Notice2026-04418
Self-Regulatory Organizations; Texas Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Second Amended and Restated Limited Liability Company Agreement of Texas Stock Exchange LLC as the Third Amended and Restated Limited Liability Company Agreement of Texas Stock Exchange LLC
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
March 6, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 44 (Friday, March 6, 2026)</title>
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[Federal Register Volume 91, Number 44 (Friday, March 6, 2026)]
[Notices]
[Pages 11102-11104]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-04418]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104919; File No. SR-TXSE-2026-002]
Self-Regulatory Organizations; Texas Stock Exchange LLC; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend the Second Amended and Restated Limited Liability Company
Agreement of Texas Stock Exchange LLC as the Third Amended and Restated
Limited Liability Company Agreement of Texas Stock Exchange LLC
March 3, 2026.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on February 25, 2026, Texas Stock Exchange LLC (the ``Exchange''
or ``TXSE'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The Exchange
filed the proposal as a ``non-controversial proposed rule change
pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-
4(f)(6) thereunder.\4\ The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange filed a proposal to amend the Second Amended and
Restated Limited Liability Company Agreement of Texas Stock Exchange
(the ``LLC Agreement'') related to amending the LLC Agreement to the
Third Amended and Restated Limited Liability Company Agreement of Texas
Stock Exchange LLC (the ``Third LLC Agreement''). The text of the
proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is available on the
Commission's website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>) at the
Exchange's website (<a href="https://txse.com/rule-filings">https://txse.com/rule-filings</a>), and at the
principal office of the Exchange.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant parts of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend and restate the LLC Agreement to
eliminate the requirement for a Member Representative Director to be
prohibited from owning, directly or indirectly, an ownership interest
in the Exchange. The Exchange is proposing to make this change in
anticipation of the election of the full board prior to launch and in
recognition of other precedent. The Exchange is also proposing to make
certain non-substantive changes including corresponding changes related
to this update to the LLC Agreement, to eliminate unnecessary language,
and to clean up errors in numbering.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\5\ Specifically, the Exchange believes the proposed rule change is
consistent with the objectives of Section 6(b)(1) \6\ of the Act in
particular, in that such amendments enable the Exchange to be so
organized as to have the capacity to be able to carry out the purposes
of the Act and to comply with the provisions of the Act, the rules and
regulations thereunder, and the rules of the Exchange. The Exchange
also believes that the proposed amendments are consistent with Section
6(b)(5) of the Act,\7\ which requires the rules of an exchange to 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.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(1).
\7\ 15 U.S.C. 78f(b)(5).
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The Exchange specifically believes that the proposed change to
delete the restriction on a Member Representative
[[Page 11103]]
Director owning interests in the Exchange, directly or indirectly, will
provide additional flexibility for the Exchange in its ability to elect
qualified Member Representative Directors to the board of the Exchange
and promote the Exchange's ability to attract qualified Member
Representative Directors. Further, the restriction on ownership for
Member Representative Directors is not required by certain other
exchanges.\8\ Moreover, the voting and ownership limitations contained
in Section 14 of the Seventh Amended and Restated Stockholders'
Agreement of TXSE Group Inc. provide further constraints on undue
influence concerns with respect to member representation on the
Exchange board. Finally, the current proposal will not impede the
Exchange's obligations under Section 6(b)(3) of the Act regarding the
fair representation of members. Among other things, the right of
members to petition to submit their own candidate as Member
Representative Directors is retained. If members of the Exchange are
not satisfied with the Member Representative Director nominees proposed
by the Exchange, the LLC Agreement provides a process for members to
petition to submit their own candidates as Member Representative
Directors.
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\8\ See, e.g., Ninth Amended and Restated Bylaws of CBOE BZX
Exchange, Inc. (<a href="https://cdn.cboe.com/resources/regulation/by_laws/Ninth-Amended-and-Restated-Bylaws-of-Cboe-BZX-Exchange-Inc.pdf">https://cdn.cboe.com/resources/regulation/by_laws/Ninth-Amended-and-Restated-Bylaws-of-Cboe-BZX-Exchange-Inc.pdf</a>, at
Section 3.2); Ninth Amended and Restated Bylaws of CBOE BYX
Exchange, Inc. ((<a href="https://cdn.cboe.com/resources/regulation/by_laws/Ninth-Amended-and-Restated-Bylaws-of-Cboe-BYX-Exchange-Inc.pdf">https://cdn.cboe.com/resources/regulation/by_laws/Ninth-Amended-and-Restated-Bylaws-of-Cboe-BYX-Exchange-Inc.pdf</a>, at
Section 3.2).
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The Exchange will also make corresponding and clarifying changes to
the LLC Agreement to conform to the above, as well as some minor
corrections to the numbering of Article I, Definitions. The Exchange
believes that the clarifying and clean-up changes are consistent with
the Act because they are not substantive and only act to make the LLC
Agreement clearer and easier to understand.
For these reasons, the Exchange believes this amendment would
enable the Exchange to be so organized as to have the capacity to carry
out the purposes of the Act and to comply with the provisions of the
Act, including the fair representation provisions of Section 6(b)(3) of
the Act, the rules and regulations thereunder, and the rules of the
Exchange, promote just and equitable principles of trade, remove
impediments to and perfect the mechanism of a free and open market, and
protect investors and the public interest.
(B) Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposal will impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. The proposal is not intended to
address competitive issues but rather is concerned with the
administration of the Exchange.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants or Others
The Exchange has neither solicited nor received written comments on
the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \9\ and Rule
19b-4(f)(6) \10\ thereunder.
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\9\ 15 U.S.C. 78s(b)(3)(A)(iii).
\10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative prior to 30 days after the date of filing. Rule
19b-4(f)(6)(iii), however, permits the Commission to designate a
shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the 30-day operative delay contained in Rule 19b-
4(f)(6)(iii) so that the Exchange may amend its LLC Agreement and begin
its Member Director Representative selection as soon as possible. The
Exchange states that the proposed changes to the LLC Agreement do not
materially alter the Exchange's existing governance framework or raise
novel issues not previously considered by the Commission.\11\ The
Commission believes the proposed rule change presents no novel legal or
regulatory issues, and that waiver of the 30-day operative delay is
consistent with the protection of investors and the public interest.
Accordingly, the Commission hereby waives the operative delay and
designates the proposal operative upon filing.\12\
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\11\ See, e.g., supra note 8.
\12\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposal is
consistent with the Act. Comments may be submitted by any of the
following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#bbc9ced7de96d8d4d6d6ded5cfc8fbc8ded895dcd4cd"><span class="__cf_email__" data-cfemail="3a484f565f17595557575f544e497a495f59145d554c">[email protected]</span></a>. Please include
File No. SR-TXSE-2026-002 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File No. SR-TXSE-2026-002. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
Copies of the filing will be available for inspection and copying at
the principal office of the Exchange. Do not include personal
identifiable information in submissions; you should submit only
information that you wish to make available publicly. We may redact in
part or withhold entirely from publication submitted material that is
obscene or subject to copyright protection. All submissions should
refer to file number SR-TXSE-2026-002 and should be submitted on or
before March 27, 2026.
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For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-04418 Filed 3-5-26; 8:45 am]
BILLING CODE 8011-01-P
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