Self-Regulatory Organizations; EDGA Exchange, Inc.; EDGX Exchange, Inc.; International Securities Exchange, LLC; New York Stock Exchange LLC; NYSE Amex LLC; NYSE Arca, Inc.; Order Granting Approval of Proposed Rule Change Relating to a Corporate Transaction in Which Deutsche Börse AG and NYSE Euronext Would Become Subsidiaries of Alpha Beta Netherlands Holding N.V.

I. Introduction

On October 12, 2011, each of EDGA Exchange, Inc (“EDGA”), EDGX Exchange, Inc. (“EDGX”), International Securities Exchange LLC (“ISE”), New York Stock Exchange LLC (“Exchange”), NYSE Amex LLC (“NYSE Amex”), and NYSE Arca, Inc. (“NYSE Arca”), filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), and Rule 19b-4 thereunder, proposed rule changes in which their respective indirect parent owners will become subsidiaries of Alpha Beta Netherlands Holding N.V (“Holdco”). The proposed rule changes were published for comment in the Federal Register on October 20, 2011. The Commission received three comment letters, one each on the NYSE, NYSE Amex, and NYSE Arca proposals, from one commenter. The Exchange filed a response to these comments on January 5, 2012.

The Commission has reviewed carefully the proposed rule change, the comment letters, and finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. In particular, the Commission finds that the proposed rule changes are consistent with Section 6(b) of the Act, which, among other things, requires a national securities exchange to be so organized and have the capacity to be able to carry out the purposes of the Act and to enforce compliance by its members and persons associated with its members with the provisions of the Act, the rules and regulations thereunder, and the rules of the exchange, and assure the fair representation of its members in the selection of its directors and administration of its affairs, and provide that one or more directors shall be representative of issuers and investors and not be associated with a member of the exchange, broker, or dealer. Section 6(b) of the Act also requires that the rules of the exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest.

II. Discussion

The Exchange, NYSE Amex and NYSE Arca (each a “NYSE Exchange”) and ISE, EDGA and EDGX (each a “DB Exchange” or a “DB U.S. Regulated Subsidiary”) have submitted their proposed rule changes in connection with the proposed business combination (the “Combination”) of NYSE Euronext, a Delaware corporation (“NYSE Euronext”), and Deutsche Börse AG, an Aktiengesellschaft organized under the laws of the Federal Republic of Germany (“Deutsche Börse”).

NYSE Euronext owns 100% of the equity interest of NYSE Group, Inc., a Delaware corporation (“NYSE Group”), which in turn directly or indirectly owns (1) 100% of the equity interest of the NYSE Exchanges and (2) 100% of the equity interest of NYSE Market, Inc. (“NYSE Market”), NYSE Regulation, Inc. (“NYSE Regulation”), NYSE Arca L.L.C. (“NYSE Arca LLC”) and NYSE Arca Equities, Inc. (“NYSE Arca Equities”) (the NYSE Exchanges, together with NYSE Market, NYSE Regulation, NYSE Arca LLC and NYSE Arca Equities, the “NYSE U.S. Regulated Subsidiaries” and each, a “NYSE U.S. Regulated Subsidiary”).

Deutsche Börse indirectly owns 50% of the equity interest of International Securities Exchange Holdings, Inc. (“ISE Holdings”), which in turn holds 100% of the equity interest of ISE. ISE Holdings also holds 31.54% of the equity interest of Direct Edge Holdings LLC (“Direct Edge Holdings”), which in turn indirectly holds 100% of the equity interest of EDGA and EDGX.

As a result of the Combination, the businesses of NYSE Euronext and Deutsche Börse, including the NYSE U.S. Regulated Subsidiaries and the DB U.S. Regulated Subsidiaries (together, the “U.S. Regulated Subsidiaries” and each, a “U.S. Regulated Subsidiary”), would be held under a single, publicly traded holding company organized under the laws of the Netherlands (“Holdco”). The proposed rule changes are necessary to effectuate the consummation of the Combination and will not be operative until the date of the consummation of the Combination (the “Closing Date”). The proposed rule changes and exhibits thereto contain modifications to the underlying corporate governance documents of the U.S. Regulated Subsidiaries and their respective direct and indirect owners that reflect the current structure of the Combination. The Commission notes that any changes to the structure of the Combination that are made subsequent to the date of this approval order but prior to the Closing Date may be considered additional proposed rule changes required to be filed with and approved by the Commission pursuant to Section 19 of the Act. In addition, the Commission notes that, if the Combination is not consummated, the proposed rule changes will not become effective.

A. Corporate Structure

Following the Combination, Holdco would be a for-profit, publicly traded corporation formed under the laws of the Netherlands and would act as the holding company for the businesses of NYSE Euronext and Deutsche Börse, with NYSE Euronext and Deutsche Börse each being a separate subsidiary of Holdco. Holdco would hold all of the equity interests in NYSE Euronext, which would hold (1) 100% of the equity interest of NYSE Group (which, in turn, would continue to directly or indirectly hold 100% of the equity interests of the NYSE U.S. Regulated Subsidiaries) and (2) 100% of the equity interest of Euronext N.V. (which, in turn, directly or indirectly holds 100% of the equity interests of trading markets in Belgium, France, the Netherlands, Portugal, and the United Kingdom). Holdco would also hold a majority of the equity interests in Deutsche Börse, which would indirectly hold 50% of the equity interest of ISE Holdings (which, in turn, would continue to hold (1) 100% of the equity interest of ISE and (2) 31.54% of the equity interest of Direct Edge Holdings). Direct Edge Holdings would continue to indirectly hold 100% of the equity interest of EDGA and EDGX. Holdco intends to list its ordinary shares on the New York Stock Exchange, the regulated market of the Frankfurt Stock Exchange, and the regulated market segment of Euronext Paris. Holdco and its subsidiaries will have dual headquarters in Frankfurt and New York.

In Europe, NYSE Euronext, Deutsche Börse and their respective subsidiaries own several European exchanges, including trading operations on regulated and non-regulated markets for cash products in Germany, France, Belgium, the Netherlands, and Portugal and derivatives in the United Kingdom and in the five above-mentioned locations. As a result, the activities of the NYSE Euronext and Deutsche Börse European markets are or may be subject to the jurisdiction and authority of a number of European regulators, including the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht), the Hessian Exchange Supervisory Authority, the Dutch Minister of Finance, the French Minister of the Economy, the French Financial Market Authority (Autorité des Marchés Financiers), the French Prudential Supervisory Authority (Autorité de Contrôle Prudentiel), the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten), the Belgian Financial Services and Markets Authority (Autorité des Services et Marchés Financiers), the Portuguese Securities Market Commission (Comissão do Mercado de Valores Mobiliários—CMVM), and the U.K. Financial Services Authority (FSA).

The NYSE Exchanges and DB Exchanges represent that the Combination will have no effect on the ability of any party to trade securities on the NYSE Exchanges or DB Exchanges. Other than as described herein, the NYSE Exchanges and the DB Exchanges also represent that Holdco will not make any changes to the regulated activities of the U.S. Regulated Subsidiaries in connection with the Combination. If Holdco determines to make any such changes to the regulated activities of any U.S. Regulated Subsidiary, it will seek the approval of the Commission.

A core aspect of the structure of the Combination is local regulation of the marketplace, members, and issuers. Therefore, securities exchanges, members, and issuers of the U.S. Regulated Subsidiaries will continue to be regulated in the same manner as they are currently regulated. The Commission notes that this conclusion (i.e., that securities exchanges, members, and issuers of the U.S. Regulated Subsidiaries will continue to be regulated in the same manner as they are currently regulated) is based on the structure of the Combination as described in this proposal.

1. Holdco

Following the Combination, Holdco will be a for-profit, publicly traded corporation that will act as a holding company for the businesses of NYSE Euronext and Deutsche Börse. Holdco will hold (i) all of the equity interests in NYSE Euronext, which in turn, directly or indirectly holds 100 percent of the equity interests of the NYSE U.S. Regulated Subsidiaries, and (ii) a majority of the equity interests in Deutsche Börse, which indirectly holds interests in ISE, EDGA, and EDGX. Section 19(b) of the Act and Rule 19b-4 thereunder require a self-regulatory organization (“SRO”) to file proposed rule changes with the Commission. Although Holdco is not an SRO, certain provisions of its proposed Deed of Amendment of Articles of Association (the “Holdco Articles”), along with other corporate documents, are rules of an exchange if they are stated policies, practices, or interpretations, as defined in Rule 19b-4 under the Act, of the exchange, and must be filed with the Commission pursuant to Section 19(b)(4) of the Act and Rule 19b-4 thereunder. Accordingly, the NYSE Exchanges and DB Exchanges have filed the proposed Holdco Articles, along with other corporate documents, with the Commission.

Voting and Ownership Limitations

The proposed Holdco Articles include restrictions on the ability to vote and own shares of stock of Holdco. Under the proposed Holdco Articles, no person (either alone or together with its related persons) will be entitled to vote or cause the voting of shares of stock of Holdco beneficially owned by such person or its related persons, in person or by proxy or through any voting agreement or other arrangement, to the extent that such shares represent in the aggregate more than 20% of the then outstanding votes entitled to be cast on such matter. No person (either alone or together with its related persons) may acquire the ability to vote more than 20% of the then outstanding votes entitled to be cast on any such matter by virtue of agreements or arrangements entered into with other persons not to vote shares of Holdco's outstanding capital stock. Holdco shall disregard any such votes purported to be cast in excess of these limitations.

In addition, no person (either alone or together with its related persons) may at any time beneficially own shares of stock of Holdco representing in the aggregate more than 40% of the then outstanding votes entitled to be cast on any matter, except that a 20% restriction would apply to any person, either alone or with its related person, that is a member of an NYSE Exchange or DB Exchange. In the event that a person, either alone or together with its related persons, beneficially owns shares of stock of Holdco in excess of the 40% threshold, such person and its related persons will be obligated to offer for sale and to transfer that number of shares necessary so that such person shall beneficially own a number of shares entitling the holder thereof to cast votes on any matter which is in the aggregate no more than 40% of the then outstanding votes entitled to be cast on any matter. If such person(s) fails to comply within two weeks, Holdco will be irrevocably authorized to act on behalf of such person(s) in order to ensure compliance with the Holdco transfer obligation.

Furthermore, the Holdco Articles would provide that in the event any person, either alone or together with its related persons, exceeds the Holdco ownership restriction (any such person(s), a “Non-Compliant Owner”), the Non-Compliant Owner would cease to have certain rights to the extent that its shareholding exceeds the Holdco ownership restriction. Specifically, the Non-Compliant Owner's rights to vote, to attend general meetings of Holdco shareholders and to receive dividends or other distributions attached to such shares in excess of the Holdco ownership restriction would be suspended for so long as the Holdco ownership restriction is exceeded.

Further, the Holdco Articles would permit the Holdco board of directors to require any person and its related persons that the board reasonably believes to be subject to the voting or ownership limitations summarized above, or owning in the aggregate 5% or more of the then issued and outstanding shares of Holdco entitled to vote on any matter, which ownership has not been reported to Holdco, to provide Holdco information regarding such ownership upon the request of the Holdco board of directors.

The Holdco board of directors may waive the provisions regarding voting and ownership limits, subject to a determination by the Holdco board of directors that the exercise of such voting rights (or the entering into of a voting agreement) or ownership, as applicable:

• Will not impair the ability of any of the U.S. Regulated Subsidiaries, Holdco, NYSE Group, or ISE Holdings to discharge their respective responsibilities under the Act and the rules and regulations thereunder;
• Will not impair the ability of any of the European Market Subsidiaries, Holdco, or Euronext to discharge their respective responsibilities under the European Exchange Regulations;

• Is otherwise in the best interest of Holdco, its shareholders, the U.S. Regulated Subsidiaries, and the European Market Subsidiaries; and
• Will not impair the Commission's ability to enforce the Act or the European Regulators' ability to enforce the European Exchange Regulations.

Such resolution expressly permitting such voting or ownership must be filed with and approved by the Commission under Section 19 of the Act and filed with and approved by each European Regulator having appropriate jurisdiction and authority.

In addition, for so long as Holdco directly or indirectly controls the Exchange, NYSE Market, NYSE Arca, or NYSE Arca Equities or any facility of NYSE Arca, NYSE Amex, ISE, EDGA, or EDGX, the Holdco board of directors cannot waive the voting and ownership limits above the 20% threshold for any person if such person or its related persons is a member of NYSE, an ETP Holder of NYSE Arca Equities, or an OTP Holder or an OTP Firm of NYSE Arca, a member of Amex, a member of ISE, a member of EDGA, or a member of EDGX. Further, the Holdco board of directors also cannot waive the voting and ownership limits above the 20% threshold if such person or its related persons is subject to any statutory disqualification (as defined in Section 3(a)(39) of the Act) (a “U.S. Disqualified Person”) or has been determined by a European Regulator to be in violation of laws or regulations adopted in accordance with the European Directive on Markets in Financial Instruments applicable to any European Market Subsidiary requiring such person to act fairly, honestly and professionally (a “European Disqualified Person”).

Members that trade on an exchange traditionally have had ownership interests in such exchange. As the Commission has noted in the past, however, a member's interest in an exchange could become so large as to cast doubt on whether the exchange can fairly and objectively exercise its self-regulatory responsibilities with respect to that member. A member that is a controlling shareholder of an exchange might be tempted to exercise that controlling influence by directing the exchange to refrain from, or the exchange may hesitate to, diligently monitor and surveil the member's conduct or diligently enforce its rules and the federal securities laws with respect to conduct by the member that violates such provisions.

The Commission finds the ownership and voting restrictions in the proposed Holdco Articles are consistent with the Act. These requirements should minimize the potential that a person could improperly interfere with or restrict the ability of the Commission, the Exchange, or its subsidiaries to effectively carry out their regulatory oversight responsibilities under the Act.

2. NYSE Euronext and NYSE Group

Following the Combination, NYSE Euronext will be a wholly-owned subsidiary of Holdco. Furthermore, NYSE Euronext will no longer be a publicly-held company and the NYSE Exchanges have proposed certain changes to reflect that NYSE Euronext will become a wholly owned subsidiary and will no longer be publicly held. NYSE Euronext will act as a holding company for the businesses of the NYSE Group and Euronext. NYSE Euronext will own all of the equity interests in NYSE Group and its subsidiaries, including the Exchange, NYSE Arca, and NYSE Amex and all of the equity interests in Euronext and its respective subsidiaries. Section 19(b) of the Act and Rule 19b-4 thereunder require a SRO to file proposed rule changes with the Commission. Although NYSE Euronext and NYSE Group are not SROs, certain provisions of the current NYSE Euronext's Amended and Restated Certificate of Incorporation (“NYSE Euronext Certificate of Incorporation”), NYSE Euronext's Amended and Restated Bylaws (“NYSE Euronext Bylaws”), NYSE Group's Amended and Restated Certificate of Incorporation (“NYSE Group Certificate of Incorporation”), and NYSE Group's Amended and Restated Bylaws (“NYSE Bylaws”) are rules of an exchange if they are stated policies, practices, or interpretations, as defined in Rule 19b-4 under the Act, of the exchange, and must be filed with the Commission pursuant to Section 19(b)(4) of the Act and Rule 19b-4 thereunder. Accordingly, the NYSE Exchanges have filed the proposed NYSE Euronext Certificate of Incorporation, the proposed NYSE Euronext Bylaws, the proposed NYSE Group Certificate of Incorporation, and the proposed NYSE Group Bylaws with the Commission.

Voting and Ownership Limitations; Changes in Control

The NYSE Exchanges have proposed changing the voting and ownership limitations of NYSE Euronext to include a statement that such limitations would not be applicable as long as Holdco owned all of the issued and outstanding shares of NYSE Euronext and only for so long as NYSE Euronext directly or indirectly controls any NYSE U.S. Regulated Subsidiary or any European Market Subsidiary. Instead, while NYSE Euronext is a wholly-owned subsidiary of Holdco, there shall be no transfer of the shares of NYSE Euronext without the approval of the Commission. If NYSE Euronext ceases to be wholly owned by Holdco, but directly or indirectly controls any NYSE U.S. Regulated Subsidiary or any European Market Subsidiary, the voting and ownership limitations would apply.

In addition, the NYSE Exchanges propose amending the voting and ownership restrictions in the proposed NYSE Euronext Certificate. The NYSE Exchanges propose amending the NYSE Euronext Certificate to: (i) Change the 10% percent threshold for the voting restriction to a 20% threshold, (ii) change the 20% percent threshold for the ownership restriction to a 40% restriction, except that the 20% threshold would continue to apply to any person who is (or with respect to whom a related person is) a member of the Exchange or NYSE Amex, an ETP Holder, or an OTP Holder or OTP Firm; and (iii) incorporate NYSE Amex into certain provisions. The NYSE Euronext board of directors would be unable to waive the voting and ownership limits above the 20% threshold if such person or its related persons is a member of the Exchange or NYSE Amex, an ETP Holder, an OTP Holder or an OTP Firm. Similar changes have been proposed for NYSE Group. Moreover, the NYSE Exchanges have proposed changing the voting and ownership limitations of NYSE Group so that such limitations would apply only for so long as NYSE Group directly or indirectly controls any NYSE U.S. Regulated Subsidiary or any European Market Subsidiary.

The Commission finds that the changes to the ownership and voting restrictions in the proposed NYSE Euronext Certificate and the proposed NYSE Group Certificate, as well as the change in control provisions in the NYSE Euronext Certificate are consistent with the Act. The Commission notes that the proposed ownership and voting percentage restrictions are consistent with thresholds previously approved by the Commission. Moreover, the transfer, ownership and voting restrictions should minimize the potential that a person could improperly interfere with or restrict the ability of the Commission, the NYSE U.S. Regulated Subsidiaries to effectively carry out their regulatory oversight responsibilities under the Act.

In addition, to allow Holdco to wholly own and vote all of NYSE Euronext stock upon consummation of the Combination, Holdco delivered a written notice to the board of directors of NYSE Euronext pursuant to the procedures set forth in the current NYSE Euronext Certificate of Incorporation requesting approval of its ownership and voting of NYSE Euronext stock in excess of the NYSE Euronext voting restriction and NYSE Euronext ownership restriction. The board of directors of NYSE Euronext must resolve to expressly permit ownership or voting in excess of the NYSE Euronext voting restriction limitation and NYSE Euronext ownership restriction. Such resolution of the NYSE Euronext board of directors must be filed with and approved by the Commission under Section 19(b) of the Act, and become effective thereunder. Further, the board of directors may not approve any voting or ownership in excess of the limitations unless it determines that such ownership or exercise of voting rights (i) will not impair the ability of the NYSE U.S. Regulated Subsidiaries, NYSE Euronext, and NYSE Group to discharge their respective responsibilities under the Act and the rules and regulations thereunder, (ii) will not impair the ability of any European Market Subsidiary, NYSE Euronext, or Euronext to discharge their respective responsibilities under the European Exchange Regulations, (iii) is otherwise in the best interests of NYSE Euronext, its shareholders, and the NYSE U.S. Regulated Subsidiaries, and (iv) will not impair the Commission's ability to enforce the Act or the European Regulators' ability to enforce the European Exchange Regulations. For so long as NYSE Euronext directly or indirectly controls the Exchange or NYSE Market, NYSE Arca, NYSE Arca Equities, any facility of NYSE Arca, or NYSE Amex, the NYSE Group board of directors cannot waive the voting and ownership limits above the 20% threshold if such person or its related persons is a member Exchange, an ETP Holder, an OTP Holder or an OTP Firm, or member of NYSE Amex. Further, the NYSE Euronext board of directors cannot waive the voting and ownership limits above the 20% threshold if such person or its related persons is a U.S. Disqualified Person or a European Disqualified Person.

The notice from Holdco included representations that neither Holdco, nor any of its related persons, is: (1) A NYSE Member; (2) an Amex Member; (3) an ETP Holder, an OTP Holder or an OTP Firm; or (4) a U.S Disqualified Person or a European Disqualified Person. The NYSE Euronext board of directors adopted a resolution approving Holdco's request that it be permitted, either alone or with its related persons, to exceed the NYSE Euronext voting restriction and the NYSE Euronext ownership restriction.

The Commission believes it is consistent with the Act to allow Holdco to wholly own and vote all of the outstanding common stock of NYSE Euronext. The Commission notes that Holdco represents that neither Holdco nor any of its related persons is subject to any statutory disqualification (as defined in Section 3(a)(39) of the Act), or is a member of the Exchange or NYSE Amex, an ETP Holder, an OTP Holder or an OTP Firm, or a European Disqualified Person. Moreover, Holdco has comparable voting and ownership limitations to ISE Holdings. Holdco has also included in its corporate documents certain provisions designed to maintain the independence of the NYSE U.S. Regulated Subsidiaries' self-regulatory functions from Holdco, NYSE Euronext and NYSE Group. Accordingly, the Commission believes that the acquisition of ownership and exercise of voting rights of NYSE Euronext common stock by Holdco will not impair the ability of the Commission or any of the NYSE U.S. Regulated Subsidiaries to discharge their respective responsibilities under the Act.

3. Proposed Amendments to Board Composition Requirements for the Exchange, NYSE Amex, NYSE Market and NYSE Regulation

The Third Amended and Restated Operating Agreement, dated as of April 1, 2009, of the Exchange (the “Exchange Operating Agreement”), currently provides that (1) a majority of the members of the Exchange's board of directors must be U.S. persons and members of the board of directors of NYSE Euronext who satisfy the independence requirements of the NYSE Euronext board, and (2) at least 20% of the Exchange's board members must be persons who are not board members of NYSE Euronext but who qualify as independent under the independence policy of the NYSE Euronext board of directors (the “Non-Affiliated Exchange Directors”). The nominating and governance committee of the NYSE Euronext board of directors is required to designate as Non-Affiliated Exchange Directors the candidates recommended jointly by the Director Candidate Recommendation Committees of each of NYSE Market and NYSE Regulation or, in the event there are Petition Candidates (as such term is defined in the Exchange Operating Agreement), the candidates that emerge from a specified process will be designated as the Non-Affiliated Exchange Directors.

Under the Proposed Rule Change, these provisions would be amended (i) to provide that the independent members of the Exchange's board of directors, rather than the nominating and governance committee of the NYSE Euronext board of directors, will designate the Non-Affiliated Exchange Directors and make the other related determinations that were previously to be made by the nominating and governance committee of the NYSE Euronext board of directors; (ii) to provide that instead of using the independence policy of the NYSE Euronext board of directors to assess the independence of the Exchange's board members, the Exchange will have its own independence policy (the “SRO Director Independence Policy”); (iii) in light of the fact that the board of directors of NYSE Euronext will be decreased in size once it becomes a wholly-owned subsidiary of Holdco, the requirement that a majority of the members of the Exchange's board of directors must be members of the board of directors of NYSE Euronext would be eliminated; and (iv) to provide that at least 20% of the Exchange's directors must be persons who are not members of the board of directors of Holdco (rather than referring to the board of directors of NYSE Euronext). Substantially the same revisions would be made to the analogous provisions of the Amended and Restated Operating Agreement of NYSE Amex, the Amended and Restated Bylaws of NYSE Market and the Third Amended and Restated Bylaws of NYSE Regulation.

The SRO Director Independence Policy to be adopted by each of the Exchange, NYSE Market, NYSE Regulation and NYSE Amex under the Proposed Rule Change would be substantially similar to the current Independence Policy of the NYSE Euronext board of directors, except that certain conforming changes would be made, including the deletion of provisions that currently apply only to NYSE Euronext directors and expressly do not apply to directors of these NYSE U.S. Regulated Subsidiaries. In particular, (i) references to NYSE Euronext would refer instead to the relevant NYSE U.S. Regulated Subsidiary or Holdco, as applicable; (ii) the requirement that at least three-fourths of the directors must be independent would be deleted, since the organizational documents of these NYSE U.S. Regulated Subsidiaries contain the independence and other qualification requirements for directors; (iii) the requirement in the Independence Policy of NYSE Euronext that the board consider the special responsibilities of a director in light of NYSE Euronext's ownership of NYSE U.S. Regulated Subsidiaries and European regulated entities would be deleted, because unlike NYSE Euronext, these NYSE U.S. Regulated Subsidiaries are not holding companies; (iv) the requirement for directors to inform the Chairman of the Nominating and Governance Committee of certain relationships and interests would be deleted, since the boards of these NYSE U.S. Regulated Subsidiaries do not have a Nominating and Governance Committee, except that in the SRO Director Independence Policy to be adopted by NYSE Regulation, this provision would reference the Nominating and Governance Committee of NYSE Regulation, Inc.; (v) references to NYSE Alternext, Inc. would refer instead to NYSE Amex, because of this entity's name change; (vi) because the current Independence Policy of NYSE Euronext provides that a director of an affiliate of a Member Organization cannot qualify as an independent director of these NYSE U.S Regulated Subsidiaries, the conflicting language stating that a director of an affiliate of a Member Organization shall not per se fail to be independent would be deleted; and (vii) because language in the current Independence Policy of NYSE Euronext provides that an executive officer of an issuer whose securities are listed on a NYSE Exchange cannot qualify as an independent director of these NYSE U.S Regulated Subsidiaries, the conflicting language providing an exception applicable only to NYSE Euronext directors would be deleted. In addition, the “additional independence requirements” at the end of the current Independence Policy of NYSE Euronext, which provides that executive officers of foreign private issuers, executive officers of NYSE Euronext and directors of affiliates of member organizations must together comprise no more than a minority of the total board, would be eliminated. This provision is designed to ensure that although persons who are directors of an affiliate of a Member Organization or who are executive officers of a “foreign private issuer” listed on a NYSE Exchange may in some circumstances qualify as independent for purposes of NYSE Euronext board membership, such persons may not, together with executive officers of NYSE Euronext, constitute more than a minority of the total NYSE Euronext directors. Under the proposed SRO Director Independence Policy, such persons could not be deemed to be independent directors of the relevant NYSE U.S. Regulated Subsidiary and, accordingly, this limitation on the number of such persons who may serve on the board is unnecessary.

The Commission finds that these proposals, taken together, are consistent with the Act, particularly Section 6(b)(1), which requires an exchange to be so organized and have the capacity to carry out the purposes of the Act. Further, the Commission notes that the NYSE Exchanges are not proposing to change any of the provisions relating to (i) the fair representation of the members of each of the NYSE Exchanges in the selection of its directors and administration of its affairs or (ii) one or more of the directors of each of the NYSE Exchanges being representative of issuers and investors and not being associated with a member of the exchange or with a broker dealer, each as required under Section 6(b)(3) of the Act.

4. Deutsche Börse/ISE Holdings

Following the Combination, ISE Holdings's indirect parent, Deutsche Börse, will become a subsidiary of Holdco. Deutsche Börse will own all of the equity interests in ISE and approximately 31.54% interest in EDGA and EDGX. Section 19(b) of the Act and Rule 19b-4 thereunder require a self-regulatory organization (“SRO”) to file proposed rule changes with the Commission. Although ISE Holdings is not an SRO, certain provisions of its Amended and Restated Certificate of Incorporation (the “ISE Holdings Certificate”) and Amended and Restated Bylaws of ISE Holdings (“the ISE Holdings Bylaws”) are rules of an exchange if they are stated policies, practices, or interpretations, as defined in Rule 19b-4 under the Act, of the exchange, and must be filed with the Commission pursuant to Section 19(b)(4) of the Act and Rule 19b-4 thereunder. Accordingly, the DB U.S. Regulated Subsidiaries have filed a proposed change to the ISE Holdings Bylaws with the Commission.

Voting and Ownership Limitations; Changes in Control of the Exchange

The proposed Second Amended and Restated Bylaws of ISE Holdings (“Proposed ISE Bylaws”) include restrictions on the ability to vote and own shares of stock of ISE Holdings. Under the ISE Holdings Certificate, no person (either alone or together with its related persons) will be entitled to vote or cause the voting of shares of stock of ISE Holdings beneficially owned by such person or its related persons, in person or by proxy or through any voting agreement or other arrangement, to the extent that such shares represent in the aggregate more than 20% of the then outstanding votes entitled to be cast on such matter. No person (either alone or together with its related persons) may acquire the ability to vote more than 20% of the then outstanding votes entitled to be cast on any such matter by virtue of agreements or arrangements entered into with other persons not to vote shares of ISE Holdings's outstanding capital stock.

In addition, no person (either alone or together with its related persons) may at any time beneficially own shares of stock of ISE Holdings representing in the aggregate more than 40% of the then outstanding votes entitled to be cast on any matter. If a person were to obtain a voting or ownership interest in excess of the voting or ownership restrictions without obtaining the approval of the Commission, the shares of ISE Holdings would automatically transfer to a statutory trust established under and pursuant to the provisions of the Delaware Statutory Trust Act, 12 Del. C. §§ 3801 et seq. (“ISE Trust”). The ISE Holdings Certificate and the ISE Holdings Bylaws provide that the board of directors of ISE Holdings may waive these voting and ownership restrictions in an amendment to the ISE Holdings Bylaws if it makes certain findings and the amendment to the ISE Holdings Bylaws has been filed with, and approved by, the Commission under Section 19(b) of the Act.

The ISE Holdings board of directors may waive these voting and ownership restrictions in an amendment to the ISE Holdings Bylaws if, in connection with the adoption of such amendment, the board of directors in its sole discretion adopts a resolution stating that it is the determination of the board of directors that such amendment:

• Will not impair the ability of ISE Holdings and any of the DB U.S. Regulated Subsidiaries, or facility thereof, to carry out their respective responsibilities under the Act and the rules and regulations thereunder;
• Is otherwise in the best interest of ISE Holdings, its stockholders and the DB U.S. Regulated Subsidiaries;
• Will not impair the Commission's ability to enforce the Act;
• For so long as ISE Holdings directly or indirectly controls the Exchange, neither such person nor any of its related persons is an ISE Member, EDGA Member or EDGX Member; and
• Neither such person nor any of its related persons is subject to any “statutory disqualification” (as such term is defined in Section 3(a)(39) of the Act).

Such amendment shall not be effective unless it has been filed with and approved by the Commission under Section 19(b) of the Act.

In addition, to allow Holdco to indirectly own 50% of the outstanding common stock of ISE Holdings upon consummation of the Combination, Holdco has delivered written notice to the board of directors of ISE Holdings pursuant to the procedures set forth in the ISE Holdings Certificate requesting approval of its voting and ownership of ISE Holdings shares in excess of the ISE Holdings Voting Restriction and the ISE Holdings Ownership Restriction. Among other things, in this notice, Holdco represented to the board of directors of ISE Holdings that neither it, nor any of its related persons, is (1) an ISE Member; (2) EDGA Member; (3) EDGX Member; or (4) subject to any “statutory disqualification.”

The Commission believes it is consistent with the Act to allow Holdco to indirectly own 50% of the outstanding common stock of ISE Holdings. The Commission notes that Holdco represents that neither Holdco nor any of its related persons, is (1) an ISE Member; (2) EDGA Member; (3) EDGX Member; or (4) subject to any “statutory disqualification.”

Holdco has also included in its corporate documents certain provisions designed to maintain the independence of the DB U.S. Regulated Subsidiaries' self-regulatory functions from Holdco and Deutsche Börse. Accordingly, the Commission believes that the acquisition of ownership and exercise of voting rights of ISE Holdings common stock by Holdco will not impair the ability of the Commission or any of the DB U.S. Regulated Subsidiaries to discharge their respective responsibilities under the Act.

B. Relationship of Holdco, NYSE Euronext, Deutsche Börse, SWX, ISE Holdings, NYSE Group, and the U.S. Regulated Subsidiaries; Jurisdiction Over Holdco

Although Holdco itself will not carry out regulatory functions, its activities with respect to the operation of any of the U.S. Regulated Subsidiaries must be consistent with, and not interfere with, the U.S. Regulated Subsidiaries' self-regulatory obligations. The proposed Holdco corporate documents include certain provisions that are designed to maintain the independence of the U.S. Regulated Subsidiaries' self-regulatory functions from Holdco, NYSE Euronext, ISE Holdings and NYSE Group, enable the U.S. Regulated Subsidiaries to operate in a manner that complies with the U.S. federal securities laws, including the objectives and requirements of Sections 6(b) and 19(g) of the Act, and facilitate the ability of the U.S. Regulated Subsidiaries and the Commission to fulfill their regulatory and oversight obligations under the Act.

For example, under the proposed Holdco Articles, Holdco shall comply with the U.S. federal securities laws, the European Exchange Regulations, and the respective rules and regulations thereunder; shall cooperate with the Commission, the European Regulators, and the U.S. Regulated Subsidiaries. Also, each director, officer, and employee of Holdco, to the extent in discharging his or her responsibilities shall comply with the U.S. federal securities laws and the rules and regulations thereunder, cooperate with the Commission, and cooperate with the U.S. Regulated Subsidiaries. In addition, in discharging his or her responsibilities as a member of the board, each director of Holdco must, to the fullest extent permitted by applicable law, take into consideration the effect that Holdco's actions would have on the ability of the U.S. Regulated Subsidiaries to carry out their responsibilities under the Act, on the ability of the European Market Subsidiaries to carry out their responsibilities under the European Exchange Regulations as operators of European Regulated Markets, and on the ability of the U.S. Regulated Subsidiaries, NYSE Group, ISE Holdings and Holdco (i) to engage in conduct that fosters and does not interfere with the ability of the U.S. Regulated Subsidiaries, NYSE Group, ISE Holdings and Holdco to prevent fraudulent and manipulative acts and practices in the securities markets; (ii) to promote just and equitable principles of trade in the securities markets; (iii) to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities; (iv) to remove impediments to and perfect the mechanisms of a free and open market in securities and a U.S. national securities market system; and (v) in general, to protect investors and the public interest. For so long as Holdco directly or indirectly controls any U.S. Regulated Subsidiary, Holdco, its directors, officers and employees shall give due regard to the preservation of the independence of the self-regulatory function of the U.S. Regulated Subsidiaries (to the extent of each U.S. Regulated Subsidiary's self-regulatory function) and the European Market Subsidiaries (to the extent of each European Market Subsidiaries' self-regulatory function). Further, Holdco agrees to keep confidential all confidential information pertaining to: (1) The self-regulatory function of the any U.S. Regulated Subsidiary (including but not limited to disciplinary matters, trading data, trading practices and audit information) contained in the books and records of any of the U.S. Regulated Subsidiaries; and (2) the self-regulatory function of the European Market Subsidiaries under the European Exchange Regulations as operator of a European Regulated Market (including but not limited to disciplinary matters, trading data, trading practices and audit information) contained in the books and records of the European Market Subsidiaries, and not use such information for any commercial purposes.

In addition, Holdco's books and records shall be subject at all times to inspection and copying by the Commission, the European Regulators, any U.S. Regulated Subsidiary (provided that such books and records are related to the activities of such U.S. Regulated Subsidiary or any other U.S. Regulated Subsidiary over which such U.S. Regulated Subsidiary has regulatory authority or oversight) and any European Market Subsidiary (provided that such books and records are related to the operation or administration of such European Market Subsidiary or any European Regulated Market over which such European Market Subsidiary has regulatory authority or oversight). Holdco's books and records related to U.S. Regulated Subsidiaries shall be maintained within the United States, and Holdco's books and records related to European Market Subsidiaries shall be maintained in the home jurisdiction of one or more of the European Market Subsidiaries. The Holdco Articles also provide that if and to the extent that any of Holdco's books and records may relate to both European Market Subsidiaries and U.S. Regulated Subsidiaries (each such book and record an “Overlapping Record”), Holdco shall be entitled to maintain such books and records either in the home jurisdiction of one or more European Market Subsidiaries or in the United States.

In addition, for so long as Holdco directly or indirectly controls any U.S. Regulated Subsidiary, the books, records, premises, officers, directors, and employees of Holdco shall be deemed to be the books, records, premises, officers, directors, and employees of the U.S. Regulated Subsidiaries for purposes of and subject to oversight pursuant to the Act, and for so long as Holdco directly or indirectly controls any European Market Subsidiary, the books, records, premises, officers, directors, and employees of Holdco shall be deemed to be the books, records, premises, officers, directors, and employees of such European Market Subsidiaries for purposes of and subject to oversight pursuant to the European Exchange Regulations.

Holdco and its directors and, to the extent they are involved in the activities of the U.S. Regulated Subsidiaries, Holdco's officers and employees whose principal place of business and residence is outside of the United States irrevocably submit to the jurisdiction of the U.S. federal courts and the Commission with respect to activities relating to the U.S. Regulated Subsidiaries, and to the jurisdiction of the European Regulators and European courts with respect to activities relating to the European Market Subsidiaries.

Holdco would also sign an irrevocable agreement and consent for the benefit of each U.S. Regulated Subsidiary that it will comply with provisions in the Holdco Articles regarding (i) cooperation with the Commission and such U.S. Regulated Subsidiaries; (ii) compliance with U.S. federal securities laws; (iii) inspection and copying of Holdco's books, records and premises; (iv) Holdco's books, records, premises, officers, directors and employees being deemed to be those of U.S. Regulated Subsidiaries; (v) maintenance of books and records in the United States; (vi) confidentiality of information regarding the U.S. Regulated Subsidiaries' self-regulatory function; (vii) preservation of the independence of the self-regulatory function of the U.S. Regulated Subsidiaries; and (viii) taking reasonable steps to cause Holdco's officers, directors and employees to consent to the applicability to them of the Holdco Articles.

Further, Holdco acknowledges that it is responsible for referring possible rule violations to the NYSE Exchanges and the DB Exchanges. Holdco will become a party to the agreement among NYSE Euronext, NYSE Group, the Exchange, NYSE Market and NYSE Regulation to provide adequate funding for NYSE Regulation. In addition, Holdco will become a party to the agreement among Deutsche Börse, Eurex Frankfurt, Eurex Zürich, SIX (formerly SWX), SIX Group (formerly SWX Group), Verein SIX Swiss Exchange (formerly SWX Swiss Exchange), U.S. Exchange Holdings, Inc., ISE Holdings and ISE to provide for adequate funding for ISE's regulatory responsibilities.

Finally, the proposed Holdco Articles require that, for so long as Holdco controls, directly or indirectly, any of the U.S. Regulated Subsidiaries, any changes to the proposed Holdco Articles be submitted to the board of directors of such U.S. Regulated Subsidiaries, and if any such boards of directors determines that such amendment is required to be filed with or filed with and approved by the Commission pursuant to Section 19 of the Act and the rules thereunder, such change shall not be effective until filed with or filed with and approved by, the Commission.

The Commission finds that these provisions are consistent with the Act, and that they are intended to assist the Exchange in fulfilling its self-regulatory obligations and in administering and complying with the requirements of the Act. With respect to the maintenance of books and records of Holdco, the Commission notes that while Holdco has the discretion to maintain Overlapping Records in either the United States or the home jurisdiction of one or more of the European Market Subsidiaries, Holdco is liable for any books and records it is required to produce for inspection and copying by the Commission that are created outside the United States and where the law of a foreign jurisdiction prohibits Holdco from providing such books and records to the Commission for inspection and copying. Moreover, the Commission notes that Deutsche Börse and NYSE Euronext, the two indirect entities currently controlling the U.S. Regulated Subsidiaries, are under existing obligations to make their books and records available in compliance with the requirements of Rule 17a-1(b). The Commission notes that the respective obligations of NYSE Euronext and Deutsche Börse established in these prior orders remain in effect. The Commission also notes that the trusts established under the prior orders also remain in effect unchanged, other than revising the reference in the NYSE Euronext trust agreement (“NYSE Trust”) from the nominating and governance committee of NYSE Euronext to the nominating and governance committee of Holdco. In addition, the Commission also notes that the 2007 Resolutions and Supplemental Resolutions remain in effect.

Under Section 20(a) of the Act, any person with a controlling interest in the U.S. Regulated Subsidiaries shall be jointly and severally liable with and to the same extent that the U.S. Regulated Subsidiaries are liable under any provision of the Act, unless the controlling person acted in good faith and did not directly or indirectly induce the act or acts constituting the violation or cause of action. In addition, Section 20(e) of the Act creates aiding and abetting liability for any person who knowingly provides substantial assistance to another person in violation of any provision of the Act or rule thereunder. Further, Section 21C of the Act authorizes the Commission to enter a cease-and-desist order against any person who has been “a cause of” a violation of any provision of the Act through an act or omission that the person knew or should have known would contribute to the violation. These provisions are applicable to Holdco's dealings with the U.S. Regulated Subsidiaries.

C. Holdco Director Independence Policy

Under the Proposed Rule Change, Holdco would adopt the Holdco Independence Policy, which would be substantially similar to the current Independence Policy of the NYSE Euronext board of directors, except that, in part, (i) a majority (as opposed to 75%) of the board of Holdco would be required to be independent; (ii) executive officers of listed companies would no longer be prohibited from being considered independent for purposes of the Holdco board; (iii) the “additional independence requirements” at the end of the current Independence Policy of NYSE Euronext, which provide that executive officers of foreign private issuers, executive officers of NYSE Euronext and directors of affiliates of member organizations must together comprise no more than a minority of the total board, would be eliminated; (iv) the Holdco Independence Policy would not be applicable to NYSE Regulation, Inc., the Exchange, NYSE Amex or NYSE Market, which would have their own director independence policy; and (v) references to the independence standards and criteria in the Dutch Corporate Governance Code would be added, because such standards and criteria would apply to Holdco, a Dutch company, and would supplement (rather than supersede or limit) the other independence standards and criteria set forth in the Holdco Independence Policy.

The Commission finds that these proposals, taken together, are consistent with the Act, particularly Section 6(b)(1), which requires an exchange to be so organized and have the capacity to carry out the purposes of the Act. The Commission notes that a majority of Holdco's Board would still need to be independent. In addition, the Commission notes that as a company listed on the Exchange, Holdco's board of directors must also satisfy the independence requirements applicable to a listed company's board of directors as contained in the Exchange's Listed Company Manual. Further, the Commission notes that there are requirements in Holdco's Independence Policy that independent directors may not be or have been within the last year, and may not have an immediate family member who is or within the last year was, a member of the Exchange, NYSE Arca or NYSE Amex.

D. Listing of Holdco's Securities

Holdco intends to list its shares of common stock for trading on the Exchange, and apply for admission of its shares to trading on the regulated market of the Frankfurt Stock Exchange and the regulated market segment of the Euronext Paris. Pursuant to NYSE Rule 497, any security of Holdco and its affiliates shall not be approved for listing on the Exchange unless NYSE Regulation determines that such securities satisfy the Exchange's rules for listing, and such finding is approved by the NYSE Regulation board of directors. The Commission finds that the proposed procedure for the initial listing of Holdco common stock is consistent with the Act.

NYSE Regulation will be responsible for all Exchange listing-compliance decisions with respect to Holdco as an issuer. NYSE Regulation will prepare a quarterly report, as described in Rule 497(c)(1) summarizing its monitoring of Holdco's compliance with such listing standards. This report will be provided to the NYSE Regulation board of directors and a copy will be forwarded promptly to the Commission. Once a year, an independent accounting firm will review Holdco's compliance with the Exchange's listing standards and a copy of its report will be forwarded promptly to the Commission. If NYSE Regulation determines that Holdco is not in compliance with any applicable listing standard of the Exchange, NYSE Regulation will notify Holdco promptly and request a plan for compliance. Within five business days of providing such notice to Holdco, NYSE Regulation will file a report with the Commission identifying the date on which Holdco is not in compliance with the listing standard at issue and any other material information conveyed to Holdco in the notice of non-compliance. Within five business days of receiving a plan of compliance from the issuer, NYSE Regulation will notify the Commission of such receipt, whether the plan was accepted by NYSE Regulation or what other action was taken with respect to the plan, and the time period provided to regain compliance with the Exchange's listing standard, if any. The Commission believes that the procedures for monitoring of the listing of and trading of Holdco's securities are consistent with the Act.

E. Options Trading Rights

The Commission received three similar comment letters on the proposed rule changes regarding certain Option Trading Rights (“OTRs”) that were separated from full New York Stock Exchange, Inc. seats (“Separated OTRs”). All New York Stock Exchange seat ownership (with or without OTRs) was extinguished in the 2006 demutualization of New York Stock Exchange, Inc. Although the commenter takes no position on the merits of the Combination, the commenter opposes the Combination on the grounds that the Exchange does not fully own all of the assets being transferred. Specifically, the commenter contends that the owners of Separated OTRs retained their Separated OTRs, even after the New York Stock Exchange, Inc. exited the options business in 1997, with the expectation that their ownership of the Separated OTRs would afford them full rights to trade options under the auspices of New York Stock Exchange, Inc. or its successor entity. The commenter contends that such ownership gives a right to trade options on NYSE Market and NYSE Arca, and after the Combination, Euronext. The commenter refers to its comment letters in connection with the demutualization of New York Stock Exchange, Inc. in its merger with Archipelago as well as the combination of NYSE Group and Euronext N.V. The commenter asked that reserves be put aside for the Exchange to meet its obligations to Separated OTR holders. The NYSE Response to Comments states that the issue of the rights of owners of Separated OTRs is not before the Commission in the context of the NYSE Exchanges' proposed rule filings and notes that the NYSE Exchanges are not proposing in their respective filings a change in the trading rights on the Exchange, NYSE Amex or NYSE Arca, respectively.

The issue of the rights of owners of Separated OTRs is not before the Commission in the context of this rule filing. Pursuant to Section 19(b)(1) of the Act, an SRO (such as NYSE) is required to file with the Commission any proposed rule or any proposed change in, addition to, or deletion from the rules of such SRO. Further, pursuant to Section 19(b)(2) of the Act, the Commission shall approve a proposed rule change filed by an SRO if the Commission finds that such proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to the SRO.

III. Conclusion

For the foregoing reasons, the Commission finds that the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange.

It is therefore ordered, pursuant to Section 19(b)(2) of the Act that the proposed rule changes (SR-EDGA-2011-34; SR-EDGX-2011-33; SR-ISE-2011-69; SR-NYSE-2011-51; SR-NYSEAmex-2011-78; SR-NYSEArca-2011-72), are approved.