
appoint or elect as the Non-Affiliated Affiliated Regulation Directors’’).34 proceedings pursuant to NYSE Rule
Market Directors the candidates 475.
nominated by the nominating and Committees of the NYSE Regulation
Board of Directors In addition, a regulatory advisory
governance committee of the NYSE committee will be created by the NYSE
Group board of directors (such The NYSE Regulation board of Regulation board of directors and will
candidates, ‘‘Non-Affiliated Market directors may create one or more include representatives of member
Director Candidates’’). committees comprised of NYSE organizations. This committee will have
The nominating and governance Regulation directors. It will create a responsibilities specified in proposed
committee of the NYSE Group board of nominating and governance committee, NYSE Rule 20(b).
directors shall be obligated to designate which will be comprised of a majority Upon completion of the Merger, the
as Non-Affiliated Market Director of NYSE Group Independent Directors NYSE Regulation board of directors is
Candidates those Fair Representation and at least two Non-Affiliated expected to establish one or more
Candidates who are recommended by Regulation Directors. It is expected that additional advisory committees. The
the NYSE Market DCRC, including those the committees of the NYSE Group
advisory committees will facilitate
who emerge from the petition process of board of directors will perform the
communication and provide input to
New York Stock Exchange members, all board committee functions relating to
the board of directors, management, and
as described below under ‘‘Fair audit and compensation. With due
staff of NYSE Regulation and its
Representation of Members.’’ regard to the independence of NYSE
affiliated entities on policies, programs,
Regulation, compensation for NYSE
NYSE Market Management regulatory aspects of products and
Regulation will be determined in
services to further strengthen the ability
The officers of NYSE Market will consultation with the NYSE Regulation
of NYSE Regulation and its affiliated
manage the business and affairs of directors. This is similar to the interplay
entities to better serve its regulatory
NYSE Market, subject to the oversight of between the compensation committee
and the regulatory oversight committee responsibilities.
the NYSE Market board of directors, and
except as discussed below in relation to of the NYSE that exists today. On an annual basis, the NYSE
NYSE Regulation. The chief executive The NYSE Regulation board of Regulation board of directors will
officer of NYSE Group will serve as the directors may also create committees appoint a director candidate
chief executive officer of NYSE Market comprised in whole or in part of recommendation committee (‘‘NYSE
and will also serve as a director of NYSE individuals who are not directors. For Regulation DCRC’’) comprised of
Market. example, the NYSE Regulation board of representatives of each of (a) upstairs
directors will appoint a Committee for firms, (b) specialists, and (c) floor
NYSE Regulation, Inc. Review that will, among other things, brokers. The NYSE Regulation DCRC
As noted above, New York Stock review disciplinary decisions on behalf will be responsible for recommending to
Exchange LLC will be the sole voting of the NYSE Regulation board of the nominating and governance
equity holder of NYSE Regulation. directors. This committee will be committee of the NYSE Regulation
NYSE Regulation will hold all of the comprised of both directors of NYSE board of directors Fair Representation
assets and liabilities held by the NYSE Regulation that satisfy the Candidates for the Non-Affiliated
prior to the Merger related to the independence requirements for Regulation Directors.
regulatory functions conducted by the directors of NYSE Regulation, as well as Appointment of Non-Affiliated
NYSE prior to the Merger. After the persons who are not directors; provided, Regulation Directors
Merger, NYSE Regulation will be however, that a majority of the members
responsible for the regulatory functions of the committee voting on a matter New York Stock Exchange LLC, as the
of New York Stock Exchange LLC subject to a vote of the committee will sole equity owner of NYSE Regulation,
pursuant to the NYSE Delegation be directors of NYSE Regulation. Among will appoint or elect as the Non-
Agreement (described below), as well as the persons on the committee who are Affiliated Regulation Directors the
many of the regulatory functions of the not directors, there will be included candidates nominated by the
Pacific Exchange pursuant to the Pacific representatives of each of (a) upstairs nominating and governance committee
Exchange Regulatory Services firms, (b) specialists, and (c) floor of NYSE Regulation (such candidates,
Agreement. brokers. The Exchange Rules are ‘‘Non-Affiliated Regulation Director
proposed to be amended to reflect the Candidates’’).
NYSE Regulation Board of Directors The nominating and governance
The NYSE Regulation board of 33 At the request of the Exchange, the Commission committee of NYSE Regulation shall be
directors will consist of a number of staff replaced ‘‘directors’’ with ‘‘persons’’ to match obligated to designate as Non-Affiliated
directors as determined from time to the language in the proposed Bylaws of NYSE Regulation Director Candidates those
Regulation. December 14 Telephone Conversation.
time by New York Stock Exchange LLC 34 Note that the reference to ‘‘at least 20%, and
Fair Representation Candidates who are
(as the sole equity holder of NYSE recommended by the NYSE Regulation
not less than two’’ is keyed into the requirements

Regulation); provided that: (1) The chief outlined in the ‘‘Fair Representation of Members’’ DCRC, including those who emerge
executive officer of NYSE Regulation section below. There may in fact be more Non- from the petition process of New York
Affiliated Regulation Directors, but they would not Stock Exchange members, all as
will be a director of NYSE Regulation; be subject to the selection, recommendation and
(2) a majority of the NYSE Regulation petition procedures described in the ‘‘Fair
directors will be NYSE Group Representation of Members’’ section. 35 See proposed NYSE Rule 46A.
described below under ‘‘Fair comprised of: (1) Organizations that Candidates put forward by the NYSE
Representation of Members.’’ obtain Trading Licenses in accordance Market DCRC and/or NYSE Regulation
with the rules of New York Stock DCRC, as applicable, to be Fair
NYSE Regulation Management
Exchange LLC (including the rules of Representation Candidates will be
The officers of NYSE Regulation will eligibility that will apply to those who announced to the member organizations
manage the affairs of NYSE Regulation, wish to be a member or member of New York Stock Exchange on a date
subject to the oversight of the NYSE organization); and (2) broker-dealers in each year (‘‘Announcement Date’’)
Regulation board of directors. The chief that agree to submit to the jurisdiction sufficient to accommodate the process
executive officer of NYSE Regulation and rules of New York Stock Exchange for the proposal of alternate nominees
will attend as appropriate meetings of LLC, without obtaining a Trading by petition. Following the
the board of directors of NYSE Group License and thus without having rights Announcement Date, and subject to the
and its subsidiaries, and also will not be to directly access the trading facilities of limitations described below, a person
prohibited from meeting with NYSE Market.36 After the Merger, NYSE shall be a petition candidate if a
management of NYSE Group and its Market may decide to issue separate properly completed petition shall be
subsidiaries. However, he or she will licenses for electronic-only access or completed and such person shall be
not be an officer or employee of any access limited to particular products. endorsed by a number of votes equal to
affiliated entity other than NYSE Such decisions would be implemented at least ten percent (10%) of the votes
Regulation and will report solely to the only following any required rule eligible to be cast for such candidate as
NYSE Regulation board of directors. changes filed with and approved by the described below. For purposes of
Commission. determining whether a person has been
Archipelago Holdings, Inc.
Fair Representation of Members endorsed by the requisite ten percent
Through the Merger, Archipelago will (10%) of votes to be a petition
become a wholly owned subsidiary of To ensure fair representation of New candidate, the votes eligible to be cast
NYSE Group. The governing documents York Stock Exchange members in the shall be as follows:
of Archipelago will remain unchanged selection of directors and the • For purposes of a candidate for the
other than amendments required to administration of the affairs of New New York Stock Exchange LLC board of
permit NYSE Group to own all of the York Stock Exchange LLC after the directors or the NYSE Regulation board
outstanding shares of Archipelago. Mergers,37 twenty percent (20%), and of directors, each member organization
These amendments will be proposed in not less than two, of the directors on the in good standing shall be entitled to one
a separate application on Form 19b–4 to boards of directors of each of New York
vote for each trading license owned by
be filed by the Pacific Exchange. Stock Exchange LLC, NYSE Market and
it, and each member organization in
NYSE Regulation will be persons who
PCX Holdings, Inc. good standing that does not own a
are not NYSE Group directors, and will
trading license shall be entitled to one
PCX Holdings will remain a wholly be chosen solely from candidates
vote;
owned subsidiary of Archipelago after (referred to herein as ‘‘Fair
• For purposes of a candidate for the
the Merger, and the Proposed Rule Representation Candidates’’) who are
NYSE Market board of directors, each
Change will not affect its governing recommended by the NYSE Market
member organization in good standing
documents or operations. DCRC and/or NYSE Regulation DCRC,
shall be entitled to one vote for each
as applicable, including those who may
Pacific Exchange, Inc. and PCX emerge from the petition process trading license owned by it (and
Equities, Inc. described below in this section, to fill member organizations that do not own
The Pacific Exchange will remain a positions as non-affiliated directors on a trading license shall not be entitled to
wholly owned subsidiary of PCX the boards of New York Stock Exchange vote);
Holdings and will maintain its status as LLC, NYSE Market and NYSE provided, however, that, in each case, no
a registered national securities exchange Regulation, respectively. member organization, either alone or
and an SRO. Its operations will remain New York Stock Exchange LLC together with its affiliates (as defined
unchanged except with regard to its members will also have the right to under Rule 12b–2 under the Act), may
regulatory responsibilities, many of propose Fair Representation Candidates account for more than fifty percent
which will be performed by NYSE by petition. The petition process will (50%) of the votes endorsing a
Regulation after the Merger. work as follows: particular petition candidate, and any
PCX Equities will remain a wholly votes cast by such member organization,
owned subsidiary of the Pacific 36 Proposed NYSE Rule 2(a) defines the term either alone or together with its
Exchange. Its operations will remain ‘‘member,’’ when used to denote a natural person affiliates, in excess of such fifty percent
approved by the Exchange, as meaning a natural (50%) limitation shall be disregarded.
unchanged except with regard to its person associated with a member organization who
regulatory responsibilities, many of has been approved by the Exchange and designated Each petition must include for each
which will be performed by NYSE by such member organization to effect transactions potential Fair Representation Candidate
Regulation after the Merger. on the floor of the Exchange or any facility thereof. a completed questionnaire used to
37 See section 6(b)(3) of the Act. In nominating
gather information concerning non-
New York Stock Exchange Membership candidates that will serve on the boards of New
affiliated director candidates for the
York Stock Exchange LLC, NYSE Market and NYSE
After the Merger, there will continue Regulation, the nominating and governance relevant entity (the form of
to be ‘‘members’’ and ‘‘member committees of NYSE Group and NYSE Regulation questionnaire will be provided upon the
organizations’’ of the New York Stock respectively will include at least one person request of any member organization).
intended to allow each such board to meet the
Exchange. Such members or member requirements of section 6(b)(3) of the Act
The petitions must be filed within two
organizations (and new applicants), weeks after the Announcement Date.
concerning issuers and at least one person intended

however, will not, by virtue of their to allow each such board to meet the requirements The nominating and governance
membership, be equity owners of NYSE of section 6(b)(3) of the Act concerning investors. committee of the NYSE Group board of
At the request of the Exchange, the Commission
Group or any of its subsidiaries. Instead, staff modified the language of this footnote to
directors (with respect to candidates for
after the Merger, such members and clarify its meaning. December 14 Telephone New York Stock Exchange LLC and
member organizations will be Conversation. NYSE Market), and the nominating and
governance committee of the NYSE a trading license shall not be entitled to report will be forwarded promptly to the
Regulation board of directors (with vote); Commission. If NYSE Regulation
respect to NYSE Regulation) will provided, however, that, in each case, no determines that NYSE Group common
determine whether the persons member organization, either alone or stock is not in compliance with any
proposed by petition are eligible for together with its affiliates, may account applicable listing standard, NYSE
election to the position for which they for more than twenty percent (20%) of Regulation shall notify NYSE Group
are to be nominated, and such the votes endorsing a particular petition promptly and request a plan for
determinations will be final and candidate, and any votes cast by such compliance. Within five business
conclusive. Those to be nominated for member organization, either alone or days 40 of providing such notice to
the New York Stock Exchange LLC or together with its affiliates, in excess of NYSE Group, NYSE Regulation shall file
NYSE Regulation board of directors such twenty percent (20%) limitation a report with the Commission
must qualify as independent under the shall be disregarded. identifying the date on which NYSE
independence policy of the NYSE Group common stock was not in
Group board of directors. Those to be Listing of NYSE Group Common Stock compliance with the listing standard at
nominated for a position on the NYSE on NYSE Market issue and any other material
Market board must meet any applicable Initial Listing information conveyed to NYSE Group in
constituent status qualifications that NYSE Group intends to list its shares the notice of non-compliance. Within
have been prescribed for such directors of common stock for trading on New five business days of receiving a plan of
by rule or policy filed with the York Stock Exchange LLC. Pursuant to compliance from the issuer, NYSE
Commission. All nominees must be free proposed NYSE Rule 497(b), any Regulation will notify the Commission
of any statutory disqualification (as security of NYSE Group or its affiliates of such receipt, whether the plan was
defined in section 3(a)(39) of the Act). shall not be approved for listing on New accepted by NYSE Regulation or what
If the sum of the number of other action was taken with respect to
York Stock Exchange LLC unless NYSE
candidates recommended by the NYSE the plan, and the time period provided
Regulation finds that such securities
Market DCRC and/or the NYSE to regain compliance with the
satisfy New York Stock Exchange LLC’s
Regulation DCRC, as applicable, and the Exchange’s listing standard, if any.
rules for listing, and such finding is
number of petition candidates exceeds
approved by the NYSE Regulation board Trading Licenses; Access to NYSE
the number of available Fair
of directors. As proposed NYSE Rule Market
Representation Candidate positions for
497 will not be in effect, the Merger will Following the Merger, NYSE Market
New York Stock Exchange LLC, NYSE
not have closed and the NYSE will issue Trading Licenses to registered
Market or NYSE Regulation, as
Regulation board of directors will not broker-dealers, subject to an annual fee
applicable, all such candidates shall be
have been constituted as contemplated to NYSE Market paid in monthly
submitted to the member organizations
herein prior to the time by which the installments, and review and approval
for a vote. The candidates receiving the
highest number of votes for the available initial listing of the NYSE Group of the applicant by NYSE Regulation.
Fair Representation Candidate positions common stock must be approved, that Organizations holding Trading Licenses
shall be the Fair Representation listing will be reviewed by the will be subject to rules applicable to
Candidates recommended to the regulatory staff of NYSE and approved member organizations, and except as
nominating and governance committee by the Regulatory Oversight Committee otherwise noted herein, those rules will
of the board of directors of NYSE Group of the current board of directors of be substantively the same as the rules
or NYSE Regulation, as applicable. The NYSE, as the most logical predecessor to applicable to NYSE member
member organizations will be afforded a the NYSE Regulation board.38 organizations under the NYSE’s current
confidential voting procedure and will Continued Listing and Trading Constitution and Rules.41 Each Trading
be given no less than 20 business days License will entitle its holder to have
NYSE Regulation will be responsible physical and electronic access to the
to submit their votes. For purposes of
for all listing compliance decisions with trading facilities of NYSE Market,
determining which candidates received
respect to NYSE Group as an issuer. subject to such limitations and
the highest number of votes and
NYSE Regulation will prepare a requirements as may be specified in the
therefore should be the Fair
quarterly report summarizing its rules, and in each case will include the
Representation Candidates
monitoring of NYSE Group common right to designate a natural person,
recommended to the applicable
stock’s compliance with listing subject to pre-approval by NYSE
nominating and governance committee,
standards and trading rules as described Regulation, who may have physical
the votes eligible to be cast shall be as
in proposed NYSE Rule 497(c).39 This access to the floor and facilities of NYSE
follows:
• For purposes of a candidate for the report will be provided to the NYSE Market to trade thereon. The quantity
New York Stock Exchange LLC board of Regulation board of directors and a copy and price of Trading Licenses issued
directors or the NYSE Regulation board will be forwarded promptly to the shall be annually determined by a
of directors, each member organization Commission. Once a year an ‘‘Dutch auction.’’
in good standing shall be entitled to one independent accounting firm will The clearing price at which all
vote for each trading license owned by review NYSE Group’s compliance with Trading Licenses will be sold in the
it, and each member organization in the listing standards and a copy of its
40 Proposed NYSE Rule 497 provides for a period
good standing that does not own a 38 This process is not included in the text of of five days. The Exchange has represented that it
trading license shall be entitled to one proposed NYSE Rule 497. The Exchange has plans to amend proposed NYSE Rule 497 to change
vote; represented that it will amend proposed NYSE Rule ‘‘five days’’ to ‘‘five business days.’’ December 14
• For purposes of a candidate for the 497 to include this procedure prior to any Telephone Conversation.
NYSE Market board of directors, each Commission approval of the Proposed Rule Change. 41 As noted above, the term ‘‘member
member organization in good standing December 14 Telephone Conversation. organization’’ may also include any other registered
39 At the request of the Exchange, the Commission broker-dealer that agrees to be regulated by NYSE
shall be entitled to one vote for each staff edited this statement to match the language in Regulation, notwithstanding that it does not hold a
trading license owned by it (and proposed NYSE Rule 497. December 14 Telephone Trading License and thus does not have direct
member organizations that do not own Conversation. access to the trading facilities of NYSE Market.
auction will be determined under NYSE Market will use its discretion to the requirements of section 6(b)(2) of the
procedures calculated to provide conclude an auction that will best serve Act regarding fair access to the facilities
suitable revenue to NYSE Market while the dual goals of raising adequate of a registered exchange. As discussed
providing fair access to its facilities to proceeds for NYSE Market while selling more fully below, the Dutch auction is
member organizations that wish to do a number of Trading Licenses adequate itself a fair way to determine access,
business there. For each auction NYSE to serve the needs of investors and the especially given that it is subject to
Market will determine the minimum broker-dealer community. provisions calculated to insure that
price that a bidder will be required to It is also proposed that, in each Trading Licenses are widely available,
pay for each Trading License auction, NYSE Market will limit the such as the provisions (i) specifying a
(‘‘Minimum Bid Price’’), which will be number of Trading Licenses that may be reasonable minimum bid price, (ii)
no greater than 80% of the clearing bid for by a single member organization calculating the clearing price with
price at the last annual auction, or for to the greater of (i) 35 and (ii) 125% of reference to what will sell at least 1000
the first auction, 80% of the average the number of trading licenses (or in the Trading Licenses, assuming sufficient
annual lease price for leases case of the first auction, regular and bids, (iii) limiting the number of
commenced during a recent six month electronic access memberships) utilized Trading Licenses that may be bid for by
period.42 Unpriced ‘‘at the market’’ bids by the member organization in its a single member organization, and (iv)
will also be permitted. At the end of the business immediately prior to the the arrangement to sell additional
auction, NYSE Market will select as the auction. It is also proposed that the Trading Licenses during the year at a
purchase price for each Trading License aggregate number of Trading Licenses to 10% premium up to the maximum of
the highest bid price that will allow it be issued in any one year will be limited 1366 Trading Licenses. The procedures
to sell the number of Trading Licenses to 1,366. under which Trading Licenses will be
that will maximize auction revenue to Except for the initial Trading made available are also intended to
NYSE Market (referred to as a clearing Licenses, which will be valid from the comply with the requirements of section
price), provided that (i) the clearing closing date of the Merger through the 6(b)(4) of the Act, which requires that a
price shall not be greater than the price end of the calendar year in which the registered exchange provide for the
that will result in the sale in the auction Merger occurs, each Trading License equitable allocation of reasonable dues,
of at least 1000 Trading Licenses, (ii) will be valid for one calendar year.43 fees, and charges among its members
NYSE Market will not sell in the auction Trading Licenses will not be able to be and issuers and other persons using its
more than 1366 Trading Licenses, and if leased or transferred, although they will facilities. The price for a Trading
the bids at the clearing price bring the be permitted to be transferred to an License is reasonable because it is
total to more than 1366 Trading affiliated member organization, or to basically determined by ‘‘the market’’,
Licenses, NYSE Market will sell at the another qualified member organization that is, by the member organizations
clearing price to the unpriced ‘‘at the which continues substantially the same that wish to obtain a trading license.
market’’ bids and higher priced bids, but business as the Trading License holder. The Dutch auction allows those member
will allocate trading licenses among the A member organization may terminate a organizations to themselves determine
bids at the clearing price by lot, and (iii) Trading License prior to the expiration the price, subject to the provisions
NYSE Market at its discretion may sell of its term in accordance with referenced in clauses (i) to (iv) above
the number of Trading Licenses applicable rules and subject to which, as noted, are calculated to insure
determined by the clearing price at a applicable administrative fees. Trading that Trading Licenses are widely
price less than the clearing price but not Licenses will not represent any equity available. The minimum bid price is
lower than the Minimum Bid Price. interest in NYSE Group or any of its reasonable because it is determined
However, if there are insufficient bids at subsidiaries (including NYSE Market). with reference to the prices which
the Minimum Bid Price (including Holders of Trading Licenses will not member organizations have recently
unpriced at the market bids) to purchase have any voting rights or rights to been willing to pay for direct access to
at least 1000 Trading Licenses, NYSE distribution in New York Stock the trading facilities. The auction is also
Market may, although it need not, sell Exchange LLC, NYSE Market or NYSE closely related to the way access to the
the largest number of Trading Licenses Group by virtue of their status as New York Stock Exchange was
holders of Trading Licenses, except to traditionally priced, with supply and
as can be sold at a price equal to the
the extent their vote is sought in demand governing the price at which
Minimum Bid Price, even though such
connection with the petition traditional memberships were
number of Trading Licenses is less than
nomination process described under purchased or leased. The pricing of
1000. In the alternative, under such
‘‘Fair Representation of Members’’ Trading Licenses in between auctions is
circumstances NYSE Market may
above. also reasonable, as it is based on the
conduct another auction or auctions, As noted above, the procedures under
setting a new Minimum Bid Price, auction price, but with a premium to the
which Trading Licenses will be made auction price that is modest, but
which may be lower than that available are calculated to comply with
determined by the formula above, and hopefully will encourage participation
in any such auction the clearing price in the auction, which in turn will
43 The NYSE also proposes to provide for the sale
will be determined as explained above, strengthen the price discovery
of additional Trading Licenses during the year at a
but without the requirement to sell at premium to the auction price, pro rated for the mechanism that the auction provides.
least 1000 trading licenses. In such case, amount of time remaining for the year, in order to,
among other things, ensure that the supply of
Access to ArcaEx
42 The first auction will also have a maximum
Trading Licenses is adequate to meet demand for The Merger will have no effect on the
Trading Licenses should conditions change after the right of any party to trade securities on
price for bids, which will be 120% of the average auction, and to accommodate new businesses that
ArcaEx, a facility of the Pacific
annual lease price for leases commenced during commence operations after the beginning of the
such recent six month period. This is expected to year. This will also accommodate those who under Exchange. Any registered broker-dealer
ease the concerns of existing members given the priced their bids in the auction. The premium will who wishes to trade on ArcaEx must
potentially significant changes to business models help defray out-of-cycle administration costs and
that may evolve following the implementation of encourage participation in the annual auction,
become a permit holder by obtaining an
the Commission’s new Regulation NMS and the thereby promoting the optimal price and quantity equity trading permit from PCX
Exchange’s own hybrid market initiative. discovery in the auction. Equities. Broker-dealers that do not hold
such trading permits may have access to disciplinary rules, and rules governing 11. To determine whether persons
ArcaEx through a broker-dealer that is a hearings, arbitrations and dispute seeking to register as associated persons
permit holder. resolution. of New York Stock Exchange LLC
2. To take necessary or appropriate member organizations, including
Access to the Pacific Exchange
action to assure compliance with the members, have met such qualifications
The Merger will have no effect on the rules, interpretations, policies and for registration as may be established by
right of any party to trade securities on procedures of New York Stock Exchange New York Stock Exchange LLC,
the trading facilities of the Pacific LLC, the Federal securities laws, and including whether statutorily
Exchange. Any registered broker-dealer other laws, rules and regulations that disqualified persons will be permitted
who wishes to trade on the Pacific New York Stock Exchange LLC has the to associate with particular New York
Exchange must become a permit holder authority to administer or enforce, Stock Exchange LLC member
by obtaining a trading permit from the through examination, surveillance, organizations and members, and the
Pacific Exchange. Broker-dealers that do investigation, enforcement, disciplinary conditions of such association.
not hold such trading permits may and other programs. 12. To determine whether applicants
access the Pacific Exchange through a 3. To administer programs and for listing on New York Stock Exchange
broker-dealer that is a permit holder. systems for the surveillance and LLC have met the initial listing
enforcement of rules governing trading requirements established by the New
Delegation and Protection of SRO York Stock Exchange LLC and to
Functions; Services Agreement on the NYSE Market and any facilities
thereof and in NYSE-listed securities by determine whether listed issues and
Overview New York Stock Exchange LLC member issuers meet the continuing listing
organizations and persons associated requirements and to administer rules
Following the Merger, NYSE Group
therewith. governing listing standards established
will be the parent company of two
4. To review complaints, examine and by the New York Stock Exchange LLC.
national securities exchanges registered 13. To coordinate with NYSE Market
under section 6 of the Act: (a) New York investigate New York Stock Exchange
with respect to the operations of Market
Stock Exchange LLC (as the proposed LLC member organizations and persons
Watch.
successor to the NYSE); and (b) the associated therewith to determine if 14. To determine, assess, collect and
Pacific Exchange (which will be held they have violated the rules and policies retain for regulatory purposes such
through Archipelago). of New York Stock Exchange LLC, the examination, access, registration,
Pursuant to the NYSE Delegation Federal securities laws, and other laws, qualification, continuing education,
Agreement, New York Stock Exchange rules and policies that New York Stock arbitration, mediation, dispute
LLC will delegate the performance of its Exchange LLC has the authority to resolution and other regulatory fees as
regulatory functions to NYSE Regulation administer, interpret or enforce. may be imposed from time to time and
and the performance of its market 5. To administer New York Stock to retain disciplinary fines and penalties
functions to NYSE Market.44 The Pacific Exchange LLC enforcement and as may be imposed in disciplinary
Exchange will also contract for the disciplinary programs, including actions, for regulatory purposes.
provision of certain of its regulatory investigation, adjudication of cases and 15. To establish the annual budget for
functions from NYSE Regulation the imposition of fines and other NYSE Regulation.
pursuant to the Pacific Exchange sanctions. A decision upon appeal to 16. To determine allocation of NYSE
Regulatory Services Agreement. the NYSE Regulation board of directors Regulation resources.
of disciplinary matters shall be the final 17. To establish and assess fees and
NYSE Delegation Agreement action of New York Stock Exchange other charges on New York Stock
The NYSE Delegation Agreement will LLC. Exchange LLC member organizations
provide that New York Stock Exchange 6. To administer New York Stock and persons associated therewith, and
LLC shall delegate to NYSE Regulation, Exchange LLC’s Office of the Hearing others using the services or facilities of
and NYSE Regulation shall assume, the Board. NYSE Regulation.
following responsibilities and functions 7. To conduct arbitrations, mediations 18. To manage external relations on
of a registered national securities and other dispute resolution programs. enforcement and regulatory policy
exchange: 45 8. To conduct qualification issues with Congress, the Commission,
1. To establish and administer rules examinations and continuing education state regulators, other self-regulatory
and regulations, including developing programs. organizations, business groups, and the
and adopting necessary or appropriate 9. To determine whether natural public.
amendments thereto, interpretations, person designees for Trading Licenses New York Stock Exchange LLC will
exemptions, policies and procedures and applications for member also delegate performance of the
relating to the business of New York organizations have met the requirements following market functions to NYSE
Stock Exchange LLC members, member established by New York Stock Market pursuant to the NYSE Delegation
organizations and their employees, Exchange LLC. Agreement: 46
allied members, and approved persons 10. To place restrictions on the 1. To operate NYSE Market, including
(‘‘member organizations and persons business activities of New York Stock automated systems supporting it.
associated therewith’’) including, but Exchange LLC member organizations 2. To provide and maintain a
not limited to regulatory fees, and persons associated therewith communications network infrastructure
qualifications, reporting and consistent with the public interest, the linking market participants for the
membership requirements, trading, protection of investors, the rules and efficient process and handling of
financial, operational, sales practice and policies of New York Stock Exchange quotations, orders, transaction reports
LLC, the federal securities laws, and and comparisons of transactions.

44 See proposed NYSE Rule 20(a).
45 Note
other laws, rules and policies that New
that, of necessity, NYSE Market will be 46 Note that, of necessity, NYSE Market will be
called upon to coordinate with and assist NYSE

York Stock Exchange LLC has the called upon to coordinate with and assist NYSE
Regulation in certain of its functions. See supra authority to administer, interpret or Regulation in certain of its functions. See supra
note 29. enforce. note 29.
3. To act as a Securities Information 2. To delegate authority to NYSE information to the Commission or New
Processor for quotations and transaction Regulation and, to the extent applicable, York Stock Exchange LLC.
information related to securities traded NYSE Market to take actions on behalf 2. NYSE Regulation’s books and
on NYSE Market and other trading of the New York Exchange LLC. records shall be subject at all times to
facilities operated by NYSE Market. 3. To elect the members of the boards inspection and copying by (a) the
4. To administer the participation of of directors of NYSE Market and NYSE Commission and (b) by New York Stock
New York Stock Exchange LLC in the Regulation. Exchange LLC.
National Market System and 4. To coordinate actions of NYSE 3. NYSE Regulation’s books and
Commission regulations related thereto. Regulation and NYSE Market as records shall be maintained within the
5. To collect, process, consolidate and necessary. United States.
provide to NYSE Regulation accurate 5. To resolve as appropriate any 4. The books, records, premises,
information requisite to operation of a disputes between NYSE Regulation and officers, directors and employees of
surveillance audit trail. NYSE Market. NYSE Regulation shall be deemed to be
6. To develop and adopt rules 6. To direct NYSE Regulation and
the books, records, premises, officers,
governing listing standards applicable to NYSE Market to take action necessary to
directors and employees of New York
securities listed on New York Stock effectuate the purposes and functions of
Stock Exchange LLC for purposes of and
Exchange LLC and the issuers of those New York Stock Exchange LLC,
consistent with the independence of the subject to oversight pursuant to the Act.
securities in consultation with NYSE 5. NYSE Regulation shall comply with
Regulation. regulatory functions delegated to NYSE
Regulation, exchange rules, policies and the Federal securities laws and the rules
7. To establish and assess listing fees, and regulations thereunder and shall
access fees, transaction fees, market data procedures and the Federal securities
laws. cooperate with the Commission and
fees and other fees for the products and New York Stock Exchange LLC pursuant
services offered by NYSE Market. The delegation of regulatory functions
to NYSE Regulation will be subject to to and to the extent of its regulatory
8. To develop, adopt and administer
certain provisions designed to ensure authority, and shall take reasonable
rules governing the issuance of Trading
the ability of the New York Stock steps necessary to cause its agents to
Licenses.
9. To operate Market Watch in Exchange LLC to comply with its cooperate, with the Commission and,
coordination with NYSE Regulation and obligations as SRO and to maintain the where applicable, New York Stock
to refer to NYSE Regulation any ability of the Commission to ensure Exchange LLC pursuant to their
complaints of a regulatory nature effective oversight of these obligations. regulatory authority.
involving potential rule violations by Specifically, for so long as NYSE 6. NYSE Regulation, its directors and
Trading License holders, member Regulation has any delegated regulatory officers, and those of its employees
organizations or employees. responsibility pursuant to this whose principal place of business and
10. To establish the annual budget for Agreement, NYSE Regulation agrees residence is outside of the United States
NYSE Market. that: shall be deemed to irrevocably submit to
11. To determine allocation of NYSE 1. To the fullest extent permitted by the jurisdiction of the United States
Market resources. applicable law, all confidential Federal courts and the Commission for
12. To manage external relations on information pertaining to the self- the purposes of any suit, action or
matters related to trading on and the regulatory function of New York Stock proceeding pursuant to the United
operation and functions of the NYSE Exchange LLC or any Delegated States Federal securities laws and the
Market with Congress, the Commission, Regulatory Responsibility (including but rules and regulations thereunder,
state regulators, other self-regulatory not limited to disciplinary matters, commenced or initiated by the
organizations, business groups, and the trading data, trading practices and audit Commission arising out of, or relating
public. information) contained in the books and to, the activities of New York Stock
New York Stock Exchange LLC will records of New York Stock Exchange Exchange LLC or any delegated
have ultimate responsibility for the LLC or NYSE Market that shall come regulatory responsibility (and shall be
operations, rules and regulations into the possession of NYSE Regulation deemed to agree that NYSE Regulation
developed by NYSE Regulation and shall: (a) Not be made available to any may serve as the U.S. agent for purposes
NYSE Market, as well as their person (other than as provided in the of service of process in such suit, action
enforcement. Actions taken pursuant to next sentence) other than to those or proceeding), and NYSE Regulation
delegated authority will remain subject officers, directors, employees and agents and each such director, officer or
to review, approval or rejection by the of the NYSE Regulation who have a employee, in the case of any such
board of directors of New York Stock reasonable need to know the contents director, officer or employee by virtue of
Exchange LLC in accordance with thereof; (b) be retained in confidence by his acceptance of any such position,
procedures established by that board of NYSE Regulation and the officers, shall be deemed to waive, and agree not
directors; provided that action taken directors, employees and agents of to assert by way of motion, as a defense
upon review of disciplinary decisions NYSE Regulation; and (c) not be used or otherwise in any such suit, action or
by the NYSE Regulation board of for any commercial purposes; provided, proceeding, any claims that it or they
directors shall be final action of the New that nothing in this sentence shall be are not personally subject to the
York Stock Exchange LLC. interpreted so as to limit or impede the jurisdiction of the Commission, that
In addition, New York Stock rights of the Commission or New York such suit, action or proceeding is an
Exchange LLC will expressly retain the Stock Exchange LLC to access and inconvenient forum or that the venue of
following authority and functions: examine such confidential information such suit, action or proceeding is
1. To exercise overall responsibility pursuant to the Federal securities laws improper, or that the subject matter
for ensuring that statutory and self- and the rules and regulations thereof may not be enforced in or by
regulatory obligations and functions of thereunder, or to limit or impede the such courts or agency.
New York Stock Exchange LLC are ability of any officers, directors, In addition, for so long as NYSE
fulfilled and to perform any duties and employees or agents of NYSE Regulation Regulation has any delegated regulatory
functions not delegated. to disclose such confidential responsibility pursuant to the NYSE
Delegation Agreement, New York Stock 5. NYSE Market shall comply with the pursuant to this Agreement, New York
Exchange LLC agrees that: Federal securities laws and the rules Stock Exchange LLC agrees that New
1. New York Stock Exchange LLC and regulations thereunder and shall York Stock Exchange LLC may not
shall not transfer or assign its cooperate with the Commission and transfer or assign any of its shares of
membership in NYSE Regulation to New York Stock Exchange LLC pursuant common stock of NYSE Market.
another person. to and to the extent of its regulatory The NYSE Delegation Agreement may
2. New York Stock Exchange LLC authority, and shall take reasonable not be modified except pursuant to a
shall not use any assets of, or any steps necessary to cause its agents to written agreement among New York
regulatory fees, fines or penalties cooperate, with the Commission and, Stock Exchange LLC, NYSE Regulation
collected by, NYSE Regulation for where applicable, New York Stock and NYSE Market; provided that, prior
commercial purposes or distribute such Exchange LLC pursuant to their to the effectiveness of any such
assets, fees, fines or penalties to NYSE regulatory authority. amendment, such amendment shall be
Group or any other entity other than 6. NYSE Market, its directors, officers filed with, and approved by, the
NYSE Regulation. and employees shall give due regard to Commission under section 19 of the Act
In addition, for so long as NYSE the preservation of the independence of and the rules promulgated thereunder.
Market has any delegated market the self-regulatory function of New York
responsibility pursuant to the NYSE Services Agreement
Stock Exchange LLC delegated to NYSE
Delegation Agreement, NYSE Market Regulation and to obligations to Following the Merger, the Pacific
agrees that: investors and the general public and Exchange and NYSE Regulation will be
1. To the fullest extent permitted by shall not take any actions that would parties to a services agreement. The
applicable law, all confidential interfere with the effectuation of any services agreement will ensure that the
information pertaining to the self- decisions by the board of directors or Pacific Exchange will provide adequate
regulatory function of New York Stock managers of New York Stock Exchange funding to NYSE Regulation so that
Exchange LLC or any Delegated Market LLC and NYSE Regulation relating to NYSE Regulation has the capacity to
Responsibility (including but not their regulatory functions (including carry out the regulatory services it will
limited to disciplinary matters, trading disciplinary matters) or that would provide to the Pacific Exchange.
data, trading practices and audit interfere with the ability of New York Regulatory Activities of NYSE
information) contained in the books and Stock Exchange LLC to carry out its Regulation
records of New York Stock Exchange responsibilities under the Act or NYSE
LLC or NYSE Regulation that shall come Regulation with respect to regulatory Currently, the regulatory
into the possession of NYSE Market responsibilities delegated by New York responsibilities of the NYSE are
shall: (a) Not be made available to any Stock Exchange LLC. conducted within the NYSE by the
person (other than as provided in the 7. NYSE Market, its directors and following five divisions, collectively
next sentence) other than to those officers, and those of its employees referred to as NYSE Regulation: Listed
officers, directors, employees and agents whose principal place of business and Company Compliance; Member Firm
of the NYSE Market who have a residence is outside of the United States Regulation; Market Surveillance;
reasonable need to know the contents shall be deemed to irrevocably submit to Enforcement; and Arbitration/Dispute
thereof; (b) be retained in confidence by the jurisdiction of the United States Resolution. In addition, although not
NYSE Market and the officers, directors, Federal courts and the Commission for currently within NYSE Regulation, the
employees and agents of NYSE Market; the purposes of any suit, action or Office of the Hearing Board and the
and (c) not be used for any commercial proceeding pursuant to the United Chief Hearing Officer report to the
purposes; provided, that nothing in this States federal securities laws and the NYSE board of directors through its
sentence shall be interpreted so as to rules and regulations thereunder, regulatory oversight committee rather
limit or impede the rights of the commenced or initiated by the than to the chief regulatory officer.
Commission or New York Stock Commission arising out of, or relating Regulatory Quality Review (‘‘RQR’’) is
Exchange LLC to access and examine to, the activities of New York Stock similarly positioned, and the heads of
such confidential information pursuant Exchange LLC or any delegated market Corporate Audit and RQR likewise
to the federal securities laws and the responsibility (and shall be deemed to report to the regulatory oversight
rules and regulations thereunder, or to agree that NYSE Market may serve as committee in respect of RQR functions.
limit or impede the ability of any the U.S. agent for purposes of service of After the Merger, NYSE Regulation will
officers, directors, employees or agents process in such suit, action or operate as a separate not-for-profit
of NYSE Market to disclose such proceeding), and NYSE Market and each entity, rather than as a division of NYSE
confidential information to the such director, officer or employee, in Group.
Commission or New York Stock the case of any such director, officer or NYSE Regulation will continue to
Exchange LLC. employee by virtue of his acceptance of have the same responsibilities as its
2. NYSE Market’s books and records any such position, shall be deemed to current responsibilities, and will be
shall be subject at all times to inspection waive, and agree not to assert by way of contracted to provide certain of the
and copying by (a) the Commission and motion, as a defense or otherwise in any regulatory responsibilities of the Pacific
(b) by New York Stock Exchange LLC. such suit, action or proceeding, any Exchange, and the administration of
3. NYSE Market’s books and records claims that it or they are not personally disciplinary actions, except that the
shall be maintained within the United subject to the jurisdiction of the Office of the Hearing Board does not
States. Commission, that such suit, action or currently (and after the Merger will not)
4. The books, records, premises, proceeding is an inconvenient forum or report through or to the chief regulatory
officers, directors and employees of that the venue of such suit, action or officer of NYSE Regulation. The NYSE
NYSE Market shall be deemed to be the proceeding is improper, or that the Regulation board of directors will
books, records, premises, officers, subject matter thereof may not be perform all the functions of the current
directors and employees of New York enforced in or by such courts or agency. regulatory oversight committee, with the
Stock Exchange LLC for purposes of and For so long as NYSE Market has any Office of the Hearing Board and the RQR
subject to oversight pursuant to the Act. delegated market responsibility function reporting to it. After the
Merger, the decisions of the Office of the additional structural and governance that member organizations will be those
Hearing Board may be reviewed by the changes to comply with any rules that hold Trading Licenses, as well as
non-management members of the NYSE finally adopted by the Commission those who do not hold Trading Licenses
Regulation board of directors, pursuant following its proposals relating to but have agreed to subject themselves to
to the NYSE Delegation Agreement, or governance, transparency, oversight and NYSE Regulation.
by the Pacific Exchange board of ownership of SROs. In addition, upon completion of the
directors as to disciplinary matters Merger, the governance portion of the
affecting Pacific Exchange members and Rules of New York Stock Exchange LLC
NYSE Constitution will be replaced by
permit holders, pursuant to the Pacific New York Stock Exchange LLC, as the the proposed governing documents of
Exchange Regulatory Services proposed successor to the NYSE’s NYSE Group and affiliated entities. In
Agreement. As noted above, the NYSE registration as a national securities order to maintain a coherent set of Rules
Regulation board of directors will create exchange, proposes to make a number of and comply with New York Stock
a successor committee to the current amendments to the NYSE Rules, which, Exchange LLC’s obligations as a self-
regulatory enforcement and listing after the Merger, will be the rules of regulatory organization, this Proposed
standards committee of the NYSE board New York Stock Exchange LLC.49 As, Rule Change seeks to codify any
of directors, to be called the Committee such, the first proposed amendment is relevant provisions of the non-
for Review. This successor committee to delete references to ‘‘New York Stock governance portions of the NYSE
will include both NYSE Regulation Exchange, Inc.’’ in the rules and replace Constitution and remove all references
directors, and other individuals them with ‘‘the Exchange.’’ to the NYSE Constitution. In order to
representing member constituencies. It In addition, under the current conform the NYSE Rules, the Exchange
is also expected to include individuals business model of the NYSE, in order to proposes to amend those Exchange
representing investor and listed effect transactions on the NYSE trading Rules that make reference to the NYSE
company constituencies. Any member floor, a NYSE member has to own or Constitution.
of the Committee for Review, including lease a NYSE membership, or ‘‘seat.’’ The Proposed Rule Change further
the non-director representatives on such Upon completion of the Merger, NYSE seeks to amend rules that reference the
committee, will be authorized to call up memberships and leases of those NYSE board of executives. Upon
disciplinary decisions for appellate memberships will cease to exist. completion of the Merger, it is
review, as will the Executive Floor Instead, they will be replaced with contemplated that the NYSE Market and
Governors who will constitute the most Trading Licenses. NYSE Rules 300 and NYSE Regulation boards of directors
senior level of practitioner supervision 300T are proposed to specify the terms will establish one or more advisory
on the trading floor. under which Trading Licenses will be committees (including industry
NYSE Regulation will determine, sold. representatives and representatives of
assess, collect and retain for regulatory The NYSE proposes to amend NYSE specialists and non-specialists).
purposes such examination, access, Rule 2 to redefine the terms ‘‘member’’ Designated floor officials, to be called
registration, qualification, continuing and ‘‘member organization’’ in order to Executive Floor Governors,50 shall
education, arbitration, dispute be consistent with the new form of generally have responsibilities of the
resolution and other regulatory fees as access to the NYSE Market that will current floor representatives on the
may be imposed from time to time, result after the Merger. Currently, NYSE NYSE board of executives. In order to
subject to Commission approval. NYSE Rule 2 cites the definitions found in facilitate this transition of authority,
Regulation expects, for example, to Section 3 of Article I of the NYSE those Exchange Rules that refer to the
continue to fund its examination Constitution. The Proposed Rule Change NYSE board of executives Floor
programs for assuring financial will delete any reference to the NYSE Representatives are proposed to be
responsibility and compliance with Constitution and incorporate the new
sales practice rules, testing and amended.
definitions that comport with the fact In addition, Trading Licenses will not
continuing education services (the
primary functions of Member Firm be subject to lease or sub-lease.
49 The following NYSE Rules proposed to be
Regulation), through fees assessed Therefore, various provisions and rules
amended through this filing are currently the
directly on member organizations, that subject of pending, proposed amendments that reference leases will be deleted.
are calculated as a percentage of gross previously filed with the Commission: Rules 103A The New York Stock Exchange LLC
revenues of these member organizations and 103B (SR–NYSE–2005–40, filed on June 6, (through NYSE Regulation) will
2005); Rule 123A (SR–NYSE–2004–05, filed on continue to approve member
and will fund arbitration and dispute February 9, 2004); Rule 123D (SR–2005–46, filed on
resolution services through assessment June 29, 2005); Rule 301 (SR–NYSE–2005–83, filed organizations and persons associated
of fees.47 on November 28, 2005, operative December 5, therewith, specialists and floor brokers,
NYSE Regulation will also receive 2005); Rule 312 (SR–2005–58, filed on August 15, but will dispense with the requirement
2005); Rule 325 (SR–NYSE–2005–03, filed on for posting and personal sponsors
funding through its agreements with January 5, 2005); Rule 342 (SR–NYSE–2005–22,
New York Stock Exchange LLC and the filed on March 16, 2005; and SR–NYSE–2005–60, formerly required for members and
Pacific Exchange.48 No assets of, and no filed on August 15, 2005); Rules 475 and 476 (SR– allied members contained in NYSE
regulatory fees, fines or penalties NYSE–2005–37, filed on May 23, 2005); Rule 476A Rules 301, 304, and 311. The Exchange
(SR–NYSE–2005–40, filed on June 6, 2005; SR– proposes to amend certain Exchange
collected by NYSE Regulation, will be NYSE–2005–64, filed on September 22, 2005,
distributed or otherwise used by the rest approved on November 10, 2005; and SR–NYSE– Rules to delete references to leases and
of NYSE Group. Upon completion of the 2005–86, filed on December 7, 2005); Rule 600 (SR– to amend the definition of ‘‘member
Merger, NYSE Regulation may undergo NYSE–2005–73, filed on October 20, 2005); and organization.’’
Rule 619 (SR–NYSE–2005–18, filed on February 17, Further, the Proposed Rule Change
2005; and SR–NYSE–2005–48, filed on July 13,
47 NYSE Regulation will oversee the NYSE Hybrid includes proposed new NYSE Rule 20
2005). At the request of the Exchange, the

Market,SM currently being created by the NYSE as Commission revised the footnote to correct factual that sets forth the delegation from the
the world’s first auction/electronic hybrid trading errors. Telephone conversation between James F. New York Stock Exchange LLC to NYSE
market, through its regulatory program. Duffy, Senior Vice President and Deputy General
48 At the request of the Exchange, the Commission
Market and NYSE Regulation.
Counsel, NYSE, and Kim M. Allen, Special
staff replaced the phrase ‘‘services agreement’’ with Counsel, Commission, Division, on December 14,
‘‘agreements.’’ January 3 Telephone Conversation. 2005. 50 See proposed NYSE Rule 46A.
The Exchange also proposes to amend furthers the objectives of section III. Date of Effectiveness of the
NYSE Rule 103B, the Exchange 6(b)(5) 53 of the Act because the rules Proposed Rule Change and Timing for
Allocation Policy, with respect to the summarized herein would create a Commission Action
allocation of NYSE Group stock to (i) governance and regulatory structure that Within 35 days of the date of
give NYSE Group the right to determine is designed to prevent fraudulent and publication of this notice in the Federal
the number and identity of specialist manipulative acts and practices, to Register or within such longer period (i)
firms that will be included in the group promote just and equitable principles of as the Commission may designate up to
from which it shall choose its specialist, trade, to remove impediments to, and 90 days of such date if it finds such
provided the group consists of at least perfect the mechanism of a free and longer period to be appropriate and
four specialist firms, and (ii) provide open market and, in general, to protect publishes its reasons for so finding or
NYSE Group with the same material investors and the public interest.54 (ii) as to which the self-regulatory
with respect to each specialist firm
B. Self-Regulatory Organization’s organization consents, the Commission
applicant as would have been reviewed
Statement on Burden on Competition will:
by the Allocation Committee in
(A) By order approve such proposed
allocating other securities. All other The Exchange does not believe that rule change, or
aspects of the policy will continue to the proposed rule change, as amended, (B) Institute proceedings to determine
apply. It is expected that the will impose any burden on competition whether the proposed rule change
independent directors of NYSE Group that is not necessary or appropriate in should be disapproved.
will select the specialist for NYSE furtherance of the purposes of the Act. The Exchange is targeting a closing
Group common stock.
The Exchange is proposing this C. Self-Regulatory Organization’s date of January 23, 2006 for the Merger.
change to the Allocation Policy in Statement on Comments on the In the event that it is necessary in order
recognition of the special circumstances Proposed Rule Change Received From to facilitate that timetable, the Exchange
involved in determining which of its Members, Participants or Others requests that the Commission accelerate
specialist firms will be the specialist for effectiveness of the filing pursuant to
the NYSE Group’s stock. The Exchange While the Exchange did not solicit section 19(b)(2) to a date no later than
is concerned that it would be comments on the Proposed Rule January 23, 2006.
unreasonable to subject the non- Change, it did receive one written
IV. Solicitation of Comments
specialist members of the Exchange who comment in a letter dated December 14,
serve on the Allocation Committee to 2005 from the Independent Broker Interested persons are invited to
the unique pressures involved in Action Committee (‘‘IBAC’’). IBAC submit written data, views, and
making a judgment to remove several of noted that the Exchange had informed arguments concerning the foregoing,
the specialist units from consideration. its members that the first Trading including whether the proposed rule
In effect, they would be subject to a kind License auction would take place on change, as amended, is consistent with
of conflict that the Exchange believes December 20, 2005. IBAC stated that it the Act. Comments may be submitted by
would make it difficult for them to bring is improper for the Exchange to hold an any of the following methods:
their impartial judgment to the selection auction under the Proposed Rule Electronic Comments
process. The Exchange believes instead Change before it has been published for
that the entire selection decision is best comment and approved by the • Use the Commission’s Internet
placed in the hands of independent Commission, and that if the Exchange comment form (http://www.sec.gov/
directors, who have no ties to the did so it would prejudice IBAC’s ability rules/sro.shtml); or
member community other than their to comment on Proposed Rule Change. • Send an e-mail to rule-
membership on the board. For similar comments@sec.gov. Please include File
IBAC has not commented on the
reasons NYSE Group intends to remove Number SR–NYSE–2005–77 on the
substance of the Proposed Rule Change,
its own chief executive officer from the subject line.
but rather has objected to proposed
process, in contrast to the typical listing, Exchange action prior to Commission Paper Comments
where it is normally the chief executive approval of the Proposed Rule Change. • Send paper comments in triplicate
that would be entitled to make the final The Exchange does not agree that IBAC to Nancy M. Morris, Secretary,
decision on selection of a specialist. would be in any way prejudiced in its Securities and Exchange Commission,
2. Statutory Basis ability to comment. Conducting the first Station Place, 100 F Street, NE.,
auction provisionally would simply give Washington, DC 20549–9303.
The Exchange believes that this filing, members and others as much certainty
as amended, is consistent with section as possible as early as possible to plan All submissions should refer to File
6(b) of the Act,51 in general, and furthers for post-Merger business, as well as Number SR–NYSE–2005–77. This file
the objectives of section 6(b)(1) of the permitting both the Commission and the number should be included on the
Act,52 in particular, in that it enables the Exchange the opportunity to observe subject line if e-mail is used. To help the
Exchange to be so organized as to have whether the auction procedures resulted Commission process and review your
the capacity to be able to carry out the in a fair and orderly pricing of the comments more efficiently, please use
purposes of the Act and to comply, and Trading Licenses and fair access to the only one method. The Commission will
to enforce compliance by its exchange facilities of the Exchange. post all comments on the Commission’s
members and persons associated with Internet Web site (http://www.sec.gov/
its exchange members, with the 53 15 U.S.C. 78f(b)(5).
rules/sro.shtml). Copies of the
provisions of the Act, the rules and 54 The Commission notes that the Exchange has submission, all subsequent
regulations thereunder, and the rules of amendments, all written statements
referenced section 6(b)(3) of the Act in connection

the Exchange. The Exchange also with the Exchange’s discussion of ‘‘Fair with respect to the proposed rule
Representation of Members.’’ See supra note and change that are filed with the
believes that this filing, as amended, accompanying text. The Commission further notes
that the Exchange has referenced sections 6(b)(2)
Commission, and all written
51 15 U.S.C. 78f(b). and 6(b)(4) of the Act. See supra ‘‘Trading Licenses; communications relating to the
52 15 U.S.C. 78f(b)(1). Access to NYSE Market.’’ proposed rule change between the
Commission and any person, other than (‘‘NYSE Group’’), and its related persons NYSE, Archipelago, NYSE Group, NYSE
those that may be withheld from the to wholly own and vote all of the Merger Corporation Sub, Inc., a
public in accordance with the outstanding capital stock of Archipelago Delaware corporation and a wholly
provisions of 5 U.S.C. 552, will be Holdings, Inc., a Delaware corporation owned subsidiary of the NYSE, NYSE
available for inspection and copying in and the parent company of the Merger Sub LLC, a New York limited
the Commission’s Public Reference Exchange (‘‘Archipelago’’), upon the liability company and a wholly owned
Room. Copies of such filing also will be consummation of the proposed business subsidiary of NYSE Group, and
available for inspection and copying at combination of Archipelago and New Archipelago Merger Sub, Inc., a
the principal office of the Exchange. All York Stock Exchange, Inc., a New York Delaware corporation and a wholly
comments received will be posted Type A not-for-profit corporation (the owned subsidiary of NYSE Group.5 In
without change; the Commission does ‘‘NYSE’’), subject to certain exceptions the Mergers, NYSE members will
not edit personal identifying described herein; (ii) certain new rules receive cash and/or shares of NYSE
information from submissions. You of PCX and PCX Equities, Inc. (‘‘PCXE’’) Group common stock, and Archipelago
should submit only information that prohibiting certain relationships stockholders will receive solely shares
you wish to make available publicly. All between NYSE Group on the one hand of NYSE Group common stock.6
submissions should refer to File and OTP Holders, OTP Firms, and ETP Archipelago acquired PCX Holdings,
Number SR–NYSE–2005–77 and should Holders (in each case as defined below) Inc. (‘‘PCXH’’) on September 26, 2005,
be submitted on or before February 2, on the other hand; and (iii) to amend the and is currently the ultimate parent
2006. rules of PCX and PCXE to impose company of PCXH and all of its
certain restrictions on certain rights of subsidiaries, including PCX and PCXE.
For the Commission, by the Division of
Market Regulation, pursuant to delegated OTP Holders and ETP Holders with b. Ownership Limitation in the
authority.55 respect to the nomination and election Archipelago Certificate of Incorporation.
Nancy M. Morris, of the directors of PCX and PCXE. The Archipelago Certificate of
Incorporation was approved by the
Secretary. II. Self-Regulatory Organization’s Commission on August 9, 2004 in
[FR Doc. 06–299 Filed 1–11–06; 8:45 am] Statement of the Purpose of, and connection with the initial public
BILLING CODE 8010–01–P Statutory Basis for, the Proposed Rule offering of Archipelago.7 In order to
Change
ensure that the ownership of
In its filing with the Commission, Archipelago by the public will not
SECURITIES AND EXCHANGE PCX included statements concerning the unduly interfere with, or restrict the
COMMISSION purpose of, and basis for, the proposed ability of, the Commission or PCX to
[Release No. 34–53077; File No. SR–PCX– rule change and discussed any effectively carry out its regulatory
2005–134] comments it received on the proposed oversight responsibilities under the Act
rule change. The text of these statements and generally to enable the Archipelago
Self-Regulatory Organizations; Pacific may be examined at the places specified Exchange, L.L.C. (‘‘ArcaEx’’) to operate
Exchange, Inc.; Notice of Filing of in Item IV below.4 PCX has prepared in a manner that complies with the
Proposed Rule Change and summaries, set forth in Sections A, B, federal securities laws, including
Amendment No. 1 Thereto Relating to and C below, of the most significant furthering the objectives of section
the Certificate of Incorporation and aspects of such statements. 6(b)(5) of the Act,8 the Archipelago
Bylaws of Archipelago Holdings, Inc. Certificate of Incorporation imposes
A. Self-Regulatory Organization’s
January 9, 2006. Statement of the Purpose of, and certain ownership and voting
Pursuant to section 19(b)(1) of the Statutory Basis for, the Proposed Rule limitations with respect to the stock of
Securities Exchange Act of 1934 Change Archipelago.
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 Specifically, the Archipelago
1. Purpose Certificate of Incorporation provides
notice is hereby given that on December
5, 2005, the Pacific Exchange, Inc. a. The Archipelago NYSE Mergers. that no person,9 either alone or together
(‘‘PCX’’ or ‘‘Exchange’’) filed with the The Exchange is submitting the with its related persons,10 may own
Securities and Exchange Commission proposed rule change in connection
5 For a description of the Merger Agreement and
(‘‘Commission’’) the proposed rule with the proposed mergers (‘‘Mergers’’)
the transactions contemplated thereby, see
change as described in Items I, II, and of the NYSE and Archipelago. Amendment No. 3 to the Registration Statement on
III below, which Items have been Following the Mergers, the businesses of Form S–4, Registration No. 333–126780, filed with
prepared by the Exchange. On December the NYSE and Archipelago will be held the Commission on November 3, 2005 (‘‘S–4
15, 2005, the Exchange amended its under a single, publicly traded holding Registration Statement’’), at 125–147.
6 Id.
proposal.3 The Commission is company named NYSE Group. The
7 See Securities Exchange Act Release No. 50170,
publishing this notice to solicit Mergers will occur pursuant to the
69 FR 50419 (August 16, 2004).
comments on the proposed rule change, terms of the Agreement and Plan of 8 15 U.S.C. 78f(b)(5).
as amended, from interested persons. Merger, dated as of April 20, 2005, as 9 The Archipelago Certificate of Incorporation
amended and restated as of July 20, defines ‘‘Person’’ to mean a natural person,
I. Self-Regulatory Organization’s 2005, as further amended as of October company, government, or political subdivision,
Statement of the Terms of Substance of 20, 2005, and as of November 2, 2005 agency, or instrumentality of a government.
the Proposed Rule Change Archipelago Certificate of Incorporation, Article
(as so amended and restated, the Fourth H(2).
PCX proposes: (i) To allow NYSE ‘‘Merger Agreement’’), by and among the 10 The Archipelago Certificate of Incorporation
Group, Inc., a Delaware corporation defines ‘‘Related Persons’’ to mean with respect to
4 Exhibit 5.A (Resolutions Adopted at the October any person (a) any other person(s) whose beneficial
55 17
20, 2005 Regular Meeting of the Board of Directors ownership of shares of stock of Archipelago with
CFR 200.30–3(a)(12). the power to vote on any matter would be
of Archipelago Holdings, Inc.), Exhibit 5.B
1 15 U.S.C. 78s(b)(1).
(Proposed PCX Rules), and Exhibit 5.C (Proposed aggregated with such first person’s beneficial
2 17 CFR 240.19b–4.
PCXE Rules) of the proposed rule change are also ownership of such stock or deemed to be
3 Amendment No. 1 replaced PCX’s original filing available on the Commission’s Web site (http:// beneficially owned by such first person pursuant to
in its entirety. www.sec.gov/rules/sro.shtml). Continued

Notice: Self-Regulatory Organizations Proposed Rule Changes: New York Stock Exchange, Inc.

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Notice: Self-Regulatory Organizations Proposed Rule Changes: New York Stock Exchange, Inc.

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2080 Federal Register / Vol. 71, No.

8 / Thursday, January 12, 2006 / Notices

Paper Comments SECURITIES AND EXCHANGE (‘‘NYSE Market’’), and NYSE

2 17 CFR 240.19b–4. publicly traded holding company

New York Stock Exchange LLC will be the sole

from time to time) with which such Person is

Incorporation, Article V, section 1(A). Incorporation, Article V, section 4.

not less than two’’ is keyed into the requirements

not less than two’’ is keyed into the requirements

concerning issuers and at least one person intended

LLC, the federal securities laws, and and comparisons of transactions.

called upon to coordinate with and assist NYSE

2005). At the request of the Exchange, the

referenced section 6(b)(3) of the Act in connection

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